MICHIGAN APPEALS REPORTS
CASES DECIDED
IN THE
MICHIGAN
COURT OF APPEALS
FROM
April 6, 2010, through June 17, 2010
CORBIN R. DAVIS
CLERK OF THE SUPREME COURT
VOLUME 288
FIRST EDITION
2012
Copyright 2012 by Michigan Supreme Court
The paper used in this publication meets the minimum
requirements of American National Standard for Information
Sciences—Permanence of Paper for Printed Library Materials,
ANSI Z39.48-1984.
COURT OF APPEALS
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ERM
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ANUARY
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HIEF
J
UDGE
WILLIAM B. MURPHY................................................................. 2013
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HIEF
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UDGE
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EM
DAVID H. SAWYER....................................................................... 2011
J
UDGES
MARK J. CAVANAGH ................................................................... 2015
KATHLEEN JANSEN ................................................................... 2013
E. THOMAS FITZGERALD.......................................................... 2015
HENRY WILLIAM SAAD.............................................................. 2015
RICHARD A. BANDSTRA ............................................................ 2015
JOEL P. HOEKSTRA..................................................................... 2011
JANE E. MARKEY......................................................................... 2015
PETER D. O’CONNELL ............................................................... 2013
WILLIAM C. WHITBECK............................................................. 2011
MICHAEL J. TALBOT .................................................................. 2015
KURTIS T. WILDER...................................................................... 2011
BRIAN K. ZAHRA.......................................................................... 2013
PATRICK M. METER.................................................................... 2015
DONALD S. OWENS..................................................................... 2011
KIRSTEN FRANK KELLY............................................................ 2013
CHRISTOPHER M. MURRAY...................................................... 2015
PAT M. DONOFRIO ...................................................................... 2011
KAREN FORT HOOD ................................................................... 2015
STEPHEN L. BORRELLO............................................................ 2013
ALTON T. DAVIS ........................................................................... 2015
DEBORAH A. SERVITTO............................................................. 2013
JANE M. BECKERING ................................................................. 2013
ELIZABETH L. GLEICHER......................................................... 2013
CYNTHIA DIANE STEPHENS.................................................... 2011
MICHAEL J. KELLY...................................................................... 2015
DOUGLAS B. SHAPIRO ............................................................... 2011
C
HIEF
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LERK:
SANDRA SCHULTZ MENGEL
R
ESEARCH
D
IRECTOR:
LARRY S. ROYSTER
SUPREME COURT
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USTICE
MARILYN KELLY......................................................................... 2013
J
USTICES
MICHAEL F. CAVANAGH............................................................ 2015
ELIZABETH A. WEAVER............................................................ 2011
MAURA D. CORRIGAN ............................................................... 2015
ROBERT P. YOUNG, J
R
. ............................................................. 2011
STEPHEN J. MARKMAN............................................................ 2013
DIANE M. HATHAWAY............................................................... 2017
C
OMMISSIONERS
MICHAEL J. SCHMEDLEN, C
HIEF
C
OMMISSIONER
SHARI M. OBERG, D
EPUTY
C
HIEF
C
OMMISSIONER
TIMOTHY J. RAUBINGER DANIEL C. BRUBAKER
LYNN K. RICHARDSON MICHAEL S. WELLMAN
KATHLEEN A. FOSTER GARY L. ROGERS
NELSON S. LEAVITT RICHARD B. LESLIE
DEBRA A. GUTIERREZ-M
c
GUIRE FREDERICK M. BAKER, J
R
.
ANNE-MARIE HYNOUS VOICE KATHLEEN M. DAWSON
DON W. ATKINS RUTH E. ZIMMERMAN
JÜRGEN O. SKOPPEK SAMUEL R. SMITH
ANNE E. ALBERS
S
TATE
C
OURT
A
DMINISTRATOR:
CARL L. GROMEK
C
LERK:
CORBIN R. DAVIS
C
RIER:
DAVID G. PALAZZOLO
TABLE OF CASES REPORTED
(Lines set in small type refer to orders appearing in the Special Orders
section beginning at page 801.)
P
AGE
A
ACE American Ins Co v Michigan Catastrophic
Claims Ass’n ..................................................... 706
American Home Assurance Co v Michigan
Catastrophic Claims Ass’n .............................. 706
Arath II, Inc v Heukels County Drain Dist ...... 324
Arkin Distributing Co v Jones ........................... 185
B
BC Tile & Marble Co, Inc v Multi Bldg Co,
Inc ..................................................................... 576
Baker, People v ..................................................... 378
Barnes, Janer v .................................................... 735
Barrett, Hoffman v .............................................. 536
Basic Property Ins Ass’n v Office of Financial
& Ins Regulation .............................................. 552
Blue Harvest, Inc v Dep’t of Transportation .... 267
Brown v Martin ................................................... 727
C
Chelsea (City of), Chelsea Investment Group
LLC v ................................................................ 239
i
P
AGE
Chelsea Investment Group LLC v City of
Chelsea .............................................................. 239
CitiFinancial Mortgage Corp, Patterson v ......... 526
Citizens Ins Co, Miller v ..................................... 424
City of Chelsea, Chelsea Investment Group
LLC v ................................................................ 239
D
DaimlerChrysler Corp, Jones v .......................... 99
Dancey v Travelers Property Casualty Co of
America .................................................................. 1
Data Tech Services, Inc v Dep’t of Treasury .... 48
Dep’t of Transportation, Blue Harvest, Inc v ... 267
Dep’t of Treasury, Data Tech Services, Inc v .... 48
Dep’t of Treasury, Ford Motor Co v ................... 491
Dep’t of Treasury, Midwest Bus Corp v ............. 334
Dep’t of Treasury, ONE’s Travel Ltd v ............. 48
Detroit Edison Co, Johnson v ............................. 688
Detroit Medical Center, Jones v ......................... 466
Duray Development, LLC v Perrin .................... 143
E
Ericksen, People v ............................................... 192
Esurance Ins Co, Henry Ford Health System v .. 593
Evans, People v .................................................... 410
F
Farm Bureau Ins, Ulrich v .................................. 310
Ford Motor Co v Dep’t of Treasury ................... 491
Fyda, People v ...................................................... 446
G
Galien Twp, Whitman v ...................................... 672
ii 288 M
ICH
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PP
P
AGE
Glass, People v ..................................................... 399
H
Henry Ford Health System v Esurance Ins Co ... 593
Heukels County Drain Dist, Arath II, Inc v ..... 324
Hoffman v Barrett ............................................... 536
Huston, People v .................................................. 387
J
Janer v Barnes ..................................................... 735
Johnson v Detroit Edison Co .............................. 688
Jones, Arkin Distributing Co v .......................... 185
Jones v DaimlerChrysler Corp ........................... 99
Jones v Detroit Medical Center ......................... 466
K
Kalamazoo County Rd Comm, Oshtemo
Charter Twp v .................................................. 296
Kern, People v ...................................................... 513
King v McPherson Hospital .................................................. 801
L
Lee, People v ........................................................ 739
Likine, People v ................................................... 648
M
Mann, People v .................................................... 114
Martin, Brown v .................................................. 727
Matthews v Natural Resources Dep’t ................ 23
McPherson Hospital, King v ................................................. 801
Michigan Catastrophic Claims Ass’n, ACE
American Ins Co v ........................................... 706
T
ABLE OF
C
ASES
R
EPORTED
iii
P
AGE
Michigan Catastrophic Claims Ass’n, American
Home Assurance Co v ..................................... 706
Midwest Bus Corp v Dep’t of Treasury ............. 334
Miller v Citizens Ins Co ...................................... 424
Miller, People v ..................................................... 207
Multi Bldg Co, Inc, BC Tile & Marble Co, Inc v . 576
Mungo, People v (On Rem) ................................. 167
N
Natural Resources Dep’t, Matthews v ............... 23
Nordlund & Associates, Inc v Village of
Hesperia ................................................................. 222
O
Office of Finanacial & Ins Regulation, Basic
Property Ins Ass’n v ........................................ 552
ONE’s Travel Ltd v Dep’t of Treasury .............. 48
Oshtemo Charter Twp v Kalamazoo County Rd
Comm ..................................................................... 296
P
Parker, People v ................................................... 500
Patterson v CitiFinancial Mortgage Corp .......... 526
People v Baker ..................................................... 378
People v Ericksen ................................................ 192
People v Evans ..................................................... 410
People v Fyda ....................................................... 446
People v Glass ...................................................... 399
People v Huston ................................................... 387
People v Kern ....................................................... 513
People v Lee ......................................................... 739
People v Likine .................................................... 648
People v Mann ..................................................... 114
iv 288 M
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P
AGE
People v Miller ..................................................... 207
People v Mungo (On Rem) .................................. 167
People v Parker .................................................... 500
People v Phelps .................................................... 123
People v Railer ..................................................... 213
People v Reid ........................................................ 661
People v Schaw .................................................... 231
People v Swain ..................................................... 609
People v Williams ................................................. 67
Perrin, Duray Development, LLC v ................... 143
Phelps, People v ................................................... 123
R
Railer, People v .................................................... 213
Reid, People v ....................................................... 661
S
Schaw, People v .................................................... 231
Shokoohi, Woodington v ...................................... 352
Swain, People v .................................................... 609
T
Tice, Tice Estate v ............................................... 665
Tice Estate v Tice ................................................ 665
Transportation (Dep’t of), Blue Harvest, Inc v .... 267
Travelers Property Casualty Co of America,
Dancey v ................................................................ 1
Treasury (Dep’t of), Data Tech Services, Inc v .... 48
Treasury (Dep’t of), Ford Motor Co v ................ 491
Treasury (Dep’t of), Midwest Bus Corp v ......... 334
Treasury (Dep’t of), ONE’s Travel Ltd v .......... 48
U
Ulrich v Farm Bureau Ins ................................... 310
T
ABLE OF
C
ASES
R
EPORTED
v
P
AGE
V
Village of Hesperia, Nordlund & Associates,
Inc v .................................................................. 222
W
Whitman v Galien Twp ....................................... 672
Williams, People v ................................................ 67
Woodington v Shokoohi ....................................... 352
vi 288 M
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PPEALS
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ASES
DANCEY v TRAVELERS PROPERTY CASUALTY COMPANY
OF AMERICA
Docket No. 288615. Submitted November 10, 2009, at Lansing. Decided
April 6, 2010, at 9:00 a.m.
Luann M. Dancey brought an action in the Oakland Circuit Court,
John J. McDonald, J., against Travelers Property Casualty Com-
pany of America, seeking, under a commercial automobile insur-
ance policy issued to Maryland Electric Company, Inc., the em-
ployer of plaintiff’s former husband, uninsured motorist (UIM)
benefits for injuries sustained in a single-vehicle accident that
occurred when the vehicle driven by plaintiff struck a ladder lying
in the roadway of I-696 at the interchange of I-696 and I-75 in
Royal Oak. Defendant sought summary disposition on the grounds
that plaintiff was not an “insured” as that term is defined in the
policy for purposes of UIM coverage and that there was no
evidence that the accident was caused by the driver of an unin-
sured motor vehicle. The trial court denied the motion, ruling that
the vehicle driven by plaintiff was covered by the policy and there
was a genuine issue of material fact whether the driver of an
uninsured vehicle caused the accident. Defendant appealed by
leave granted.
The Court of Appeals held:
1. The trial court erred by concluding that the vehicle driven
by plaintiff was a covered automobile, thus making plaintiff an
insured under the UIM endorsement. However, there remain
questions of fact regarding whether plaintiff is a named insured
and whether the policy provided UIM benefits for plaintiff. There-
fore, the trial court reached the right result, albeit for the wrong
reasons, with regard to its denial of the motion for summary
disposition.
2. Defendant’s policy provides UIM coverage in two situations:
where there is vehicle-to-vehicle contact (direct physical contact)
and where an unidentified vehicle causes an object to hit the
insured’s vehicle (indirect physical contact).
3. Plaintiff presented evidence regarding the location where
the accident occurred that supports an inference that the ladder
must have fallen off another vehicle. A reasonable juror could
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conclude from the evidence that the presence of the ladder in
the roadway, under the circumstances of this case and in the
absence of any other reasonable explanation for the ladder’s
presence, established a substantial physical nexus between a
hit-and-run vehicle and the ladder. The evidence regarding the
accident’s location created a question of fact with regard to
whether a substantial physical nexus exists between the ladder
and an unidentified hit-and-run vehicle. This case does not
require the Court of Appeals to establish an affirmative link
between a particular hit-and-run vehicle and the ladder. Al-
though some degree of speculation is necessary to determine
exactly how the ladder arrived at its location, under the unique
set of facts in this case, such speculation is permissible.
Affirmed and remanded.
Mark Granzotto, P.C. (by Mark Granzotto), and Er-
lich, Rosen & Bartnick, P.C. (by Jeffrey S. Cook), for
plaintiff.
Plunkett Cooney (by Robert G. Kamenec and Stanley
A. Prokop) for defendant.
Before: T
ALBOT
,P.J., and O’C
ONNELL
and D
AVIS
,JJ.
O’C
ONNELL
, J. Defendant, Travelers Property Casu-
alty Company of America (Travelers), appeals by
leave granted an August 27, 2008, order of the
Oakland Circuit Court denying its motion for sum-
mary disposition. For reasons slightly different from
those articulated by the trial court, we affirm the
denial of the motion for summary disposition and
remand this case back to the trial court for further
proceedings consistent with this opinion. This appeal
is being decided without oral argument pursuant to
MCR 7.214(E).
I. OVERVIEW
On November 2, 2004, plaintiff, Luann M. Dancey,
was involved in a single-vehicle accident after hitting a
2 288 M
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ladder lying in the roadway. In November 2007, plaintiff
filed a complaint seeking uninsured motorist (UIM)
benefits from defendant under a policy issued to Mary-
land Electric Company, Inc. (Maryland Electric). Defen-
dant moved for summary disposition on two grounds:
(1) plaintiff was not an “insured” as that term is defined
by the policy for purposes of UIM coverage, and (2)
there was no evidence that the accident in question was
caused by the driver of an “uninsured motor vehicle.”
The trial court denied defendant’s motion, ruling that
the vehicle that plaintiff was driving at the time of the
accident, a 2004 GMC Envoy, was covered by the policy
and that there was at least a genuine issue of fact
whether the driver of an uninsured vehicle caused the
accident.
On appeal, defendant argues that an “insured” for
purposes of UIM coverage is limited to anyone occupy-
ing a vehicle owned by Maryland Electric. Because
Maryland Electric did not own or lease the Envoy,
plaintiff was not entitled to coverage. Defendant also
argues that based upon caselaw and the lower court
record, no evidence exists that this accident was caused
by the driver of an “uninsured motor vehicle.”
We agree with the trial court that there exists a
question of fact regarding whether this accident was
caused by the driver of an “uninsured motor vehicle.”
However, while we disagree with the trial court that
plaintiff has “conclusively” established that plaintiff
is a named insured, we conclude that there exists a
question of fact whether plaintiff is a named insured
as that term is defined in defendant’s policy. There-
fore, for slightly different reasons, we affirm the
decision of the trial court. We remand this case back
to the trial court for further proceedings consistent
with this opinion.
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II. FACTS
A. THE INSURANCE POLICY
Plaintiff is the former wife of David Dancey; the
couple divorced in August 2007. David was employed by
Maryland Electric, a company that was owned by his
parents and a third person. Defendant had issued a
commercial automobile policy to Maryland Electric cov-
ering the 2004 calendar year.
The policy at issue covers eight private passenger
vehicles and 48 trucks, but they are not individually
identified by year, make, or model. Rather, covered ve-
hicles are identified by a symbol corresponding to the type
of coverage available. Specifically, “[t]he symbols entered
next to a coverage on the Declarations designate the only
‘autos’ that are covered ‘autos.’ ” The policy also contains
a UIM endorsement, which provides, in part:
We will pay all sums the “insured” is legally entitled to
recover as compensatory damages from the owner or driver
of an “uninsured motor vehicle”. The damages must result
from “bodily injury” sustained by the “insured” caused by
an “accident”. The owner’s or driver’s liability for these
damages must result from the ownership, maintenance or
use of the “uninsured motor vehicle”.
Plaintiff had previously owned a GMC Yukon. In Janu-
ary 2004, David leased a 2004 GMC Envoy from the Pat
Moran Oldsmobile dealership (the dealership) as a re-
placement vehicle for the Yukon. Plaintiff notified her
insurance agent that the Yukon was being replaced with
the Envoy. The lease that David signed with the dealer-
ship indicates that the Envoy was covered under defen-
dant’s policy. Plaintiff testified that Maryland Electric
indirectly purchased vehicles for certain employees by
giving them a monthly car allowance and that the employ-
ees, as well as their spouses, were covered under the
4 288 M
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company’s insurance policy with defendant. She further
testified that she was required to sign a written lease
agreement with Maryland Electric under which the En-
voy, which was titled in plaintiff’s name, was leased to
Maryland Electric, thereby bringing the car and herself
under the umbrella of defendant’s insurance policy. Plain-
tiff also produced a certificate of insurance that named
both herself and Maryland Electric as insured parties
under the policy issued by defendant. Plaintiff testified
that “she was actually a named insured” because the
certificate of insurance for the Envoy identified plaintiff as
an insured.
After the trial court denied defendant’s motion for
summary disposition, and before this Court granted leave
to appeal, the trial court allowed the parties to reopen
discovery. The parties took the deposition of plaintiff’s
insurance agent, Rodney Grawel, who is the general
manager of Valenti Trobec Chandler, the insurance
agency that sold the policy to Maryland Electric. Grawel
testified that Maryland Electric had insured plaintiff’s
Envoy under a policy that it had with Travelers. Grawel
testified that in January 2004, he processed a change
request with Travelers to remove the Yukon from the
policy, add the Envoy to the policy, and add plaintiff as a
named insured to the policy. He also testified that as part
of the process of incorporating the Envoy into the insur-
ance policy, Maryland Electric would have to acquire an
insurable interest in the vehicle, which would be accom-
plished when plaintiff signed a leaseback agreement for
the Envoy with Maryland Electric. No leaseback agree-
ment between Maryland Electric and plaintiff was pro-
duced at the hearing on the motion for summary disposi-
tion.
1
1
We make no determination whether such a leaseback agreement
exists and leave that decision to the fact-finder.
2010] D
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B. THE ACCIDENT
On November 2, 2004, plaintiff was driving the Envoy
when she was involved in an accident at the interchange
of I-696 and I-75 in Royal Oak. She entered eastbound
I-696 at or near I-75 and gradually moved toward the far
left of the four lanes. In this area I-696 rises far above I-75,
and noise mitigation and retaining walls line the roadway
on either side of the interchange. It is not an area that
pedestrians or other nonvehicular traffic can enter. Access
to the overpass, in essence, is limited to motor vehicles.
When plaintiff was in the center left lane or the far left
lane, she noticed a “huge steel construction ladder par-
tially opened” angled across the entire lane. Plaintiff had
not seen it earlier because her view was obstructed by
another vehicle. Plaintiff “had a split second to make a
decision do I try to run over or do I swerve.” She opted to
try to avoid the ladder and pulled sharply to the right, but
was unable to avoid the ladder completely. Plaintiff lost
control of the car, the “front left tire blew,” and the car
rolled over. The area where the accident occurred was not
under construction and none of the evidence presented
suggests how long the ladder had been in the road, how it
came to be there, or who was responsible for leaving it
there.
Plaintiff argues that because she is a named insured
under defendant’s policy and her vehicle is leased to
Maryland Electric, both the vehicle and plaintiff are
covered under the policy. Furthermore, she contends,
because the ladder fell from another vehicle that could not
be identified, this accident is covered under the UIM
endorsement to the policy.
III. ANALYSIS
As we have previously stated, defendant moved for
summary disposition on two grounds: (1) plaintiff was
6 288 M
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not an “insured” as that term is defined by the policy
for purposes of UIM coverage,
2
and (2) there was no
evidence that the accident was caused by the driver of
an “uninsured motor vehicle.” The trial court denied
defendant’s motion on both grounds, ruling that the
Envoy was covered by the policy and that there was at
least a genuine issue of fact concerning whether the
accident was caused by the driver of an uninsured
vehicle.
A. STANDARDS OF REVIEW AND BASIC PRINCIPLES
OF INSURANCE CONTRACT INTERPRETATION
We review the trial court’s ruling on a motion for
summary disposition de novo. Gillie v Genesee Co
Treasurer, 277 Mich App 333, 344; 745 NW2d 137
(2007). The construction and interpretation of an insur-
ance policy and whether the policy language is ambigu-
ous are questions of law, which we also review de novo
on appeal. Henderson v State Farm Fire & Cas Co, 460
Mich 348, 353; 596 NW2d 190 (1999).
“Summary disposition is appropriate under MCR
2.116(C)(10) if there is no genuine issue regarding any
material fact and the moving party is entitled to judg-
ment as a matter of law.” West v Gen Motors Corp, 469
Mich 177, 183; 665 NW2d 468 (2003). When reviewing
a motion under MCR 2.116(C)(10), we consider the
pleadings, admissions, affidavits, and other relevant
record evidence in the light most favorable to the
nonmoving party to determine whether any genuine
issue of material fact exists to warrant a trial. Walsh v
Taylor, 263 Mich App 618, 621; 689 NW2d 506 (2004).
2
In particular, defendant argued that an “insured,” for purposes of
UIM coverage, was limited to anyone occupying a vehicle owned by
Maryland Electric. Because Maryland Electric did not own or lease the
Envoy, plaintiff was not entitled to coverage.
2010] D
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“A genuine issue of material fact exists when the record,
giving the benefit of reasonable doubt to the opposing
party, leaves open an issue upon which reasonable
minds might differ.” West, 469 Mich at 183.
“An insurance policy is much the same as any other
contract. It is an agreement between the parties in
which a court will determine what the agreement was
and effectuate the intent of the parties.” Auto-Owners
Ins Co v Churchman, 440 Mich 560, 566; 489 NW2d 431
(1992). “The policy application, declarations page of
[the] policy, and the policy itself construed together
constitute the contract.” Royal Prop Group, LLC v
Prime Ins Syndicate, Inc, 267 Mich App 708, 715; 706
NW2d 426 (2005). An insurance contract should be read
as a whole, with meaning given to all terms. Id. A clear
and unambiguous contractual provision is to be en-
forced as written. Coates v Bastian Bros, Inc, 276 Mich
App 498, 503; 741 NW2d 539 (2007). “Clear and unam-
biguous language may not be rewritten under the guise
of interpretation,” South Macomb Disposal Auth v
American Ins Co (On Remand), 225 Mich App 635, 653;
572 NW2d 686 (1997), and “[c]ourts must be careful not
to read an ambiguity into a policy where none exists,”
Auto-Owners Ins Co v Harvey, 219 Mich App 466, 469;
556 NW2d 517 (1996). A contract is ambiguous when
two provisions “irreconcilably conflict with each other,”
Klapp v United Ins Group Agency, Inc, 468 Mich 459,
467; 663 NW2d 447 (2003), or “when [a term] is equally
susceptible to more than a single meaning,” Lansing
Mayor v Pub Service Comm, 470 Mich 154, 166; 680
NW2d 840 (2004) (emphasis in original). “However, if a
contract, even an inartfully worded or clumsily ar-
ranged contract, fairly admits of but one interpretation,
it may not be said to be ambiguous or fatally unclear.”
Mich Twp Participating Plan v Pavolich, 232 Mich App
378, 382; 591 NW2d 325 (1998).
8 288 M
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B. WHETHER PLAINTIFF IS AN INSURED
The UIM endorsement obligates defendant to pay
those sums that an “insured” is entitled to recover from
the owner or driver of an uninsured vehicle. Although
the Business Auto Coverage Form defines the term
“insured,” that definition is modified for purposes of
the UIM endorsement. If the named insured identified
in the declarations is a company or some other organi-
zation, i.e., not an individual, an “insured” is defined, in
pertinent part, as follows:
Anyone “occupying” a covered “auto” or a temporary
substitute for a covered “auto”. The covered “auto” must
be out of service because of its breakdown, repair, servicing,
“loss” or destruction.
For purposes of UIM coverage, a covered “auto”
3
is
identified by the symbol “2,” which is described in the
Business Auto Coverage Form as follows:
OWNED “AUTOS” ONLY. Only those “autos” you own
(and for Liability Coverage any “trailers” you don’t own
while attached to power units you own). This includes
those “autos” you acquire ownership of after the policy
begins.
The term “you,” as defined in the policy, refers to “the
Named Insured shown in the Declarations.” Thus, an
“insured” for purposes of UIM coverage is a person who
is occupying an auto owed by the named insured, i.e.,
Maryland Electric.
Defendant claims that because the Envoy occupied
by plaintiff was owned by the dealership and leased to
plaintiff’s then-husband David, it was not owned by the
named insured and was not covered by the UIM en-
3
The term “auto” refers to a motor vehicle. There is no dispute that
the Envoy is an “auto.”
2010] D
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dorsement. Because plaintiff was not occupying a cov-
ered auto, she was not an insured for purposes of
receiving UIM benefits.
Plaintiff did not specifically dispute defendant’s read-
ing of the relevant policy terms. Rather, she noted that the
policy included an endorsement for leased vehicles, that
there existed a leaseback agreement, a certificate of insur-
ance naming her as a named insured, and a policy change
request that added the Envoy to the policy and named her
as an additional insured. Therefore, plaintiff claimed, she
qualified as an insured for the purpose of entitlement to
UIM benefits. The crux of plaintiff’s argument was that
despite what the policy said, “she was actually a named
insured” on the policy because her insurance agent had
added both her and the Envoy to the policy.
At oral argument on the motion for summary dispo-
sition, defendant asserted that there was caselaw indi-
cating that the insurance certificate was not controlling
and submitted copies of the relevant cases to the court.
Plaintiff responded that defendant had already paid her
benefits under the policy and if defendant paid benefits,
she must be an insured. The trial court ruled, in
pertinent part, as follows:
The Court finds that the Envoy is a covered vehicle under
the policy. Under the policy, Maryland Electric is listed as the
insured and the vehicle listed is the Envoy at issue, Plaintiff’s
Exhibit D.
[
4
]
Under section B-2 of the policy, an insured
includes anyone occupying a covered auto.
Here, Plaintiff was occupying a covered auto. Further,
on the certificate of insurance issued by the State of
4
The exhibit referenced consisted of various pages of the policy. As
previously noted, the policy did not describe any of the covered vehicles by
year, make, or model, and the pages submitted by plaintiff do not do so
either. They certainly do not refer specifically to the Envoy. In this regard,
we find that a question of fact exists regarding whether the Envoy is listed
as one of the eight private passenger vehicles covered by the policy.
10 288 M
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Michigan for the Envoy at issue, the insureds are listed as
Maryland Electric Company and Luann Dancey, Plaintiff.
Now, counsel, you did provide me with two cases that
say that an insurance certificate is not an insurance policy,
but then you also bring up the fact that they’re covering
her now under no fault.
[Defense counsel]: Your Honor, I don’t admit that. I
don’t admit that. He brought that up today, and there’s no
— I just — I can’t admit it on the record. I —
The Court: (Interposing) Okay. All right.
We conclude that the trial court erred by conclusively
finding that the Envoy was a covered auto, thus making
plaintiff an insured under the UIM endorsement. How-
ever, we also conclude that the trial court reached the
right result with regard to its denial of summary
disposition on this point, albeit for the wrong reasons.
See Etefia v Credit Technologies, Inc, 245 Mich App 466,
470; 628 NW2d 577 (2001). On the basis of the facts of
this case as set forth in the lower court record, there
remain questions of fact regarding whether plaintiff is a
named insured and whether this policy provides UIM
benefits for plaintiff.
C. WHETHER THE ACCIDENT WAS CAUSED BY THE DRIVER
OF AN “UNINSURED MOTOR VEHICLE”
UIM benefits are only available if plaintiff was in-
jured in an accident with the driver of an “uninsured
motor vehicle” and that driver’s liability results from
the ownership, maintenance, or use of the “uninsured
motor vehicle.” An “uninsured motor vehicle” is de-
fined, in part, to include any land motor vehicle, i.e.,
“auto,”
[t]hat is a hit-and-run vehicle and neither the driver nor
owner can be identified. The vehicle must hit, or cause an
object to hit, an “insured”, a covered “auto” or a vehicle an
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“insured” is “occupying”. If there is no direct physical contact
with the hit-and-run vehicle, the facts of the “accident” must
be corroborated by competent evidence, other than the testi-
mony of any person having a claim under this or any similar
insurance as the result of such “accident”.
Defendant claims that in order for the hit-and-run
vehicle to “cause an object to hit” plaintiff’s vehicle,
there must be a physical nexus between the hit-and-run
vehicle and the object. Defendant argues that because
no one could affirmatively state that the ladder fell off
another vehicle, only speculation would permit a jury to
conclude that there was any nexus between the ladder
and the hit-and-run vehicle, and speculation is insuffi-
cient to establish a genuine issue of fact. Plaintiff
argues that there was no other logical explanation for
how the ladder came to be in the roadway, given that
the area was not under construction, was not open to
pedestrian traffic, and was not beneath an overpass
from which a ladder could have fallen. Further, the
language used in defendant’s policy differs from that
involved in the various cases cited by defendant. The
trial court ruled, in pertinent part, as follows:
Now, as to the uninsured motorist claim, the Court finds
that to recover under this endorsement there must be a
causal connection, a substantial physical nexus between
the hit and run vehicle and Plaintiff’s vehicle for Plaintiff
to recover.
And proof of a substantial connection with a disappear-
ing vehicle, and in this case Plaintiff alleged that the ladder
she hit must have dropped off another vehicle, is required
for recovery under the uninsured motorist endorsement.
If there’s no direct physical contact with a hit and run
vehicle, as in this case, the Plaintiff is required to show a
connection between the ladder, the alleged disappearing
vehicle, which must be corroborated by competent evi-
dence.
12 288 M
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Here, the Plaintiff has provided evidence whereby a jury
could find it more likely than not that the ladder came from
a disappearing vehicle, which is sufficient for Plaintiff to
maintain her claim for uninsured motorist benefits under
her policy.
In several cases, this Court has addressed issues
regarding coverage of accidents in which an object was
alleged to have come from an unidentified vehicle. In
Kersten v Detroit Auto Inter-Ins Exch, 82 Mich App 459;
267 NW2d 425 (1978),
5
the plaintiff was driving when
she struck “an unidentified truck tire spinning in
front of her on the passing lane of the highway....”
Id. at 463. The policy at issue required that the
plaintiff’s injuries be caused by the ownership, main-
tenance, or use of an uninsured motor vehicle and
defined an uninsured motor vehicle to include a
“hit-run” motor vehicle. Id. A “hit-run” vehicle was,
in turn, defined as “ ‘a motor vehicle which causes
bodily injury to an insured arising out of physical
contact of such vehicle with the insured or with a
vehicle’ ” occupied by the insured. Id. (emphasis in
original). Given that the tire was mounted on a rim,
that the tire was spinning, and that “the accident
occurred on a limited access highway which was
completely fenced on both sides and where pedestri-
ans or nonmotorized vehicles are rarely found,” the
Court determined that it was not clear error for the
trial court to conclude that the tire had recently
fallen from a passing vehicle. Id. at 467-468. The
Court further noted that despite the requirement
that there be physical contact between the two ve-
hicles, courts from other jurisdictions had held that
indirect contact is sufficient in certain circumstances:
5
Because Kersten was issued before November 1, 1990, it is not binding
on this Court. MCR 7.215(J)(1).
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Recovery is permitted where the evidence discloses a
direct causal connection between the hit-and-run vehicle
and plaintiff’s vehicle and which connection carries
through to the plaintiff’s vehicle by a continuous and
contemporaneously transmitted force from the hit-and-run
vehicle. For example, the intermediate vehicle cases [in
which the hit-and-run driver strikes a vehicle, which is
then propelled into the insured vehicle] are explained
because there is evidence of a simultaneous causal connec-
tion. Similarly, in the propelled object cases . . . , there is a
direct causal connection by means of a continuous and
contemporaneously transmitted force. Further, in such
cases there is convincing evidence of a hit-and-run vehicle.
But where a tire or a trunk or other piece of cargo lying on
the highway is struck and, unlike the propelled stone cases,
there is no clear testimony but only an inference of a
contemporaneous and continuing propulsion of the object
from a disappearing hit-and-run vehicle, recovery is de-
nied. The chain of causation is stretched too thin and is too
speculative. [Id. at 471-472.]
Given that, the Court held that the plaintiff was not
entitled to UIM coverage because even though the facts
permitted an inference that the tire came from a
passing vehicle, they
[did] not show a clearly definable beginning and ending of
a contemporaneously occurring chain of events. Nothing
links the tire and rim with the hit-and-run vehicle except
an inference drawn from the presence of a spinning tire
and rim on the road. Both the intermediate vehicle cases
and the propelled object cases require clearly definable or
objective evidence (rather than inferential evidence) of a
link between a disappearing vehicle and plaintiff’s vehicle.
[Id. at 472 (emphasis omitted).]
In Adams v Zajac, 110 Mich App 522; 313 NW2d 347
(1981),
6
a truck tire and rim assembly were lying in the
6
Because Adams was issued before November 1, 1990, it is also not
binding on this Court. MCR 7.215(J)(1).
14 288 M
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middle of an expressway. Id. at 525. The plaintiff’s dece-
dent either struck the tire or swerved to avoid it, lost
control of his vehicle, and crashed. Id. A motorist driving
in front of the decedent, who had successfully swerved to
avoid the tire, stated that before coming upon the tire, he
saw a flatbed tractor-trailer parked along the freeway
where he first observed the tire. Id. at 525-526. The
tractor-trailer was observed pulling away from the scene
where the accident occurred. Id. at 526. The plaintiff
sought recovery under MCL 257.1112,
7
which requires
“physical contact between the unidentified vehicle and
a vehicle occupied by the claimant [as] a condition
precedent to such action.” Adams, 110 Mich App at 526.
The Adams Court distinguished Kersten on the ground
that MCL 257.1112 did not specifically require “a
continuous and contemporaneously transmitted force
from the hit-and-run vehicle.” Adams, 110 Mich App at
528. It then held “that the ‘physical contact’ takes place
when a vehicle or an integral part of it comes into
physical contact with another vehicle.” Id. It did not
matter whether the part was “still attached or comes to
rest after being detached from the vehicle... ,” al-
though the Court also admitted that “in the latter case
it might present some difficulties... in carrying the
burden of proof.” Id. at 528. The Court concluded,
“[i]nferential evidence rather than objective evidence is
enough to establish a link between a disappearing
vehicle and plaintiff’s vehicle.” Id. at 529.
In Hill v Citizens Ins Co of America, 157 Mich App
383; 403 NW2d 147 (1987),
8
the plaintiff’s decedent was
driving on a state highway when a large camper-truck
7
MCL 257.1112 is designed “to provide a remedy to the victim of an
unidentified hit-and-run driver.” Adams, 110 Mich App at 526. Because it
is remedial in nature, it is liberally construed. Id.
8
Because Hill was issued before November 1, 1990, it is not binding on
us. MCR 7.215(J)(1).
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passed him going in the opposite direction. Id. at
384-385. A rock “ ‘came through the windshield just as
[the] camper passed’ ” the decedent’s vehicle. Id. at
384. Plaintiff, the decedent’s wife, was also in the car
and claimed that the camper had caused the rock to
become airborne. Id. at 385, The defendant had no
evidence to refute this claim. Id. The policy in question
provided UIM benefits in accidents involving hit-and-
run vehicles and included the same physical contact
requirement as in Kersten. Id. The Hill Court held that
an object propelled by the unidentified vehicle into the
insured vehicle is sufficient to satisfy the “physical
contact” requirement as long as there is “a substantial
physical nexus between the disappearing vehicle and
the object cast off or struck.” Id. at 394. The fact that
the rock came through the windshield just as the
camper went by was sufficient to establish such a nexus.
Id.
In Berry v State Farm Mut Auto Ins Co, 219 Mich App
340; 556 NW2d 207 (1996), the plaintiff drove over an
object that was lying in the road in front of her, causing
her to lose control of her vehicle. Id. at 343. She had
been unable to swerve to avoid the object because a car
was passing by in the opposite direction. Id. She had not
seen any traffic ahead of her. Id. However, shortly
before the accident, a witness had seen a truck, which
was hauling a trailer filled with scrap metal, stopped on
the side of the road approximately half a mile from the
accident site. Id. The trailer was uncovered, with two-
to three-foot sides, and a man was standing by the
trailer looking at the load. Id. The witness then saw a
piece of metal in the road at the accident site, which had
not been there when the witness had passed by 10 or 15
minutes earlier. Id. at 343-344. The accident occurred
approximately ten minutes later. Id. at 344. The policy
in question provided UIM benefits involving hit-and-
16 288 M
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run vehicles and required that the hit-and-run vehicle
strike the insured or a vehicle occupied by the insured.
Id. at 342.
The Berry Court held that the presence of scrap
metal in the trailer “at a time and location that was
temporally and spatially proximate to plaintiff’s
striking a piece of metal in the road” was sufficient to
establish “a substantial physical nexus between the
hit-and-run vehicle and the object struck by plain-
tiff....” Id. at 350. Further, given the conflict be-
tween Kersten and Adams regarding the necessity of
“ ‘a continuous and contemporaneously transmitted
force from the hit-and-run vehicle’ ” to the insured
vehicle, the Berry Court held that “the presence of a
‘continuous and contemporaneously transmitted
force’ is a significant, but not dispositive, factor to be
considered in indirect contact cases in determining
whether the requisite substantial physical nexus has
been established.” Id. at 350-351 (citation omitted).
Although there was no such evidence in the Berry
case, there was testimony providing the “convincing
and objective evidence of a hit-and-run vehicle in the
absence of a continuous and contemporaneously
transmitted force.” Id. at 351. The witness’s testi-
mony “establishe[d] a continuous sequence of events
with a clearly definable beginning and ending, result-
ing in plaintiff’s coming into contact with the piece of
metal.” Id.
The distinguishing feature between our case and
cases like Berry, Hill, and Adams is that in those cases,
there was objective and convincing evidence of another
unidentified vehicle that could have been the source of
the object that made contact with the insured vehicle.
In Adams, there was a truck stopped in the same area of
the road where the truck tire was located. In Hill, there
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was a camper-truck passing by at the same moment the
rock was sent flying. In Berry, the only case that is
binding on this Court, there was a truck hauling scrap
metal just down the road from the accident site and a
piece of scrap metal in the road at the accident site. This
case is more like Kersten, in that there was an object in
the road and circumstantial evidence that it could have
come from a vehicle, but no objective evidence of any
vehicle in the area that could have been the source of
the object.
Plaintiff testified that she did not see the ladder
fall off a vehicle. She testified that she saw a vehicle
in front of her in the center left lane just before she
came upon the ladder, but this vehicle blocked her
view of the ladder and thus was not the source of the
ladder. Plaintiff also stated that there might have
been another vehicle in front of her that changed
lanes just before she noticed the ladder. That vehicle
did not drop the ladder but successfully avoided it.
She recalled someone at the scene mentioning a
truck, but she could not say if that person “said that
they saw it fall or if it was a truck. I remember
everyone said it was a truck but I don’t know if
anyone specifically saw the truck or not.” In other
words, people were speculating that the ladder must
have come from a truck. None of the witnesses could
connect the ladder to any passing vehicle.
9
9
Panels of this Court have held, in unpublished cases, that absent
evidence of an actual vehicle that is the source of the object in the road,
a “substantial physical nexus” between the unidentified vehicle and the
object struck is not established. See, e.g., Kerr v Citizens Ins Co of
America, unpublished opinion per curiam of the Court of Appeals, issued
January 22, 2008 (Docket No. 273319) (bale of hay in the road, no
evidence of any vehicle seen in the area from which it could have fallen);
Girodat v Auto Club Ins Ass’n, unpublished opinion per curiam of the
Court of Appeals, issued March 4, 1997 (Docket No. 194688) (tire lying in
18 288 M
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Defendant’s policy is somewhat different from those
at issue in Kersten and Hill and from the statute at
issue in Adams, because rather than requiring direct
physical contact between an unidentified vehicle and
the insured’s vehicle, it provides that coverage is avail-
able in two situations: (1) where there is vehicle-to-
vehicle contact (direct physical contact); and (2) where
the unidentified vehicle causes an object to hit the
insured’s vehicle (indirect physical contact). It is undis-
puted that plaintiff’s car was not hit by another car.
Further, there was no evidence that another vehicle
caused the ladder to hit plaintiff’s car. Even if the
phrase “cause an object to hit” was not limited to
instances of a direct and immediate connection between
the unidentified vehicle and the object, as in Hill, but
could be interpreted to include instances of an indirect
and intermediate connection between the unidentified
vehicle and the object, as in Berry, there was still no
evidence of another vehicle in the area that was carry-
ing a ladder at or near the time of the accident.
If this were the only evidence presented below, we
would reverse the order of the trial court. However, this
case is factually distinguishable from the cases cited
above. Plaintiff presented evidence of the location of the
accident, which supports an inference that the ladder in
question must have fallen off another vehicle. This
accident occurred at the intersection of I-696 and I-75
in Royal Oak. In the location where the accident oc-
curred, the freeway on which plaintiff was operating
her vehicle, I-696, rises high above another freeway,
I-75. Exhibit 1 of plaintiff’s brief, which we reproduce
here, depicts the area as follows:
the road, no evidence of any vehicle seen in the area from which it could
have fallen). Because these cases are unpublished, they are not binding
on us.
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The accident site is inaccessible to pedestrians and
nonvehicular traffic. Other witnesses testified that no
construction was taking place in the area at the time of
the accident. The trial court concluded that “someone
just didn’t walk down the expressway...carrying a
ladder and drop it off,” and noted, “I don’t think it
dropped from an airplane.” Upon viewing the aerial
photograph of the crash site, it is obvious that this
accident occurred on a raised highway in an area that is
only accessible to motor vehicles. A reasonable juror
could conclude that there is no reasonable explanation
for the presence of a ladder in the middle of an overpass
20 288 M
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soaring high above Royal Oak and inaccessible to non-
vehicular traffic except that the ladder must have fallen
off a vehicle. Accordingly, a reasonable juror could
conclude that the presence of a ladder in the roadway,
under these circumstances and in the absence of any
other reasonable explanation for the ladder’s presence,
established a “substantial physical nexus” between a
hit-and-run vehicle and the ladder struck by plaintiff.
Further, Berry, which is the only case that is binding
on us, does not preclude us from considering the unique
location of this accident in determining that a question
of fact exists in this case. The Berry holding simply
discussed a situation in which the Court determined
that a “substantial physical nexus” was established by
the proofs. See Berry, 219 Mich App at 350. This case
does not require us to establish an affirmative link
between a particular hit-and-run vehicle and the ladder
lying in the roadway. And although the evidence does
not establish an identifiable vehicle from which the
ladder might have fallen, the evidence also permits a
reasonable person to eliminate all reasonable sources
for the presence of the ladder except one: the ladder fell
off a vehicle (such as a work truck). Berry does not
preclude us from considering whether evidence of an
accident’s location creates a question of fact with regard
to whether a substantial physical nexus exists between
the ladder and an unidentified hit-and-run vehicle.
Although we find Kersten, Adams, and Hill useful to
reflect on when considering the circumstances under
which a “substantial physical nexus” can exist, these
cases are not binding on us and do not require us to
adopt a different outcome.
Although some degree of speculation is necessary to
determine exactly how this ladder arrived at its loca-
tion, we conclude that, under the unique set of facts in
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this case, such speculation is permissible. In fact, we
believe that such speculation does not surpass the level
of speculation permitted by the Berry Court when
finding that a reasonable juror could conclude that the
metal found in the roadway had fallen from a truck that
a witness saw in the vicinity of the accident approxi-
mately 15 minutes before the accident.
We affirm the denial of the motion for summary
disposition and remand this case to the trial court for
further proceedings consistent with this opinion. We do
not retain jurisdiction.
22 288 M
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MATTHEWS v DEPARTMENT OF NATURAL RESOURCES
Docket No. 288040. Submitted January 12, 2010, at Grand Rapids.
Decided April 6, 2010, at 9:05 a.m.
Glen J. and Carol J. Matthews and others brought an action in the
Mecosta Circuit Court against the Department of Natural Re-
sources, alleging that they have a prescriptive easement to access
their landlocked property through certain state-owned land and to
maintain a pathway of several hundred wooden pallets laid end-
to-end across the wetland area of the state land for such purposes.
The trial court, Scott Hill-Kennedy, J., held that plaintiffs proved
a prescriptive easement across the state-owned land and could
continue to use the pallet pathway without obtaining a statutorily
required permit to place fill material or maintain a use in a
wetland. Defendant appealed.
The Court of Appeals held:
1. Before March 1, 1988, claims of adverse possession or
prescriptive easement were allowed against the state. Effective
March 1, 1988, the Legislature amended the relevant statute, MCL
600.5821(1), to provide that a person may not acquire title to
state-owned property through adverse possession or prescriptive
easement. The statute, however, does not operate to extinguish
rights that vested before March 1, 1988.
2. Assuming all other elements have been established, one
gains title by adverse possession when the period of limitations
expires, not when an action regarding the title to the property is
brought.
3. A prescriptive easement results from open, notorious, ad-
verse, and continuous use of another’s property for 15 years and
requires elements similar to adverse possession, except exclusivity.
Plaintiffs must demonstrate an entitlement to a prescriptive
easement by clear and cogent evidence.
4. Defendant did not dispute that plaintiffs’ use was open,
notorious, and adverse, but disputed whether their use had been
continuous for a 15-year period. Because none of the plaintiffs had
any ownership interest in the landlocked property until at least
1984, they must show privity of estate by tacking on the possessory
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periods of their predecessors-in-interest to achieve the necessary
15-year period. Privity may be shown in one of two ways: including a
description of the disputed acreage in the deed or by an actual
transfer or conveyance of possession of the disputed acreage by parol
statements made at the time of conveyance. Plaintiffs’ deeds did not
convey an easement across the state land. The facts of this case show
that plaintiffs, who were well acquainted with their predecessors-in-
interest, must have understood that an easement was appurtenant to
the land. It was undoubtedly the original owners’ intent to transfer
their rights to the easement to plaintiffs. The parol transfer require-
ment can also be satisfied in the limited circumstances where the
tacking property owners are well acquainted with the predecessors-
in-interest and there is clear and cogent evidence that the
predecessors-in-interest undoubtedly intended to transfer their
rights to their successors-in-interest, for example, by showing that
the successors had visited and remained on the property and had
used it for many years before their acquisition of title. When, as in
this case, predecessors and successors are so intimately acquainted, it
would not be reasonably expected for the predecessors to expressly
articulate to the successors a right that all parties already believed
they possessed. The trial court correctly held that plaintiffs could tack
their prescriptive use with that of their predecessors-in-interest
because under the circumstances they were able to show privity
through their continual, prior use of the easement.
5. The trial court did not violate the provisions of the Natural
Resources and Environmental Protection Act, MCL 324.101 et
seq., or the separation of powers doctrine when it recognized that
plaintiffs had established the existence of a prescriptive easement,
however, the court was not permitted to disregard the statutory
requirements when determining the scope of the easement. Plain-
tiffs have a duty to follow the applicable laws and regulations
affecting the land over which their easement extends. The trial
court erred by judicially creating an additional exception to the
statutory permit requirements by holding that plaintiffs could be
exempted from the permit requirement as long as they took efforts
to minimize their intrusive activities. The trial court erred by
holding that plaintiffs were allowed to continue maintaining the
pallet pathway without obtaining a permit.
Affirmed in part and reversed in part.
1. E
ASEMENTS —
P
RESCRIPTIVE
E
ASEMENTS —
P
RIVITY OF
E
STATE —
T
ACKING
.
Privity of estate, for purposes of tacking on the possessory periods of
predecessors-in-interest and successors-in-interest to determine if
the period of limitations for a prescriptive easement has been
24 288 M
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satisfied, may be shown in one of two ways: by including a
description of the disputed acreage in the deed or by an actual
transfer or conveyance of possession of the disputed acreage by
parol statements made at the time of the conveyance; the parol
transfer requirement can also be satisfied in the limited circum-
stances where the successors-in-interest are well acquainted with
the predecessors-in-interest and there is clear and cogent evidence
that the predecessors-in-interest undoubtedly intended to transfer
their rights to the successors-in-interest, for example, by showing
that the successors-in-interest had visited and remained on the
property and had used it for many years before acquiring title to
the property and, therefore, it would not be reasonably expected
for the predecessors to expressly articulate to the successors a
right that all parties already believed they possessed.
2. E
ASEMENTS —
P
RESCRIPTIVE
E
ASEMENTS —
S
TATUTES —
R
EGULATIONS
.
A property owner with a prescriptive easement has a duty to follow
any applicable laws and regulations affecting the land over which
the easement extends.
Lynch, Gallagher, Lynch, Martineau & Hackett,
P.L.L.C. (by Mary Ann J. O’Neil and Jennifer M. Gallo-
way), for plaintiffs.
Michael A. Cox, Attorney General, B. Eric Restuccia,
Solicitor General, and Marie Shamraj and Daniel P.
Bock, Assistant Attorneys General, for defendant.
Before: K. F. K
ELLY
,P.J., and H
OEKSTRA
and W
HITBECK
,
JJ.
P
ER
C
URIAM.
This case arises out of the alleged right of
certain landlocked property owners to maintain and use
a crude pathway (several hundred wooden pallets laid
end-to-end) across a state-owned and -regulated wet-
land. Defendant, Department of Natural Resources
1
(the Department), appeals as of right the trial court’s
1
The Department of Natural Resources was abolished and replaced by
the Department of Natural Resources and Environment, MCL
324.99919, effective January 17, 2010.
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order entering judgment in favor of plaintiffs, Glen Mat-
thews, Carol Matthews, Kevin Matthews, Stephanie Mat-
thews, Martin Schaeffer, and Ann Schaeffer
2
(collectively,
the landlocked property owners). The Department argues
that the trial court erred by finding that privity existed
between the landlocked property owners and their
predecessors-in-interest when there was no mention of an
easement in the deeds and it was undisputed that the
issue of an easement was never discussed with the previ-
ous owners. The Department also contends that the trial
court erred by allowing the landlocked property owners to
place fill material in a regulated wetland without obtain-
ing a permit.
3
The landlocked property owners respond
that the trial court properly found that they had estab-
lished privity between them and their predecessors-in-
interest on the basis of their prior use of the landlocked
parcel. The landlocked property owners also contend that
the trial court properly balanced common-law provisions
against statutory provisions and held that the various
rights sought to be protected by those laws weighed in
favor of the landlocked property owners. We affirm in part
and reverse in part.
I. BASIC FACTS AND PROCEDURAL HISTORY
In 1969, Arthur Funnell and his wife, Edna Funnell;
2
We note that the spelling of the surname “Schaeffer” varies in the
record. However, for consistency, we will use this spelling throughout this
opinion.
3
Although the Department is responsible for administration and
control of state-owned land, MCL 324.503(1), at the time of the lower
court proceedings in this action, the Department of Environmental
Quality was vested with authority for regulating uses of wetlands, MCL
324.30301 et seq. The Department of Environmental Quality was abol-
ished and replaced by the Department of Natural Resources and Envi-
ronment, MCL 324.99919, effective January 17, 2010, and the powers
and duties of the former department are now assigned to the Department
of Natural Resources and Environment.
26 288 M
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their son, Melvin Funnell, and his wife, Betty Funnell;
and their daughter, Joyce Schaeffer, and her husband,
Robert Schaeffer (collectively, the Funnells), purchased
the landlocked parcel, which consisted of 40 acres of
property in Sheridan Township, Mecosta County, Michi-
gan. Each of the three couples received an undivided
1
/
3
interest. The prior owners were Albert and Delila Ander-
son, who purchased the landlocked parcel from the state
of Michigan in 1937. Arthur Funnell intended to use the
landlocked parcel as a seasonal hunting camp. The land-
locked parcel has no direct access to any public road. To
the north and west, it is surrounded by state-owned
property. And to the east and south, it is surrounded by
private property. Plaintiff Glen Matthews testified at trial
that his father-in-law, Arthur Funnell, had specifically
sought out an inexpensive parcel of land and that he
purchased the landlocked parcel with full knowledge that
it was landlocked. Glen Matthews also testified that,
although the family was not specifically looking for a
landlocked parcel, landlocked land is less expensive than
properties with road access.
The state-owned land that surrounds the landlocked
parcel on two sides is part of the Martiny Lakes State
Game Area. The nearest maintained road is Madison
Road, located approximately one mile to the north of
the landlocked parcel. There is an old two-track logging
road that extends from Madison Road through the state
land. This two-track road ends approximately 0.22
miles short of the landlocked parcel.
Over time, the Funnells transferred their ownership
interests to the landlocked property owners. The land-
locked property owners are all members of Arthur
Funnell’s family, either by blood or affinity. In February
1984, Arthur Funnell’s widow, Edna Funnell, deeded
her
1
/
3
interest to their daughter Carol Matthews and
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her husband Glen Matthews. In May 1996, Melvin
Funnell’s widow, Betty Funnell, deeded her
1
/
3
interest
to her nephew, Martin Schaeffer, and his wife, Ann
Schaeffer. And in January 1998, Robert Schaeffer’s
widow, Joyce Schaeffer, deeded her
1
/
3
interest to her
nephew, Kevin Matthews, and his wife, Stephanie Mat-
thews.
The landlocked property owners and their predeces-
sors (the Funnells) visited the property during hunting
season in the late 1960s, accessing it by foot. Initially,
they would walk across an adjacent parcel of privately
owned land. However, shortly thereafter, the owner of
that private land asked them to stop crossing that land,
so the Funnells began parking at the end of a trail just
off Madison Road, and would then walk the rest of the
way across the state-owned land. Around 1975, they
were able to drive a little further off Madison Road
because the two-track road had been created for logging
purposes on the state land. They were unable to drive
further than the end of the two-track road because the
ground was too wet and swampy. In the early 1970s,
they began using snowmobiles to traverse the swamp
and then later used all-terrain vehicles.
From the time that the Funnells first acquired the
landlocked parcel, they would place some dead wood
from the surrounding forest in particularly wet areas of
the state-owned land to help them traverse it. However,
in 1984 or 1985, the landlocked property owners began
to place wooden pallets on the ground in the swamp
area to make it more passable. This resulted in the
construction of a pathway of pallets that stretches 0.22
miles (or 1,200 feet), from the end of the two-track road
to the landlocked parcel.
The landlocked property owners testified that in
addition to using the land as a hunting camp, they used
28 288 M
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the land and the cabin thereon essentially as a family
retreat, with couples spending quiet weekends there
together or with numerous family members gathering
to celebrate holidays together.
Glen Matthews testified that there was no discussion
about access or an easement at the time the property
was conveyed to him. Carol Matthews explained that
there was no need for a specific discussion regarding
access because Glen and Carol Matthews took it for
granted that the two-track road and the pallet path
were the sole means to get to the property. Carol
Matthews also explained that the transfer of interest
from the Funnells was just a formality because the
landlocked property owners “were always involved.”
Martin and Ann Schaeffer similarly testified that there
was no discussion about access or an easement at the
time the property was conveyed to them because they
had never accessed the property in any manner other
than by going across the two-track road and the pallet
path. Kevin Matthews, however, testified he and his
uncles, Robert Schaeffer and Melvin Funnell, did have
specific discussions about how to access the property
before he took ownership. Kevin explained that Robert
and Melvin told him that they had “pretty much ex-
hausted any other alternatives on how to get in and
out” and that the pallet path was the best route.
The Department’s wildlife habitat biologist, Jeffrey
Greene, was assigned to Mecosta County in 1998. In the
course of his duties, he noted that there was evidence of
illegal activities on the state land between Madison
Road and the landlocked parcel. He noticed dumping of
trash, piles of new pallets at the end of the two-track
road, and old pallets placed in the swamp south of the
end of the two-track road. (Greene, however, did not
suspect the landlocked property owners of dumping the
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trash, and the Department concedes that there is no
reason to believe that they were responsible.) However,
Greene testified that pallets harm the wetland by
breaking down wetland vegetation and increasing soil
erosion and sedimentation. Greene also testified that
the pathway of pallets presented not only harm to the
wetland, but also a danger to hunters on the state-
owned land. According to Greene, the pallets were
slippery, with nails protruding from them; thus, he was
concerned about the safety of hunters who may walk on
them.
Additionally, Greene noted that the illegal use of
motorized vehicles
4
has resulted in harm to the wetland
and was the very reason why the trail was becoming
more difficult to traverse. The motorized vehicle usage
had torn up the wetland and created holes, which
vehicles could then sink into and get stuck. Because of
these activities and the risks of harm to the hunters,
wetland, and wildlife, Greene spoke with his supervisor
about closing the two-track road. On August 21, 2003, a
gate was placed off Madison Road, cutting off vehicular
access to the two-track road.
On August 25, 2003, Greene met with three of the
landlocked property owners. Greene offered to issue a
key to the gate and a use permit, which would allow the
landlocked property owners to open the gate and access
the two-track road for a period of one year. But the
landlocked property owners did not respond. Greene
also requested that the landlocked property owners
assist him in removing the pallets and proposed that
4
It is illegal to use an off-road recreation vehicle (including a snowmo-
bile or all-terrain vehicle) in a state game area except on roads, trails, or
areas designated for such purpose. MCL 324.81133(e). Additionally, it is
illegal to operate an off-road recreation vehicle in a wetland. MCL
324.81133(o). It is not illegal to travel by foot through a state game area.
30 288 M
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they could replace the pallets with proper walkways
over the wetter spots of the trail. But the landlocked
property owners declined this suggestion, instead in-
quiring about the possibility of obtaining an easement
across the state-owned land from the Department.
Greene provided them with the Department’s easement
application, but the landlocked property owners never
applied because they heard that it was unlikely that the
Department would grant their request. The landlocked
property owners filed this action, alleging that they had
a prescriptive easement to access their landlocked par-
cel through the state-owned land and to maintain the
pathway of pallets through the state-owned wetland
area. The landlocked property owners requested a judg-
ment allowing them ingress and egress to the land-
locked parcel by vehicle, all-terrain vehicle, and snow-
mobile. (The landlocked property owners also alleged
an implied easement, but that issue has not been raised
again on appeal and we will not discuss it further).
On March 13, 2008, at the end of a three-day bench
trial, the trial court ruled from the bench that the
landlocked property owners had proven a prescriptive
easement across the state-owned land to access their
property. The trial court held that the landlocked prop-
erty owners were required to demonstrate that they
used state-owned land to access their parcel in a way
that was open, notorious, and hostile for a period of 15
years before March 1, 1998 (the date on which a statute
barred prescriptive easement actions against the state.)
The trial court found that a parol grant of an easement
did occur because the landlocked property owners and
their predecessors had continually used the pathway
and had always assumed that they would be able to
cross the state-owned land to access their property.
According to the trial court,
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the behavior of the many parties having participated in
going back and forth on this property, and clearly under-
standing that it was accessed by this easement, leaves no
doubt that there was privity, leaves no doubt that there was
parol indications or information known or made known to
these parties at the time the property was conveyed from
one family member or a group of family members to
another family member or a group of family members. I am
not saying there were actual words, but I think the
activities of using the property for such a long time left no
doubt as to what was understood to be part of the convey-
ance.
In April 2008, the trial court issued a posttrial
written judgment. The trial court confirmed its holding
that the landlocked property owners had established a
prescriptive easement. However, the trial court re-
quested that the parties submit posttrial briefs on the
issue of the scope of the prescriptive easement.
On September 11, 2008, after receiving the posttrial
briefs and conducting a telephone conference, the trial
court issued a written opinion and order. The trial court
first cited caselaw indicating that easement holders are
generally allowed to do such acts as are necessary to
make effective use and enjoyment of the easement and
that the scope of the easement is largely determined by
what is reasonable under the circumstances. The trial
court then turned to the provisions of the Natural
Resources and Environmental Protection Act
(NREPA), which prohibits people from placing fill ma-
terial in the wetlands.
5
The trial court acknowledged
that “[a]llowing Plaintiffs to continue to use the ease-
ment as they have historically done would appear to
violate the above provisions of [the NREPA]” but then
qualified that statement by stating that the trial court
could “excuse[]” the violation “by [its] decision that a
5
MCL 324.30304(a).
32 288 M
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prescriptive easement has been established.” The trial
court went on to note that the NREPA did allow for
certain easement exceptions for construction of various
types of roads and pipelines, and then stated that
“[w]hile Plaintiffs’ easement does not fit into one of
these categories, it is apparent that the Legislature
recognized that certain other rights would be balanced
against, and in some cases take priority over the pro-
tection of wetland areas through elimination of any
possibly intrusive activities.” The trial court then ex-
plained its understanding that the landlocked property
owners’
use of the private property would be materially curtailed if
they are not allowed to place something on the path to
allow motorized vehicles to travel to and from their private
property. Walking or skiing would be the only means of
ingress and egress at times when the ground and/or water
are not frozen. Based on age and physical limitations, this
limits the ability of some of the plaintiffs to visit the
property. It also limits hauling of supplies and other items
during deer hunting season and again limits participation
in this activity by some of the plaintiffs.
The trial court also acknowledged that the state had
significant interests in protecting the integrity and
value of the wetlands. The trial court then went on to
note the difficulty in attempting to strike a balance
between the parties’ competing interests: “Both inter-
ests are significant, and it is well recognized that they
are to be protected. So, what is the balance to be
struck?”
The trial court “reject[ed]” the Department’s recom-
mended solutions:
Requiring permitting likely means that numerous steps
must be taken, which likely would include the installation
of a boardwalk, engineered floating pads, or a similar
structure by Plaintiffs over the full .22-mile path. Based on
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the limited relevant testimony at trial, a cost of $40,000 or
more was suggested for installation of a boardwalk. The
Court finds that requiring a boardwalk or engineered
floating mat over the full .22 miles [sic] path is unreason-
able. It would likely be prohibitively expensive for plaintiffs
and also likely would in effect deny Plaintiffs the reason-
able enjoyment of their property rights.
The trial court then continued:
Moreover, adopting Defendant’s proposed solution
would require Plaintiffs to seek permits and approval for
their uses from Defendant, effectively placing the determi-
nation of the scope of the easement (or the existence of the
easement at all) in the hands of the Defendant and not the
Court. Effectively, this would mean the Plaintiffs had
achieved nothing in establishing the existence of the ease-
ment. Despite the possibility that the Plaintiffs might be
able to comply with the permitting process and still enjoy
the benefits of their easement, the likely outcome of the
process is speculative on this record. Plaintiffs likely would
have no greater rights than the general public with respect
to their easement.
Although noting the potential harm to the wetland
ecosystem by continued use of the pallets, the trial
court nevertheless ruled that the landlocked property
owners could continue to maintain and use their make-
shift pallet pathway to traverse the regulated wetland
without applying for or obtaining a statutorily required
permit from the Department of Environmental Quality.
The Department now appeals the trial court’s rulings
that the landlocked property owners demonstrated the
requisite privity to allow them to tack their periods of
prescriptive use with those of the predecessors-in-
interest and that the landlocked property owners could
place fill material and maintain a use in a wetland
without obtaining a permit from the Department of
Environmental Quality.
34 288 M
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II. TACKING AND PRIVITY
A. STANDARD OF REVIEW
The Department argues that the trial court erred by
finding that privity exists when there was no mention of
an easement in the deeds and it was undisputed that
the issue of an easement was never discussed with the
previous owners at the time of the conveyances.
Actions to quiet title are equitable, and we review the
trial court’s holdings de novo.
6
However, we review the
trial court’s findings of fact for clear error.
7
B. ANALYSIS
Generally, the period of limitations for the recovery
or possession of land is 15 years.
8
However, it is well
settled that “[t]he statute of limitations for recovering
real property does not run against the state or state
agencies,...unless there is legislation to the con-
trary.”
9
Before March 1, 1988, legislation to the con-
trary did exist that allowed claims of adverse possession
or prescriptive easement against the state.
10
Effective
March 1, 1988, however, the Legislature, in 1988 PA 35,
6
Gorte v Dep’t of Transportation, 202 Mich App 161, 165; 507 NW2d
797 (1993).
7
Higgins Lake Prop Owners Ass’n v Gerrish Twp, 255 Mich App 83,
117; 662 NW2d 387 (2003).
8
MCL 600.5801(4).
9
Gorte, 202 Mich App at 165, citing Caywood v Dep’t of Natural
Resources, 71 Mich App 322; 248 NW2d 253 (1976).
10
Gorte, 202 Mich App at 165. Before March 1, 1988, MCL 600.5821(1)
provided:
No action for the recovery of any land shall be commenced by
or on behalf of the people of this state unless it is commenced
within 15 years after the right or title of the people of this state in
the land first accrued or within 15 years after the people of this
state or those from or through whom they claim have been seised
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amended MCL 600.5821(1) and reinstated the common-
law rule that one cannot acquire title to state-owned
property through adverse possession or prescriptive
easement.
11
MCL 600.5821(1) now provides:
Actions for the recovery of any land where the state is a
party are not subject to the periods of limitations, or laches.
However, a person who could have asserted claim to title by
adverse possession for more than 15 years is entitled to
seek any other equitable relief in an action to determine
title to the land.
Interpreting the amended MCL 600.5821(1), this
Court has held that, because the Legislature removed
the prior language that permitted the running of the
limitations period, the period of limitations for adverse
possession can no longer run against the state.
12
This
Court clarified, though, that Ҥ 5821, as amended, can-
not be applied to plaintiffs if it would abrogate or impair
a vested right.”
13
Therefore, “[t]he statute does not
operate to extinguish rights that have vested before the
effective date of the statute, March 1, 1988.”
14
“Because the statute cannot be applied if it would
abrogate or impair a vested right,” it is necessary to
determine when the plaintiffs’ claim of title to the
property vested.
15
The party claiming a prescriptive
easement is vested with title to the land upon the
expiration of the period of limitations, “and this title is
good against the former owner and against third par-
or possessed of the premises, or have received the rents and
profits, or some part of the rents and profits, of the premises.
11
Gorte, 202 Mich App at 166.
12
Id. at 167.
13
Id.
14
Higgins Lake, 255 Mich App at 119.
15
Gorte, 202 Mich App at 168.
36 288 M
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23 [Apr
ties.”
16
In other words, “the expiration of the period of
limitation terminates the title of those who slept on
their rights and vests title in the party claiming adverse
possession. Thus, assuming all other elements have
been established, one gains title by adverse possession
when the period of limitation expires, not when an
action regarding the title to the property is brought.”
17
“An easement represents the right to use another’s
land for a specified purpose.”
18
In other words, “ ‘[a]n
easement does not displace the general possession of the
land by its owner, but merely grants the holder of the
easement qualified possession only to the extent neces-
sary for enjoyment of the rights conferred by the
easement.’ ”
19
A prescriptive easement results from
open, notorious, adverse, and continuous use of anoth-
er’s property for a period of 15 years.
20
A prescriptive
easement requires elements similar to adverse posses-
sion, except exclusivity.
21
The plaintiff bears the burden
to demonstrate entitlement to a prescriptive easement
by clear and cogent evidence.
22
The Department does not dispute that the landlocked
property owners have met the requirements of showing
that their use was open, notorious, and adverse. Rather,
the Department contends that the landlocked property
owners have failed to show continuous use of the
property for a period of 15 years.
16
Id.
17
Id. at 168-169 (citation omitted).
18
Plymouth Canton Community Crier, Inc v Prose, 242 Mich App 676,
678; 619 NW2d 725 (2000).
19
Id. at 679 n 2, quoting Schadewald v Brulé, 225 Mich App 26, 35; 570
NW2d 788 (1997) (alteration added).
20
Higgins Lake, 255 Mich App at 118.
21
Id.
22
Killips v Mannisto, 244 Mich App 256, 260; 624 NW2d 224 (2001).
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As explained above, in order to claim a prescriptive
easement against the state, the landlocked property
owners have to show that they possessed the easement
for a full 15 years before March 1, 1988. In other words,
they have to show that they began to use the claimed
easement on March 1, 1973, or before. However, none of
the current landlocked property owners had any own-
ership interest in the landlocked parcel until at least
1984. Therefore, in order for their claim to survive, the
landlocked property owners have to show privity of
estate by “tacking” on the possessory periods of their
predecessors-in-interest to achieve the necessary 15-
year period.
23
If they are able to show such “tacking,”
then the Department concedes that the landlocked
property owners will satisfy the 15-year period because
it is undisputed that the landlocked property owners’
immediate predecessors-in-interest bought the prop-
erty in 1969.
“[P]rivity may be shown in one of two ways, by (1)
including a description of the disputed acreage in the
deed, or (2) an actual transfer or conveyance of posses-
sion of the disputed acreage by parol statements made
at the time of conveyance.”
24
There is no dispute that none of the landlocked
property owners’ deeds conveyed an easement across
the state-owned land. And the Department contends
that the landlocked property owners cannot show trans-
fer by parol evidence because all the landlocked prop-
erty owners admitted that no discussions took place
regarding an easement or the method of accessing the
landlocked parcel at the time of their respective convey-
23
Siegel v Renkiewicz Estate, 373 Mich 421, 425; 129 NW2d 876 (1964);
Killips, 244 Mich App at 259.
24
Killips, 244 Mich App at 259 (citation omitted); see also Siegel, 373
Mich at 425.
38 288 M
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ances. The landlocked property owners respond, how-
ever, pointing out that they had been visiting and using
the property since the Funnells first purchased it in
1969 and that it was always understood that the only
means of access to the landlocked parcel was to travel
across the state land.
The Department responds to the landlocked property
owners’ argument, pointing out that to show privity
there must be a “parol,” or oral,
25
statement made at
the time of conveyance. The Department contends then
that the landlocked property owners’ mere use of the
same pathway was insufficient to show privity. How-
ever, the landlocked property owners counter that con-
tention, relying on caselaw in which the Michigan
Supreme Court held that past use of a property was
sufficient to meet the parol statement requirement.
In von Meding v Strahl,
26
the plaintiffs sought to
quiet title in a 20-foot-wide lane leading to Lake Michi-
gan and to restrain the defendants, neighboring land-
owners, from using the lane. On appeal, the Court held
that some of the defendants, the Flanagans, had estab-
lished an easement by prescription and tacking.
27
At the
time the plaintiffs brought their suit, the Flanagans
had owned their property from 1928 to 1941.
28
Because
they had only owned their property for 13 years, the
Court stated that they could sustain their prescriptive
interest only if they could tack their ownership to that
of the prior owner, Mrs. Dillenbeck.
29
After noting the
parol transfer requirement, the Court held that the
25
Black’s Law Dictionary (7th ed).
26
von Meding v Strahl, 319 Mich 598, 602; 30 NW2d 363 (1948).
27
Id. at 614-615.
28
Id. at 614.
29
Id.
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Flanagans could tack their use to that of their prede-
cessor based on their prior use of the lane.
30
Specifically,
the Court explained:
We are satisfied from the record that the Flanagans,
owners of parcel 11, were well acquainted with the Dillen-
becks from whom they acquired the title, that they had
visited and remained on the property and had used the strip
for many years prior to their acquisition of the title to the
property. The easement was so jointly used by the neigh-
bors, that it was considered as appurtenant to all of the
lands. The conclusion is inescapable that in 1928 when the
Flanagans purchased the land, the parties must have
understood that an easement was appurtenant to the land,
parcel 11. Undoubtedly it was the intention of Dillenbeck to
transfer her rights to the easement to the Flanagans. The
record leads us to the conclusion that there was a parol
transfer by Mrs. Dillenbeck to the Flanagans of her rights
in the easement sufficient to permit the Flanagans to tack
the prior adverse user of Mrs. Dillenbeck to their own
adverse user to make up the prescriptive period.
[
31
]
The Department attempts to distinguish von Meding
from this present case by noting that the record in von
Meding was “meager and complicated,”
32
whereas the
record here is “very clear.” The Department also argues
that reading von Meding to allow for privity absent
evidence of an express parol grant would contravene the
well-established rule requiring that parol statements be
made at the time of conveyance. According to the
Department, courts should not be permitted to simply
look at the totality of circumstances and surmise that a
transfer was intended.
However, we conclude that von Meding is analogous
and supports a ruling in the landlocked property own-
30
Id. at 614-615.
31
Id. (emphasis added).
32
Id. at 602.
40 288 M
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ers’ favor. It is important to clarify that this is not a case
of an arms-length, third-party transfer. In this case, the
landlocked property owners all testified that they and
their family members/predecessors-in-interest had “al-
ways” used the easement. They collectively testified
that they had never used any other way to access their
landlocked parcel and, indeed, did not know of any
other viable means of access. This is substantially
similar to the facts in von Meding in that, here, the
landlocked property owners were well acquainted with
the Funnells and had visited and remained on the
property and had used the pathway for many years
before their acquisition of the title to the property.
33
Thus, as in von Meding, “[t]he conclusion is inescap-
able” that in 1984 when the first of the landlocked
property owners began to purchase the land, the parties
must have understood that an easement was appurte-
nant to the land.
34
As in von Meding, undoubtedly it was
the Funnells’ intention to transfer their rights to the
easement to the landlocked property owners.
35
And, while we appreciate the Department’s concerns
about interpreting too broadly, or even effectively con-
travening, the parol statement requirement, a ruling in
favor of the landlocked property owners under the
circumstances of this case will not operate to deterio-
rate the parol statement rule. We are following the von
Meding precedent, which created a reasonable exemp-
tion to the common-law rule requiring parol state-
ments, by holding that the parol transfer requirement
can be satisfied in the limited circumstances where the
tacking property owners are “well acquainted” and
33
See id. at 614-615.
34
See id. at 614.
35
See id. at 614-615.
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there is clear and cogent evidence
36
that the
predecessors-in-interest “[u]ndoubtedly” intended to
transfer their rights to their successors-in-interest, for
example, by showing that the successors had “visited
and remained on the property and had used [it] for
many years prior to their acquisition of the title to the
property.”
37
Indeed, to hold otherwise would needlessly
impose an artificial requirement on parties in similar
circumstances and would possibly work to deny parties
their otherwise properly vested rights. Where predeces-
sors and successors are so intimately acquainted as
under the facts here, it would not be reasonably ex-
pected for the predecessors to expressly articulate to the
successors a right that all parties already believed they
possessed.
The Department additionally argues that the trial
court’s finding of fact that the landlocked property
owners always believed they had an easement was
clearly erroneous in light of their testimony that they
asked Jeffrey Greene about the possibility of acquiring
an easement over the land. The Department posits that
the landlocked property owners “would not have asked
about acquiring an easement if...they already be-
lieved they owned one.” This argument is without
merit. As stated previously, a party claiming a prescrip-
tive easement is vested with title to the land upon the
expiration of the period of limitations.
38
Therefore, the
fact that the landlocked property owners began to
question their right to cross the state land after the
Department began blocking their access in 2003 does
not negate that their right was already vested.
36
Killips, 244 Mich App at 260.
37
von Meding, 319 Mich at 614-615.
38
Gorte, 202 Mich App at 168.
42 288 M
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Accordingly, we conclude that the trial court cor-
rectly held that the landlocked property owners could
tack their prescriptive use of the state-owned land with
that of their predecessors-in-interest because under the
circumstances they were able to show privity through
their continual, prior use of the easement.
III. STATUTORY PERMIT REQUIREMENTS
A. STANDARD OF REVIEW
The Department argues that a trial court may not
exempt parties from statutory permit requirements
simply on the basis of its finding that the parties hold a
common-law prescriptive easement across wetlands.
Actions to quiet title are equitable, and we review the
trial court’s holdings de novo.
39
The proper interpreta-
tion of a statute is also a question of law subject to our
review de novo.
40
We review the trial court’s findings of
fact for clear error.
41
B. ANALYSIS
The Department argues that the landlocked property
owners have violated the NREPA both by placing “fill
material”—the wooded pallets—in a wetland, and by
constructing and maintaining a “use or development”—
the pathway of pallets—in a wetland, without obtaining a
permit. Specifically, § 30304 of the NREPA provides in
pertinent part:
Except as otherwise provided in this part or by a permit
issued by the department under sections 30306 to 30314 and
pursuant to part 13, a person shall not do any of the following:
39
Id. at 165.
40
Putkamer v Transamerica Ins Corp of America, 454 Mich 626, 631;
563 NW2d 683 (1997).
41
Higgins Lake, 255 Mich App at 117.
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(a) Deposit or permit the placing of fill material in a
wetland.
***
(c) Construct, operate, or maintain any use or develop-
ment in a wetland.
[
42
]
The Department further contends that the trial court
had no authority to excuse the landlocked property
owners from adhering to the statutory permit require-
ment. The landlocked property owners respond, argu-
ing that the trial court was entitled to recognize an
exception to the permit requirement on the basis of its
perception of the desirability of “balancing” the statute
against other “rights” not enumerated in the statute.
We first conclude that the trial court did not violate
the NREPA or the separation of powers doctrine when
it recognized that the landlocked property owners had
established the existence of a prescriptive easement.
The Michigan Supreme Court has made clear that the
NREPA does not grant the Department exclusive juris-
diction to manage the land within its control.
43
More-
over, this Court has stated that the NREPA does not
expressly or impliedly supersede common-law prin-
ciples regarding implied easements.
44
However, we do
not agree that the trial court was permitted to disregard
the statutory requirements when determining the scope
of the easement.
Here, the trial court recognized that, under common
law, parties that have shown the existence of a prescrip-
42
MCL 324.30304.
43
Burt Twp v Dep’t of Natural Resources, 459 Mich 659, 669-670; 593
NW2d 534 (1999).
44
Schumacher v Dep’t of Natural Resources, 256 Mich App 103, 109 n
3; 663 NW2d 921 (2003).
44 288 M
ICH
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tive easement are “allowed to do such acts as are
necessary to make effective the enjoyment of the ease-
ment, and the scope of this privilege is determined
largely by what is reasonable under the circum-
stances.”
45
The trial court then concluded that it was
unreasonable to require the landlocked property own-
ers to obtain a permit. We disagree.
As the Department points out, neither the landlocked
property owners nor the trial court offered any evidence
or authority to “support the proposition that a right to
prescriptive use of another’s property may also convey
the right to violate a statute.” In other words, the fact
that the landlocked property owners may have a right
to use the easement at issue does not negate their duty
to follow the applicable laws and regulations affecting
the land over which their easement extends. For ex-
ample, mere establishment of a right to use of an
easement does not permit the easement holder to
disregard local zoning ordinances.
46
The NREPA sets forth a clear mandate that, absent
qualification under one of several enumerated excep-
tions,
47
a person must obtain a permit before placing fill
material or maintaining a use in a wetland.
48
And
although recognizing that the NREPA expressly pro-
vided specific enumerated exceptions, the trial court
nevertheless took it upon itself to recognize an addi-
tional exception for the landlocked property owners
under the circumstances of this case. The trial court
45
Killips, 244 Mich App at 261.
46
See Bevan v Brandon Twp, 438 Mich 385, 400; 475 NW2d 37 (1991).
See also Burt Twp, 459 Mich at 661-662 (holding that even the Depart-
ment of Natural Resources itself is subject to comply with the local
zoning ordinances).
47
MCL 324.30305.
48
MCL 324.30304.
2010] M
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reasoned that the enumerated exceptions were created
to recognize “that certain other rights would be bal-
anced against, and in some cases take priority over the
protection of wetland areas through elimination of any
possibly intrusive activities.” Therefore, the trial court
found that the landlocked property owners could like-
wise be exempted from the permit requirement as long
as they took efforts to minimize their intrusive activi-
ties. In so holding, the trial court erred.
As the Department points out, it is a well-established
rule of statutory construction that when the Legisla-
ture enumerates a list of conditions or exceptions in a
statute, “[t]heir enumeration eliminates the possibility
of their being other exceptions under the legal maxim
expressio unius est exclusio alterius.”
49
As the Depart-
ment explains, the trial court therefore erred in holding
“that the exact opposite is true and that, if the Legis-
lature enumerates a list of statutory exceptions, it-
. . . must intend to open the door to any other excep-
tions that a court may deem reasonable.” The trial
court was not entitled to engage in its own permitting
process contrary to the Legislature’s express intent and
judicially create an additional exception to the permit
requirement.
Additionally, we disagree with the trial court that it
would be unreasonable to require the landlocked prop-
erty owners to apply for a proper permit. The trial
court’s concerns about the additional burdens that may
be placed on the landlocked property owners by the
permitting process are speculative. And it is the prov-
ince of the Department,
50
not the court, to assess the
49
Hoerstman Gen Contracting, Inc v Hahn, 474 Mich 66, 74; 711 NW2d
340 (2006). See also Black’s Law Dictionary (7th ed), p 1635 (“The
expression of one thing is the exclusion of another.”).
50
MCL 324.30301(d); MCL 324.30304.
46 288 M
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circumstances and devise a plan to allow the landlocked
property owners the most reasonable use of their land
while still protecting the state’s interest in preserving
and protecting the character and integrity of the wet-
lands.
51
Accordingly, we conclude that the trial court
erred by holding that the landlocked property owners
were allowed to continue maintaining their pallet path-
way without obtaining a proper permit.
We affirm the trial court’s decision that the land-
locked property owners established the existence of a
prescriptive easement over state-owned land, but we
reverse the trial court’s decision that the landlocked
property owners need not follow the statutory require-
ment of obtaining a permit to place fill material in a
wetland area.
51
On this point, we acknowledge the trial court’s concerns that
installation of a boardwalk system over the full 0.22-mile path might be
cost prohibitive. Thus, we would caution the Department to avoid
imposing permit requirements that would rise to the level of effectively
denying the landlocked property owners the reasonable enjoyment of
their property rights.
2010] M
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ONE’S TRAVEL LTD v DEPARTMENT OF TREASURY
DATA TECH SERVICES, INC v DEPARTMENT OF TREASURY
Docket Nos. 287254 and 287255. Submitted November 9, 2009, at Lansing.
Decided April 6, 2010, at 9:10 a.m.
Plaintiffs, ONE’s Travel Ltd. and Data Tech Services, Inc., both
for-profit Michigan corporations subject to taxation under the
Single Business Tax Act (SBTA), MCL 208.1 et seq., repealed
effective December 31, 2007, and both subsidiaries of Credit Union
ONE, a state chartered credit union created pursuant to the Credit
Union Act, MCL 490.101 et seq., and which is exempt from
taxation under the SBTA, claimed small business tax credits under
MCL 208.36 for certain tax years. The Department of Treasury
denied the credits. ONE’s Travel and Data Tech challenged the tax
assessments made by the department in the Court of Claims,
which consolidated the matters. Plaintiffs moved for summary
disposition, arguing that because Credit Union ONE is not a
taxpayer under the SBTA and is totally exempt from the single
business tax, its tax exempt activities are totally unrelated to
plaintiffs’ taxable activities and cannot be consolidated with
plaintiffs’ gross receipts for purposes of determining plaintiffs’
eligibility for the small business credit. The department moved for
summary disposition arguing that it is irrelevant that Credit
Union ONE is exempt from taxation under the SBTA and claiming
that plaintiffs and Credit Union ONE formed an “affiliated group”
as defined under the act and, therefore, plaintiffs were required to
consolidate their business activities with those of Credit Union
ONE for purposes of determining plaintiffs’ eligibility for the
small business credit. The Court of Claims, Joyce A. Draganchuk,
J., denied plaintiffs’ motion and granted summary disposition in
favor of the department. ONE’s Travel appealed (Docket No.
287254) and Data Tech appealed (Docket No. 287255). The Court
of Appeals consolidated the appeals.
The Court of Appeals held:
1. Entities that are part of a corporate structure in which the
parent is a state chartered credit union exempt from taxation
under the SBTA must, for purposes of determining their eligibility
for the small business tax credit, consolidate their gross receipts
48 288 M
ICH
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48 [Apr
with the business activities of other members of their affiliated
group, including the parent credit union. Only when the consoli-
dated number meets the threshold requirements of MCL 208.36(2)
for the small business tax credit will the individual entities qualify
for the credit.
2. If an entity is part of an affiliated group, a controlled group
of corporations, or an entity under common control, it must
aggregate the business activities of all the other entities of the
group to determine eligibility for the small business tax credit.
3. A “United States corporation,” for the limited purpose of
determining whether an “affiliated group” exists under MCL
208.3(1), is an association, joint-stock company, or an insurance
company that is created or organized in or under the laws of the
United States or under the laws of a state. The same definition
applies in determining whether an entity is required, under MCL
208.36(7), to consolidate its business activities with other entities
in determining eligibility for the small business tax credit.
4. Credit Union ONE is a “United States corporation” within
the meaning of § 3(1), because it is an association created or
organized under Michigan law. Credit Union ONE and plaintiffs
are an affiliated group, as defined in § 3(1), and as incorporated by
§ 36(7), thus plaintiffs were required to consolidate the business
activity of Credit Union ONE with their gross receipts.
5. Section 36(7) requires a member of an affiliated group to
consolidate its “business activities” with that of the other mem-
bers in the group in order to take the credit allowed by § 36(2).
Section 36(2) premises an entity’s eligibility for the tax credit, in
part, on whether its “gross receipts” exceed a certain amount for
the tax year at issue. The two provisions require that the “business
activities” of the group be consolidated with the “business activ-
ity” of the taxpayer entity claiming the credit, and that this
consolidated number, or the gross receipts, not exceed the thresh-
old amounts under § 36(2). Therefore, in these cases, it is only
relevant whether a nontaxpayer entity that is part of an affiliated
group, here Credit Union ONE, has “business activity” within the
meaning of the SBTA. It is that business activity that must be
consolidated with the business activity of plaintiffs.
6. The definition of “business activity” in MCL 208.3(2) does
not require an entity to be a taxpayer in order to have business
activity. “Business activity” is, under § 3(2), a transfer of property
or the performance of services within this state with the object of
gain, benefit, or advantage to the taxpayer or to others. The term
“others” encompasses all those “others” than taxpayers. Credit
Union ONE has business activity, for purposes of the SBTA,
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because it transfers property and performs services within the
state to the benefit of others. Although Credit Union ONE has no
single business tax liability because it is tax exempt, it still may
have business activity for purposes of determining whether its
subsidiaries qualify for a tax credit under § 36(2) and § 36(7).
Affirmed.
1. T
AXATION —
S
INGLE
B
USINESS
T
AX
A
CT —
A
FFILIATED
G
ROUPS —
S
MALL
B
USINESS
T
AX
C
REDIT
.
Entities that are part of a corporate structure in which the parent is
a state chartered credit union that is exempt from taxation under
the Single Business Tax Act must, for purposes of determining
their eligibility for the small business tax credit provided by MCL
208.36, consolidate their business activities with the business
activities of other members of their affiliated group, including the
parent credit union; only when the consolidated number meets the
threshold requirements of § 36(2) will the individual entities
qualify for the tax credit (MCL 208.1 et seq., repealed effective
December 31, 2007).
2. T
AXATION —
S
INGLE
B
USINESS
T
AX
A
CT —
W
ORDS AND
P
HRASES —
A
FFILIATED
G
ROUPS —
U
NITED
S
TATES
C
ORPORATIONS —
A
SSOCIATIONS
.
An “affiliated group” for purposes of MCL 208.36(7) and MCL
208.3(1) of the Single Business Tax Act is two or more United
States corporations, one of which owns or controls, directly or
indirectly, 80 percent or more of the capital stock with voting
rights of the other or others; a United States corporation, for such
purposes, is an association, joint-stock company, or an insurance
company created or organized in or under the law of the United
States or under the laws of a state; an “association” is a gathering
of people for a common purpose, the persons so joined, or an
unincorporated organization that is not a legal entity separate
from the persons who compose it (MCL 208.1 et seq., repealed
effective December 31, 2007).
3. T
AXATION —
S
INGLE
B
USINESS
T
AX
A
CT —
A
FFILIATED
G
ROUPS —
S
MALL
B
USINESS
T
AX
C
REDIT —
W
ORDS AND
P
HRASES —
B
USINESS
A
CTIVITY —
O
THERS
.
The Single Business Tax Act, in MCL 208.36(7), requires a member
of an affiliated group to consolidate its business activities with the
business activities of the other members of the group in order to
determine its eligibility for the small business tax credit allowed by
MCL 208.36(2); “business activity,” for such purposes, is a transfer
of property or the performance of services within the state with
the object of gain, benefit, or advantage to the taxpayer or to
50 288 M
ICH
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others; the term “others” encompasses all those “others” than
taxpayers; the fact that a member of an affiliated group is exempt
from taxation under the act does not mean that it does not have
business activities (MCL 208.1 et seq., repealed effective December
31, 2007).
Varnum LLP (by Thomas J. Kenny and Marla
Schwaller Carew) for plaintiffs.
Michael A. Cox, Attorney General, B. Eric Restuccia,
Solicitor General, and Bruce C. Johnson, Assistant
Attorney General, for defendant.
Before: B
ORRELLO
,P.J., and W
HITBECK
and K. F. K
ELLY
,
JJ.
P
ER
C
URIAM.
In these tax disputes, we must decide
whether plaintiffs are eligible for the small business tax
credit provided by § 36, MCL 208.36, of the Single
Business Tax Act (SBTA), MCL 208.1 et seq., repealed
effective December 31, 2007. The Court of Claims
determined that plaintiffs are not eligible for the credit
and granted summary disposition in defendant’s favor.
We agree and hold that entities part of a corporate
structure in which the parent is a state chartered credit
union exempt from taxation under the SBTA must, for
purposes of determining their eligibility for the small
business tax credit, consolidate their gross receipts with
the business activities of other members in their “affili-
ated group,” including the parent credit union. Accord-
ingly, we affirm.
I. BASIC FACTS AND PROCEDURAL HISTORY
Plaintiffs, Data Tech Services, Inc. (Data Tech), and
ONE’s Travel Ltd., are both for-profit Michigan corpo-
rations subject to taxation under the SBTA. Both plain-
tiffs are also subsidiaries of Credit Union ONE, a state
2010] ONE’
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chartered credit union created pursuant to Michigan’s
Credit Union Act, MCL 490.101 et seq., that is exempt
from taxation under the SBTA.
In Docket No. 287255, Data Tech claimed the small
business credit for tax years 2001 through 2004 in its
SBT return. Data Tech did not consolidate its business
activities with those of Credit Union ONE because it
believed that no consolidation of business activity is
required under § 36 since Credit Union ONE is exempt
from state taxation. The department audited Data
Tech’s 2001 through 2004 tax returns and determined,
however, that the SBTA required Data Tech to consoli-
date its business activity with Credit Union ONE and
that such a consolidation rendered Data Tech ineligible
for the small business credit. As a result, the depart-
ment assessed a tax against Data Tech in the amount of
$157,240. Data Tech paid the tax under protest and
then challenged the assessment in the Michigan Tax
Tribunal. See Data Tech Services, Inc v Dep’t of Trea-
sury, MTT Docket No. 323084.
1
Before the matter could be resolved, however, the
department audited Data Tech’s 2005 SBT return and
found that Data Tech had again erroneously claimed
the small business credit. In its 2005 SBT return, Data
Tech had carried forward a “loss adjustment” from its
2002 tax return as a result of not qualifying for the
credit in 2002. It was Data Tech’s position that its
business loss in 2002 caused the amount distributed to
its sole shareholder to fall below $115,000 and, thus, it
was entitled to the small business credit in 2005. The
department, however, determined that Data Tech could
not use its 2002 business loss as a “loss adjustment”
1
The parties’ respective motions for summary disposition in that case
are being held in abeyance pending the resolution of the issue in this
Court.
52 288 M
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48 [Apr
because Data Tech never received the small business
credit in 2002. Accordingly, the department assessed a
tax against Data Tech in the amount of $29,115. Data
Tech also paid that amount under protest and then
challenged the assessment in the Court of Claims.
In Docket No. 287254, ONE’s Travel claimed the
small business credit for tax year 2005. Like Data Tech,
ONE’s Travel did not consolidate its business activities
with those of Credit Union ONE because it believed
that under § 36 no consolidation of business activity is
required since Credit Union ONE is exempt from state
taxation. The department audited ONE’s Travel’s 2005
SBT return and determined that ONE’s Travel was not
eligible for the credit because another member of the
same “control group,” Data Tech, did not qualify for the
credit. Accordingly, the department assessed a tax
against ONE’s Travel in the amount of $6,194. ONE’s
Travel challenged the assessment by filing a complaint
in the Court of Claims.
Because the same issue is involved in both cases, the
parties stipulated that the matters would be consoli-
dated in the Court of Claims and the issue would be
decided on their motions for summary disposition.
Plaintiffs jointly moved for summary disposition under
MCR 2.116(C)(10), arguing that because Credit Union
ONE is not a taxpayer under the SBTA and is totally
exempt from the SBT, its tax exempt activities are
“totally unrelated” to plaintiffs’ taxable activities and
cannot be consolidated with plaintiffs’ gross receipts for
purposes of determining plaintiffs’ eligibility for the
small business credit. The department countered that
summary disposition should be granted in its favor. It
argued that it is irrelevant that Credit Union ONE is
exempt from taxation under the SBTA and that plain-
tiffs and Credit Union ONE formed an “affiliated
2010] ONE’
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group” as defined under the act. The Court of Claims
ruled in favor of the department, and plaintiffs subse-
quently filed their claims of appeal with this Court. This
Court consolidated the appeals.
II. STANDARDS OF REVIEW
The resolution of these appeals turns on whether
plaintiffs are required to consolidate their gross receipts
with the business activity of their parent, Credit Union
ONE, a cooperative nonprofit entity, for purposes of
qualifying for the small business tax credit pursuant to
§ 36(7) of the SBTA, MCL 208.36(7). Because the mat-
ter was decided on the parties’ motions for summary
disposition under MCR 2.116(C)(10), we review the
Court of Claims decision de novo. JW Hobbs Corp v
Dep’t of Treasury, 268 Mich App 38, 43; 706 NW2d 460
(2005). Summary disposition under this subrule is
properly granted if there is no genuine issue of material
fact and the moving party is entitled to judgment as a
matter of law. Id.
Further, we review questions of law, including the
proper interpretation of a statute, de novo. Ford Credit
Int’l, Inc v Dep’t of Treasury, 270 Mich App 530, 534;
716 NW2d 593 (2006). The Court’s main goal in inter-
preting the meaning of a statute is to discern and give
effect to the Legislature’s intent. Kmart Mich Prop
Servs, LLC v Dep’t of Treasury, 283 Mich App 647, 650;
770 NW2d 915 (2009). The first step in ascertaining the
Legislature’s intent is to examine the written language.
Id. If the language is plain and unambiguous, judicial
construction is neither necessary nor permitted, and
the language must be applied as written. Mt Pleasant v
State Tax Comm, 477 Mich 50, 53; 729 NW2d 833
(2007). Statutory language is ambiguous “only if it
‘irreconcilably conflict[s]’ with another provision or
54 288 M
ICH
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48 [Apr
when it is equally susceptible to more than a single
meaning.” Lansing Mayor v Pub Serv Comm, 470 Mich
154, 166; 680 NW2d 840 (2004) (citation omitted; empha-
sis in original). In conducting this review, we must read
words and phases, not discretely, but rather within the
context of the whole act. Green v Ziegelman, 282 Mich
App 292, 301-302; 767 NW2d 660 (2009). “However, tax
statutes that grant tax credits or exemptions are to be
narrowly construed in favor of the taxing authority be-
cause such statutes reduce the amount of tax imposed.”
Alliance Obstetrics & Gynecology, PLC v Dep’t of Trea-
sury, 285 Mich App 284, 286; 776 NW2d 160 (2009).
III. THE SBTA AND THE SMALL BUSINESS CREDIT
As this Court has noted, the SBTA, MCL 208.1 et seq.,
repealed effective December 31, 2007, is a tax on the
privilege of doing business in Michigan. TMW Enter-
prises Inc v Dep’t of Treasury, 285 Mich App 167, 173;
775 NW2d 342 (2009); Manske v Dep’t of Treasury, 265
Mich App 455, 459; 695 NW2d 92 (2005). Any person
doing business in the state incurs a SBT liability. MCL
208.31. However, certain entities are exempt from taxa-
tion under the SBTA, including this state and other
states, the federal government, and their political sub-
divisions and agencies as well as those persons exempt
from federal income tax under the Internal Revenue
Code. See MCL 208.35. There is no dispute in the
present matter that plaintiffs are subject to taxation
under the SBTA, whereas Credit Union ONE is exempt.
Entities that are not exempt under the SBTA, like
plaintiffs, calculate their SBT liability by first deter-
mining their tax base, which is the taxpayer’s total
business income. TMW Enterprises, 285 Mich App at
173-174; Jefferson Smurfit Corp v Dep’t of Treasury,
248 Mich App 271, 273; 639 NW2d 269 (2001). This
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number is then apportioned to account for only the
activity that took place in Michigan, MCL 208.40; MCL
208.41, and adjusted as necessary, to arrive at the
taxpayer’s adjusted tax base. MCL 208.31(2). A certain
percentage rate, depending on the tax years at issue, is
then applied against the taxpayer’s adjusted tax base to
compute the taxpayer’s SBT liability. MCL 208.31(1).
The SBTA also includes a small business tax credit that
reduces the single business tax liability of qualifying small
businesses. MCL 208.36. The credit is a percentage reduc-
tion of the tax liability, computed by dividing the taxpay-
er’s adjusted business income by a percentage of its tax
base. Horner, Michigan Single Business Tax, Small Busi-
ness Credit, 57 Mich B J 734, 736 (1978). To qualify, for
the tax years relevant to these appeals, § 36(2) of the
SBTA, MCL 208.36(2), requires that an entity’s “gross
receipts” not exceed $10,000,000 and its compensation to
officers or shareholders not exceed $115,000 per year.
MCL 208.36(2); MCL 208.36(2)(b)(i). That provision
states, in relevant part:
The credit provided in this section shall be taken before
any other credit under this act, and is available to any
person whose gross receipts do not exceed $6,000,000.00
for tax years commencing on or after January 1, 1984 and
before January 1, 1989; $7,000,000.00 for tax years com-
mencing in 1989; $7,250,000.00 for tax years commencing
in 1990; $7,500,000.00 for tax years commencing in 1991;
or $10,000,000.00 for tax years commencing after 1991,
and whose adjusted business income minus the loss adjust-
ment does not exceed $475,000.00 for tax years commenc-
ing on or after January 1, 1985, subject to the following:
***
(b) A corporation other than a subchapter S corporation
is disqualified if either of the following occur for the
respective tax year:
56 288 M
ICH
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(i) Compensation and director’s fees of a shareholder or
officer exceed $95,000.00 for tax years commencing on or
after January 1, 1985 and before January 1, 1998 or exceed
$115,000.00 for tax years commencing after December 31,
1997. [MCL 208.36(2).]
Section 36(7) specifies further eligibility requirements
for entities that make up, or are a part of, larger
business structures. It provides:
An affiliated group as defined in this act, a controlled
group of corporations as defined in section 1563 of the
internal revenue code and further described in 26 C.F.R.
1.414(b)-1 and 1.414(c)-1 to 1.414(c)-5, or an entity under
common control as defined by the internal revenue code
shall not take the credit allowed by this section unless the
business activities of the entities are consolidated. [MCL
208.36(7) (emphasis added).]
In other words, if an entity is part of (1) an affiliated
group, (2) a controlled group of corporations, or (3) an
entity under common control, it must aggregate the
“business activities” of all the other entities in the
group. Only if the consolidated number meets the
threshold requirements of § 36(2) would the individual
entities qualify for the credit, i.e., the taxpaying entity’s
gross receipts fall below the threshold amount despite
the consolidation of business activities.
IV. ANALYSIS
Here, there is no dispute that plaintiffs, standing
alone, qualify for the small business tax credit; whereas,
if their gross receipts are consolidated with Credit
Union ONE’s business activity, they do not so qualify.
Rather, the disagreement lies in whether plaintiffs must
consolidate their gross receipts with Credit Union
ONE’s business activity because they form (1) an affili-
ated group, (2) a controlled group of corporations, or (3)
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an entity under common control. It is plaintiffs’ posi-
tion on appeal that Credit Union ONE and plaintiffs
form neither an affiliated group nor a controlled group
of corporations because Credit Union ONE is not a
“corporation” within the meaning of § 36(7). We dis-
agree with plaintiffs.
A. AFFILIATED GROUP
As noted, § 36(7) states that an “affiliated group,” for
purposes of that subsection, is defined by the SBTA.
And, § 3(1) of the SBTA, MCL 208.3(1), defines an
“affiliated group” to mean
2 or more United States corporations, 1 of which owns or
controls, directly or indirectly, 80% or more of the capital
stock with voting rights of the other United States corpo-
ration or United States corporations. As used in this
subsection, “United States corporation” means a domestic
corporation as those terms are defined in section 7701(a)(3)
and (4) of the internal revenue code. [Emphasis added.]
Contrary to plaintiffs’ position on appeal, this subsec-
tion specifically adopts the definition of “domestic cor-
poration” as defined in the Internal Revenue Code, to
mean “United States corporation” for purposes of de-
termining whether an “affiliated group” exists when
considering eligibility for the small business credit
under § 36(7). Section 7701(a)(3) and (4) of the Internal
Revenue Code, as incorporated by § 3(1), provide:
(3) Corporation. The term “corporation” includes asso-
ciations, joint-stock companies, and insurance companies.
(4) Domestic. The term “domestic” when applied to a
corporation or partnership means created or organized in
the United States or under the law of the United States or
of any State unless, in the case of a partnership, the
Secretary provides otherwise by regulations. [26 USC
7701(a)(3) and (4).]
58 288 M
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Thus, the meaning of “United States corporation,”
limited to the purposes of determining whether an
affiliated group exists under § 3(1), is an association,
joint-stock company, or an insurance company that is
created or organized in or under the laws of the United
States or under the laws of a state. Because § 36(7)
adopts the definition provided for by § 3(1), it obviously
follows that the same definition applies in that subsec-
tion of the small business credit provision.
Given this definition, it is our view that Credit Union
ONE is a “United States corporation” within the mean-
ing of § 3(1). Namely, while Credit Union ONE is not a
corporation in a strictly pure sense—it was not formed
under the Michigan Business Corporation Act, MCL
450.1101 et seq., and is not registered with the Corpo-
rations Division of the Michigan Department of Energy,
Labor and Economic Growth—it is an “association”
created or organized under Michigan law. Neither the
SBTA nor the portions of the Internal Revenue Code
cited by § 3(1) define the term “association.” However,
this Court gives undefined terms their plain and ordi-
nary meaning and may rely on dictionary definitions to
ascertain the Legislature’s plain intent. Alvan Motor
Freight, Inc v Dep’t of Treasury, 281 Mich App 35, 40,
43; 761 NW2d 269 (2008). Black’s Law Dictionary (8th
ed) defines “association” as “[a] gathering of people for
a common purpose; the persons so joined,” and also as
“[a]n unincorporated organization that is not a legal
entity separate from the persons who compose it.”
Here, Credit Union ONE is plainly a gathering of people
for a common purpose and it is also an “unincorporated
organization,” because the credit union is not incorpo-
rated under Michigan law. Further, as plaintiffs cor-
rectly note, Credit Union ONE is created or organized
in or under the laws of this state. Credit Union ONE, as
the parties agree, is a state chartered credit union
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created under Michigan’s Credit Union Act, MCL
490.101 et seq., and is regulated by the Office of Finan-
cial and Insurance Regulation of the Michigan Depart-
ment of Energy, Labor and Economic Growth. Accord-
ingly, because Credit Union ONE is a “United States
corporation,” as that term is defined by § 3(1), and as
incorporated by § 36(7), and because it “owns or con-
trols, directly or indirectly, 80% or more of the capital
stock with voting rights” of Data Tech and ONE’s
Travel, it is part of an “affiliated group,” as that term is
defined in § 3(1) of the SBTA.
2
Thus, we conclude that,
under § 36(7), plaintiffs were required to consolidate
the business activity of their parent, Credit Union
ONE, with their gross receipts.
Plaintiffs, however, argue that Credit Union ONE
cannot be an “association” because as a domestic credit
union formed under the Credit Union Act, it is defined
as “a cooperative, non-profit entity organized under
this act for the purposes of encouraging thrift among its
members...touseandcontrol their own money on a
democratic basis....” However, given the plain and
ordinary meaning of the term “association,” we fail to
see how a domestic credit union, like Credit Union
ONE, is not also an association. The common and
ordinary meaning of the term “association,” as a gath-
ering of persons for a common purpose, is so broad that
it encompasses cooperative nonprofit entities. And,
significantly, nothing in the definition of domestic
credit union excludes it from fitting within the defini-
tion of an association. Accordingly, there is no merit to
2
It is unclear from the record what percentage Credit Union ONE
owns of each plaintiff. However, the parties raise no arguments related to
how much Credit Union ONE owns and, thus, we assume that Credit
Union ONE meets the additional requirements in the definition of
“affiliated group” under § 3(1) and as incorporated by § 36(7).
60 288 M
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plaintiffs’ argument that Credit Union ONE cannot be
an association simply because it is a domestic credit
union.
Having concluded that Data Tech and ONE’s Travel
formed an “affiliated group” with Credit Union ONE, it
is not necessary for us to reach the question whether
these entities also formed either a “controlled group of
corporations” or an “entity under common con-
trol....” Because Data Tech and ONE’s Travel each
formed an affiliated group with Credit Union ONE,
both were required to consolidate their business activi-
ties and gross receipts with Credit Union ONE’s busi-
ness activity in order to be eligible for the small
business credit. See MCL 208.36(2); MCL 208.36(7).
However, as the parties agree, once their receipts are
consolidated with Credit Union ONE, they are no
longer eligible for the small business credit pursuant to
§ 36(2) of the SBTA, MCL 208.36(2). Accordingly, the
trial court did not err by determining that the depart-
ment properly disallowed plaintiffs to claim the small
business credit for the tax years in question.
3
3
The Court of Claims agreed with the department’s determination that
ONE’s Travel had to consolidate its receipts with Credit Union ONE on the
basis that another member of the “controlled group of corporations,” Data
Tech, had been denied the small business credit. We need not determine
whether the court’s analysis was correct or not, because the result ulti-
mately reached was correct. As already stated, as part of an affiliated group,
ONE’s Travel was required to consolidate its gross receipts with Credit
Union ONE’s business activity. And, as plaintiffs concede, ONE’s Travel
would not be eligible for the small business credit if its gross receipts are to
be consolidated with the business activity of Credit Union ONE. Further, it
is also unnecessary for us to consider the department’s decision disallowing
Data Tech to carry forward to 2005 its “loss adjustment” from 2002, because
none of the parties raise arguments on appeal relating to the department’s
decision. Rather, our decision regarding whether plaintiffs must consolidate
their gross receipts with Credit Union ONE’s business activity is dispositive
on the issue whether Data Tech was entitled to the small business credit in
2005.
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B. “BUSINESS ACTIVITY”
Plaintiffs also argue that even if Credit Union ONE
could be considered part of an affiliated group, its
“business activity” cannot be consolidated with plain-
tiffs’ gross receipts because, as a tax-exempt entity it is
not a taxpayer under MCL 208.10 of the SBTA, and
thus it has neither “business activity” nor “gross re-
ceipts.” Again, we disagree.
As noted, § 36(7) of the SBTA, MCL 208.36(7), re-
quires a member of an affiliated group to consolidate its
“business activities” with that of the other members in
the group in order to take the credit allowed by § 36(2).
And, § 36(2) of the SBTA, MCL 208.36(2), premises an
entity’s eligibility for the tax credit, in part, on whether
its “gross receipts” exceed $10,000,000 for the tax years
at issue. Reading the two provisions together requires
that the business activities of the group be consolidated
with the business activity of the taxpayer entity claim-
ing the credit, and that this consolidated number, or the
gross receipts,
4
not exceed the threshold amounts under
§ 36(2). Thus, under the present circumstances, it is
only relevant whether a non-taxpayer entity that is part
of an affiliated group, here the credit union, has “busi-
ness activity” within the meaning of the SBTA because
it is that business activity that must be consolidated
with the business activity of the entity claiming the
credit. Section 36(7) makes no mention of members’
gross receipts and plaintiff’s argument as it relates to
“gross receipts” is irrelevant. Thus, we address plain-
tiffs’ argument only as it relates to “business activity.”
4
Section 7(3) of the SBTA, MCL 208.7(3), defines “gross receipts” as:
“[T]he entire amount received by the taxpayer from any activity whether
in intrastate, interstate, or foreign commerce carried on for direct or
indirect gain, benefit, or advantage to the taxpayer or to others....”
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Section 3(2) of the SBTA, MCL 208.3(2), defines
“business activity” as
a transfer of legal or equitable title to or rental of property,
whether real, personal, or mixed, tangible or intangible, or
the performance of services, or a combination thereof,
made or engaged in... within this state, whether in
intrastate, interstate, or foreign commerce, with the object
of gain, benefit, or advantage, whether direct or indirect, to
the taxpayer or to others ....[Emphasis added.]
Under the plain language of this definition, there is no
mandate that requires an entity to be a taxpayer in
order to have business activity. To the contrary, busi-
ness activity is simply defined as “a transfer of...
property...ortheperformance of services...within
this state...with the object of gain, benefit, or advan-
tage... to the taxpayer or to others....” Plaintiffs’
understanding of this definition effectively omits, and
renders nugatory, the phrase “or to others.” It is
incumbent upon us, however, to give meaning and effect
to every word used in a statute and to avoid an
interpretation that renders any portion of the statute
nugatory. By Lo Oil Co v Dep’t of Treasury, 267 Mich
App 19, 50; 703 NW2d 822 (2005); S Abraham & Sons,
Inc v Dep’t of Treasury, 260 Mich App 1, 15; 677 NW2d
31 (2003). Thus, we cannot follow plaintiffs’ lead and
ignore the phrase “or to others.” And, while the credit
union is not a taxpayer, its activities clearly fall within
the gambit of the phrase, “or to others,” because the
term “others,” giving it its plain and ordinary meaning
within the context of the statute, encompasses all those
“others” than taxpayers. It follows that, by definition,
the credit union has business activity, as that term is
defined by the SBTA because it transfers property and
performs services within the state to the benefit of
others.
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Moreover, simply because Credit Union ONE is ex-
empt from taxation does not mean that it does not have
business activities, as plaintiff contends. Clearly, the
definition of business activity is not applied to Credit
Union ONE for purposes of determining its liability
under the SBTA—it has no liability. But, it does not
logically follow that Credit Union ONE has no business
activity or that the definition cannot be applied to the
credit union for purposes of determining whether
Credit Union ONE’s subsidiaries are eligible for the
small business tax credit. Nor does consolidating the
credit union’s business activity with plaintiffs’ business
activities result in an imposition of a SBT on Credit
Union ONE. Rather, it is plaintiffs who are ultimately
on the hook for small business taxes with or without the
benefit of the small business tax credit; the credit union
has no liability in this context.
Finally, plaintiffs analogize this case to the facts in
Alameda Gage Corp v Dep’t of Treasury, 159 Mich App
693; 407 NW2d 61 (1987), where the parent corporation
had no SBT liability and its subsidiary would qualify for
the small business tax credit if its gross receipts were
considered alone. The Court held that when the subsid-
iary’s gross receipts were consolidated with its parent
corporation’s business activities, the subsidiary quali-
fied for the credit because the parent corporation, by
definition, had no business activity. Id. at 697. A super-
ficial reading of Alameda Gage Corp suggests that this
Court should be compelled to reach the same outcome.
However, the facts of Alameda Gage Corp are clearly
distinguishable from the present matter because the
parent corporation in Alameda Gage Corp had no SBT
liability since it had no instate activities whatsoever; all
of its business activity occurred out of state. By defini-
tion, business activity includes only those activities that
occurred in state. Here, Credit Union ONE has no SBT
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liability because it is tax exempt as a credit union, not
because it has no instate business activity. Rather, all of
Credit Union ONE’s business activities occur in state.
And, as we have already explained, although Credit
Union ONE has no SBT liability because it is tax
exempt, this does not mean that it cannot have business
activity for purposes of determining whether its subsid-
iaries qualify for a tax credit under § 36(7) and § 36(2).
There simply is no such limitation in the plain language
that defines “business activity.”
C. REVENUE ADMINISTRATIVE BULLETIN 1989-49
Lastly, plaintiffs contend that the department’s deci-
sion to consolidate plaintiffs’ gross receipts with the
business activity of its parent was contrary to the
department’s own published guidance. This argument
is unavailing. Revenue Administrative Bulletin (RAB)
1989-49 provides guidelines regarding the circum-
stances under which a group of corporate taxpayers
must file a consolidated SBT return under § 77 of the
SBTA, MCL 208.77.
5
It has absolutely no relevance, and
is inapplicable, to the circumstances under which an
5
Section 77 provides, in part:
(1) The commissioner may require or permit the filing of a
consolidated or combined return by an affiliated group of United
States corporations if all of the following conditions exist:
(a) All members of the affiliated group are Michigan taxpayers.
(b) Each member of the affiliated group maintains a relation-
ship with 1 or more members of the group which includes
intercorporate transactions of a substantial nature....
(c) The business activities of each member of the affiliated
group are subject to apportionment by a specific apportionment
formula contained in this act which specific formula also is
applicable to all other members of the affiliated group....[MCL
208.77.]
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entity claiming the small business credit must consoli-
date business activities because of its business struc-
ture. In fact, RAB 1989-49 makes no mention whatso-
ever of the allowance of the small business credit
generally, or of § 36(7) specifically. Moreover, even if
RAB 1989-49 were on point, we are not required to
follow the department’s published guidelines, because
such interpretive statements do not carry the force of
law and are not otherwise binding on this Court. Kmart
Mich Prop Servs, LLC, 283 Mich App at 654.
Affirmed.
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PEOPLE v WILLIAMS
Docket No. 284585. Submitted August 5, 2009, at Grand Rapids. Decided
April 8, 2010, at 9:00 a.m.
Glenn T. Williams was charged in the Muskegon Circuit Court,
Timothy G. Hicks, J., with the armed robberies of a Clark gas
station and an Admiral tobacco shop. He pleaded nolo contendere
with regard to the Clark gas station incident and guilty with
regard to the Admiral tobacco shop incident, and was sentenced.
He then moved to withdraw his pleas. Defendant alleged that the
factual foundation for each plea was not sufficiently established
because, with regard to the Admiral incident, there was no
evidence that defendant committed a completed larceny, and with
regard to the Clark incident, defendant was not adequately iden-
tified as the robber. The trial court denied the motion. The Court
of Appeals, in an unpublished order, entered June 16, 2008 (Docket
No. 284585), granted defendant’s delayed application for leave to
appeal, but only with regard to the conviction for the Admiral
incident and “on the issue of a completed larceny only.” The
Supreme Court denied defendant’s application for leave to appeal.
482 Mich 1035 (2008).
The Court of Appeals held:
1. The trial court did not err by accepting defendant’s guilty
plea in regard to the Admiral incident, although there was no proof
or evidence of a completed larceny. MCL 750.529, defining armed
robbery, and MCL 750.530, defining robbery, after their amend-
ment by 2004 PA 128, now encompass attempts. As a result, a
completed larceny is no longer required for a conviction of armed
robbery.
2. The armed robbery statute, MCL 750.529, requires that a
defendant be engaged in conduct proscribed under the robbery
statute, MCL 750.530. For robbery to rise to the level of an armed
robbery, § 529 requires that the individual possess a dangerous
weapon or an article used or fashioned in a manner to lead any
person to reasonably believe the article is a dangerous weapon, or
to represent orally or otherwise that he or she is in possession of a
dangerous weapon. Here, defendant admitted acting in a manner
to suggest to the Admiral store clerk that he possessed a weapon.
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3. The conduct proscribed by § 530 is the use of force or
violence while in the course of committing a larceny of any money
or other property that may be the subject of larceny. The phrase
“in the course of committing a larceny” in § 530 “includes acts that
occur in an attempt to commit the larceny, or during the commis-
sion of the larceny, or in flight or attempted flight after the
commission of the larceny, or in an attempt to retain possession of
the property.” Therefore, the crime of armed robbery now also
encompasses attempts to commit that offense. The statutory
language specifically considers and incorporates acts taken in an
attempt to commit a larceny, regardless of whether the act is
completed. Acts taken in the process of committing a larceny
necessarily include steps or behaviors occurring at any point in the
continuum, despite whether they are successfully completed.
4. Defendant admitted representing to the Admiral clerk that
he was in possession of a weapon and that he had the intent to take
or obtain money from the store’s cash register. It was not estab-
lished that defendant had any intention to harm the clerk. While
defendant left the store without any money from the cash register,
sufficient elements of the crime were established to sustain his
conviction.
Affirmed.
G
LEICHER
, J., dissenting, stated that the Legislature did not
intend by amending MCL 750.529 in 2004 to fundamentally alter
the elements of the offense by eliminating the requirement of a
completed larceny. Under the common law, the crime of robbery
included as an essential element the commission of a larceny.
Neither MCL 750.529 nor MCL 750.530 contains definite, clear, or
plain language showing the Legislature’s intent to fundamentally
alter the common law. The plain language of § 530 refutes that the
robbery statute, as amended in 2004, permits a conviction without
proof of a completed larceny. The Legislature sought to make clear
that robbery encompasses acts that occur before, during, and after
the larceny, not that the Legislature intended to eliminate larceny
as an element of the crime. Here, no evidence exists that defendant
committed a larceny during the Admiral incident. Therefore, the
trial court abused its discretion by denying defendant’s motion to
withdraw the plea in the Admiral matter. The conviction and
sentence with regard to the Admiral incident should be vacated.
C
RIMINAL
L
AW —
A
RMED
R
OBBERY —
R
OBBERY —
A
TTEMPTS TO
C
OMMIT
L
ARCENY
.
The statutes defining armed robbery and robbery, after their amend-
ment by 2004 PA 128, encompass attempts; a completed larceny is
no longer required for a conviction of armed robbery or robbery;
68 288 M
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the statutory language specifically considers and incorporates acts
taken in an attempt to commit a larceny, regardless of whether the
act is completed; acts taken in the process of committing a larceny
necessarily include steps or behaviors occurring at any point in the
continuum, despite whether they are successfully completed (MCL
750.529, 750.530).
Michael A. Cox, Attorney General, B. Eric Restuccia,
Solicitor General, Tony Tague, Prosecuting Attorney,
and Charles F. Justian, Chief Appellate Attorney, for
the people.
Peter Ellenson for defendant.
Before: O
WENS
,P.J., and T
ALBOT
and G
LEICHER
,JJ.
T
ALBOT
, J. We granted defendant’s delayed applica-
tion for leave to appeal
1
the trial court’s denial of his
request to withdraw his guilty plea to a charge of armed
robbery. MCL 750.529. The trial court sentenced defen-
dant, as a fourth-offense habitual offender, MCL 769.12,
to 24 to 40 years’ imprisonment. We affirm.
I. FACTUAL AND PROCEDURAL HISTORY
Defendant was initially charged with two separate
armed robberies, which occurred on consecutive days at
different locations involving a Clark gas station and an
Admiral tobacco shop. As part of a “package” deal,
defendant pleaded nolo contendere with regard to the
Clark gas station charge and guilty with regard to the
Admiral tobacco shop charge. Difficulties were encoun-
tered when the trial court tried to establish a factual
1
People v Williams, unpublished order of the Michigan Court of
Appeals, entered June 16, 2008 (Docket No. 284585). Our Supreme Court
denied defendant’s subsequent application for leave to appeal. People v
Williams, 482 Mich 1035 (2008).
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basis for defendant’s pleas. In this appeal, we are
interested solely in defendant’s plea in the Admiral
tobacco shop case.
With regard to the Admiral tobacco shop, defendant
acknowledged that his intent, upon entering the store,
was to steal money. Defendant also admitted that he
had placed his hand “up under” his coat, suggesting the
possession of a weapon, and told the clerk, “[Y]ou know
what this is, just give me what I want.” The trial court
accepted the plea finding it “to be knowing, voluntary,
understanding, and accurate.” Subsequently, defendant
was sentenced to 24 to 40 years’ imprisonment for that
armed robbery.
Approximately one year after the pleas were accepted
and six months after being sentenced, defendant filed a
motion seeking to withdraw his pleas. Defendant ar-
gued that his plea in the Admiral tobacco shop case was
deficient because there was no demonstration or show-
ing that defendant actually took any property from the
store. Following the submission of additional briefs, the
trial court issued a written opinion and order denying
defendant’s motion to withdraw his pleas. This appeal
ensued.
II. STANDARD OF REVIEW
The issue before this Court can be summarized as
whether a completed larceny is necessary to sustain a
conviction for armed robbery, pursuant to MCL
750.529. Consequently, the outcome of this appeal is
completely dependent on the statutory language com-
prising MCL 750.529 and MCL 750.530. It is well
recognized:
“[T]he interpretation and application of statutes is a
question of law that is reviewed de novo.” People v Webb,
458 Mich 265, 274; 580 NW2d 884 (1998). The primary goal
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of statutory interpretation is to give effect to the intent of the
Legislature. People v Williams, 475 Mich 245, 250; 716 NW2d
208 (2006). The objective of statutory interpretation is to
discern the intent of the Legislature from the plain language
of the statute. People v Sobczak-Obetts, 463 Mich 687, 694-
695; 625 NW2d 764 (2001). “We begin by examining the plain
language of the statute; where that language is unambiguous,
we presume that the Legislature intended the meaning
clearly expressed—no further judicial construction is re-
quired or permitted, and the statute must be enforced as
written.” People v Morey, 461 Mich 325, 330; 603 NW2d 250
(1999). In doing so, we must be mindful that “[i]t is the role
of the judiciary to interpret, not write, the law.” People v
Schaefer, 473 Mich 418, 430-431; 703 NW2d 774 (2005),
clarified in part on other grounds People v Derror, 475 Mich
316, 320 (2006). [People v Barrera, 278 Mich App 730,
735-736; 752 NW2d 485 (2008).]
This Court also reviews de novo as a question of law
whether specific conduct falls within the prohibitions of
a statute. People v Adkins, 272 Mich App 37, 39; 724
NW2d 710 (2006). Relevant to this appeal, we would
further note that there exists no absolute right to
withdraw a guilty plea, which decision is within the
trial court’s discretion. People v Ovalle, 222 Mich App
463, 465; 564 NW2d 147 (1997).
III. ANALYSIS
The four statutes pertaining to robbery are contained
within chapter LXXVIII of the Michigan Penal Code.
2
In
this appeal, we are concerned with the statutes pertain-
ing to robbery and unarmed robbery following their
legislative revision in 2004 PA 128. Specifically, MCL
750.529, defining armed robbery, currently provides:
2
Specifically: MCL 750.529 (armed robbery), MCL 750.529a (carjack-
ing), MCL 750.530 (robbery), and MCL 750.531 (bank robbery).
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A person who engages in conduct proscribed under
section 530 and who in the course of engaging in that
conduct, possesses a dangerous weapon or an article used
or fashioned in a manner to lead any person present to
reasonably believe the article is a dangerous weapon, or
who represents orally or otherwise that he or she is in
possession of a dangerous weapon, is guilty of a felony
punishable by imprisonment for life or for any term of
years. If an aggravated assault or serious injury is inflicted
by any person while violating this section, the person shall
be sentenced to a minimum term of imprisonment of not
less than 2 years.
Robbery is defined within MCL 750.530, which states:
(1) A person who, in the course of committing a larceny
of any money or other property that may be the subject of
larceny, uses force or violence against any person who is
present, or who assaults or puts the person in fear, is guilty
of a felony punishable by imprisonment for not more than
15 years.
(2) As used in this section, “in the course of committing
a larceny” includes acts that occur in an attempt to commit
the larceny, or during commission of the larceny, or in flight
or attempted flight after the commission of the larceny, or
in an attempt to retain possession of the property.
It must be determined, on the basis of these recent
revisions, whether a perpetrator must actually commit
a completed larceny to be convicted of an armed rob-
bery.
3
Specifically, with reference to the issue on appeal,
we must address whether the trial court erred by
accepting defendant’s guilty plea to the offense of
armed robbery when there was no proof or evidence of
a completed larceny. We find that the statutory lan-
3
Larceny is defined as: “The unlawful taking and carrying away of
someone else’s personal property with the intent to deprive the possessor
of it permanently.” Black’s Law Dictionary (8th ed).
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guage now encompasses attempts and that, as a result,
a completed larceny is no longer required for a convic-
tion of armed robbery.
4
It is undisputed that MCL 750.529 and MCL 750.530
must be read together because armed robbery requires
that a person be “engage[d] in conduct proscribed
under [MCL 750.530].” MCL 750.529. In addition, for a
robbery to rise to the level of an armed robbery, MCL
750.529 requires that the individual “possess[] a dan-
gerous weapon or an article used or fashioned in a
manner to lead any person...toreasonably believe the
article is a dangerous weapon, or who represents orally
or otherwise that he or she is in possession of a
dangerous weapon....” Notably, defendant acknowl-
edged during his plea hearing that he acted in a manner
to suggest to the store clerk that he possessed a weapon.
Hence, the issue before us is restricted solely to whether
a larceny must be completed for defendant’s armed
robbery conviction to stand.
Clearly, other than separately requiring the existence
or representation of the presence of a weapon, the crime
of armed robbery is restricted to the “conduct pro-
scribed under section 530....”MCL750.529. In turn,
MCL 750.530 indicates that the conduct “proscribed” is
the use of “force or violence” while “in the course of
committing a larceny of any money or other property
that may be the subject of larceny....”Our analysis
must focus on the definition, contained in MCL
750.530(2), of the phrase “in the course of committing a
larceny,” which “includes acts that occur in an attempt
to commit the larceny, or during the commission of the
larceny, or in flight or attempted flight after the com-
mission of the larceny, or in an attempt to retain
4
In contrast, the dissent finds that the absence of a completed larceny
precludes a conviction under the statute.
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possession of the property.”
5
(Emphasis added.) This
Court has no alternative but to strictly adhere to the
language used by the Legislature in revising this stat-
ute and not seek to attribute either motive or reasoning
beyond the plain and ordinary meaning of the wording
chosen for use. As such, the crime of armed robbery now
also encompasses attempts to commit that offense.
“Where, as here, a statute supplies its own glossary,
courts may not import any other interpretation, but
must apply the meaning of the terms as expressly
defined.” Detroit v Muzzin & Vincenti, Inc, 74 Mich App
634, 639; 254 NW2d 599 (1977). When dealing with
statutory language, it is a well-defined precept that,
[w]hile courts may decide the validity of statutes and
ordinances and construe laws in order to determine the
actual legislative intent, the duty of the courts, both with
respect to city ordinances and with respect to enactments
of the legislature, is merely to interpret and apply the law
as it is found to be. They cannot, under the guise of
construction, redraft, or change the plain phrasing of the
legislative fiat. They may not legislate, nor undertake to
compel legislative bodies to do so. [1 Michigan Pleading &
Practice (2d ed) § 2:28, pp 125-127.]
In other words,
when a statute specifically defines a given term, that
definition alone controls. Therefore, a statutory definition
supersedes a commonly accepted dictionary or judicial
definition of a term. [22 Michigan Civil Jurisprudence
(2005 revision), § 202, p 731.]
5
The dissent elects to interpret this provision to indicate merely the
legislative reinstitution of a transactional approach that would allow an
armed robbery to be charged if a weapon, or the threat of a weapon, is
used at any point in the continuum of the completion of a larceny.
Interpreted in this manner, a completed larceny is a necessary component
to meet the statutory definition.
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The legislative definition of “in the course of commit-
ting a larceny” specifically “includes acts that occur in
an attempt to commit the larceny....” The term
“attempt,” which is not defined within the statute, is
recognized to mean:
1. The act or an instance of making an effort to accomplish
something, esp. without success. 2. Criminal law. An overt
act that is done with the intent to commit a crime but that
falls short of completing the crime. • Attempt is an inchoate
offense distinct from the attempted crime. Under the Model
Penal Code, an attempt includes any act that is a substantial
step toward commission of a crime, such as enticing, lying in
wait for, or following the intended victim or unlawfully
entering a building where a crime is expected to be commit-
ted. [Black’s Law Dictionary (8th ed).]
As such, the statutory language specifically considers
and incorporates acts taken in an attempt to commit a
larceny, regardless of whether the act is completed. This
is consistent with the language of MCL 750.530(2),
which distinguishes, by the use of the word “or,” acts
committed in “an attempt to commit the larceny” from
those acts occurring “during the commission of the
larceny” or any subsequent acts comprising flight or
efforts to retain any property. The term “or” is “used to
connect words, phrases, or clauses representing alter-
natives.” Random House Webster’s College Dictionary
(1997). Hence, an attempt to commit a larceny com-
prises a separate and distinct action and is not merely a
component of a completed larceny. In addition, we
would note that MCL 750.530(2) defines “in the course
of committing a larceny” (emphasis added) and not “the
larceny.” The term “a larceny” denotes a more generic,
non-specific or generalized act. The fact that the term
“the larceny” is subsequently used within this subsec-
tion of the statute merely denotes a reference back to
the more generalized “a larceny.” Logically, acts taken
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in the process of committing a larceny necessarily
include steps or behaviors occurring at any point in the
continuum, despite whether they are successfully com-
pleted. This language necessarily demonstrates the
Legislature’s intent to include attempts to commit a
larceny, both by implication and by the specific lan-
guage contained in this statutory provision.
Consistent with the statutory language, which ex-
pands the crime of armed robbery to include attempts,
is the recently revised criminal jury instruction relating
to this crime.
6
The language of the criminal jury in-
struction pertaining to armed robbery is clearly consis-
tent with the language of MCL 750.529 and MCL
750.530, providing:
(1) The defendant is charged with the crime of armed
robbery. To prove this charge, the prosecutor must prove
each of the following elements beyond a reasonable doubt:
(2) First, the defendant [used force or violence against /
assaulted / put in fear] [state complainant’s name].
(3) Second, the defendant did so while [he / she] was in the
course of committing a larceny. A “larceny” is the taking and
movement of someone else’s property or money with the
intent to take it away from that person permanently.
“In the course of committing a larceny” includes acts
that occur in an attempt to commit the larceny, or during
the commission of the larceny, or in flight or attempted
flight after the commission of the larceny, or in an attempt
to retain possession of the property or money.
(4) Third, [state complainant’s name] was present while
defendant was in the course of committing the larceny.
(5) Fourth, that while in the course of committing the
larceny, the defendant:
6
We recognize that use of the standard criminal jury instructions is not
mandatory and they are not binding authority. People v Petrella, 424 Mich
221, 277; 380 NW2d 11 (1985).
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[Choose one or more of the following as warranted by the
charge and proofs:]
(a) possessed a weapon designed to be dangerous and
capable of causing death or serious injury; [or]
(b) possessed any other object capable of causing death
or serious injury that the defendant used as a weapon; [or]
(c) Possessed any [other] object used or fashioned in a
manner to lead the person who was present to reasonably
believe that it was a dangerous weapon; [or]
(d) represented orally or otherwise that [he / she] was in
possession of a weapon.
[Add the following paragraph if appropriate:]
(6) Fifth, the defendant inflicted an aggravated assault
or serious injury to another while in the course of commit-
ting the larceny. [CJI2d 18.1 (footnotes omitted).]
An “attempt” is defined within this section of the
criminal jury instructions as having “two elements”:
First, the defendant must have intended to commit the
crime. Second, the defendant must have taken some action
toward committing the alleged crime, but failed to com-
plete the crime....Inorder to qualify as an attempt, the
action must go beyond mere preparation, to the point
where the crime would have been completed if it had not
been interrupted by outside circumstances. To qualify as
an attempt, the act must clearly and directly be related to
the crime the defendant is charged with attempting and
not some other goal. [CJI2d 18.7.]
Clearly, the criminal jury instructions have specifically
been revised to fully coincide with the statutory language
of MCL 750.529 and MCL 750.530
7
and to include a
definition of the term “attempt” separate from the more
general instruction of a crime comprising an attempt.
CJI2d 9.1.
7
“This revised instruction is intended to set forth the elements of the
armed robbery offense created by 2004 PA 128, effective July 1, 2004,
MCL 750.529.” Commentary following CJI2d 18.1.
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We would note that the immediate prior version of
the relevant statute, MCL 750.529, before its amend-
ment by 2004 PA 128, read:
Any person who shall assault another, and shall feloni-
ously rob, steal and take from his person, or in his
presence, any money or other property, which may be the
subject of larceny, such robber being armed with a danger-
ous weapon, or any article used or fashioned in a manner to
lead the person so assaulted to reasonably believe it to be a
dangerous weapon, shall be guilty of a felony....
In revising this language, the Legislature not only
recognized the actual possession of a weapon or repre-
sentation by a criminal that he or she is armed, irre-
spective of the actual presence of a weapon, but also
removed the language mandating the actual behavior of
to “rob, steal and take....”Had theLegislature not
intended a broader revision of the statute, this language
could have remained untouched. In addition, the re-
vised language helps to delineate this offense from
assault with the intent to rob and steal while armed,
MCL 750.89, which statute provides:
Assault with intent to rob and steal being armed—Any
person, being armed with a dangerous weapon, or any
article used or fashioned in a manner to lead a person so
assaulted reasonably to believe it to be a dangerous
weapon, who shall assault another with intent to rob and
steal shall be guilty of a felony, punishable by imprison-
ment in the state prison for life, or for any term of years.
Hence, MCL 750.89, while similar to MCL 750.529,
requires the additional element of an actual “assault.”
8
8
MCL 750.529 does include a provision for imposition of a minimum
two-year sentence “[i]f an aggravated assault or serious injury is inflicted
by any person while violating this section....”This merely provides a
prosecutor with a certain degree of latitude in electing to charge a
particular offender, based on the circumstances of the case. Notably, both
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Clearly, 2004 PA 128 was enacted, at least in part, to
legislatively reinstitute a transactional approach to this
crime, in response to our Supreme Court’s decision in
People v Randolph, 466 Mich 532; 648 NW2d 164
(2002). While the Legislature was motivated to enact a
provision that would establish a transactional approach
to robbery in order to not limit or restrict to a temporal
point during the commission of the crime when the
threat of violence or use of a weapon had to occur, the
statutory language has exceeded this restricted purpose
and it is beyond the role of this Court to speculate
regarding what the Legislature intended to do. Rather,
we can only enforce the language of the statute as it is
actually written.
We would assert that the two remaining criminal
statutes in this chapter of the Penal Code also reflect
this broader perspective. Notably, the carjacking stat-
ute, MCL 750.529a, is almost identical to the wording of
MCL 750.530. Specifically, MCL 750.529a provides, in
relevant part:
(1) A person who in the course of committing a larceny
of a motor vehicle uses force or violence or the threat of
force or violence, or who puts in fear any operator, passen-
ger, or person in lawful possession of the motor vehicle, or
any person lawfully attempting to recover the motor ve-
hicle, is guilty of carjacking, a felony punishable by impris-
onment for life or for any term of years.
(2) As used in this section, “in the course of committing
a larceny of a motor vehicle” includes acts that occur in an
statutory provisions, MCL 750.89 and MCL 750.529, indicate that
punishment for either offense is imprisonment for life, or for any term of
years. A panel of this Court has indicated, in an unpublished opinion,
that assault with intent to rob while armed comprises a necessarily
included lesser offense of armed robbery but went further to suggest that
“[t]he offenses are distinguished only by whether a larceny occurred.”
People v Hunt, unpublished opinion per curiam of the Court of Appeals,
issued May 12, 2009 (Docket No. 284648), p 2.
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attempt to commit the larceny, or during commission of the
larceny, or in flight or attempted flight after the commis-
sion of the larceny, or in an attempt to retain possession of
the motor vehicle.
As already noted, 2004 PA 128 also revised this statute.
Similar to MCL 750.529, the earlier version of the
carjacking statute provided, in relevant part:
(1) A person who by force or violence, or by threat of
force or violence, or by putting in fear robs, steals, or takes
a motor vehicle as defined in section 412 from another
person, in the presence of that person or the presence of a
passenger or in the presence of any other person in lawful
possession of the motor vehicle, is guilty of carjacking, a
felony punishable by imprisonment for life or for any term
of years.
Once again, the Legislature removed the language
“robs, steals, or takes,” insinuating that the revised
statute was intended to include attempts to commit the
designated crime. In contrast, MCL 750.531, which has
not been subject to any recent revisions, clearly indi-
cates that it encompasses the “intent” to commit the
crime of bank robbery. Specifically, MCL 750.531 states:
Bank, safe and vault robbery—Any person who, with
intent to commit the crime of larceny, or any felony, shall
confine, maim, injure or wound, or attempt, or threaten to
confine, kill, maim, injure or wound, or shall put in fear any
person for the purpose of stealing from any building, bank,
safe or other depository of money, bond or other valuables,
or shall by intimidation, fear or threats compel, or attempt
to compel any person to disclose or surrender the means of
opening any building, bank, safe, vault or other depository
of money, bonds, or other valuables, or shall attempt to
break, burn, blow up or otherwise injure or destroy any
safe, vault or other depository of money, bonds or other
valuables in any building or place, shall, whether he
succeeds or fails in the perpetration of such larceny or
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felony, be guilty of a felony, punishable by imprisonment in
the state prison for life or any term of years.
This is important to demonstrate that the concept or
legislative act of including language that encompasses
an attempt within the statutory definition of a crime is
neither unusual nor inconsistent with the most current
revisions pursuant to 2004 PA 128. In fact, the revisions
to MCL 750.529 through MCL 750.530 now render all of
the statutes within this chapter of the Penal Code
internally consistent.
9
A recognized “rule of statutory interpretation pro-
vides that well-settled common-law principles are not to
be abolished by implication, and when an ambiguous
statute contravenes the common law, it must be inter-
preted so that it makes the least change in the common
law.” Heinz v Chicago Rd Investment Co, 216 Mich App
289, 295; 549 NW2d 47 (1996). However, simulta-
neously, “this Court is instructed to avoid any construc-
tion that would render a statute, or any part of it,
surplusage or nugatory.” Id. at 295-296. First and
foremost, concerns regarding the revised statute’s al-
leged abrogation of the common law by no longer
requiring a completed larceny are unnecessary. This
particular concern pertaining to statutory interpreta-
tion pertains to ambiguous statutes and we believe the
language of MCL 750.529 and MCL 750.530 to be clear
in encompassing attempts within the purview of “in the
course of committing a larceny” by definition. Second,
9
We would note that other jurisdictions have adopted the approach of
including an attempt to commit the offense within the statute defining
the crime. “ ‘Under some of the new penal codes robbery does not require
an actual taking of property. If force or intimidation is used in the
attempt to commit theft this is sufficient.’ ” Black’s Law Dictionary (8th
ed), quoting Perkins & Boyce, Criminal Law (3d ed, 1982), p 343, after
defining “robbery.” See, also, Irons v State, 886 So 2d 726 (Miss App,
2004).
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the very fact that the Legislature has elected to use a
transactional approach is according to our Supreme
Court, in and of itself “contrary to the common law.”
Randolph, 466 Mich at 545. If the Legislature intended
this statute to adopt a transactional approach, it is
reasonable to assume it was aware of its abrogation of
the common law and intended to take it a step further.
See 22 Michigan Civil Jurisprudence, Statutes (2009),
§ 220. In addition, the statute, even before its revision,
superseded the common law. Specifically:
When a statute takes up and completely covers a subject
previously governed by the common law, the common law
ceases to operate upon it, except where the statute has
made no provisions for its punishment. The statute declar-
ing how penalties will be enforced covers the entire ground
and leaves nothing to be supplied by the common law. By
statute the common law prevails where there is no specific
statute determining what constitutes an offense....
The state is not tied down by any provision of the
Federal Constitution to the practice and procedure which
existed at common law; and thus, subject to the provisions
of its own constitution, it may avail itself of the wisdom
gathered from experience to make such changes as may be
deemed necessary. [1 Gillespie, Michigan Criminal Law &
Procedure (2d), § 1:5, pp 19-20.]
Finally, as a general observation, in defining a robbery,
the “essential elements of unarmed robbery are assault
with force and violence while the defendant is not
armed, accompanied by the intent to rob and steal.” 4
Gillespie, Michigan Criminal Law & Procedure (2d),
§ 133:2, p 400. Hence, it is the violence or threat of force
and the intent that constitute the primary elements
rather than the successful completion of a particular act
that comprise this offense.
Further, the legislative history pertaining to the
statutory revisions supports a holding that the inclu-
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sion of attempts within the offense was deliberate.
Specifically, in discussing the content of the proposed
revisions, it was noted:
The bill would amend the Michigan Penal Code to specify
that certain offenses involving larceny would include acts
that occurred in an attempt to commit the larceny, during the
commission of the larceny, in flight or attempted flight after
the larceny was committed, or in an attempt to retain
possession of the stolen property. This would apply to armed
robbery, unarmed robbery, and carjacking. [Senate Fiscal
Agency Analysis, HB 5105, May 17, 2004 (emphasis added).]
Unfortunately, following revision of the statutory
language, the application and interpretation of these
provisions has not been consistent within caselaw. In
People v Chambers, 277 Mich App 1,8n7;742NW2d
610 (2007), this Court acknowledged the revision of
MCL 750.529 and MCL 750.530 and noted the alter-
ation of previously recognized elements defining these
crimes. Subsequently, in an unpublished opinion, this
Court, citing Chambers opined, in pertinent part:
Under the plain language of the armed robbery statute,
the phrase “in the course of committing a larceny” includes
acts that occur in an attempt to commit a larceny, during its
commission, and ones that occur in flight after the larceny.
MCL 750.530. Thus, the armed robbery statute does not
require that a felonious taking or completed larceny occur; it
requires that the use of force or the placement of a person in
fear, occur “in the course of committing a larceny” and with
the use of a dangerous weapon, or an object reasonably
believed to be a dangerous weapon. [People v Nelson, unpub-
lished opinion per curiam of the Court of Appeals, issued
January 8, 2009 (Docket No. 281662), p 2.]
Other opinions appear to retain the previous require-
ments of a completed larceny but lack a certain level of
clarity in their analysis. By way of example, in People v
Thomas, unpublished opinion per curiam of the Court
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of Appeals, issued October 6, 2009 (Docket No. 287382),
the Court distinguished between the revised armed rob-
bery statute and the bank robbery statute. However, in
undertaking this analysis the Court did not recognize any
significant departure in the elements for armed robbery
from caselaw that existed before the revision of MCL
750.529, resulting in the determination by the Court that
“[a]rmed robbery continues to require a theft from a
person....”Id., unpub op p 2. Notably, in and of itself
this is an inaccuracy because the current statute encom-
passes the use or threat of force (with the presence or
representation of a weapon) against a person while “in the
course of committing a larceny of any money or other
property that may be the subject of larceny....” MCL
750.529; MCL 750.530(1). It does not require a direct
“taking” or “theft from a person.” Similarly, a statement
by this Court in People v Monk, unpublished opinion per
curiam of the Court of Appeals, issued January 22, 2009
(Docket No. 280291), contains an obvious contradiction.
On the one hand, the Court states, “Acts included in the
phrase ‘in the course of committing a larceny’ include all
acts that occur during a larceny’s attempt or commis-
sion....Anattempted or committed larceny by an armed
individual, or by a person the victim reasonably believes is
armed, is required under the statute.” Id., unpub op p 2.
However, this statement is immediately followed by a
reference indicating the necessity of a taking despite
recognition that the statute encompasses attempts to
commit the crime. Specifically, the Court opined, “The
statute does not expressly require that any property
actually taken must be owned by the victim. Rather,
property must just be taken from the victim or his
presence in the course of a larceny.”
10
Id.
10
This same inconsistency is also present within caselaw involving
MCL 750.529a, the carjacking statute. In discussing concerns pertaining
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Courts must proceed with greater caution in their use
and reliance on prior published opinions delineating the
elements of armed robbery, which preceded the revision of
MCL 750.529. “[A] change by amendment in the phrase-
ology of a statute is presumed to indicate a legislative
purpose to change the meaning.” 3A Michigan Pleading &
Practice (2d ed, 2007 revised vol), § 36:146, p 251; see,
also, People v Auto Serv Councils of Mich, Inc, 123 Mich
App 774, 787; 333 NW2d 352 (1983) (“It is reasonable to
presume some intentionality in the insertion of this addi-
tional language.”). Clearly, the Legislature has enacted
changes affecting the elements comprising this offense
and it is our responsibility to correctly apply the revised
language of MCL 750.529 to the particular evidence and
facts of each individual case.
IV. CONCLUSION
“[W]hen determining whether sufficient evidence
has been presented to sustain a conviction, a court must
to double jeopardy considerations involving the carjacking statute and the
assault with intent to rob while armed statute, this Court noted: “[T]he
assault with the intent to rob while armed statute does not require the
larceny of a motor vehicle, as does the carjacking statute,” implying the
necessity of a completed larceny. People v McGee, 280 Mich App 680, 685;
761 NW2d 743 (2008). See, also, People v Carter, unpublished opinion per
curiam of the Court of Appeals, issued March 27, 2007 (Docket No. 268408),
p 2, indicating the carjacking statute requires a “taking and asportation”;
People v Richardson, unpublished opinion per curiam of the Court of
Appeals, issued October 25, 2007 (Docket No. 270606), p 3, implying the
necessity of a completed taking but not retention of a vehicle to be convicted
of carjacking. In contrast, in People v Morgan, unpublished opinion per
curiam of the Court of Appeals, issued May 19, 2009 (Docket No. 284986), p
2, this Court recognized the necessity of only an attempt to commit a larceny
as meeting the statutory requirements for carjacking. In People v Dearmin,
unpublished opinion per curiam of the Court of Appeals, issued May 11,
2006 (Docket No. 259432), p 3, a panel of this Court clearly recognized the
inclusion of an attempt within MCL 750.529a, stating, in relevant part:
“While the new statute makes clear that actions taken in an attempt to
commit a larceny are included in the ambit of the statute, it also makes clear
that the required criminal act or attempt is a larceny.”
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view the evidence in a light most favorable to the
prosecution and determine whether any rational trier
of fact could have found that the essential elements of
the crime were proven beyond a reasonable doubt.”
People v Wolfe, 440 Mich 508, 515; 489 NW2d 748
(1992), amended 441 Mich 1201 (1992). In the factual
circumstances of this case, defendant acknowledged
that he represented to the store clerk that he was in
possession of a weapon at the Admiral tobacco shop.
From the colloquy at sentencing, it was also established
that defendant had the intent to take or obtain money
from the store’s cash register. It was not established
that defendant had any intention to harm the store’s
clerk. While defendant was not successful in that he left
the store without money from the cash register, suffi-
cient elements of the crime were established to sustain
his conviction for armed robbery based on the language
of the statute.
Affirmed.
O
WENS
,P.J., concurred.
G
LEICHER
,J.(dissenting). I respectfully dissent. In my
view, the Legislature did not intend that its 2004
amendment of the armed robbery statute would funda-
mentally alter the elements of that offense by eliminat-
ing the requirement of a completed larceny.
I. UNDERLYING FACTS AND PROCEEDINGS
On July 13, 2006, a man matching defendant’s de-
scription entered a Clark gas station in Norton Shores,
declared that he had a gun, and ordered the attendant
to give him all the money in the cash register. After the
attendant complied, the assailant pushed her into a
back room and fled. The next day, defendant entered
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the Admiral tobacco shop (Admiral Tobacco) in
Roosevelt Park, approached the clerk with his hand in
his jacket, and announced, “[Y]ou know what this is,
just give me what I want.” The clerk did not give
defendant any money or property, and defendant fled
from the store without having stolen anything. Defen-
dant apparently broke his leg in flight from the store,
and the police eventually apprehended him. When the
police arrested defendant, they noted that he wore on
his body and possessed in his vehicle the same clothing
worn by the man who had robbed the Clark station the
previous day.
The prosecutor charged defendant with armed rob-
bery of the Clark station (Case No. 06-053668-FC). In a
separate complaint arising from the Admiral Tobacco
events, the prosecutor charged defendant with assault
with intent to rob while armed, MCL 750.89, and armed
robbery, MCL 750.529 (Case No. 06-053640-FC). At a
January 2007 hearing, the prosecutor informed the
circuit court “that [defendant] will be offering...pleas
of guilty in both files.” The prosecutor advised that in
the Admiral Tobacco case, the prosecution had elected
to dismiss the assault with intent to rob while armed
charge and accept defendant’s guilty plea to a charge of
armed robbery. Defense counsel summarized the par-
ties’ agreement that defendant’s sentence would
“not...exceed 24 years on the minimum-maximum at
the Michigan Department of Corrections.”
After apprising defendant of his constitutional and
other rights, the circuit court moved on to establish a
factual predicate for defendant’s plea to the Clark
station robbery. However, defendant denied having rep-
resented to the station attendant that he possessed a
weapon. When the circuit court offered to allow the
parties additional time to further discuss defendant’s
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guilty plea, the prosecutor suggested that the court
instead establish the “factual scenario of the Admiral”
Tobacco incident. Under questioning by the prosecutor,
defendant admitted that he had entered Admiral To-
bacco with the intent to steal money, had his hand “up
under” his coat, and told the clerk, “[Y]ou know what
this is, just give me what I want.” The prosecutor’s
questioning continued as follows:
[Prosecutor]: Okay. And it was your intent, at that time,
for her to give you the money out of the cash register, is
that right?
Defendant: Yeah.
[Prosecutor]: All right.
The Court: Great—
[Prosecutor]: And I think that satisfies.
The Court: Great. I think we’re all set on Admiral.
The parties then returned to presenting a factual
basis for defendant’s plea to the Clark station robbery.
Defense counsel averred that defendant was high on
cocaine during the Clark station robbery and could not
recall the details of the crime. Defense counsel proposed
that defendant could enter a no contest plea. The circuit
court agreed it would resort to a police report to
establish the factual predicate for defendant’s no con-
test plea, summarizing,
I think we’ve established here a lack of memory is the
reason for the nolo plea about the Clark station, in file
number 668. The report established that Mr. Williams, is
guilty of the crime, on that file, to which he pleads no
contest. The court finds the plea to be knowing, voluntary,
understanding, and accurate. On that file, the court will
accept the plea.
On the other file, Mr. Williams’s testimony does that for
me. The court finds his testimony to establish commission
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of that crime and location here in Muskegon County. The
court finds that plea as well to be knowing, voluntary,
understanding, and accurate. So the court accepts that
plea.
On February 9, 2007, the court sentenced defendant to
concurrent terms of 24 to 40 years’ imprisonment for
the Clark station and Admiral Tobacco robberies.
In October 2007, defendant moved to withdraw both
his pleas, contending that the circuit court neglected to
secure an adequate factual foundation for either plea.
According to defendant, the Admiral Tobacco plea dis-
cussions revealed no evidence that he had committed a
larceny, and the police report used to supply the factual
basis of the Clark station plea did not sufficiently
identify defendant as the robber. The circuit court
denied defendant’s motions, ruling (1) with respect to
the Admiral Tobacco plea, that the language of the
armed robbery statute allows conviction based on an
attempted larceny, which the plea discussions substan-
tiated, and (2) concerning the Clark station robbery,
that the entirety of the police report and plea proceed-
ing amply established defendant’s participation in the
Clark station robbery. This Court granted defendant’s
delayed application for leave to appeal, “limited to case
no. 06-053640-FC [Admiral Tobacco] on the issue of a
completed larceny only. In all other respects, the de-
layed application for leave is denied.” People v Williams,
unpublished order of the Court of Appeals, entered
June 16, 2008 (Docket No. 284585).
II. ANALYSIS
“There is no absolute right to withdraw a guilty plea
once it has been accepted by the trial court.” People v
Montrose (After Remand), 201 Mich App 378, 380; 506
NW2d 565 (1993). Where, as here, a defendant moves to
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withdraw his or her plea after sentencing occurs, “[t]he
trial court’s decision will not be disturbed on appeal
absent a clear abuse of discretion that resulted in a
miscarriage of justice.” People v Boatman, 273 Mich
App 405, 406-407; 730 NW2d 251 (2006). “In reviewing
the adequacy of the factual basis for a plea, this Court
examines whether the factfinder could properly convict
on the facts elicited from the defendant at the plea
proceeding.” People v Brownfield (After Remand), 216
Mich App 429, 431; 548 NW2d 248 (1996), citing People
v Booth, 414 Mich 343, 360; 324 NW2d 741 (1982).
Defendant insists that because he “never stole, moved
or touched property” during the Admiral Tobacco inci-
dent, a fact-finder could not have convicted him of an
armed robbery. Defendant emphasizes that larceny con-
stitutes “an integral and necessary element of armed
robbery,” and absent evidence of a completed larceny, the
circuit court erred by accepting his guilty plea to violating
MCL 750.529. The majority rejects defendant’s argument,
holding that the Legislature’s 2004 amendment of the
robbery statute “specifically considers and incorporates
acts taken in an attempt to commit a larceny, regardless of
whether the act is completed.” Ante at 75. In my estima-
tion, the majority erroneously reaches its holding by
reading into the statute language that the Legislature did
not incorporate into the statute.
I approach my analysis bearing in mind that “[u]n-
derlying the criminal statutes of this state is the com-
mon law.” People v McDonald, 409 Mich 110, 117; 293
NW2d 588 (1980). The common-law definition of a
crime binds Michigan courts until the Legislature modi-
fies the elements of the crime. People v Perkins, 468
Mich 448, 455; 662 NW2d 727 (2003). In People v
Covelesky, 217 Mich 90, 100; 185 NW 770 (1921), our
Supreme Court instructed:
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A well recognized rule for construction of statutes is
that when words are adopted having a settled, definite and
well known meaning at common law it is to be assumed
they are used with the sense and meaning which they had
at common law unless a contrary intent is plainly shown.
When a statute incorporates general common-law
terms to describe an offense, we thus construe the
statutory crime through the lens of common-law defi-
nitions. People v Riddle, 467 Mich 116, 125; 649 NW2d
30 (2002). In Riddle, our Supreme Court quoted ap-
provingly the following relevant passage from Moris-
sette v United States, 342 US 246, 263; 72 S Ct 240; 96
L Ed 288 (1952):
[W]here [a legislature] borrows terms of art in which are
accumulated the legal tradition and meaning of centuries
of practice, it presumably knows and adopts the cluster of
ideas that were attached to each borrowed word in the body
of learning from which it was taken and the meaning its
use will convey to the judicial mind unless otherwise
instructed. In such case, absence of contrary direction may
be taken as satisfaction with widely accepted definitions,
not as a departure from them.
Michigan’s original robbery statutes derived from
the common-law crime of robbery, and fashioned that
crime into two grades. People v Calvin, 60 Mich 113,
120; 26 NW 851 (1886). In Calvin, our Supreme Court
distinguished the two grades of robbery as “one in
which the robbery is committed by an assault and
robbery from the person, the robber being armed with a
dangerous weapon,...theother in which the offense is
perpetrated by force and violence, or by assault or
putting in fear, and robbing, stealing, and taking from
the person of another, the robber not being armed with
a dangerous weapon....” Id. at 119. Today, MCL
750.530 delineates the elements of an unarmed robbery,
and MCL 750.529 defines armed robbery by adding to
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MCL 750.530 the element that the robber possessed a
dangerous weapon or “an article used or fashioned in a
manner to lead any person present to reasonably be-
lieve the article [was] a dangerous weapon, or [the
robber] represent[ed] orally or otherwise that he or she
[was] in possession of a dangerous weapon....”
Under the common law, the crime of robbery indis-
putably included as an essential element the commis-
sion of a larceny. “Since, by definition, robbery includes
larceny, robbery requires a caption and asportation of
the property of another.” Wharton’s Criminal Law
(15th ed), § 457, p 13. Wharton further instructs that a
defendant accomplishes “a caption when...[he] takes
possession; he takes possession when he exercises do-
minion and control over the property.” Id. Professors
Wayne LaFave and Austin Scott also explain, in rel-
evant part:
Robbery, a common-law felony, and today everywhere a
statutory felony regardless of the amount taken, may be
thought of as aggravated larceny—misappropriation of
property under circumstances involving a danger to the
person as well as a danger to property—and thus deserving
of a greater punishment than that provided for larceny.
[LaFave & Scott, Criminal Law (Hornbook Series, 1972),
§ 94, p 692.]
Larceny, in turn, “requires that there be a ‘trespass in
the taking,’ i.e., that the thief take the property out of
the possession of its possessor....”Id., § 85, p 622.
In Covelesky, 217 Mich at 96-97, our Supreme Court
observed that Michigan’s robbery statutes embody the
common-law offense of robbery:
Robbery at common law is defined as the felonious
taking of money or goods of value from the person of
another or in his presence, against his will, by violence or
putting him in fear. This definition has been followed by
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most of the statutes, and even where the language has been
varied sufficiently to sustain, by a literal interpretation, a
narrower definition of the offense, it has usually been held
that it could not be presumed that the legislature intended
to change the nature of the crime as understood at common
law. [Quotation marks and citation omitted.]
In Saks v St Paul Mercury Indemnity Co, 308 Mich 719,
723-724; 14 NW2d 547 (1944), the Supreme Court
quoted approvingly the following from a decision of the
Washington Supreme Court, Cartier Drug Co v Mary-
land Cas Co, 181 Wash 146, 149; 42 P2d 37 (1935): “ ‘In
the administration of criminal law, two distinct ele-
ments are held to be necessary to the crime of robbery:
(1) Putting the victim in fear of violence to his person or
property; and (2) the taking of money, property, or thing
of value from his person or in his presence.’ ” And in
People v LaTeur, 39 Mich App 700, 706; 198 NW2d 727
(1972), this Court noted that “[l]arceny is one of the
essential elements of an armed robbery charge.” More
recently, in People v Jankowski, 408 Mich 79, 87; 289
NW2d 674 (1980), the Supreme Court reiterated the
proposition that “[r]obbery has long been defined in
this jurisdiction to be nothing more than a ‘larceny
committed by assault or putting in fear’.” “When the
taking is accomplished by force or assault, the offense is
aggravated to one of robbery.” Id.at88.
With these principles in mind, I conclude that the
Legislature did not intend that the armed robbery
statute would permit a conviction absent an accom-
plished larceny. In 2004, the Legislature reworked
Michigan’s robbery statute, MCL 750.529, to read, in
relevant part, as follows:
A person who engages in conduct proscribed under
section 530 and who in the course of engaging in that
conduct, possesses a dangerous weapon or an article used
or fashioned in a manner to lead any person present to
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reasonably believe the article is a dangerous weapon, or
who represents orally or otherwise that he or she is in
possession of a dangerous weapon, is guilty of a felony
punishable by imprisonment for life or for any term of
years.
Concomitantly, the Legislature enacted a revised un-
armed robbery statute, MCL 750.530, that described as
follows the unlawful “conduct” referenced in § 529:
(1) A person who, in the course of committing a larceny
of any money or other property that may be the subject of
larceny, uses force or violence against any person who is
present, or who assaults or puts the person in fear, is guilty
of a felony punishable by imprisonment for not more than
15 years.
(2) As used in this section, “in the course of committing
a larceny” includes acts that occur in an attempt to commit
the larceny, or during commission of the larceny, or in flight
or attempted flight after the commission of the larceny, or
in an attempt to retain possession of the property.
The majority holds that when the Legislature
amended § 530 in 2004, it intended to eliminate a
larcenous taking as a requisite element of a robbery. In
the majority’s opinion, “[t]he legislative definition of ‘in
the course of committing a larceny’ specifically ‘in-
cludes acts that occur in an attempt to commit the
larceny,’ ” reflecting the Legislature’s intent to punish
both complete and incomplete larceny-related actions.
Ante at 75.
When construing statutory language, which we
review de novo, this Court must ascertain and give
effect to the Legislature’s intent. People v Pasha, 466
Mich 378, 382; 645 NW2d 275 (2002); People v Hill,
269 Mich App 505, 514; 715 NW2d 301 (2006).
“Because the Legislature is presumed to understand
the meaning of the language it enacts into law,
statutory analysis must begin with the wording of the
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statute itself.” Robinson v Detroit, 462 Mich 439, 459;
613 NW2d 307 (2000); see also Pasha, 466 Mich at
382 (“The first step in that determination is to review
the language of the statute itself.”) (quotation marks
and citation omitted). In Bush v Shabahang, 484
Mich 156, 167-168; 772 NW2d 272 (2009), our Su-
preme Court offered this additional guidance regard-
ing statutory interpretation:
A statute must be read in conjunction with other
relevant statutes to ensure that the legislative intent is
correctly ascertained. The statute must be interpreted in
a manner that ensures that it works in harmony with the
entire statutory scheme. Moreover, courts must pay
particular attention to statutory amendments, because a
change in statutory language is presumed to reflect
either a legislative change in the meaning of the statute
itself or a desire to clarify the correct interpretation of
the original statute. Finally, an analysis of a statute’s
legislative history is an important tool in ascertaining
legislative intent.
Our Supreme Court has explained that the Legisla-
ture enacted the current version of the robbery statute
in response to the Supreme Court’s decision in People v
Randolph, 466 Mich 532; 648 NW2d 164 (2002). In
Randolph, the Supreme Court considered whether the
robbery statute then in effect embraced the “transac-
tional approach” to robbery, under which “a defendant
has not completed a robbery until he has escaped with
stolen merchandise. Thus, a completed larceny may be
elevated to a robbery if the defendant uses force after
the taking and before reaching temporary safety.” Id.at
535. The Supreme Court in Randolph rejected the
transactional approach, holding that under the common
law the force or violence element of robbery “had to be
applied before or during the taking.” Id. at 538. When
the Legislature subsequently amended the robbery stat-
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utes, it “explicitly stated that unarmed robbery is a
transactional offense.” People v Morson, 471 Mich 248,
265 n 2; 685 NW2d 203 (2004) (C
ORRIGAN
, C.J., concur-
ring).
Distilled to its essence, the majority’s position here
is that, in addition to legislatively overruling Ran-
dolph, the Legislature’s 2004 amendments to MCL
750.529 and MCL 750.530 also fundamentally altered
the common-law underpinnings of the crime of rob-
bery by eliminating the requirement of a completed
larceny. But my analysis of the statutory language
and the legislative history reveals no support for the
majority’s conclusion. Although the Legislature has
the authority to abrogate the common law, “[w]hen it
does so, it should speak in no uncertain terms.”
Hoerstman Gen Contracting, Inc v Hahn, 474 Mich 66,
74; 711 NW2d 340 (2006). Neither § 529 nor § 530
contains definite, clear, or plain language evincing
the Legislature’s intent to fundamentally alter the
understanding of more than a century, that “[l]arceny
is one of the essential elements of an armed robbery
charge.” LaTeur, 39 Mich App at 706.
Furthermore, the plain language of MCL 750.530
refutes that the amended robbery statutes permit
conviction without proof of a completed larceny. Pur-
suant to § 530(1), a person who uses force or violence,
puts in fear, or assaults another “in the course of
committing a larceny” is guilty of a felony. Subsection
530(2) sets forth that the phrase “in the course of
committing a larceny” includes “acts that occur in an
attempt to commit the larceny, or during commission
of the larceny, or in flight or attempted flight after
the commission of the larceny, or in an attempt to
retain possession of the property.” Section 530 does
not specifically define “in the course of,” but accord-
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ing to Webster’s New World Dictionary (2d college ed,
1970), “in the course of” means “in the progress or
process of; during.” Applying this meaning in the
context of § 530, subsection 530(1) signifies that a
person who uses force or violence at any point from
the inception of the larceny until its conclusion is
subject to prosecution for armed robbery. By elucidat-
ing in § 530 the “acts” constituting robbery, the
Legislature intended to expand the temporal scope of
the crime, transforming it into a transactional of-
fense. Reading §§ 530(1) and (2) as a contextual
whole, it appears that the Legislature sought to make
clear that robbery encompasses acts that occur be-
fore, during, and after the larceny, not that the
Legislature intended to eliminate larceny as an ele-
ment of the crime. Nor does the legislative history
suggest any purpose other than “to include any crime
of larceny that involved the use of force or violence, or
fear, at any time during the commission of the crime.”
House Legislative Analysis, HB 5105, February 12,
2004.
“Before accepting a guilty plea, a trial court must
question the defendant to ascertain whether there is
support for a finding that the defendant is guilty of the
offense to which he is pleading guilty.” People v Watkins,
468 Mich 233, 238; 661 NW2d 553 (2003). When ques-
tioning the defendant, the circuit court “must establish
support for a finding that the defendant is guilty of the
offense charged or to which the defendant is pleading.”
MCR 6.302(D)(1). Here, no evidence exists that defen-
dant committed a larceny at Admiral Tobacco. Without
evidence that defendant’s actions at Admiral Tobacco
included a larceny, I believe that the circuit court
abused its discretion by denying defendant’s motion to
withdraw his guilty plea. Consequently, I would vacate
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defendant’s conviction and sentence with regard to the
Admiral Tobacco incident.
1
1
Because the length of the sentence imposed by the circuit court in the
Clark station robbery (Case No. 06-053668-FC) was directly linked to and
packaged with defendant’s plea in the Admiral Tobacco case as part of a
bargain made pursuant to People v Cobbs, 443 Mich 276; 505 NW2d 208
(1993), I believe that defendant should be permitted to withdraw the nolo
contendere plea in Case No. 06-053668-FC.
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JONES v DAIMLERCHRYSLER CORPORATION
Docket No. 285099. Submitted December 8, 2009, at Detroit. Decided
January 7, 2010. Approved for publication April 8, 2010, at 9:05
a.m.
Timothy and Chrystal Jones brought a negligence action against
DaimlerChrysler Corporation in the Macomb Circuit Court for
injuries sustained by Timothy Jones when he fell through a
trapdoor on the mezzanine of one of defendant’s plants while
working for a contractor. The trapdoor, which was situated near
the top of a staircase, had been opened moments before the
accident by one of Timothy Jones’s coworkers, who was unaware
of his approach. The trial court, Mary A. Chrzanowski, J., granted
defendant’s motion for summary disposition of plaintiffs’
premises-liability claim on the ground that defendant had no
knowledge of the dangerous condition on its property and could
not have discovered it between its creation and the accident.
Plaintiffs appealed.
The Court of Appeals held:
1. The trial court properly granted defendant’s motion for
summary disposition with respect to the open trapdoor because
defendant had no duty to protect plaintiff from a temporary,
unexpected hazardous condition of which defendant had no notice
and that was created by employees of a contractor to whom
defendant had given control over the work site.
2. The trial court erred by granting defendant’s motion for
summary disposition with respect to plaintiffs’ claim that the
location and design of the trapdoor made it a dangerous condition,
which presented a question of fact. This claim is properly catego-
rized as one alleging premises liability rather than nuisance, and
the evidence indicates that the dangers presented by the trapdoor
were not open and obvious.
Affirmed in part, reversed in part, and remanded for further
proceedings.
1. N
EGLIGENCE —
P
REMISES
L
IABILITY —
D
ANGEROUS
C
ONDITIONS
.
The creation of a temporary, unexpected dangerous condition by
employees of a contractor that has control over a work site does
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not give rise to premises liability where the owner of the work site
had no knowledge or notice of the condition.
2. N
EGLIGENCE —
P
REMISES
L
IABILITY —
D
ANGEROUS
C
ONDITIONS —
L
OCATION AND
D
ESIGN OF
T
RAPDOOR
.
A claim that the location and design of a trapdoor makes it a
dangerous condition presents a factual question that precludes
summary disposition.
Sachs Waldman, Professional Corporation (by
George T. Fishback), for plaintiffs.
Cardelli, Lanfear & Buikema, P.C. (by Anthony F.
Caffrey III and Lisa C. Walinske), for defendant.
Before: M
ETER
,P.J., and B
ORRELLO
and S
HAPIRO
,JJ.
P
ER
C
URIAM.
In this premises liability action, plain-
tiffs
1
appeal by right following the trial court’s grant of
defendant’s motion for summary disposition under
MCR 2.116(C)(10) and dismissal of plaintiffs’ complaint
with prejudice. We affirm in part, reverse in part, and
remand for further proceedings.
I. SUMMARY OF FACTS AND PROCEEDINGS
Plaintiff was injured on May 31, 2006, when he fell
through a trapdoor opening
2
in a mezzanine walkway in
1
Because plaintiff Chrystal Jones brings a derivative loss of consor-
tium claim, references in this opinion to “plaintiff” refer to plaintiff
Timothy Jones.
2
The trapdoor sits to the right of a staircase leading to the mezzanine
walkway made of open metal grating. The trapdoor is hinged at the edge
of the grating under the railing surrounding the stairwell so that when it
is opened, the grating swings up and rests against the railing (where it
can be held with a hook), creating an open hole without barriers on the
three sides along the walkway. Thus, by coming up the stairs and making
two 90-degree turns, a person faces an open edge of the hole with the left
and far edges also open, and the lifted grating to the right, leaning
against the railing.
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defendant’s Sterling Heights plant. At the time of the
accident, plaintiff was working on a renovation project
at the plant and was employed by Durr Systems (Durr)
as a millwright. Defendant hired Durr to change over a
multitude of conveyor components that are used on the
paint line of the assembly plant. Plaintiff testified that
he was the supervisor for the millwrights working on
the project and had been working on-site for roughly
two to three weeks, between six and seven days a week.
Before this assignment, plaintiff had been to this plant
on five or six occasions to do preliminary work for this
job. Defendant’s plant was shut down while Durr was
completing the work, and plaintiff did not report to an
employee of defendant during his time working at the
plant.
One of the conveyors that the Durr employees were
working on could only be accessed from the mezzanine.
Plaintiff indicated that he was familiar with the area
within defendant’s plant where he was working, includ-
ing the mezzanine area. Plaintiff testified that during
his time on this job, he had been on the mezzanine
often, climbing the stairs roughly three or four times a
day before the incident in order to check the progress of
the work being done. Plaintiff acknowledged that he
knew there were grates that could be removed in the
mezzanine area because he had seen some removed in
other parts of the plant. Plaintiff was also familiar with
similar grate systems in other plants he had worked in.
Plaintiff knew that the Durr employees would need to
lift or hoist some products to the mezzanine, and he
stated that occasionally the products are lifted through
removed sections of the grating.
On the night of the incident, plaintiff walked up the
stairs to the mezzanine in order to distribute pay-
checks. According to plaintiff, Mike Perry, the iron-
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worker foreman, walked up the stairs behind plaintiff.
Regarding the fall, plaintiff testified that he “went up
the staircase and went to my right as I got to the top of
the staircase, and that’s all I remember... the next
thing I know, I was laying on the floor.” Plaintiff did not
recall seeing anyone on the mezzanine before his fall
and he did not recall looking down. Plaintiff was wear-
ing safety glasses and a hard hat at the time he fell.
When plaintiff awoke, he was laying on the ground.
Plaintiff was told after the fall that the “Perry boys,” a
group of cousins that worked as ironworkers for Durr,
may have moved a section of grating from the floor.
One of the Perry boys, Lonnie Perry, worked as an
ironworker at Durr on the date of the incident. Lonnie
stated that he heard plaintiff tell his cousin, Mike Perry,
that a section of the conveyor would need to be lifted
through the grating. Lonnie testified:
And, Mike told us, me and Randy Perry, to go up the
stairwell to see if we could get the grating open so we could
shoot a small piece of conveyor end in up though the
grating. And I looked and I seen there wasn’t...nosafety
tape or anything such as that, so I told the steward that we
needed some red tape. And, he said he didn’t have any, but
he would go look. So, then I and Randy walked up the
stairwell, identified the piece of grating where we needed to
shoot the rig through with the piece. And, it was all
phosphated, all gluey, pretty sticky; didn’t believe we could
ever get it open. Randy was standing in front of me; I bent
over at the—the left edge of it; I put my pry bar in there
and I got it to come open, surprisingly, and found out it was,
actually, even on hinges. And, just—I no more than opened
it, my—I was looking towards my cousin Randy, his eyes
got big, I heard the grating rattle; I looked and [plaintiff]
had walked right by me, right into the hole and all I could
see was his eyes of terror going to the ground. And, it was
just that quick. [Plaintiff] had been walking and he had
followed me right up the stairwell. I didn’t realize it. And,
he had a handful of checks in his hand and he was just
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getting ready to go down the conveyor to hand out checks
to—to his employees, his millwrights. And, as soon as I
heard the rattle, I seen his eyes and I seen checks flying
everywhere...andIwatched him go to the ground and hit
the gang box. He bounced off a set of torches and a gang
box and laid there unconscious.
Lonnie said that the grating was open “two tenths of a
second, possibly” before plaintiff stepped into the hole.
Michaeline Cartwright, who worked as a safety coordi-
nator for Durr from 2004 to 2006, documented that the
grating had been opened “for less than ten seconds.”
Cartwright testified that on the night of the incident,
she spoke to one of defendant’s employees, Nick Juncaj,
who was temporarily working as the UAW safety rep-
resentative. Juncaj testified that he filled in for the
regular safety representative for five weeks, beginning
on May 19, 2006. According to Cartwright, Juncaj
stated that there had been two other accidents at the
same location within the past three years. However, at
his deposition, Juncaj denied knowing of any prior
accidents and he did not recall telling Cartwright of
other injuries in this area. Juncaj testified that he had
worked at the Sterling Heights plant since 1991, full
time since 1994. Pat Christie, defendant’s safety super-
visor, testified that the hinged sections on the mezza-
nine have been used “time and again.” Christie also
indicated that he had no knowledge of other accidents
with people falling through the hinged section of the
mezzanine floor.
Plaintiffs originally sought relief asserting claims of
both premises liability, based on defendant’s ownership
of the premises, and contractor liability, under the
retained control doctrine, on the theory that defendant
had retained control over the renovation project. See
Ormsby v Capital Welding, Inc, 471 Mich 45, 60; 684
NW2d 320 (2004). However, plaintiffs stipulated to
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dismissal of this latter claim, as well as its claim
predicated on the inherently dangerous activity doc-
trine, and proceeded only on the claim predicated on
defendant’s ownership of the premises.
Defendant filed a motion requesting summary dispo-
sition. After considering the evidence, the trial court
granted defendant’s motion, holding:
In the instant matter, the dangerous condition was
created when plaintiff’s co-employees raised a grate on the
mezzanine-level walkway, creating an unwarned and un-
guarded hole through which someone could fall. The record
is devoid of any evidence suggesting defendant knew or
should have known that plaintiff’s co-employees would
create such a dangerous condition.
Moreover, the record clearly established the dangerous
condition existed for less than ten seconds before plaintiff
fell through the opening. There is no evidence suggesting
defendant knew of the dangerous condition in the short
time of its existence; the short time also precludes a finding
that defendant could have discovered the dangerous condi-
tion before plaintiff encountered it.
The mere fact that similar accidents may have occurred
in the past does not establish defendant had knowledge of
[the fact] that an actual dangerous condition, the open
grate, existed when plaintiff fell. To the contrary, the grate
was obviously kept closed to prevent injuries. While defen-
dant would clearly have had knowledge of the potential for
danger from the prior accidents, defendant would not have
knowledge that that actual dangerous condition existed or
would be permitted to exist without some sort of protection
(e.g., warning tape or barricade) when plaintiff fell. Hence,
plaintiff has not shown further discovery stands a fair
chance of uncovering factual support for his position to
avoid summary disposition.
Plaintiffs now appeal, challenging the grant of sum-
mary disposition as well as the trial court’s subsequent
denial of their motion for reconsideration.
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II. STANDARD OF REVIEW
We review de novo a trial court’s decision on a motion
for summary disposition. Odom v Wayne Co, 482 Mich
459, 466; 760 NW2d 217 (2008). For a motion brought
under MCR 2.116(C)(10), we review the pleadings,
admissions, and other evidence in the light most favor-
able to the nonmoving party and, if there are no
genuine issues of material fact, the moving party is
entitled to judgment as a matter of law. Id. at 466-467.
A trial court’s action on a motion for reconsideration is
reviewed for an abuse of discretion. Woods v SLB Prop
Mgt, LLC, 277 Mich App 622, 629; 750 NW2d 228
(2008).
III. ANALYSIS
As an initial matter, we note that a subcontractor’s
employee who is injured on a work site may bring
claims for both premises liability and contractor liabil-
ity. See, e.g., Ghaffari v Turner Constr Co, 473 Mich 16;
699 NW2d 687 (2005); Perkoviq v Delcor Homes-Lake
Shore Pointe, Ltd, 466 Mich 11; 643 NW2d 212 (2002).
Therefore, plaintiffs’ concession that they had no con-
tractor liability claim did not automatically preclude a
premises liability claim. To the extent that defendant
asserted the contrary, we reject its argument.
To establish a premises liability claim, “a plaintiff
must prove the elements of negligence: (1) the defen-
dant owed the plaintiff a duty, (2) the defendant
breached that duty, (3) the breach was the proximate
cause of the plaintiff’s injury, and (4) the plaintiff
suffered damages.” Benton v Dart Props, Inc, 270 Mich
App 437, 440; 715 NW2d 335 (2006).
Plaintiffs first argue that the trial court erred by
concluding that defendant had not created the danger-
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ous condition and could not be held liable for plaintiff’s
injuries. Plaintiffs argue that defendant created the
danger by placing the trapdoor in the mezzanine walk-
way. Defendant argues that plaintiff’s coworkers cre-
ated the condition when the trapdoor was opened and
no barricade was placed around the opening. We con-
clude that there are two separate potential dangerous
conditions on defendant’s premises for which it could be
held liable. Although the trial court appears to have
based its ruling on the conclusion that the dangerous
condition was the open trapdoor, at oral argument,
counsel for plaintiffs indicated that the dangerous con-
dition was not the open trapdoor, per se, but rather its
location in the walkway and where it was hinged.
Because these are distinct claims, see Bluemer v Sagi-
naw Central Oil & Gas Serv, Inc, 356 Mich 399; 97
NW2d 90 (1959), we address them separately.
A. THE OPEN TRAPDOOR
Looking first at defendant’s liability for the open
trapdoor as the dangerous condition, we conclude that
the trial court properly granted summary disposition on
this issue.
“It is a general proposition that liability for an injury
due to defective premises ordinarily depends upon
power to prevent the injury....”Nezworski v Mazanec,
301 Mich 43, 56; 2 NW2d 912 (1942) (quotation marks
and citation omitted). In this case, there is undisputed
evidence that one of plaintiff’s coworkers opened the
trapdoor moments before plaintiff fell. Defendant did
not open the section and leave it in a dangerous
condition. Rather, the open trapdoor was a construction
site hazardous condition that was created by one of
plaintiff’s co-employees. We believe that defendant had
106 288 M
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no duty to protect plaintiff from this condition based on
Young v Delcor Assoc, Inc, 477 Mich 931 (2006).
In Young v Delcor Assoc, Inc, unpublished opinion
per curiam of the Court of Appeals, issued June 27,
2006 (Docket No. 266491), rev’d 477 Mich 931 (2006),
the plaintiff was a subcontractor’s employee who
stepped on a wall panel that had been laid down over
one-third of a second-floor stairwell opening that was
neither covered nor barricaded. The plaintiff knew that
there was a stairwell opening under the wall, but
thought the wall panel was a solid section. The wall was
in two sections that separated when the plaintiff
stepped on the panel, and the plaintiff fell more than 20
feet through both the second and first floor stairwell
openings into the basement. Id. at 2. The trial court
concluded that there was an outstanding factual ques-
tion as to whether the defendant had possession and
control over the premises at the time of the plaintiff’s
injuries, “a necessary element of both claims.” Id. at 4.
However, it concluded that the premises liability claim
failed as a matter of law because “either the opening
itself or the opening partially covered by the wall panel”
was open and obvious or “presented an unexpected
hazard for which [defendant] did not have notice as
even plaintiff did not realize that the wall panel would
not support his weight.” Id. at 4-5. The plaintiff ap-
pealed the summary disposition on both the premises
liability and contractor liability claims. The Court of
Appeals panel affirmed summary disposition on the
contractor liability claim, but reversed on the premises
liability claim, concluding:
[T]he allegedly dangerous condition for which plaintiff
was attempting to hold [defendant] liable...as the pre-
mises possessor, was the stairwell sans stairs. That is the
allegedly unreasonable risk of harm that [defendant]
should have known existed on its property, not the jointed
2010] J
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wall panel that plaintiff’s coworker placed partially over
the opening just before plaintiff fell. And, we agree with the
trial court that the open, unbarricaded stairwell was an
open and obvious condition.... However, the issue is
whether there is evidence that creates a genuine issue of
material fact that [defendant] should have anticipated
harm despite plaintiff’s knowledge of the stairwell sans
stairs, i.e., if special aspects of the condition made the open
and obvious risk unreasonably dangerous. We conclude
that [defendant] should have anticipated such harm....
[Id. at 6-7.]
It concluded that there was a genuine issue of material
fact “regarding whether there were special aspects of
the stairwell that gave rise to a uniquely high likelihood
of harm or severity of harm if confronted and, there-
fore, [defendant] had a duty to undertake reasonable
precautions to protect invitees, like plaintiff, from that
risk.” Id. at 8.
Our Supreme Court unanimously peremptorily re-
versed the panel and reinstated the trial court’s grant of
summary disposition on the premises liability claim.
Young, 477 Mich at 931. Citing Perkoviq, 466 Mich at
18-20, it held:
The defendant premises owner did not have a duty to
protect the plaintiff, an employee of an independent con-
tractor hired to perform construction work on the owner’s
premises, from the construction site hazardous condition
that contributed to the plaintiff’s injury. Moreover, the
temporary hazardous condition was created by the inde-
pendent contractor, the defendant premises owner had no
notice of the condition, and the condition was not unrea-
sonably dangerous....[Young, 477 Mich at 931 (emphasis
added).]
Here, defendant had no notice that the grate was being
opened; none of its employees was present and it was
uncontested that the trapdoor had been open at most 10
108 288 M
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seconds before the accident occurred.
3
See Moore v
Traverse City Masonic Bldg Ass’n, 324 Mich 507, 521;
37 NW2d 457 (1949) (holding that the plaintiff failed to
prove “that the door in question was open a sufficient
length of time before the accident to charge defendant
with knowledge that the door was open”). Additionally,
it was an independent contractor that created the
temporary hazardous condition. Because Durr employ-
ees opened the trapdoor in order to get equipment
through, the open trapdoor was a “construction site
hazardous condition that contributed to the plaintiff’s
injury.” Young, 477 Mich at 931. We find Young control-
ling on this point, and hold that defendant had no duty
to protect plaintiff from the open trapdoor.
Plaintiffs argue that MuthvWPLahey’s, Inc, 338
Mich 513; 61 NW2d 619 (1953), provides that liability
may be imposed on defendant based on Durr employees’
actions. We disagree. In Muth, a customer who went
into a store to buy shoes fell through a trapdoor that
was left open by a shoe department employee. Id. at
516. At the time, the shoe department was operated by
another company pursuant to a lease. Id. Our Supreme
Court upheld the imposition of liability on the store
owner, even though it was the shoe department compa-
ny’s employee who had left the door open. Id. at
519-520. In Bluemer, 356 Mich at 409-411, however, our
Supreme Court distinguished Muth, and indicated that
the imposition of liability on the store owner was not
3
Plaintiffs’ allegations regarding additional accidents do not provide
evidence of notice of the open trapdoor; rather, they are more appropri-
ately applied to whether defendant had notice of whether the location of
the trapdoor or how it was hinged was a dangerous condition. We note,
however, that plaintiffs’ allegations of notice that are premised on an
accident that occurred in 1988, before defendant owned the facility,
cannot be sustained absent some evidence that defendant acquired
knowledge of that accident.
2010] J
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based simply on the fact that the defendant owned the
store, but based on the store owner’s essentially com-
plete control over the shoe department company’s busi-
ness activities, including employee hiring. Id. at 409-
410. By contrast, where a lessor does not conduct
business or direct its tenant’s business, liability is
imposed on the lessee, not the property owner. Id. at
411-412. See also Brown v Std Oil Co, 309 Mich 101; 14
NW2d 797 (1944) (holding that the owner of a gas
station was not liable for the injuries to an employee of
the lessee gas station because the lease did not reserve
to the owner the right to exercise control over the
business or operations of the lessee on the premises).
Here, defendant had turned over control of the con-
struction site to Durr, and there was no evidence that
defendant was exercising control over the construction
site. Accordingly, the negligent acts of Durr employees
in opening the trapdoor without proper barricading
could not be imputed to defendant.
B. THE PRESENCE, LOCATION, AND DESIGN OF THE TRAPDOOR
Alternatively, plaintiffs argue that defendant was
liable because it created a dangerous condition by
leaving the trapdoor
4
in a place that invitees were free
to use, by leaving the trapdoor hinged in a manner that
left a completely unguarded hole in the grating when
open, and by failing to give any warning regarding its
existence or to provide barricades or other safeguards
when the trapdoor was open. We conclude that this
claim is distinct from the dangerous condition of the
open trapdoor and that plaintiffs have shown an out-
standing question of fact on this issue, which precludes
summary disposition.
4
The evidence indicated that the trapdoor was not designed or placed by
defendant, but rather existed before defendant purchased the building.
110 288 M
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In Bluemer, 356 Mich at 410-416, our Supreme Court
concluded that the liability of a property owner for the
dangerousness of a trapdoor based on “its use, location,
and other circumstances” was a question separate and
apart from its liability based on the lessee’s employee’s
negligence in leaving the trapdoor open, and that liabil-
ity could be imposed for the former. Bluemer cites two
cases that we find similar to the instant case:
In Dahl v. Glover, 344 Mich 639 [75 NW2d 11 (1956)],
which was an action for damages resulting from plaintiff
falling into a manhole in a sidewalk in front of defendants’
premises, the proofs indicated that plaintiff stepped on the
cover of the manhole, and that the cover tilted upward and
rolled away. Plaintiff’s fall resulted. It was the theory of the
plaintiff that the cover was defective. The trial court in
submitting the case to the jury referred to different types of
nuisances, including such resulting by reason of circum-
stances and surroundings, leaving it to the jury to say
whether under the facts in the case and inferences to be
drawn therefrom the manhole and manhole cover consti-
tuted a menace dangerous to the public and therefore a
nuisance. The charge as given was approved by this Court
and judgment for the plaintiff was affirmed.
In Brown v. Nichols, 337 Mich 684 [60 NW2d 907
(1953)], plaintiff was injured as the result of being struck
by a door to an establishment owned and operated by the
defendants, which door was so constructed that it swung
out over a public sidewalk. The trial court did not submit
the case to the jury on the theory of a nuisance in fact
because of the consequences that might result from the use
of a door so constructed and operated. In reversing the case
and remanding it for a new trial, it was held:
“The question as to what constitutes a nuisance is one of
law for the court, but it is for the jury to decide whether a
particular act or structure or use of property, which is not
a nuisance per se, is a nuisance in fact and whether an
alleged nuisance is the cause of the losses or injuries
2010] J
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complained of and to what extent such losses or injuries are
attributable to the nuisance.” [Bluemer, 356 Mich at 413-
414.]
Although these cases describe the issue as a nuisance
claim, we do not believe that plaintiffs were required to
allege a nuisance in order to claim that the location of
the trapdoor and its design (i.e. where the hinges were
placed) created a dangerous condition. Rather, we be-
lieve that such claims fall under the category of pre-
mises liability. See Michigan Law and Practice, § 1, p 97
(noting that “several Michigan decisions use the term
‘nuisance’ liability to refer to what is essentially pre-
mises liability”); see also Kilts v Kent Co Bd of Super-
visors, 162 Mich 646, 651; 127 NW 821 (1910) (defining
a nuisance as “involv[ing], not only a defect, but threat-
ening or impending danger to the public” and conclud-
ing that the plaintiffs’ claims for faulty tower construc-
tion sounded in negligence, not nuisance).
Because we read Bluemer as using “nuisance” to
refer to a premises liability claim rather than a true
nuisance claim, we conclude that whether the use or
location of a trapdoor makes it a dangerous condition is
a factual question for the jury. Bluemer, 356 Mich at
413-416. Furthermore, given the evidence that none of
Durr’s employees was aware that the grating was
hinged and the photographs that indicate the hinges are
hidden, we conclude that this condition is not open and
obvious. Accordingly, the trial court erred by granting
summary disposition on plaintiffs’ premises liability
claim as to the location of the trapdoor and how it was
hinged. Therefore, we reverse the trial court’s grant of
summary disposition, as to the question of trapdoor
placement and hinging only, and remand for trial.
5
5
We take no position as to whether the placement of the trapdoor or its
design (i.e. where the hinges were placed) was a negligent or dangerous
112 288 M
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IV. CONCLUSION
We affirm the trial court’s grant of summary dispo-
sition as to the open trapdoor, reverse the grant of
summary disposition as to the location of the trapdoor
and the placement of its hinges, and remand for further
proceedings consistent with this opinion. We do not
retain jurisdiction. No costs, neither party having fully
prevailed.
condition. We are only holding that a question of fact exists on this issue.
Additionally, because we find an error in the granting of summary
disposition, we need not consider the question of whether the trial court
erred by denying plaintiff’s motion for reconsideration.
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PEOPLE v MANN
Docket No. 288329. Submitted February 3, 2010, at Grand Rapids.
Decided April 8, 2010, at 9:10 a.m.
Jacob P. Mann was convicted by a jury in the Berrien Circuit Court,
Alfred M. Butzbaugh, J., of three counts of first-degree criminal
sexual conduct and one count of second-degree criminal sexual
conduct with regard to victims under 13 years of age. Defendant
appealed.
The Court of Appeals held:
1. Evidence that defendant committed the crime of attempted
first-degree criminal sexual conduct against a different minor
victim before committing the instant offenses was admissible
under MCL 768.27a(1). The evidence was relevant because it
tended to show that it was more probable than not that the two
minors in this case were telling the truth when they indicated that
defendant had committed criminal sexual conduct offenses against
them. The evidence also made the likelihood of defendant’s behav-
ior toward the minors in this case more probable. The probative
value of the evidence was not substantially outweighed by the
danger of unfair prejudice. The jury was properly instructed that
the only purpose for which the evidence could be considered was to
help the jury judge the believability of the testimony regarding the
acts for which defendant was on trial. The trial court did not abuse
its discretion by admitting the evidence.
2. Comments by the prosecution about defendant not testify-
ing, when viewed in context, were not comments on defendant’s
failure to testify, but rather, were comments regarding the fact
that a statement by defendant regarding his intent was not
necessary in order to prove his intent. Any prejudice that resulted
was mitigated by the jury instructions. Defendant was not denied
a fair trial or his rights to due process.
Affirmed.
Michael A. Cox, Attorney General, B. Eric Restuccia,
Solicitor General, Arthur J. Cotter, Prosecuting Attor-
ney, and Aaron J. Mead, Assistant Prosecuting Attor-
ney, for the people.
114 288 M
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Law Office of John D. Roach, Jr., PLC (by John D.
Roach, Jr.), for defendant.
Before: T
ALBOT
,P.J., and W
HITBECK
and O
WENS
,JJ.
P
ER
C
URIAM
. Following a consolidated trial, the jury
convicted defendant, Jacob Mann, of three counts of
first-degree criminal sexual conduct (CSC I),
1
and one
count of second-degree criminal sexual conduct (CSC
II).
2
The trial court sentenced Mann to 15 to 50 years’
imprisonment for each of the three convictions for CSC
I and to 4 to 15 years’ imprisonment for the CSC II
conviction, with credit for 156 days, the sentences to
run concurrently. Mann appeals as of right. We affirm.
I. BASIC FACTS AND PROCEDURAL HISTORY
RB, one of the victims in this case, was eight years old
at the time of the offense. He lived with his 18-year-old
brother, PP, and their mother in a two-bedroom apart-
ment in Berrien County. PP slept in one of the bed-
rooms and their mother slept in the other bedroom. RB
used what was designed as a dining room for his
bedroom. There were bunk beds in this room.
JB, another victim in this case, who was six years old
and lived on the same street, sometimes played and
spent the night with RB. Mann, who was 17 years old at
the time of the offenses, was one of PP’s friends. Mann
was often at RB and PP’s apartment playing video
games with PP and frequently spent the night. When
JB spent the night at the apartment, RB would usually
sleep in one of the bunk beds and JB would sleep in the
other. If JB was not spending the night, RB would sleep
1
MCL 750.520b(1)(a).
2
MCL 750.520c(1)(a).
2010] P
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in one of the bunk beds and Mann would sometimes
sleep in the other. Because RB and PP’s mother worked
during the day and sometimes on the weekend, there
were times when Mann was at the apartment without
her being there.
The last time Mann spent the night at the apartment
was in early March 2008. On March 10, 2008, RB began
wanting to sleep with his mother all the time. RB told
his mother that he felt safer sleeping with her. RB also
told his mother that he did not want Mann spending the
night anymore. When his mother asked why, RB stated
that Mann touched him “badly.” When asked to explain,
RB indicated that Mann put his “front” in RB’s “be-
hind” and that Mann used lotion when he did this. RB
also indicated that Mann made RB “suck him” and that
Mann sucked RB as well. At trial, RB specifically
testified that Mann did “[b]ad things” to him every time
that Mann came over to the apartment. These bad
things happened in RB’s bedroom, in the bathroom, and
in the front room. In addition, RB testified that when
JB spent the night, RB saw Mann sucking JB in the top
bunk bed when RB got up to go to the bathroom. JB
testified at trial that Mann touched his penis with his
hand on more than one occasion, but did not testify that
there was any other sexual contact.
In response to RB’s disclosure to her, RB’s mother
took him to the hospital for an examination. The
examining physician found redness around RB’s anus
and a small, superficial abrasion about two millimeters
long on his anus. RB’s mother also recalled that within
a month and a half before RB made his disclosure, she
looked at RB’s anus in response to his complaints of
pain, and she noticed redness around his anus, but at
the time, she presumed it was a heat rash.
116 288 M
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While being interviewed by the police, Mann indi-
cated that he played video games at RB and PP’s
apartment, but denied that the alleged crimes occurred.
Mann did not testify at trial. A jury subsequently
convicted Mann of three counts of CSC I and one count
of CSC II as set forth above.
II. PRIOR BAD ACT
A. STANDARD OF REVIEW
Mann argues that his due process rights were vio-
lated because the trial court admitted evidence of a
prior bad act that likely prejudiced the jury. We review
for an abuse of discretion a trial court’s decision to
admit or exclude evidence.
3
Where the admission of
evidence involves a preliminary question of law, we
review that question de novo.
4
B. ANALYSIS
MCL 768.27a(1) provides, in pertinent part: “Not-
withstanding [MCL 768.27], in a criminal case in which
the defendant is accused of committing a listed offense
against a minor, evidence that the defendant committed
another listed offense against a minor is admissible and
may be considered for its bearing on any matter to
which it is relevant.”
In this case, Mann was accused of committing two
listed offenses,
5
specifically, CSC I and CSC II.
6
And the
3
People v Lukity, 460 Mich 484, 488; 596 NW2d 607 (1999).
4
Id.
5
MCL 768.27a(2)(a) states: “ ‘Listed offense’ means that term as
defined in section 2 of the sex offenders registration act, 1994 PA 295,
MCL 28.722.”
6
MCL 28.722(e)(x) states that a “[l]isted offense” includes violations of
MCL 750.520b (CSC I) and MCL 750.520c (CSC II).
2010] P
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victims in this case, eight-year-old RB and six-year-old
JB, were minors when the offenses were committed.
7
In
addition, there was evidence that Mann previously
committed another listed offense in 2002, specifically,
attempted CSC I against another minor.
8
On the basis of the foregoing, we conclude that
evidence that Mann committed the crime of at-
tempted CSC I against a minor in 2002 was admis-
sible to “be considered for its bearing on any matter
to which it [was] relevant” in this case.
9
The chal-
lenged evidence was relevant because it tended to show
that it was more probable than not that the two minors
in this case were telling the truth when they indicated
that Mann had committed CSC offenses against them.
10
The challenged evidence also made the likelihood of
Mann’s behavior toward the minors at issue in this case
more probable.
11
In addition, the probative value of the evidence was
not substantially outweighed by the danger of unfair
prejudice.
12
Whether the minors in this case were telling
the truth had significant probative value because it
underlies whether Mann should be convicted of the
crimes for which he was charged. Further, the trial
court specifically instructed the jury on two occasions
that the only purpose for which the evidence could be
considered was to help them judge the believability of
the testimony regarding the acts for which Mann was
on trial. And jurors are presumed to follow their in-
7
MCL 768.27a(2)(b).
8
MCL 28.722(e)(x) and (xiii).
9
MCL 768.27a(1).
10
MRE 401.
11
Id.; People v Pattison, 276 Mich App 613, 620; 741 NW2d 558 (2007).
12
MRE 403; Pattison, 276 Mich App at 621 (stating that courts must
still weigh the evidence under MRE 403).
118 288 M
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structions.
13
Moreover, the trial court took precautions
to limit any prejudicial effect by ensuring that the
videotape of Mann’s guilty plea to the prior offense was
not played for the jury. Instead, the trial court allowed
a stipulation that Mann committed the act to be entered
into evidence.
In sum, we conclude that the trial court did not abuse
its discretion by admitting evidence that Mann previ-
ously committed another listed offense against a minor
because that evidence was properly admissible pursu-
ant to MCL 768.27a(1). Because MCL 768.27a applied
in this case, we need not consider whether the require-
ments of MCL 768.27 and its counterpart MRE 404(b)
were met.
14
III. PROSECUTORIAL MISCONDUCT
A. STANDARD OF REVIEW
Mann argues that the prosecutor inappropriately
commented during closing arguments on Mann’s
failure to testify. Therefore, he argues, his constitu-
tional rights against self-incrimination and to due
process were violated. Where issues of prosecutorial
misconduct are preserved, we review them de novo to
determine if the defendant was denied a fair and
impartial trial.
15
Issues of prosecutorial misconduct
are reviewed “on a case-by-case basis by examining
the record and evaluating the remarks in con-
text....”
16
13
People v Unger, 278 Mich App 210, 237; 749 NW2d 272 (2008).
14
People v Smith, 282 Mich App 191, 205; 772 NW2d 428 (2009)
(“Where listed offenses are at issue, the analysis begins and ends with
MCL 768.27a.”).
15
People v Thomas, 260 Mich App 450, 453; 678 NW2d 631 (2004).
16
Id. at 454.
2010] P
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B. ANALYSIS
“A defendant in a criminal case has a constitutional
right against compelled self-incrimination and may
elect to rely on the ‘presumption of innocence.’ ”
17
Hence, a prosecutor may not comment on a defendant’s
failure to testify.
18
Such remarks “are prohibited be-
cause they ask the jury to draw the inference that the
defendant is guilty or hiding something merely because
he has not taken the stand.”
19
However, “[p]rosecutors
are typically afforded great latitude regarding their
arguments and conduct at trial. They are generally free
to argue the evidence and all reasonable inferences
from the evidence as it relates to their theory of the
case.”
20
During her closing argument, the prosecutor dis-
cussed CSC II, specifically the difficulty of establishing
the intent element of CSC II:
Now sexual conduct, contact, is the difference. Sexual
contact describes more—is more aimed at touching, fon-
dling, that sort of thing, touching of the genital areas and
touching with an intent—or a sexual intent.
The judge is also going to instruct you, ladies and
gentlemen, that intent can be derived not from just what a
person says, but from that person’s actions.
So, ladies and gentlemen, it’s difficult for me to know
what anybody’s thinking at any given time. It’s difficult for
me to prove what anybody’s thinking. But you can use not
only what their [sic] thinking and what their [sic] saying,
but also what they’re doing to determine what their intent
was at the time.
17
People v Fields, 450 Mich 94, 108-109; 538 NW2d 356 (1995), citing
US Const, Am V; Const 1963, art 1, § 15.
18
Fields, 450 Mich at 108-109; MCL 600.2159.
19
People v Buckey, 424 Mich 1, 14; 378 NW2d 432 (1985).
20
Unger, 278 Mich App at 236 (citation omitted).
120 288 M
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The prosecutor later turned to the subject of Mann’s
intent:
Soweknow...that his intent in this particular case,
looking at the way that he conducted business, the way
that he acted throughout this time, we know that his intent
was sexual because it’s been his intent, all along it’s been
sexual. We don’t know. He didn’t say. He didn’t tell us. So
we don’t have that evidence. But based on—
Defense counsel objected, and the prosecutor withdrew
the statement and then stated: “We can’t read Jacob’s
mind, I guess, is a better way to say. So we don’t
know—I can’t prove what’s in his mind.”
We conclude that although the prosecutor’s comment
about Mann not testifying could be read as implicating
a potential violation of Mann’s right to remain silent,
the impropriety did not rise to the level of a due process
violation. Intent is an element of CSC II, and the
prosecutor’s theory of the case was that Mann met the
elements of CSC II, including the intent element, be-
cause Mann intentionally touched the victim for a
sexual purpose.
21
Viewed in context, the prosecutor was
arguing that the jury could infer intent from Mann’s
actions and thus proof of Mann’s intent did not need to
stem from Mann stating his intent, something Mann
did not do. The prosecutor’s argument supported her
theory of the case, which was that Mann intended to
commit an offense that was sexual in nature. And it was
clear that the prosecutor was not actually commenting
on Mann’s failure to testify but on the fact that a
defendant’s statement is not necessary to prove intent.
On the record, the argument was not improper.
Moreover, an appropriate response to an objection for
an improper remark by a prosecutor is the issuance of a
21
See MCL 750.520c(1)(a); MCL 750.520a(q).
2010] P
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121
curative instruction.
22
Although defense counsel did not
request a curative instruction or a ruling from the trial
court on defense counsel’s objection, the trial court
instructed the jurors that “[e]very defendant has the
absolute right not to testify. When you decide the case
you must not consider the fact that he did not testify. It
must not affect your verdict in any way.” In addition,
the trial court also provided the jurors with the stan-
dard jury instructions regarding what may be consid-
ered as evidence and how they must use their common
sense in deciding the case. Any prejudice flowing from
the prosecutor’s remark was mitigated by the jury
instructions.
23
Based on the foregoing, the prosecutor’s
remark did not deny Mann a fair trial or his due process
rights under the Michigan and federal constitutions.
Affirmed.
22
People v Stanaway, 446 Mich 643, 687; 521 NW2d 557 (1994).
23
People v Abraham, 256 Mich App 265, 279; 662 NW2d 836 (2003)
(“Jurors are presumed to follow their instructions, and instructions are
presumed to cure most errors.”).
122 288 M
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PEOPLE v PHELPS
Docket No. 288999. Submitted February 2, 2010, at Grand Rapids.
Decided April 13, 2010, at 9:00 a.m.
Kenneth J. Phelps was convicted of first-degree criminal sexual
conduct (CSC I) and third-degree criminal sexual conduct (CSC
III) following a bench trial in the Allegan Circuit Court, George R.
Corsiglia, J. Defendant appealed.
The Court of Appeals held:
1. In determining whether the prosecution presented suffi-
cient evidence to sustain a conviction, the reviewing court must
consider the evidence in a light most favorable to the prosecution
and consider whether there was sufficient evidence to justify a
rational trier of fact’s finding that all the elements of the crime
were proved beyond a reasonable doubt.
2. There was sufficient evidence to support defendant’s CSC I
conviction. MCL 750.520b(1)(f) provides that a person is guilty of
CSC I if he or she uses force or coercion to engage in sexual
penetration with another person and causes personal injury. The
definition of “force or coercion” includes the use of concealment or
surprise to accomplish the sexual penetration. While the 16-year-
old complainant had engaged in some consensual sexual acts with
defendant, a 24-year-old man, he used the element of surprise to
engage in acts of penile-vaginal penetration to which the complain-
ant did not consent. A rational trier of fact could also have
concluded that the penetration occurred through the use of actual
physical force. Under MCL 750.520h, the complainant’s testimony
did not need to be corroborated.
3. There was also sufficient evidence to support defendant’s
CSC III conviction under MCL 750.520d(1)(b), which prohibits
sexual penetration through the use of force or coercion. By
performing cunnilingus on the complainant immediately after he
withdrew his penis from her vagina, defendant seized control of
the complainant in a manner to facilitate the accomplishment of
sexual penetration without regard to her wishes at a time when
she was in shock or surprise, and defendant did not stop when the
complainant told him to.
2010] P
EOPLE V
P
HELPS
123
4. In calculating defendant’s recommended minimum sentence
range under the sentencing guidelines, the trial court did not err
by assessing 10 points for offense variable (OV) 10 (exploitation of
a vulnerable victim), MCL 777.40(1)(b). Defendant exploited the
complainant for selfish purposes. He manipulated the complainant
into engaging in sexual acts with him and allowing him to be in a
position in which he could engage in nonconsensual intercourse.
The complainant was vulnerable because it was readily apparent
that she was susceptible to physical restraint, persuasion, or
temptation given her age and immaturity.
5. The trial court erred by assessing 10 points for OV 9
(number of victims), MCL 750.39(1)(c), because two to nine
victims were not placed in danger of physical injury or death and
no victims were placed in danger of property loss. Defendant
committed criminal sexual conduct crimes against one victim only,
the complainant. Although two of the complainant’s friends were
in her bedroom while the offense occurred, nothing in the record
suggested that they were ever placed in danger of physical injury,
loss of life, or loss of property. Defendant did not threaten anyone,
and he did not make physical contact with either of the complain-
ant’s friends. The error requires resentencing because assessing
zero points for OV 9 would result in a lower recommended
minimum sentence range.
6. The trial court did not abuse its discretion by assessing zero
points for OV 13 (continuing pattern of criminal behavior), MCL
777.43, because defendant had not engaged in a pattern of feloni-
ous criminal activity involving three or more crimes against a
person within a five-year period. With respect to one of the three
incidents alleged by the prosecution, defendant was not charged
with a crime, and the evidence merely established that he was
accused of wrongdoing.
7. The failure of defendant’s counsel to object to the scoring of
OV 9 and OV 10 did not deny defendant the effective assistance of
counsel.
Convictions affirmed; case remanded for resentencing.
Michael A. Cox, Attorney General, B. Eric Restuccia,
Solicitor General, Frederick Anderson, Prosecuting At-
torney, and Judy Hughes Astle, Assistant Prosecuting
Attorney, for the people.
State Appellate Defender (by Marla R. McCowan and
Jacqueline C. Ouvry) for defendant.
124 288 M
ICH
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123 [Apr
Before: T
ALBOT
,P.J., and W
HITBECK
and O
WENS
,JJ.
P
ER
C
URIAM.
Defendant Kenneth Phelps appeals as of
right his convictions of first-degree criminal sexual
conduct (CSC I)
1
and third-degree criminal sexual con-
duct (CSC III).
2
Following a bench trial, the trial court
convicted Phelps and sentenced him as a second-offense
habitual offender
3
to imprisonment for 23 to 45 years
for the CSC I conviction and imprisonment for 14 to 22
years and 6 months for the CSC III conviction. We
affirm Phelps’s convictions, but remand for resentenc-
ing.
I. BASIC FACTS AND PROCEDURAL HISTORY
On December 21, 2007, CJ, age 19, and DH, age 14,
went to visit their friend, the complainant, age 16, at
the complainant’s residence. The complainant lived
with her mother, her brother, who was also age 16, and
her older sister in a doublewide trailer at a trailer park
in Wayland, Michigan. CJ and DH arrived at the com-
plainant’s residence at about 6:00 p.m. that evening and
socialized with the complainant, her brother, and an-
other friend, J. As the evening progressed, the com-
plainant drank three or four cans of beer.
That same evening, Phelps was spending time with
his friends (apparently in the same trailer park), smok-
ing marijuana, and drinking four or five “double shots”
of Jack Daniel’s whiskey. In the early morning hours of
December 22, 2007, after the complainant’s mother had
gone to bed, sometime between 12:00 and 1:30 a.m.,
Phelps, age 24, left his friend’s residence and noticed
1
MCL 750.520b(1)(f) (use of force or coercion causing personal injury).
2
MCL 750.520d(1)(b) (use of force or coercion).
3
MCL 769.10.
2010] P
EOPLE V
P
HELPS
125
that the complainant’s brother’s bedroom light was on.
Phelps, a friend of both the brother and J, stopped and
knocked on the brother’s window, and the three friends
began talking. At some point, Phelps climbed through
the brother’s window, sat in the bedroom, and contin-
ued conversing with his two friends. After Phelps
entered the trailer, CJ, DH, and the complainant all
went into the brother’s bedroom and joined the conver-
sation. The individuals talked in the brother’s bedroom
and in the living room of the trailer. The complainant
had previously met Phelps on one occasion, and Phelps
was aware that the complainant was either age 16 or 17.
The complainant testified that a short while after
Phelps arrived at the trailer, she conversed with him
about the fact that she was still a virgin, and she told
him that she was not ready to lose her virginity.
Eventually, the complainant, CJ, and DH retreated to
the complainant’s bedroom, while Phelps, the brother,
and J went into the brother’s bedroom located directly
across a small six-foot-wide hallway-like space. Some-
time thereafter, the complainant informed CJ and DH
that she thought Phelps was “cute.” CJ and DH then
went into the brother’s room and encouraged Phelps to
go into the complainant’s bedroom to “make out” with
her. DH testified that she merely encouraged Phelps to
give the complainant a “goodnight kiss.” Phelps agreed
and went into the complainant’s room and sat on an air
mattress with the complainant and began kissing her
while CJ and DH remained in the room. The physical
contact between Phelps and the complainant pro-
gressed. The two fondled each other, and Phelps re-
moved the complainant’s jeans. She consented when he
digitally penetrated her vagina and performed cunnilin-
gus on her. CJ and DH remained in the room while the
sexual acts took place, but both testified that they were
talking to each other and were unaware of what was
126 288 M
ICH
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123 [Apr
occurring other than the kissing. The complainant
testified that Phelps asked her to touch his penis, but
she refused. Phelps also asked the complainant to have
sex with him, but she again refused. During this first
encounter in the bedroom, Phelps accepted the com-
plainant’s assertion that she did not want to have “sex,”
and at some point, he went outside the trailer and
smoked cigarettes with the brother and J.
About 15 or 20 minutes later, at approximately 2:00
or 3:00 a.m., Phelps returned to the complainant’s
bedroom. The complainant and Phelps both testified
that CJ asked Phelps to return to the room to once
again kiss the complainant. The complainant testified,
however, that she told her friends not to go get Phelps
a second time. However, CJ and DH testified that they
were sleeping and that the lights were turned off when
Phelps entered the bedroom the second time and
climbed into bed with the complainant. All four indi-
viduals gave differing testimony regarding what oc-
curred next.
The complainant testified that Phelps entered the
room, got into her bed, and began kissing her. According
to the complainant, she again consented when Phelps
removed her clothing and digitally penetrated her va-
gina. According to the complainant, Phelps then pen-
etrated her vagina with his penis. The complainant
testified that Phelps’s conduct of penetrating her with
his penis caught her by surprise. According to the
complaint, she told him no and that she did not “want
to.” The complainant testified that she told Phelps “no
like 5 times,” but Phelps refused to stop. The complain-
ant testified that Phelps eventually pulled his penis out
of her vagina but immediately began performing oral
sex on her. The complainant stated that she then told
Phelps to stop performing oral sex, but he refused until
2010] P
EOPLE V
P
HELPS
127
she yelled for him to get off her and CJ turned the
bedroom light on. The complainant testified that
Phelps was on top of her when the intercourse occurred
and was sitting on the floor next to the bed when he
performed oral sex on her after the intercourse.
Phelps gave a different account of his second encoun-
ter with the complainant. He testified as follows:
[W]e started making out again, rubbing on each other,
started with fingering....Iasked her a couple times if she
wanted to go any further, if she wanted to do anything else
and her friends had joined in the conversation and we
ended up all 3 of us, or 4 of us rather were talking about,
you know, pro’s and con’s I guess you would say of different
sexual things we could do or couldn’t do or whatever.
Phelps explained that CJ and DH “encouraged” the
complainant and “told her you know, well yeah if you
want to go ahead and do it if you want to type of thing.”
Phelps continued his testimony as follows:
Q. [by defense counsel] Did you ask her if she wanted to
have intercourse or what did you say?
A. Yeah, I asked her—I asked her earlier if she wanted to
have intercourse and she wasn’t sure. I said so what do you
want to do and she says well alright, and I said are you
sure, and then she said. Then I engaged in penile/vaginal
penetration.
***
Q. Did she say anything out loud or anything at that
time?
A. A couple seconds later she was like stop, and I didn’t
hear her at first and she said stop again and I said what’s
wrong and she says it hurts, and so I stopped and I pulled
my penis out of her and I said well let me help you climax
through cunnilingus,...that’s the gist of what I told her,
and she said okay, just kind of mumbled okay and I went to
128 288 M
ICH
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PP
123 [Apr
do that and then a couple seconds after that she’s like no,
stop, that doesn’t feel right either, I just don’t want to do
nothing no more. So, as I was sitting up the light came on
and I looked at her friends...and I noticed there was
blood on the mattress there...andatthat point I left the
room and went into the bathroom to wash up. When I came
back out of the bathroom...[DH] told me that...[the
complainant] was saying that I had raped her, but that
neither [DH] nor anybody else knew why [the complainant]
was saying this.
CJ testified that she did not encourage Phelps and
the complainant to have sex and was awakened when
the complainant yelled at Phelps to “stop now and get
off” in a scared voice. At that point, CJ turned the
bedroom light on and saw Phelps’s face covered in
blood. She then turned the light back off and told
Phelps to get out. CJ explained that she turned the light
off again because it was “a disturbing sight....”
DH also testified that she did not encourage the
complainant to have sex with Phelps, and she explained
that she was awakened when the complainant yelled,
“[N]o, get off me, I don’t want to do this, and she was
just yelling, and then we just got up.” According to DH,
the complainant was crying, and when the lights went
on, she saw Phelps on the floor near the side of the bed
near the “middle” of the complainant’s body. DH saw
Phelps’s face was covered in blood, and she ran out of
the room at that point. After Phelps left the bedroom,
CJ explained that the complainant sat on the bed
“freaking out,” almost crying, and then she went out-
side with CJ and DH where she cried and was “pretty
upset.” Both CJ and DH convinced Phelps to leave the
trailer. Phelps testified that he left the residence after
both CJ and DH informed him that the complainant
was upset and would not reenter the trailer while
Phelps was still present.
2010] P
EOPLE V
P
HELPS
129
On the evening of December 22, 2007, the complain-
ant went with her mother to the YWCA at approxi-
mately 9:00 p.m., where nurse examiner Sara Koster
performed a sexual assault examination (using what is
commonly called a “rape kit”). At trial, Koster testified
as an expert in sexual assault trauma identification and
treatment. Koster performed a full physical examina-
tion of the complainant, and she discovered four inju-
ries related to the sexual activity: (1) a tear in the cervix
that was bleeding, which Koster testified is usually
caused by digital penetration; (2) a tear at the posterior
fourchette, which is a fold of skin on the outside of the
opening to the vagina into the vaginal wall (Koster
testified that this tear is normally caused by penile-
vaginal penetration); (3) redness and swelling of the
clitoris; and (4) a tear in the hymen, which Koster
testified is normally consistent with penile-vaginal pen-
etration but could be caused by digital penetration.
Koster explained that the complainant’s injuries ap-
peared painful and were bleeding, but no treatment was
necessary because that area of the female body gener-
ally heals itself. According to Koster, some virgins suffer
injuries similar to the complainant’s the first time they
have sex, but some do not.
Near the end of March 2007, Officer Trina Sims of
the Michigan State Police spoke with Phelps after
having a difficult time locating him. Phelps told Officer
Sims that he had consensual sex with the complainant
and that he stopped having intercourse when she said
“no, no, no stop.” Lieutenant Harris Edwards, a foren-
sic science interview specialist with the Michigan State
Police, interviewed Phelps after his arrest. Phelps
waived his constitutional rights and voluntarily spoke
with Lieutenant Edwards. Lieutenant Edwards testi-
fied regarding Phelps’s statements during the inter-
view:
130 288 M
ICH
A
PP
123 [Apr
He said that both himself and [the complainant] were
messing around and making out. He initially advised
me...that the two other young ladies that were there had
brought it to his attention that [the complainant] was
interested in him, that she liked him, and so he conversed
with her. He told the two young ladies that he probably
shouldn’t be messing with this girl because he knew she
was 16 and he’s been in trouble before for messing with
young girls.
***
We talked a little bit more about the, you know, if he had
felt he had done anything wrong that day and he was very
cooperative and saying yes, and hindsight is 20/20 and I
should have never messed with her and she was 16, he felt
that she was too immature to make a decision like [sic].
Following the close of proofs, the trial court found
Phelps guilty of CSC I and CSC III. Phelps now appeals.
II. SUFFICIENCY OF THE EVIDENCE
A. STANDARD OF REVIEW
Phelps argues that the prosecution failed to present
sufficient evidence to show that he used force or coer-
cion to accomplish sexual penetration with the com-
plainant. We review de novo a challenge to the suffi-
ciency of the evidence.
4
B. APPLICABLE LEGAL PRINCIPLES
In determining whether the prosecution presented suf-
ficient evidence to sustain a conviction, we construe the
evidence in a light most favorable to the prosecution and
consider whether there was sufficient evidence to justify a
4
People v Lueth, 253 Mich App 670, 680; 660 NW2d 322 (2002).
2010] P
EOPLE V
P
HELPS
131
rational trier of fact in finding that all the elements of the
crime were proved beyond a reasonable doubt.
5
MCL 750.520b(1)(f) provides that a person is guilty of
CSC I if that person uses force or coercion to engage in
sexual penetration with another person and causes per-
sonal injury.
6
MCL 750.520b(1)(f)(v) defines “force or
coercion” as including the use of concealment or surprise
to accomplish the act of sexual penetration. MCL
750.520d(1)(b) provides that a person is guilty of CSC III
if that person engages in sexual penetration through the
use of “force or coercion.” MCL 750.520d(1)(b) provides
that “[f]orce or coercion includes but is not limited to any
of the circumstances listed in [MCL 750.520b(1)(f)(i)to
(v)].” “The existence of force or coercion is to be deter-
mined in light of all the circumstances....”
7
“[T]he
prohibited ‘force’ encompasses the use of force against a
victim to either induce the victim to submit to sexual
penetration or to seize control of the victim in a manner to
facilitate the accomplishment of sexual penetration with-
out regard to the victim’s wishes.”
8
Further, in a pros-
ecution for CSC I or CSC III, “[a] victim need not resist
the actor,”
9
and “[t]he testimony of a victim need not be
corroborated....”
10
C. APPLYING THE PRINCIPLES
1. CSC I
We conclude that there was sufficient evidence to
allow a rational trier of fact to conclude beyond a
5
People v Johnson, 460 Mich 720, 722-723; 597 NW2d 73 (1999).
6
See also People v Nickens, 470 Mich 622, 629; 685 NW2d 657 (2004).
7
People v Crippen, 242 Mich App 278, 282; 617 NW2d 760 (2000).
8
People v Carlson, 466 Mich 130, 140; 644 NW2d 704 (2002).
9
MCL 750.520i.
10
MCL 750.520h.
132 288 M
ICH
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123 [Apr
reasonable doubt that Phelps used force or coercion
when he penetrated the complainant’s vagina with his
penis, causing personal injury. The evidence showed
force or coercion through the element of surprise.
11
The
complainant testified that, earlier in the evening before
the offense occurred, she told Phelps that she was a
virgin and did not want to lose her virginity. During
their first consensual sexual encounter that evening,
the complainant refused to touch Phelps’s penis and
told him “No” when he asked to have sexual intercourse
with her. The complainant testified that when Phelps
entered her bedroom the second time, she did not tell
him that he could penetrate her vagina with his penis
and that she was unaware that Phelps removed his
pants. She consented only to digital penetration, and
she testified that she was surprised when Phelps pen-
etrated her vagina with his penis. In addition, the
complainant was visibly upset and crying after the
incident.
Even without additional evidence, the complainant’s
testimony that she did not give Phelps permission to
have penile-vaginal intercourse, was engaged in a dif-
ferent consensual act with him, and was surprised when
he inserted his penis into her vagina was sufficient to
sustain a conviction of CSC I because “[t]he testimony
of a victim need not be corroborated....”
12
The evi-
dence supported that Phelps used the element of sur-
prise to overcome the complainant and engage in
penile-vaginal intercourse. Although Phelps testified
that the sexual intercourse was consensual, we will not
interfere with the fact-finder’s role of determining the
weight of the evidence or the credibility of witnesses.
13
11
MCL 750.520b(1)(f)(v).
12
MCL 750.520h.
13
People v Wolfe, 440 Mich 508, 514-515; 489 NW2d 748 (1992).
2010] P
EOPLE V
P
HELPS
133
There was also sufficient evidence to allow a rational
trier of fact to conclude beyond a reasonable doubt that
Phelps penetrated the complainant’s vagina through
the use of actual physical force.
14
The complainant
testified that Phelps was physically on top of her when
he penetrated her vagina with his penis, and she
explained that when she told Phelps no “around 5
[times], give or take a few,” Phelps told her “no, I’m not
done yet” and kept his penis inside her for approxi-
mately “[f]ive minutes” while she was underneath him
and telling him no. Again, the complainant’s testimony
need not be corroborated to sustain a conviction of CSC
I,
15
and this Court will not interfere with issues of the
credibility of a witness or the weight of the evidence.
16
2. CSC III
We also conclude that there was sufficient evidence to
allow a rational trier of fact to conclude beyond a
reasonable doubt that Phelps used force or coercion
when he performed cunnilingus on the complainant
without her consent immediately after withdrawing his
penis from her vagina.
17
Therefore, he was properly
convicted of CSC III. The complainant testified that
Phelps immediately began performing cunnilingus af-
ter he withdrew his penis from her vagina and refused
to stop despite her repeatedly telling him to stop.
According to the complainant, Phelps only stopped after
CJ turned on the bedroom light. This evidence shows
that Phelps “seize[ed] control of [the complainant] in a
manner to facilitate the accomplishment of sexual pen-
etration without regard to [the complainant]’s
14
MCL 750.520b(1)(f)(i).
15
MCL 750.520h.
16
Wolfe, 440 Mich at 514-515.
17
Johnson, 460 Mich at 722-723.
134 288 M
ICH
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123 [Apr
wishes.”
18
Phelps was on top of the complainant when
he engaged in intercourse, and when he withdrew his
penis, he began performing cunnilingus while the com-
plainant was lying on the bed in shock or surprise, and
he refused to stop when she told him to.
According to CJ, the complainant was yelling in a
scared voice, and when CJ turned on the light, Phelps
had blood on his face. Although the complainant did not
testify that she tried to physically resist Phelps or try to
get up from the bed, “[a] victim need not resist the actor
in a prosecution [for criminal sexual conduct].”
19
Phelps
testified that the complainant “mumbled” her assent
when he suggested that he perform cunnilingus, but, as
stated earlier, the role of this Court is not to interfere
with the fact-finder’s role of determining the credibility
of the witnesses and the weight of the evidence.
20
III. OFFENSE VARIABLE SCORING
A. STANDARD OF REVIEW
Phelps contends that the trial court erred in scoring
offense variable (OV) 9 and OV 10 at sentencing. “This
Court reviews a sentencing court’s scoring decision to
determine whether the trial court properly exercised its
discretion and whether the record evidence adequately
supports a particular score.”
21
However, this issue also
involves statutory interpretation, which this Court re-
views de novo.
22
“Scoring decisions for which there is
any evidence in support will be upheld.”
23
And, ulti-
18
Carlson, 466 Mich at 140.
19
MCL 750.520i.
20
Wolfe, 440 Mich at 514-515.
21
People v McLaughlin, 258 Mich App 635, 671; 672 NW2d 860 (2003).
22
Id.
23
People v Endres, 269 Mich App 414, 417; 711 NW2d 398 (2006).
2010] P
EOPLE V
P
HELPS
135
mately, Phelps is entitled to resentencing on the basis of
a scoring error only if the error alters the recommended
minimum sentence range under the legislative sentenc-
ing guidelines.
24
B. OV 10
MCL 777.40 governs the scoring of OV 10, exploita-
tion of a vulnerable victim, and it provides in relevant
part that 10 points must be assessed when “[t]he
offender exploited a victim’s physical disability, mental
disability, youth or agedness, or a domestic relationship,
or the offender abused his or her authority status.”
25
The statute defines “exploit” as “to manipulate a victim
for selfish or unethical purposes.”
26
“Vulnerability” is
defined as “the readily apparent susceptibility of a
victim to injury, physical restraint, persuasion, or temp-
tation.”
27
We conclude that the trial court did not abuse
its discretion in assessing 10 points for OV 10 because
evidence on the record supported that Phelps “ex-
ploited” the complainant’s youth and that the com-
plainant was “vulnerable” within the meaning of MCL
777.40.
28
The complainant’s age alone did not support
the scoring of the offense variable. Rather, the record
supported that her age and immaturity made her a
vulnerable victim.
First, evidence on the record supported that Phelps
exploited the complainant for selfish purposes by ma-
nipulating her into engaging in sexual acts with him
and allowing him to be in a position in which he could
24
People v Francisco, 474 Mich 82, 89 n 8; 711 NW2d 44 (2006).
25
MCL 777.40(1)(b).
26
MCL 777.40(3)(b).
27
MCL 777.40(3)(c).
28
Endres, 269 Mich App at 417.
136 288 M
ICH
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123 [Apr
engage in nonconsensual sexual intercourse.
29
Phelps, a
24-year-old man, testified that he was aware that the
complainant was only 16 or 17 years old, and he
acknowledged that he had previous “trouble” with
young girls. Phelps told the complainant’s friends that
he should not be “messing” with a young girl like the
complainant. The complainant informed Phelps that
she was a virgin and did not want to lose her virginity,
and she refused to engage in intercourse or touch
Phelps’s penis when he asked her to do so. After the
initial sexual encounter, despite knowing that the com-
plainant did not want to have sexual intercourse or
touch his penis, Phelps entered the complainant’s bed-
room a second time, when the lights were off, climbed
into her bed, removed his clothing without the com-
plainant’s knowledge, and, while the complainant was
in a compromised position, took advantage of the situ-
ation and inserted his penis into her vagina without her
consent. Phelps admitted to the interviewing police
officer that he coerced the complainant into engaging in
sex with him. Phelps also admitted to the officer that
the complainant was too immature to make the decision
to have sex. Phelps testified that he tried to talk the
complainant into having intercourse even after she said
she “wasn’t sure” because of his own “[s]elfish rea-
sons.”
Second, the evidence showed that the complainant
was vulnerable because it was readily apparent that she
was susceptible to physical restraint, persuasion, or
temptation.
30
The complainant was in a compromised
position when Phelps penetrated her with his penis.
Phelps was physically on top of the complainant in a
dark room. In this position, Phelps could physically
29
MCL 777.40(3)(b).
30
MCL 777.40(3)(c).
2010] P
EOPLE V
P
HELPS
137
restrain the complainant while he engaged in inter-
course, and he refused to withdraw his penis after the
complainant told him to stop. The complainant was
susceptible to persuasion or temptation to engage in
sexual acts and to allow Phelps to be in a position in
which he could penetrate her with his penis. The
complainant was only 16 years of age and was a virgin.
According to Phelps, he used the complainant’s friends
to apply peer pressure on her to allow him to engage in
sex, and he acknowledged in the police interview that
the complainant was too immature to make the decision
to have sex with him. Nevertheless, according to Lieu-
tenant Harris, Phelps “emphasized” in the interview
that he “coerced” the complainant into engaging in sex
with him and took advantage of her willingness to allow
him to engage in certain sexual activities by inserting
his penis into her vagina without her consent.
In sum, we conclude that the trial court properly
scored OV 10.
C. OV 9
MCL 777.39 governs the scoring of OV 9 and provides
in relevant part that the trial court assess 10 points
when “2 to 9 victims... were placed in danger of
physical injury or death, or 4 to 19 victims... were
placed in danger of property loss.”
31
The statute defines
“victim” as “each person who was placed in danger of
physical injury or loss of life or property....”
32
We
conclude the trial court abused its discretion by scoring
OV 9 at 10 points. There was no evidence on the record
to support the conclusion that two people in this case
were in danger of physical injury or loss of life or that
31
MCL 777.39(1)(c).
32
MCL 777.39(2)(a).
138 288 M
ICH
A
PP
123 [Apr
four people were in danger of loss of property when
Phelps committed criminal sexual conduct crimes
against one victim only.
The only evidence of injury in this case consisted of
testimony by a YWCA nurse examiner that the com-
plainant suffered internal injuries to her vaginal area.
Although two of the complainant’s friends were in the
bedroom when the offense took place, nothing in the
record suggested that they were ever placed in danger
of physical injury, loss of life, or loss of property. Phelps
did not threaten anyone, and he did not make physical
contact with either of the complainant’s friends.
We conclude that the trial court abused its discretion
by assessing 10 points for OV 9. Rescoring OV 9 by
assessing zero points
33
would result in a lower recom-
mended minimum sentence range.
34
Thus, Phelps is
entitled to resentencing.
35
D. OV 13
The prosecution argues that Phelps is not entitled to
resentencing because the trial court should have as-
sessed 25 points for OV 13, continuing pattern of
criminal behavior, and any error with respect to scoring
OV 9 would become harmless because it would not
result in a lower recommended minimum sentence
range. We disagree. After reviewing the record, we con-
33
MCL 777.39(1)(d).
34
For the CSC I conviction, Phelps’s offense variable level was calcu-
lated at 65 points and his prior record variable level was calculated at 60
points, resulting in a recommended minimum sentence range of 135 to
281 months with habitual offender enhancement. Reducing the offense
variable level by 10 points would result in a recommended minimum
sentence range of 126 to 262 months. Phelps’s minimum sentence for the
CSC I conviction was 276 months. See MCL 777.16y and MCL 777.62.
35
Francisco, 474 Mich at 89 n 8.
2010] P
EOPLE V
P
HELPS
139
clude that the trial court did not abuse its discretion by
scoring OV 13 at zero points because there was insuffi-
cient evidence to show that Phelps engaged in a pattern
of felonious criminal activity involving three or more
crimes against a person over the past five years, as
defined in the statute.
36
MCL 777.43 governs the scoring of OV 13 and
provides in relevant part as follows:
(1) Offense variable 13 is continuing pattern of criminal
behavior. Score offense variable 13 by determining which of
the following apply and by assigning the number of points
attributable to the one that has the highest number of points:
***
(c) The offense was part of a pattern of felonious
criminal activity involving 3 or more crimes against a
person ................................................................... 25 points
***
(2) All of the following apply to scoring offense variable 13:
(a) For determining the appropriate points under this
variable, all crimes within a 5-year period, including the
sentencing offense, shall be counted regardless of whether the
offense resulted in a conviction.
***
(c) Except for offenses related to membership in an
organized criminal group or that are gang-related, do not
score conduct scored in offense variable 11 or 12.
[
37
]
36
MCL 777.43(1)(c) and (2)(a); Endres, 269 Mich App at 417.
37
At the time of the offense, MCL 777.43(1)(c) was designated MCL
777.43(1)(b), but the language was identical. 2008 PA 562, which redes-
ignated the subdivision, also added the language “or that are gang-
related” to MCL 777.43(2)(c).
140 288 M
ICH
A
PP
123 [Apr
Before trial, the prosecution moved to admit evidence
pursuant to MRE 404(b) of two instances of sexual
misconduct involving Phelps. In the motion, the pros-
ecution proposed to offer evidence that Phelps was
convicted of fourth-degree criminal sexual conduct
(CSC IV) in December 2005 after he engaged in sexual
intercourse with a 14-year-old girl. The prosecution also
proposed to offer evidence involving an August 2005
accusation that he engaged in forcible nonconsensual
anal sex with an 18-year-old woman. Phelps was not
charged in connection with the August 2005 incident.
The prosecution argues that Phelps engaged in a
pattern of felonious criminal activity involving three or
more crimes against a person (including the CSC I
conviction in this case)
38
and thus, pursuant to MCL
777.43(1)(c), the trial court should have assessed 25
points for OV 13. The prosecution concedes that, under
MCL 777.43(2)(c), Phelps’s CSC III conviction in this
case cannot be considered for purposes of scoring OV 13
because that offense was considered for scoring OV 11.
We conclude that the trial court did not abuse its
discretion by assessing zero points for OV 13 because
the evidence on the record did not support that Phelps
engaged in a pattern of felonious criminal activity
involving three or more crimes against a person within
a five-year period.
39
There was evidence to show that
Phelps committed two felonies against a person within
the previous five-year period: Phelps was convicted of
CSC I in this case and CSC IV in 2005. However, the
38
MCL 777.43(2)(a); People v McGraw, 484 Mich 120, 135; 771 NW2d
655 (2009) (“Offense variables are properly scored by reference only to
the sentencing offense except when the language of a particular offense
variable statute specifically provides otherwise.”).
39
See McLaughlin, 258 Mich App at 671; People v Hornsby, 251 Mich
App 462, 468; 650 NW2d 700 (2002).
2010] P
EOPLE V
P
HELPS
141
record evidence was insufficient to show that Phelps
committed a third instance of felonious criminal activ-
ity against a person. With respect to the conduct involv-
ing the 18-year-old woman in August 2005, Phelps
merely acknowledged that the woman had “accused”
him, but Phelps was not charged with any criminal
offense. The prosecution did not introduce any testi-
mony of the woman or the police officer involved with
the incident. Although a crime need not result in a
conviction to be counted under OV 13,
40
Phelps’s testi-
mony merely established that he was accused of wrong-
doing and did not sufficiently support that he engaged
in felonious criminal activity against a person. In sum,
the trial court did not abuse its discretion by assessing
zero points for OV 13 when the record evidence did not
support a higher score.
IV. EFFECTIVE ASSISTANCE OF COUNSEL
Phelps argues that he was denied the effective assis-
tance of counsel when counsel failed to object to the
trial court’s scoring of OV 9 and OV 10 at sentencing. In
light of the relief afforded Phelps with respect to OV 9,
we will not address Phelps’s argument with respect to
that variable. And with respect to OV 10, defense
counsel did not act deficiently by failing to raise an
objection to the assessment of 10 points for this variable
because, as discussed previously, evidence on the record
supported the trial court’s scoring.
41
We affirm, but we remand for resentencing consis-
tent with this opinion. We do not retain jurisdiction.
40
MCL 777.43(2)(a).
41
See People v Rodriguez, 212 Mich App 351, 356; 538 NW2d 42 (1995)
(“[C]ounsel is not required to make a groundless objection at sentenc-
ing.”).
142 288 M
ICH
A
PP
123 [Apr
DURAY DEVELOPMENT, LLC v PERRIN
Docket No. 287722. Submitted February 3, 2010, at Grand Rapids.
Decided April 13, 2010, at 9:05 a.m.
Duray Development, LLC, brought an action in the Kent Circuit
Court against Carl Perrin, Perrin Excavating, LLC, and Outlaw
Excavating, LLC, alleging breach of contract. Duray Development
had entered into an excavation contract on September 30, 2004,
with Perrin, Perrin Excavating, and KDM Excavating in which
Robert Munger signed on behalf of Duray Development, Carl
Perrin signed on behalf of himself and Perrin Excavating, and Dan
Vining signed on behalf of KDM Excavating. On October 27, 2004,
Duray Development and Carl Perrin entered into a new contract
intended to supersede the September 30, 2004, contract. The new
contract contained the same language and provisions as the earlier
contract but was between Duray Development and Outlaw only,
and Carl Perrin, Perrin Excavating, and KDM Excavating were
not parties. Outlaw had been recently formed by Carl Perrin and
Vining, who signed the new contract on behalf of Outlaw, holding
themselves out to Duray Development as the owners and persons
in charge of Outlaw. The two contracts were drafted because on
September 30, 2004, Outlaw had not yet been validly formed and
Duray Development did not want the excavation work to wait until
Outlaw was formed. The October 27, 2004, contract was entered
into once the parties thought that Outlaw was a valid limited
liability company. After bringing its action, Duray Development
discovered that Outlaw did not obtain a “filed” status as a limited
liability company until November 29, 2004, and was therefore not
a valid limited liability company when the second contract was
executed. The trial court, Paul J. Sullivan, J., ruled in favor of
Duray Development, finding that Carl Perrin was in breach of
contract. Carl Perrin argued in a posttrial memorandum that he
was not personally liable and that Outlaw was liable under the
doctrine of de facto corporation. The trial court determined that
the provisions of the Limited Liability Company Act, MCL
450.4101 et seq., regarding when a limited liability company comes
into existence and has powers to contract had superseded the de
facto corporation doctrine and made it inapplicable to limited
liability companies. Carl Perrin appealed.
2010] D
URAY
D
EV V
P
ERRIN
143
The Court of Appeals held:
1. Carl Perrin did not preserve for appeal his argument that
the doctrine of corporation by estoppel precluded Duray Develop-
ment from arguing that he is personally liable. He did, however,
preserve for appeal the de facto corporation issue.
2. The four elements for a de facto corporation require incor-
porators to have proceeded (1) in good faith (2) under a valid
statute (3) for an authorized purpose and (4) to have executed and
acknowledged articles of association pursuant to that purpose.
There is no question that the elements other than the good-faith
element were satisfied in this case. There is no evidence to suggest
that Carl Perrin formed Outlaw in anything other than good faith.
The trial court correctly concluded that all the elements of a de
facto corporation were present in this case. The trial court erred by
holding that the de facto corporation doctrine cannot apply to
limited liability companies. The de facto corporation doctrine
applies to Outlaw and, therefore, Outlaw, and not Carl Perrin,
individually, is liable for the breach of the second contract.
3. The doctrine of corporation by estoppel may reasonably be
extended to limited liability companies. The record clearly sup-
ports a finding of limited liability company by estoppel through the
extension of the corporation by estoppel doctrine. However, the
trial court did not clearly err by failing to raise sua sponte the issue
of corporation by estoppel.
4. The record does not reflect that the trial court considered all
the relevant factors in holding that the defendants were barred
from calling witnesses because they failed to file a witness list
within the time allotted. On remand, the trial court should
consider the relevant factors and explain its determination on the
record.
Reversed and remanded.
1. C
ORPORATIONS —
L
IMITED
L
IABILITY
C
OMPANIES —
L
IABILITY OF
M
EMBERS.
Limited liability applies once a limited liability company comes into
existence, and a member or manager is not liable thereafter for the
acts, debts, or obligations of the company (MCL 450.4501[3]).
2. C
ORPORATIONS —
C
ONTRACTS —
C
ONTRACTING
B
EFORE
C
ORPORATE
E
XISTENCE —
L
IABILITY
.
A person who signs a contract on behalf of a company that is not yet
in existence generally becomes personally liable on the contract;
the company can become liable if, after the company comes into
existence, it either ratifies or adopts the contract, a court deter-
mines that a de facto corporation existed at the time of the
144 288 M
ICH
A
PP
143 [Apr
contract, or a court orders that the corporation by estoppel
doctrine prevented the opposing party from arguing against the
existence of a corporation.
3. C
ORPORATIONS —
D
E
F
ACTO
C
ORPORATIONS —
C
ORPORATIONS BY
E
STOPPEL
.
The de facto corporation and the corporation by estoppel doctrines
are separate and distinct doctrines; the former doctrine allows a
defectively formed corporation to attain the legal status of a
corporation while the latter doctrine prevents a party who dealt
with an association as though it were a corporation from denying
its existence.
4. C
ORPORATIONS —
D
E
F
ACTO
C
ORPORATIONS
.
A de facto corporation instantly comes into being when its incorpo-
rators have proceeded in good faith under a valid statute for an
authorized purpose and have executed and acknowledged articles
of association pursuant to that purpose; a de facto corporation is
an actual corporation that, with respect to all the world except the
state, enjoys the status and powers of a de jure corporation.
5. C
ORPORATIONS —
L
IMITED
L
IABILITY
C
OMPANIES —
D
E
F
ACTO
C
ORPORATIONS —
C
ORPORATIONS BY
E
STOPPEL
.
The doctrine of de facto corporation and the doctrine of corporation
by estoppel apply to limited liability companies (MCL 450.4101 et
seq.).
6. T
RIAL —
W
ITNESSES —
F
AILURE TO
T
IMELY
S
UBMIT
W
ITNESS
L
ISTS —
S
ANC-
TIONS
.
A trial court’s decision to bar witness testimony after a party has
failed to timely submit a witness list is reviewed for an abuse of
discretion; the record should reflect that the trial court gave
careful consideration to the relevant factors involved and consid-
ered all of its options in determining what sanction was just and
proper in the context of the case.
Schenk, Boncher & Rypma (by Frederick J. Boncher)
for Duray Development, LLC.
Miller Johnson (by David J. Gass and Joseph J.
Gavin) for Carl Perrin.
Before: T
ALBOT
,P.J., and W
HITBECK
and O
WENS
,JJ.
2010] D
URAY
D
EV V
P
ERRIN
145
P
ER
C
URIAM.
In this breach of contract action, defen-
dant Carl Perrin appeals as of right the August 21, 2008
judgment following a bench trial in which the trial court
found that Perrin was in breach of contract and owed
damages to plaintiff, Duray Development, LLC, in the
amount of $96,637.68. The judgment did not find de-
fendants Perrin Excavating, LLC, or Outlaw Excavat-
ing, LLC, in breach of contract, so neither of those
defendants are parties to this appeal.
We find no plain error in the trial court’s failure to
raise sua sponte the issue of corporation by estoppel.
However, we reverse the judgment of the trial court
that the de facto corporation doctrine cannot apply to
limited liability companies, and we reverse the trial
court’s decision to bar defendants from calling wit-
nesses. Accordingly, we remand for further proceedings
in accordance with this opinion.
I. BASIC FACTS AND PROCEDURAL HISTORY
Duray Development is a residential development
company whose sole member is Robert Munger. Mu-
nger’s responsibilities were to locate and purchase
property, and then work with engineering companies
and municipalities to have the property zoned and fully
developed for residential living. In 2004, Duray Devel-
opment purchased 40 acres of undeveloped property
called “Copper Corners,” located at the intersection of
76th Street and Craft Avenue in Caledonia Township,
Michigan.
On September 30, 2004, Duray Development entered
into a contract with Perrin, Perrin Excavating, and KDM
Excavating for excavating at Copper Corners. In that
contract, Munger signed on Duray Development’s behalf,
Perrin signed on behalf of himself and Perrin Excavating,
and Dan Vining signed on behalf of KDM Excavating.
146 288 M
ICH
A
PP
143 [Apr
On October 27, 2004, Duray Development and Perrin
entered into a new contract, intended to supersede the
September 30, 2004 contract. The new contract con-
tained the same language and provisions as the earlier
contract. However, the new contract was between Du-
ray Development and Outlaw only, and Perrin, Perrin
Excavating, and KDM Excavating were not parties.
Outlaw was an excavation company that Perrin and
Vining had recently formed. Perrin and Vining signed
the new contract on behalf of Outlaw, and both held
themselves out to Duray Development as the owners
and persons in charge of the company. Although the
parties did not execute the second contract until Octo-
ber 27, 2004, it was drafted on September 30, 2004, the
same day the parties signed the first contract. Once
signed, all parties proceeded under the contract as if
Outlaw were the contractor for the Copper Corners
development.
Two contracts were drafted because Perrin had not
yet formed Outlaw at the time of the first contract.
However, Duray Development did not want to wait for
Perrin to finish forming the company before starting
the excavation of Copper Corners. Therefore, the par-
ties entered into the first contract on September 30,
2004, and then entered into the second contract once
the parties thought Outlaw was a valid limited liability
company.
Defendants began excavation and grading work pur-
suant to the contracts, but did not perform satisfacto-
rily or on time. Duray Development then sued defen-
dants for breach of contract. Defendants answered and
filed a counterclaim against Duray Development, alleg-
ing that they performed the work according to the
terms of the contracts and that Duray Development
owed defendants approximately $35,000. Duray Devel-
2010] D
URAY
D
EV V
P
ERRIN
147
opment later learned through discovery that Outlaw did
not obtain a “filed” status as a limited liability company
until November 29, 2004, and therefore Outlaw was not
a valid limited liability company at the time the parties
executed the second contract.
1
Duray Development filed an amended complaint and
obtained a default judgment because defendants failed
to file an answer. Defendants then moved for entry of an
order to set aside the default judgment. The trial court
granted defendants’ motion and set aside the default.
But the trial court subsequently ruled that defendants
would not be allowed to call any witnesses at trial
because defendants had failed to provide a witness list
by the deadline set forth in the scheduling order. After
trial, the trial court ruled in favor of Duray Develop-
ment, finding that Perrin was in breach of contract and
owed $96,367.68 in damages to Duray Development.
In a posttrial memorandum, Perrin argued that he
was not personally liable for Duray Development’s
damages. He asserted that, although Outlaw was not a
valid limited liability company at the time of the execu-
tion of the second contract, Outlaw was nevertheless
liable to Duray Development under the doctrine of de
facto corporation. The trial court opined that if Outlaw
were a corporation, then the de facto corporation doc-
trine most likely would have applied. However, the trial
court concluded that the Limited Liability Company
Act
2
“clearly and specifically provides for the time that
a limited liability company comes into existence and has
powers to contract” and therefore superseded the de
1
According to the Limited Liability Company Act, MCL 450.4101 et
seq., a limited liability company does not exist until the state adminis-
trator endorses the articles of organization with the word “filed.” MCL
450.4104(2) and (6).
2
MCL 450.4101 et seq.
148 288 M
ICH
A
PP
143 [Apr
facto corporation doctrine and made it inapplicable to
limited liability companies altogether. Perrin now ap-
peals.
II. PERRIN’S PERSONAL LIABILITY
A. STANDARD OF REVIEW
Perrin argues that he was not personally liable
because he signed the second contract on behalf of
Outlaw. According to Perrin, even though Outlaw was
not yet a properly formed limited liability company,
the parties all treated the contract as though Outlaw
was a properly formed limited liability company and,
therefore, the doctrine of de facto corporation
shielded Perrin from personal liability. He further
argues that the doctrine of corporation by estoppel
precluded Duray Development from arguing that he
is personally liable.
The issue whether the doctrine of de facto corpora-
tion applies to Perrin requires us to consider the Lim-
ited Liability Company Act and the Business Corpora-
tion Act.
3
We review de novo questions of law, including
questions regarding whether a statute applies and re-
garding interpretation of the statute.
4
Despite his contention on appeal, Perrin did not
preserve the issue of corporation by estoppel. And
although Perrin argues on appeal that corporation by
estoppel and de facto corporation are doctrines so
closely related that raising one of them at trial pre-
serves both on appeal, caselaw does not support such an
argument. Perrin cites PIM, Inc v Steinbichler Optical
3
MCL 450.1101 et seq.
4
Sands Appliance Servs, Inc v Wilson, 463 Mich 231, 238; 615 NW2d
241 (2000); Alex v Wildfong, 460 Mich 10, 21; 594 NW2d 469 (1999).
2010] D
URAY
D
EV V
P
ERRIN
149
Technologies USA, Inc,
5
in support of this point. But in
that case, although this Court noted that the two
doctrines were closely related, it never went so far as to
support Perrin’s argument regarding preservation of
the issue. Further, the Michigan Supreme Court later
vacated this Court’s decision in that case.
6
Therefore, because Perrin did not preserve the issue
of corporation by estoppel, we will only review the issue
for plain error.
7
Plain error occurs at the trial court level
if (1) an error occurred (2) that was clear or obvious and
(3) prejudiced the party, meaning it affected the out-
come of the lower court proceedings.
8
B. THE LIMITED LIABILITY COMPANY ACT
The Limited Liability Company Act provides pre-
cisely when a limited liability company comes into
existence. MCL 450.4202(2) provides that “[t]he exist-
ence of the limited liability company begins on the
effective date of the articles of organization as provided
in [MCL 450.4104].” MCL 450.4104(1) requires that the
articles of organization be delivered to the administra-
tor of the Michigan Department of Energy, Labor and
Economic Growth (DELEG).
9
Under MCL 450.4104(2),
after delivery of the articles of organization, “the ad-
5
PIM, Inc v Steinbichler Optical Technologies USA, Inc, unpublished
opinion of the Court of Appeals, issued September 4, 2001 (Docket Nos.
220053 and 222221).
6
PIM, Inc v Steinbichler Optical Technologies USA, Inc, 468 Mich 896
(2003).
7
People v Carines, 460 Mich 750, 763, 774; 597 NW2d 130 (1999);
Veltman v Detroit Edison Co, 261 Mich App 685, 690; 683 NW2d 707
(2004) (applying the unpreserved plain error standard to civil cases).
8
Carines, 460 Mich at 763.
9
See also MCL 450.4102(2)(a) and (f) (defining “administrator” and
“department”).
150 288 M
ICH
A
PP
143 [Apr
ministrator shall endorse
[10]
upon it the word ‘filed’ with
his or her official title and the date of receipt and of
filing[.]” And under MCL 450.4104(6), “[a] document
filed under [MCL 450.4104(2)] is effective at the time it
is endorsed[.]”
Once a limited liability company comes into exist-
ence, limited liability applies, and a member or manager
is not liable for the acts, debts, or obligations of the
company.
11
In contrast, a person who signs a contract on
behalf of a company that is not yet in existence gener-
ally becomes personally liable on that contract.
12
How-
ever, a company can become liable if, (1) after the
company comes into existence, it either ratifies or
adopts that contract,
13
(2) a court determines that a de
facto corporation existed at the time of the contract,
14
or
(3) a court orders that corporation by estoppel pre-
vented the opposing party from arguing against the
existence of a corporation.
15
In this case, Perrin signed the articles of organization
for Outlaw on the same day as the second contract,
October 27, 2004. Perrin then signed the October 27,
2004 contract on behalf of Outlaw. However, the DE-
LEG administrator did not endorse the articles of
organization until November 29, 2004. Therefore, pur-
10
The Legislature amended both MCL 450.4104(2) and MCL
450.4104(6) after the date of the second contract to change the words
“indorse” and “indorsed” to “endorse” and “endorsed.” 2005 PA 218,
effective January 1, 2006. The Legislature, however, did not amend the
substantive portions of the subsections.
11
MCL 450.4501(3).
12
Campbell v Rukamp, 260 Mich 43, 46; 244 NW 222 (1932).
13
Id.; Henderson v Sprout Bros, Inc, 176 Mich App 661, 673; 440 NW2d
629 (1989).
14
Tisch Auto Supply Co v Nelson, 222 Mich 196, 200; 192 NW 600
(1923).
15
Estey Mfg Co v Runnels, 55 Mich 130, 133; 20 NW 823 (1884).
2010] D
URAY
D
EV V
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ERRIN
151
suant to the Limited Liability Company Act, Outlaw
was not in existence on October 27, 2004. And Outlaw
did not adopt or ratify the second contract. Therefore,
Perrin became personally liable for Outlaw’s obliga-
tions unless a de facto limited liability company existed
or limited liability company by estoppel applied.
16
C. DE FACTO CORPORATION AND CORPORATION BY ESTOPPEL
De facto corporation and corporation by estoppel are
separate and distinct doctrines that warrant individual
treatment. The de facto corporation doctrine provides
that a defectively formed corporation—that is, one that
fails to meet the technical requirements for forming a
de jure corporation—may attain the legal status of a de
facto corporation if certain requirements are met, as
discussed later in this opinion. The most important
aspect of a de facto corporation is that courts perceive
and treat it in all respects as if it were a properly formed
de jure corporation. For example, it can sue and be
sued.
17
Often, as in this case, the status of the company
is crucial to determine whether the parties forming the
corporation are individually liable.
18
Corporation by estoppel, on the other hand, is an
equitable remedy and does not concern legal status.
19
The general rule is: “Where a body assumes to be a
corporation and acts under a particular name, a third
16
Tisch Auto Supply, 222 Mich at 200; Estey Mfg, 55 Mich at 133.
17
Tisch Auto Supply, 222 Mich at 200; Eaton v Walker, 76 Mich 579,
586; 43 NW 638 (1889); Henderson, 176 Mich App at 672. The only
exception is that the state may challenge its status. See Newcomb-
Endicott Co v Fee, 167 Mich 574, 582; 133 NW 540 (1911); 6 Michigan
Civil Jurisprudence, § 40, p 135.
18
See, e.g., Berlin State Bank v Nelson, 231 Mich 463, 465; 204 NW 92
(1925).
19
Estey Mfg, 55 Mich at 133; see also 6 Michigan Civil Jurisprudence,
§ 44, p 139.
152 288 M
ICH
A
PP
143 [Apr
party dealing with it under such assumed name is
estopped to deny its corporate existence.”
20
Like the de
facto corporation doctrine, corporation by estoppel of-
ten arises in the context of assessing individual versus
corporate liability. The purpose of the doctrine is so
“that one who contracts with an association as a corpo-
ration is estopped to deny its corporate existence...so
as to prevent one from maintaining an action on the
contract against the associates, or against the officers
making the contract, as individuals or partners.”
21
In sum, the de facto corporation doctrine allows a
defectively formed corporation to attain the legal status
of a corporation. The corporation by estoppel doctrine
prevents a party who dealt with an association as
though it were a corporation from denying its existence.
Stated another way, the de facto corporation doctrine
establishes the legal existence of the corporation. By
contrast, the corporation by estoppel doctrine merely
prevents one from arguing against it, and does nothing
to establish its actual existence in the eyes of the rest of
the world.
Despite their differences, the two doctrines are often
discussed in tandem and the Supreme Court tends to
collapse discussion of the two into a single blended
analysis.
22
One reason that the two doctrines are often
blended together is because a common fact pattern
continually emerges in the caselaw: a party conducts
business with an association that it believes to be a de
jure corporation, but which was defective in some way
20
Estey Mfg, 55 Mich at 133.
21
6 Michigan Civil Jurisprudence, § 47, p 140, citing Lockwood v
Wynkoop, 178 Mich 388; 144 NW 846 (1914).
22
See, e.g., Tisch Auto Supply, 222 Mich at 200-202; Newcomb-Endicott
Co, 167 Mich at 581-582; Eaton, 76 Mich at 586-587; Swartwout v
Michigan Air Line R Co, 24 Mich 389, 396 (1872).
2010] D
URAY
D
EV V
P
ERRIN
153
and never truly incorporated. In that situation, both
corporation by estoppel and de facto corporation natu-
rally become relevant.
With that said, we, however, will consider each doc-
trine separately and deliberately. Each concept involves
a separate set of factors, and caselaw suggests that one
can exist without the other.
23
Moreover, a separate
analysis is especially important in this case because
Perrin preserved the issue of de facto corporation for
appeal, but failed to preserve the issue of corporation by
estoppel. Therefore, the two arguments are subject to
different standards of review.
D. THE DE FACTO CORPORATION DOCTRINE
The Michigan Supreme Court established the four
elements for a de facto corporation long ago:
“When incorporators have [1] proceeded in good faith,
[2] under a valid statute, [3] for an authorized purpose, and
[4] have executed and acknowledged articles of association
pursuant to that purpose, a corporation de facto instantly
comes into being.
[
24
]
A de facto corporation is an actual
23
See, e.g., Lockwood, 178 Mich at 391-392 (applying corporation by
estoppel after assuming, but not concluding, the corporation was de jure);
City of Kalamazoo v Kalamazoo Heat, Light & Power Co, 124 Mich 74,
82-83; 82 NW 811 (1900) (applying corporation by estoppel after declin-
ing to consider de facto corporation).
24
Perrin acknowledges these elements in his brief, but he also quotes
an opinion from the United States District Court for the Eastern District
of Michigan to suggest different elements of the de facto corporation
doctrine: “ ‘ (1) a charter or statute under which a corporation with the
powers assumed might have been organized; (2) a bona fide attempt to
organize a corporation under such charter or statute; and (3) an actual
use of the corporate powers.’ ” Model Board, LLC v Board Institute, Inc,
2009 WL 691891, *4; 2009 US Dist LEXIS 19822, *9-*10 (ED Mich,
2009). This case, in turn, cited Tisch Auto Supply, 222 Mich at 196,
without providing a specific page reference. This language, however, is
not found anywhere in Tisch Auto Supply. It is worth noting that the
154 288 M
ICH
A
PP
143 [Apr
corporation. As to all the world, except the State, it enjoys
the status and powers of a de jure corporation.”
[
25
]
Here, there is no question that elements (2), (3), and
(4) were satisfied. First, the Limited Liability Company
Act is a valid statute that allows for limited liability
companies in Michigan. Second, Perrin and Vining
presumably formed Outlaw for the purpose of starting a
new excavation company, which is an authorized pur-
pose. Third, Perrin executed the articles of organization
on October 27, 2004, the same day the parties executed
the second contract.
It is less obvious whether the first element of the
doctrine—good faith—was satisfied. There is little guid-
ance in Michigan caselaw for a definition, or applica-
tion, of this specific element. But in Newcomb-Endicott
CovFee,
26
the Michigan Supreme Court, although
applying a different set of elements,
27
did state that in
the absence of a claim or evidence of fraud or false
representation on the part of the incorporators, and in
light of a bona fide attempt to incorporate, there was no
reason to deny a company the status of a de facto
corporation.
Here, Duray Development does not allege that Perrin
set up the corporation through fraud or false represen-
tations; that is, Duray Development does not allege that
Perrin set up the corporation as a sham, for fraudulent
purposes, or as a mere instrumentality under a theory
Supreme Court long ago stated the same three elements as Model Board
in Newcomb-Endicott Co, 167 Mich at 580-581; however, the four ele-
ments from Tisch Auto Supply are the most often cited language
regarding a de facto corporation.
25
Tisch Auto Supply, 222 Mich at 200 (citations omitted); see also
Henderson, 176 Mich App at 672.
26
Newcomb-Endicott Co, 167 Mich at 582.
27
See n 24 of this opinion.
2010] D
URAY
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EV V
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ERRIN
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of piercing the corporate veil. Rather, as the record
indicates, Duray Development did not learn until after
filing the complaint in this case that Outlaw was not a
valid limited liability company on October 27, 2004.
Duray Development at all times dealt with Outlaw as a
valid corporation with which it contracted. Duray De-
velopment’s sole member, Munger, testified that once
the second contract took effect, Duray Development no
longer considered Perrin or Perrin Excavating as par-
ties to the contract, but instead considered Outlaw to be
the new “contractor.” There is no evidence whatsoever
to suggest that Perrin formed Outlaw in anything other
than good faith. Accordingly, the trial court was correct
to conclude that, had Outlaw been formed as a corpo-
ration instead of a limited liability company, it would
have been a de facto corporation for purposes of liability
on the October 27, 2004 contract. Thus, all elements of
a de facto corporation were present in this case.
The trial court, however, concluded that the de facto
corporation doctrine does not apply to limited liability
companies and therefore did not apply to Outlaw. It
reasoned that the plain reading of the Limited Liability
Company Act “clearly and specifically provides for the
time that a limited liability company comes into exist-
ence and has powers to contract.” The trial court then
cited a passage from a legal treatise, which states “[t]he
de facto corporation doctrine and, presumably, a pos-
sible de facto [limited liability company] doctrine are
apparently dead in Michigan, having been replaced by
the Business Corporation Act, MCL 450.1221, and the
[Limited Liability Company Act], MCL 450.4202.”
28
Thus, the trial court concluded that the Legislature had
28
Cambridge & Christopoulos, Michigan Limited Liability Companies,
ICLE (2d ed, 2008 supp), § 3.30.
156 288 M
ICH
A
PP
143 [Apr
“clearly spoken on this subject” and did not extend the
de facto corporation doctrine to limited liability compa-
nies.
Neither this Court nor the Supreme Court has ad-
dressed whether the de facto corporation doctrine can
be extended or applied to a limited liability company.
29
That is not to say, however, that the doctrine cannot be
applied to a limited liability company. The 1911 case of
Newcomb-Endicott Co is similar to the facts here and
suggests that the plain language of the Limited Liabil-
ity Company Act and the Business Corporation Act
should not supplant the de facto corporation doctrine.
In Newcomb-Endicott Co, the defendants formed a
corporation by filing the articles of association with the
Secretary of State on June 15, 1908, and with the
county clerk in March 1909.
30
At the time, the relevant
incorporating statute provided that a corporation did
not exist until the articles of association were filed with
both offices.
31
Therefore, the defendants’ corporation
did not technically exist until March 1909. However, the
defendants’ corporation contracted with the plaintiff in
July 1908, and accumulated an unpaid debt for which
the plaintiff sued.
32
At trial, the circuit court ruled that,
although the corporation did not exist at the time of the
contract and when the debts were incurred, it was a de
facto corporation and, as such, the corporation, not the
individual defendants, was liable.
33
The plaintiff ap-
pealed and argued, in part, that the de facto corporation
doctrine contradicted the plain language of the appli-
29
Id. (noting that “there are no reported cases in Michigan concerning
this uncertainty”).
30
Newcomb-Endicott Co, 167 Mich at 577.
31
Id. at 579-580.
32
Id. at 576.
33
Id. at 578.
2010] D
URAY
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EV V
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ERRIN
157
cable statute, which clearly stated how and when a
corporation was formed.
34
The Supreme Court ruled
otherwise, reasoning that, although the plain language
of the statute “contemplates the complete organization
of the association,” including how the articles of asso-
ciation were to be filed, it did not preclude the applica-
tion of the de facto corporation doctrine.
35
The Supreme Court’s conclusion in Newcomb-
Endicott Co, that statutes contemplating complete or-
ganization of an association do not preclude application
of the de facto corporation doctrine, contradicts the idea
that the de facto corporation doctrine perished on
enactment of the Business Corporation Act and the
Limited Liability Company Act. Although Newcomb-
Endicott Co dealt with a corporation rather than a
limited liability company, it would be arbitrary to con-
clude, without any precedent to the contrary, that the
de facto corporation doctrine applies to corporations
but not to limited liability companies.
Indeed, the similarities between the Business Corpo-
ration Act and the Limited Liability Company Act
support the conclusion that the de facto corporation
doctrine applies to both. The purposes for forming a
limited liability company and a corporation are similar.
Notably, the Limited Liability Company Act states, “A
limited liability company may be formed under this act
for any lawful purpose for which a domestic corporation
or a domestic partnership could be formed, except as
otherwise provided by law.”
36
Further, both the Limited
Liability Company Act and the Business Corporation
Act contemplate the moment in time when a limited
34
Id. at 579.
35
Id. at 582.
36
MCL 450.4201; see also MCL 450.1251(1).
158 288 M
ICH
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liability company or corporation comes into existence.
37
Because the Business Corporation Act and the Limited
Liability Company Act relate to the common purpose of
forming a business and because both statutes contem-
plate the moment of existence for each, they should be
interpreted in a consistent manner.
38
Accordingly, we conclude that the de facto corpora-
tion doctrine applies to Outlaw, a limited liability com-
pany. As a result, Outlaw, and not Perrin, individually, is
liable for the breach of the October 27, 2004 contract.
E. CORPORATION BY ESTOPPEL
As stated previously, generally, a person who signs a
contract on behalf of a company that is not yet in
existence becomes personally liable on that contract.
39
However, a court can order that the company is instead
liable if it finds that corporation by estoppel prevented
the opposing party from arguing against the existence
of a corporation.
40
The Supreme Court in Estey Mfg Co
v Runnels,
41
summarized the principle of corporation by
estoppel as follows: “Where a body assumes to be a
corporation and acts under a particular name, a third
party dealing with it under such assumed name is
estopped to deny its corporate existence.”
As with the doctrine of de facto corporation, this
Court has not addressed whether corporation by estop-
pel can be applied to limited liability companies. How-
37
MCL 450.1221 (Business Corporation Act); MCL 450.4202 (Limited
Liability Company Act).
38
McNeil v Charlevoix Co, 275 Mich App 686, 701; 741 NW2d 27
(2007); State Treasurer v Schuster, 456 Mich 408, 417; 572 NW2d 628
(1998).
39
Campbell, 260 Mich at 46.
40
Estey Mfg, 55 Mich at 133.
41
Id.
2010] D
URAY
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EV V
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ERRIN
159
ever, corporation by estoppel is an equitable remedy,
and its purpose is to prevent one who contracts with a
corporation from later denying its existence in order to
hold the individual officers or partners liable.
42
The
doctrine has come up on numerous occasions in con-
junction with de facto corporations.
43
In that setting,
the rule is:
In the case of the associates in the corporation de facto,
and those who have had dealings with it, there is a mutual
estoppel, resting upon broad grounds of right, justice and
equity. The first class are not suffered to deny their
incorporation, nor the second to dispute the validity of
their assertions of corporate powers.
[
44
]
With this in mind, and in light of the purpose of
corporation by estoppel, the corporate structure has
little impact on the equitable principles at stake. In
other words, there is no reason or purpose to draw a
distinction on the basis of corporate form. Furthermore,
like de facto corporation, because corporation by estop-
pel coexists with the Business Corporation Act, so too
can it coexist with the Limited Liability Company Act.
Further, the Supreme Court has on at least one
occasion applied the doctrine in a not-for-profit corpo-
rate context.
45
Extending the corporation by estoppel
doctrine to nonprofit corporations was not a great leap
in the application of the doctrine. And extension of the
corporation by estoppel doctrine to nonprofit corpora-
tions supports the conclusion that the doctrine can also
be extended beyond application solely to cases involving
42
Id.; 6 Michigan Civil Jurisprudence, § 47, p 140, citing Lockwood,
178 Mich at 388.
43
See, e.g., Newcomb-Endicott Co, 167 Mich at 581-582, citing Swart-
wout, 24 Mich at 396; Tisch Auto Supply, 222 Mich at 201.
44
Swartwout, 24 Mich at 396 (citations omitted).
45
See Flueling v Goeringer, 240 Mich 372, 375; 215 NW 294 (1927).
160 288 M
ICH
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143 [Apr
for-profit corporations. For these reasons, we conclude
that the doctrine of corporation by estoppel may rea-
sonably be extended to limited liability companies.
Moreover, here, the record clearly supports a finding
of “limited liability company by estoppel” through the
extension of the corporation by estoppel doctrine. Per-
rin was an individual party to the first contract, as was
his limited liability company, Perrin Excavating. How-
ever, only Outlaw became a party to the second con-
tract, which superseded the first. And all parties dealt
with the second contract as though Outlaw were a
party. After the second contract, Duray Development
received billings from Outlaw, and not from Perrin.
Duray Development also received a certificate of liabil-
ity insurance for Outlaw. Munger testified that he dealt
with Perrin, Perrin Excavating, and KDM Excavating
before the second contract and only dealt with Outlaw
after. Duray Development continued to assume Outlaw
was a valid limited liability company after filing the
lawsuit and only learned of the filing and contract
discrepancies once litigation began in July 2006.
However, we cannot find plain error requiring rever-
sal on the doctrine of limited liability company by
estoppel. Perrin did not raise the issue in the trial court,
and the trial court did not err by not raising it for him.
“Trial courts are not the research assistants of the
litigants; the parties have a duty to fully present their
legal arguments to the court for its resolution of their
dispute.”
46
“[A] party may not remain silent in the trial
court, only to prevail on an issue that was not called to
the trial court’s attention.”
47
Accordingly, it was not the
trial court’s responsibility to raise an argument for
Perrin that he did not raise for himself. And, as indi-
46
Walters v Nadell, 481 Mich 377, 388; 751 NW2d 431 (2008).
47
Id.
2010] D
URAY
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EV V
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ERRIN
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cated above, corporation by estoppel, like de facto
corporation, has never been applied to limited liability
companies in the past. Thus, we cannot conclude that
the trial court made a clear and obvious mistake by not
applying the corporation by estoppel doctrine when
there is no precedent indicating that the trial court
should have applied the doctrine. Accordingly, we con-
clude that no plain error occurred requiring reversal on
this issue.
III. EXCLUSION OF PERRIN’S TESTIMONY
A. STANDARD OF REVIEW
Perrin argues that the trial court’s decision to not
allow him to testify because defendants failed to provide
a witness list before trial was unreasonable and unprin-
cipled. According to Perrin, he was a party to the
litigation who was denied his day in court. Further,
Perrin argues, the decision effectively dismissed his
counterclaim against Duray Development.
This Court reviews for an abuse of discretion a trial
court’s decision to bar witness testimony after a party
has failed to timely submit a witness list.
48
An abuse of
discretion exists when the trial court’s decision falls
outside the range of principled outcomes.
49
B. ANALYSIS
MCR 2.401(I)(1) provides that all parties must file
and serve witness lists within the time allotted by the
trial court. MCR 2.401(I)(2) provides that “[t]he trial
48
Carmack v Macomb Co Community College, 199 Mich App 544, 546;
502 NW2d 746 (1993).
49
Maldonado v Ford Motor Co, 476 Mich 372, 388; 719 NW2d 809
(2006).
162 288 M
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143 [Apr
court may order that any witness not listed in accor-
dance with this rule will be prohibited from testifying at
trial except upon good cause shown.” Here, the trial
court entered a scheduling order requiring the parties
to submit their witness lists no later than 28 days
before the close of discovery. And Perrin concedes that
defendants did not provide a witness list within that
time.
On the first day of trial, the trial court addressed
defendants’ failure to submit a witness list pursuant to
the scheduling order, and stated:
Without having listed witnesses or without having listed
or exchanged exhibits and so forth, I do believe that the
defense will have some difficulty getting me to allow
witnesses or exhibits. It’s been represented to me that [the]
defense does not intend to do so.
[
50
]
I agree with plaintiff’s
counsel here that rebuttal is for the plaintiff to present
rebuttal evidence and rebuttal witnesses if it finds the need
to do so and desires to do so. The—however, on the other
hand, while the plaintiff is not required to call anyone
other than those he believes is needed to basically prove his
case and the damages being claimed here, that once those
witnesses are on the stand, certainly they can be cross-
examined by the defense, and potentially the items coming
out in that cross-examination might be adequate defense,
and for that matter, even sustain a counterclaim.
***
But certainly as far as the defense here, it wouldn’t be
the first case that was made by use of witnesses called by an
opponent, so I can’t—the mere fact that they are not going
to be presenting any witnesses of their own or presenting
any exhibits does not necessarily mean that they lose, at
least that’s my belief at this particular stage.
50
Defense counsel stated earlier in the hearing: “With respect to
witnesses, we don’t intend to have witnesses other than those named by
the plaintiff, and Mr. Perrin, who is a party to this case.”
2010] D
URAY
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EV V
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ERRIN
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After the conclusion of Duray Development’s
proofs, defense counsel proceeded with his case and
attempted to call Perrin as a witness. Duray Devel-
opment’s counsel objected, citing the trial court’s
earlier ruling. Defense counsel responded that he
should be able to question Perrin regarding Munger’s
testimony that he did not learn until discovery that
Outlaw did not exist at the time of the second
contract and whether the work performed was pur-
suant to a contract with Outlaw. He argued that
Munger’s testimony brought a new issue to the case.
Duray Development’s counsel replied by pointing out
that the original complaint itself addressed the issue,
by alleging Perrin was individually liable because
Outlaw was not a valid company until after the
second contract. The trial court agreed with Duray
Development’s counsel, at which point defense coun-
sel stated: “That’s fine. I think it’s been covered
anyways.”
Once a party has failed to file a witness list in
accordance with the scheduling order, it is within the
trial court’s discretion to impose sanctions against that
party. These sanctions may preclude the party from
calling witnesses. Disallowing a party to call witnesses
can be a severe punishment, equivalent to a dismissal.
51
But that proposition does not mean that disallowing
witnesses is always tantamount to a dismissal. Nor does
it mean that a trial court cannot impose such a sanction
even if it is equivalent to a dismissal.
52
Because the
decision is within the trial court’s discretion, caselaw
mandates that the trial court consider “the circum-
stances of each case to determine if such a drastic
51
Grubor Enterprises, Inc v Kortidis, 201 Mich App 625, 628; 506
NW2d 614 (1993).
52
Id. at 628-629.
164 288 M
ICH
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143 [Apr
sanction is appropriate.”
53
“[T]he record should reflect
that the trial court gave careful consideration to the
factors involved and considered all of its options in
determining what sanction was just and proper in the
context of the case before it.”
54
Relevant factors can
include, but are not limited to,
(1) whether the violation was wilful or accidental; (2) the
party’s history of refusing to comply with discovery re-
quests (or refusal to disclose witnesses); (3) the prejudice to
the defendant; (4) actual notice to the defendant of the
witness and the length of time prior to trial that the
defendant received such actual notice; (5) whether there
exists a history of plaintiff’s engaging in deliberate delay;
(6) the degree of compliance by the plaintiff with other
provisions of the court’s order; (7) an attempt by the
plaintiff to timely cure the defect[;] and (8) whether a
lesser sanction would better serve the interests of justice.
This list should not be considered exhaustive.
[
55
]
The trial court should also “determine whether the
party can prove the elements of his position based solely
on the parties’ testimony and any other documentary
evidence.”
56
Here, the record does not reflect that the trial court
gave consideration to these factors or considered all of
its options in determining what sanction was just and
proper in the context of the case before it.
57
Therefore,
on remand the trial court should reassess Perrin’s
53
Dean v Tucker, 182 Mich App 27, 32; 451 NW2d 571 (1990). “[T]he
mere fact that a witness list was not timely filed does not, in and of itself,
justify the imposition of such a sanction.” Id.
54
Id.
55
Id. at 32-33 (citations omitted). Note that in Dean, it was the plaintiff
who failed to file a witness list.
56
Grubor Enterprises, 201 Mich App at 629.
57
See id.; Dean, 182 Mich App at 32.
2010] D
URAY
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EV V
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ERRIN
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request to testify, taking the above-mentioned factors
into consideration and explaining its determination on
the record.
We find no plain error in the trial court’s failure to
raise sua sponte the issue of corporation by estoppel.
However, we reverse the judgment of the trial court
that the de facto corporation doctrine cannot apply to
limited liability companies, and we reverse the trial
court’s decision to bar defendants from calling wit-
nesses. Accordingly, we remand for further proceedings
in accordance with this opinion. We do not retain
jurisdiction. No taxable costs pursuant to MCR 7.219,
neither party having prevailed in full.
166 288 M
ICH
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PEOPLE v MUNGO (ON REMAND)
Docket No. 269250. Submitted July 15, 2009, at Lansing. Decided April
13, 2010, at 9:10 a.m.
Michael W. Mungo was charged in the Washtenaw Circuit Court with
unlawfully carrying a concealed weapon. A police officer found the
weapon under the driver’s seat of defendant’s automobile during a
search conducted after the officer made a routine traffic stop and
arrested defendant’s passenger on outstanding warrants for traffic
violations. The court, David S. Swartz, J., granted defendant’s
motion to suppress evidence of the gun and quash the information.
The Court of Appeals, W
HITBECK
, C.J., and T
ALBOT
and Z
AHRA
,JJ.,
reversed and remanded, holding that a police officer may search an
automobile incident to a passenger’s arrest when before the search
there was no probable cause to believe that the automobile
contained contraband or that the driver and owner of the automo-
bile had engaged in unlawful activity and that the search was
therefore constitutionally permissible. 277 Mich App 577 (2008).
Defendant sought leave to appeal. The Michigan Supreme Court
initially held the application in abeyance and, following the release
of the United States Supreme Court’s decision in Arizona v Gant,
556 US ___; 129 S Ct 1710 (2009), remanded the case to the Court
of Appeals for reconsideration in light of Gant. 483 Mich 1091
(2009).
On remand, the Court of Appeals held:
1. The search of defendant’s vehicle incident to the arrest of
his passenger was unreasonable and violated the Fourth Amend-
ment. In Gant, the United States Supreme Court held that a
search incident to an arrest may include only the person of the
arrestee and the area within his or her immediate control, that is,
the area from which he or she might gain a weapon or evidence
that could be destroyed. A police officer may search a vehicle
incident to a recent occupant’s arrest only when the arrestee is
unsecured and is within reaching distance of the passenger com-
partment at the time of the search or when it is reasonable to
believe that evidence relevant to the crime of arrest might be
found in the vehicle. In this case, defendant was not under arrest
at the time of the search, which was incident to the passenger’s
2010] P
EOPLE V
M
UNGO
(O
N
R
EM
) 167
arrest. Both defendant and the passenger had been secured in the
backseat of a police vehicle, and neither defendant nor the passen-
ger would have been able to reach into the passenger compartment
of defendant’s automobile during the search, so officer safety was
not a concern. The passenger was arrested for traffic violations, so
there would have been no reasonable basis for the police officer to
conclude that evidence of those offenses could be found during the
search. The trial court correctly granted defendant’s motion to
suppress the evidence and quash the information.
2. The retroactivity doctrine provides that a new rule for the
conduct of criminal prosecutions must be applied retroactively to
all state or federal cases pending on direct review or not yet final,
with no exception for cases in which the new rule constitutes a
clear break from prior law. The rule of Gant applies to this case.
3. The exclusionary rule precludes the use at trial of evidence
obtained in violation of the Fourth Amendment. Its purpose is to
deter police misconduct. The good-faith exception to the exclusion-
ary rule applies in situations such as one in which a police officer
acts in good faith and in an objectively reasonable manner on a
search warrant later found defective because of a judicial error.
Excluding evidence obtained in such a search would not deter
police misconduct. The exclusionary rule should be applied on a
case-by-case basis, and only if application of the rule would deter
police misconduct.
4. The retroactivity doctrine does not preclude application of
the good-faith exception. Even assuming that reliance on Michigan
caselaw could form a basis to invoke the good-faith exception,
however, the prior opinion in this case was the first published
Michigan case to extend the decision in New York v Belton, 453 US
454 (1981), which applied the search-incident exception in the
context of a vehicle search, to a search incident solely to a
passenger’s arrest. The law on this point was thus not established
and clear, and the search in this case could not have been premised
on a good-faith reliance on caselaw.
Affirmed.
1. S
EARCHES AND
S
EIZURES —
A
RRESTS —
S
EARCHES
I
NCIDENT TO AN
A
RREST —
A
UTOMOBILE
S
EARCHES
.
A search incident to an arrest may include only the person of the
arrestee and the area within his or her immediate control, that is,
the area from which he or she might gain a weapon or evidence
that could be destroyed; a law enforcement officer may search a
vehicle incident to a recent occupant’s arrest only when the
arrestee is unsecured and is within reaching distance of the
168 288 M
ICH
A
PP
167 [Apr
passenger compartment at the time of the search or when it is
reasonable to believe that evidence relevant to the crime of arrest
might be found in the vehicle (US Const, Am XIV).
2. C
RIMINAL
L
AW —
R
ETROACTIVITY OF
D
ECISIONS
.
A new rule for the conduct of criminal prosecutions must be applied
retroactively to all cases pending on direct review or not yet final,
even if the new rule constitutes a clear break from prior law.
Michael A. Cox, Attorney General, B. Eric Restuccia,
Solicitor General, Brian L. Mackie, Prosecuting Attor-
ney, and David A. King, Assistant Prosecuting Attorney,
for the people.
Ferris & Salter, P. C . (by Don Ferris), and The Mungo
Law Firm, PLC (by Leonard Mungo), for defendant.
ON REMAND
Before: W
HITBECK
,P.J., and T
ALBOT
and Z
AHRA
,JJ.
Z
AHRA
, J. The prosecution appeals as of right the
circuit court’s order granting defendant’s motion to
suppress evidence and quash the information. Previ-
ously, this Court reversed the circuit court’s order,
holding that “a police officer may search a car incident
to a passenger’s arrest where before the search there
was no probable cause to believe that the car contained
contraband or that the driver and owner of the car had
engaged in any unlawful activity.” People v Mungo, 277
Mich App 577, 578; 747 NW2d 875 (2008). Following
this Court’s decision, defendant appealed in our Su-
preme Court, which held the application for leave to
appeal in abeyance pending release of the United States
Supreme Court’s decision in Arizona v Gant, 556 US
___; 129 S Ct 1710; 173 L Ed 2d 485 (2009). On April 21,
2009, the United States Supreme Court issued an
opinion in Gant, holding that a vehicle may not be
2010] P
EOPLE V
M
UNGO
(O
N
R
EM
) 169
searched “incident to a recent occupant’s arrest after
the arrestee has been secured and cannot access the
interior of the vehicle.” Id. at ___; 129 S Ct at 1714.
Consequently, our Supreme Court has vacated this
Court’s decision in Mungo and remanded for reconsid-
eration in light of Gant. People v Mungo, 483 Mich 1091
(2009). On remand, we affirm the circuit court’s order
suppressing evidence and quashing the information.
I. BASIC FACTS AND PROCEDURE
As stated in this Court’s previous opinion:
Washtenaw County Sheriff’s Deputy Ryan Stuck law-
fully initiated a traffic stop of a car driven by defendant.
Mark Dixon was the sole passenger in the car. Upon
request, defendant produced the vehicle registration and
proof of insurance. Deputy Stuck also requested the occu-
pants’ driver’s licenses and ran Law Enforcement Informa-
tion Network (LEIN) checks on both Dixon and defendant.
Deputy Stuck found that Dixon had two outstanding
warrants issued for failing to appear in court to answer
traffic-violation charges. Deputy Stuck arrested Dixon,
asked his dispatcher to send another officer to assist him,
and secured Dixon in the backseat of his squad car. Deputy
Stuck directed defendant to step out of his car and con-
ducted a pat-down search. Thereafter, Deputy Stuck
searched defendant’s car and found an unloaded gun in a
case underneath the driver’s seat and ammunition in the
glove compartment. Deputy Stuck asked defendant to
produce a permit to carry a concealed weapon. However,
defendant produced only a permit to purchase a firearm.
Defendant’s LEIN check did not reveal that he had been
issued a concealed-weapons permit. Deputy Stuck arrested
defendant for unlawfully carrying a concealed weapon.
In the circuit court, defendant moved to quash the
information and suppress evidence of the gun. The pros-
ecutor relied on New York v Belton, 453 US 454; 101 S Ct
2860; 69 L Ed 2d 768 (1981), to argue that the arrest of any
person in a car justifies a search of the passenger compart-
170 288 M
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ment of that car. The prosecutor argued that the search
that led to the discovery of the gun was constitutionally
permissible because Dixon, a passenger in defendant’s car,
was lawfully arrested. Defendant relied on State v Brad-
shaw, 99 SW3d 73 (Mo App, 2003), a case in which a
divided panel of the Missouri Court of Appeals distin-
guished Belton and held that police officers cannot lawfully
search a driver’s vehicle following the arrest of a passenger
where the passenger was safely arrested and there was no
reasonable suspicion that the driver possessed unlawful
items.
The circuit court distinguished Belton and followed
Bradshaw. The circuit court concluded that defendant was
not under arrest at the time Deputy Stuck searched his car.
The circuit court further concluded that defendant had a
protected privacy interest in his car. The circuit court held
that there was no probable cause to arrest defendant and,
therefore, the search of his car was not constitutionally
permissible. This appeal followed. [Mungo, 277 Mich App
at 578-580.]
II. ANALYSIS
A. STANDARD OF REVIEW
This Court reviews de novo a trial court’s decision to
dismiss a charge on legal grounds. People v Owen, 251
Mich App 76, 78; 649 NW2d 777 (2002). This Court
reviews a trial court’s findings of fact for clear error.
MCR 2.613(C).
B. APPLICATION OF GANT v ARIZONA
In Gant, 556 US at ___; 129 S Ct at 1714-1715, two
persons were arrested outside a residence at which
narcotics allegedly were sold. These persons were se-
cured in separate police cars. Defendant Gant, who had
been at the residence earlier, arrived in his vehicle and
was arrested for driving with a suspended license after
2010] P
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he had left the vehicle and walked some 10 to 12 feet.
An additional patrol car arrived, and Gant was locked in
the backseat of that car. Two officers searched Gant’s
car and found a gun and a bag of cocaine. Ultimately,
the Arizona Supreme Court held that the search of
Gant’s car was unreasonable under the Fourth Amend-
ment of the United States Constitution. Id. at ___; 129
S Ct at 1715.
The United Stated Supreme Court revisited in
Gant the issue of what circumstances permit a police
officer to search the passenger compartment of a
vehicle incident to a recent occupant’s arrest. Id.at
___; 129 S Ct at 1716. The Gant Court began its
analysis by noting that, generally, warrantless
searches are unreasonable per se under the Fourth
Amendment. One exception to this general rule is
that a search may be permissible if it is incident to a
lawful arrest. That exception “derives from interests
in officer safety and evidence preservation that are
typically implicated in arrest situations.” Id. A search
incident to an arrest may include only the person of
the arrestee and the area within the immediate
control of the arrestee, i.e., the area from which the
arrestee might gain a weapon or evidence that could
be destroyed. Id., citing Chimel v California, 395 US
752, 763; 89 S Ct 2034; 23 L Ed 2d 685 (1969). The
Gant Court explained that in New York v Belton, 453
US 454; 101 S Ct 2860; 69 L Ed 2d 768 (1981), the
Supreme Court considered the application of the
Chimel rule in the context of a vehicle search. It held
that “when an officer lawfully arrests ‘the occupant
of an automobile, he may, as a contemporaneous
incident of that arrest, search the passenger compart-
ment of the automobile’ and any containers therein.”
Gant, 556 US at ___; 129 S Ct at 1717, quoting Belton,
453 US at 460.
172 288 M
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The Supreme Court observed that the decision in
Belton “has been widely understood to allow a vehicle
search incident to the arrest of a recent occupant even
if there is no possibility the arrestee could gain access to
the vehicle at the time of the search.” Gant, 556 US at
___; 129 S Ct at 1718. The Court continued:
Under this broad reading of Belton, a vehicle search
would be authorized incident to every arrest of a recent
occupant notwithstanding that in most cases the vehicle’s
passenger compartment will not be within the arrestee’s
reach at the time of the search. To read Belton as autho-
rizing a vehicle search incident to every recent occupant’s
arrest would thus untether the rule from the justifications
underlying the Chimel exception—a result clearly incom-
patible with our statement in Belton that it “in no way
alters the fundamental principles established in the Chimel
case regarding the basic scope of searches incident to lawful
custodial arrests.” 453 U. S. at 460, n 3. Accordingly, we
reject this reading of Belton and hold that the Chimel
rationale authorizes police to search a vehicle incident to a
recent occupant’s arrest only when the arrestee is unse-
cured and within reaching distance of the passenger com-
partment at the time of the search.
Although it does not follow from Chimel, we also conclude
that circumstances unique to the vehicle context justify a
search incident to a lawful arrest when it is “reasonable to
believe evidence relevant to the crime of arrest might be
found in the vehicle.” Thornton [v United States, 541 US 615,
632; 124 S Ct 2127; 158 L Ed 2d 905 (2004)] (Scalia, J.,
concurring in judgment). In many cases, as when a recent
occupant is arrested for a traffic violation, there will be no
reasonable basis to believe the vehicle contains relevant
evidence. See, e.g., Atwater v. Lago Vista, 532 U. S. 318, 324
[121 S Ct 1536; 149 L Ed 2d 549] (2001); Knowles v. Iowa,
525 U. S. 113, 118 [119 S Ct 484; 142 L Ed 2d 492] (1998). But
in others, including Belton and Thornton, the offense of
arrest will supply a basis for searching the passenger com-
partment of an arrestee’s vehicle and any containers therein.
[Gant, 556 US at ___; 129 S Ct at 1719.]
2010] P
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The Supreme Court concluded that “[n]either the
possibility of access nor the likelihood of discovering
offense-related evidence authorized the search in this
case.” Id. The Court noted that unlike in Belton,in
which a single police officer had to deal with four
unsecured arrestees, in Gant, five officers were present
to deal with three arrestees, all of whom were secured
in police vehicles before the search of Gant’s car oc-
curred. Thus, Gant could not have reached into the
passenger compartment of his vehicle at the time the
vehicle was searched. Furthermore, unlike in Thornton,
in which the defendant was arrested for a narcotics
offense, Gant was arrested for driving with a suspended
license. The police could not have expected to find
evidence of that offense from a search of Gant’s car. The
Gant Court determined that “[b]ecause police could not
reasonably have believed either that Gant could have
accessed his car at the time of the search or that
evidence of the offense for which he was arrested might
have been found therein, the search in this case was
unreasonable.” Id.
The Supreme Court concluded:
Police may search a vehicle incident to a recent occu-
pant’s arrest only if the arrestee is within reaching dis-
tance of the passenger compartment at the time of the
search or it is reasonable to believe the vehicle contains
evidence of the offense of arrest. When these justifications
are absent, a search of an arrestee’s vehicle will be unrea-
sonable unless police obtain a warrant or show that an-
other exception to the warrant requirement applies. The
Arizona Supreme Court correctly held that this case in-
volved an unreasonable search. Accordingly, the judgment
of the State Supreme Court is affirmed. [Id. at ___; 129 S Ct
at 1723-1724.]
Applying Gant to the facts presented in this case, we
conclude that the search of defendant’s vehicle incident
174 288 M
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to the arrest of Dixon was illegal and that the circuit
court correctly granted defendant’s motion to suppress
the evidence and quash the information.
Deputy Stuck placed Dixon under arrest after discov-
ering that Dixon had two outstanding warrants for traffic
violations. The officer secured Dixon in the backseat of the
police vehicle. The officer searched the vehicle only after
an additional police unit had arrived and defendant had
been secured in the backseat of that police vehicle. Defen-
dant was not under arrest at the time the search occurred,
and Deputy Stuck searched defendant’s vehicle incident
to Dixon’s arrest. Neither defendant nor Dixon would
have been able to reach into the passenger compartment
of defendant’s vehicle when the search occurred; thus,
concern for officer safety was not at issue. See Gant, 556
US at ___; 129 S Ct at 1716. Further, because Dixon was
placed under arrest for traffic violations, there would have
been no reasonable basis for the officer to conclude that
evidence of those offenses could be found in a search of
defendant’s vehicle. See id. at ___; 129 S Ct at 1719;
Thornton, 541 US at 632 (Scalia, J., concurring in the
judgment). Thus, we conclude that Deputy Stuck’s war-
rantless search of defendant’s car was unreasonable and
in violation of the Fourth Amendment. See Gant, 556 US
at ___; 129 S Ct at 1723-1724.
C. THE EXCLUSIONARY RULE AND THE RETROACTIVITY DOCTRINE
This Court sua sponte issued an order directing the
parties to file supplemental briefs addressing applica-
tion of the good-faith exception to the exclusionary rule,
see United States v Leon, 468 US 897; 104 S Ct 3405; 82
L Ed 2d 677 (1984); People v Goldston, 470 Mich 523;
682 NW2d 479 (2004), and the retroactivity doctrine,
see Griffith v Kentucky, 479 US 314, 328; 107 S Ct 708;
93 L Ed 2d 649 (1987); People v Bell (On Second
2010] P
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Remand), 264 Mich App 58; 689 NW2d 732 (2004).
Defendant ignored this Court’s directive. The prosecu-
tion filed a brief acknowledging that Gant must be
applied retroactively in the instant case. Nonetheless,
the prosecution advocated for reversal of the circuit
court’s order of suppression under the good-faith excep-
tion to the exclusionary rule. We conclude that the
search at issue in this case does not fall within the
good-faith exception to the exclusionary rule. Defen-
dant is entitled to have the rule of law established in
Gant applied to this case.
The judicially created exclusionary rule operates to
preclude from use at trial evidence obtained in violation
of the Fourth Amendment. Leon, 468 US at 906. The
purpose of the exclusionary rule is to deter police
misconduct. Id.InLeon, the United States Supreme
Court established a good-faith exception to the exclu-
sionary rule, noting that application of the exclusionary
rule requires weighing the benefits of the resulting
deterrence of police misconduct against the costs in-
curred by preventing the introduction of otherwise
valid evidence. Id. at 906-907. The Leon Court con-
cluded that circumstances could exist in which these
costs could outweigh any slight benefits gained by
application of the exclusionary rule. For example, if a
law enforcement officer acted in good faith and in an
objectively reasonable manner on a search warrant
later found to be defective because of a judicial error,
excluding the evidence obtained in the search would not
operate to deter police misconduct. Id. at 920-921. The
Leon Court concluded that the exclusionary rule should
be applied on a case-by-case basis, and only if applica-
tion would deter police misconduct. Id. at 918.
1
1
In Goldston, our Supreme Court adopted the good-faith exception to
the exclusionary rule in Michigan. Goldston, 470 Mich at 526, 543; Const
176 288 M
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The retroactivity doctrine provides that “a new rule
for the conduct of criminal prosecutions is to be applied
retroactively to all cases, state or federal, pending on
direct review or not yet final, with no exception for
cases in which the new rule constitutes a ‘clear break’
with the past.” Griffith, 479 US at 328. The interaction
between the good-faith exception to the exclusionary
rule and the retroactivity doctrine has been addressed
by a number of federal courts. Divergent opinions have
emerged in the federal courts in regard to the interac-
tion and application of these two legal concepts.
In United States v Buford, 623 F Supp 2d 923 (MD
Tenn, 2009), a case decided after the United States
Supreme Court’s decision in Gant, the United States
District Court for the Middle District of Tennessee
addressed application of the good-faith exception to the
exclusionary rule in a case factually similar to the
instant case. The Buford court concluded that while
there is tension between the policies supporting the
exclusionary rule and the retroactivity doctrine, the
retroactivity doctrine required rejection of the good-
faith exception to the exclusionary rule in that case:
[A]n extension of the “good faith” exception would lead
to perverse results. For instance, under the [prosecution’s]
argument, there is no basis for distinguishing the peti-
tioner in the “new rule” case from similarly situated
defendants whose cases were proceeding when the new
rule was announced. That is, from the [prosecution’s] view
of the “good faith” exception, there is no distinction
between Gant and the defendant here, because both arrest-
ing officers were operating in a Belton world. Under the
1963, art 1, § 11. The Goldston Court held that the exclusionary rule
should be applied on a case-by-case basis, and only in circumstances in
which exclusion of evidence would serve to deter police misconduct that
occurs during search or seizure or in the preparation of an affidavit.
Goldston, 470 Mich at 538, 540-543.
2010] P
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[prosecution’s] argument, then, Gant himself would only
be entitled to the rather hollow relief of knowing that the
search he was subjected to was a violation of his consti-
tutional rights; that is, he would not be entitled to
suppression of the evidence because the evidence was
obtained in a good faith reliance on Belton. Anyone
similarly situated to Gant (such as the defendant) who
was unfortunate enough to be arrested pre-Gant would
likewise receive the same hollow relief. Anyone similarly
situated to Gant, however, who was arrested subsequent
to the Gant decision would be entitled to suppression of
the evidence because the Gant decision would eliminate
the good faith requirement. Therefore, the individual
(Gant) who successfully convinced the Court that his
Fourth Amendment rights had been violated would run
the risk of criminal penalty, while subsequent defen-
dants might go free, despite being subject to identical
intrusions on privacy. Indeed, discussing a defendant
similarly situated to the one in this case, one court noted,
“[t]o say that an exception exists under the Leon rule to
the application of [a] United States Supreme Court[]
holding... which would permit the principle of the []
holding to be ignored [in a case subsequent to the
holding]...toDefendant’s prejudice, creates logical and
rationalogical anomalies in implementation of Fourth
Amendment doctrine of a decidedly perverse effect.” U.S.
v. Holmes, 175 F.Supp.2d 62 n. 6 (D.Me.2001) (noting the
conundrum but not resolving the issue). [Buford, 623 F
Supp 2d at 926-927.]
The Buford court rejected the prosecution’s contention
that its interpretation of the law eliminated the good-
faith doctrine, noting that the cases that articulated the
doctrine had not “gone so far as to extend the doctrine
to reliance on decisions of the United States Supreme
Court that were reversed or overturned while the
defendant’s case was on review.” Id. at 927. The Buford
court suppressed the evidence obtained in the search of
the defendant’s vehicle. Id.
178 288 M
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A contrary result was reached by the United States
District Court for the Eastern District of Washington.
In United States v Grote, 629 F Supp 2d 1201, 1206-
1207 (ED Wash, 2009) (Grote I), the district court ruled
that even if the search incident to the defendant’s
arrest were not valid under Gant, the good-faith excep-
tion would apply and the evidence should not be ex-
cluded. In its subsequent order denying reconsidera-
tion, the court rejected the defendant’s assertion that
application of the good-faith exception violated the
retroactivity doctrine set out in Griffith and relied on in
Buford. In the order denying reconsideration, the court
stated:
This court understands the importance of the retroac-
tivity doctrine in insuring that similarly situated criminal
defendants are treated the same. In this court’s view,
however, the good faith exception to the exclusionary rule
is of equal importance. The exclusionary rule is intended to
deter future police misconduct, not to cure past violations
of a defendant’s rights. Future police misconduct is not
deterred when, as here, the officer did not engage in any
misconduct and did not make a mistake of fact or law, but
acted in objective good faith on the search incident to arrest
law as it existed at the time, and had existed for many
years. There is no deterrent effect to be gained by applying
the exclusionary rule in this case. [United States v Grote,
unpublished order of the United States District Court for
the Eastern District of Washington, entered July 15, 2009
(Case No. CR-08-6057-LRS); 2009 WL 2068023, at *3; 2009
US Dist LEXIS 60893, at *9-10 (Grote II).]
Similarly in United States v McCane, 573 F3d 1037,
1039 (CA 10, 2009), the United States Court of Appeals
for the Tenth Circuit concluded that, in light of Gant,
the district court had erred by concluding that the
search of the defendant’s vehicle was valid, but affirmed
the district court’s denial of the defendant’s motion to
suppress on the basis of the good-faith exception to the
2010] P
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exclusionary rule. The McCane court noted that Tenth
Circuit pre-Gant precedent supported the search of the
defendant’s vehicle. Id. at 1041-1042. The McCane
court held that the district court properly denied the
defendant’s motion to suppress the evidence. Id.at
1039, 1045. In so doing, the court concluded that
application of the retroactivity doctrine did not pre-
clude application of the good-faith exception to the
exclusionary rule:
McCane argues the retroactivity rule announced in
Griffith v. Kentucky, 479 U.S. 314, 322-23, 107 S.Ct. 708, 93
L.Ed.2d 649 (1987), requires application of the Supreme
Court’s holding in Gant to this case. The issue before us,
however, is not whether the Court’s ruling in Gant applies
to this case, it is instead a question of the proper remedy
upon application of Gant to this case. In Leon, the Supreme
Court considered the tension between the retroactive ap-
plication of Fourth Amendment decisions to pending cases
and the good-faith exception to the exclusionary rule,
stating that retroactivity in this context “has been assessed
largely in terms of the contribution retroactivity might
make to the deterrence of police misconduct.” 468 U.S. at
897, 912-13, 104 S. Ct. 3405. The lack of deterrence likely
to result from excluding evidence from searches done in
good-faith reliance upon settled circuit precedent indicates
the good-faith exception should apply in this context. See
[Illinois v] Krull [480 US 340, 360; 107 S Ct 1160; 94 L Ed
2d 364 (1987)] (declining to apply a court decision declaring
a statute unconstitutional to a case pending at the time the
decision was rendered and instead applying the good-faith
exception to the exclusionary rule because the officer
reasonably relied upon the statute in conducting the
search). [Id. at 1044 n 5.]
Further, in United States v Lopez, 567 F3d 755,
757-758 (CA 6, 2009) (Lopez I), the United States Court
of Appeals for the Sixth Circuit reversed the lower
court’s denial of the defendant’s motion to suppress the
evidence in light of Gant and remanded for further
180 288 M
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proceedings, notwithstanding its conclusion that the
search was permitted under the Belton standard. On
remand, the prosecution asserted that “the exclusion-
ary rule should not apply to the questioned evidence in
this case because the search of [the defendant’s] car was
conducted ‘in good faith reliance on Belton and its
progeny.’ ” United States v Lopez, 655 F Supp 2d 720,
728 (ED Ky, 2009) (Lopez II). The United States District
Court for the Eastern District of Kentucky noted that
Gant did not address “the consequences of its holding
regarding searches conducted incident to lawful arrests
in reliance on Belton and subsequent decisions applying
Belton.” Id. at 725. The district court also noted that
the Sixth Circuit court did not “reverse the judgment of
conviction with instructions that the charges be dis-
missed. Instead, it stated that, ‘[t]he judgment of the
district court is reversed and remanded for further
proceedings consistent with this opinion.” Id. at 727-
728. The district court thus concluded that the Sixth
Circuit court’s “opinion did not restrict this Court from
considering whether the good faith exception to the
exclusionary rule applies to the facts presented.’ ” Id.at
732.
The district court then conducted a hearing regard-
ing whether the police officer acted in good faith in
conducting the search of the defendant’s car. United
States v Lopez, unpublished memorandum opinion of
the United States District Court for the Eastern Dis-
trict of Kentucky, issued September 23, 2009 (Case No.
6:06-120-DCR); 2009 WL 3112127, at *2; 2009 US Dist
LEXIS 87720, at *7 (Lopez III). The district court
observed, “Like its sister circuits prior to Gant, the
Sixth Circuit recognized as lawful under Belton
searches of vehicles conducted incident to an arrest
even in circumstances where the arrestee did not have
access to the passenger compartment of his car.” Id.,
2010] P
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citing United States v White, 871 F2d 41, 44 (CA 6,
1989), and United States v Martin, 289 F3d 392 (CA 6,
2002).
2
The Lopez III court then concluded:
Here, the arrest was proper and the officer conducted
the search in accordance with existing case law from this
circuit. There is absolutely no evidence (or even argument)
that the officer conducting the search was reckless in any
way. While police conducting searches incident to arrests
will likely change following Gant, the officer conducting the
search of Lopez’s vehicle acted appropriately at that time.
In short, a reasonably well-trained officer would not have
known or concluded that the search was “illegal” in light of
all the circumstances presented. [Lopez III, 2009 WL
3112127 at *4; 2009 US Dist LEXIS 87720 at *12.]
Preliminarily, we reject the notion expressed in Bu-
ford that the retroactivity doctrine precludes applica-
tion of the good-faith exception to the exclusionary rule.
As stated in Grote II, 2009 WL 2068023 at *3; 2009 US
Dist LEXIS 60893 at *9, these two legal principles are of
equal importance. Further, each principle presents con-
stitutional concerns distinct from the other. As recently
stated, “because there is a clear dichotomy between
Fourth Amendment violation and remedy, the retroac-
tive application of Gant here to conclude that there was
a violation does not inevitably lead to the conclusion
that the good-faith exception cannot be considered to
determine the appropriate remedy.” People v Key, ___
P3d ___ (Colo App, 2010).
*
We conclude that the retroactivity doctrine requires
that Gant be applied to the instant case. The search at
issue in the present case violated the Fourth Amend-
2
The district court also cited several cases not selected for publication.
* Opinion withdrawn August 5, 2010, by People v Key, unpublished
opinion of the Colorado Court of Appeals (Case No. 07CA1257)—R
EPORTER
.
182 288 M
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ment and was unconstitutional. Having made this de-
termination, our next inquiry is whether the evidence
obtained as a result of the unconstitutional search
should be suppressed. It is in this context that we
examine the good-faith exception to the exclusionary
rule.
Whether reliance on caselaw can form a basis to
invoke the good-faith exception to the exclusionary
rule is a significant legal question. The United States
Supreme Court has been silent on this issue. The
Sixth Circuit and Tenth Circuit courts of appeals
have expanded the good-faith exception to apply to a
law enforcement officer’s reliance on caselaw. In
McCane and similarly in Lopez, however, it was the
clear and established law of the circuit that law
enforcement officers were vested with the right to
search a vehicle incident to a recent occupant’s
arrest. McCane, 573 F3d at 1041-1042 (citing several
Tenth Circuit opinions upholding searches without
regard to the nature of the offense and in which the
defendant was already restrained); Lopez III, 2009
WL 3112127 at *2; 2009 US Dist LEXIS 87720 at *7
(“Like its sister circuits prior to Gant, the Sixth
Circuit recognized as lawful under Belton searches of
vehicles conducted incident to an arrest even in
circumstances where the arrestee did not have access
to the passenger compartment of his car.”). See also
Grote I, 629 F Supp 2d at 1205 (noting that at the
time the defendant’s vehicle was searched it was
“well accepted in the Ninth Circuit and elsewhere”
that police could search a motor vehicle incident to a
lawful arrest “without regard to whether an arrestee
was secured or unsecured, and without regard to
whether evidence particular to the crime of arrest
might be found in the vehicle”).
2010] P
EOPLE V
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) 183
Assuming without deciding that reliance on Michi-
gan caselaw can form a basis to invoke the good-faith
exception to the exclusionary rule, we conclude that the
exception does not apply in the present case. Unlike
Lopez and McCane, in which the caselaw in each circuit
was established and clear, the instant case represented
the first published case in Michigan to address the
applicability and extension of Belton to a vehicle search
solely incident to a passenger’s arrest. Indeed, this
panel published its prior opinion in this matter because
we concluded that this issue presented a matter of first
impression in Michigan. Given our conclusion that the
law in this state on this point was not established and
clear, the search and seizure of evidence from defen-
dant’s vehicle could not, as a matter of law, have been
premised on law enforcement’s good-faith reliance on
caselaw. We therefore conclude that the good-faith ex-
ception to the exclusionary rule has no application in
the present case. Pursuant to the retroactivity doctrine,
defendant is entitled to have the rule of law announced
in Gant applied to this case.
III. CONCLUSION
We affirm the circuit court’s order granting defen-
dant’s motion to suppress evidence and quash the
information.
184 288 M
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ARKIN DISTRIBUTING COMPANY v JONES
Docket No. 287932. Submitted February 10, 2010, at Detroit. Decided
April 13, 2010, at 9:15 a.m.
Arkin Distributing Company obtained a default judgment in the
Oakland Circuit Court in 1991 against Donna J. Jones and her
husband. The judgment was for money that plaintiff alleged Jones
had embezzled from it. Jones subsequently pleaded nolo conten-
dere to 24 counts of embezzlement and was sentenced to prison in
1995. Following her release, she made monthly restitution pay-
ments to plaintiff beginning in 1998. After her discharge from
parole in January 2003, she continued to make monthly payments
to plaintiff until January 2008. Jones’s husband died in 2007, and
she received additional assets. Plaintiff began collection proceed-
ings on the default judgment, and Jones moved to quash the
execution. The court, Edward Sosnick, J., granted the motion, and
plaintiff appealed.
The Court of Appeals held:
The trial court abused its discretion by granting Jones’s motion.
MCL 600.5809(3) provides that the period of limitations for an action
founded on a judgment is 10 years. Any payment on a debt, however,
regardless of whether it is made before or after the expiration of the
limitations period, extends the limitation period. A discharge from
parole is a remission of the remaining portion of a defendant’s
sentence. Following her discharge, Jones was no longer subject to the
jurisdiction of the Department of Corrections and was no longer
required to comply with the parole condition regarding restitution.
Thus, the payments Jones made after her discharge from parole
constituted a recognition of her remaining civil obligation to plaintiff
and an indication of her intention to pay it. Her continued payments
to plaintiff extended the period of limitations under MCL 600.5809(3)
through January 2018.
Reversed.
J
UDGMENTS —
E
XECUTION OF
J
UDGMENTS —
L
IMITATION OF
A
CTIONS —
P
AYMENTS
ON
J
UDGMENTS
.
The period of limitations for an action founded on a judgment or
decree is 10 years from the rendition of the judgment or decree,
2010] A
RKIN
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ISTRIB
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but any payment on the judgment extends the limitations period,
regardless of whether the person makes the payment before or
after the limitations period expires (MCL 600.5809[3]).
Barris, Sott, Denn & Driker, P.L.L.C. (by Stephen E.
Glazek and Erica Fitzgerald), for plaintiff.
Hyman Lippitt, P.C. (by Norman L. Lippit and Daniel
J. McCarthy), for defendant.
Before: G
LEICHER
,P.J., and O’C
ONNELL
and W
ILDER
,
JJ.
P
ER
C
URIAM.
Plaintiff appeals by leave granted an
order granting defendant’s motion to quash execution
of a default judgment against defendant. We reverse.
I
Plaintiff operated as a wholesale distributor of chil-
dren’s toys until 1995. Defendant was employed by
plaintiff as a bookkeeper from 1970 to 1991, during
which time she handled all of plaintiff’s banking and
cash. In 1991, plaintiff alleged that defendant had
embezzled more than $562,000 over a 10-year period.
Plaintiff commenced a civil action against defendant
and her husband, Gary Jones. Defendant failed to
defend the action, and a default judgment was entered
on July 24, 1991, against defendant in the amount of
$562,664.97, plus interest totaling $165,743.56. Follow-
ing a bench trial on the remaining claims against Gary
Jones, on January 8, 1993, the trial court granted
plaintiff constructive trusts in certain assets owned by
defendant and Jones, such as bank accounts and real
property.
In separate criminal proceedings, defendant pleaded
nolo contendere to 24 counts of embezzlement by an
186 288 M
ICH
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agent or trustee of more than $100, former MCL
750.174. Pursuant to resentencing ordered by this
Court in People v Jones, unpublished memorandum
opinion of the Court of Appeals, issued March 10, 1995
(Docket No. 165512), defendant was sentenced on July
17, 1995, to 4 to 10 years in prison, with restitution of
$537,432.10 to be a parole condition. Defendant was
apparently released from prison 1
1
/
2
years later. As a
condition of her parole, defendant began making
monthly payments of at least $200 in May 1998. Accord-
ing to defendant’s pleadings, she was discharged from
parole in January 2003, but the record shows that
defendant made monthly payments of $230 to plaintiff
until January 2008.
As a result of Gary Jones’s death on June 15, 2007,
defendant received additional assets, and plaintiff be-
gan collection proceedings on the 1991 default judg-
ment. Defendant maintained that the 10-year statutory
limit on the default judgment had expired and re-
quested that the trial court quash the execution and
return financial assets already seized. The trial court
ruled in favor of defendant, reasoning that payments
made by defendant under the restitution order in the
criminal case did not revive defendant’s obligation to
make payments under the civil order.
II
On appeal, plaintiff argues that defendant’s monthly
partial payments revived and extended the period of
limitations for the default judgment. We agree. The
quashing of an execution rests in the discretion of the
trial court. See Schmidt v Bretzlaff, 208 Mich App 376,
378; 528 NW2d 760 (1995). An abuse of discretion
occurs when a result falls outside the range of prin-
cipled outcomes. Woods v SLB Prop Mgt, LLC, 277 Mich
2010] A
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App 622, 625; 750 NW2d 228 (2008). The applicability
of a statute of limitations is a question of law reviewed
de novo. Joliet v Pitoniak, 475 Mich 30, 35; 715 NW2d
60 (2006).
Plaintiff acknowledges that the 1991 default judg-
ment is subject to the 10-year period of limitations set
forth in MCL 600.5809(3), which provides:
Except as provided in [MCL 600.5809(4)], the period of
limitations is 10 years for an action founded upon a
judgment or decree rendered in a court of record of this
state, or in a court of record of the United States or of
another state of the United States, from the time of the
rendition of the judgment or decree....Within the appli-
cable period of limitations prescribed by this subsection, an
action may be brought upon the judgment or decree for a
new judgment or decree. The new judgment or decree is
subject to this subsection.
[
1
]
Nevertheless, “any payment on a debt, whether before
or after the running of the period of limitations, acts to
extend the limitations period.” Wayne Co Social Servs
Dir v Yates, 261 Mich App 152, 156; 681 NW2d 5 (2004).
Plaintiff argues that the order for restitution and the
default judgment constituted the same debt, so defen-
dant’s monthly restitution payments made as a condi-
tion of parole extended the limitations period for the
default judgment. We need not reach the merits of this
argument, however, because we conclude that payments
1
At the time of the 1991 default judgment, the former version of MCL
600.5809(3) similarly provided:
Except as provided in [MCL 600.5809(4)], the period of limita-
tions is 10 years for actions founded upon judgments or decrees
rendered in a court of record of this state, or in a court of record of
the United States or of another state of the United States, from the
time of the rendition of the judgment....Within these periods an
action may be brought upon the judgment for a new judgment,
which in its turn, will be subject to this subsection.
188 288 M
ICH
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185 [Apr
made after defendant was discharged from parole con-
stituted a recognition of the remaining civil obligation
to plaintiff and an indication of an intention to pay the
same.
The Parole Board, within the Department of Correc-
tions, possesses exclusive jurisdiction over parole mat-
ters. Hopkins v Parole Bd, 237 Mich App 629, 646; 604
NW2d 686 (1999); see also MCL 791.238(1) (“Each
prisoner on parole shall remain in the legal custody and
under the control of the department.”). Any restitution
ordered is a condition of parole. MCL 769.1a(11). MCL
791.242(1) provides:
If a paroled prisoner has faithfully performed all of the
conditions and obligations of parole for the period of time
fixed in the order of parole, and has obeyed all of the rules
and regulations adopted by the parole board, the prisoner
has served the full sentence required. The parole board
shall enter a final order of discharge and issue the paroled
prisoner a certificate of discharge.
A discharge “ ‘is a remission of the remaining portion of
the sentence.’ ” People v Gregorczyk, 178 Mich App 1,
11; 443 NW2d 816 (1989), quoting In re Eddinger, 236
Mich 668, 670; 211 NW 54 (1926). After delivery, a
discharge cannot be recalled.
“Unless and until parole is successfully completed,
the prisoner is deemed to be serving the sentence
imposed by the trial court.” Harper v Dep’t of Correc-
tions, 215 Mich App 648, 650; 546 NW2d 718 (1996),
citing MCL 791.238(6); see also MCL 791.234(3) (stat-
ing that for certain prisoners serving consecutive sen-
tences, “discharge shall be issued only after the total of
the maximum sentences has been served less good time
and disciplinary credits, unless the prisoner is paroled
and discharged upon satisfactory completion of the
parole”) and MCL 791.234(4) (similar provisions). The
2010] A
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maximum length of a period of parole is determined by
the Department of Corrections within the time remain-
ing of the maximum term of imprisonment. See People
v Tanner, 387 Mich 683, 695; 199 NW2d 202 (1972)
(B
RENNAN
, J., dissenting).
Nothing in the record contradicts defendant’s claim
that she was discharged from parole in January 2003.
Regardless, even if defendant was not discharged at
that time, her maximum discharge date based on her
10-year maximum term of imprisonment was December
4, 2004.
2
See Tanner, 387 Mich at 689; Harper, 215 Mich
App at 650. Following discharge from parole, defendant
was no longer subject to the jurisdiction of the Depart-
ment of Corrections, and any remaining portion of
defendant’s sentence, including the condition that she
pay restitution, abated. Gregorczyk, 178 Mich App at
11-12.
Despite the abatement of the parole condition for
restitution, defendant continued to make monthly pay-
ments to plaintiff of $230 until January 2008. With
these partial payments, defendant acknowledged the
remaining obligation under the default judgment to
compensate plaintiff for the loss suffered as a result of
the embezzlement. Yates, 261 Mich App at 156. We
conclude that these payments on the remaining obliga-
tion served to extend the period of limitations under
MCL 600.5809(3) through January 2018. Alpena Friend
of the Court ex rel Paul v Durecki, 195 Mich App 635;
491 NW2d 864 (1992) (“[A] partial payment made on a
note after it matures serves to revive the statute of
limitation, and a cause of action begins to accrue on
that date.”). Because the 10-year period of limitations
2
For purposes of this appeal, defendant’s maximum discharge date
includes 215 days’ credit for time served, but not good time and
disciplinary credits.
190 288 M
ICH
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185 [Apr
had not expired when plaintiff restarted collection
proceedings following Gary Jones’s death, the trial
court abused its discretion when it granted defendant’s
motion to quash execution of the default judgment.
In light of our conclusion, we need not address
plaintiff’s remaining claim on appeal.
Reversed. Plaintiff, being the prevailing party, may
tax costs pursuant to MCR 7.219.
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PEOPLE v ERICKSEN
Docket No. 288496. Submitted April 6, 2010, at Lansing. Decided April
15, 2010, at 9:00 a.m.
An Alpena Circuit Court jury convicted Chad J. Ericksen of assault
with intent to commit murder. The court, John F. Kowalski, J.,
sentenced defendant as a fourth-offense habitual offender to life
imprisonment, and defendant appealed.
The Court of Appeals held:
1. The elements of assault with intent to commit murder are
(1) an assault (2) with an actual intent to kill, (3) which, if
successful, would make the killing murder. Circumstantial evi-
dence and the reasonable inferences it permits are sufficient to
support a conviction provided the prosecution meets its burden of
proof beyond a reasonable doubt.
2. Taken as a whole and viewed in a light most favorable to the
prosecution, the evidence presented, together with the reasonable
inferences that may be drawn from that evidence, was sufficient to
support defendant’s conviction. With regard to defendant’s intent,
the evidence established that defendant secreted a knife before
leaving with companions to confront the victim and told his
companions that he had “stuck” the victim five times, which a jury
could reasonably have interpreted as an admission that he know-
ingly stabbed the victim several times. Defendant’s intent could
also be inferred from the nature, extent, and location of the
wounds.
3. While defendant challenged the credibility of testimony by
his companions and codefendants, questions of credibility are for
the trier of fact to resolve. The trial court specifically instructed
the jury to examine accomplices’ testimony carefully and consider
it more cautiously than that of other witnesses, and jurors are
presumed to follow the court’s instructions.
4. The instances of prosecutorial misconduct that defendant
alleged did not deprive him of a fair trial. During opening state-
ment, the prosecutor attempted to describe the victim’s antici-
pated testimony, and while the victim did not testify, other
witnesses did describe the victim’s condition and the surgeries he
192 288 M
ICH
A
PP
192 [Apr
required. The prosecutor’s statement in closing argument that the
victim was in a wheelchair was conclusory given the evidence
presented, but it was brief, there was testimony that the victim’s
injuries necessitated amputation of his legs, and the trial court
instructed the jurors not to let sympathy influence their decisions.
The statement was not so inflammatory as to have prejudiced
defendant. The prosecutor did not interject his personal beliefs
into the case. Moreover, taken in context, the prosecutor’s argu-
ment in closing that it would not be reasonable for the jury to find
defendant guilty of a lesser included offense was a request by the
prosecutor for the jury to convict defendant because the evidence
showed an intent to commit murder. Finally, the prosecutor did
elicit testimony from a police detective that the trial testimony of
one of defendant’s companions was consistent with an earlier
police interview, but while a witness cannot properly comment on
another witness’s credibility, defendant opened the door to the
question through attempts to undermine the companion’s cred-
ibility by identifying inconsistencies in his statements to the
police.
5. While defendant argued that the trial court based his
sentence on facts not proved beyond a reasonable doubt, in
violation of Blakely v Washington, 542 US 296 (2004), Blakely does
not apply to Michigan’s indeterminate sentencing scheme.
6. The trial court properly scored offense variable 4 (psycho-
logical injury to victim). MCL 777.34(2) requires the court to
assess 10 points if the victim sustained serious psychological injury
that may require professional treatment, although treatment need
not actually have been sought.
7. The trial court properly scored offense variable 19 (interfer-
ence with the administration of justice). Interfering or attempting
to interfere with the administration of justice includes acts that
constitute obstruction of justice. Providing a false name to the
police may constitute an interference with the administration of
justice. In this case, defendant asked one of his companions to
dispose of the knife he used to stab the victim and asked others to
lie about where defendant was when the crime was committed.
These were attempts to create a false alibi and mislead the police
investigation and under MCL 777.49(c), were attempts to interfere
with the administration of justice.
8. Defendant argued that because he had not previously been
charged with assault with intent to commit murder, the trial court
should not have considered a statement in his presentence inves-
tigation report indicating that he had a history of similar offenses.
2010] P
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Similar does not mean identical, and the stabbing incidents
described in the report were similar.
9. Defendant was entitled to 282 days’ jail credit for time
served in jail before sentencing.
Affirmed; remanded for correction of judgment of sentence.
1. C
RIMINAL
L
AW —
A
SSAULT WITH
I
NTENT TO
C
OMMIT
M
URDER —
E
LEMENTS OF
A
SSAULT WITH
I
NTENT TO
C
OMMIT
M
URDER —
I
NTENT TO
K
ILL —
C
IRCUM-
STANTIAL
E
VIDENCE —
I
NFERENCES FROM
C
IRCUMSTANTIAL
E
VIDENCE.
The elements of assault with intent to commit murder are (1) an
assault (2) with an actual intent to kill, (3) which, if successful,
would make the killing murder; the defendant’s intent can be
inferred from any facts in evidence, including the nature,
extent, and location of any wounds inflicted on the victim (MCL
750.83).
2. S
ENTENCES —
S
ENTENCING
G
UIDELINES —
O
FFENSE
V
ARIABLES —
V
ICTIMS —
P
SYCHOLOGICAL
I
NJURY TO
V
ICTIMS
.
A sentencing court must assess points under offense variable 4 of the
sentencing guidelines if the victim sustained serious psychological
injury that may require professional treatment; treatment, how-
ever, need not actually have been sought for these points to be
assessed (MCL 777.34).
3. S
ENTENCES —
S
ENTENCING
G
UIDELINES —
O
FFENSE
V
ARIABLES —
I
NTERFERENCE
WITH THE
A
DMINISTRATION OF
J
USTICE
.
A defendant’s attempts to create a false alibi, mislead police inves-
tigators, or divert suspicion away from himself or herself and onto
others constitute attempts to interfere with the administration of
justice for purposes of scoring offense variable 19 of the sentencing
guidelines (MCL 777.49).
Michael A. Cox, Attorney General, B. Eric Restuccia,
Solicitor General, Ed Black, Prosecuting Attorney, and
Andrea Christensen, Assistant Attorney General, for
the people.
Smith & Brooker, P.C. (by George B. Mullison), and
Chad J. Ericksen, in propria persona, for defendant.
Before: D
AVIS
,P.J., and D
ONOFRIO
and S
TEPHENS
,JJ.
194 288 M
ICH
A
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192 [Apr
P
ER
C
URIAM.
Defendant appeals as of right his jury
trial conviction of assault with intent to commit mur-
der, MCL 750.83. The trial court sentenced defendant
as a fourth-offense habitual offender, MCL 769.12, to
serve a life sentence. Because the prosecution presented
sufficient evidence from which a jury could convict
defendant beyond a reasonable doubt and defendant’s
claims of prosecutorial misconduct, ineffective assis-
tance of counsel, and sentencing error are without
merit, we affirm defendant’s conviction and life sen-
tence. We remand only for ministerial correction of
defendant’s judgment of sentence to include 282 days of
jail credit.
I
Before being attacked, the victim, Ervin Ritthaler,
Jr., had been involved in an altercation with the sister of
one of defendant’s friends. Defendant and two other
men confronted the victim about the earlier incident.
The confrontation soon became violent, and defendant
stabbed Ritthaler several times in the back with a knife
he had secreted on his person. The wounds resulted in
a cascade of severe medical complications for Ritthaler,
including multiple organ failures, cardiac arrest, brain
injury, and, ultimately, amputation of both of his legs
below the knee.
II
Defendant first argues on appeal that his conviction
cannot stand because the prosecution failed to present
sufficient evidence at trial. We review de novo a chal-
lenge on appeal to the sufficiency of the evidence. People
v Hawkins, 245 Mich App 439, 457; 628 NW2d 105
(2001). The elements of assault with intent to commit
murder are “(1) an assault, (2) with an actual intent to
2010] P
EOPLE V
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195
kill, (3) which, if successful, would make the killing
murder.” People v Brown, 267 Mich App 141, 147-148;
703 NW2d 230 (2005) (quotation marks and citations
omitted). We examine the evidence in a light most
favorable to the prosecution, resolving all evidentiary
conflicts in its favor, and determine whether a rational
trier of fact could have found that the essential ele-
ments of the crime were proved beyond reasonable
doubt. Hawkins, 245 Mich App at 457; People v Terry,
224 Mich App 447, 452; 569 NW2d 641 (1997).
Defendant specifically asserts that because the pros-
ecution’s case rested extensively on circumstantial evi-
dence, he could have been convicted only if that evi-
dence proved the prosecution’s theory of guilt with
“impelling certainty.” This is a misstatement of the law.
Circumstantial evidence and the reasonable inferences
it permits are sufficient to support a conviction, pro-
vided the prosecution meets its constitutionally based
burden of proof beyond a reasonable doubt. People v
Nowack, 462 Mich 392, 400; 614 NW2d 78 (2000).
Defendant also argues that the prosecution pre-
sented insufficient evidence to establish that he had the
requisite specific intent. The evidence at trial estab-
lished that defendant secreted a knife before leaving
with his companions to confront Ritthaler. In addition,
defendant told his companions that he had “stuck
[Ritthaler] five times.” A trier of fact could reasonably
have interpreted this statement as an admission that he
knowingly stabbed the victim many times. The medical
evidence showed that Ritthaler’s right back had four
knife wounds. Defendant’s intent could be inferred
from any facts in evidence, including the nature, extent,
and location of these wounds. People v Mills, 450 Mich
61, 71; 537 NW2d 909 (1995); People v Unger, 278 Mich
App 210, 223, 231; 749 NW2d 272 (2008). This Court
196 288 M
ICH
A
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192 [Apr
has consistently observed that “[b]ecause of the diffi-
culty of proving an actor’s state of mind, minimal
circumstantial evidence is sufficient.” People v
McRunels, 237 Mich App 168, 181; 603 NW2d 95 (1999).
Here, the evidence was more than minimal and clearly
demonstrated that defendant acted with the requisite
intent.
Defendant also challenges the credibility of the tes-
timony of his companions and codefendants, arguing
that they were not credible because each man received
a favorable plea deal in exchange for his testimony. Both
men, however, acknowledged their respective plea
agreements during their testimony. Not only does this
Court scrupulously leave questions of credibility to the
trier of fact to resolve, People v Williams, 268 Mich App
416, 419; 707 NW2d 624 (2005), but the jury was also
specifically instructed to “examine an accomplice’s tes-
timony closely and be very careful about accepting it”
and to consider it “more cautiously than you would that
of an ordinary witness.” “It is well established that
jurors are presumed to follow their instructions.”
People v Graves, 458 Mich 476, 486; 581 NW2d 229
(1998).
Defendant also highlights a statement the trial court
made at sentencing to the effect that it did not appear
that defendant intended the extent of the injury sus-
tained by Ritthaler. The record reveals that the trial
court actually stated that it was “guessing” that the
injuries sustained were “more serious than [defendant]
ever intended....” The court’s conjecture regarding
defendant’s motivation is, by its very nature, pure
speculation, as opposed to the jury’s determination of
guilt beyond a reasonable doubt.
In sum, taken as a whole and viewed in a light most
favorable to the prosecution, the evidence presented
2010] P
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below, together with the reasonable inferences that may
be drawn from that evidence, was sufficient to support
defendant’s convictions. Hawkins, 245 Mich App at 457.
III
Defendant next argues that he was denied a fair trial
when the prosecutor engaged in numerous instances of
misconduct. See People v Dobek, 274 Mich App 58, 63;
732 NW2d 546 (2007). However, because a timely ob-
jection could have cured any of the alleged errors, we
review defendant’s allegations of prosecutorial miscon-
duct for plain error affecting substantial rights. People v
Thomas, 260 Mich App 450, 453-454; 678 NW2d 631
(2004).
Defendant first asserts that the prosecutor engaged
in misconduct when he stated during his opening state-
ment that Ritthaler had many health problems stem-
ming from the attack, and then stated during closing
argument that Ritthaler was confined to a wheelchair.
Defendant contends that these comments were im-
proper because they were irrelevant, unduly prejudicial,
intended to elicit the jury’s sympathy for the victim,
and, in relation to the second statement, constituted
facts not in evidence.
The record reveals that the prosecutor actually
stated during his opening statement that although
Ritthaler had no memory of the night he was attacked,
“he can tell you about his state of health today, and he
can testify to a number of other aspects of information
which will be useful.” When read in context with the
rest of the prosecutor’s opening statement, it is appar-
ent that the prosecutor was attempting to describe
Ritthaler’s anticipated testimony. While Ritthaler ulti-
mately did not testify, his treating physicians did testify
and described Ritthaler’s condition on being brought
198 288 M
ICH
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192 [Apr
into the emergency room and the multiple surgeries he
required before he was transported to another hospital
for further treatment. This evidence was relevant to all
elements of the crime and was congruent with the
prosecutor’s opening statement.
The prosecutor’s statement during closing argu-
ment that Ritthaler was now in a wheelchair was
conclusory given the record evidence. “[A] prosecutor
may not make a statement of fact to the jury that is
unsupported by the evidence....”People v Schuma-
cher, 276 Mich App 165, 178; 740 NW2d 534 (2007).
While the prosecutor did assert during opening state-
ment that Ritthaler’s lower legs were eventually
amputated because of the damage caused by the
attack, there was no sworn testimony from a witness
during trial that Ritthaler was wheelchair-bound.
There is also no indication from the record before us
that Ritthaler was in the courtroom or that any
documentary evidence was admitted that disclosed
that Ritthaler was confined to a wheelchair. However,
to the extent that the statement might be considered
improper, it constituted only a brief portion of the
closing argument, which included a lengthy and de-
tailed discussion of the evidence. Moreover, there was
testimony that the victim had to have his lower legs
amputated, and without lower legs, it is not a stretch
to describe the victim as wheelchair-bound. When
viewed as part of the closing argument as a whole, the
statement does not appear so inflammatory as to have
prejudiced defendant. Additionally, the trial court
instructed the jury to consider only the evidence and
clarified that the attorneys’ statements were not
evidence. Further, the trial court instructed the jury
that it must not let sympathy influence its decision.
“Jurors are presumed to follow their instructions, and
2010] P
EOPLE V
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instructions are presumed to cure most errors.”
People v Abraham, 256 Mich App 265, 279; 662 NW2d
836 (2003).
1
Defendant also argues that the prosecutor interjected
his personal beliefs into the case when he stated during
his opening statement that defendant’s companions
went to see Ritthaler in order to talk to him but
defendant had a different intent. Rather than offering
his personal beliefs about defendant’s guilt, the pros-
ecutor was simply summarizing the anticipated testi-
mony of defendant’s companions, as well as providing a
fair view of what the evidence would show. Opening
statement is the appropriate time to state the facts that
will be proved at trial. People v Moss, 70 Mich App 18,
32; 245 NW2d 389 (1976). Defendant has not shown
error.
Defendant also argues that the prosecutor engaged in
misconduct when he argued during closing argument
that it would not be reasonable to find defendant guilty
of the lesser included offense of assault with intent to
commit great bodily harm less than murder or assault
with a dangerous weapon. However, when read in
context of the entire closing argument, it is apparent
that the prosecutor was asking the jury to convict
1
Defendant also claims that defense counsel’s failure to object to the
prosecutor’s wheelchair reference amounted to ineffective assistance of
counsel. Defense counsel’s failure to object to the prosecutor’s wheelchair
reference was likely a strategic decision. See People v Bahoda, 448 Mich
261, 287 n 54; 531 NW2d 659 (1995). Counsel could have reasonably
believed that by raising a procedural objection, defendant would be
showing a detrimental lack of sympathy for the victim, especially
considering the fact that the victim was a double amputee without lower
legs. In any event, defendant has not established that but for the alleged
error, a different result was likely or that the proceedings were funda-
mentally unfair or unreliable. People v Rodgers, 248 Mich App 702, 714;
645 NW2d 294 (2001). Therefore, defendant’s claim of ineffective assis-
tance of counsel in this regard is wholly without merit.
200 288 M
ICH
A
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192 [Apr
defendant because the evidence showed that defendant
inflicted “multiple stabbings in the vital area,” there-
fore establishing the element of intent to commit mur-
der.
Defendant’s final claim of prosecutorial misconduct
relates to testimony elicited from an Alpena Police
Department detective that the trial testimony of one of
defendant’s companions was consistent with an earlier
police interview. While a witness cannot properly com-
ment on the credibility of another witness, People v
Buckey, 424 Mich 1, 17; 378 NW2d 432 (1985), defen-
dant opened the door to the question when he at-
tempted to undermine his companion’s credibility by
pointing out that his statements to police were not
consistent, see People v Verburg, 170 Mich App 490,
497-498; 430 NW2d 775 (1988). Again, defendant has
not shown error.
Because defendant has not shown error with regard
to any of his assignments of prosecutorial misconduct,
his concomitant arguments that he was denied due
process when the trial court “failed to control the
prosecutor” or that he was denied effective assistance of
counsel when trial counsel failed to object to the pros-
ecutor’s actions also fail. Failing to advance a meritless
argument or raise a futile objection does not constitute
ineffective assistance of counsel. People v Snider, 239
Mich App 393, 425; 608 NW2d 502 (2000). And after
reviewing the record, we are confident that the trial
court satisfied its duty to ensure that defendant re-
ceived a fair trial. See People v Ullah, 216 Mich App 669,
674; 550 NW2d 568 (1996).
IV
Defendant next challenges his life sentence. He first
argues, on the basis of Blakely v Washington, 542 US
2010] P
EOPLE V
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201
296; 124 S Ct 2531; 159 L Ed 2d 403 (2004), and its
progeny, that his sentence is constitutionally barred for
the reason that the trial court engaged in impermissible
fact-finding and based his sentence on facts that had
not been proved beyond a reasonable doubt to a jury.
But our Supreme Court has clearly and consistently
held that Blakely does not apply to Michigan’s indeter-
minate sentencing scheme, and defendant’s argument
is thus without merit. See People v McCuller, 479 Mich
672, 683; 739 NW2d 563 (2007); People v Drohan, 475
Mich 140, 164; 715 NW2d 778 (2006); People v Claypool,
470 Mich 715, 730 n 14; 684 NW2d 278 (2004).
Defendant next argues that the trial court improp-
erly scored offense variables (OVs) 4 and 19 for reasons
besides those related to the principle underlying
Blakely.
2
“A sentencing court has discretion in deter-
mining the number of points to be scored, provided that
evidence of record adequately supports a particular
score.” People v Hornsby, 251 Mich App 462, 468; 650
NW2d 700 (2002). “This Court reviews a sentencing
court’s scoring decision to determine whether the trial
court properly exercised its discretion and whether the
record evidence adequately supports a particular
score.” People v McLaughlin, 258 Mich App 635, 671;
672 NW2d 860 (2003). To the extent that a challenge to
the trial court’s scoring of a variable involves a question
of statutory interpretation, this Court reviews de novo
questions of statutory interpretation. People v Osan-
towski, 481 Mich 103, 107; 748 NW2d 799 (2008).
With regard to OV 4, a sentencing court must assess
10 points under OV 4 if the victim sustained serious
psychological injury that may require professional
treatment, although treatment need not actually have
2
Defendant accepted the scoring of the sentencing guidelines at the
time of sentencing, but did file a subsequent motion for resentencing.
202 288 M
ICH
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192 [Apr
been sought in order for these points to be assessed.
MCL 777.34(2). Defendant’s argument seems to disre-
gard that portion of the statute stating that actual
psychological treatment is not a necessary prerequisite
to the scoring of points. The presentence investigation
report (PSIR) indicated that Ritthaler suffered from
“depression” and that his “personality” had changed as
of a result of his continuing poor heath following the
assault and amputations. This was sufficient evidence
to uphold the scoring decision. Hornsby, 251 Mich App
at 468.
With regard to OV 19, MCL 777.49(c) requires that
the sentencing court assess 10 points if “[t]he offender
otherwise interfered with or attempted to interfere
with the administration of justice[.]” Defendant chal-
lenges the trial court’s assessment of 10 points, arguing
that his conduct of leaving the scene of the crime and
leaving the state did not constitute interference with
the administration of justice because he was not actu-
ally being chased by police when he left. The prosecu-
tion responds that additional conduct on the part of
defendant constituted interference with the adminis-
tration of justice under the language of the statute. The
prosecution specifically argues that defendant at-
tempted to impede the investigation of the crime by
wiping the knife down, asking one of his companions to
dispose of it, and asking others to lie about his where-
abouts on the night of the crime.
The primary rule for determining legislative intent is
that statutory language is to be strictly construed
according to its plain and ordinary meaning. People v
Noble, 238 Mich App 647, 658-659; 608 NW2d 123
(1999). If the meaning of a statute is clear and unam-
biguous, further construction is neither required nor
permitted. People v Davis, 468 Mich 77, 79; 658 NW2d
2010] P
EOPLE V
E
RICKSEN
203
800 (2003). Interfering or attempting to interfere with
the administration of justice includes acts that consti-
tute obstruction of justice, but is not limited to such
acts. People v Barbee, 470 Mich 283, 286-287; 681 NW2d
348 (2004). Providing a false name to the police may
constitute an interference with the administration of
justice that can be scored under OV 19. Id. at 288. In
this case, there was evidence that defendant asked one
of his companions to dispose of the knife he used to stab
the victim and asked others to lie about his where-
abouts during the night of the crime. Clearly, defen-
dant’s attempt to hide or dispose of the weapon in
conjunction with his encouragement of others to lie
about where he was at the time of the stabbing was a
multifaceted attempt to create a false alibi and mislead
the police. His actions ultimately constituted fabrica-
tions that were self-serving attempts at deception obvi-
ously aimed at leading police investigators astray or
even diverting suspicion onto others and away from
him. Unmistakably, defendant’s actions were attempts
to interfere with the administration of justice as con-
templated by the plain language of MCL 777.49(c), and
the trial court did not abuse its discretion by assessing
10 points for OV 19.
3
We also reject defendant’s attendant argument that
he was denied effective assistance of counsel when his
trial counsel agreed that the trial court had properly
3
We recognize that our Supreme Court has explained that, as a general
matter, offense variables should not be scored on the basis of acts
occurring after the completion of a crime unless the applicable offense
variable statute otherwise provides. People v McGraw, 484 Mich 120, 122,
135; 771 NW2d 655 (2009). However, our Supreme Court’s directive in
Barbee, being more specific and applicable, is controlling. See Crane v
Reeder, 22 Mich 322, 334 (1871); Darmstaetter v Moloney, 45 Mich 621,
624; 8 NW 574 (1881); Wayne Co Prosecutor v Wayne Circuit Judge, 154
Mich App 216, 221; 397 NW2d 274 (1986).
204 288 M
ICH
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192 [Apr
scored the OVs. Again, failing to advance a meritless
argument or raise a futile objection does not constitute
ineffective assistance of counsel. Snider, 239 Mich App
at 425. Defendant is not entitled to resentencing.
V
Defendant next argues that the trial court erred by
refusing to strike certain information from the PSIR.
Defendant first takes issue with a statement contained
in the PSIR that he “has a history of offenses similar to
the current conviction.” Defendant asserts that because
this instance is the first in which he was charged with
assault with intent to murder, the other conduct listed
in the PSIR was insufficient to qualify as similar to the
conduct that resulted in the current conviction. The
term “similar” is defined by the Random House Web-
ster’s College Dictionary (1997) as “having a likeness or
resemblance, [especially] in a general way[.]” The defi-
nition does not require that each occurrence be identi-
cal to the others or that each circumstance could be
charged under the same criminal statute.
The “Criminal Justice” section of defendant’s PSIR
reveals that in 1997 defendant was involved in a stab-
bing outside a bar and that he was involved in another
incident involving a knife in 1998, when he threatened
two witnesses to the 1997 incident. The final charge in
both of these incidents was assault with intent to
commit great bodily harm less than murder, which is a
necessarily included lesser offense of assault with in-
tent to murder. Brown, 267 Mich App at 150-151
(observing that “the elements of assault with intent to
do great bodily harm less than murder are completely
subsumed in the offense of assault with intent to
commit murder”). Further, the PSIR contained a refer-
ence to another, uncharged incident that occurred in
2010] P
EOPLE V
E
RICKSEN
205
1997 in which defendant stabbed an acquaintance at a
rest stop in Genesee County.
Finally, defendant asserts that the trial court should
not have considered information related to his prior
offenses when the information had not been proved
beyond a reasonable doubt before a jury. To the extent
that this argument rings of Blakely, it fails, as we
discussed earlier in part III. In any event, it is well
established that a PSIR may include information that
would not be admissible at trial, including information
about prior convictions as well as other criminal activity
allegedly committed by the defendant. People v Flem-
ing, 428 Mich 408, 418; 410 NW2d 266 (1987).
We note that defendant is entitled to 282 days’ jail
credit for time served in jail before sentencing. See MCL
769.11b. Jail credit was not included in the judgment of
sentence.
VI
In sum, defendant’s claims that there was insuffi-
cient evidence to support his conviction, that he was
denied a fair trial because of prosecutorial misconduct,
that his sentences are invalid and that he is entitled to
resentencing, that he was denied effective assistance of
counsel at trial, that the trial court denied him a fair
trial, and that the trial court improperly considered
inaccurate information in his PSIR all fail, and we
affirm defendant’s conviction and life sentence.
Defendant’s conviction and life sentence are af-
firmed. We remand this case to the trial court for
ministerial correction of the judgment of sentence to
include 282 days’ jail credit. We do not retain jurisdic-
tion.
206 288 M
ICH
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192 [Apr
PEOPLE v MILLER
Docket No. 294566. Submitted April 13, 2010, at Detroit. Decided April
15, 2010, at 9:05 a.m.
Marvin Miller was charged in the St. Clair Circuit Court with larceny
from a motor vehicle, MCL 750.356a(1), and larceny of property with
a value of less than $200, MCL 750.356(1) and (5), both in connection
with property that he allegedly stole from a truck. Defendant moved
to quash the information related to the charge of larceny from a
motor vehicle, arguing that MCL 750.356a(1) did not apply to the cell
phone that he allegedly removed because such phones are not
permanently attached to the vehicle. The court, James P. Adair, J.,
granted the motion. The Court of appeals granted the prosecution
leave to appeal.
The Court of Appeals held:
MCL 750.356a(1) provides that a person who steals or unlaw-
fully takes or removes a “wheel, tire, air bag, catalytic converter,
radio, stereo, clock, telephone, computer, or other electronic device
in or on any motor vehicle, house trailer, trailer, or semitrailer” is
guilty of a felony. Nothing in the language of the statute indicates
a legislative intent to limit the statute’s application to items that
are permanently attached to the vehicle. The statute applies to
enumerated items that are not generally attached to but are
merely included within the space of the vehicle.
Reversed.
L
ARCENY —
L
ARCENY
F
ROM A
V
EHICLE —
I
TEMS
N
OT
A
TTACHED TO A
M
OTOR
V
EHICLE
.
A person who steals or unlawfully removes or takes a wheel, tire, air
bag, catalytic converter, radio, stereo, clock, telephone, computer,
or other electronic device in or on a motor vehicle, house trailer,
trailer, or semitrailer is guilty of a felony under MCL 750.356a(1);
the statute applies to enumerated items that are not attached to
but are merely included within the space of the vehicle.
Michael A. Cox, Attorney General, B. Eric Restuccia,
Solicitor General, Michael D. Wendling, Prosecuting At-
torney, and Timothy K. Morris, Assistant Prosecuting
Attorney, for the people.
2010] P
EOPLE V
M
ILLER
207
Boucher and Kanan PLLC (by Michael G. Boucher)
for defendant.
Before: M. J. K
ELLY
,P.J., and T
ALBOT
and W
ILDER
,JJ.
P
ER
C
URIAM.
In this interlocutory appeal, the prosecu-
tion appeals by leave granted an order granting defen-
dant’s motion to quash a charge of larceny from a motor
vehicle, MCL 750.356a(1). We reverse.
I
On June 24, 2009, William Buchheister drove his
truck to a softball field in St. Clair County, parked it in
a lot about 50 feet away from the field, and left it
unlocked. At approximately 9:30 p.m., Buchheister was
watching a softball game, and a friend alerted him that
someone was in his truck. Buchheister alleged that he
saw defendant get out of the truck and flee, so Buchhe-
ister and his friends pursued. Buchheister further al-
leged that his friends apprehended defendant about 15
minutes later. Buchheister’s cellular telephone, keys,
and wallet had been removed from his truck. His
cellular telephone and keys were found on a street
corner, and his wallet was found in a factory near the
area where defendant allegedly ran.
Defendant was charged with larceny from a motor
vehicle under MCL 750.356a(1), on the basis of the
allegation that he took Buchheister’s cellular tele-
phone, and also with larceny of less than $200, MCL
750.356(1) and (5). Defendant moved to quash the
charge of larceny from a motor vehicle, arguing that
MCL 750.356a(1) does not apply to cellular telephones
because they are not permanently attached to the
vehicle and would not reduce the value of the vehicle if
taken. In granting defendant’s motion, the trial court
208 288 M
ICH
A
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207 [Apr
concluded that cellular telephones do not fall within the
parameters of the statute. After the prosecution unsuc-
cessfully sought reconsideration from the trial court,
this Court granted leave to appeal. People v Miller,
unpublished order of the Court of Appeals, entered
November 17, 2009 (Docket No. 294566).
II
On appeal, the prosecution argues that the trial court
improperly interpreted MCL 750.356a(1) as being lim-
ited to the larceny of electronic devices that are perma-
nently attached to the vehicle. We agree. This Court
reviews a trial court’s decision on a motion to quash the
information for an abuse of discretion. See People v
Stone, 463 Mich 558, 561; 621 NW2d 702 (2001). To the
extent that a lower court’s decision on a motion to
quash the information is based on an interpretation of
the law, appellate review of the interpretation is de
novo. Id.
The primary goal of judicial interpretation of stat-
utes is to ascertain and give effect to the intent of the
Legislature. People v Droog, 282 Mich App 68, 70; 761
NW2d 822 (2009). To determine the intent of the
Legislature, this Court must first examine the language
of the statute. Bush v Shabahang, 484 Mich 156,
166-167; 772 NW2d 272 (2009). The language must be
read and understood in its grammatical context and in
relation to the statute as a whole. United States Fidelity
& Guaranty Co v Mich Catastrophic Claims Ass’n (On
Rehearing), 484 Mich 1, 13; 795 NW2d 101 (2009);
Bush, 484 Mich at 167. “ ‘[T]his Court must enforce
clear and unambiguous statutory provisions as writ-
ten.’ ‘If the language of [a] statute is unambiguous, the
Legislature must have intended the meaning clearly
expressed, and the statute must be enforced as writ-
ten.’ ” United
2010] P
EOPLE V
M
ILLER
209
States Fidelity, 484 Mich at 12-13 (citations omitted).
Nothing will be read into a clear and unambiguous
statute that is not within the manifest intent of the
Legislature as derived from the language of the statute
itself. Bay Co Prosecutor v Nugent, 276 Mich App 183,
189; 740 NW2d 678 (2007). If a statute is ambiguous,
judicial construction is appropriate. People v Warren,
462 Mich 415, 427; 615 NW2d 691 (2000). “A provision
is not ambiguous just because ‘reasonable minds can
differ regarding’ the meaning of the provision.” People v
Gardner, 482 Mich 41, 50 n 12; 753 NW2d 78 (2008),
quoting Lansing Mayor v Pub Serv Comm, 470 Mich
154, 165; 680 NW2d 840 (2004). On the contrary, a
statutory provision is ambiguous only if it irreconcilably
conflicts with another statutory provision or it is
equally susceptible to more than one meaning. Gard-
ner, 482 Mich at 50 n 12.
MCL 750.356a(1) provides, in relevant part:
A person who commits larceny by stealing or unlawfully
removing or taking any wheel, tire, air bag, catalytic
converter, radio, stereo, clock, telephone, computer, or
other electronic device in or on any motor vehicle, house
trailer, trailer, or semitrailer is guilty of a felony punishable
by imprisonment for not more than 5 years or a fine of not
more than $10,000.00, or both.
The language of MCL 750.356a(1) is clear and unam-
biguous. It criminalizes stealing, unlawfully removing,
or taking a specific and limited list of items of property
(wheels, tires, air bags, catalytic converters, radios,
stereos, clocks, telephones, computers, or other elec-
tronic devices) from a specific and limited list of vehicles
(motor vehicles, house trailers, trailers, or semitrail-
ers). The broad term “telephone” that the Legislature
adopted, which is defined as “an apparatus, system, or
process, for transmission of sound or speech to a distant
210 288 M
ICH
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207 [Apr
point, [especially] by an electric device,” Random House
Webster’s College Dictionary (2000), includes the cellu-
lar or “mobile” telephone that defendant allegedly took
from Buchheister’s truck.
Nothing in the language of MCL 750.356a(1) ex-
presses the legislative intent to limit the statute’s
application to items that are permanently attached to
the vehicle. See Nugent, 276 Mich App at 189. Rather,
the property listed in MCL 750.356a(1) includes items
“in or on” the vehicles listed. “In” is “used to indicate
inclusion within space, a place, or limits,” whereas “on”
means “so as to be attached to or unified with....”
Random House Webster’s College Dictionary (2000).
The fact that wheels, tires, air bags, and catalytic
converters are generally on or attached to a vehicle does
not by itself prevent the application of MCL 750.356a(1)
to other enumerated items that are not generally at-
tached to but are merely included within the space of
the vehicle.
Contrary to defendant’s argument, the application of
subsection (1) of MCL 750.356a to all enumerated items
“in or on” the listed vehicles does not result in a scheme
of punishment in subsection (1) that irreconcilably
conflicts with the statute as a whole. See Gardner, 482
Mich at 50 n 12. A person who violates subsection (1) is
guilty of a felony with a specific punishment, regardless
of the value of the property stolen, unlawfully removed,
or taken. In contrast, a person who violates subsection
(2) of the statute is guilty of a misdemeanor or felony,
with a range of possible punishments, depending on the
value of the stolen or unlawfully removed property and
the person’s prior convictions. MCL 750.356a(2). “[T]he
ultimate authority to provide for penalties for criminal
offenses is constitutionally vested in the Legislature.”
People v Hegwood, 465 Mich 432, 436; 636 NW2d 127
2010] P
EOPLE V
M
ILLER
211
(2001). As the Supreme Court explained in People v
Milbourn, 435 Mich 630, 635; 461 NW2d 1 (1990), the
distinctions between “sentence ranges for different
offenses across the spectrum of criminal behavior”
reflect the Legislature’s “value judgments concerning
the relative seriousness and severity of individual crimi-
nal offenses.” It is reasonable to conclude from the
distinctions in subsections (1) and (2) that the Legisla-
ture intended to penalize the stealing, unlawful re-
moval, or taking of specific items commonly associated
with vehicles in subsection (1) differently than the
stealing or unlawful removal of other unspecified prop-
erty in subsection (2).
Reversed.
212 288 M
ICH
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PEOPLE v RAILER
Docket No. 291817. Submitted April 13, 2010, at Lansing. Decided April
20, 2010, at 9:00 a.m.
Jeremy E. Railer was convicted of unlawful imprisonment, MCL
750.349b, among other crimes, by a jury in the Ingham Circuit
Court, Rosemarie E. Aquilina, J. Defendant appealed only his
unlawful-imprisonment conviction, which arose from an incident
in which he dragged the woman he was dating across a parking lot,
forced her into her car, and drove her to a location he forbade her
to disclose.
The Court of Appeals held:
1. Evidence that defendant had forced the victim into her car,
struck and choked her when she protested his actions, and
forbidden her to reveal her location to her sister when she called
the victim’s cell phone was sufficient to support his conviction for
unlawful imprisonment.
2. The trial court did not abuse its discretion by allowing two of
defendant’s former girlfriends to testify that he had physically abused
them. MCL 768.27b(1) allows the admission of evidence of other acts
of domestic violence to show a defendant’s character or propensity to
commit the same act if it is not otherwise excluded under MRE 403
and the other requirements of MCL 768.27b are met.
Affirmed.
E
VIDENCE —
O
THER
A
CTS OF
D
OMESTIC
V
IOLENCE
.
Evidence of other acts of domestic violence that occurred within 10
years of the charged offense is admissible for any purpose for
which it is relevant, including to show a defendant’s character or
propensity to commit the same act, if it is not otherwise excluded
under MRE 403 (MCL 768.27b).
Michael A. Cox, Attorney General, B. Eric Restuccia,
Solicitor General, Stuart J. Dunnings, III, Prosecuting
Attorney, Guy L. Sweet, Appellate Division Chief, and
John J. Murray, Assistant Prosecuting Attorney, for the
people.
2010] P
EOPLE V
R
AILER
213
Lawrence J. Bunting for defendant.
Before: S
AAD
,P.J., and H
OEKSTRA
and M
URRAY
,JJ.
M
URRAY
, J. Defendant appeals as of right his jury trial
conviction of unlawful imprisonment, MCL 750.349b,
for which he was sentenced as a third-offense habitual
offender, MCL 769.11, to 129 months to 30 years’
imprisonment.
1
We affirm.
I. BACKGROUND
This is a case about control. It arises out of defen-
dant’s romantic relationship with Amy Nichols. These
individuals, having dated sporadically in their youth,
resumed their amorous affair and began cohabitating in
November 2007. Defendant was jobless, without a car,
and completely reliant on Nichols for his transporta-
tion. In Nichols’s words, defendant “did what he
wanted to do,” and while defendant left her ignorant
about his activities, “[her] business was his business.”
The relationship had a long history of dysfunction.
For example, on one occasion in April 2008, Nichols was
arrested—while in her car with her children—when a
police officer discovered marijuana under her seat.
Nichols testified that although the marijuana was de-
fendant’s, she decided to take the blame because she
still loved defendant, who had nonetheless threatened
that if Nichols faced subsequent criminal charges, he
would deny his ownership of the drugs and inculpate
Nichols.
1
Defendant was also convicted of possession of marijuana, MCL
333.7403(2)(d), and assault and battery, MCL 750.81 (the lesser included
offense of his original charge of assault with intent to do great bodily
harm less than murder, MCL 750.84), but appeals neither of these
convictions.
214 288 M
ICH
A
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213 [Apr
Nichols had little contact with defendant following
her arrest until June 16, 2008. On that date, defendant
approached Nichols, who was in her car. Upon Nichols’s
attempt to leave, defendant reached through the open
car window, grabbed Nichols by the throat, and threat-
ened to kill her. Defendant called Nichols later that
night, this time threatening to “slit [her] throat.” The
next night, June 17, 2008, Nichols was driving to her
aunt’s house when defendant called her phone and told
her to stop the car and back up, whereupon defendant
got into the car and began driving. With Nichols unsure
of their destination, defendant took Nichols’s cellular
phone after her sister called. Minutes later, defendant
and Nichols arrived at the apartment complex of defen-
dant’s friend, but defendant refused to return Nichols’s
phone or keys and instead twisted her wrist and told
her that she was going to spend time with him. The two
went into the apartment, but returned a short time
later when defendant needed to retrieve an item from
the car. Seizing the opportunity, Nichols ran into the
apartment ahead of defendant, borrowed the cellular
phone of an unknown man inside, and informed her
sister of her whereabouts. Defendant subsequently lo-
cated Nichols and took her outside, at which point
Nichols sat down in the middle of the parking lot hoping
to buy time until the police arrived.
At that, defendant dragged Nichols by her hair across
the parking lot and into the car. Defendant then drove
Nichols to another parking lot, where he punched her in
the mouth and choked her until she lost consciousness
because Nichols “wouldn’t shut [her] smart mouth.”
When Nichols resumed consciousness, defendant drove
to a store. Nichols, however, refused to accompany
defendant into the store because she had “wet [her]
pants.” During this time, Nichols’s sister had been
calling repeatedly. On the fourth call, defendant held
2010] P
EOPLE V
R
AILER
215
the phone to Nichols’s ear and instructed her not to
reveal their location and threatened to hang up the
phone if Nichols did not comply because, as Nichols
testified, defendant had told her that “nobody was
going to get in the way of him spending time with
[Nichols].” Scared of defendant, Nichols complied.
After the call, Nichols reassured defendant that she
loved him and convinced him to go into the store by
himself, since her pants were wet, to buy her new pants.
Once defendant went into the store with Nichols’s
phone, Nichols enlisted the aid of a man in the parking
lot to lead her safely into the store. Inside, the store
manager assisted Nichols in reporting the incident to
police and her family. Police arrived, and after a brief
chase inside the store, defendant was arrested as he was
attempting to hide an item on a store shelf. A canine
officer later discovered marijuana on a shelf next to the
area where defendant was arrested. After a jury trial,
defendant was convicted of unlawful imprisonment,
possession of marijuana, and assault and battery. The
instant appeal ensued.
II. ANALYSIS
A. SUFFICIENCY OF THE EVIDENCE
Defendant first argues that insufficient evidence
existed to support his conviction of unlawful imprison-
ment. Due process requires that, to sustain a convic-
tion, the evidence must show guilt beyond a reasonable
doubt. People v Johnson, 460 Mich 720, 723; 597 NW2d
73 (1999). In determining the sufficiency of the evi-
dence, this Court reviews the evidence in the light most
favorable to the prosecution. People v Tombs, 472 Mich
446, 459; 697 NW2d 494 (2005). We do not consider
whether any evidence existed that could support a
216 288 M
ICH
A
PP
213 [Apr
conviction; rather, we must determine whether a ratio-
nal trier of fact could find that the evidence proved the
essential elements of the crime beyond a reasonable
doubt. People v Wolfe, 440 Mich 508, 513-514; 489
NW2d 748 (1992), citing People v Hampton, 407 Mich
354, 366; 285 NW2d 284 (1979) (opinion by C
OLEMAN
,
C.J.). “[C]ircumstantial evidence and reasonable infer-
ences arising from th[e] evidence can constitute satis-
factory proof of the elements of a crime.” People v Lee,
243 Mich App 163, 167-168; 622 NW2d 71 (2000).
As noted, defendant was convicted of unlawful im-
prisonment under MCL 750.349b, which provides as
follows:
(1) A person commits the crime of unlawful imprison-
ment if he or she knowingly restrains another person
under any of the following circumstances:
(a) The person is restrained by means of a weapon or
dangerous instrument.
(b) The restrained person was secretly confined.
(c) The person was restrained to facilitate the commis-
sion of another felony or to facilitate flight after commis-
sion of another felony.
Thus, to be guilty of unlawful imprisonment under
MCL 750.349b(1)(b), (1) a defendant must knowingly
restrain a person, and (2) the restrained person must be
“secretly confined.” “ ‘Restrain’ means to forcibly re-
strict a person’s movements or to forcibly confine the
person so as to interfere with that person’s liberty
without that person’s consent or without lawful author-
ity.” MCL 750.349b(3)(a). To “secretly confine” means
either “[t]o keep the confinement of the restrained
person a secret” or “[t]o keep the location of the
restrained person a secret.” MCL 750.349b(3)(b)(i) and
(ii).
2010] P
EOPLE V
R
AILER
217
Ample evidence was presented to support this con-
viction. First, it is clear that Nichols was forcibly
confined against her will when defendant dragged her
by her hair across the parking lot to force her into the
car. Twice after leaving the apartment—once at the
store and once before arriving—the car was parked.
However, Nichols dared not leave while in defendant’s
presence given that, before arriving at the store, defen-
dant had struck her face and choked her until she lost
consciousness when she voiced her displeasure with the
situation. Once at the store, defendant—who was in
possession of Nichols’s phone and answered the fourth
call of Nichols’s sister—precluded Nichols from commu-
nicating freely with her family and took the car keys
and Nichols’s phone when he went into the store. These
same acts provided sufficient evidence that defendant
knowingly committed this misconduct, so a jury could
have reasonably inferred that defendant knowingly
restrained Nichols. Furthermore, the phone call from
Nichols’s sister revealed that defendant intended to
keep both the actual confinement and location of the
confinement a secret. Indeed, frightened of defendant,
Nichols complied with defendant’s demand that she not
reveal their location. See People v Jaffray, 445 Mich
287, 309; 519 NW2d 108 (1994) (“[T]he essence of
‘secret confinement’...isdeprivation of the assistance
of others by virtue of the victim’s inability to commu-
nicate his predicament.”).
Defendant counters that his conviction is unsustain-
able where (1) he left Nichols alone in the car before she
freely walked into the store and reported defendant to
police and (2) Nichols’s credibility was suspect given
her letters to defendant before trial in which she
admitted she was lying. Neither argument has merit.
First, MCL 750.349b(3)(a) expressly provides that
“[t]he restraint does not have to exist for any particular
218 288 M
ICH
A
PP
213 [Apr
length of time....”Theperiod from when defendant
dragged Nichols into the car until he left Nichols to go
inside the store was sufficient to sustain defendant’s
conviction under the statute. Second, issues of witness
credibility are matters for the jury and not this Court.
People v Fletcher, 260 Mich App 531, 561; 679 NW2d
127 (2004). Hence, defendant’s arguments on both
scores do not alter our conclusion that this conviction
must stand.
B. OTHER ACTS OF DOMESTIC VIOLENCE
Defendant’s final argument is that MRE 404(b) pre-
cluded the admission of the testimony of two former
girlfriends who revealed his prior threats and acts of
violence against them. A trial court’s evidentiary ruling
is reviewed for abuse of discretion. People v Starr, 457
Mich 490, 494; 577 NW2d 673 (1998). However, prelimi-
nary questions of law pertaining to this issue are
reviewed de novo. People v Katt, 468 Mich 272, 278; 662
NW2d 12 (2003).
2
Evidence is generally admissible if it is relevant and
its probative value is not substantially outweighed by
the danger of unfair prejudice. MRE 402; MRE 403;
People v Taylor, 252 Mich App 519, 521; 652 NW2d 526
(2002). Under MRE 404(b), the prosecution may not
present evidence of a defendant’s other crimes, wrongs,
or acts in order to show a defendant’s propensity to
commit a crime. People v Magyar, 250 Mich App 408,
413-414; 648 NW2d 215 (2002). Notwithstanding this
prohibition, however, in cases of domestic violence,
MCL 768.27b permits evidence of prior domestic vio-
lence in order to show a defendant’s character or
2
Contrary to the prosecution’s claim, this issue is preserved because
defendant challenged the admission of this evidence at trial and in his
pretrial motion.
2010] P
EOPLE V
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AILER
219
propensity to commit the same act. People v Schultz,
278 Mich App 776, 778; 754 NW2d 925 (2008). That
statute provides in relevant part:
Except as provided in [MCL 768.27b(4)], in a criminal
action in which the defendant is accused of an offense
involving domestic violence, evidence of the defendant’s
commission of other acts of domestic violence is admissible
for any purpose for which it is relevant, if it is not
otherwise excluded under Michigan rule of evidence 403.
[MCL 768.27b(1).]
Here, defendant was accused of assault with intent to
commit great bodily harm less than murder. Such
conduct constitutes “domestic violence,” which is de-
fined to include occurrences causing physical or mental
harm to a family or household member or placing a
family or household member in fear of harm.
3
MCL
768.27b(5)(a)(i) and (ii). At trial, the prosecution called
defendant’s former girlfriends from four and five years
earlier. Both testified about defendant’s physical abuse
and threats to kill them. One testified that defendant
forced her into his van and drove off with her against
her will, and the other explained that defendant would
grab and yell at her to listen to him. Such behavior
clearly meets the definition of “domestic violence”
under the statute, occurred within 10 years of the
charged offense as required by MCL 768.27b(4), and
would be highly relevant to show defendant’s tendency
to assault Nichols as charged. Furthermore, MRE 403
did not preclude admission of this evidence where the
testimony of the former girlfriends was brief and not
nearly as graphic or violent as defendant’s transgres-
sions recounted in Nichols’s testimony. While this evi-
dence was certainly damaging and prejudicial—as is
3
A “family or household member” includes individuals with whom a
defendant had a dating relationship. MCL 768.27b(5)(b)(iv).
220 288 M
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most evidence presented against a criminal
defendant—it was by no means inflammatory, nor did it
interfere with the jury’s ability to logically weigh the
evidence. People v Mills, 450 Mich 61, 75-76; 537 NW2d
909 (1995). Its admission was, therefore, proper.
Affirmed.
2010] P
EOPLE V
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NORDLUND & ASSOCIATES, INC v VILLAGE OF HESPERIA
Docket No. 289304. Submitted April 15, 2010, at Grand Rapids. Decided
April 20, 2010, at 9:05 a.m.
Nordlund & Associates, Inc., brought an action in the Oceana Circuit
Court against the village of Hesperia and the Newaygo County
Drain Commissioner, alleging breach of contract in connection
with two construction projects on which plaintiff had worked but
had not been fully paid. Defendants counterclaimed that plaintiff
was also liable for breach of contract because the contractor for
which plaintiff worked had installed a water main before the
necessary permits had been approved, causing the village to incur
fines. The court, Terrence R. Thomas, J., entered a stipulation and
order for arbitration pursuant to MCL 600.5001 et seq. The
arbitrator awarded defendants approximately $4,400, which the
court affirmed. Plaintiff appealed.
The Court of Appeals held:
1. The arbitrator did not exceed his powers under MCR
3.602(J)(2)(c) by deciding whether defendants were entitled to the
damages they had sought in their counterclaim, despite the fact
that this issue was not included in the parties’ arbitration sum-
maries, because the parties’ arbitration agreement specifically
provided that all issues raised in the pleadings must be submitted
to arbitration.
2. The trial court properly refused to modify the arbitration
award under MCR 3.602(K)(2)(a) because plaintiff’s allegations of
error related to the arbitrator’s interpretation of the underlying
contract, not to an evident mathematical miscalculation or mis-
taken description.
Affirmed.
A
RBITRATION —
S
TATUTORY
A
RBITRATION —
M
ODIFICATION OF
S
TATUTORY
A
RBI-
TRATION
A
WARDS
.
The court rule allowing judicial modification of statutory arbitration
awards on the basis of an evident miscalculation of figures or an
evident mistake in a description does not extend to allegations that
the arbitrator misconstrued the underlying contract (MCR
3.602[K][2][a]).
222 288 M
ICH
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Reisinger Law Firm, PLLC (by Ralph M. Reisinger),
for Nordlund & Associates, Inc.
Williams, Hughes & Cook, PLLC (by Douglas M.
Hughes and Eric C. Grimm), for the village of Hesperia.
Before: O
WENS
,P.J., and S
AWYER
and O’C
ONNELL
,JJ.
P
ER
C
URIAM.
Plaintiff, Nordlund & Associates, Inc.,
appeals as of right the circuit court’s order confirming
an arbitration award and denying plaintiff’s motion to
vacate or modify the arbitration award. We affirm.
I. FACTS
On January 7, 2005, plaintiff filed a breach of con-
tract action against the village of Hesperia.
1
Defendant
filed a counterclaim alleging breach of contract and
demanding indemnification.
On January 22, 2007, the circuit court entered a
stipulation and order for arbitration pursuant to MCL
600.5001 et seq. The order provided that the parties
would submit “all issues in this action which are subject
to the jurisdiction of this court” to binding arbitration.
Pursuant to the circuit court’s order, the parties ex-
ecuted an arbitration agreement, which stated that
“[a]ll theories/defenses and affirmative defenses raised
in the pleadings of the parties during the course of these
proceedings and associated damages, offsets, and failure
to mitigate claims” would be submitted for arbitration.
Before this dispute, plaintiff acted as defendant’s
engineer for roughly 22 years. Two projects are relevant
to this appeal: (1) the Sunset Boulevard/Family Dollar
1
Because the village of Hesperia is the only defendant with an interest
in this appeal, for purposes of this opinion the singular “defendant” will
refer to it exclusively.
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ESPERIA
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water main project and (2) improvements to the sewer
system and wastewater treatment plant, known as “the
SRF project” for its connection to the State Revolving
Fund.
A. SUNSET BOULEVARD/FAMILY DOLLAR PROJECT
Innovative Construction hired plaintiff to do work in
relation to the opening of a Family Dollar store near
Sunset Boulevard. In furtherance of this project, plain-
tiff filed an application on behalf of defendant, seeking
authorization to extend a water main along Sunset
Boulevard. Plaintiff billed defendant $600 for this work,
but never received payment.
Plaintiff also prepared additional permit applications
and gave them to defendant to submit to the proper
authorities. These permits, which were subsequently
denied, required approval by the Michigan Department
of Environmental Quality (MDEQ) before the water
main could be installed. However, Innovative Construc-
tion installed the water main before any permits were
approved. As a result, the MDEQ fined defendant
$12,140. Defendant sought reimbursement from plain-
tiff for that amount, charging that plaintiff was respon-
sible for the premature installation.
B. SRF PROJECT
On November 10, 2003, by written contract, defen-
dant hired plaintiff to perform professional services. On
August 5, 2004, defendant terminated the contract. The
contract provided that it could be terminated without
cause and that, upon termination, “[a]n equitable ad-
justment shall be made in the contract price.” Defen-
dant argued that because only 65 percent of plaintiff’s
work was salvageable by the engineering firm that
224 288 M
ICH
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222 [Apr
replaced plaintiff, the “equitable adjustment” should
equal that percentage of the fees plaintiff earned,
reduced by any payment already made. Defendant
claimed that it had paid plaintiff $10,000. Plaintiff
disagreed, claiming that it should be paid the full
amount of $39,677.18. Plaintiff also disputed the
$10,000 reduction, on the ground that defendant’s
$10,000 payment was for work performed on another,
unrelated job, the Division Street Bridge project.
The parties submitted to the arbitrator an “arbitra-
tion summary,” in which they fully briefed the issues to
be decided. Following a hearing, the arbitrator issued
an opinion setting forth the following findings: (1)
plaintiff was entitled to $14,787.29 for the use of its
plans and specifications on the SRF project, (2) defen-
dant was entitled to $19,787.42 in compensation for
plaintiff’s breach of the SRF project contract (that
amount being the difference between plaintiff’s con-
tract price and what defendant ultimately paid another
party to complete the contract), (3) defendant failed to
prove that it had paid plaintiff $10,000 on the SRF
project, (4) defendant was not entitled to recover any
damages attributable to the Sunset Boulevard/Family
Dollar project, and (5) plaintiff was entitled to payment
of its overdue $600 invoice relating to the Sunset
Boulevard/Family Dollar project. After calculating all
offsets, the arbitrator awarded defendant a total of
approximately $4,400.
Plaintiff moved to vacate or modify the arbitration
award, arguing that the arbitrator had “miscalculated”
the award of damages, MCR 3.602(K)(2)(a), and ex-
ceeded his powers by deciding an issue that had not
been submitted to arbitration, MCR 3.602(J)(2)(c). Spe-
cifically, plaintiff argued that the breach of contract
claim, which the arbitrator found entitled defendant to
2010] N
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ESPERIA
225
$19,787.42 in compensation, was never brought or
argued at arbitration, and that the arbitrator’s decision
thus reached “beyond the boundaries of the submis-
sion” and should be vacated.
In response, defendant argued that there was no
mathematical “miscalculation” as envisioned by MCR
3.602(K)(2)(a) and that the arbitrator did not exceed his
powers because no express limit was placed on those
powers under the arbitration agreement. The motion
was heard on November 10, 2008, and the circuit court
ruled from the bench as follows:
I thought the arbitrator was quite thorough relative to
the matter and the Court would not intervene and set
aside. I agree that none of the statutory bases were clearly
struck which would cause this Court to... intervene
relative to the settlement and the Order and the findings of
the arbitrator.
For that reason, I deny your Motion.
The circuit court thereafter issued a written order
confirming the arbitration award and denying plain-
tiff’s motion.
II. ANALYSIS
Plaintiff argues that the trial court erred by confirming
the arbitration award because the arbitrator both ex-
ceeded his powers when he rendered a decision on an issue
that had not been submitted to arbitration and “miscal-
culated” the award of damages. We disagree. A trial
court’s decision to enforce, vacate, or modify an arbitra-
tion award is reviewed de novo. Saveski v Tiseo Archi-
tects, Inc, 261 Mich App 553, 554; 682 NW2d 542 (2004).
If an agreement to arbitrate provides that judgment
may be entered on the arbitration award, then it is
considered a statutory arbitration. Gordon Sel-Way, Inc
226 288 M
ICH
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v Spence Bros, Inc, 438 Mich 488, 495; 475 NW2d 704
(1991). Here, the parties’ arbitration agreement stated
that a party could move to enforce the award and that
the circuit court could enforce the arbitration award.
Therefore, the agreement is for statutory arbitration.
MCR 3.602 governs judicial review and enforcement
of statutory arbitration agreements. MCR 3.602(A).
MCR 3.602(K) sets forth the reasons for which a trial
court may correct or modify an arbitration award:
(2) On motion of a party filed within 91 days after the
date of the award, the court shall modify or correct the
award if:
(a) there is an evident miscalculation of figures or an
evident mistake in the description of a person, a thing, or
property referred to in the award;
(b) the arbitrator has awarded on a matter not submit-
ted to the arbitrator, and the award may be corrected
without affecting the merits of the decision on the issues
submitted; or
(c) the award is imperfect in a matter of form, not
affecting the merits of the controversy.
In addition, a trial court must vacate an arbitration
award if a party has filed a motion requesting it and one
of the following has occurred:
(a) the award was procured by corruption, fraud, or
other undue means;
(b) there was evident partiality by an arbitrator ap-
pointed as a neutral, corruption of an arbitrator, or mis-
conduct prejudicing a party’s rights;
(c) the arbitrator exceeded his or her powers; or
(d) the arbitrator refused to postpone the hearing on a
showing of sufficient cause, refused to hear evidence ma-
terial to the controversy, or otherwise conducted the hear-
ing to prejudice substantially a party’s rights. [MCR
3.602(J)(2).]
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Plaintiff first argues that the arbitrator exceeded his
powers, MCR 3.602(J)(2)(c), when he rendered a deci-
sion on an issue that had not been submitted to
arbitration. Specifically, plaintiff claims the arbitrator
exceeded his powers in ruling that defendant was
entitled to $19,787.42 in damages for plaintiff’s breach
of the contract for the SRF project.
The scope of an arbitrator’s remedial authority is
“limited to the contractual agreement of the parties.”
Ehresman v Bultynck & Co, PC, 203 Mich App 350, 355;
511 NW2d 724 (1994). Thus, “[a]rbitrators exceed their
power when they ‘act beyond the material terms of the
contract from which they primarily draw their author-
ity, or in contravention of controlling principles of
law.’ ” Saveski, 261 Mich App at 554, quoting DAIIE v
Gavin, 416 Mich 407, 434; 331 NW2d 418 (1982).
In this case, the parties’ arbitration agreement pro-
vided that “[a]ll theories/defenses and affirmative de-
fenses raised in the pleadings of the parties during the
course of these proceedings and associated damages,
offsets, and failure to mitigate claims” shall be submit-
ted for arbitration. Defendant’s amended counterclaim
included the following allegations:
1. That a contract for professional services was signed
between the parties to this action.
2. That Paragraph XV, entitled “Professional Stan-
dards,” required Nordlund to perform contractual services
at a competency level maintained by other participating
professional engineers.
3. That Nordlund breached this contract in that
contractual services were delivered at less than the
competency level maintained by other professional engi-
neers, as neither the design plan, nor the project plan
were adequate, both of which had to be redone by other
engineers.
228 288 M
ICH
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222 [Apr
4. That as a proximate result of the breach by Nord-
lund, the Village has been damaged in that they were
forced to hire another engineer to complete the services
required by the contract.
5. That Nordlund is liable to the Village for damages for
their breach of the agreement.
It is clear from these allegations that defendant was
seeking damages for breach of the SRF project contract.
Thus, the arbitrator did not exceed his powers by
concluding that defendant was entitled to $19,787.42 in
compensation for plaintiff’s breach of the SRF project.
See Saveski, 261 Mich App at 554. The terms of the
agreement limited the scope of arbitration to those
issues raised in the pleadings, and defendant raised the
issue of damages for breach of the SRF project contract
in its pleadings. That this issue was not raised in the
parties’ subsequent arbitration summaries is irrelevant
to whether the arbitrator exceeded his powers when
rendering the award. Therefore, the arbitrator did not
exceed his powers as set forth in the arbitration agree-
ment, see Ehresman, 203 Mich App at 355; Saveski, 261
Mich App at 554, and the trial court therefore did not
err by confirming the arbitration award and denying
plaintiff’s motion to vacate or modify it.
Plaintiff’s final argument on appeal is that the arbi-
trator miscalculated the award of damages, asserting
that the calculation was faulty because the arbitrator
failed to grasp the clear and concise meaning of the
contract. Plaintiff contends that this Court must review
various valuations and contract interpretations made
by the arbitrator by characterizing them as a miscalcu-
lation of the award. We disagree.
MCR 3.602(K)(2)(a) states that a court must modify
an arbitration award if “there is an evident miscalcula-
tion of figures or an evident mistake in the description
2010] N
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of a person, a thing, or property referred to in the
award.” This Court has repeatedly emphasized that it
must carefully evaluate claims of arbitrator error to
ensure that they are not being used as a ruse to induce
this Court to review the merits of the arbitrator’s
decision. Gordon Sel-Way, Inc, 438 Mich at 497; Wash-
ington v Washington, 283 Mich App 667, 675; 770
NW2d 908 (2009). MCR 3.602(K)(2)(a) allows for modi-
fication or correction of an award only when it is based
on a mathematical miscalculation, such as where an
arbitrator erred in adding a column of numbers, or an
evident mistake in a description. Because plaintiff’s
alleged error concerns the interpretation of the under-
lying contract, and not descriptions or mathematical
calculations, it cannot be said that there was an evident
mistake for purposes of MCR 3.602(K)(2)(a). Therefore,
the circuit court properly refused to modify the arbitra-
tion award on that basis.
Affirmed.
230 288 M
ICH
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PEOPLE v SCHAW
Docket No. 286410. Submitted November 12, 2009, at Lansing. Decided
April 20, 2010, at 9:10 a.m.
Thomas Schaw, Jr., was convicted by a jury in the Kent Circuit Court
of assault with intent to do great bodily harm less than murder,
MCL 750.84; torture, MCL 750.85; and unlawful imprisonment,
MCL 750.349b, after he choked and restrained his wife, held a
knife to her neck, attempted to drug her, and threatened to kill her.
At trial, the court, George S. Buth, J., denied defendant’s motion
for a mistrial based on the admission of audio recordings in which
defendant told the victim that he was a convicted felon and had
spent time in prison. Defendant appealed.
The Court of Appeals held:
1. The prosecution presented sufficient evidence to sustain
defendant’s torture conviction. The victim testified that defen-
dant’s violent acts caused her to hallucinate, lose control, and
experience flashbacks, which sufficed to establish that defendant
inflicted a mental injury that resulted in a substantial alteration of
mental functioning that was manifested in a visibly demonstrable
manner under MCL 750.85(2)(d). There was evidence from which
the jury could have concluded that these symptoms resulted from
the victim’s preexisting mental conditions, but the special suscep-
tibility of a victim to a particular injury does not constitute an
independent cause that exonerates the defendant from criminal
liability. It was the jury’s role to determine the extent to which
these symptoms were the result of defendant’s conduct rather
than the victim’s preexisting mental conditions.
2. The trial court did not abuse its discretion by denying
defendant’s motion for a mistrial. Defendant’s statements to the
victim that he was a convicted felon and had served time in prison
were relevant to show his consciousness of guilt under MRE
801(d)(2) because they were made in an effort to convince the
victim to alter her expected testimony at trial. There is no danger
that the jury gave these statements undue or preemptive weight in
light of the victim’s detailed testimony regarding the assault,
defendant’s consistent statements to a police officer, and defense
2010] P
EOPLE V
S
CHAW
231
counsel’s statement to the jury that defendant’s previous convic-
tion was of a different nature than the offenses for which he was
on trial.
Affirmed.
C
RIMINAL
L
AW —
T
ORTURE —
S
EVERE
M
ENTAL
P
AIN OR
S
UFFERING —
P
REEXISTING
C
ONDITIONS
.
A victim’s special susceptibility to the type of injury a defendant
caused does not constitute an independent cause that exonerates
the defendant from criminal liability for torture (MCL 750.85).
Michael A. Cox, Attorney General, B. Eric Restuccia,
Solicitor General, William A. Forsyth, Prosecuting At-
torney, and Timothy K. McMorrow, Chief Appellate
Attorney, for the people.
State Appellate Defender Office (by Peter Jon Van
Hoek) for defendant.
Before: M
ETER
,P.J., M
URPHY
, C.J., and Z
AHRA
,J.
P
ER
C
URIAM.
Defendant appeals as of right from his
convictions by a jury of assault with intent to do great
bodily harm less than murder, MCL 750.84; torture,
MCL 750.85; and unlawful imprisonment, MCL
750.349b. The trial court sentenced him as a fourth-
offense habitual offender, MCL 769.12, to 5 to 10 years’
imprisonment for the assault conviction, 225 months’
to 30 years’ imprisonment for the torture conviction,
and 5 to 15 years’ imprisonment for the unlawful-
imprisonment conviction. We affirm.
Defendant’s convictions arose from an altercation he
had with his wife Cheryl Schaw at their apartment on
December 2, 2007. Defendant and Cheryl argued, and
defendant choked and restrained Cheryl, held a knife to
her neck, attempted to drug her, and threatened to kill
her.
232 288 M
ICH
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231 [Apr
Defendant first argues that the prosecution pre-
sented insufficient evidence to sustain the torture con-
viction. We review this issue de novo. People v Lueth,
253 Mich App 670, 680; 660 NW2d 322 (2002). In
determining whether the prosecution presented suffi-
cient evidence to sustain a conviction, this Court must
construe the evidence in the light most favorable to the
prosecution and consider whether a rational trier of fact
could have determined that all the elements of the
crime were proven beyond a reasonable doubt. People v
Johnson, 460 Mich 720, 722-723; 597 NW2d 73 (1999).
MCL 750.85 provides, in relevant part:
(1) A person who, with the intent to cause cruel or
extreme physical or mental pain and suffering, inflicts
great bodily injury or severe mental pain or suffering upon
another person within his or her custody or physical
control commits torture and is guilty of a felony punishable
by imprisonment for life or any term of years.
(2) As used in this section:
(a) “Cruel” means brutal, inhuman, sadistic, or that
which torments.
(b) “Custody or physical control” means the forcible
restriction of a person’s movements or forcible confine-
ment of the person so as to interfere with that person’s
liberty, without that person’s consent or without lawful
authority.
(c) “Great bodily injury” means either of the following:
(i) Serious impairment of a body function as that term is
defined in section 58c of the Michigan vehicle code,...
MCL 257.58c.
(ii) One or more of the following conditions: internal
injury, poisoning, serious burns or scalding, severe cuts, or
multiple puncture wounds.
(d) “Severe mental pain or suffering” means a mental
injury that results in a substantial alteration of mental
2010] P
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233
functioning that is manifested in a visibly demonstrable
manner caused by or resulting from any of the following:
(i) The intentional infliction or threatened infliction of
great bodily injury.
(ii) The administration or application, or threatened
administration or application, of mind-altering substances
or other procedures calculated to disrupt the senses or the
personality.
(iii) The threat of imminent death.
(iv) The threat that another person will imminently
be subjected to death, great bodily injury, or the admin-
istration or application of mind-altering substances or
other procedures calculated to disrupt the senses or
personality.
(3) Proof that a victim suffered pain is not an element of
the crime under this section.
Defendant did not cause great bodily injury to
Cheryl. Therefore, the question is whether he “in-
flict[ed]...severe mental pain or suffering” upon her.
MCL 750.85(1). To justify the conviction, defendant
must have caused “a mental injury that result[ed] in a
substantial alteration of mental functioning that [was]
manifested in a visibly demonstrable manner....”
MCL 750.85(2)(d).
1
Defendant argues that this defini-
tion of “severe mental pain or suffering” was not
satisfied at trial. Indeed, defendant specifically con-
tends in his appellate brief that there was insufficient
evidence “to permit a trier of fact to conclude that
[Cheryl] sustained a mental injury that substantially
altered her mental functioning in a visibly demon-
strable manner.” We disagree.
Significantly, Cheryl testified that she “started to
hallucinate after the incident because it put me in a
1
Defendant does not dispute that the additional requirement from
MCL 750.85(2)(d)(i), (ii), (iii), or (iv) was satisfied here.
234 288 M
ICH
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231 [Apr
state that I could not control ....”(Emphasis added.)
She also stated that the incident “scarred her,” and
she replied “yes” when asked whether the incident
“affected [her] substantially.” She testified: “I’ve had
a flashback of body memories that was brought on by
the violence that happened that night, and I haven’t
had the best of a childhood or anything, and it just
brought a memory back and it was a serious one.”
It is true that Cheryl had mental issues before the
incident; she stated that she was manic-depressive
and schizoaffective and was off her medication at the
time of the attack. However, she stated that she had
“gotten to the point” where she could “think through
it” without her medication. As noted above, she
indicated that the attack “put [her] in a state that
[she] could not control,” and she went on to testify
that she went back on her medication after the
attack.
While there was evidence that the jury could have
credited to conclude that all of Cheryl’s mental issues
resulted solely from her preexisting conditions, there
was also evidence that the jury could have credited, and
evidently did credit, to conclude that defendant’s attack
caused some of her mental injuries. It is the jury’s role
to evaluate and weigh the evidence. People v McRunels,
237 Mich App 168, 181; 603 NW2d 95 (1999). That
Cheryl experienced hallucinations and had to resume
her medication after the attack was evidence of a
substantial altering of mental functioning and evidence
of a visibly demonstrable mental injury. As noted in
People v Alter, 255 Mich App 194, 204-205; 659 NW2d
667 (2003), when a defendant causes an injury, the
special susceptibility of a victim to a particular injury
does not constitute an independent cause of the injury
2010] P
EOPLE V
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CHAW
235
such that a defendant is exonerated from criminal
liability. Reversal is unwarranted.
2
Defendant next argues that the trial court should
have granted his motion for a mistrial. We review for an
abuse of discretion a trial court’s decision regarding a
motion for a mistrial. People v Nash, 244 Mich App 93,
96; 625 NW2d 87 (2000). This Court will find an abuse
of discretion if the trial court chose an outcome that is
outside the range of principled outcomes. People v
Babcock, 469 Mich 247, 269-270; 666 NW2d 231 (2003);
Shulick v Richards, 273 Mich App 320, 324; 729 NW2d
533 (2006). A trial court should grant a mistrial “only
for an irregularity that is prejudicial to the rights of the
defendant and impairs his ability to get a fair trial.”
People v Haywood, 209 Mich App 217, 228; 530 NW2d
497 (1995) (citations omitted).
This issue involves the recorded evidence of conver-
sations defendant had with Cheryl while he was in jail.
The prosecution introduced the audio recordings of one
meeting at the jail and four telephone calls to show that
defendant attempted to coerce Cheryl into changing her
testimony. On the recordings, defendant stated multiple
times that he was a convicted felon and had spent time
in prison. Defendant contends that the admission of
these statements warranted a mistrial.
Under MRE 402, relevant evidence is admissible
unless excluded by the state or federal constitution or
by a rule of evidence. MRE 401 defines relevant evi-
dence as evidence having “any tendency to make the
existence of any fact that is of consequence to the
determination of the action more probable or less
2
In a footnote in his appellate brief, defendant refers to certain jury
instructions provided by the trial court and suggests that they were
inadequate; however, he makes no reasoned appellate argument concern-
ing the instructions and fails to assert that they require reversal.
236 288 M
ICH
A
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231 [Apr
probable than it would be without the evidence.” Evi-
dence that a defendant made efforts to influence an
adverse witness is relevant if it shows consciousness of
guilt. People v Mock, 108 Mich App 384, 389; 310 NW2d
390 (1981). Defendant’s statements that he was a
convicted felon and that he had previously served time
in prison were relevant in this case because they were
made in the context of his concerted efforts to convince
Cheryl to recant her earlier statements regarding his
conduct during the assault. The record makes clear that
defendant was using his status as a previous prisoner in
an attempt to convince Cheryl to lie during her antici-
pated testimony at the trial.
3
Defendant’s efforts to
influence Cheryl showed consciousness of guilt and
were admissible as admissions under MRE 801(d)(2).
Defendant contends that the statements were inad-
missible under MRE 403. MRE 403 provides that “evi-
dence may be excluded if its probative value is substan-
tially outweighed by the danger of unfair
prejudice....”“Inthis context, prejudice means more
than simply damage to the opponent’s cause. A party’s
case is always damaged by evidence that the facts are
contrary to his contentions, but that cannot be grounds
for exclusion.” People v Vasher, 449 Mich 494, 501; 537
NW2d 168 (1995). Instead, “[e]vidence is unfairly preju-
dicial when there exists a danger that marginally pro-
bative evidence will be given undue or preemptive
weight by the jury.” People v Crawford, 458 Mich 376,
398; 582 NW2d 785 (1998).
Here, defendant’s statements that he was a convicted
felon and that he spent time in prison were made as
3
For example, at one point defendant told Cheryl, “Look . . . I don’t
need to go to prison for this because if I go they’re going to keep me there
for a long time because I’m already a convicted felon. I’ve already been
there once.”
2010] P
EOPLE V
S
CHAW
237
part of a concerted effort to manipulate Cheryl into
lying to the authorities prosecuting the case. As such,
they were highly probative of consciousness of guilt.
Additionally, we find no danger that defendant’s state-
ments were given “undue or preemptive weight by the
jury,” id., in light of Cheryl’s clear and detailed testi-
mony regarding the assault and defendant’s own state-
ments to a police officer, which were consistent with
Cheryl’s account of the incident. Moreover, we note that
defense counsel informed the jury during her closing
argument that the offense underlying defendant’s pre-
vious conviction was different in nature from the
charged offenses. Given the circumstances, we cannot
conclude that the trial court abused its discretion by
denying the motion for a mistrial.
4
Affirmed.
4
Defendant also argues that the prosecutor committed misconduct
when he deliberately introduced evidence of defendant’s statements in
contravention of an agreement made between defense counsel and the
prior prosecutor assigned to the case. Defendant asserts that the pros-
ecutor’s intentional misconduct amounted to grounds for granting his
motion for a mistrial. However, the statements were admissible, as noted
previously, and thus defendant did not suffer prejudice that impaired his
ability to get a fair trial. Haywood, 209 Mich App at 228. Accordingly, a
mistrial was not warranted.
238 288 M
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CHELSEA INVESTMENT GROUP LLC v CITY OF CHELSEA
Docket No. 288920. Submitted April 6, 2010, at Detroit. Decided April 27,
2010, at 9:05 a.m.
Chelsea Investment Group L.L.C. brought an action in the Washtenaw
Circuit Court against the city of Chelsea and Chelsea City Manager
Michael Steklac, alleging that defendants’ temporary inability to
provide sufficient water and sewer capacity to a proposed condo-
minium project pursuant to the parties’ planned unit development
(PUD) agreement constituted a breach of contract, an unlawful
taking of the property without just compensation, and gross negli-
gence. The temporary lack of capacity had led the Department of
Environmental Quality (DEQ) to impose a temporary moratorium on
development, which caused Pulte Land Company, with whom plain-
tiff had signed a purchase agreement for the proposed home sites, to
terminate the contract after the first of three anticipated phases had
been completed. Defendants and plaintiff filed cross-motions for
summary disposition. The trial court, David S. Swartz, J., denied
plaintiff’s motion and granted defendants’ motion in part, ruling that
plaintiff’s negligence claim was barred by governmental immunity
under MCL 691.1407(2). After a bench trial, the court ruled that
although plaintiff had not established its taking claim, defendants
were liable for breach of contract, which entitled plaintiff to
$2,276,621.44 in damages, $330.717.80 in interest through Septem-
ber 3, 2008, and interest after that date as calculated under MCL
600.6013(8) until the judgment was satisfied, in addition to costs and
sanctions plus interest on the same terms. Defendants appealed, and
plaintiffs cross-appealed.
The Court of Appeals held:
1. The trial court did not clearly err by ruling that defendants
had breached the PUD agreement. The agreement indicated that
the existing wastewater treatment plant was adequate to handle
the proposed development and specified that the city would
expand its water capacity without delaying the development itself
or the issuance of related approvals or permits. However, after
plaintiff submitted its plans, defendants could not timely approve
them because their wastewater treatment plant and water mains
2010] C
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still lacked the necessary capacity. This failure to provide timely
approval was the most direct cause of plaintiff’s harm.
2. The trial court did not err by awarding plaintiff damages for
the second planned phase of the development. The amount
awarded was not speculative but was based on the terms of the
purchase agreement, and evidence indicated that Pulte would have
completed this phase had defendants approved the site plan and
offered all the lots at issue.
3. The trial court did not err by failing to award plaintiff
damages for the third planned phase of the development because,
given the evidence that Pulte was uncertain whether it would
move forward with this phase of the development, it cannot be said
with certainty that plaintiff’s loss of the profits from this phase
was the result of defendants’ breach of contract.
4. The trial court erred by requiring interest to be calculated at
six-month intervals on July 1 and January 1. The plain language of
MCL 600.6013(8), which permits the award of interest on a money
judgment, indicates that interest must be calculated at six-month
intervals from the date the complaint is filed using the interest rates
announced on either July 1 or January 1, whichever immediately
precedes the six-month calculation date. The conflicting interpreta-
tion of the State Court Administrative Office is not entitled to
deference because it conflicts with the plain statutory language.
5. Defendants’ failure to issue plaintiff permits and approvals
during the DEQ-imposed moratorium on development did not con-
stitute a taking that required compensation because plaintiff was not
singled out to bear the burden of the regulation. Further, plaintiff
presented no evidence demonstrating the extent to which the value of
the land at issue was diminished during the moratorium. Finally,
plaintiff could not have established that the regulation interfered
with its distinct, investment-backed expectations because it was not
reasonable to expect that the development would not be subject to
obtaining approvals for each stage. For the same reasons, defendants’
failure to issue the necessary permits and approvals did not violate
plaintiff’s substantive due process rights.
6. The trial court did not err by dismissing plaintiff’s gross
negligence claim against Steklac on governmental immunity
grounds because, given that he actively sought solutions for both
the wastewater and water capacity issues, the evidence did not
indicate that his conduct was so reckless as to demonstrate a
substantial lack of concern for whether an injury would result.
Affirmed in part, vacated in part, and remanded for further
proceedings.
240 288 M
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239 [Apr
I
NTEREST —
M
ONEY
J
UDGMENTS —
C
ALCULATION OF
I
NTEREST ON
M
ONEY
J
UDG-
MENTS
.
The statutory provision governing awards of interest on money
judgments requires interest to be calculated at six-month intervals
from the date of filing the complaint at a rate of interest equal to
one percent plus the average interest rate paid at auctions of
five-year United States treasury notes during the six months
immediately preceding July 1 and January 1; for example, interest
for a complaint filed in August 2008 would be calculated in
February 2009 using the January 1, 2009, rate, and would be
calculated again in August 2009, using the July 1, 2009, rate (MCL
600.6013[8]).
Bodman LLP (by Jerold Lax) and Jackier Gould PC
(by Dean J. Gould) for plaintiff.
Plunkett Cooney (by Mary Massaron Ross and Hilary
A. Dullinger) for defendants.
Before: J
ANSEN
,P.J., and C
AVANAGH
and K. F. K
ELLY
,JJ.
P
ER
C
URIAM
. In this contract action, defendants, city of
Chelsea and Michael Steklac, appeal and plaintiff, Chelsea
Investment Group L.L.C., cross-appeals the trial court’s
order entering judgment in defendants’ favor after a
bench trial. We affirm in part and vacate in part.
I. FACTS AND PROCEDURAL HISTORY
In 2000, plaintiff acquired 157 acres of undeveloped
real property in Chelsea, Michigan, by land contract.
Plaintiff paid $500,000 of the $5 million purchase price at
closing, leaving $4,500,000 to be paid in equal semiannual
installments over the next five years.
1
Plaintiff also
agreed to pay the property taxes.
1
The land was not immediately released to plaintiff; rather, it was
released incrementally with subsequent payments. However, the contract
permitted plaintiff to develop infrastructure on the property during the
term of the land contract.
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After entering into the land contract, plaintiff peti-
tioned the city of Chelsea to rezone the property as a
planned unit development (PUD). Plaintiff also peti-
tioned for site plan approval for the purpose of devel-
oping single-family units. The city’s planning commis-
sion issued two resolutions that made findings and
recommendations on plaintiff’s petitions. Ultimately,
the planning commission recommended that defendant
approve the rezoning request and the proposed devel-
opment as long as plaintiff met all the provisions in the
resolutions. Accordingly, in November 2001, the prop-
erty was rezoned. Further discussions ensued concern-
ing the site plan and, in April 2002, plaintiff proposed a
detailed plan for the construction of a development
called “Heritage Pointe,” which would contain 352
single-family condominiums.
A. THE PUD AGREEMENT
In April 2003, the city approved this site plan, and
plaintiff and the city entered into a PUD agreement,
which was recorded in the Register of Deeds Office. The
PUD agreement granted plaintiff site plan approval for
all 352 residences and required the development of
Heritage Pointe to be carried out in five separate
phases, each of which contemplated the development of
a certain number of lots. Under the agreement, each
phase was conditioned on plaintiff’s obtaining site plan
approval for the project from the city. In particular, no
zoning or building permits could be issued in a phase
until “the public water mains, public sanitary sewers,
and all appurtenances necessary to support that phase
ha[d] been installed,” approved, and accepted by defen-
dant.
The PUD agreement was divided into several parts:
recitals, statements of mutual agreement, plaintiff’s
242 288 M
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239 [Apr
obligations under Part A, and the city’s obligations
under Part B. The recitals provided an account of what
had occurred over the last several years with regard to
the subject property. The statements of agreement
indicated that the PUD zoning designation would “con-
sist of the findings and recommendations of the [city]
Planning Commission adopted on November 21,
2001....”Inother words, the PUD agreement incor-
porated a November 2001 resolution of the city’s plan-
ning commission. Part 3 of the resolution stated, in
relevant part:
b. Sanitary sewer — The existing sanitary sewer is
adequate to handle the proposed development. However,
the [waste water treatment plant] must be expanded and
10 acres of additional land is needed for that expansion....
c. Water — Existing water mains cannot provide vol-
umes or pressure needed for the proposed 352 houses.
Part A of the PUD agreement set forth plaintiff’s
contractual obligations and provided conditions under
which plaintiff would develop the property. Plaintiff, for
instance, was required to donate 10 acres of land to
defendant for the expansion of the city’s wastewater
treatment plant (WWTP) and to convey a conservation
easement of approximately 30 acres. Further, Part A of
the agreement indicated that it was defendant’s duty to
expand the existing water capacity. Paragraph 4 of the
PUD agreement stated:
The [city] is in the process of extending the existing 12”
water main down Elm Street... which 12” Water Main
Work will be completed by the [city], at the [city’s] expense,
in sufficient time so as not to interfere with or delay
[plaintiff’s] development of the Property. In consideration of
the donation/conveyance of the WWTP property...,the
[city] agrees that neither the Developer...noranyofthe
owners of lots/units in the Development will ever be
required to install (or pay to install) any offsite improve-
2010] C
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ments with regard to the provision of water to the Devel-
opment and, if there is ever a need to increase the water
capacity to the Development, the [city] will be responsible for
installing any and all offsite improvements related to
increasing the water capacity to the Development without
contribution of any kind from the Developer . . . or any
owners of lots/units in the Development....
Part B of the PUD agreement contained further
obligations of the city. It stated, in full:
The [city] agrees to do the following in a timely manner
so as not to delay any approvals or the issuance of any
permits or certificates of occupancy in the Development:
1. Approve PUD zoning for the Property, based on the
Area/Site Plan.
2. Extend the 12” water main in Elm Street, at the
[city’s] expense, to the west line of the Property by Elm
Street and Taylor Lane.
3. Mill and apply a 2” overlay to, at the [city’s] expense,
the remaining segment of Taylor Lane, between Dexter
Chelsea Road and the South line of the Property, in
accordance with [city] standards and specifications so as
not to delay or interfere with the Development.
4. Construct and perform those requisite tasks, at the
[city’s] expense, as outlined above, in connection with the
installation of any offsite utilities.
5. Accept street and public utilities as public facilities
upon inspection, testing, submission of as-built drawings,
and approval by the [city] Engineer.
6. To obtain any offsite easements in connection with
any requisite improvements to Dexter/Chelsea Road as
provided above. [Emphasis added.]
B. THE PULTE PURCHASE AGREEMENT
In May 2004, plaintiff entered into a purchase agree-
ment with Pulte Land Company for the construction of
the residential units. Under the purchase agreement,
244 288 M
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239 [Apr
Pulte agreed to purchase the home sites from plaintiff
for $23,000 per lot. Pulte was to purchase the lots and
construct the homes in three phases, which roughly
corresponded with the five phases in the PUD agree-
ment. Specifically, Phase One was Pulte’s purchase of
76 lots, which encompassed the first phase in the PUD
agreement; Phase Two was Pulte’s purchase of 167 lots,
encompassing the middle two phases in the PUD agree-
ment; and Phase Three was Pulte’s purchase of 109
lots, encompassing the final two phases in the PUD
agreement.
Importantly, Pulte’s purchase of the sites was condi-
tioned on plaintiff’s securing governmental approval for
each phase. The purchase agreement also required
Pulte to pay a $250,000 deposit, which would be fully
refundable if plaintiff failed to obtain the necessary
governmental approvals within certain time limits. For
example, once Pulte closed on Phase One, plaintiff had
a year from that date to obtain the necessary approvals
for Phase Two. In addition, Pulte also agreed to pay the
property’s taxes.
C. PERFORMANCE
Pulte closed on Phase One by August 2004. Pulte was
ready to begin work on Phases Two and Three begin-
ning in the summer of 2005. Thus, plaintiff sought the
city’s approval of the plans for those phases. Plaintiff’s
engineer submitted the final plans to the city in March
2005.
In May 2005, the city informed plaintiff that the
WWTP lacked sufficient capacity for the development.
Apparently, according to defendant Michael Steklac, the
city manager, the city was aware of a problem with the
reverse osmosis (RO) system, a treatment that provided
the city with soft water, as early as 2003 or 2004.
2010] C
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However, this problem related to having to change the
system’s filter too frequently; Steklac was not aware of
the capacity issue until April or May 2005. Up until that
point, Steklac had believed, on the basis of the advice of
the city’s engineers, that the earliest the city would
need to address the WWTP capacity issue was within
five years of 2004. Steklac was surprised when he
learned of the WWTP capacity issue in May 2005.
Steklac worked with plaintiff in attempting to re-
solve the WWTP issue. Steklac met with the city’s
engineers, considered plaintiff’s proposals, and submit-
ted plaintiff’s proposals to the Michigan Department of
Environmental Quality (MDEQ) for consideration. Ap-
parently, the city council refused to adopt and imple-
ment plaintiff’s suggestion that it cease using the RO
system. Had the city agreed to turn the RO system off,
the additional necessary capacity would have become
available, thereby allowing the MDEQ to issue a permit.
However, according to Steklac, stopping the RO system
was not a viable option. Although keeping the RO
system running was not a matter of health and safety
but an aesthetic issue, the city council voted to continue
the system because citizens were paying for soft water
and the city was obligated to provide that water. Thus,
the solutions contemplated were explored in the context
of keeping the RO system online.
In June 2005, the city learned that it also had a water
capacity issue. The city’s new water superintendent had
found that the city was reporting a greater water
capacity to the MDEQ than it really had. After the
water superintendent informed the MDEQ of the lack
of capacity, the MDEQ issued a moratorium on devel-
opment in July 2005. The city informed plaintiff of the
water capacity problem in July 2005. According to
Steven Fisher, plaintiff’s president, these capacity prob-
246 288 M
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239 [Apr
lems were a complete surprise. Although plaintiff had
been aware of water moratoriums in 1999 and 2000, it
had taken steps to make certain that its development
would not be affected by any future moratoriums and
had been “very sensitive” to the issue.
Plaintiff and the city continued to work together to
solve these problems. At one point, the city indicated
that 85 lots might be available. Pulte affirmed that it
would take fewer than the 167 lots that it was promised
under Phase Two because stopping its operations would
be costly. However, the city reneged on the offer of 85
lots.
Despite these efforts, by August 2005, a year after
Pulte had completed Phase One, plaintiff still had not
obtained the necessary governmental approvals that
would permit Pulte to proceed with the project. Thus,
Pulte exercised its option under the purchase agree-
ment to terminate the agreement and to receive a full
refund of its $250,000 deposit. By March 2006, approxi-
mately eight months after the moratorium had been
issued, the city resolved both the WWTP and water
capacity issues, and the moratorium was removed.
Plaintiff mitigated its damages by entering into a
contract for the sale of some of the lots with another
builder. However, plaintiff was not able to obtain a
similar purchase price for the lots.
D. PRETRIAL PROCEDURE
On February 9, 2006, plaintiff filed a suit against the
city and Steklac requesting injunctive and declaratory
relief, alleging that defendants had breached the PUD
agreement by failing to provide sufficient water and
sewer capacity, that defendants’ actions constituted an
unlawful taking of the property, and that defendants
2010] C
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were grossly negligent in carrying out their duties in a
manner that caused plaintiff harm.
In August 2007, defendants and plaintiff filed cross-
motions for summary disposition. The trial court denied
plaintiff’s motion and granted defendants’ motion in
part, dismissing the portion of plaintiff’s claim alleging
that defendants had been negligent. According to the
court, “strategic actions related to the performance of a
contract do not fall within the definition of Gross
Negligence...that was ‘the proximate cause’ of plain-
tiff’s injuries.” Thus, the court ruled that plaintiff’s
negligence claim was barred by governmental immu-
nity under MCL 691.1407(2). The court, however, ruled
that questions of fact existed as to the remaining counts
and, thus, denied summary disposition of these claims.
The parties moved for summary disposition again in
June 2008, but the trial court denied both parties’
motions; in its view, questions of fact existed as to the
remaining claims.
E. BENCH TRIAL
The matter was set for a bench trial on July 25, 2008.
The parties stipulated to waive live testimony except as
it related to the issue of damages and agreed to submit
proposed findings of fact and conclusions of law. At trial,
Fisher testified that the total profit plaintiff would have
gained if Pulte had completed Phase Two was
$2,349,340, as well as an additional $1,504,068 had
Pulte completed Phase Three. Fisher stated that Pulte
also agreed to pay property taxes, which brought the
total plaintiff was to have gained from Phases Two and
Three to $3,873,524. Because Fisher was able to sell
some of the property to another developer—
approximately 45 lots, albeit at a lower price of $18,000
per lot—the damages were reduced by $342,835, result-
248 288 M
ICH
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239 [Apr
ing in total damages of $3,530,689. Fisher also indicated
that plaintiff should be reimbursed for the $250,000
deposit that Pulte had paid to plaintiff in contemplation
of completing the contract, which plaintiff had to re-
fund.
At the close of trial, the court adopted plaintiff’s
findings of fact and conclusions of law, except with
regard to plaintiff’s taking claim. The court concluded
that plaintiff could not establish a taking claim, but
that it had established a breach of the PUD agreement.
It further indicated that plaintiff’s damages would be
limited to Phase Two.
Before the court entered its judgment, plaintiff
moved for costs and attorney fees. In its brief in
support, plaintiff argued that interest on the verdict,
costs, and attorney fees should be calculated at six-
month intervals from the date the complaint was filed,
using the relevant interest rate as of January 1 or July
1. Plaintiff contended that this calculation was consis-
tent with the plain language of MCL 600.6013(8), which
allows interest on a money judgment and provides:
Except as otherwise provided in subsections (5) and (7)
and subject to subsection (13), for complaints filed on or
after January 1, 1987, interest on a money judgment
recovered in a civil action is calculated at 6-month intervals
from the date of filing the complaint at a rate of interest
equal to 1% plus the average interest rate paid at auctions
of 5-year United States treasury notes during the 6 months
immediately preceding July 1 and January 1, as certified by
the state treasurer, and compounded annually, according to
this section. Interest under this subsection is calculated on
the entire amount of the money judgment, including attor-
ney fees and other costs. The amount of interest attribut-
able to that part of the money judgment from which
attorney fees are paid is retained by the plaintiff, and not
paid to the plaintiff’s attorney.
2010] C
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In response, defendants argued that MCL 600.6013(8)
requires that interest be calculated at six-month inter-
vals, changing on July 1 and January 1. According to
defendants, this method of calculation is the correct one
because the State Court Administrative Office has
interpreted MCL 600.6013(8) in this manner.
Subsequently, the trial court entered its judgment
awarding plaintiff $2,276,621 in damages
2
plus interest
on that amount “through September 3, 2008, and
interest subsequent to that date until the judgment is
satisfied in an amount determined pursuant to MCL
600.6013(8),” in addition to costs and sanctions plus
interest on the same terms. Defendants appealed and
plaintiff cross-appealed the trial court’s judgment and
order.
II. DEFENDANTS’ APPEAL
Defendants raise two arguments before this Court:
that the trial court erred by ruling that the city had
breached the PUD agreement and by awarding plaintiff
damages. We consider each argument in turn.
A. BREACH OF CONTRACT
Defendants contend that the trial court erred by
concluding that the city had agreed to provide plaintiff
with instantaneous access to water under the PUD
agreement and therefore breached the PUD agreement
by failing to do so. We disagree. We review a trial court’s
findings of fact in a bench trial for clear error and its
conclusions of law de novo. Ligon v Detroit, 276 Mich
2
This number was calculated by taking the total profit from Phase
Two, plus the $250,000 earnest money deposit and the $20,116 in
property taxes, and subtracting the $342,835 that had resulted from
plaintiff’s mitigation.
250 288 M
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239 [Apr
App 120, 124; 739 NW2d 900 (2007). A finding is clearly
erroneous if there is no evidentiary support for it or if
this Court is left with a definite and firm conviction that
a mistake has been made. Hill v City of Warren, 276
Mich App 299, 308; 740 NW2d 706 (2007). The trial
court’s findings are given great deference because it is
in a better position to examine the facts. Id. Further, to
the extent that this matter requires us to interpret the
meaning of the PUD agreement, our review is also de
novo. McDonald v Farm Bureau Ins Co, 480 Mich 191,
197; 747 NW2d 811 (2008).
After our review of the record, we cannot conclude
that the trial court clearly erred by ruling that the city
had breached the PUD agreement. The agreement, by
incorporating the November 21 resolution, noted that
the existing WWTP was “adequate to handle the pro-
posed development.” With regard to water capacity, the
PUD agreement, also through the resolution, indicated
that the existing water mains were inadequate to pro-
vide the necessary volume of water or the necessary
water pressure. However, the city explicitly agreed
under Part A of the PUD agreement to expand the
water capacity for the development at its own expense
in exchange for plaintiff’s donation of almost 40 acres of
land. Part A, ¶ 4 of the PUD agreement stated in part:
The [city] is in the process of extending the existing 12”
water main down Elm Street... which 12” Water Main
Work will be completed by the [city], at the [city’s] expense,
in sufficient time so as not to interfere with or delay
[plaintiff’s] development of the Property. In consideration of
the donation/conveyance of the WWTP property..., the
[city] agrees that...ifthere is ever a need to increase the
water capacity to the Development, the [city] will be respon-
sible for installing any and all offsite improvements related
to increasing the water capacity to the Development without
2010] C
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contribution of any kind from the Developer . . . or any
owners of lots/units in the Development.... [Emphasis
added.]
Further, under Part B of the PUD agreement, the city
explicitly agreed to “[c]onstruct and perform those
requisite tasks, at the [city’s] expense, as outlined
above, in connection with the installation of any offsite
utilities” in a “timely manner so as not to delay any
approvals or the issuance of any permits or certificates
of occupancy in the Development....” (Emphasis
added.)
Despite its explicit promises not to interfere with or
delay plaintiff’s development, the city did exactly that.
In August 2004, Pulte had completed Phase One and
was waiting for plaintiff to obtain the necessary govern-
mental approvals for the next phases of the project.
Plaintiff submitted its plans to the city in March 2005,
but the city did not approve them. Instead, in May 2005,
the city reported that the WWTP lacked capacity and,
in July 2005, it told plaintiff that water capacity was
also lacking and that an MDEQ moratorium had been
issued preventing development. By August 2005, the
city still had not resolved the issues or otherwise
approved plaintiff’s plan, and Pulte exercised its right
to terminate its agreement with plaintiff. Under these
circumstances, the city’s actions interfered with and
delayed plaintiff’s development of Heritage Pointe.
Given the foregoing, we are not definitely and firmly
convinced that the trial court made a mistake when it
ruled that the city had breached the PUD agreement.
Defendants, however, argue that the trial court erred
to the extent it concluded that the city was required to
provide “instantaneous access” to water and sewer
capacity, or to otherwise provide those services at a
certain date. In defendants’ view, the city was not
252 288 M
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239 [Apr
contractually obligated to provide water services or
facilities at a certain date because the PUD agreement
is “devoid of any timing provision.” This argument is
unavailing. At the outset, this Court notes that the trial
court never ruled that the city was required to provide
plaintiff with “instantaneous access” to water under
the PUD agreement. Nor are we of the view that the
PUD agreement contained such a requirement, or,
indeed, any certain or firm date requirement.
However, we cannot agree with defendants’ conten-
tion that the PUD agreement was devoid of any timing
provisions, or that it did not contractually obligate the
city to provide such services. While it is true that
nothing in the language of the agreement required that
water services be available by a certain date, Part A, ¶ 4
of the PUD agreement did contain language that re-
quired the city to “install[] any and all offsite improve-
ments related to increasing the water capacity to the
Development” if such a necessity arose. And the city
further agreed, under Part B of the agreement, to
“[c]onstruct and perform those requisite tasks, at the
[city’s] expense, as outlined above, in connection with
the installation of any offsite utilities”ina“timely
manner so as not to delay any approvals or the issuance
of any permits....”(Emphasis added.) Nothing in the
language of Part B limited this requirement to the
specific obligations listed in part B of the PUD agree-
ment. Rather, the phrase “as outlined above,” when
read in context of the entire agreement and in conjunc-
tion with the phrase “in connection with the installa-
tion of any offsite utilities,” related back to the provi-
sions of ¶ 4. Thus, defendants’ attempt to limit the
city’s duties to those contained in Part B (meaning that
the city was not contractually obliged to provide water
or sewer capacity), and their accompanying contention
that Part B is devoid of any timing provision, fail.
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Clearly, the phrase “timely manner,” as used in Part B,
indicated an intent to provide water services, not at a
certain date or instantaneously, but in an amount of
time that would not delay approvals or interfere with
plaintiff’s development. The PUD agreement was not
devoid of a timing provision.
3
Finally, defendants assert that even if the breach did
occur, it was not the cause of plaintiff’s harm. According
to defendants, the cause of plaintiff’s harm was the
condition of the real estate market. We disagree. To
recover in a breach of contract action, a plaintiff must
prove that the defendant’s breach was the proximate
cause of the harm the plaintiff suffered. Alan Custom
Homes, Inc v Krol, 256 Mich App 505, 512; 667 NW2d
379 (2003). In other words, the breach must be the most
direct, natural, and foreseeable cause of the plaintiff’s
harm. See Unibar Maintenance Servs, Inc v Saigh, 283
Mich App 609, 625; 769 NW2d 911 (2009). Here, the
city’s failure to provide timely approval consistent with
the PUD agreement was the most direct cause of the
harm plaintiff suffered. Had the city provided the
approvals, Pulte would have proceeded with Phase Two.
The fact that Pulte was willing and ready to proceed
with Phase Two construction with fewer lots was not
3
Defendants also argue that the trial court erred to the extent it found
that the city failed to provide access to water and sewer capacity within
“a reasonable time.” Defendants’ argument is based on the principle that
courts may require performance of a contract to be completed within a
“reasonable time” if the contract lacks definiteness as to the time of
performance. However, the language of the PUD agreement made specific
reference to the city’s obligation to provide services in a “timely manner
so as not to delay any approvals or issuance of any permits....”Thus,
given our conclusion that the PUD agreement was not devoid of a timing
provision, it is unnecessary for us to assume that the trial court based its
conclusion on an application of the principle that courts may infer a
reasonable time for performance. Thus, we do not consider defendants’
argument.
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the result of adverse market conditions, as defendants
now argue. Rather, Pulte was willing to do so because
the city, at one point, had offered plaintiff and Pulte the
opportunity to proceed with 85 lots as opposed to 167.
For all the foregoing reasons, we conclude that the trial
court did not clearly err by concluding that the city had
breached the PUD agreement.
B. DAMAGES
Defendants next contend that the trial court erred by
awarding plaintiff damages for Phase Two. In defen-
dants’ view, the award should be vacated because it is
too speculative. We cannot agree. We review a trial
court’s determination of damages after a bench trial for
clear error. Alan Custom Homes, 256 Mich App at 513.
It is true that damages that are speculative or based on
conjecture are not recoverable. Ensink v Mecosta Co
Gen Hosp, 262 Mich App 518, 525; 687 NW2d 143
(2004). However, it is not necessary that damages be
determined with mathematical certainty; rather, it is
sufficient if a reasonable basis for computation exists.
Id.
The trial court awarded plaintiff $2,276,621 for
Phase Two. The award of damages was not speculative.
Rather, it was based on the testimony of Steven Fisher,
plaintiff’s president, who testified regarding how much
profit plaintiff would have realized had Phase Two been
completed. It appears from our review of the record that
Fisher’s computation was based on the terms of the
purchase agreement, under which Pulte agreed to pay
property taxes and to compensate plaintiff $23,000 per
lot. The measure of damages also included Pulte’s
$250,000 earnest money deposit, minus the amount
plaintiff gained from selling some lots to a different
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developer. Given this record evidence, we simply fail to
see how this measure of damages was speculative.
Further, there is no merit to defendants’ contention
that the damages were speculative because Pulte did
not know whether it would complete Phase Two. In
support, defendants cite the testimony of Pulte’s repre-
sentative, Steven Atchinson, who indicated that Pulte
was uncertain whether it would acquire more than half
the Phase Two lots. However, a review of Atchinson’s
deposition testimony reveals that Pulte was ready and
willing to proceed with Phase Two; the only reason
Pulte did not know whether it would complete Phase
Two was that the city had not approved plaintiff’s site
plan and the city had only offered Pulte half the Phase
Two lots. Accordingly, the evidence provided permitted
a reasonable basis by which to calculate damages, and
the trial court did not clearly err. Defendants are not
entitled to any relief based on their claims of error
raised on appeal.
III. PLAINTIFF’S CROSS-APPEAL
We now consider plaintiff’s arguments raised in its
cross-appeal, including its allegations that the trial
court erred in measuring damages, in calculating inter-
est, and by dismissing plaintiff’s taking and gross
negligence claims.
A. DAMAGES
Plaintiff first contends that the trial court erred by
failing to award plaintiff damages for Phase Three. We
cannot agree because we are not convinced, after our
review of the record, that a mistake has been made.
Atchinson testified that Pulte’s business plan in 2006
did include all of Phases Two and Three. But Atchinson
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also indicated that Pulte was uncertain whether it
would move forward with the entire project given the
fact that it would become more difficult to invest money
over time. Thus, although Pulte was contemplating
completion of Phase Three, it remains entirely specula-
tive whether Pulte actually would have closed on Phase
Three. See Ensink, 262 Mich App at 525. Pulte could
have failed to close on phase three for any number of
reasons, such as unfavorable market conditions or a
change in business plans. Thus, it cannot be said with
certainty that plaintiff’s loss of the Phase Three profits
was the result of defendants’ breach of the PUD agree-
ment. Accordingly, the trial court did not clearly err and
plaintiff is not entitled to damages for Phase Three.
B. INTEREST
Plaintiff next asserts that the trial court erred by
calculating interest at six-month intervals on July 1 and
January 1, inconsistently with MCL 600.6013(8). Plain-
tiff posits that the statute requires that interest be
calculated at six-month intervals from the date of the
complaint, using the most immediately preceding inter-
est rate from July 1 or January 1. We agree.
At the outset, we note that it is well established that
interest is calculated from the date the complaint is
filed. See Ayar v Foodland Distrib, 472 Mich 713,
716-717; 698 NW2d 875 (2005). However, when the
interest is recalculated under the statute is an issue of
first impression.
4
To frame the question more concisely,
4
The Michigan Supreme Court has considered the meaning of MCL
600.6013(8) on numerous occasions but has not considered the particular
question before this Court. See, e.g., Ayar, 472 Mich at 716-718 (conclud-
ing that the plain language of the statute does not preclude attorney fees
or costs from the interest calculation measured from the date the
complaint is filed); Morales v Auto-Owners Ins Co (After Remand), 469
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we must decide whether MCL 600.6013(8) requires
interest to be calculated at six-month intervals from the
day the complaint is filed or whether it requires interest
to be calculated every six months on January 1 and July
1 from the date the complaint is filed. Issues of statu-
tory construction are questions of law reviewed de novo
on appeal. Stabley v Huron-Clinton Metro Park Auth,
228 Mich App 363, 366; 579 NW2d 374 (1998). Our goal
in construing a statute is to discern the intent of the
Legislature, as expressed by the words of the statute.
Computer Network, Inc v AM Gen Corp, 265 Mich App
309, 327; 696 NW2d 49 (2005). We must “presume every
word is used for a purpose, and as far as possible...
give effect to every clause and sentence.” Verizon North,
Inc v Pub Serv Comm, 263 Mich App 567, 570; 689
NW2d 709 (2004). The Court must give all the statute’s
words their plain and ordinary meanings, unless other-
wise defined by the Legislature. See Stabley, 228 Mich
App at 367. If the meaning of the language is plain and
unambiguous, then we must apply the statute as writ-
ten and not substitute our own policy preferences for
those of the Legislature. Lantz v Southfield City Clerk,
245 Mich App 621, 626; 628 NW2d 583 (2001).
MCL 600.6013(8) permits an award of interest on a
money judgment. It provides:
Except as otherwise provided in subsections (5) and (7)
and subject to subsection (13), for complaints filed on or
after January 1, 1987, interest on a money judgment
recovered in a civil action is calculated at 6-month intervals
from the date of filing the complaint at a rate of interest
equal to 1% plus the average interest rate paid at auctions
of 5-year United States treasury notes during the 6 months
Mich 487, 491-492; 672 NW2d 849 (2003) (concluding that MCL
600.6013(8) requires calculation of interest on a judgment following a
prejudgment appellate delay, without interruption, from the date the
complaint is filed).
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immediately preceding July 1 and January 1, as certified
by the state treasurer, and compounded annually, accord-
ing to this section. Interest under this subsection is calcu-
lated on the entire amount of the money judgment, includ-
ing attorney fees and other costs. The amount of interest
attributable to that part of the money judgment from
which attorney fees are paid is retained by the plaintiff, and
not paid to the plaintiff’s attorney. [Emphasis added.]
In our view, the language of this provision is plain
and unambiguous. It requires that “interest on a money
judgment...[be] calculated at 6-month intervals from
the date of the filing of the complaint at a rate of
interest equal to 1% plus the average interest rate
[of]... United States treasury notes during the 6
months immediately preceding July 1 and January
1....”When this language is parsed, MCL 600.6013(8)
simply requires that interest on a judgment be recalcu-
lated every six months from the date of the filing of the
complaint using the interest rates announced on July 1
or January 1, whichever is “immediately preceding” the
complaint’s six-month calculation date. For example,
interest for a complaint filed in August 2008 would be
calculated in February 2009 using the January 1, 2009,
rate, and would be calculated again in August 2009,
using the July 1, 2009, rate.
Defendants contend that the trial court’s calculation
should be affirmed. They argue that the proper inter-
pretation of MCL 600.6013(8) mandates that interest
be calculated at six-month intervals on July 1 and
January 1, starting from the date the complaint is filed.
According to defendants, this interpretation is consis-
tent with the Michigan State Court Administrative
Office’s July 27, 2009, publication entitled “Interest
rates for money judgments under MCL 600.6013.” With
regard to MCL 300.6013(8), it stated:
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Interest is calculated at 6-month intervals on Jan 1st
and July 1st of each year, starting from the date the
complaint is filed, compounded annually. The interest rate
equals the rate paid on 5-year United States treasury
notes, as certified by the state treasurer, for the 6 months
preceding each Jan 1st and July 1st, plus 1%.
We disagree. This interpretation is plainly contrary
to the clear language of the statute, which requires that
interest be recalculated at six-month intervals from the
date of the complaint, using the immediately preceding
interest rate from July 1 or January 1. While some
deference is due to an administrative agency’s interpre-
tation of a statute it is charged with executing, Nelligan
v Gibson Insulation Co, 193 Mich App 274, 281; 483
NW2d 460 (1992), an agency’s interpretation is not
binding on this Court and it cannot overcome the
statute’s plain meaning, Ludington Serv Corp v Acting
Ins Comm’r, 444 Mich 481, 503-504; 511 NW2d 661
(1994). Because the State Court Administrative Office’s
recommendation is contrary to the statute’s plain
meaning, this Court is not bound to follow it. Thus, the
interest on plaintiff’s judgment must be recalculated on
remand consistently with the language of MCL
600.6013(8).
C. TAKING CLAUSES AND SUBSTANTIVE DUE PROCESS
Plaintiff next argues that the trial court erred by
dismissing its claims that defendants’ actions consti-
tuted an unlawful taking and violated its substantive
due process rights. In particular, plaintiff alleges that
defendants engaged in arbitrary action that signifi-
cantly and adversely affected plaintiff’s economic inter-
ests in the subject property. Plaintiff alleges that defen-
dants’ actions undermined its investment-backed
expectations, which were based on defendants’ repre-
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sentations in the PUD agreement. We disagree. Follow-
ing a bench trial, we review a trial court’s conclusions of
law on constitutional issues de novo. Novi v Robert
Adell Children’s Funded Trust, 473 Mich 242, 248; 701
NW2d 144 (2005).
Both the Fifth Amendment of the United States
Constitution and Const 1963, art 10, § 2 prohibit the
taking of private property for public use without just
compensation. Cummins v Robinson Twp, 283 Mich
App 677, 706; 770 NW2d 421 (2009). The Taking
Clauses do not prohibit the government’s interference
with a private individual’s property, but require that
interferences amounting to a taking be compensated.
Id. Typically, the government takes private property
through formal condemnation proceedings. See Dor-
man v Clinton Twp, 269 Mich App 638, 645; 714 NW2d
350 (2006). However, governmental regulations that
overburden a property may also constitute a compens-
able taking. K & K Constr, Inc v Dep’t of Natural
Resources, 456 Mich 570, 576; 575 NW2d 531 (1998).
Regulatory taking claims that do not rise to the level of
a categorical taking
5
are governed by the standard set
out in Penn Central Transp Co v New York City, 438 US
104; 98 S Ct 2646; 57 L Ed 2d 631 (1978). The balancing
test announced in that case requires a reviewing court
to engage in an ad hoc factual inquiry, focusing on “(1)
the character of the government’s action, (2) the eco-
nomic effect of the regulation on the property, and (3)
the extent by which the regulation has interfered with
distinct, investment-backed expectations.” K & K Con-
str, 456 Mich at 577, quoting Penn Central, 438 US at
5
A “categorical” taking occurs when there has been a physical invasion
of a landowner’s property or when a regulatory taking has deprived an
owner of all economically and beneficial use of the land. Lucas v South
Carolina Coastal Council, 505 US 1003, 1015; 112 S Ct 2886; 120 L Ed 2d
798 (1992). Plaintiff does not assert such a claim in the instant matter.
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124. “While there is no set formula for determining
when a taking has occurred under this test, it is at least
‘clear that the question whether a regulation denies the
owner economically viable use of his land requires at
least a comparison of the value removed with the value
that remains.’ ” K & K Constr, 456 Mich at 588 (citation
omitted). Moreover, a mere reduction in the value of
regulated property is insufficient by itself to establish
that a compensable taking has occurred. Penn Central,
438 US at 131; Dorman, 269 Mich App at 647.
We agree with the trial court that plaintiff has not
satisfied the Penn Central test. “The relevant inquiries
regarding the character of the government’s action is
whether it singles [a] plaintiff[] out to bear the burden
for the public good and whether the regulation being
challenged ‘is a comprehensive, broadly based regula-
tory scheme that burdens and benefits all citizens
relatively equally.’ ” Cummins, 283 Mich App at 720
(citation omitted). In this case, the MDEQ imposed a
temporary moratorium on the issuance of water and
sewer permits because of health and safety concerns
arising from the capacity of the WWTP during wet
periods. As a result, the city was temporarily precluded
from issuing approvals and permits for plaintiff’s devel-
opment. All developers in the area connecting to the
water facilities at issue would be subject to the same
moratoriums. Thus, plaintiff has failed to establish that
the MDEQ moratorium singled it out.
Further, plaintiff has produced no evidence demon-
strating the extent to which the land’s value was
diminished during the moratorium. Even assuming,
without deciding, that the value of the land was dimin-
ished while the moratorium was in effect, plaintiff still
would not be able to establish a taking. This is because
the land retained some value, given that plaintiff was
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free to use the property in any other way. Further, the
fact that plaintiff was not able to realize a profit similar
to that which it would have gained under the Pulte
purchase agreement does not establish a taking. “The
Taking Clause does not guarantee property owners an
economic profit from the use of their land.” Paragon
Props Co v Novi, 452 Mich 568, 579 n 13; 550 NW2d 772
(1996).
6
Finally, plaintiff could not have established that the
regulation interfered with its distinct, investment-
backed expectations. This is because plaintiff had no
reasonable expectation that the development would not
be subject to obtaining city approvals for each stage of
the development. The PUD agreement explicitly stated
that no zoning or building permits could be issued in a
phase until “the public water mains, public sanitary
sewers, and all appurtenances necessary to support that
phase ha[d] been installed,” approved, and accepted by
the city. Moreover, we note that plaintiff knew problems
could arise regarding water facilities, given that the
MDEQ had issued moratoriums in 1995 and 2000 and
that plaintiff’s president had admitted being particu-
larly sensitive to the issue during contract negotiations.
Given the foregoing, plaintiff has failed to produce
evidence that would satisfy the Penn Central test.
Accordingly, we conclude that the trial court did not err
by concluding that no taking of plaintiff’s property had
occurred.
6
We also note that, generally, “requiring plaintiffs to obtain building
and occupancy permits cannot itself constitute a taking of property.”
Cummins, 283 Mich App at 719. However, in instances of abnormally
long delays, even temporary takings may be compensable. See id. at
716-717. But no extraordinary delay occurred in the instant case; the
MDEQ moratorium was only in effect for a period of eight months. The
obvious implication is that once the moratorium was lifted, the property
would recover its full value.
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Lastly, we also find unavailing plaintiff’s related
argument that the trial court erred by dismissing its
claim that defendants’ actions violated plaintiff’s sub-
stantive due process rights. It is true that both the
Fourteenth Amendment of the United States Constitu-
tion and Const 1963, art 1, § 17 guarantee that no state
shall deprive any person of “ ‘life, liberty or property,
without due process of law.’ ” People v Sierb, 456 Mich
519, 522; 581 NW2d 219 (1998). For the reasons ex-
plained in the above analysis, plaintiff has failed to
show that it suffered a deprivation of property. Further,
even if plaintiff had established such a deprivation, its
claim would nonetheless fail because the city’s reasons
for not issuing the permits were reasonable and legiti-
mate. With regard to the WWTP issue, Steklac testified
that the city was obligated to provide its citizens with
soft water and it could not increase capacity by stopping
the RO system. And, with regard to water capacity, the
MDEQ issued the moratorium in July 2005 for health
and safety reasons after it learned that the city had
been mistakenly overreporting its capacity. For these
reasons, plaintiff’s substantive due process claim nec-
essarily fails.
D. GROSS NEGLIGENCE
Plaintiff next argues that the trial court erred by
granting summary disposition in defendants’ favor as to
its gross negligence claim against Steklac. We disagree.
It appears from our review of the record that the trial
court granted defendants’ motion under MCR
2.116(C)(7). We review de novo a motion decided under
MCR 2.116(C)(7), which alleges that a claim is barred
because of immunity by law. Bennett v Detroit Police
Chief, 274 Mich App 307, 310; 732 NW2d 164 (2007).
“ ‘[S]ummary disposition is precluded where reasonable
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jurors honestly could have reached different conclu-
sions with respect to whether a defendant’s conduct
amounted to gross negligence.’ ” Kendricks v Rehfield,
270 Mich App 679, 682; 716 NW2d 623 (2006) (citation
omitted).
In this case, the trial court, citing MCL 691.1407(2),
concluded that Steklac’s conduct did not fall within the
definition of “gross negligence” and therefore plaintiff’s
negligence claim against him was barred by governmen-
tal immunity. MCL 691.1407(2) provides, in part:
[E]ach officer and employee of a governmental
agency...isimmune from tort liability for an injury to a
person or damage to property caused by the officer...
while in the course of employment or service... while
acting on behalf of a governmental agency if...:
***
(c) The officer’s...conduct does not amount to gross
negligence that is the proximate cause of the injury or
damage.
MCL 691.1407(7)(a) defines “gross negligence” as “con-
duct so reckless as to demonstrate a substantial lack of
concern for whether an injury results.” Evidence of
ordinary negligence is not enough to establish a mate-
rial question of fact regarding whether a government
employee was grossly negligent. Maiden v Rozwood, 461
Mich 109, 122-123; 597 NW2d 817 (1999). Rather, there
must be evidence that the employee’s conduct was
reckless. Id. And, further, the employee’s conduct must
be the proximate cause of the plaintiff’s injury. Robin-
son v Detroit, 462 Mich 439, 462; 613 NW2d 307 (2000).
There is no question in the present matter that
Steklac, as city manager of Chelsea, was a public
employee. Nor is there any question that Steklac was
acting within the scope of his employment while work-
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ing with plaintiff with regard to the PUD agreement.
Rather, the only issue on appeal is whether Steklac’s
conduct was grossly negligent. The trial court held that
it was not, and we find no reason to disagree. A review
of the record reveals that Steklac actively sought solu-
tions for both the WWTP and water capacity issues.
Indeed, Steklac testified that he attempted to solve the
problem by considering a broad range of solutions
proposed by both the city’s and plaintiff’s engineers.
These suggestions were proposed to the MDEQ, but
were ultimately found to be unworkable. The fact that
a solution was not reached before Pulte exercised its
right to terminate the purchase agreement is not evi-
dence that Steklac’s conduct was reckless. Nor does the
fact that Steklac knew that the WWTP was not operat-
ing optimally as early as 2003 or 2004 demonstrate a
substantial lack of concern for whether an injury would
result. His knowledge of the issue was with regard to
the proper functioning of the RO system, not with
regard to the system’s capacity. Thus, it cannot be said
that Steklac intentionally misled plaintiff with regard
to the WWTP’s capacity. Therefore, we affirm the trial
court’s ruling that Steklac was entitled to governmental
immunity on plaintiff’s claim of gross negligence.
Affirmed in part, but vacated with respect to the trial
court’s calculation of interest. Remanded for further
proceedings not inconsistent with this opinion. We do
not retain jurisdiction.
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BLUE HARVEST, INC v DEPARTMENT OF TRANSPORTATION
Docket No. 281595. Submitted July 7, 2009, at Lansing. Decided April 29,
2010, at 9:00 a.m.
Blue Harvest, Inc., Blueberry Heritage Farms, Inc., and others
engaged in the commercial production of blueberries in Ottawa
and Muskegon counties brought an action in the Court of Claims
against the Department of Transportation (DOT), alleging
trespass-nuisance and inverse condemnation as a result of the
physical intrusion of road salt from adjacent highways and roads
onto plaintiffs’ properties. Plaintiffs also brought a claim in the
Ottawa Circuit Court against the Ottawa County Road Commis-
sion, alleging inverse condemnation as a result of road salt
intrusion. The cases were consolidated in the Ottawa Circuit
Court. The trial court, Edward R. Post, J., granted summary
disposition to DOT and Ottawa County on the inverse-
condemnation claims and denied DOT’s motion for summary
disposition on the trespass-nuisance claim and instead, determin-
ing that a trespass-nuisance exception to governmental immunity
existed, granted summary disposition in favor of plaintiffs on that
claim. DOT appealed as of right the denial of its motion for
summary disposition of the trespass-nuisance claim. Plaintiffs
cross-appealed the order granting summary disposition to both
defendants on the inverse-condemnation claims.
The Court of Appeals held:
1. There is no trespass-nuisance exception to the doctrine of
sovereign immunity for claims against the state. The Legislature
did not provide a trespass-nuisance exception to governmental
immunity for claims against the state, and there was no common-
law trespass-nuisance exception to sovereign immunity before
July 1, 1965. DOT was entitled to summary disposition with
regard to the trespass-nuisance claim. The order granting sum-
mary disposition of that claim in favor of plaintiffs must be
reversed, and the case must be remanded for the entry of a
judgment in favor of DOT with regard to that claim.
2. The right to just compensation, in the context of an inverse-
condemnation suit for diminution in value caused by the alleged
harmful effects to property abutting a public highway, exists only
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ARVEST V
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where the landowner can allege a unique or special injury, that is,
an injury that is different in kind, not simply in degree, from the
harm suffered by all persons similarly situated. The just-
compensation requirement of the Michigan Constitution does not
require the state to compensate every property owner in proximity
to a public highway for the normal inconveniences associated
therewith. A plaintiff states a claim for which relief may be
granted only if the plaintiff alleges harm of a unique or peculiar
kind. Plaintiffs have suffered some kind of loss as a result of the
application of the road salt; however, their claims are precluded
under the common-law doctrine of damnum absque injuria. Plain-
tiffs’ injury is merely of a different degree than that suffered by the
public at large. The trial court properly held that the injury was
not actionable. The order granting summary disposition of the
inverse-condemnation claims in favor of defendants must be
affirmed.
Affirmed in part, reversed in part, and remanded.
B
ECKERING
, J., concurring, wrote separately to elaborate on the
majority’s analysis that revealed that a common-law exception did
not exist before July 1, 1965, with respect to trespass-nuisance
claims against the state. Plaintiffs cited no caselaw establishing
that any exceptions to governmental immunity with respect to
political subdivisions before 1965 are to be imputed to sovereign
immunity as well. Although trespass-nuisance claims and
unconstitutional-taking claims are similar, they remain distinct
actions. The difference between the injuries suffered by plaintiffs
and similarly situated property owners is best categorized as one of
degree, and not of kind, and therefore the majority properly
determined that plaintiffs’ inverse-condemnation claims must fail.
1. G
OVERNMENTAL
I
MMUNITY —
S
OVEREIGN
I
MMUNITY —
E
XCEPTIONS —
T
RESPASS
-
N
UISANCE
.
There is no trespass-nuisance exception to the doctrine of sovereign
immunity for claims against the state (MCL 691.1407[1]).
2. H
IGHWAYS —
I
NVERSE
-C
ONDEMNATION
A
CTIONS —
J
UST
C
OMPENSATION —
U
NIQUE OR
S
PECIAL
I
NJURIES
.
The right to just compensation, in the context of an inverse-
condemnation suit for diminution in value caused by the alleged
harmful effects to property abutting a public highway, exists only
where the landowner can allege a unique or special injury that is
different in kind, not simply in degree, from the harm suffered by
all persons similarly situated.
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Varnum, Riddering, Schmidt & Howlett LLP (by
Stephen P. Afendoulis and Beverly Holaday) for plain-
tiffs.
Michael A. Cox, Attorney General, B. Eric Restuccia,
Solicitor General, and Patrick F. Isom, Assistant Attor-
ney General, for the Department of Transportation.
Smith Haughey Rice & Roegge (by Jon D. Vander
Ploeg and Charles F. Behler) for the Ottawa County
Road Commission.
Before: M
ETER
,P.J., and M
URRAY
and B
ECKERING
,JJ.
M
ETER
,P.J. Defendant Department of Transportation
(DOT) appeals as of right from an order denying its
motion for summary disposition on grounds of govern-
mental immunity regarding plaintiffs’ trespass-
nuisance claim. Plaintiffs cross-appeal to challenge the
grant of summary disposition to both defendants on
plaintiffs’ inverse-condemnation claim. We reverse the
trial court’s order relating to the trespass-nuisance
claim but affirm in all other respects. Of particular note
is our holding that there is no trespass-nuisance excep-
tion to the doctrine of sovereign immunity.
Plaintiffs are engaged in the commercial production
of blueberries in Ottawa and Muskegon counties. Plain-
tiffs own or lease property that is adjacent to highways
or primary county roads. DOT contracts with county
road commissions, including defendant Ottawa County
Road Commission (Ottawa County), to maintain the
highways and county roads during the winter, when salt
is used to prevent the formation of ice on the highways
and roads. Plaintiffs claim that the amount of salt used
in western Michigan has increased during a pertinent
15-year period. They allege that droplets of salt-laden
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water are thrown into the air by passing vehicles and
are then blown by the wind onto plaintiffs’ property.
They contend that this salt spray causes damage to
plaintiffs’ blueberry bushes, which results in a loss of
blueberry production from those bushes.
Plaintiffs sued DOT and Ottawa County, alleging
inverse condemnation. Plaintiffs also raised a claim of
trespass-nuisance against DOT. The trial court granted
summary disposition under MCR 2.116(C)(10) to DOT
and Ottawa County on the inverse-condemnation claim,
finding that plaintiffs failed to present evidence to
establish that their injury was “of a unique or peculiar
character different from the effects experienced by all
similarly situated property owners.” The trial court
concluded that plaintiffs were not permanently de-
prived of their property and that “the incidental entry
of road salt onto Plaintiffs’ properties has only rendered
the growing of blueberries uneconomical.” The trial
court further found that there was no “direct and
immediate intrusion” onto plaintiffs’ property in this
case.
1
The trial court subsequently denied DOT’s motion
for summary disposition under MCR 2.116(C)(7) (gov-
ernmental immunity) on the trespass-nuisance claim
and instead determined that plaintiffs were entitled to
summary disposition on this claim under MCR
2.116(C)(10). The trial court followed Hadfield v Oak-
land Co Drain Comm’r, 430 Mich 139, 147-149; 422
NW2d 205 (1988), overruled by Pohutski v City of Allen
Park, 465 Mich 675; 641 NW2d 219 (2002). Hadfield
held that a limited trespass-nuisance exception to gov-
ernmental immunity existed, consistent with caselaw
1
The trial court first granted summary disposition to Ottawa County
in a separate proceeding and then later applied the same rationale in
granting summary disposition to DOT.
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predating the enactment of statutory immunity. See
Hadfield, 430 Mich at 147-150 (opinion by B
RICKLEY
, J.).
The trial court concluded that plaintiffs established the
elements for their trespass-nuisance claim and that
plaintiffs were therefore entitled to summary disposi-
tion.
On appeal, DOT argues that the trial court erred by
denying its motion for summary disposition on the
trespass-nuisance claim because it is entitled to immu-
nity with regard to this claim.
This Court reviews de novo a trial court’s grant of
summary disposition. Maiden v Rozwood, 461 Mich
109, 118; 597 NW2d 817 (1999). In determining
whether summary disposition under MCR 2.116(C)(7)
is appropriate, a court considers all documentary evi-
dence submitted by the parties, accepting as true the
contents of the complaint unless affidavits or other
appropriate documents specifically contradict them.
See Patterson v Kleiman, 447 Mich 429, 433-435; 526
NW2d 879 (1994). “If the facts are not in dispute and
reasonable minds could not differ concerning the legal
effect of those facts, whether a claim is barred by
immunity is a question for the court to decide as a
matter of law.” Poppen v Tovey, 256 Mich App 351, 354;
664 NW2d 269 (2003); see also Cain v Lansing Housing
Comm, 235 Mich App 566, 568; 599 NW2d 516 (1999)
(“[A]pplicability of governmental immunity is a ques-
tion of law that is reviewed de novo on appeal.”).
Disposition of the present issue requires this Court to
resolve the question whether the tort of trespass-
nuisance is an exception to governmental immunity.
Trespass-nuisance is a trespass or interference with the
use or enjoyment of land by way of a physical intrusion
that the government sets in motion and that results in
personal or property damage. McDowell v Detroit, 264
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Mich App 337, 352; 690 NW2d 513 (2004), rev’d on
other grounds 477 Mich 1079 (2007). Its elements have
been stated simply as a condition, a cause, and control
by the government. Id.
MCL 691.1407(1) provides:
Except as otherwise provided in this act, a governmental
agency is immune from tort liability if the governmental
agency is engaged in the exercise or discharge of a govern-
mental function. Except as otherwise provided in this act,
this act does not modify or restrict the immunity of the
state from tort liability as it existed before July 1, 1965,
which immunity is affirmed.
“Absent a statutory exception, a governmental
agency is immune from tort liability when it exercises
or discharges a governmental function.” Maskery v
Univ of Mich Bd of Regents, 468 Mich 609, 613; 664
NW2d 165 (2003). A “governmental agency” is “the
state or a political subdivision.” MCL 691.1401(d).
“ ‘State’ means the state of Michigan and its agencies,
departments, commissions, courts, boards, councils,
and statutorily created task forces and includes every
public university and college of the state, whether
established as a constitutional corporation or other-
wise.” MCL 691.1401(c). “Political subdivision”
means a municipal corporation, county, county road com-
mission, school district, community college district, port
district, metropolitan district, or transportation authority
or a combination of 2 or more of these when acting jointly;
a district or authority authorized by law or formed by 1 or
more political subdivisions; or an agency, department,
court, board, or council of a political subdivision. [MCL
691.1401(b).]
The statutory exceptions to governmental immunity
are failure to maintain highways, MCL 691.1402(1); the
negligent operation of government-owned vehicles,
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MCL 691.1405; public-building defects, MCL 691.1406;
the performance of proprietary functions, MCL
691.1413; and the ownership or operation of certain
governmental hospitals, MCL 691.1407(4). MCL
691.1417 et seq. also provides for liability for sewage-
disposal-system events. None of these exceptions is
relevant to the present case.
Previously, the Supreme Court held that a limited,
nonstatutory trespass-nuisance exception existed to
governmental immunity. Hadfield, 430 Mich at 145
(opinion by B
RICKLEY
, J.). Later, in Pohutski, 465 Mich at
685, the Supreme Court noted that it had “strayed from
the plain language” of MCL 691.1407(1) when it con-
cluded in Hadfield that “the historic trespass-nuisance
exception was required by the language of [MCL
691.1407(1)].” The Supreme Court in Pohuski over-
ruled Hadfield to “rectify Hadfield’s misconstruction of
the statutory text.” Pohutski, 465 Mich at 695.
Significantly, however, the Pohutski Court, in reach-
ing its conclusions, relied on the word “state” from the
second sentence of MCL 691.1407(1). Id. at 688-689.
Again, this sentence states: “Except as otherwise pro-
vided in this act, this act does not modify or restrict the
immunity of the state from tort liability as it existed
before July 1, 1965, which immunity is affirmed.”
(Emphasis added.) The Pohutski Court concluded that
because cities, and not the state as defined in MCL
691.1401(c), were involved in that case, the second
sentence of MCL 691.1407(1) was simply inapplicable.
Pohutski, 465 Mich at 689. The Court then held that,
for cities, “the plain language of the governmental tort
liability act does not contain a trespass-nuisance excep-
tion to governmental immunity.” Id. at 689-690.
The Pohutski Court stated:
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Because the state is not involved as a party in these
cases, we need not explicate fully the meaning of the second
sentence of [MCL 691.1407(1)]. We agree with Justice
G
RIFFIN
[in his partial dissent in Li v Feldt (After Remand),
434 Mich 584, 599; 456 NW2d 55 (1990), overruled in part
by Pohutski] that, at most, the language of the second
sentence requires an historical analysis of the state’s sov-
ereign immunity, but we have no occasion to undertake
such an analysis here. Therefore, contrary to the dissent’s
assertion, we make no determinations regarding common-
law exceptions to the state’s governmental immunity. [Po-
hutski, 465 Mich at 688 n 1 (emphasis in original).]
Here, the “state,” as defined in MCL 691.1401(c), is
indeed involved. The question, then, is whether the
second sentence of MCL 691.1407(1) allows plaintiffs to
pursue the instant lawsuit or whether DOT is protected
by governmental immunity.
We find no basis to conclude that a trespass-nuisance
exception exists for claims against the state. Plaintiffs
argue that the second sentence of MCL 691.1407(1)
preserves a common-law exception to governmental
immunity for trespass-nuisance, but they cite only
Hadfield to support this position. Hadfield and the
pertinent cases cited therein, however, did not address
“sovereign immunity” (i.e., the immunity of the state).
See Pohutski, 465 Mich at 682 (discussing sovereign
immunity); see also Myers v Genesee Co Auditor, 375
Mich 1, 6; 133 NW2d 190 (1965) (“Sovereign immunity
is a specific term limited in its application to the State
and to the departments, commissions, boards, institu-
tions, and instrumentalities of the State.”).
“So far as the State itself is concerned, the doctrine of
sovereign immunity as it presently exists in Michigan is a
creature of the legislature. The doctrine has been modified
by the legislature, abolished by the legislature, re-
established by the legislature, and further modified by the
legislature.” [McDowell v State Hwy Comm’r, 365 Mich
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268, 271; 112 NW2d 491 (1961), quoting the brief of the
Attorney General (emphasis added).]
The Legislature has not seen fit to expand upon this
“creature of the legislature” by providing a trespass-
nuisance exception to governmental immunity for
claims against the state, and there is simply no indica-
tion that a common-law trespass-nuisance exception to
sovereign immunity was in effect at the time of the
enactment of MCL 691.1407(1).
In Ross v Consumers Power Co (On Rehearing), 420
Mich 567; 363 NW2d 641 (1984), the Supreme Court
examined MCL 691.1407(1). It first discussed the “an-
cient common-law concept” of sovereign immunity,
Ross, 420 Mich at 597, and later stated:
The first sentence of § 7 was intended to not only
restore governmental immunity to non-sovereign govern-
mental agencies, but to provide uniform treatment for
state and local agencies. Furthermore, the affirmance of
common-law sovereign immunity in the second sentence of
§ 7 was a clear directive that this Court henceforth could
not... judicially abrogate the state’s sovereign immu-
nity....
Therefore, at the time § 7 was enacted, the state was
immune from tort liability when it was engaged in the
exercise or discharge of a governmental function, unless a
statutory exception was applicable. This same immunity is
reiterated by the first and second sentences of § 7.
***
In summary, at the time § 7 was enacted and became
effective, the state enjoyed immunity from tort liability at
common law whenever it was engaged in the exercise or
discharge of a governmental function, unless a statutory
exception was applicable. This common-law sovereign im-
munity was codified by the second sentence of § 7. The
immunity granted to the state by the first sentence of § 7 is
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essentially coextensive with this common-law immunity.
We note that this interpretation furthers the Legislature’s
intent to create uniform standards of liability for state and
non-sovereign governmental agencies. [Id. at 605-606,
608.]
Ross clearly indicates that exceptions to sovereign im-
munity must be granted by the Legislature. Again, the
Legislature has not provided such an exception for
trespass-nuisance claims.
2
We thus hold that DOT was
entitled to summary disposition with regard to plain-
tiffs’ trespass-nuisance claim.
In their cross-appeal, plaintiffs claim that the trial
court should not have granted defendants summary
disposition with regard to the inverse-condemnation
claim. In reviewing a motion for summary disposition
under MCR 2.116(C)(10), this Court considers the
pleadings, depositions, admissions, and other docu-
mentary evidence in the light most favorable to the
nonmovant. Morris & Doherty, PC v Lockwood, 259
Mich App 38, 42 n 2; 672 NW2d 884 (2003). If the
evidence fails to demonstrate a genuine issue of
material fact, the movant is entitled to judgment as a
matter of law. Franchino v Franchino, 263 Mich App
172, 181; 687 NW2d 620 (2004). A genuine issue of
material fact exists when, after the court reviews the
record in the light most favorable to the nonmovant,
there remains an issue upon which reasonable minds
could differ. West v Gen Motors Corp, 469 Mich 177,
183; 665 NW2d 468 (2003).
2
Plaintiffs contend that their trespass-nuisance claim rises to the level
of an unconstitutional-taking claim and therefore cannot be barred by
sovereign immunity. We need not decide whether such a taking claim
would be exempt from sovereign immunity because, as noted later in this
opinion, plaintiffs have failed to set forth the necessary allegations to
constitute an unconstitutional-taking claim.
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“ ‘Eminent domain’ or ‘condemnation’ is the power
of a government to take private property.” Silver Creek
Drain Dist v Extrusions Div, Inc, 468 Mich 367, 373;
663 NW2d 436 (2003). The United States Constitution
precludes the federal government from taking private
property unless it is taken for a public use and with just
compensation. US Const, Am V. Similarly, the Michigan
Constitution requires that “[p]rivate property shall not
be taken for public use without just compensation.”
Const 1963, art 10, § 2. Additionally, MCL 213.55(1)
requires that, in the event the parties fail to agree with
regard to the purchase of the property, courts ascertain
and determine just compensation to be made for con-
demned property.
“An inverse or reverse condemnation suit is one
instituted by a landowner whose property has been
taken for public use without the commencement of
condemnation proceedings.” Electro-Tech, IncvHF
Campbell Co, 433 Mich 57, 88-89; 445 NW2d 61 (1989)
(citation and quotation marks omitted). “While there is
no exact formula to establish a de facto taking, there
must be some action by the government specifically
directed toward the plaintiff’s property that has the
effect of limiting the use of the property.” Dorman v
Clinton Twp, 269 Mich App 638, 645; 714 NW2d 350
(2006) (citation and quotation marks omitted). Gener-
ally, a plaintiff alleging a de facto taking or inverse
condemnation must establish (1) that the government’s
actions were a substantial cause of the decline of the
property’s value and (2) that the government abused its
powers in affirmative actions directly aimed at the
property. Hinojosa v Dep’t of Natural Resources, 263
Mich App 537, 548; 688 NW2d 550 (2004). “Further, a
plaintiff alleging inverse condemnation must prove a
casual connection between the government’s action and
the alleged damages.” Id. Additionally,
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[a]ny injury to the property of an individual which deprives
the owner of the ordinary use of it is equivalent to a taking,
and entitles him to compensation. So a partial destruction
or diminution of value of property by an act of government,
which directly and not merely incidentally affects it, is to
that extent an appropriation. [Peterman v Dep’t of Natural
Resources, 446 Mich 177, 190; 521 NW2d 499 (1994)
(citations and quotation marks omitted).]
In cases involving a “legalized nuisance,” e.g., “the
persistent passing of trains on a railroad, or planes in
the air, or vehicles on the road,” a plaintiff must allege
that the property is directly affected in a manner that is
unique or peculiar relative to the property of other
similarly situated persons. Spiek v Dep’t of Transp, 456
Mich 331, 345; 572 NW2d 201 (1998).
In Spiek, 456 Mich at 334, the plaintiffs’ residence
abutted the service drive to an interstate highway, and
they initiated an inverse-condemnation action against
the defendant, “alleging that defendant’s actions in
locating the service drive adjacent to their property had
‘so interfered with Plaintiffs’ quiet use and enjoyment
of the property as to render it worthless, and to consti-
tute a taking of property for public purpose without
payment of just compensation....’” The trial court
granted the defendant’s motion for summary disposi-
tion “ ‘as a matter of public policy.’ ” Id. at 336. This
Court reversed, concluding that the plaintiffs should
have been afforded an opportunity to establish that
their use and enjoyment of the property was affected
detrimentally to a degree greater than the public. Id.
The Supreme Court granted leave to appeal “to decide
whether noise, dust, vibration, and fumes experienced
by owners of property along an interstate freeway
constitute a taking of a recognized property interest
where the effects alleged are not unique or peculiar in
character.” Id. at 332.
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The Supreme Court opined that if “a legalized nuisance
affects all in its vicinity in common, damages generally are
not recoverable under just-compensation theory” because
such common injuries are “incidental effects not amount-
ing to an appropriation.” Id. at 345. The Court discussed
the common-law doctrine of damnum absque injuria:
“ ‘Loss, hurt, or harm without injury in the legal sense;
that is, without such breach of duty as is redressible by a
legal action. A loss or injury which does not give rise to an
action for damages against the person causing it.’ ” Id.at
346, quoting Black’s Law Dictionary (6th ed).
The Spiek Court noted that if
the plaintiff alleges that the property is directly affected in
a manner that is unique or peculiar in comparison to the
property of other similarly situated persons, the plaintiff
states a claim for which the relief sought may be granted
under well-established principles for proving the right to
compensation. [Spiek, 456 Mich at 346.]
The Court specifically explained:
The right to just compensation, in the context of an
inverse condemnation suit for diminution in value caused
by the alleged harmful affects to property abutting a public
highway, exists only where the landowner can allege a
unique or special injury, that is, an injury that is different
in kind, not simply in degree, from the harm suffered by all
persons similarly situated. While the Michigan courts have
not had the opportunity to address this issue directly in
recent years, the overwhelming weight of foreign authority
supports this conclusion, as do contemporary public policy
considerations. [Id. at 348.]
The Court opined further:
In the context of traffic flow, a degree of harm threshold,
as opposed to the well-established difference in kind
threshold, would be unworkable both in a practical sense
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and from the standpoint of public policy because it would
depend on the amount of traffic traveling a particular
highway at a particular time that may change over time
because of factors unrelated to and out of the control of the
state. For example, demographic changes and economic
changes affecting commercial and industrial development
may determine the degree of harm, rather than the actual
location of the highway in a particular place by the state.
To require the state to litigate every case in which a person
owning land abutting a public highway feels aggrieved by
changing traffic conditions would wreak havoc on the
state’s ability to provide and maintain public highways and
place within the judicial realm that which is inappropriate
for judicial remedy. Where harm is shared in common by
many members of the public, the appropriate remedy lies
with the legislative branch and the regulatory bodies
created thereby, which participate extensively in the regu-
lation of vibrations, pollution, noise, etc., associated with
the operation of motor vehicles on public highways. Only
where the harm is peculiar or unique in this context does
the judicial remedy become appropriate. [Id. at 349.]
The Supreme Court concluded that the defendant
was entitled to summary disposition because the plain-
tiffs had failed to overcome the doctrine of damnum
absque injuria by failing to “alleg[e] harm of a character
different from that suffered by all living in similar
proximity to a highway.” Id. at 350. The Court found
that the “plaintiffs’ complaint alleges the same type of
incidental and consequential harm as is experienced by
all persons similarly situated to plaintiffs in that they
reside near a public highway.” Id. The Court further
rejected the plaintiffs’ assertion “that recovery was
available if the harm suffered merely differed in degree
from the inconvenience experienced by the public at
large.” Id. The Court ultimately held:
The just-compensation requirement in the Michigan
Constitution does not require the state to compensate
every property owner living in proximity to a public high-
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way for the normal inconveniences associated therewith.
The plaintiff states a claim for which relief may be granted
only where the plaintiff alleges harm of a unique or
peculiar kind. We reverse the decision of the Court of
Appeals and reinstate the trial court’s order granting
defendant’s motion for summary disposition. [Id. at 350-
351.]
In this case, defendants used salt as a means to
prevent ice from building up on public highways and
roads. Notably, plaintiffs allege that the harm is caused
not by the act of administering salt to the highways and
roads, but as a result of traffic causing salt spray to
ultimately invade plaintiffs’ property, thereby harming
their blueberry crops. Ottawa County formed the Ot-
tawa County Road Salt Commission to identify strate-
gies to modify Ottawa County’s winter road mainte-
nance to prevent further environmental impacts related
to the application of road salt. A survey was conducted,
which estimated losses to blueberry production for
2003. The survey looked at 16 property owners with 32
farms. Fifteen farms did not provide any information
regarding losses. The other 17 farms listed losses rang-
ing from $3,000 to $200,000. Seven farms listed losses
of less than $10,000; seven farms listed losses between
$10,000 and $50,000; one farm listed losses of $80,000;
one farm listed losses of $120,000; and one farm listed
losses of $200,000. The road salt commission noted that
the environmental impact from road salt received at-
tention after blueberry growers reported damage to
blueberry bushes near roadways. The road salt commis-
sion also acknowledged:
The threat of increasing road salt usage to the blueberry
industry is not the only cause for concern. If current winter
road maintenance practices are not changed, the damage
observed to roadside trees and ornamental plants could
become more widespread. Other impacts could also become
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more pronounced. Elevated levels of chloride, for example,
have been detected in irrigation ponds adjacent to road-
ways. Rising chloride levels have also been found in
groundwater in Illinois, as well as in the Great Lakes.
While the chloride levels detected in groundwater and in
the Great Lakes are not yet believed to be harmful to
humans, some research indicates that these levels have
already altered our ecosystems. For instance, researchers
have identified the increased salinity in the Great Lakes as
a factor in the migration of some exotic species to this
region.
The road salt commission’s report, Recommendations
for Salt Management, generally focused on the environ-
mental impact on blueberry crops. Nevertheless, as
noted in the report’s facts and findings regarding im-
pacts of road salt usage:
Other environmental impacts, including damage to
other types of roadside vegetation and water resources, are
occurring or suspected of occurring as a result of road salt
usage. The effect of road salt exposure on trees is explained
in an article which appeared in Michigan Landscape Maga-
zine (See Attachment K). The impact on water resources is
documented in Table 1 and Figures 1-2.
The road salt commission also provided measures
designed to eliminate the damaging effects of road salt
exposure to blueberries by establishing windbreaks
using salt resistant tree species, placing the first row of
blueberry plantings at least 300 feet from the road,
digging irrigation ponds at the back of the field away
from roads, and improving drainage around fields.
Certainly, plaintiffs have suffered some kind of loss
as a result of the application of the road salt; however,
their claims are precluded under the common-law doc-
trine of damnum absque injuria. See Spiek, 456 Mich at
346. Ultimately, the harm is akin to that resulting from
“the amount of traffic traveling a particular highway at
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a particular time ....”Seeid. at 349. The by-product
pollution is suffered by all people owning land adjacent
to the salted roads, and the harm-causing factors are
“unrelated to and out of the control of the state.” Id.
“[A]cts done in the proper exercise of governmental
powers, and not directly encroaching upon private
property, though their consequences may impair its use,
are universally held not to be a taking within the
meaning of the constitutional provision.” Case v Sagi-
naw, 291 Mich 130, 141; 288 NW 357 (1939) (citation
and quotation marks omitted). Thus, such acts do not
entitle the property owner to compensation from the
state. Id. at 141-142.
Plaintiffs maintain that their injury is different from
other similarly situated property owners. Plaintiffs
emphasize the loss of their cash crop as compared to
other property owners’ lawns, ornamental plantings, or
incidental roadside vegetation. However, plaintiffs’ in-
jury clearly is merely of a different degree than that
suffered by the public at large and therefore is not
actionable. Spiek, 456 Mich at 350.
Affirmed in part, reversed in part, and remanded for
entry of judgment in favor of DOT. We do not retain
jurisdiction.
M
URRAY
, J., concurred.
B
ECKERING
,J.(concurring). I concur in the result
reached by the majority in this matter, but write sepa-
rately to elaborate on the majority’s analysis and why
we are compelled to dismiss plaintiffs’ claims.
In reaching its conclusion that there is no trespass-
nuisance exception to the doctrine of sovereign immu-
nity, the majority relies in part on Ross v Consumers
Power Co (On Rehearing), 420 Mich 567; 363 NW2d 641
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(1984), which predates Pohutski v City of Allen Park,
465 Mich 675; 641 NW2d 219 (2002). In Pohutski, our
Supreme Court held that the first sentence of MCL
691.1407(1) contains no trespass-nuisance exception to
governmental immunity for cities. Pohutski, 465 Mich
at 689-690. MCL 691.1407(1) provides:
Except as otherwise provided in this act, a governmental
agency is immune from tort liability if the governmental
agency is engaged in the exercise or discharge of a govern-
mental function. Except as otherwise provided in this act,
this act does not modify or restrict the immunity of the
state from tort liability as it existed before July 1, 1965,
which immunity is affirmed.
The Pohutski Court cited Ross, a pre-Hadfield
1
case, for
the propositions that because the state created the
courts, it is not subject to the courts, that the govern-
mental tort liability act “ ‘was intended to provide
uniform liability and immunity to both state and local
governmental agencies’ when involved in a governmen-
tal function,” and that by enacting the second sentence
of MCL 691.1407(1), the Legislature meant to ensure
that “ ‘by restoring to municipal corporations immu-
nity for governmental functions and making uniform
the immunity of all governmental entities for govern-
mental functions [in the first sentence], it was not
thereby waiving the state’s common-law absolute sov-
ereign immunity for non-governmental func-
tions....’”Pohutski, 465 Mich at 681-683, 693, citing
and quoting Ross, 420 Mich at 598, 605, 614, and Ross,
420 Mich at 669 (L
EVIN
, J., dissenting in part). The
Court specifically refrained, however, from interpreting
or applying the second sentence of MCL 691.1407(1),
stating that the second sentence did not apply because
1
Hadfield v Oakland Co Drain Comm’r, 430 Mich 139; 422 NW2d 205
(1988), overruled by Pohutski, 465 Mich at 695.
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the state was not a party, and therefore, it would not
“explicate fully the meaning of the second sentence” or
make any “determinations regarding common-law
[trespass-nuisance] exceptions to the state’s govern-
mental immunity.” Pohutski, 465 Mich at 688 n 1, 689.
The Court also stated that, “at most, the language of
the second sentence requires an historical analysis of
the state’s sovereign immunity, but we have no occasion
to undertake such an analysis here.” Id.at688n1
(emphasis omitted). In concluding that the second sen-
tence contains no trespass-nuisance exception to sover-
eign immunity, the majority in this case also cites Ross,
reiterating and expanding upon the propositions previ-
ously cited in Pohutski. Although Ross predated Po-
hutski and was superseded in part on other grounds by
MCL 691.1407(5), the portions of Ross cited in the
majority opinion remain good law.
I agree with the majority’s outcome primarily, how-
ever, because an historical analysis of sovereign immu-
nity before July 1, 1965, reveals no indication that a
common-law exception existed with respect to trespass-
nuisance claims against the state. As noted by the
majority, plaintiffs cite only Hadfield, 430 Mich 139, in
support of their contention that the second sentence of
MCL 691.1407(1) preserves the common-law exception
for trespass-nuisance claims against the state. The
Hadfield Court conducted an extensive historical analy-
sis in its decision; however, the 13 cases referenced in
that decision do not shed any light on the concept of
sovereign immunity. Significantly, the defendants in
those cases, which focus primarily on “nuisance”
claims, fall under the “political subdivision” definition
of MCL 691.1401(b), not the “state” definition of MCL
691.1401(c). See Pennoyer v Saginaw, 8 Mich 534 (1860)
(the defendant was a city); Sheldon v Village of Kalama-
zoo, 24 Mich 383 (1872) (the defendant was a village);
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Ashley v Port Huron, 35 Mich 296 (1877) (the defendant
was a city); Rice v City of Flint, 67 Mich 401; 34 NW 719
(1887) (the defendant was a city); Seaman v City of
Marshall, 116 Mich 327; 74 NW 484 (1898) (the defen-
dant was a city); Ferris v Detroit Bd of Ed, 122 Mich
315; 81 NW 98 (1899) (the defendant board of education
was a political subdivision); Kilts v Kent Co Bd of
Supervisors, 162 Mich 646; 127 NW 821 (1910) (the
defendant county board of supervisors was a political
subdivision); Attorney General, ex rel Wyoming Twp v
Grand Rapids, 175 Mich 503; 141 NW 890 (1913)
(litigation between municipalities); Donaldson v City of
Marshall, 247 Mich 357; 225 NW 529 (1929) (the
defendant was a city); Robinson v Wyoming Twp, 312
Mich 14; 19 NW2d 469 (1945) (the defendant was a
township); Rogers v Kent Co Bd of Co Rd Comm’rs, 319
Mich 661; 30 NW2d 358 (1948) (the defendant was a
political subdivision); Defnet v Detroit, 327 Mich 254; 41
NW2d 539 (1950) (the defendant was a city); Herro v
Chippewa Co Rd Comm’rs, 368 Mich 263; 118 NW2d
271 (1962) (the defendant was a political subdivision).
As such, the defendants in those cases could not be
afforded sovereign immunity. See Myers v Genesee Co
Auditor, 375 Mich 1, 6; 133 NW2d 190 (1965) (“Sover-
eign immunity is a specific term limited in its applica-
tion to the State and to the departments, commissions,
boards, institutions, and instrumentalities of the
State.”) (emphasis omitted). Plaintiffs cite no caselaw
establishing that any exceptions to governmental im-
munity with respect to political subdivisions before
1965 are to be imputed to sovereign immunity as well.
Additionally, I note that footnote 2 of the majority
opinion briefly addresses plaintiffs’ argument that their
trespass-nuisance claim rises to the level of an
unconstitutional-taking claim and is, therefore, exempt
from sovereign immunity. The footnote states: “We need
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not decide whether such a taking claim would be exempt
from sovereign immunity because, as noted later in this
opinion, plaintiffs have failed to set forth the necessary
allegations to constitute an unconstitutional-taking
claim.” While I agree with this statement, it is worth
noting that while trespass-nuisance and unconstitutional-
taking claims are similar, they remain distinct actions.
In Hinojosa v Dep’t of Natural Resources, 263 Mich
App 537; 688 NW2d 550 (2004), this Court discussed
the distinction between claims for trespass-nuisance
and unconstitutional taking. The Hinojosa Court first
discussed the applicability of Buckeye Union Fire Ins Co
v Michigan, 383 Mich 630; 178 NW2d 476 (1970),
2
noting:
2
In Buckeye, 383 Mich at 632, on April 10, 1963, a fire started in
buildings owned by the state and spread to neighboring properties. The
plaintiffs sued the state, asserting that the condition of the buildings
“constituted a nuisance to the premises and properties insured by
plaintiffs.” Id. The trial court concluded that there was a nuisance, but
that the state had sovereign immunity as to the nuisance action. Id.at
633. In reversing the trial court and the Court of Appeals, our Supreme
Court essentially converted the plaintiffs’ nuisance claim to an
unconstitutional-taking claim. The Court noted that sovereign immunity
does not apply to taking claims, id. at 641, and justified its holding on
public policy grounds, stating: “Courts of other states have applied
similar provisions in their state constitutions to factual situations
corresponding to those of this case,” id. at 642. The Court quoted the
Massachusetts Supreme Judicial Court:
“This private nuisance was nonetheless one merely because the
city had acquired the lot through foreclosure for nonpayment of
taxes. Public policy in a civilized community requires that there be
someone to be held responsible for a private nuisance on each piece
of real estate, and, particularly in an urban area, that there be no
oases of nonliability where a private nuisance may be maintained
with impunity.” [Id. at 643-644, quoting Kurtigian v City of
Worcester, 348 Mass 284, 291; 203 NE2d 692 (1965).]
Our Supreme Court held that “[t]here is no sovereign immunity appli-
cable to a situation of nuisance as we have in this case.” Buckeye, 383
Mich at 644.
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The liability imposed on the state [in Buckeye] was for
the tort of nuisance, not to justly compensate an owner for
the taking of private property for public use. Nevertheless,
the Buckeye Court relied on the Taking Clause as its
rationale for concluding that common-law sovereign immu-
nity did not shield the state from liability for nuisance.
[Hinojosa, 263 Mich App at 543.]
This Court also noted:
Regarding Buckeye, the Hadfield Court observed that,
“although the plaintiff had alleged nuisance and this Court
found nuisance, the holding was premised on the fact that
an unconstitutional taking had occurred,” and that the
Buckeye Court treated the two causes of action as synony-
mous....ButtheCourt also noted that “[d]irect reliance
on [the Taking Clause] should not be confused with the
assertion of the trespass-nuisance exception...[because]
other trespass-nuisance cases that cited the taking provi-
sion of the constitution merely employed that provision as
a rationale for the judicially created rule that would impose
liability in a tort setting involving governmental immu-
nity.”...OurSupreme Court later would again emphasize
that a constitutional taking and the tort of trespass-
nuisance are distinct actions. [Id. at 545-546, quoting
Hadfield, 430 Mich at 165 n 10, 168.]
This Court underscored that although judicial decisions
have closely associated trespass-nuisance with the Tak-
ing Clause, the former action remains a tort. Hinojosa,
263 Mich App at 546. See also Peterman v Dep’t of
Natural Resources, 446 Mich 177, 206-207; 521 NW2d
499 (1994) (a constitutional taking and the tort of
trespass-nuisance are distinct actions).
The Hinojosa Court concluded:
In the case at bar, the trial court correctly dismissed
plaintiffs’ tort claim of trespass-nuisance because our Su-
preme Court in Pohutski overruled Hadfield, finding that
“the plain language of the governmental tort liability act
does not contain a trespass-nuisance exception to govern-
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mental immunity.” Pohutski, supra at 689-690. But the
majority in Pohutski pointedly declined to address whether
facts that previously might have supported liability for a
trespass-nuisance could establish an unconstitutional tak-
ing. The Pohutski Court stated:
“The parties have addressed whether trespass nuisance
is not a tort within the meaning of the governmental
immunity statute, but rather an unconstitutional taking of
property that violates Const 1963, art 10, § 2. The trial
courts in these cases have yet to address the taking claims.
Therefore, we decline to discuss those claims at this time.”
[Id. at 699.]
Thus, although presented the opportunity, our Supreme
Court declined to adopt Justice K
ELLY
’s views that Buckeye
“acknowledged that the trespass-nuisance exception has a
constitutional basis,” and that “[g]overnmental immunity
is not a defense to a constitutional tort claim, hence not to
a claim based on trespass-nuisance.” Pohutski, supra at
709 (K
ELLY
, J., dissenting), citing Thom v State Hwy
Comm’r, 376 Mich 608, 628; 138 NW2d 322 (1965). We
conclude, therefore, that the issue whether trespass-
nuisance as alleged here may constitute a constitutional
taking was not decided in Buckeye. Hence, we must con-
sider other decisions addressing the application of the
Taking Clause. [Hinojosa, 263 Mich App at 547-548.]
The Hinojosa Court held that the plaintiffs failed to
state a cause of action for a “ ‘taking’ ” or “ ‘inverse
condemnation.’ ” Id. at 548.
In sum, courts of this state have held that trespass-
nuisance and unconstitutional taking are distinct ac-
tions. Our Supreme Court has not yet addressed
whether facts that might establish liability for trespass-
nuisance could establish an unconstitutional-taking
claim. See id. at 547. It is clear, however, that while our
Legislature has the constitutional authority to modify
or abolish the ability to bring trespass-nuisance claims
against the state, an unconstitutional-taking action
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may not be limited except as provided by the Michigan
Constitution. [Id. at 546.] Thus, if plaintiffs alleged a
taking, they may have a cause of action. As stated by the
majority, however, we need not address that issue
because plaintiffs failed to set forth the allegations
necessary to establish an unconstitutional taking.
Finally, in regard to plaintiffs’ inverse-condemnation
claim, I agree with the majority’s conclusion that the
difference between the injuries suffered by plaintiffs
and similarly situated property owners is best catego-
rized as one of degree, and not of kind, and therefore,
plaintiffs’ claim must fail. I acknowledge, however, that
this is a close call requiring careful consideration.
The majority compares this case to Spiek v Dep’t of
Transp, 456 Mich 331, 333-334; 572 NW2d 201 (1998),
wherein the plaintiffs brought an inverse-condemnation
action against the defendant for locating an interstate
highway service drive adjacent to their residential prop-
erty. The plaintiffs’ complaint alleged that the service
drive produced
“an essential change in the neighborhood [that]... vio-
lated restrictive covenants in the subdivision... [and]
caused grave and serious damage to the value of the...
property by increasing dramatically the levels of noise,
vibrations, pollution and dirt in the once-residential
area...[thus] destroying the desirability of the...prop-
erty as an area for living and...destroying the acceptabil-
ity of the property for residential purposes.” [Id. at 334.]
As noted in the majority opinion for this case, the Spiek
Court held that damages are not recoverable for a
“legalized nuisance” such as “the persistent passing of
trains on a railroad, or planes in the air, or vehicles on
the road” unless “the plaintiff alleges that the property
is directly affected in a manner that is unique or
peculiar in comparison to the property of other simi-
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larly situated persons....”Id. at 345-346. The plaintiff
must allege an injury “different in kind, not simply in
degree, from the harm suffered by all persons similarly
situated.” Id. at 348. Significantly, the Spiek Court
further stated:
In the context of traffic flow, a degree of harm threshold,
as opposed to the well-established difference in kind
threshold, would be unworkable both in a practical sense
and from the standpoint of public policy because it would
depend on the amount of traffic traveling a particular
highway at a particular time that may change over time
because of factors unrelated to and out of the control of the
state. For example, demographic changes and economic
changes affecting commercial and industrial development
may determine the degree of harm, rather than the actual
location of the highway in a particular place by the state.
To require the state to litigate every case in which a person
owning land abutting a public highway feels aggrieved by
changing traffic conditions would wreak havoc on the
state’s ability to provide and maintain public highways and
place within the judicial realm that which is inappropriate
for judicial remedy. Where harm is shared in common by
many members of the public, the appropriate remedy lies
with the legislative branch and the regulatory bodies
created thereby, which participate extensively in the regu-
lation of vibrations, pollution, noise, etc., associated with
the operation of motor vehicles on public highways. Only
where the harm is peculiar or unique in this context does
the judicial remedy become appropriate. [Id. at 349.]
The Spiek Court reversed the decision of the Court of
Appeals and reinstated the Court of Claims order grant-
ing summary disposition to the defendant, concluding
that the plaintiffs had failed to state a claim upon which
relief could be granted because they did not allege harm
to their property that differed “in kind from the harm
suffered by all living in proximity to a public highway in
Michigan.” Id. at 350. Rather, the plaintiffs’ complaint
alleged “the same type of incidental and consequential
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harm as is experienced by all persons similarly situated
to plaintiffs in that they reside near a public highway.”
Id.
In this case, plaintiffs allege that the spreading of salt
on public highways and primary county roads adjacent
to their blueberry fields ultimately results in reduced
blueberry production. According to plaintiffs, after the
salt is spread, passing vehicles and the wind throw salt
water onto their fields, causing damage to blueberry
bushes and reduced production from those bushes. The
spreading of salt on the roads may be categorized as a
“legalized nuisance” comparable to locating a highway
service drive near residential property, resulting in
increased levels of noise, vibration, pollution, and dirt
from traffic flow. See id. at 345. Therefore, like the
plaintiffs in Spiek, plaintiffs in this case must allege an
injury “different in kind, not simply in degree, from the
harm suffered by all persons similarly situated.” Id.at
348. Plaintiffs’ injury must be unique or peculiar. See
id. at 346.
As our Supreme Court articulated in Spiek, it would
be unworkable to apply a degree-of-harm threshold,
rather than a difference-in-kind threshold, in the con-
text of traffic flow. Id. at 349. It would also be unwork-
able under the facts of this case. The road commissions
responsible for spreading salt do so to prevent the
formation of ice on public highways and primary county
roads during the winter months. The amount of salt
spread on the roads directly correlates to the severity of
the weather. According to plaintiffs, once the salt is
spread, salt water is thrown onto their fields by passing
vehicles and the wind. Thus, the degree of harm suf-
fered by plaintiffs is largely dependent on the weather
over the course of the winter, which is out of defen-
dants’ control, and traffic flow, which may also be
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affected by factors out of defendants’ control. Requiring
the state and county road commissions to litigate every
case in which vegetation is damaged by salt spray would
seriously impede their ability to protect Michigan’s
citizens from the hazards presented by ice-covered
roads. I agree with the Spiek Court that under facts
such as these, a legislative remedy is more appropriate
than a judicial remedy. The legislative branch is the
appropriate branch to weigh the safety hazards pre-
sented by ice-covered roads against the environmental
and economic impact of salt usage and, if deemed
necessary, order that the spreading of salt be reduced or
replaced with an alternative method of deicing the
roads.
Plaintiffs claim that the harm they suffer is of a
different kind than the harm suffered by those similarly
situated. Plaintiffs liken their situation to that experi-
enced by the respondents in United States v Causby,
328 US 256, 258-259; 66 S Ct 1062; 90 L Ed 1206 (1946),
wherein the persistent intrusion of low-flying army and
navy aircraft accessing the glide path of a runway by
passing approximately 83 feet over the respondents’
property, 67 feet above their house, 63 feet above the
barn, and 18 feet above the highest tree forced the
respondents to give up using their property as a com-
mercial chicken farm. The United States Supreme
Court held that such conduct (which involved traveling
below the navigable airspace of the United States)
3
amounted to a physical invasion of the property enti-
tling the respondents to compensation for the taking of
their property. Id. at 265-267. Plaintiffs argue that the
respondents in Causby prevailed because their harm
3
“[N]avigable airspace” was then defined as “ ‘airspace above the
minimum safe altitudes of flight prescribed by the Civil Aeronautics
Authority.’ ” Causby, 328 US at 263, quoting 49 USC 180.
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was distinguishable from others who suffered the mere
normal inconveniences of modern air travel over their
lands at higher altitudes. Plaintiffs contend that, like
the respondents in Causby, they have suffered a unique
injury, namely the destruction of their crops hundreds
of feet from the roadsides as compared to other property
owners who have suffered the incidental burning of
some of their lawns. But, unlike the respondents in
Causby, plaintiffs do not suggest that their properties
have been singled out in some way. Rather, they claim
that the harm they suffer—damage to their blueberry
bushes—is unique because it is economic in nature.
Plaintiffs engage in commercial blueberry production,
and when their bushes are damaged and rendered less
productive, the damage affects plaintiffs’ economic vi-
ability. While there is merit to the argument that the
harm suffered by plaintiffs is different from that suf-
fered by a property owner who, for example, has lost
merely a section of lawn or decorative plantings as a
result of salt spray, I must agree with the majority that
the difference between the injuries is best categorized
as one of degree, and not of kind. First, as noted in the
majority opinion, there is evidence that blueberry
bushes are not the only type of vegetation affected by
the spreading of salt on the roads. The report issued by
the road salt commission indicates that salt usage
damages roadside trees and ornamental plants. It may
also negatively affect our ecosystems by raising the level
of chloride in nearby bodies of water. Therefore, it is
reasonable to presume that persons who use their
roadside properties for the commercial production of
trees or ornamental plants, or any other type of com-
mercial enterprise that may be negatively affected by
the spreading of salt on the roads, would suffer the
same kind of injury as plaintiffs. Moreover, in cases
where a property owner loses merely decorative plant-
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ings or any other type of vegetation that was not
intended to produce a profit, the owner loses not only
the value of that particular vegetation, which may be
substantial if, for example, the owner has costly orna-
mental plantings along the roadside, but also the option
to use the roadside property to grow any new vegetation
that would be damaged by salt spray, including cash
crops.
Because the harm suffered by plaintiffs differs only
in degree, and not in kind, from the harm suffered by
those similarly situated, I agree with the majority that
plaintiffs’ inverse-condemnation claim must fail.
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OSHTEMO CHARTER TOWNSHIP v
KALAMAZOO COUNTY ROAD COMMISSION
Docket No. 292980. Submitted March 2, 2010, at Grand Rapids. Decided
April 29, 2010, at 9:05 a.m.
Oshtemo Charter Township brought an action in the Kalamazoo
Circuit Court against the Kalamazoo County Road Commission,
Alamo Township, and Kalamazoo Charter Township, seeking, in
part, a preliminary injunction that would stay the decision of the
road commission to void certain parts of plaintiff’s Truck Route
Ordinance No. 478 pursuant to MCL 257.726(3) and prevent heavy
trucks from using three streets. The trial court, Alexander C.
Lipsey, J., granted a preliminary injunction after finding that
plaintiff would likely prevail on the merits of the case because, as
a result of an apparent typographical error in the last sentence of
MCL 257.726(3), the road commission did not have the authority
to void the disputed parts of plaintiff’s ordinance. The road
commission appealed by leave granted, and Oshtemo Charter
Township cross-appealed.
The Court of Appeals held:
The trial court misinterpreted MCL 257.726(3). A typographi-
cal error exists on the face of the statute. Although the trial court
correctly observed that, as a general rule, clear statutory language
must be enforced as written, the trial court overlooked the
interpretive doctrine of statutory construction known as scriven-
er’s error. Application of the doctrine leads to the conclusion that
the reference to MCL 247.671 to MCL 247.675 in MCL 257.726(3)
was a product of a clerical error that provides no means to
effectuate the text of MCL 257.726(3) and renders the statute
nugatory. By construing the phrase “MCL 247.671 to 247.675” as
“MCL 247.651 to 247.675” under the scrivener’s error doctrine,
the provisions of the statute may be given effect and not rendered
nugatory. The preliminary injunction must be vacated, and the
case must be remanded to the trial court for further proceedings.
Vacated and remanded.
M
ETER
,P.J., concurring, agreed with the majority’s analysis
concerning the doctrine of scrivener’s error as applied in this case,
but wrote separately to state that the same result could be
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obtained by application of additional principles of statutory con-
struction that are grounded in Michigan caselaw, including the
principle that apparently plain statutory language can be rendered
ambiguous by its interaction with other statutes. An ambiguity
exists because the provisions referred to in MCL 257.726(3)
provide no means to effectuate the text of the statute, whereas the
provisions found in MCL 247.651 through MCL 247.655 do. A
construction of MCL 257.726(3) that substitutes “MCL 247.651”
for “MCL 247.671” reflects a commonsense construction that best
accomplishes the purpose of MCL 257.726(3). The trial court’s
enforcement of MCL 257.726(3) as written rendered the statute
nugatory and produced absurd consequences. Vacation of the
preliminary injunction and a remand for further proceedings is
appropriate even without application of the doctrine of scrivener’s
error.
1. S
TATUTES —
D
OCTRINE OF
S
CRIVENER
’
S
E
RROR
.
The interpretive doctrine of statutory construction known as scriv-
ener’s error may be applied when on the face of a statute it is clear
that a mistake of expression or clerical error, rather than of
legislative wisdom, has been made; if the objective import of the
statute is clear, it is not contrary to sound principles of statutory
interpretation to give the totality of the context precedence over a
single mistake of expression or clerical error.
2. S
TATUTES —
D
OCTRINE OF
S
CRIVENER
’
S
E
RROR —
H
IGHWAYS —
W
ORDS AND
P
HRASES —
C
OUNTY
P
RIMARY
R
OADS
.
Use of the phrase “MCL 247.671 to 247.675” in MCL 257.726(3),
which was meant to incorporate the provisions of 1951 PA 51 that
pertain to the designation of county primary roads, was a clerical
error, but under the interpretive doctrine of statutory construction
known as scrivener’s error, the text of MCL 257.726(3) may be
given effect if the phrase is interpreted instead as “MCL 247.651 to
247.675.”
Fahey Schultz Burzych Rhodes PLC (by William K.
Fahey and Stephen J. Rhodes) and James W. Porter, P.C.
(by James W. Porter), for Oshtemo Charter Township.
Smith Haughey Rice & Roegge (by Jon D. Vander
Ploeg, Charles F. Behler, and Karl W. Butterer, Jr.) and
Lewis Reed & Allen, P.C. (by Stephen Denenfeld), for the
Kalamazoo County Road Commission.
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Ford, Kriekard, Soltis & Wise, P.C. (by Robert A.
Soltis), for Alamo Township.
Bauckham, Sparks, Lohrstorfer, Thall & Seeber, P.C.
(by Kenneth C. Sparks), for Kalamazoo Charter Town-
ship.
Before: M
ETER
,P.J., and Z
AHRA
and D
ONOFRIO
,JJ.
P
ER
C
URIAM
. Defendant Kalamazoo County Road
Commission appeals by leave granted an order that
granted plaintiff, Oshtemo Charter Township, a pre-
liminary injunction enjoining the implementation of
the road commission’s decision to void a portion of
plaintiff’s truck route ordinance. Plaintiff cross-
appealed. We hold that the trial court misinterpreted
MCL 257.726(3), the statute authorizing the road com-
mission to resolve the dispute among several townships
in this matter. We conclude that a typographical error
exists on the face of MCL 257.726(3). The trial court
erred when it failed to employ the interpretive doctrine
known as scrivener’s error when construing MCL
257.726(3). We vacate the preliminary injunction and
remand this case for further proceedings.
On March 27, 2007, plaintiff adopted its Truck Route
Ordinance No. 478. The ordinance designates, “to the
exclusion of all other roads,” certain specific streets
traversing the township for use by heavy trucks, includ-
ing double-trailer gravel trucks. It also expressly bars
any person from operating “a truck or truck-tractor and
semi-trailer or truck-tractor and trailer combination, or
truck and trailer combination with a combined carrying
capacity of over five (5) tons in Oshtemo Charter
Township on any road other than a designated truck
route,” except as expressly provided elsewhere in the
ordinance. According to the road commission, this or-
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dinance bars double-trailer gravel trucks from using
three streets within plaintiff township: Tenth Street,
Ninth Street, and H Avenue. This prohibition of the use
of these three streets has the effect of routing the truck
traffic to roads in defendants Alamo Township and
Kalamazoo Charter Township and off the roads that
provide the most direct routes of access to US-131.
Plaintiff’s ordinance became effective on May 4, 2007.
Subsequently, the Michigan Legislature enacted 2008
PA 539, which amended MCL 257.726(3), effective
January 13, 2009, to provide:
If a township has established any prohibition or limita-
tion under subsection (1) [on the operation of trucks or
other commercial vehicles] on any county primary road
that an adjoining township determines diverts traffic onto
a border highway or street shared by the township and the
adjoining township, the adjoining township may submit a
written objection to the county road commission having
jurisdiction over the county primary road, along with a
copy to the township that established the prohibition or
limitation, on or before the later of March 1, 2009, or 60
days after the township approves the prohibition or limi-
tation. The written objection shall explain how the prohi-
bition or limitation diverts traffic onto the border highway
or street shared by the township and the adjoining town-
ship. The county road commission shall then investigate
the objection. The township and adjoining township shall
cooperate with that investigation and negotiate in good
faith to resolve the objection. If the objection is not resolved
within 60 days after the township receives the copy of the
written objection, the county road commission has the
authority to, and shall, either approve or void the prohibi-
tion or limitation that is the subject of the objection within
60 days thereafter, which decision shall be final. For
purposes of this subsection, “county primary road” means
a highway or street designated as a county primary road
pursuant to 1951 PA 51, MCL 247.671 to 247.675.
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Significantly, a review of MCL 247.671 to 247.675
reveals a complete absence of any provisions regarding
the designation of a highway or street as a county
primary road.
In February 2009, both Alamo Township and
Kalamazoo Charter Township filed written objections
with the road commission with respect to plaintiff’s
truck route ordinance. When the three townships in-
volved in this case could not resolve the dispute, the
road commission held a public hearing on the objections
and, pursuant to MCL 257.726(3), declared the truck
route ordinance void with regard to the three contested
streets and opened those streets to use by heavy trucks.
Plaintiff commenced the present lawsuit in the Kalama-
zoo Circuit Court on June 4, 2009, with the filing of a
10-count complaint, which sought, in part, the issuance
of a preliminary injunction that would stay the road
commission’s decision and prevent heavy trucks from
using the contested streets.
The trial court heard plaintiff’s request for a prelimi-
nary injunction on June 22, 2009. Following the close of
arguments, the trial court granted plaintiff’s request
for a preliminary injunction from the bench. The trial
court began its bench ruling by observing that plain-
tiff’s entitlement to the requested injunction depended
on the results of the balancing of four factors: (1) the
likelihood that the applicant will prevail on the merits;
(2) a demonstration that the applicant will suffer ir-
reparable injury if the relief is not granted; (3) whether
harm to the applicant in the absence of temporary relief
outweighs the harm to the opposing party if relief is
granted; and (4) harm to the public interest if the
injunction is issued. The trial court then concluded that
factors (2), (3), and (4) were a “wash” and “equally
balanced out” between the opposing sides. It opined
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that “the real question is[,] given that everything else is
equally balanced out, does plaintiff have the likelihood
of success on the merits.”
The trial court, focusing on an apparent typographi-
cal error in the last sentence of MCL 257.726(3),
resolved this question as follows:
The Court is aware that there is—there are notes from
the complier [sic] who does in fact provide that the desti-
nation [sic] set forth in the ordinance [sic], in fact is either
typographical or some clerical error, and that the legisla-
ture could in fact have, or should [have] probably meant to
include a different reference with regard to the definition
of county primary roads.
The court is then—thus faced with the very interesting
dilemma of interpreting the statue [sic] in a way that
actually provides for justification for the Road Commission
action. Or interpreting the statue [sic] as it’s written with
some questions in terms of whether the Road Commission
had the authority to void the ordinance, as it presently
existed at the time of the hearings in May.
This court after much deliberation and recognizing, to
be honest, that either status quo is not going to substan-
tially impact the citizens of these communities to any great
extent. It believes that it should follow the lead of our
Supreme Court and hold that the language that is written
is the language that is written.
Therefore, the court does believe as written there is a
substantially [sic] likelihood that Osthemo [sic] will be
successful at the—on the merits, and that absent amend-
ment the County Road Commission would not have author-
ity to mediate or determine the relative positions of the
townships in this matter.
Therefore, having determined that three, four—two,
three and four are a wash in terms of the balances that are
necessary, and having determined that as to item one there
is a likelihood of success on the part [of] Osthemo [sic]. The
court will grant a preliminary injunction in this matter
pending further action in court.
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The trial court then gave effect to its bench ruling by
entering an order granting a preliminary injunction on
June 22, 2009.
On appeal, the road commission argues that the trial
court erred as a matter of law when it found that
plaintiff is likely to prevail because a typographical
error contained in MCL 257.726(3) removed from the
road commission the power to nullify plaintiff’s ordi-
nance.
This Court reviews a trial court’s decision to issue a
preliminary injunction for an abuse of discretion. Ther-
matool Corp v Borzym, 227 Mich App 366, 372; 575
NW2d 334 (1998). We review de novo questions of
statutory interpretation. See City of Romulus v Dep’t of
Environmental Quality, 260 Mich App 54, 64; 678
NW2d 444 (2003).
MCL 257.726(1)(c) authorizes local authorities, such
as plaintiff township, to enact ordinances that desig-
nate only certain highways or streets within their
jurisdiction for use by trucks or other commercial
vehicles. MCL 257.726(3) establishes a procedure by
which townships that adjoin a township that enacts
such an ordinance may challenge the ordinance when
the prohibition or limitation placed on “any county
primary road...diverts traffic onto a border highway
or street shared by the township and the adjoining
township....”
The trial court based its decision that plaintiff was
likely to prevail on the merits on a literal application of
the language of MCL 257.726(3). The trial court con-
cluded that, in accordance with the last sentence of the
statute, the road commission was authorized to resolve
conflicts over prohibitions or limitations placed on a
street or highway designated as a “county primary
road” pursuant to “1951 PA 51, MCL 247.671 to
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247.675.” The trial court then noted that the statutory
provisions codified at MCL 247.671 through MCL
247.675 contain no “county primary road designa-
tion[s]” and, therefore, the three streets at issue could
not be designated “county primary road[s]” pursuant to
MCL 247.671 to MCL 247.675. If the streets at issue
were not “county primary road[s],” then the road
commission lacked the authority to nullify any portion
of plaintiff’s truck route ordinance.
The trial court correctly observed that, as a general
rule, clear statutory language must be enforced as
written. Fluor Enterprises, Inc v Dep’t of Treasury, 477
Mich 170, 174; 730 NW2d 722 (2007). What the trial
court overlooked, however, is the interpretive doctrine
of statutory construction known as scrivener’s error. In
his book, A Matter of Interpretation: Federal Courts and
the Law (New Jersey: Princeton University Press,
1997), pp 20-21, Justice Antonin Scalia described the
doctrine as follows:
I acknowledge an interpretive doctrine of what the old
writers call lapsus linguae (slip of the tongue), and what
our modern cases call “scrivener’s error,” where on the
very face of the statute it is clear to the reader that a
mistake of expression (rather than of legislative wisdom)
has been made. For example, a statute may say “defen-
dant” when only “criminal defendant” (i.e., not “civil
defendant”) makes sense. The objective import of such a
statute is clear enough, and I think it not contrary to sound
principles of interpretation, in such extreme cases, to give
the totality of context precedence over a single word.
[Citations omitted.]
Applying this doctrine to the case here, we conclude
that it is apparent that a typographical error exists in
MCL 257.726(3).
MCL 257.726(3) applies, in accordance with its plain
language, to challenges raised to prohibitions or limita-
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tions placed on a “county primary road.” The statute
defines the term “county primary road” as “a highway
or street designated as a county primary road pursuant
to 1951 PA 51, MCL 247.671 to 247.675.” (Emphasis
added.) However, MCL 247.671 repeals all acts and
portions of acts that are inconsistent with 1951 PA 51.
MCL 247.672 establishes the effective date of the act as
June 1, 1951. MCL 247.673 precludes the act from
taking effect unless Senate Bill No. 41 of the 1951
session is enacted into law and becomes effective. MCL
247.674 empowers the state transportation commission
to issue certain types of bonds. Finally, MCL 247.675(1)
establishes a truck safety fund and MCL 247.675(2)
establishes a truck safety commission that is to “control
the expenditures of the truck safety fund” and ensure
that the funds are spent in the manners authorized by
MCL 247.675(4).
A further review of 1951 PA 51 reveals that the
provisions governing the designation of county primary
roads are set forth in §§ 1 through 5 of the act, MCL
247.651 through MCL 247.655. A juxtaposition of the
provisions of MCL 247.651 through MCL 247.655
against the provisions of MCL 247.671 through MCL
247.675 makes clear that one of the statutory refer-
ences found in the last sentence of MCL 257.726(3) is
the product of a clerical error, i.e., there was an acci-
dental substitution of a “7” for a “5” in the first
statutory citation, MCL 247.671. Significantly, the pro-
visions referred to in MCL 257.726(3) provide no means
to effectuate the text of MCL 257.726(3), whereas the
provisions found in MCL 247.651 to MCL 247.655 do.
By construing the phrase “MCL 247.671 to 247.675”
as “MCL 247.651 to 247.675,” the provisions found in
1951 PA 51 that pertain specifically to the designation
of county primary roads are thus incorporated into
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MCL 257.726(3). The inclusion of the provisions found
at MCL 247.651 to MCL 247.655 is also consistent with
the overall text of MCL 257.726(3). The structure of the
last sentence of MCL 257.726(3) indicates that the
citation that follows the public act citation was meant to
be a parallel citation that provides the statutory equiva-
lent to the public act citation; 1951 PA 51 is codified as
MCL 247.651 through MCL 247.675. Furthermore, the
last sentence of MCL 257.726(3) clearly indicates that
the statutory reference contained therein was meant to
include the provisions within 1951 PA 51 that provide
for the designation of a highway or street as a county
primary road. The text of MCL 257.726(3) clearly
reflects the Legislature’s intent to create a process by
which disputes arising from prohibitions or limitations
placed on county primary roads are resolved.
The trial court’s conclusion that it had to enforce
MCL 257.726(3) as written renders MCL 257.726(3)
nugatory because the provisions cited do not pertain to
the designation of county primary roads; therefore,
absent a means to determine whether the highway or
street at issue constitutes a county primary road, MCL
257.726(3) cannot be applied to resolve any dispute
arising from a prohibition or limitation placed on any
highway or street. A court should avoid assigning any
construction to a statute that renders any part of the
statute nugatory. Jenkins v Patel, 471 Mich 158, 167;
684 NW2d 346 (2004).
The trial court’s assessment of plaintiff’s likelihood
of success was predicated on an error in statutory
construction. Accordingly, we vacate the grant of a
preliminary injunction and remand this case for further
proceedings. We need not address the additional issues
raised on appeal because they are not yet ripe for
review.
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We vacate the preliminary injunction and remand for
further proceedings consistent with this opinion. We do
not retain jurisdiction.
M
ETER
,P.J. (concurring). While I concur in the ma-
jority’s analysis concerning the doctrine of scrivener’s
error as applied to this case, I write separately to
express my opinion that the same result may be ob-
tained using the typical principles of statutory con-
struction as set forth in Michigan caselaw.
At issue here is the trial court’s issuance of a prelimi-
nary injunction. A trial court must consider the follow-
ing four factors when deciding whether to issue a
preliminary injunction:
(1) harm to the public interest if the injunction issues;
(2) whether harm to the applicant in the absence of
temporary relief outweighs the harm to the opposing party
if relief is granted; (3) the likelihood that the applicant will
prevail on the merits; and (4) a demonstration that the
applicant will suffer irreparable injury if the relief is not
granted. [Thermatool Corp v Borzym, 227 Mich App 366,
376; 575 NW2d 334 (1998).]
The decision of the trial court “must not be arbitrary and
must be based on the facts of the particular case.” Id.
This appeal centers on whether the trial court cor-
rectly evaluated plaintiff’s likelihood of prevailing on
the merits—factor 3 from Thermatool Corp—and the
resolution of this issue depends on whether the trial
court correctly construed MCL 257.726(3). I find that
the trial court did not correctly construe the statute
both because of the doctrine of scrivener’s error (as
adequately set forth in the majority opinion and not
repeated here) and, alternatively, because of additional
principles of statutory construction that are grounded
in Michigan caselaw.
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MCL 257.726(3) provides:
If a township has established any prohibition or limita-
tion under subsection (1) [on the operation of trucks or
other commercial vehicles] on any county primary road
that an adjoining township determines diverts traffic onto
a border highway or street shared by the township and the
adjoining township, the adjoining township may submit a
written objection to the county road commission having
jurisdiction over the county primary road, along with a
copy to the township that established the prohibition or
limitation, on or before the later of March 1, 2009, or 60
days after the township approves the prohibition or limi-
tation. The written objection shall explain how the prohi-
bition or limitation diverts traffic onto the border highway
or street shared by the township and the adjoining town-
ship. The county road commission shall then investigate
the objection. The township and adjoining township shall
cooperate with that investigation and negotiate in good
faith to resolve the objection. If the objection is not resolved
within 60 days after the township receives the copy of the
written objection, the county road commission has the
authority to, and shall, either approve or void the prohibi-
tion or limitation that is the subject of the objection within
60 days thereafter, which decision shall be final. For
purposes of this subsection, “county primary road” means
a highway or street designated as a county primary road
pursuant to 1951 PA 51, MCL 247.671 to 247.675.
As noted in the majority opinion:
The trial court based its decision that plaintiff was likely
to prevail on the merits on a literal application of the
language of MCL 257.726(3). The trial court concluded
that, in accordance with the last sentence of the statute,
the road commission was authorized to resolve conflicts
over prohibitions or limitations placed on a street or
highway designated as a “county primary road” pursuant
to “1951 PA 51, MCL 247.671 to 247.675.” The trial court
then noted that the statutory provisions codified at MCL
247.671 through MCL 247.675 contain no “county primary
road designation[s]” and, therefore, the three streets at
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issue could not be designated “county primary road[s]”
pursuant to MCL 247.671 to MCL 247.675. If the streets at
issue were not “county primary road[s],” then the road
commission lacked the authority to nullify any portion of
plaintiff’s truck route ordinance. [Ante at 302-303.]
I find that the construction afforded the last sentence
of MCL 257.726(3) by the trial court violated principles
of statutory construction as set forth by the law of our
state.
The trial court correctly noted that clear statutory
language must be enforced as written. Fluor Enter-
prises, Inc v Dep’t of Treasury, 477 Mich 170, 174; 730
NW2d 722 (2007). However, the trial court failed to
acknowledge the principle that “apparently plain statu-
tory language can be rendered ambiguous by its inter-
action with other statutes.” Ross v Modern Mirror &
Glass Co, 268 Mich App 558, 562; 710 NW2d 59 (2005).
Here, when MCL 257.726(3) is read in conjunction with
MCL 247.671 through MCL 247.675, as referenced in
MCL 257.726(3), an ambiguity arises in MCL
257.726(3).
MCL 257.726(3) applies to challenges raised to pro-
hibitions or limitations placed on a “county primary
road.” “County primary road” is defined in MCL
257.726(3) as “a highway or street designated as a
county primary road pursuant to 1951 PA 51, MCL
247.671 to 247.675.” (Emphasis added.) A review of
MCL 247.671 to 247.675 reveals the absence of any
provisions regarding the designation of a highway or
street as a county primary road. The provisions govern-
ing the designation of county primary roads are instead
set forth in §§ 1 through 5 of 1951 PA 51: MCL 247.651
through MCL 247.655. Thus, an ambiguity exists be-
cause the provisions referred to in MCL 257.726(3)
provide no means to effectuate the text of MCL
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257.726(3), whereas the provisions found in MCL
247.651 through MCL 247.655 do. Therefore, a con-
struction of MCL 257.726(3) that substitutes “MCL
247.651” for “MCL 247.671” reflects a commonsense
construction that best accomplishes the purpose of
MCL 257.726(3). Marquis v Hartford Accident & In-
demnity (After Remand), 444 Mich 638, 644; 513 NW2d
799 (1994); Adams Outdoor Advertising, Inc v Canton
Charter Twp, 269 Mich App 365, 371; 711 NW2d 391
(2006).
The trial court’s conclusion that it had to enforce
MCL 257.726(3) as written renders MCL 257.726(3)
nugatory and also produces absurd consequences. As
noted by the majority, a court should avoid assigning
any construction to a statute that renders any part of
the statute nugatory. Jenkins v Patel, 471 Mich 158,
167; 684 NW2d 346 (2004). I additionally note, as I
wrote in Detroit Int’l Bridge Co v Commodities Export
Co, 279 Mich App 662, 674; 760 NW2d 565 (2008), that
in 2006 a majority of the Supreme Court justices also
determined that a court should avoid interpreting a
statute in a way that produces absurd consequences.
This analysis and the caselaw cited convince me that
vacating the preliminary injunction and remanding for
further proceedings would be appropriate even if we
were to refrain from relying on Justice Antonin Scalia’s
recitation of the doctrine of scrivener’s error.
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ULRICH v FARM BUREAU INSURANCE
Docket No. 289467. Submitted April 13, 2010, at Lansing. Decided April
29, 2010, at 9:10 a.m.
Linda A. Ulrich brought an action on July 16, 2007, in the
Washtenaw Circuit Court against Farm Bureau Insurance, Len
H. Naylor, and Torron T. Jamerson, seeking damages recover-
able under the no-fault automobile insurance act for injuries
sustained in a motor vehicle accident on September 19, 2006,
when a vehicle driven by Naylor and owned of Jamerson caused
an accident that included the vehicle driven by plaintiff and
insured by Farm Bureau. The complaint made no claim for
uninsured motorist benefits. On January 8, 2008, plaintiff
moved to amend her complaint to include claims for
uninsured/underinsured coverage. Farm Bureau opposed the
motion on the ground that plaintiff failed to comply with the
policy by failing to assert a claim for uninsured motorist
benefits within the one-year period provided in the insurance
contract. Plaintiff claimed that the one-year period was void
pursuant to a “Notice and Order of Prohibition Pursuant to
MCL 500.2236(5),” Order No. 05-060-M, issued December 16,
2005, by Chief Deputy Insurance Commissioner Frances K.
Wallace, that disapproved no-fault insurance forms that pro-
vided a contractual limitations period of less than three years
for uninsured motorist coverage. Plaintiff’s policy, which auto-
matically renewed every six months without any modifications
to the policy, had been renewed on September 11, 2006. The
trial court, David S. Swartz, J., granted the motion to amend the
complaint. Farm Bureau moved for summary disposition, which
the trial court denied, holding that the claim was not barred by
the one-year contractual limitation period because the amended
complaint related back to the original complaint, and that the
policy was subject to Order No. 05-060-M, because it was
reissued after the date of Order No. 05-060-M. The Court of
Appeals granted Farm Bureau’s application for leave to appeal
the order denying the motion for summary disposition.
The Court of Appeals held:
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1. Order No. 05-060-M prohibits policies that limit the time
to file a claim or commence suit for uninsured motorist benefits
to less than three years but it provides an exception where the
insurer was legally using a policy with a limitations period of
less than three years before the date of Order No. 05-060-M as
long as the policy is not revised in any respect. The order
contains no sunset provision or expiration date for forms
currently in use and does not prescribe any prohibition on
renewal. The trial court clearly erred by ruling that the
contractual one-year limitations period was unenforceable.
2. There is no authority for applying the relation-back
doctrine of MCR 2.118(D) to the contractual limitations period.
Plaintiff’s claim for personal injury protection insurance ben-
efits and her legal action to recover those benefits cannot be
reasonably construed as notice of a claim for uninsured motorist
benefits provided to Farm Bureau within one year of the
accident as required by the policy.
Reversed.
I
NSURANCE —
C
ONTRACTS —
N
O
-F
AULT
B
ENEFITS —
U
NINSURED
M
OTORIST
B
EN-
EFITS
.
An insured’s notice of a claim for personal injury protection
insurance benefits under the no-fault automobile insurance act
is not a notice of a claim for uninsured motorist benefits under
the act.
Bredell and Bredell (by John H. Bredell) for Linda A.
Ulrich.
Bowen, Radabaugh & Milton, P.C. (by Thomas R.
Bowen and Mary Rourke Benedetto), for Farm Bureau
Insurance.
Before: S
AAD
,P.J., and H
OEKSTRA
and M
URRAY
,JJ.
S
AAD
,P.J. Defendant Farm Bureau Insurance appeals
the trial court’s order that denied its motion for sum-
mary disposition. We reverse.
I. FACTS AND PROCEEDINGS
On December 16, 2005, the Office of Financial and
2010] U
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Insurance Services
1
(OFIS) issued a “Notice and Order
of Prohibition Pursuant to MCL 500.2236(5),” Order
No. 05-060-M (Order No. 05-060-M).
2
Order No. 05-
060-M was signed by Chief Deputy Insurance Commis-
sioner Frances K. Wallace. Order No. 05-060-M disap-
proved no-fault automobile insurance forms that
provided a contractual limitations period of less than
three years for claims for uninsured motorist coverage.
The issue presented here is whether a one-year limita-
tions period for uninsured motorist coverage claims is
enforceable where the no-fault policy form predated the
issuance of Order No. 05-060-M, but the policy was
renewed after December 16, 2005.
Plaintiff held a no-fault automobile insurance policy
issued by Farm Bureau (hereafter defendant). The
continuous renewal policy renewed every six months
without any modifications of the terms of the policy.
Plaintiff’s policy had renewed on September 11, 2006,
and was scheduled to expire on March 11, 2007. The
accident that gave rise to this action occurred on
September 19, 2006. The policy provided uninsured
motorist coverage in the amount of $100,000 per person
and $300,000 per accident, subject to this condition:
3. Time Limitation for Action Against Us
Any person seeking Uninsured Motorist Coverage must:
a. present the claim for compensatory damages in com-
pliance with all the Duties After an Accident or Loss listed
1
Pursuant to Executive Order No. 2008-2, effective April 6, 2008, OFIS
became known as the Office of Financial and Insurance Regulation. See
McDonald v Farm Bureau Ins Co, 480 Mich 191, 201 n 2; 747 NW2d 811
(2008).
2
This order can be found in pdf format on the State of Michigan
website at <http://www.michigan.gov/documents/Prohibition_Order_
121605_145496_7.pdf> (accessed April 20, 2010).
312 288 M
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on page 4 of this policy and all other terms and conditions
of this coverage and the policy; and
b. present to us a written notice of the claim for
Uninsured Motorist Coverage within one year after the
accident occurs.
A suit against us for Uninsured Motorist Coverage may
not be commenced later than one year after the accident
that caused the injuries being claimed, unless there has
been full compliance with all the Duties After an Accident
or Loss listed on page 4 of this policy and all other terms
and conditions of this coverage and the policy.
Plaintiff’s accident on September 19, 2006, involved
defendant Len Henry Naylor, who drove an automobile
owned by defendant Torron Thomas Jamerson. Plain-
tiff alleges that Naylor was driving at more than 90
miles per hour when he rolled his vehicle and caused a
multi-car collision that included the vehicle driven by
plaintiff. Plaintiff sustained a fractured wrist and other
injuries in this collision.
On July 16, 2007, plaintiff brought this action
against defendant, Jamerson, and Naylor for damages
recoverable under the no-fault act. The complaint made
no claim for uninsured motorist benefits. Jamerson and
Naylor failed to respond, and plaintiff entered a default
against them. On January 8, 2008, plaintiff moved to
amend her complaint to include claims against defen-
dant for uninsured/underinsured coverage under the
policy. She stated that she sought uninsured motorist
coverage because defendants Naylor and Jamerson
failed to respond to plaintiff’s complaint and defaults
had been entered against them.
3
Plaintiff sought mon-
3
Plaintiff has not provided documentation that either Naylor or
Jamerson was uninsured for purposes of obtaining uninsured motorist
coverage under defendant’s policy. Apparently, her claim is based on the
assumption that Naylor or Jamerson’s no-fault carriers would deny any
claim on the ground that their insureds defaulted.
2010] U
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UREAU
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etary relief under a count for breach of contract, and
also declaratory relief that defendant was contractually
obligated to provide the coverage. Defendant opposed
the motion on the ground that plaintiff failed to comply
with the contract by failing to assert a claim for
uninsured motorist benefits within the one-year con-
tractual limitations period. Defendant asserted that the
amendment would prejudice defendant because it
would violate the contractual provision requiring plain-
tiff to commence this litigation within one year of the
date of the accident.
In response, plaintiff said that the one-year contrac-
tual limitations provision was void pursuant to the
Insurance Commissioner’s Order No. 05-060-M prohib-
iting one-year provisions for policies written after De-
cember 16, 2005. Plaintiff contended that this prohibi-
tion applied to the policy that was in effect on the date
of the accident, because the policy period began on
September 11, 2006, after the date of the Insurance
Commissioner’s Order No. 05-060-M. She also con-
tended that defendant’s reliance on the invalidated
provision constituted a frivolous argument, warranting
sanctions under MCR 2.114(F).
The trial court heard the motion to amend on March
26, 2008. The trial court granted plaintiff’s motion, but
noted that defendant’s objection on the ground of
untimeliness was preserved.
Defendant moved for summary disposition pursuant
to MCR 2.116(C)(8) and (10). It argued that there was
no genuine issue of fact that the policy form in question
had legally been in use since before the Insurance
Commissioner issued Order No. 05-060-M. Defendant
argued that the plain and unambiguous policy language
barred coverage where the insured failed to bring her
action for uninsured motorist coverage within the one-
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year period following the date of loss. Defendant main-
tained that Order No. 05-060-M “expressly left in force
contracts already in effect,” as of December 16, 2005,
and therefore did not abrogate the one-year limitations
period in plaintiff’s policy.
4
Defendant cited our Su-
preme Court’s decision in McDonald v Farm Bureau Ins
Co, 480 Mich 191, 201; 747 NW2d 811 (2008), in
support of its argument.
Plaintiff argued in response that Order No. 05-060-M
voided the one-year contractual limitations period.
Plaintiff asserted that her policy was reissued on Sep-
tember 11, 2006, and therefore was subject to Order No.
05-060-M. Alternatively, plaintiff also argued that she
satisfied the policy’s notice provision because she filed
her lawsuit within one year from the date of the
accident, and the amendment should relate back to that
date. She stated that the original complaint included a
third-party claim against the owner and the insured of
the subject vehicle, which was sufficient to put defen-
dant on notice that she would file an uninsured motor-
ist coverage claim if these parties had no insurance
coverage.
Defendant filed a reply and maintained that renewal
of the policy after the issuance of Order No. 05-060-M
did not invalidate the one-year contractual provision
because the policy had been legally written before the
order was issued. It also denied that plaintiff’s action
for personal injury protection benefits served as notice
of a potential uninsured motorist claim.
4
Defendant brought a separate motion for summary disposition on the
ground that there was no genuine issue of material fact that plaintiff
failed to establish a threshold injury under MCL 500.3135 and Kreiner v
Fischer, 471 Mich 109; 683 NW2d 611 (2004). The trial court denied that
motion. There is no issue on appeal concerning this motion.
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Defendant also argued that plaintiff’s original com-
plaint failed to give defendant notice of the uninsured
motorist claim.
The trial court determined that plaintiff’s claim was
not barred by the contractual limitations period be-
cause the amended complaint related back to the date of
the original pleading under MCR 2.118(D). The court
also concluded that McDonald, 480 Mich 191, did not
apply retroactively. Finally, it determined that the no-
fault policy was subject to Order No. 05-060-M because
the policy was reissued on September 11, 2006, after the
date of the order. The trial court denied defendant’s
motion in an order dated November 26, 2008. We
granted defendant leave to bring an interlocutory ap-
peal.
5
II. LEGAL ANALYSIS
In reviewing a trial court’s decision to deny or grant
a motion for summary disposition under MCR
2.116(C)(10), we review “ ‘the pleadings, admissions,
and other evidence submitted by the parties in the light
most favorable to the nonmoving party. Summary dis-
position is appropriate if there is no genuine issue
regarding any material fact and the moving party is
entitled to judgment as a matter of law.’ ” Odom v
Wayne Co, 482 Mich 459, 466-467; 760 NW2d 217
(2008), quoting Brown v Brown, 478 Mich 545, 551-552;
739 NW2d 313 (2007).
This appeal stems from the controversy regarding
the enforceability of contractual limitations clauses in
no-fault automobile insurance policies. In Tom Thomas
5
Plaintiff and defendant subsequently executed a settlement regarding
her claim for personal injury protection benefits. This agreement ex-
pressly did not affect plaintiff’s claim for uninsured motorist benefits.
316 288 M
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310 [Apr
Org, Inc v Reliance Ins Co, 396 Mich 588; 242 NW2d
396 (1976), our Supreme Court adopted the judicial
tolling doctrine, which provides that an insurance poli-
cy’s contractual period of limitations is tolled from the
date that the insured submits a claim to the insurer
until the date that the insurer denies the claim. Id. at
596-597. In Tom Thomas Org, the Court declined to
also consider whether a one-year limitations period was
unconscionable or inherently unreasonable. Id. at 597.
But, in Rory v Continental Ins Co, 473 Mich 457; 703
NW2d 23 (2005), the Michigan Supreme Court over-
ruled Tom Thomas and held that courts may not
rewrite insurance policies on grounds of “reasonable-
ness.” In Rory, the Michigan Court of Appeals held that
an insurance policy’s one-year limitations period for
claims for uninsured motorist coverage was unenforce-
able because it was unreasonable to require the insured
to discover the other driver’s insurance status and
other relevant information within a year of the acci-
dent. Rory v Continental Ins Co, 262 Mich App 679,
686-687; 687 NW2d 304 (2004). The Supreme Court
reversed this Court’s decision, and held that unambigu-
ous contracts must be enforced as written, and not
abrogated on the basis of a court’s “independent assess-
ment of ‘reasonableness.’ ” Rory, 473 Mich at 468-469.
The Court noted that MCL 500.2236(5) conferred on
the Insurance Commissioner the discretion to “ ‘disap-
prove, withdraw approval or prohibit the issuance,
advertising, or delivery’ ” of any insurance form that
“ ‘contains exceptions and conditions that unreason-
ably or deceptively affect the risk purported to be
assumed in the general coverage of the policy.’ ” Rory,
473 Mich at 474 (emphasis omitted). It held that “the
Legislature has assigned the responsibility of evaluat-
ing the ‘reasonableness’ of an insurance contract to the
person within the executive branch charged with re-
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viewing and approving insurance policies: the Commis-
sioner of Insurance.” Id. at 475. “In this instance, the
Commissioner has approved the Continental policy
form containing the shortened limitations provision for
issuance and use in the state of Michigan.” Id.
On December 16, 2005, Chief Deputy Insurance
Commissioner Frances K. Wallace signed Order No.
05-060-M. Citing her statutory authority
6
to disapprove
objectionable policy forms, the commissioner deter-
mined that a one-year limitations period for claims for
uninsured motorist coverage was unreasonable because
it does not allow the insured sufficient time to confirm
whether the responsible party was insured on the day of
the accident. The commissioner stated as follows:
Under these circumstances, policyholders who purchase
optional uninsured motorist benefits with a limitation of
less than three years to file claims or commence suit for
those benefits will often be paying for coverage that is
illusory as a practical matter. Such a provision is “mislead-
ing” and “unreasonably or deceptively affect(s) the risk
purported to be assumed in the general coverage of the
policy” within the meaning of section 2236(5). [Order No.
05-060-M, p 4.]
The commissioner declared the following prohibition:
Accordingly, effective immediately on the date of this
order, Insurance Company Name shall not issue, adver-
tise, or deliver to any person in this state a policy or rider
that limits the time to file a claim or commence suit for
uninsured motorist benefits to less than three years unless
Insurance Company Name was legally using that policy
or rider form in Michigan prior to the date of this notice
and order of prohibition. Moreover, Insurance Company
Name shall not modify in any respect a policy form or rider
containing a provision that limits the time to file a claim or
commence suit for uninsured motorist benefits to less than
6
MCL 500.2236(5).
318 288 M
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three years that it was legally using in Michigan prior to
this notice and order of prohibition and thereafter issue,
advertise, or deliver the revised policy form or rider in this
state, unless the limitation is deleted entirely or is changed
to not less than three years from the date of the accident.
This notice and order of prohibition does not prohibit
Insurance Company Name from continuing to use any
policy form or rider that it may have been legally using in
Michigan prior to the date of this notice of prohibition
containing a limitation of less than three years to claim or
file suit for uninsured motorist benefits, so long as such
policy or rider is not revised in any respect. The Commis-
sioner is currently considering what action is appropriate
with regard to those policies or riders in use before the date
of this notice and order. The Commissioner may withdraw
approval of those forms as provided in section 2236(5) at a
future time. [Order No. 05-060-M, pp 4-5.]
Here, there is no question of fact that the policy
predated the issuance of Order No. 05-060-M. Plaintiff
argues, however, that the order applies because her
policy was “rewritten” when it was renewed on Septem-
ber 11, 2006.
In McDonald, 480 Mich at 193, 200-201, our Su-
preme Court rejected the insured’s argument that her
no-fault policy’s one-year contractual limitations period
for underinsured motorist coverage was tolled from the
time she presented a claim to the insurer until the time
that the insurer denied the claim. In its analysis, the
Court considered the plaintiff’s argument that Order
No. 05-060-M established a public policy against enforc-
ing contractual limitations periods shorter than three
years. Id. at 201. The Court rejected this argument,
stating as follows:
[T]he “Notice and Order” also expressly states that it
does not prohibit insurers from continuing to use policies
that were legally in use before December 16, 2005. More-
over, the general rule is that contracts are interpreted in
2010] U
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accordance with the law in effect at the time of their
formation. See, e.g., Byjelich v John Hancock Mut Life Ins
Co, 324 Mich 54, 61; 36 NW2d 212 (1949). Thus, the
one-year limitation was valid at the time the parties
entered into the contract. [McDonald, 480 Mich at 201.]
The majority noted that the OFIS had the authority to
determine whether an insurance contract was valid,
and the order “expressly left in force contracts already
in effect.” Id. at 202. The accident in McDonald oc-
curred in 2001, before Order No. 05-060-M was issued.
Id. at 194. Similarly, in McGraw v Farm Bureau Gen Ins
Co of Mich, 274 Mich App 298, 304-305; 731 NW2d 805
(2007), this Court held that OFIS Notice and Order of
Prohibition No. 06-008-M, issued April 4, 2006, which
imposed the same restrictions for underinsured motor-
ist coverage, did not retroactively invalidate one-year
contractual limitations periods in policies that were
already in effect. Again, in McGraw, the insured’s claim
arose before Order No. 06-008-M was issued. Id. at 300.
Although McDonald, 480 Mich 191, and McGraw,
274 Mich App 298, are instructive, they do not address
the precise question presented here of whether Order
No. 05-060-M prohibits the renewal of grandfathered
policies after December 16, 2005. In both McDonald
and McGraw, the insureds’ claims arose before the
commissioner’s orders were issued. Plaintiff contends
that under the automatic renewal process for her own
policy, once the policy period expires and the policy is
renewed, the renewed policy becomes subject to the
requirements of Order No. 05-060-M. This is a misread-
ing of Order No. 05-060-M.
Order No. 05-060-M prohibits the issuance, adver-
tisement, or delivery of policies or riders that limit the
time to file a claim or commence suit for uninsured
motorist benefits to less than three years, but it unam-
320 288 M
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biguously provides an exception where the insurer “was
legally using that policy or rider form in Michigan prior
to the date of this notice and order of prohibition.” The
order prohibits the modification of such forms, but it
does not prohibit their renewal or reissuance. Indeed,
the language of the order further states that an insurer
is not prohibited “from continuing to use any policy
form or rider that it may have been legally using in
Michigan prior to the date of this notice...solong as
such policy or rider is not revised in any respect.”
Moreover, the order indicates that the commissioner
was “currently considering what action is appropriate
with regard to those policies or riders in use before the
date of this notice and order” and commented that it
“may withdraw approval of those forms as provided in
section 2236(5) at a future time.” (Emphasis added.)
The order contains no sunset provision or expiration
date for forms currently in use, nor does it prescribe any
prohibition on renewal. Plaintiff’s argument is based on
an attempt to read terms into the order that are not
expressed, or even implied, by its plain language.
And, importantly, the order specifically states that
the commissioner was not, at that time, taking any
action with respect to the grandfathered policies and
riders. The order further provides that future action,
including withdrawal of approval, was under consider-
ation. These provisions are clearly inconsistent with
plaintiff’s preferred interpretation of the order. The
trial court clearly erred by ruling that defendant’s
one-year contractual limitations period was unenforce-
able.
Plaintiff also argues that her claim for uninsured
motorist benefits was timely because it related back to
the original complaint, which was filed within the
one-year period. MCR 2.118(D) provides as follows:
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An amendment that adds a claim or a defense relates
back to the date of the original pleading if the claim or
defense asserted in the amended pleading arose out of the
conduct, transaction, or occurrence set forth, or attempted
to be set forth, in the original pleading.
The relation-back doctrine applies to amended plead-
ings and may affect the analysis of the timeliness of an
action for purposes of compliance with statutes of
limitations. Doyle v Hutzel Hosp, 241 Mich App 206, 212
n 2; 615 NW2d 759 (2000). However, defendant does not
assert that plaintiff’s uninsured motorist claim is un-
timely pursuant to a statute of limitations, but rather
that it is untimely under the contractual limitations
period stated in the policy. Plaintiff cites no authority
for applying the relation-back doctrine of MCR 2.118(D)
to contractual limitations periods. And, there is no
authority for the proposition, because to apply the
relation-back doctrine in this context would be incon-
sistent with the principle of applying private contracts
in accordance with their terms as stated in unambigu-
ous language. See Rory, 473 Mich at 465-468, which
held that the rights and limitations contained in an
uninsured motorist insurance provision are purely con-
tractual and are to be construed employing the prin-
ciples of contract construction and without reference to
external statutes. See also Liparoto Constr, Inc v Gen
Shale Brick, Inc, 284 Mich App 25, 31-32; 772 NW2d
801 (2009), which held that “[a]pplication of the doc-
trine of equitable tolling to contractual limitations
periods would be inconsistent with the deference af-
forded to parties’ freedom to contract, including the
freedom to avoid, by contract, what might otherwise be
an applicable rule of law.” Moreover, the policy requires
the insured to present defendant written notice of a
claim for uninsured motorist coverage within one year
after the accident occurs. It further provides that a legal
322 288 M
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action for uninsured motorist coverage “may not be
commenced later than one year after the accident that
caused the injuries being claimed, unless there has been
full compliance with all the Duties After an Accident or
Loss listed on page 4 of this policy and all other terms
and conditions of this coverage and the policy.” Assum-
ing, arguendo, that the relation-back doctrine enabled
plaintiff to avoid the one-year limitation for legal action
for uninsured motorist coverage, her failure to present
a written claim for that coverage to defendant within
the one-year period would nonetheless bar her claim for
relief. Plaintiff’s claim for personal injury protection
insurance benefits, and her legal action to recover the
same, cannot be reasonably construed as notice of a
claim for uninsured motorist benefits.
III. CONCLUSION
Plaintiff’s claim for uninsured motorist coverage is
barred by her policy’s one-year contractual limitation
provision and the trial court incorrectly held that this
provision was voided by Order No. 05-060-M.
Accordingly, we reverse the trial court’s order that
denied Farm Bureau Insurance’s motion for summary
disposition.
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ARATH II, INC v HEUKELS COUNTY DRAIN DISTRICT
Docket No. 288725. Submitted April 15, 2010, at Grand Rapids. Decided
April 29, 2010, at 9:15 a.m.
Arath II, Inc., and Arath IV, Inc. (collectively Arath), brought an
action in the Kent Circuit Court against the Heukels County Drain
District and the Kent County Drain Commissioner, alleging that
the design of the drain district caused flooding on its property,
which is located within the drain district. Arath sought an order
for superintending control to compel the drain commissioner to
perform certain construction activities and argued that defen-
dants’ failure to undertake the maintenance and improvements
necessary to prevent excess storm water from being diverted onto
and detained on Arath’s property constituted a trespass. Defen-
dants sought summary disposition on the basis that Arath failed to
follow the procedure outlined in the Drain Code, MCL 280.1 et seq.,
to petition for the repairs and improvements Arath sought. The
trial court, George S. Buth, J., granted summary disposition in
favor of the defendants. Arath appealed.
The Court of Appeals held:
Arath simply sought a court order ordering defendants to
improve the Heukels Drain so that excess water no longer over-
flows onto Arath’s property. The Drain Code provides that if Arath
wants defendants to improve the drain it must first institute the
filing of a petition with the drain commissioner. Only after a
petition is filed and the commissioner makes a determination that
the requested improvement or repair is needed may the commis-
sioner then undertake the project. In the absence of such a
determination, the drain commissioner has no authority to make
any improvements to the drain. Arath failed to petition for such a
determination and failed to establish that defendants had the
authority to act pursuant to the Drain Code. Arath failed to state
a claim on which relief could be granted. Summary disposition
pursuant to MCR 2.116(C)(8) was appropriate. Because the drain
commissioner has not received the authority to improve the drain
in the manner sought by Arath, and remedy the trespass alleged by
324 288 M
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Arath, it is premature to determine whether the alleged overflow
of water onto Arath’s property caused by defects in the drain
constitutes a trespass.
Affirmed.
D
RAINS —
I
MPROVEMENTS —
R
EPAIRS —
P
ETITIONS FOR
I
MPROVEMENTS OR
R
EPAIRS
.
The Drain Code provides that when a landowner whose property is
in a drain district wants the drain to be improved or repaired, the
landowner must first institute the filing of a petition with the
drain commissioner; only after a petition is filed and a determina-
tion is made that the requested improvement or repair is needed
may the drain commissioner undertake the project (MCL 280.1 et
seq.).
Rhoades McKee PC (Gregory G. Timmer) for plain-
tiffs.
The Hubbard Law Firm, P.C. (by Michael G. Wood-
worth and Mark T. Koerner), for defendants.
Before: O
WENS
,P.J., and S
AWYER
and O’C
ONNELL
,JJ.
O’C
ONNELL
, J. Plaintiffs, Arath II, Inc., and Arath IV,
Inc., appeal as of right the final order of the Kent
Circuit Court granting summary disposition in favor of
defendants, Heukels County Drain District (the drain
district) and the Kent County Drain Commissioner,
pursuant to MCR 2.116(C)(8) and (10). We affirm.
The drain district, located in Kent County, was
established by a final order of determination on August
28, 1937.
1
When the drain district was established, a
special assessment district was created that encom-
passes approximately 217.3 acres in Sections 22, 23, and
27 of Grand Rapids Township. The special assessment
district is bounded on the north by Bradford Street, on
the west by Leffingwell Street, on the south by Michi-
gan Street, and on the east by East Beltline. Interstate
1
The drain itself is known as the Heukels Drain.
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96 cuts through the district, which is located immedi-
ately to the west of the East Beltline/I-96 interchange.
The Kent County Drain Commissioner (drain commis-
sioner) has jurisdiction over the district pursuant to the
Drain Code, MCL 280.1 et seq.
Plaintiffs are related Michigan corporations.
2
Arath
states in its complaint that it owns property located
within the drain district. Apparently, this property is in
an industrial park immediately south of I-96 and north
of the Mid-Michigan Railroad tracks. There is a wetland
subject to the regulatory authority of the Michigan
Department of Environmental Quality (MDEQ)
3
lo-
cated on part of Arath’s property.
Arath filed its complaint in this case on June 6, 2008,
alleging that the design of the drain district caused
flooding on its property. According to Arath, the Heu-
kels Drain diverted storm water exceeding natural flow
volume and rate from the area north of I-96 through
48-inch-diameter culverts under both westbound and
eastbound I-96 to Oak Industrial Court. When the
water entered Oak Industrial Court, it apparently trav-
eled south over a portion of Arath’s property and
through a 24-inch-diameter culvert under the Mid-
Michigan Railroad tracks. From there, the water would
continue to flow south to 2925 Michigan Street, a parcel
of land owned by the city of Grand Rapids, and flow
under Michigan Street, where an overflow structure
had been installed.
4
In its complaint, Arath claimed that
2
Apparently James Azzar is the president of both corporations. We will
refer to both corporations, collectively, as “Arath.”
3
Pursuant to Executive Order 2009-45, on October 8, 2009, the MDEQ
was eliminated and the Department of Natural Resources and Environ-
ment was created in its stead. MDEQ will be used in this opinion to refer
to the relevant department.
4
This runoff eventually flowed into Middleboro Lake, located south of
Michigan Street.
326 288 M
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the culvert under the Mid-Michigan Railroad tracks
and the overflow structure at Michigan Street were
inadequate, causing water to be retained on Arath’s
property.
In its complaint, Arath first sought an order for
superintending control to compel the drain commis-
sioner to construct a 48-inch-diameter culvert under
the Mid-Michigan Railroad tracks and to remove the
overflow structure under Michigan Street. Arath also
argued that defendants’ failure to undertake the main-
tenance and improvements necessary to prevent excess
storm water from being diverted onto and detained on
Arath’s property constituted a trespass on Arath’s
property. In its request for relief, Arath asked that the
trial court “enter an Order in Plaintiffs’ favor enjoining
Defendants from continuing their trespass, and further
Order Defendants to complete the necessary mainte-
nance, repair and improvements more specifically iden-
tified above.”
Defendants moved for summary disposition pursuant
to MCR 2.116(C)(8) and (10), claiming, in pertinent
part, that Arath could not seek an order for superin-
tending control to compel the drain commissioner to
act. Instead, defendants argued, the Drain Code re-
quired Arath to petition the drain commissioner to act
before the drain commissioner would have the author-
ity to make repairs and improvements to the Heukels
Drain. Defendants then provided information indicat-
ing that Arath had never pursued a petition under the
Drain Code to obtain work on the Heukels Drain.
Douglas Sporte, the deputy drain commissioner for
Kent County, noted that in November 2004, he provided
Arath’s attorney with the form of the petition needed to
initiate a drain project pursuant to the provisions of the
Drain Code, as well as a form listing the procedures
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needed to accomplish drain work in accordance with the
code. However, Arath never filed a petition seeking to
initiate a project on the Heukels Drain. Because no
petition had ever been filed, the drain commissioner
never convened a board of determination to consider
whether a project on the Heukels Drain would be
necessary.
In 2007, Arath’s president, James Azzar, apparently
attempted to install a 48-inch-diameter culvert near the
Mid-Michigan Railroad tracks in order to address the
flooding on Arath’s property. The MDEQ issued a public
notice regarding the project on June 26, 2007. When the
drain commissioner’s office received the notice, it in-
formed Azzar that he was required to receive a permit
from the drain commissioner’s office in order to con-
tinue the project and the drain commissioner’s office
enclosed a permit application. However, on August 21,
2007, the MDEQ refused to approve the project and
denied Azzar’s request for a permit to install the
48-inch-diameter culvert. In explaining its decision, the
MDEQ noted that “the proposed project will have a
greater adverse impact to regulated resources than is
required to achieve the project purpose.” Azzar peti-
tioned for reversal of the denial, but the record does not
indicate whether this petition was successful.
The trial court granted defendants’ motion for sum-
mary disposition pursuant to MCR 2.116(C)(8) and (10),
finding that summary disposition was appropriate be-
cause Arath “did not follow the law and did not file a
petition with the drain commission[er].”
On appeal, Arath claims that the trial court erred by
dismissing its underlying cause of action in this case.
According to Arath, it was not required to file a petition
with the drain commissioner before commencing this
cause of action because it did not seek the repair or
328 288 M
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324 [Apr
maintenance of an existing drain. Instead, Arath ap-
pears to argue that because there is no “public drain”
on its property, it is somehow exempt from filing a
petition and, instead, is entitled to seek injunctive relief
requiring defendants to repair and maintain the drain
in order to prevent an overflow of storm water onto its
property.
However, in its complaint, Arath indicates that it is
simply seeking an injunction to force defendants to
make repairs and improvements to certain portions of
the Heukels Drain that it believes are necessary to
prevent the overflow of storm water onto its property.
5
In claiming that defendants are “trespassing” on Ar-
ath’s property by “detaining” and “diverting” excess
storm water in the drainage district onto its property,
Arath appears to assert that the alleged “trespass” is
simply the overflow of water onto its property, as
opposed to a more overt act. Although Arath presents
its cause of action as a plea to protect infringement of
its property rights, the relief it seeks reveals the true
nature of the case: Arath simply wants the trial court to
order defendants to improve the Heukels Drain so that
excess water no longer overflows onto Arath’s property.
However, the Drain Code, MCL 280.1 et seq., makes
clear that when a landowner whose property is in a
particular drain district wants the drain to be cleaned
5
Notably, although Arath alleges that the Heukels Drain transverses
its property, it does not argue that the drain should be moved or removed
from its property. Instead, it wants the drain to be repaired and improved
so that storm water does not collect on its property. Accordingly, it
appears that the situation that Arath wants the trial court to address is
not the transportation of water over its property, but the buildup of
excess water on its property. Otherwise, Arath would have requested that
the drain commissioner reroute the drain around its property, instead of
simply requesting the court to require the drain commissioner to repair
and improve the drain so that water flows over its property more
efficiently.
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or improved in some manner, that landowner, in con-
junction with a certain number of other landowners
whose lands would also be liable for assessment to pay
for such work, should petition the drain commissioner
to perform the requested work. MCL 280.191.
6
The
drain commissioner can then undertake a review pro-
cess, including the appointment of a three-member
“board of determination” to review the proposal and
providing an opportunity for a public hearing. MCL
280.191; MCL 280.72. Once the board makes a deter-
6
MCL 280.191 states:
When a drain or portion thereof, which traverses lands wholly
in 1 county, and lands only in 1 county which is subject to
assessment, needs cleaning out, relocating, widening, deepening,
straightening, tiling, extending, or relocating along a highway, or
requires structures or mechanical devices that will properly purify
or improve the flow of the drain or pumping equipment necessary
to assist or relieve the flow of the drain, or needs supplementing by
the construction of 1 or more relief drains which may consist of
new drains or extensions, enlargements, or connections to existing
drains, or needs 1 or more branches added thereto, any 5 or at least
50% of the freeholders if there are less than 5 freeholders whose
lands shall be liable to an assessment for benefits of such work,
may make petition in writing to the commissioner setting forth the
necessity of the proposed work and the commissioner shall proceed
in the same manner provided for the location, establishment, and
construction of a drain. If the project includes a tiled relief drain,
or the tiling of an existing open drain or any portion thereof, with
a conduit a part of which has an inside diameter in excess of 36
inches or the retiling of an existing drain with a conduit, a part of
which has an inside diameter in excess of 36 inches, then the
petition shall comply with [MCL 280.71]. The preceding sentence
shall not be applicable to the construction of bridges, culverts, and
passageways. The word tiling as used in this and other sections of
this act, means the laying of a conduit composed of tile, brick,
concrete, or other material....After the board of determination
determines the necessity for the work, as provided in [MCL
280.72], the commissioner shall, as soon as practicable after the
final order of determination prescribed in [MCL 280.151] has been
filed by him, proceed as provided in [MCL 280.151 to 280.161]. If
the apportionment is the same as the last recorded apportion-
ments, no day of review is necessary, but in other cases the
commissioner shall proceed as provided in sections 151 to 161,
including the notice of and the holding of a day of review.
330 288 M
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mination regarding the necessity of the proposed im-
provement or repair, MCL 280.72(3), “any person feel-
ing aggrieved by the determination may institute an
action in the circuit court for the county in which the
real property is located for a determination of neces-
sity,” MCL 280.72a. If a determination is made that a
repair or improvement is needed, the drain commis-
sioner may then undertake the project, apportioning
project costs among those benefiting from it. MCL
280.151; MCL 280.191. See also Bosanic v Motz Dev,
Inc, 277 Mich App 277, 284-286; 745 NW2d 513 (2007).
Arath does not dispute that its property is located in
the drain district. Further, in its complaint, it notes that
“[t]he Drain Commissioner is legally obligated to in-
spect, maintain, repair and improve the Heukels Drain
pursuant to the Drain Code” and specifically requests
that defendants “comply with its [sic, their] obligations
under the Drain Code....”However, the Drain Code
provides that if Arath wants defendants to improve the
drain, it must first institute the filing of a petition with
the drain commissioner. Only after a petition is filed
and a determination is made that the requested im-
provement or repair is needed may the drain commis-
sioner then undertake the project. Arath has not par-
ticipated in filing a petition to request improvements to
the Heukels Drain, nor has it established that such a
petition has been filed or that a determination has
otherwise been made that would permit the drain
commissioner to make the improvements to the Heu-
kels Drain that Arath desires. In the absence of such a
determination, the drain commissioner has no author-
ity to make any improvements to the Heukels Drain.
Accordingly, although Arath claims that defendants
breached their duty to maintain, repair, and improve
the drain in the manner set forth in the Drain Code, it
has failed to establish that defendants even had the
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authority to act pursuant to the Drain Code. Arath
failed to state a claim on which relief could be granted,
and summary disposition was appropriate pursuant to
MCR 2.116(C)(8).
7
In Bosanic, the plaintiffs sought recovery from the
county drain commissioner for damages arising from
the flooding of their homes. Bosanic, 277 Mich App at
278. In particular, the plaintiffs claimed that the drain
commissioner was, in part, responsible for the under-
sized drain system in their subdivision that, they
claimed, caused the flooding. Id. The Bosanic Court
concluded that recovery was precluded under MCL
691.1417 because before the flooding occurred, no peti-
tion had been filed or determination made directing the
drain commissioner to “ ‘repair, correct, or remedy’ ”
any problem in the drain system. Bosanic, 277 Mich
App at 285. “In the absence of those prerequisite
actions, defendant had no authority to address the
defect in the drain system.” Id. at 285-286.
Admittedly, the Bosanic Court addressed whether
the plaintiffs could seek damages from the drain com-
missioner under an exception to governmental immu-
nity set forth in MCL 691.1417. However, the rationale
set forth by the Bosanic Court’s decision is also appli-
cable to this case: The Drain Code limits the authority
of a drain commissioner to remedy defects to a drain by
requiring outside actors to undertake prerequisite ac-
tions before providing the drain commissioner with
authority to act.
In its complaint, Arath also requested that the trial
court determine whether the detention and diversion of
excess storm water on its property constitutes a tres-
7
Because summary disposition was appropriate pursuant to MCR
2.116(C)(8), we need not consider whether summary disposition was
appropriate pursuant to MCR 2.116(C)(10).
332 288 M
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pass. Yet again, it appears that the “trespass” to which
Arath refers is the overflow of excess water onto Arath’s
property caused by poorly designed culverts in the
Heukels Drain.
8
Further, Arath seems to indicate that if
the drain were repaired and improved, the alleged
trespass would cease. Accordingly, it appears that be-
cause the drain commissioner has not yet even received
the authority to repair and improve the Heukels Drain
in the manner sought by Arath (and, hence, remedy the
trespass alleged by Arath), a determination whether the
alleged overflow of water onto Arath’s property caused
by defects in the Heukels Drain constitutes a trespass
would be premature.
In addition, MCL 280.195 permits the drain commis-
sioner to obtain any right-of-way from Arath that it
might need in order to undertake a project to maintain
or improve the Heukels Drain. Therefore, if the drain
commissioner were to receive the authority to improve
and repair the Heukels Drain in the manner sought by
Arath, it would have the authority to obtain any neces-
sary right-of-way in the manner set forth in the Drain
Code.
Affirmed.
8
When setting forth its allegation of trespass in its complaint, Arath
described the nature of the trespass in question as the “detaining” and
“diverting” of excess storm water onto its property, indicating that it was
not challenging the normal flow of water within the Heukels Drain, but
instead was claiming that a trespass occurred when water overflowed the
drain and settled on Arath’s property.
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MIDWEST BUS CORPORATION v DEPARTMENT OF TREASURY
Docket No. 288686. Submitted March 4, 2010, at Lansing. Decided March
16, 2010. Approved for publication May 4, 2010, at 9:00 a.m.
Midwest Bus Corporation, formerly known as Midwest Bus Rebuild-
ers Corporation, brought an action in the Court of Claims against
the Department of Treasury and the state treasurer, seeking the
refund of single business taxes paid for certain tax years. Plaintiff
claimed that for purposes of its single business tax base its sales of
bus parts that were installed on buses when the plaintiff rehabili-
tated or remanufactured the buses should have been allocated to
the states to which the buses were delivered after the rehabilita-
tion work. Defendants claimed that the sales were incident to the
rehabilitation work and should be allocated to Michigan, where
the work was performed. The Court of Claims, James R. Giddings,
J., granted summary disposition for defendants, agreeing with
defendants that the predominate purpose of the bus rehabilitation
contracts at issue was the provision of the rehabilitation service
and that the service of actually installing the bus parts was not
merely incident to the sale of the parts. Plaintiff appealed.
The Court of Appeals held:
1. The Single Business Tax Act, MCL 208.1 et seq., repealed
effective December 31, 2007, distinguishes between two types of
sales for purposes of computing a taxpayer’s tax base. The first
type, sales of tangible personal property, are considered “in this
state” if the property is shipped or delivered to any purchaser
within this state. The second type, sales other than sales of
tangible personal property, are considered “in this state” if either
the business activity is performed in Michigan or, if performed in
Michigan and elsewhere, based on costs of performance, the
greater proportion of the business activity is performed in Michi-
gan. The transactions at issue in this case are mixed transactions
that involve sales of tangible personal property and sales other
than sales of tangible personal property.
2. A six-part incidental-to-service test is applied to determine
whether a transaction should be considered a sale of tangible
personal property or a sale of a service, i.e., a sale other than a sale
of tangible personal property, when a business relationship in-
334 288 M
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volves both the provision of services and the transfer of tangible
personal property. The test looks objectively at the entire transac-
tion to determine whether it was principally a transfer of tangible
personal property or a provision of a service. A court, in determin-
ing whether the transfer of tangible personal property was inci-
dental to the rendering of personal or professional services, should
examine (1) what the buyer sought as the object of the transaction,
(2) what the seller or service provider was in the business of doing,
(3) whether the goods were provided as a retail enterprise with a
profit-making motive, (4) whether the tangible goods were avail-
able for sale without the service, (5) the extent to which intangible
services have contributed to the physical item that was trans-
ferred, and (6) any other factors relevant to the particular trans-
action. Consideration of these factors in this case indicates that the
Court of Claims correctly concluded that the remanufacturing
contract primarily considered by the Court of Claims, as well as
other remanufacturing contracts like it, are predominately for the
provision of a service—a rehabilitation service. These sales are, for
purposes of the sales factor used to determine the tax base, sales
other than sales of tangible personal property and, because the
services were provided in Michigan, the sales were in this state for
purposes of MCL 208.53.
3. The sale of the bus parts was incidental to the service of
actually performing the rehabilitation of the buses, and that
service was provided in Michigan.
4. The Court of Claims did not abuse its discretion when it
determined that plaintiff was not entitled to an award of sanctions
under MCR 2.313(C) for defendants’ failure to admit, pursuant to
plaintiff’s request for an admission under MCR 2.312(A), with
regard to a matter that the parties voluntarily settled before the
hearing on the parties’ cross-motions for summary disposition.
Affirmed.
T
AXATION —
S
INGLE
B
USINESS
T
AX
A
CT —
S
ALES —
S
ERVICES —
S
ALES
I
NCIDENTAL
TO
S
ERVICES
.
An incidental-to-service test may be applied to determine, for
purposes of establishing a taxpayer’s tax base under the Single
Business Tax Act, whether a business transaction that involved
both the transfer of tangible personal property and the provision
of a service involved a transfer of tangible personal property that
was incidental to the rendering of personal services; the test
examines what the buyer sought as the object of the transaction,
what the seller or service provider was in the business of doing,
whether the goods were provided as a retail enterprise with a
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profit-making motive, whether the goods were available for sale
without the service, the extent to which intangible services have
contributed to the physical item that was transferred, and any
other relevant factors (MCL 208.1 et seq., repealed effective
December 31, 2007).
Timothy J. Rudolph for plaintiff.
Michael A. Cox, Attorney General, B. Eric Restuccia,
Solicitor General, and Heidi L. Johnson-Mehney, Assis-
tant Attorney General, for defendants.
Before: F
ITZGERALD
,P.J., and C
AVANAGH
and D
AVIS
,JJ.
C
AVANAGH
, J. Plaintiff appeals as of right a Court of
Claims order granting defendants’ motion for summary
disposition in this tax dispute involving the Single
Business Tax Act (SBTA), MCL 208.1 et seq., repealed
effective December 31, 2007. We affirm.
Plaintiff filed its declaratory judgment action fol-
lowing an audit covering single business tax years
1999 through 2004, and the receipt of tax due bills.
Plaintiff averred that it was in the business of selling
bus parts and remanufacturing buses. Plaintiff al-
leged that its remanufacturing contracts with various
transit authorities involved primarily the sale of
tangible personal property—bus parts, regardless of
the fact that charges for plaintiff’s installation of
those parts were also included in the contracts.
Accordingly, revenue from the sales at issue, which
gave rise to the disputed tax due bills, should have
been allocated to the destinations where the parts
were shipped, as sales of tangible personal property
under MCL 208.52, and not allocated to Michigan,
under MCL 208.53, where the installation services
were performed. Thus, plaintiff alleged, it was en-
titled to a refund of the overpayment of taxes.
336 288 M
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Subsequently, cross-motions for summary disposition
were filed and the parties agreed that the matter was
controlled by the holding in Catalina Mktg Sales Corp v
Dep’t of Treasury, 470 Mich 13; 678 NW2d 619 (2004).
Plaintiff’s legal position remained the same. Defendants,
however, argued that plaintiff’s business of remanufactur-
ing buses did not merely involve the sale of bus parts.
Rather, plaintiff “remanufactured” buses, which meant
that the service of actually installing the bus parts was not
merely incidental to the sale of the parts—the rehabilita-
tion service was the predominant purpose of the business
contracts. Accordingly, revenue from the disputed sales is
properly allocated to Michigan, under MCL 208.53, where
the services were performed and plaintiff was not entitled
to any refund or other relief. After consideration of the
“incidental to service” six-part test set forth in Catalina
Mktg Sales Corp, the Court of Claims agreed with defen-
dants and granted their motion for summary disposition.
This appeal followed.
First, plaintiff argues that the revenue it received
from remanufacturing contracts like the one it had with
the Massachusetts Bay Transportation Authority
(MBTA) is predominantly for the sale of tangible per-
sonal property and should be allocated, under MCL
208.52, to destinations outside Michigan. We disagree.
This Court reviews de novo a decision by the Court of
Claims on a motion for summary disposition and issues
requiring statutory interpretation. Herald Wholesale,
Inc v Dep’t of Treasury, 262 Mich App 688, 693; 687
NW2d 172 (2004).
The single business tax (SBT) was explained in
Trinova Corp v Dep’t of Treasury, 433 Mich 141; 445
NW2d 428 (1989), as follows:
The single business tax is a form of value added tax,
although it is not a pure value added tax. “Value added is
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defined as the increase in the value of goods and services
brought about by whatever a business does to them be-
tween the time of purchase and the time of sale.” In short,
a value added tax is a tax upon business activity. The act
employs a value added measure of business activity, but its
intended effect is to impose a tax upon the privilege of
conducting business activity within Michigan. It is not a
tax upon income. [Id. at 149 (citations omitted).]
The “value added” concept has been described as “a
means of consistently measuring the size of business
firms and other economic enterprises comprising the
total economy....”Haughey, The economic logic of the
single business tax, 22 Wayne L R 1017 (1976). “[T]he
measure of the tax is the use of labor and capital.”
Kasischke, Computation of the Michigan single business
tax: Theory and mechanics, 22 Wayne L R 1069, 1070
(1976).
The computation of the SBT involves several steps,
but begins with calculation of the taxpayer’s tax base.
“The tax base computation is designed to calculate the
contribution each business makes to the total economy;
in economic terms, this contribution is the economic
size of the business.” Id. “Each business will pay a tax
proportionate to its economic size.” Id. If the taxpayer’s
business activities are confined to Michigan, the entire
tax base is allocated to Michigan and subject to taxation
under the SBTA. See MCL 208.40. If the taxpayer’s
business activities are taxable both in Michigan and
another state, only a certain part of its tax base is
allocated to Michigan because a state may not tax value
earned outside of its borders. See MCL 208.41; Trinova
Corp, 433 Mich at 151 (citation omitted).
The SBTA provides a formula for apportioning a tax
base between two or more taxing states and the formula
takes into consideration three factors: property, payroll,
and sales. Id. at 151-152; see, also, MCL 208.45a. At
338 288 M
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issue in this case is the sales factor. Under MCL
208.51(1), the sales factor is a fraction that has as its
numerator the taxpayer’s total sales in this state, and
as its denominator “the total sales of the taxpayer
everywhere during the tax year.” The SBTA distin-
guishes between two types of sales: sales of tangible
personal property and sales “other than sales of tan-
gible personal property....” MCL 208.52 and MCL
208.53. For purposes of the sales factor, under MCL
208.52(b), sales of tangible personal property are con-
sidered “in this state,” if “the property is shipped or
delivered to any purchaser within this state....”And,
under MCL 208.53, sales, “other than sales of tangible
personal property,” are considered “in this state” if
either the business activity is performed in Michigan or
if performed in Michigan and elsewhere, “based on
costs of performance, the greater proportion of the
business activity is performed in this state....”Sales
“in this state” are placed in the numerator of the sales
factor, while sales not considered “in this state” are
placed in the denominator.
On appeal the parties agree that the transactions at
issue in this case are “mixed transactions” in that they
involve elements of both sales of tangible personal
property and sales other than sales of tangible personal
property. That is, bus parts were sold, but so was the
service of installing the bus parts. However, plaintiff
claims that the sale of bus parts was the primary
purpose of the transactions and that the bus parts were
“sold,” for purposes of the sales factor, when each
completely rehabilitated bus was delivered back to its
out-of-state owner. Thus, the “sale” of tangible personal
property was not “in this state” and belongs in the
denominator of the sales factor. Defendants disagree
and claim that plaintiff’s complete rehabilitation of
each bus was the primary purpose of the transaction
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and, because this business activity was performed in
Michigan, the “sale” was “in this state” and belongs in
the numerator of the sales factor. The SBTA is silent
with regard to these types of transactions. But the
parties agree that the six-part incidental-to-service test
set forth in Catalina Mktg Sales Corp is applicable to
determine whether a transaction should be considered a
sale of tangible personal property or a sale of a service,
i.e., a sale other than a sale of tangible personal
property.
In Catalina Mktg Sales Corp, the issue was whether,
under MCL 205.52 of the General Sales Tax Act, a retail
sales tax should be imposed in a transaction that
involved both the provision of services and the transfer
of tangible personal property because sales tax does not
apply to sales of services. The Catalina Court, citing
Univ of Mich Bd of Regents v Dep’t of Treasury, 217
Mich App 665; 553 NW2d 349 (1996), adopted “the
‘incidental to service’ test for categorizing a business
relationship that involves both the provision of services
and the transfer of tangible personal property as either
a service or a tangible property transaction.” Catalina
Mktg Sales Corp, 470 Mich at 24. The Catalina Court
explained that the test “looks objectively at the entire
transaction to determine whether the transaction is
principally a transfer of tangible personal property or a
provision of a service.” Id. at 24-25. And “[i]n determin-
ing whether the transfer of tangible property was
incidental to the rendering of personal or professional
services, a court should examine what the buyer sought
as the object of the transaction, what the seller or
service provider is in the business of doing, whether the
goods were provided as a retail enterprise with a
profit-making motive, whether the tangible goods were
available for sale without the service, the extent to
which intangible services have contributed to the value
340 288 M
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of the physical item that is transferred, and any other
factors relevant to the particular transaction.” Id.at26.
In our case, the parties agree that the Catalina factors
are applicable, but their analysis of each factor signifi-
cantly differs. We first turn to plaintiff’s argument.
Plaintiff argues that its remanufacturing business
involves principally a transfer of tangible personal
property. Plaintiff claims that its contract with the
MBTA proves its contention. The contract required
plaintiff to replace 427 parts on each of the MBTA’s 125
transit buses, and also set forth a list of 164 parts that
plaintiff should replace on those same buses if needed.
Thus, plaintiff argues, “[c]learly, these 552 items of
tangible personal property are the focus of the contract
and any labor involved in their installation is incidental
to the tangible personal property.” And, “the cost of
tangible personal property in performing the contrac-
tual obligations was 5.086 times the cost of labor.” This
evidence “all supports a ruling that tangible personal
property is the ‘substance of the transaction’....
Therefore, the revenue should be sourced out of Michi-
gan.”
With regard to the specific factors, plaintiff appears
to argue that (1) what the MBTA sought as the object of
the transaction was brand new bus parts, (2) plaintiff is
in the bus parts business, (3) plaintiff’s “profits are
dependent upon bus parts sales,” (4) “while the [bus]
parts are available without the services, capital grant
funding is available for a rehabilitation project of a fleet
of buses and is not available if the transit authority
simply buys the parts and replaces them,” (5) it has not
been established that any services, other than the
installation of parts, increase the value of the buses
beyond the value of the replaced parts, themselves, and
(6) “Buy America requirements,” as well as the fact that
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bus remanufacturing is a capital project eligible for
capital grants, support the conclusion that such trans-
actions should be treated as the transfer of tangible
property—bus parts.
To the contrary, defendants argue, the MBTA contract
“conclusively establishes that the transfer of parts is
incidental to the provision of [plaintiff’s] rehabilitation
service.” The title of the contract itself—“Technical Speci-
fication for Nova Bus Rehabilitation”—proves that con-
tention. The object of the transaction, as far as the MBTA
was concerned, was for its buses to be “rehabilitated.” The
contract defines “rehabilitation” to include (1) “the resto-
ration of items to new, as new, or reconditioned function-
ally, as the case may be, to the original manufacturer’s
recommendations,” (2) “the complete disassembly of an
assembly or sub-assembly into its component parts, or, to
the degree defined in the individual sections of the Speci-
fications,” (3) “[t]he cleaning, inspection and qualification
for repair or replacement of the component parts,” and (4)
“[t]he reassembly of the component parts into complete
assemblies.” Thus, contrary to plaintiff’s claims, the con-
tract required that plaintiff perform extensive servicing of
the buses.
With regard to the six specific factors, defendants
appear to argue that (1) what the MBTA sought as the
object of the transaction was the service of having its
buses rehabilitated, i.e., overhauled, (2) plaintiff is in
the business of remanufacturing or rehabilitating
buses, as well as supplying bus parts because parts
can be ordered and sent to a customer instead of
having plaintiff perform the installation service, (3)
defendants contend that this factor is not applicable
because it “is clearly intended to help determine
whether a retail sale that is taxable under the Gen-
eral Sales Tax Act took place,” (4) bus parts are
342 288 M
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available for sale by plaintiff without the service but
that is not “remanufacturing,” (5) the rehabilitation
service necessarily contributes significantly to the
value of the bus parts because the MBTA contracted
to have its buses rehabilitated and thus, absent their
installation, the parts would have been worthless to
the MBTA, and (6) no other factors were relevant to
the particular transaction.
After objectively considering the entire transac-
tion, Catalina Mktg Sales Corp, 470 Mich at 24-25, we
agree with the Court of Claims and conclude that the
remanufacturing contract at issue, as well as other
remanufacturing contracts like it, are predominantly
for the provision of a service—a rehabilitation ser-
vice. Thus, for purposes of the sales factor, these are
sales “other than sales of tangible personal property”
and, because the services were provided in Michigan,
the sales were “in this state” under MCL 208.53. This
conclusion was reached in light of the following
considerations.
First, we reviewed the MBTA remanufacturing con-
tract. The contract clearly states that it is for a “midlife
overhaul, (i.e., Rehabilitation)” of transit buses. In that
regard, the contract provides:
This overhaul project shall include repairs or replace-
ment of the components utilized in the following systems
and/or assemblies: wheelchair lift, underbody structure,
front and rear axle assemblies, interior and exterior body,
wiring and piping, steering, suspension, signage, brakes,
fuel system, kneeling system, and air system. The project
also includes painting the bus and making any other
miscellaneous repairs needed to correct broken or worn
components.
The contract defines several terms, but three are espe-
cially relevant in this case:
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Rehabilitation:
a. Shall mean the restoration of items to new, as new, or
reconditioned functionally, as the case may be, to the
original manufacturer’s recommendations.
b. Shall mean the complete disassembly of an assembly
or sub-assembly into its component parts, or, to the degree
defined in the individual sections of the Specifications.
c. The cleaning, inspection and qualification for repair
or replacement of the component parts.
d. The reassembly of the component parts into complete
assemblies
***
Remanufacture: To recondition to O.E.M. [original
equipment manufacturer] Specifications. The component
or system in question does not necessarily need to be
replaced with an all new component, but may be replaced
with a rebuilt component that meets “as new” OEM
specifications, or, the used/old component may be removed
and reconditioned itself to meet “as new” OEM specifica-
tions.
Repair or Replacement — As Required or As
Necessary:
Repair or Replacement of components or subsystems “as
required” or “as necessary” requires the contractor bring
the part, component or subsystem back to new OEM
functional specifications. If the part cannot be repaired and
brought back up to OEM specifications it must be replaced.
The part may be replaced with either a remanufactured or
a new part.
Turning to the section of the contract labeled “De-
tailed Scope of Work,” we note the following examples
1
of the types of work plaintiff was to perform: (1) remove
1
The “Detailed Scope of Work” section is several pages in length and
we have only selected some examples of the types of work plaintiff was
expected to perform in satisfaction of the contract.
344 288 M
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engine/transmission cradle assembly, and inspect and
clean the engine cradle; (2) thoroughly clean air intake
system and replace particular parts with new parts; (3)
thoroughly steam-clean engine compartment and re-
place particular parts with new parts; (4) inspect and
service OEM fire alarm, check all hard tubing for
cracks, dents, and poor solder connections, and replace
sensors; (5) inspect and repair the driveshaft assembly
to bring to new OEM condition, including rebuilding
the propeller shaft with new universal joints, dust cap,
and grease fittings; (6) remove, inspect, and clean the
air tanks; (7) completely rebuild the air dryer to OEM
specifications or replace with a new unit; (8) clean,
inspect, and pressure test the radiator and charge air
cooler assemblies; (9) remove and clean the front and
rear axle assemblies and perform magnaflux or other
Authority-approved nondestructive structural testing,
and (a) return all front axle components to new OEM
specifications, and (b) completely rebuild the differen-
tial carrier to new OEM specifications; and (10) rebuild
the steering column using new U-joints, horn ring,
contacts, tilt steering gears, and all levers, pins and
bearings, but if rebuilding could not be preformed to
OEM specifications, the steering column was to be
replaced with a new one.
Clearly, the contract is not a contract merely for the
purchase of bus parts. Rather, the contract provisions
make several references, for example, to plaintiff’s
disassembling, removing, repairing, inspecting, recon-
ditioning, rebuilding, replacing, restoring, painting, ser-
vicing, cleaning, testing, and reassembling various com-
ponents and parts of the buses. Although replacement
of certain bus parts was included in the remanufactur-
ing contract, the purchase of bus parts was not an end
in and of itself but a means, albeit a partial means, by
which to fulfill the contractual objective of plaintiff’s
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customer to have its buses completely rehabilitated.
That is, the sale of the bus parts was incidental to the
service of actually performing the rehabilitation of the
buses.
Second, we reviewed the SBTA, including the mean-
ing of “business activity” because the SBT is a tax upon
business activity. See Trinova, 433 Mich at 149. Under
MCL 208.3(2), “[b]usiness activity” “means a transfer
of legal or equitable title to or rental of property,
whether real, personal, or mixed, tangible or intangible,
or the performance of services, or a combination
thereof, made or engaged in, or caused to be made or
engaged in, within this state, whether in intrastate,
interstate, or foreign commerce, with the object of gain,
benefit, or advantage, whether direct or indirect, to the
taxpayer or to others, but shall not include the services
rendered by an employee to his employer, services as a
director of a corporation, or a casual transaction.”
In this case, it is arguable that even if the sale was a
sale of tangible personal property—bus parts—there
was “a transfer of legal or equitable title” to the bus
parts when they were incorporated into the purchaser’s
bus, i.e., as each part was installed into the bus, each
part was delivered to the purchaser and became an
integrated component of the bus. See MCL 208.3(2),
208.52(b). And because each installation occurred in
Michigan, each sale was “in this state.” See id. That the
completely rehabilitated buses were then delivered to
out-of-state owners, in compliance with the remanufac-
turing contract, does not change the analysis. Thus, for
purposes of the sales factor, the sale would be placed in
the numerator whether it was a sale of tangible per-
sonal property or the sale of a service. MCL 208.51(1).
The situation at issue here—remanufacturing—is not
analogous to manufacturing a product as plaintiff had
346 288 M
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argued in the Court of Claims. For example, when an
automobile manufacturer installs a component part
during the manufacture of a vehicle, it is installing the
component into its own vehicle. Until it is sold, the
automobile, as well as all of its component parts, are
owned by the manufacturer. Here, plaintiff is installing
its bus parts into used buses that plaintiff does not own.
In any case, we conclude that the sale of the bus parts
was merely incidental to the service of actually perform-
ing the rehabilitation of the buses and that the service
was provided in Michigan.
Third, we considered the six-factor incidental-to-
service factors set forth in Catalina Mktg Sales Corp.
With regard to the first factor—what the buyer sought
as the object of the transaction—we conclude that the
buyer sought the service of having its buses rehabili-
tated. Plaintiff was to disassemble, remove, repair,
inspect, recondition, rebuild, replace, restore, paint,
service, clean, test, and reassemble various components
and parts of the buses so they were, as the trial court
described, “almost like new,” or made to meet the
standards of a newly manufactured bus. The object of
the transaction was not merely to purchase “brand new
bus parts” as plaintiff has argued.
With regard to the second factor—what the seller or
service provider is in the business of doing—we note
that plaintiff is in both the retail business of selling bus
parts and the business of remanufacturing buses. How-
ever, with regard to the contract at issue, as well as
similar types of contracts, plaintiff was not acting as a
retailer of bus parts but was actually selling the service
of rehabilitating buses, i.e., disassembling, removing,
repairing, inspecting, reconditioning, rebuilding, re-
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placing, restoring, painting, servicing, cleaning, testing,
and reassembling various components and parts of the
buses.
The third factor—whether the goods were provided
as a retail enterprise with a profit-making motive—may
be more applicable in the context of whether a retail
sale is taxable under the General Sales Tax Act. But to
the extent it is applicable here, we agree with the Court
of Claims conclusion that, although the bus parts were
available for purchase alone, in the context of a reha-
bilitation contract, the provision of the bus parts was
merely a means to accomplish the contractual objective
of rehabilitating the buses. In a sense, plaintiff was
acting as a consumer of bus parts, not a retailer of bus
parts. The same is true with regard to the fourth
factor—whether the tangible goods were available for
sale without the service. Plaintiff is in the business of
selling bus parts, but it also sells rehabilitation services
that require the installation of bus parts as well as the
provision of other services to meet its contractual
obligations.
Similarly, with regard to the fifth factor—the extent
to which intangible services have contributed to the value
of the physical item that is transferred—again, we agree
with the Court of Claims conclusion that “there would be
no remanufacturing but for the service.” The value sought
by plaintiff’s remanufacturing customer includes all as-
pects of rehabilitation services, not just bus parts. As
plaintiff admits, “capital grant funding is available for a
rehabilitation project of a fleet of buses and is not avail-
able if the transit authority simple buys the parts and
replaces them.” And we agree with the Court of Claims’
conclusion with regard to the sixth factor that no other
factors are relevant to the particular transaction. Thus,
the Court of Claims properly held that the remanufac-
348 288 M
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turing contract at issue, as well as other remanufactur-
ing contracts like it, are predominantly for the provi-
sion of a service and are allocated to Michigan, where
the service was performed, under MCL 208.53. Accord-
ingly, we affirm the grant of summary disposition in
defendants’ favor.
Next, plaintiff argues that defendants did not meet
their burden of proof that revenue from remanufac-
turing projects was predominantly from services for
projects completed in plaintiff’s fiscal years ending in
January 2002 through January 2005. But it appears
that the Court of Claims, as well as the parties for at
least some time, were operating under the under-
standing that the MBTA contract was representative
of other remanufacturing contracts plaintiff was a
party to in those years. However, in response to
defendants’ motion for summary disposition, plaintiff
argued that some of the terms of those other con-
tracts were not similar to the MBTA contract. At oral
argument, the Court of Claims indicated that it would
consider a motion for reconsideration with regard to
fiscal years ending in January 2002 through January
2005 if plaintiff provided contracts that were signifi-
cantly different from the MBTA contract. The Court
of Claims also included that proviso in its order,
granting plaintiff 21 days to file such a motion.
Plaintiff did not file a motion for reconsideration.
Accordingly, this issue was not properly preserved for
our review. See Walters v Nadell, 481 Mich 377, 387;
751 NW2d 431 (2008).
Next, plaintiff argues that it is entitled to an award of
sanctions under MCR 2.313(C) because defendants
failed to admit that plaintiff was entitled to a refund of
SBT for the fiscal years ending in January of 2000 and
2001. A trial court’s decision on a motion for sanctions
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based on the failure to admit is reviewed for an abuse of
discretion. See Phinisee v Rogers, 229 Mich App 547,
561-562; 582 NW2d 852 (1998).
Pursuant to MCR 2.312(A), a party in a civil case may
request certain admissions from the other party before
trial. And MCR 2.313(C) provides that “[i]f a party
denies... the truth of a matter as requested under
MCR 2.312, and if the party requesting the admission
later proves...thetruth of the matter, the requesting
party may move for an order requiring the other party
to pay the expenses incurred in making that proof,
including attorney fees.” Here, plaintiff requested such
sanctions on the ground that defendants failed to admit
that plaintiff’s SBT returns filed for fiscal years ending
in January of 2000 and 2001 were from the sale of bus
parts entitling plaintiff to a refund. This was an allega-
tion set forth in plaintiff’s amended complaint. How-
ever, the parties voluntarily settled this matter before
the hearing on the cross-motions for summary disposi-
tion and, obviously, before this case was summarily
dismissed. Therefore, an award of sanctions under MCR
2.313(C) was not warranted.
In Radtke v Miller, Canfield, Paddock & Stone, 453
Mich 413; 551 NW2d 698 (1996), our Supreme Court
explained that admissions under MCR 2.312 are more a
matter of civil procedure because an admission conclu-
sively establishes the admitted facts “ ‘and the opposing
side need not introduce evidence to prove the facts.’ ”
Id. at 420, quoting 2 Jones, Evidence (6th ed), § 13C:14,
p 310 (November 1995 supp). “A request for admission
is not a typical discovery device, however, because the
purpose ‘is not to discover facts but rather to establish
some of the material facts in a case without the neces-
sity of formal proof at trial...sothat issues which are
disputed might be clearly and succinctly presented to
350 288 M
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the trier of facts.’ ” Id. at 420 n 6, quoting 23 Am Jur 2d,
Depositions and Discovery, § 314, p 613. The Radtke
Court further explained that these judicial admissions
are formal concessions “ ‘that have the effect of with-
drawing a fact from issue and dispensing wholly with
the need for proof of the fact.’ ” Id. at 420, quoting 2
McCormick, Evidence (4th ed), § 254, p 142. In this
case, because the disputed issue was settled before final
judicial disposition, plaintiff was not required to prove
the allegation by further litigation and, therefore, was
not entitled to “expenses incurred in making that
proof” within the contemplation of MCR 2.313(C).
Thus, the Court of Claims did not abuse its discretion
when it denied plaintiff’s request for sanctions under
MCR 2.313(C).
Finally, plaintiff argues that “the United States’
Constitution prohibits ruling upholding the depart-
ment’s assessments.” Although unclear, it appears that
plaintiff is claiming (1) a due process violation on the
ground that it “has been forced to pay almost $80,000 in
taxes and penalties pursuant to irrational and arbitrary
assessments,” and (2) a violation of the Commerce
Clause apparently on the ground that defendants’ in-
terpretation of the relevant statutes created an internal
and external inconsistency. These claims were not
raised before, addressed, or decided by the Court of
Claims; therefore, they are not properly preserved for
appellate review and we decline to address them. See
Walters, 481 Mich at 387.
Affirmed.
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WOODINGTON v SHOKOOHI
Docket No. 288923. Submitted March 2, 2010, at Lansing. Decided May 4,
2010, at 9:05 a.m.
Cheri L. Woodington brought an action in the Saginaw Circuit Court
seeking a judgment of divorce from Kamran Shokoohi. The trial
court, Robert L. Kaczmarek, J., entered a judgment of divorce.
Plaintiff appealed and defendant cross-appealed.
The Court of Appeals held:
1. The trial court failed to provide its analysis or reasoning
regarding its decisions to award plaintiff alimony in gross and
deny plaintiff’s request for spousal support, therefore the Court of
Appeals must reverse and remand to the trial court with instruc-
tions to make findings of fact appropriate for judicial review.
2. The trial court’s determination that the real property that
defendant purchased on Sawmill Creek was not a marital asset
was not clearly erroneous and must be affirmed.
3. The trial court abused its discretion by denying plaintiff’s
discovery request for the production of the business records of the
professional corporation that employs defendant. The matter must
be remanded to the trial court to enable plaintiff to examine the
records sought in the subpoena. After examining the records
subject to an appropriate protective order, plaintiff may move for
appropriate relief on the basis of information in the records that
could lead to a different outcome in regard to the determination
concerning defendant’s interest in the professional corporation as
a marital asset.
4. The trial court failed to make relevant findings of fact
regarding the value of certain disputed items of marital property.
This precludes meaningful review of whether the trial court’s
findings were clearly erroneous and whether its division of prop-
erty constituted an abuse of discretion. The trial court failed to
make findings regarding a 2007 GMC Yukon, a Saginaw Federal
Credit Union account and a Chase Bank account, defendant’s
401(k) account with the professional corporation, and a Mercedes
vehicle. The trial court did not fail to make relevant findings
regarding a Chemical Bank primevest account and did not clearly
352 288 M
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err in holding that the account was not a marital asset and
belonged primarily to defendant’s sister. The trial court’s
failures to make findings regarding the relevant factors for
dividing property and to assign a value to several assets or
determine the appropriate date for valuation prevents the Court
of Appeals from determining if the marital division was equi-
table. The matter must be remanded to the trial court for
adequate findings of fact.
5. The trial court failed to explain its decision to award
plaintiff less than half of the amount of attorney fees she re-
quested, therefore, there is no basis for determining whether the
award represented an abuse of discretion. The error was not
harmless. The matter must be remanded to the trial court for
appropriate findings.
6. There is no merit to defendant’s argument that the trial
court properly denied plaintiff’s request for an expert witness fee
because the court gave no credence to the expert’s opinion. No
authority was presented to support the argument that an award of
costs for an expert’s fee is in any way to be tied to the party’s
success regarding the matter on which the expert testified.
7. The prenuptial agreement of the parties is ambiguous.
The phrase “the parties specifically agree and state that this
Agreement is intended to waive rights upon death and is not
made in contemplation of any divorce” does not unambiguously
disclaim application of the agreement in the event of a divorce.
At least two interpretations of the agreement are possible: (1)
the prenuptial agreement was not intended to govern the
division of assets in a divorce; and (2) the agreement should
govern, or at least guide, the division of assets in a divorce if
such provisions are legally enforceable. The matter must be
remanded to the trial court to resolve the ambiguity. On
remand, if the trial court determines that the parties intended
for the agreement to govern division of property in a divorce, it
should further consider the meaning of the term “contribution”
as used in the agreement in reference to assets acquired during
the marriage. The trial court may also address plaintiff’s
arguments that the prenuptial agreement should be set aside on
the basis of changed circumstances.
8. The judgment must be affirmed as it pertains to the Sawmill
Creek property and the Chemical Bank primevest account. The
case must be remanded to the trial court for further findings and
proceedings regarding the decision to award plaintiff alimony in
gross in lieu of spousal support, discovery of the business records
of defendant’s employer, the trial court’s overall division of prop-
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erty and the valuation of certain specific assets, the award of
attorney fees to plaintiff, and the interpretation of the prenuptial
agreement with respect to divorce.
Affirmed in part, reversed in part, and remanded.
Braun Kendrick Finkbeiner P.L.C. (by Jamie Hecht
Nisidis) for plaintiff.
Skinner Professional Law Corporation (by David R.
Skinner) for defendant.
Before: K. F. K
ELLY
,P.J., and S
AAD
and W
HITBECK
,JJ.
S
AAD
, J. Plaintiff, Cheri Woodington, appeals the trial
court’s judgment of divorce. She argues that the trial
court made inadequate findings of fact in regard to the
value of marital property, the date of valuation, and the
status of certain assets as marital or separate property.
She also raises issues concerning discovery, spousal
support, and attorney fees. Defendant, Kamran Shok-
oohi, cross-appeals and contends that the trial court
erred by failing to divide the property in accordance
with the parties’ prenuptial agreement. We affirm some
aspects of the trial court’s judgment; however, because
the inadequacy of the trial court’s findings on several of
these matters precludes meaningful appellate review,
we remand for further proceedings.
I. SPOUSAL SUPPORT
Plaintiff argues that the trial court erred by award-
ing her alimony in gross in lieu of the spousal support
she sought. She also contends that the trial court failed
to make findings of fact in support of this decision. We
find that the trial court’s failure to make relevant
findings precludes review of this decision, and we
remand to the trial court for further findings.
354 288 M
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This Court reviews a trial court’s award of spousal
support for an abuse of discretion. Olson v Olson, 256
Mich App 619, 631; 671 NW2d 64 (2003). An abuse of
discretion occurs when the trial court’s decision falls
outside the range of reasonable and principled out-
comes. Maldonado v Ford Motor Co, 476 Mich 372, 388;
719 NW2d 809 (2006). The trial court’s findings of fact
relating to an award of spousal support are reviewed for
clear error. Moore v Moore, 242 Mich App 652, 654; 619
NW2d 723 (2000).
“ ‘In deciding a divorce action, the circuit court
must make findings of fact and dispositional rul-
ings.’ ” McDougal v McDougal, 451 Mich 80, 87; 545
NW2d 357 (1996) (citations omitted). This Court
must first review the trial court’s findings of fact.
Sparks v Sparks, 440 Mich 141, 151; 485 NW2d 893
(1992). Findings of fact, such as a trial court’s valu-
ation of particular marital assets, will not be reversed
unless clearly erroneous. Beason v Beason, 435 Mich
791, 805; 460 NW2d 207 (1990). A finding is clearly
erroneous if, after a review of the entire record, the
reviewing court is left with the definite and firm
conviction that a mistake was made. Id.; Johnson v
Johnson, 276 Mich App 1, 10-11; 739 NW2d 877
(2007). Special deference is given to the trial court’s
findings when they are based on the credibility of the
witnesses. Draggoo v Draggoo, 223 Mich App 415,
429; 566 NW2d 642 (1997). The determination of the
proper time for valuation of an asset is in the trial
court’s discretion. Gates v Gates, 256 Mich App 420,
427; 664 NW2d 231 (2003). If the trial court’s find-
ings of fact are upheld, the appellate court must
decide whether the dispositive ruling was fair and
equitable in light of those facts. Sparks, 440 Mich at
151-152. “The court’s dispositional ruling should be
affirmed unless this Court is left with the firm
2010] W
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conviction that the division was inequitable.” Picker-
ing v Pickering, 268 Mich App 1, 7; 706 NW2d 835
(2005).
Plaintiff sought spousal support in the amount of
$55,000 annually (rounded to $4,600 monthly) pay-
able until the parties’ youngest child began attending
high school, which would enable plaintiff to continue
her status as a full-time, stay-at-home mom until the
children completed middle school. Defendant stated
in his trial brief that he would be willing to pay
spousal support in the amount of $55,000 per year for
two years.
The objective of spousal support is to balance the
incomes and needs of the parties in a way that will
not impoverish either party, and support is to be
based on what is just and reasonable under the
circumstances of the case. Berger v Berger, 277 Mich
App 700, 726; 747 NW2d 336 (2008). Among the
factors that a court should consider are (1) the past
relations and conduct of the parties; (2) the length of
the marriage; (3) the abilities of the parties to work;
(4) the source and the amount of property awarded to
the parties; (5) the parties’ ages; (6) the abilities of
the parties to pay support; (7) the present situation of
the parties; (8) the needs of the parties; (9) the
parties’ health; (10) the parties’ prior standard of
living and whether either is responsible for the
support of others; (11) the contributions of the par-
ties to the joint estate; (12) a party’s fault in causing
the divorce; (13) the effect of cohabitation on a
party’s financial status; and (14) general principles of
equity. Id. at 726-727.
Plaintiff says that the trial court abused its discre-
tion because it essentially denied her spousal support,
and opted instead to award her alimony in gross, “a
356 288 M
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division of property.”
1
The trial court did not explain its
reasons for awarding alimony in gross, its reasons for
awarding the specific amount of alimony in gross, or its
reasons for denying plaintiff’s request for periodic spou-
sal support subject to modification under MCL 552.28.
Accordingly, we are unable to discern why the court
believed that this decision was appropriate for the
parties’ circumstances. The trial court could have or-
dered spousal support or an award of property called
“alimony in gross” but, to support its dispositional
ruling, the court was required to make findings of fact
that are susceptible to appellate review. Because the
trial court failed to provide its analysis or reasoning
regarding its decision to award alimony in gross and
deny plaintiff’s request for spousal support, we must
reverse and remand with instructions that the trial
court make findings of fact appropriate for judicial
review.
II. SAWMILL CREEK PROPERTY
Plaintiff maintains that the trial court erred by
finding that the real property defendant purchased on
Sawmill Creek was not a marital asset. We disagree.
We review for clear error a trial court’s findings of
fact regarding whether a particular asset qualifies as
marital or separate property. See McNamara v Horner,
249 Mich App 177, 182-183; 642 NW2d 385 (2002).
Findings of fact are clearly erroneous when this Court
is left with the definite and firm conviction that a
mistake has been made. Ackerman v Ackerman, 197
1
Staple v Staple, 241 Mich App 562, 566; 616 NW2d 219 (2000). We
note that the holding in Staple is inapplicable because Staple applies “to
judgments entered pursuant to the parties’ own negotiated settlement
agreements, not to alimony provisions of a judgment entered after an
adjudication on the merits.” Id. at 569.
2010] W
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Mich App 300, 302; 495 NW2d 173 (1992). We accord
special deference to a trial court’s factual findings that
were based on witness credibility. Draggoo, 223 Mich
App at 429.
A “trial court’s first consideration when dividing
property in divorce proceedings is the determination of
marital and separate assets.” Reeves v Reeves, 226 Mich
App 490, 493-494; 575 NW2d 1 (1997). Marital assets
are those that came “to either party by reason of the
marriage....”MCL 552.19. Generally, marital assets
are subject to being divided between the parties, but
separate assets may not be invaded. McNamara, 249
Mich App at 183.
Plaintiff presented evidence that the Sawmill Creek
property was a marital asset acquired by defendant
before she filed for divorce, but defendant presented
evidence that he bought the property for and on behalf
of his sister, with his sister’s money. This issue pre-
sented a question of the credibility of the witnesses.
Although the trial court might have found that defen-
dant’s explanation of his involvement in the Sawmill
Creek property purchase was not credible, and that he
was concealing the property’s true status as a marital
asset, it gave credence to his explanation. This finding
was not clearly erroneous because it was based on the
trial court’s findings as to the credibility of witnesses.
Draggoo, 223 Mich App at 429.
III. DISCOVERY OF BUSINESS RECORDS
Plaintiff argues that the trial court erred by denying
her discovery request for production of the business
records of the Great Lakes Eye Institute, P.C. (the P.C.).
A trial court’s decisions regarding discovery are re-
viewed for abuse of discretion. Mercy Mt Clemens Corp
v Auto Club Ins Ass’n, 219 Mich App 46, 50; 555 NW2d
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871 (1996). In view of the unique circumstances of
defendant’s relationship to the P.C., we conclude that
the trial court abused its discretion by denying the
discovery request.
After completing his residency in ophthalmology,
defendant practiced medicine with the Great Lakes Eye
Institute, P.C., a professional corporation owned by his
brother, Farhad Shokoohi. Defendant was allegedly
employed pursuant to an employment agreement, but
his compensation up to and including 2005 was sub-
stantially higher than the amount due under the agree-
ment. In 2006, the year plaintiff filed for divorce,
defendant’s compensation was reduced to the contrac-
tual payment amount. Plaintiff maintained that defen-
dant was a part owner of the P.C., although corporate
documents listed Farhad as the sole owner. She sought
discovery of the P.C.’s business records to investigate
the true nature of defendant’s relationship with the
P.C., and the method by which his compensation was
determined. The trial court reviewed the records in
camera and denied the request.
The issue, as framed by plaintiff, is not whether the
trial court erred by finding that defendant had no
ownership interest in the P.C., but whether the trial
court erred by denying plaintiff the discovery materials
she says are necessary to assess defendant’s status in
relation to the P.C. The trial court’s comments that the
materials were not discoverable because they did not
contain information concerning defendant’s income re-
flect a misunderstanding of plaintiff’s purpose in seek-
ing the documents. Plaintiff sought the documents to
assess whether defendant’s compensation was formula-
ically correlated to the P.C.’s receipts (suggesting an
ownership interest), rather than calculated only accord-
ing to the employment agreement. Plaintiff established
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suspicious circumstances warranting further investiga-
tion of how defendant’s compensation was determined.
Defendant’s actual compensation from 2000 to 2005
was substantially disparate from the compensation he
should have earned under the employment agreement,
but in 2006, the year plaintiff filed for divorce, it was
reduced to the employment agreement amount. More-
over, although defendant claims that he is and always
has been only an employee of the P.C., evidence shows
that he bragged to others that he had an ownership
interest and corporate documents show that defendant
was listed as an officer of the P.C. These circumstances
raise questions as to why defendant was paid more than
the amount due under the employment agreement, and
why the end of the overpayment coincided with the
onset of the divorce action. Defendant’s self-serving
explanation—that his brother paid him generously out
of fraternal affection until 2006—does not dispel ques-
tions as to Farhad’s actual arrangement with regard to
defendant’s compensation. Additionally, Farhad’s con-
flicting statements regarding defendant’s status as a
corporate officer merit further discovery to determine
whether defendant held any position other than that of
a salaried physician. Plaintiff should have been allowed
the opportunity to examine the documents to investi-
gate the actual nature of defendant’s status with the
P.C. The suspicious circumstances surrounding defen-
dant’s compensation militate against accepting at face
value defendant’s assertion that his additional compen-
sation was a decision based on familial favoritism.
Defendant argues that plaintiff’s expert, Robert
Selley, essentially conceded the ownership issue by
stating that ownership status did not enter into his
analysis. The pertinent question, however, is whether
the financial records contained information that might
have enabled Selley to better assess whether defendant
360 288 M
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had an ownership interest, and whether that informa-
tion could have led to a different or stronger analysis.
In Eyde v Eyde, 172 Mich App 49; 431 NW2d 459
(1988), the defendant wife, Kathleen Eyde, sought
business records from George Eyde, the brother and
business partner of her husband, Louis Eyde, in the
course of divorce proceedings to determine her hus-
band’s net worth. George Eyde brought an action to
prevent discovery of the documents. The trial court
entered an order compelling discovery but establishing
a number of safeguards designed to prevent the disclo-
sure of confidential matters and to prevent discovery of
documents that relate only to George Eyde and were
not relevant to Kathleen Eyde’s determination of Louis
Eyde’s net worth. Id. at 50. The Court stated:
Michigan has a strong historical commitment to a
far-reaching, open and effective discovery practice. Daniels
v Allen Industries, Inc, 391 Mich 398, 403; 216 NW2d 762
(1974). Discovery rules are to be liberally construed in
order to further the ends of justice. Id. The modern
tendency is to broaden the scope of discovery when neces-
sary to facilitate preparation, to guard against surprise,
and to expedite justice. Fassihi v St Mary Hospital of
Livonia, 121 Mich App 11, 15; 328 NW2d 132 (1982).
The general rule is that any document which is relevant
and not privileged is freely discoverable upon request.
Davis [v O’Brien, 152 Mich App 495, 502-504; 393 NW2d
914 (1986)]. MCR 2.302(B)(1) provides:
“Parties may obtain discovery regarding any matter, not
privileged, which is relevant to the subject matter involved
in the pending action.”
There is no requirement that there be good cause for
discovery of relevant and nonprivileged documents. Davis,
supra at 503-504. [Eyde, 172 Mich App at 54-55.]
The Court concluded that the defendant wife was
entitled to discover Louis Eyde’s records. It stated:
2010] W
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Louis Eyde’s business records and banking records were
relevant to the subject matter involved in defendant’s
divorce action. The financial status of defendant’s husband
is material and relevant to the subject matter of defen-
dant’s divorce....Defendant’s discovery so far has been
inadequate to determine the true value of Louis Eyde’s
assets; financial statements now in defendant’s possession
vary widely in their estimate of Louis Eyde’s net worth.
The documents already in defendant’s possession do not
include relevant financial information regarding all of
Louis Eyde’s known business entities. Plaintiff’s counsel
had effectively blocked any estimate of Louis Eyde’s net
worth by deposed bank officials. Thus, the documents at
issue are relevant and necessary to determine the extent
and value of defendant and Louis Eyde’s marital estate.
[Id. at 55.]
Although not directly on point, Eyde is instructive with
respect to discovery of financial records that are rel-
evant to ascertaining the value of a spouse’s assets, but
which are in the possession of a closely related third
party. In Eyde, it was already established that George
Eyde and Louis Eyde were partners in several business
endeavors, and that the records regarding the endeav-
ors in which Louis was involved were relevant to the
determination of Louis’s financial status. In the instant
case, in contrast, defendant’s status in relation to the
P.C. is uncertain. The corporate documents indicate
that Farhad is the sole shareholder, and defendant’s tax
returns indicate that he is an employee without an
ownership interest, but plaintiff has presented evidence
of an inconsistency between these “official” facts and
defendant’s actual compensation. Under these specific
circumstances, plaintiff has established that discovery
of the P.C.’s records is relevant to the subject matter,
and the records are therefore discoverable.
In granting the P.C.’s motion to quash, the trial court
stated that the records were not relevant to proving
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defendant’s income. We agree with plaintiff that this
ruling was off-point. Plaintiff needed the records to
investigate the P.C.’s basis for determining defendant’s
income, and to investigate whether this method re-
flected any understanding between Farhad and defen-
dant concerning possible ownership status. Such infor-
mation would have been highly relevant to Selley’s
analysis of the value of defendant’s “holder’s interest”
in his practice.
Plaintiff has offered concrete, specific reasons why
the P.C.’s records might reveal pertinent information
concerning defendant’s interest in the P.C. Accordingly,
we remand to the trial court to enable plaintiff to
examine the records sought in the subpoena. After
examining the records subject to an appropriate protec-
tive order, plaintiff may move for appropriate relief on
the basis of information in the records that could lead to
a different outcome in regard to defendant’s interest in
the P.C. as a marital asset.
IV. TRIAL COURT’S FINDINGS OF VALUE OF DISPUTED ASSETS
Absent a prenuptial agreement, a trial court should
equitably distribute marital property in light of all the
circumstances. Berger, 277 Mich App at 716-717. To
reach an equitable division of marital property, a trial
court should consider the duration of the marriage, the
contribution of each party to the marital estate, each
party’s station in life, each party’s earning ability, each
party’s age, health and needs, fault or past misconduct,
and any other equitable circumstance. McDougal, 451
Mich at 89; Sparks, 440 Mich at 158-160. The determi-
nation of relevant factors will vary with the circum-
stances of each case, and no one factor should be given
undue weight. The trial court must make specific
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findings regarding the factors it determines to be rel-
evant. Sparks, 440 Mich at 159; Berger, 277 Mich App
at 717.
Generally, marital assets are subject to division be-
tween the parties but the parties’ separate assets may
not be invaded. McNamara, 249 Mich App at 183.
Generally, assets earned by a spouse during the mar-
riage, whether they are received during the existence of
the marriage or after the judgment of divorce, are
properly considered part of the marital estate. Skelly v
Skelly, 286 Mich App 578, 582; 780 NW2d 368 (2009);
McNamara, 249 Mich App 183-184. The parties’ mani-
festation of intent to lead separate lives, such as by
filing a complaint for divorce or maintaining separate
homes, can be of crucial significance when apportioning
the marital estate. Byington v Byington, 224 Mich App
103, 112; 568 NW2d 141 (1997). However, property
earned after such a manifestation of intent should still
be considered a marital asset, although the presump-
tion of congruence that exists with respect to the
distribution of marital assets becomes attenuated and
may result in the nonacquiring spouse being entitled to
no share or a lesser share of the property in light of all
the apportionment factors. Id. at 115-116. Separate
assets may be invaded if one party demonstrates addi-
tional need, or had significantly contributed to the
acquisition or growth of the separate asset. Skelly, 286
Mich App at 582.
A trial court must make specific findings of fact
regarding the value of each disputed piece of marital
property awarded to each party in the judgment. Olson,
256 Mich App at 627-628. A trial court’s findings of fact
are inadequate if they are not sufficiently specific to
enable the parties to determine the approximate values
of their individual awards by consulting the verdict
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along with the valuations to which they stipulated.
Nalevayko v Nalevayko, 198 Mich App 163, 164; 497
NW2d 533 (1993). For the purposes of dividing property,
marital assets are typically valued at the time of trial or
the time judgment is entered, although a court may, in
its discretion, use a different date. Byington, 224 Mich
App at 114 n 4.
This Court further reviews whether a trial court’s
dispositional rulings are fair and equitable in light of
the trial court’s findings of fact, Sparks, 440 Mich at
151-152, but this Court will reverse only if definitely
and firmly convinced that the disposition is inequitable.
Pickering, 268 Mich App at 7. When dividing marital
property, a court is not required to award mathemati-
cally precise shares. Byington, 224 Mich App at 114-
115.
Here, the trial court did not divide the marital estate
on a percentage basis, nor did it explain its general basis
for determining an equitable division of property. It did
not make findings regarding the parties’ contributions
to the marital estate or other relevant factors for
dividing property. The trial court awarded defendant
the bulk of the marital estate, and awarded plaintiff
personal possessions, such as her vehicle, and the
children’s furniture, and awarded plaintiff one of the
parties’ homes and a property award in the form of
alimony in gross. Plaintiff specifically challenges the
trial court’s failure to make findings concerning the
value of certain assets, and generally challenges the
trial court’s failure to make findings concerning its
overall property division.
We are unable to discern the trial court’s general
plan in dividing assets. Defendant argues that the
division can be explained in reference to the prenuptial
agreement, but the trial court determined that the
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parties did not make the agreement in contemplation of
divorce. (Defendant’s argument that the trial court
erred in failing to comply with the prenuptial agree-
ment is addressed later in this opinion.) Despite this
determination by the trial court, the trial court’s divi-
sion of property was substantially consistent with the
prenuptial agreement’s requirement that property ac-
quired after the marriage “shall be divided...accord-
ing to the percentage of their respective contributions
in acquiring same.” It appears that the trial court
regarded the marital assets as the product of defen-
dant’s contributions and awarded them accordingly,
allowing plaintiff only six years of support payments
and assets such as the vacation home and a vehicle that
could be considered “her” own property. The trial
court’s failure to make findings in support of its uneven
property division raises questions regarding why it
ordered a property division in near compliance with a
prenuptial agreement that it found to be inapplicable.
Furthermore, it appears that the trial court’s decision
may have been based on the unstated premise that
defendant was the primary contributor to the marital
estate. Although plaintiff’s financial contributions to
the marital estate are negligible, it is well established
that a non-wage-earning spouse can make substantial
contributions to the marital estate by running the
household and caring for the parties’ children. Han-
away v Hanaway, 208 Mich App 278, 293; 527 NW2d
792 (1995). Plaintiff, a lawyer, quit her law practice and
suspended her legal career to stay at home with the
parties’ children. She also testified that she devoted
substantial energy and time to serving the needs of
defendant and his family. The trial court’s failure to
make relevant findings on this matter precludes mean-
ingful review of whether the trial court’s findings were
366 288 M
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clearly erroneous, and of whether its division of prop-
erty constituted an abuse of discretion.
Additionally, we agree with plaintiff that the trial
court failed to make findings regarding the following
assets:
2007 GMC Yukon. The parties gave conflicting testi-
mony concerning the value of this vehicle, but the trial
court failed to make a finding regarding its value, and
failed to explain if or why it considered the vehicle
plaintiff’s separate property.
Saginaw Federal Credit Union account and Chase
Bank account, No. ****0175. Defendant withdrew
$100,000 from the credit union account in June 2006,
the month plaintiff filed for divorce, and deposited this
amount into the Chase account. Defendant did not
account for how these funds were disseminated after
their transfer to the Chase account. In December 2007,
defendant deposited his employee bonus, in the amount
of $148,875, into the credit union account. The trial
court awarded both of these accounts to defendant,
without making relevant findings. Given the question-
able circumstances of money being withdrawn from the
parties’ joint account at the time plaintiff filed for
divorce, and being transferred to another account that
was nearly depleted over the following months, the trial
court erred by failing to make findings as to the value of
these accounts. The trial court’s decision in regard to
these accounts is problematic because there are no
findings of fact that support the trial court’s decision.
The court made no findings as to the parties’ contribu-
tions, and so forth, that would explain why the award is
so favorable to defendant. The court’s decision appears
to conform to the prenuptial agreement, but the court
found that the agreement was not made in contempla-
tion of divorce. The trial court’s decision to award these
2010] W
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accounts to defendant without making findings regard-
ing the transactions seems to assume that defendant
was entitled to dissipate the $100,000 transferred out of
the credit union without explanation, and that he was
entitled to keep as his separate property the 2007 bonus
payment of $148,875. Property acquired after the par-
ties manifest an intent to lead separate lives is not
necessarily excluded from the marital estate. The court
should consider this matter pursuant to relevant fac-
tors, such as the parties’ respective contributions to the
spouse’s compensation package. Byington, 224 Mich
App at 117. Regarding the credit union withdrawal,
when a party has dissipated marital assets without the
fault of the other spouse, the value of the dissipated
assets may be included in the marital estate. 2 Michigan
Family Law (6th ed, 2008 supp), Property Division,
§ 15.21. But the trial court made no findings to explain
its decisions regarding these accounts, or its overall
plan for dividing the marital estate.
Defendant’s 401(k) account with the P.C. The trial
court’s minimal findings of fact concerning the marital
estate in general, and several specific assets, including
this account, leave us unable to determine whether its
decisions were an abuse of discretion, or whether they
were based on clearly erroneous findings of fact.
Mercedes. Defendant argues that the Mercedes is not
marital property because he acquired it through a
“reinvestment” of an asset listed as a separate asset in
the prenuptial agreement; plaintiff rejects this charac-
terization. The trial court failed to make findings re-
garding the value of the Mercedes and its status as
marital property.
We do not, however, share plaintiff’s view that the
trial court failed to make relevant findings regarding
the Chemical Bank primevest account. Defendant held
368 288 M
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this account jointly with his sister. The trial court
awarded defendant “the value of potential interest
should sister predecease Defendant.” This statement
indicates that the trial court found that the account
belonged primarily to defendant’s sister, and was not a
marital asset. This finding is not clearly erroneous
because it is supported by defendant’s testimony, which
the trial court was free to find credible.
Notwithstanding the Chemical Bank account, we
conclude that the trial court’s failure to make findings
as to the relevant factors for dividing property, and its
failure to assign a value to several assets (or to deter-
mine the appropriate date for valuation), leave this
Court and the parties unable to assess whether the
marital division was equitable. This problem is further
complicated by the trial court’s issuance of a property
division that is substantially compliant with a prenup-
tial agreement that the trial court found was not made
in contemplation of divorce. Consequently, we remand
the case to the trial court for adequate findings of fact.
V. COSTS AND ATTORNEY FEES
Plaintiff argues that the trial court erred by award-
ing her only a fraction of the costs and attorney fees she
sought. This Court reviews a trial court’s decision to
award attorney fees in a divorce action for an abuse of
discretion. Reed v Reed, 265 Mich App 131, 164; 693
NW2d 825 (2005). The findings of fact on which the
trial court bases its decision are reviewed for clear error.
Stallworth v Stallworth, 275 Mich App 282, 288; 738
NW2d 264 (2007).
A court in a divorce action may award attorney fees
to enable a party to carry on or defend the action. MCR
3.206(C)(1); Stallworth, 275 Mich App at 288-289. MCR
3.206(C)(1) provides that a party to a divorce action
2010] W
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may request the trial court to order the other party to
pay all or part of the party’s attorney fees. The party
seeking attorney fees must allege facts sufficient to
show either that the party is unable to bear the expense
of the action, and that the other party is able to pay,
MCR 3.206(C)(2)(a), or that the attorney fees were
incurred because the other party refused to comply with
a previous court order, despite having the ability to
comply, MCR 3.206(C)(2)(b). The party requesting the
attorney fees has the burden of showing facts sufficient
to justify the award. Borowsky v Borowsky, 273 Mich
App 666, 687; 733 NW2d 71 (2007).
Attorney fees in a divorce action are awarded only as
necessary to enable a party to prosecute or defend a
suit. Gates, 256 Mich App at 438-439. It is well settled
that a party should not be required to invade assets to
satisfy attorney fees when the party is relying on the
same assets for support. Id. The property division and
the award of attorney fees “ ‘function in tandem,’ ” and
a party may be ordered to pay the opposing party’s
attorney fees if the opposing party was awarded insuf-
ficient liquid assets in the property division to pay the
fees and costs. Olson, 273 Mich App at 354 n 6. In Kosch
v Kosch, 233 Mich App 346, 354; 592 NW2d 434 (1999),
a wife who received $1.2 million in marital assets could
not show that she was unable to bear the expense of the
divorce action; consequently, this Court concluded that
she was not entitled to attorney fees. However, in
Ozdaglar v Ozdaglar, 126 Mich App 468, 473; 337
NW2d 361 (1983), this Court held that the plaintiff
wife, who was still unemployed, was entitled to attorney
fees, notwithstanding her substantial property award,
on the ground that she should not be required to pay
attorney fees from her share of the marital estate,
which she needed to support herself.
370 288 M
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Plaintiff submitted a certification of plaintiff’s coun-
sel fees and costs to the trial court on June 6, 2008.
Plaintiff retained George Snyder of Meyer, Kirk, Snyder
& Lynch, PLLC, from Bloomfield Hills, and Timothy
Fryhoff of Fryhoff & Lynch, PLLC, from Bloomfield
Hills, as well as Christopher Picard of Burkhart, Picard,
Tiderington & McLeod, PLLC, from Saginaw, to repre-
sent her in the action. Plaintiff submitted billing docu-
mentation that purportedly adjusts the Detroit-area
attorneys’ fees to the prevailing rates for legal services
in the Saginaw area, and that also adjusted the fees to
eliminate charges for duplicate services. She requested
a total of $80,226.11, plus $16,400 for reimbursement of
Selley’s expert fee. Defendant fails to acknowledge this
submission, and argues that plaintiff failed to submit
any documentation in support of her request. He also
argues that plaintiff was required to present proof of
attorney fees in the course of trial, notwithstanding
MCR 3.206(C)(1), which provides that a party “may, at
any time, request that the court order the other party to
pay all or part of the attorney fees and expenses related
to the action or a specific proceeding, including a
post-judgment proceeding.”
The trial court failed to explain its decision to award
plaintiff only $25,000, less than half of the amount
requested. Without adequate findings of fact, there is no
basis for determining whether the trial court’s award
represented an abuse of discretion. Under the circum-
stances, the error is not harmless. Although defendant
questions plaintiff’s need for three attorneys, including
two from out-of-town, it is not obvious that the fees
were unreasonable after they were adjusted for local
rates and to eliminate redundancy. Moreover, plaintiff
did not receive any liquid assets other than the payment
of alimony-in-gross over a six-year period. Plaintiff will
presumably need to use these funds for living expenses,
2010] W
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371
including a home in the Saginaw area. This circum-
stance raises the question whether plaintiff must in-
vade assets that she needs for living expenses in order
to pay her attorney fees. Ozdaglar, 126 Mich App at
473. Accordingly, the trial court should make appropri-
ate findings in this regard on remand.
Defendant also argues that the trial court properly
denied plaintiff’s expert witness fee because the trial
court gave no credence to Selley’s opinion. We have
found no authority for the principle that an award of
costs to cover an expert’s fee is in any way to be tied to
the party’s success regarding the matter on which the
expert testified. The trial court’s rejection of Selley’s
analysis does not necessarily mean that plaintiff re-
tained him to advance, in defendant’s words, “a totally
bogus claim.” Moreover, our ruling regarding plaintiff’s
right to discovery of the P.C.’s business records to
establish defendant’s interest in the P.C. undermines
defendant’s position regarding expert fees. Accordingly,
this argument is without merit.
VI. DEFENDANT’S CROSS-APPEAL: PRENUPTIAL AGREEMENT
On cross-appeal, defendant challenges the trial
court’s determination that the parties did not intend for
the prenuptial agreement to apply to a divorce. A trial
court’s refusal to enforce a prenuptial agreement is
reviewed for an abuse of discretion. Rinvelt v Rinvelt,
190 Mich App 372, 382; 475 NW2d 478 (1991).
Under Michigan law, trial courts recognize prenup-
tial agreements governing the division of property in
the event of a divorce. Reed, 265 Mich App at 141-142.
A court should never disregard a valid prenuptial agree-
ment, but should instead enforce its clear and unam-
biguous terms as written. Id. at 144-145. See also MCL
557.28, providing that “[a] contract relating to property
372 288 M
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made between persons in contemplation of marriage shall
remain in full force after marriage takes place.” However,
“[a] prenuptial agreement may be voided (1) when ob-
tained through fraud, duress, mistake, or misrepresenta-
tion or nondisclosure of material fact, (2) if it was uncon-
scionable when executed, or (3) when the facts and
circumstances are so changed since the agreement was
executed that its enforcement would be unfair and unrea-
sonable.” Reed, 265 Mich App at 142-143. To determine if
a prenuptial agreement is unenforceable because of a
change in circumstances, the focus is on whether the
changed circumstances were reasonably foreseeable ei-
ther before or during the signing of the prenuptial agree-
ment. Id. at 144. See also Lentz v Lentz, 271 Mich App
465, 471; 721 NW2d 861 (2006), and Rinvelt 190 Mich
App at 380, holding that an otherwise valid prenuptial
agreement could be invalidated on the basis of the non-
disclosure of a material fact, or if a change of circum-
stances since the execution of the agreement makes its
enforcement unfair and unreasonable.
This issue raises questions of contract interpretation.
Defendant asserts that the prenuptial agreement
clearly and unambiguously provided for the division of
property in the event of divorce, but he fails to address
§ 3.1, which states that “the parties specifically agree
and state that this Agreement is intended to waive
rights upon death and is not made in contemplation of
any divorce.” The trial court determined, on the basis of
this language, that the agreement did not apply to
divorce. The trial court did not address the remaining
provisions of § 3, which provide for the division of
property in a divorce, notwithstanding the disclaimer in
§ 3.1.
A contract must be interpreted according to its plain
and ordinary meaning. Holmes v Holmes, 281 Mich App
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575, 593; 760 NW2d 300 (2008). A contract is ambigu-
ous if it allows two or more reasonable interpretations,
or if the provisions cannot be reconciled with each
other. Klapp v United Ins Group Agency, Inc, 468 Mich
459, 467; 663 NW2d 447 (2003); Meagher v Wayne State
Univ, 222 Mich App 700, 721-722; 565 NW2d 401
(1997). Under ordinary contract principles if contrac-
tual language is clear, construction of the contract is a
question of law for the court. Id. at 721. If the contract,
although inartfully worded or clumsily arranged, fairly
admits of but one interpretation, it is not ambiguous.
Id. at 722. A court may not rewrite clear and unambigu-
ous language under the guise of interpretation. Hend-
erson v State Farm Fire & Cas Co, 460 Mich 348, 354;
596 NW2d 190 (1999). Rather, courts must give “effect
to every word, phrase, and clause in a contract and
avoid an interpretation that would render any part of
the contract surplusage or nugatory.” Klapp, 468 Mich
at 468.
Here, the prenuptial agreement is ambiguous. The
phrase, “the parties specifically agree and state that
this Agreement is intended to waive rights upon death
and is not made in contemplation of any divorce,” does
not unambiguously disclaim application of the agree-
ment in the case of divorce. Rather, it could be con-
strued to mean that the contingency of divorce was not
the purpose for which the parties entered into the
agreement. The inclusion of several provisions for di-
viding property in the event of divorce militates against
the interpretation that the parties intended for the
agreement to apply only to dissolution of the marriage
by death. Assuming, arguendo, that § 3.1 unambigu-
ously disclaims application of the agreement in the
event of divorce, the sections that follow § 3.1 create an
irreconcilable conflict that renders the agreement am-
biguous. Klapp, 468 Mich at 467. Disregarding these
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provisions would violate the principle of giving a con-
tract an interpretation that renders some part of the
contract surplusage or nugatory. Id. at 468.
Moreover, § 3.7 creates multiple options depending
upon the enforceability of prenuptial agreements in-
tended to govern property divisions in the event of
divorce. This section states as follows:
Whether or not any section of Paragraph 3 of this
Pre-Marital Agreement is valid or enforceable, the parties
agree that this paragraph is severable from the balance of
the Agreement and shall not effect the validity or enforce-
ability of any other provision of this Agreement. This
Agreement may be introduced as evidence at the time of any
divorce or separation proceedings for the court’s consider-
ation of the parties’ intention at the time of their marriage.
[Emphasis added.]
This section both preserves the prenuptial agreement
as an agreement in contemplation of death in the event
that it is deemed unenforceable in regard to divorce,
and preserves the agreement as evidence of the parties’
intent in an action for divorce. Read in conjunction with
§ 3.1, the parties assert the following: (1) that the
agreement was not made in contemplation of divorce;
(2) that the agreement lays out a plan for dividing
assets in a divorce; (3) that the plan for dividing assets
in a divorce is severable from the agreement and would
not invalidate the remainder of the agreement; and (4)
if the plan for dividing assets in a divorce is not
enforceable, it can serve as evidence of the parties’
intent. At least two interpretations of this agreement
are possible: (1) the prenuptial agreement was not
intended to govern the division of assets in a divorce;
and (2) the prenuptial agreement should govern, or at
least guide, the division of assets in a divorce if such
provisions are legally enforceable.
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Plaintiff argues that the ambiguities of the agree-
ment should be construed against defendant as the
drafter of the agreement. This is an incorrect statement
of the law: the rule of contra proferentem, i.e., that
ambiguities are to be construed against the drafter of
the contract, should only be applied if all conventional
means of contract interpretation, including the consid-
eration of relevant extrinsic evidence, have left the
finder of fact unable to determine what the parties
intended their contract to mean. Klapp, 468 Mich at
470-471; Smith v Smith, 278 Mich App 198, 200 n 1; 748
NW2d 258 (2008).
We remand this case to the trial court to resolve the
ambiguity in the prenuptial agreement. On remand, the
trial court “ ‘must interpret the contract’s terms, in
light of the apparent purpose of the contract as a whole,
the rules of contract construction, and extrinsic evi-
dence of intent and meaning.’ ” Klapp, 468 Mich 469
(citation omitted). At trial, neither party presented
extrinsic evidence regarding the meaning of the pren-
uptial agreement. The trial court may consider holding
an evidentiary hearing on this matter if necessary to
construe the prenuptial agreement. On remand, if the
trial court determines that the parties intended for the
contract to govern division of property in a divorce, it
should further consider the meaning of the term “con-
tribution” as used in the prenuptial agreement in
reference to assets acquired during the marriage. It
may also address plaintiff’s arguments that the pren-
uptial agreement should be set aside on the basis of
changed circumstances.
We affirm the trial court’s judgment as it pertains to
the Sawmill Creek property and the Chemical Bank
primevest account. We remand to the court for further
findings and proceedings regarding the following: the
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ICH
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decision to award plaintiff alimony in gross in lieu of
spousal support; discovery of the P.C.’s business
records; the trial court’s overall division of property and
the valuation of certain specific assets; the award of
attorney fees to plaintiff; and the interpretation of the
prenuptial agreement with respect to divorce. We do not
retain jurisdiction.
2010] W
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377
PEOPLE v BAKER
Docket No. 286769. Submitted May 4, 2010, at Detroit. Decided May 11,
2010, at 9:00 a.m.
Richard L. Baker was convicted following a jury trial in the Wayne
Circuit Court, James A. Callahan, J., of two counts of first-degree
criminal sexual conduct, two counts of first-degree home invasion,
and one count of assault with intent to do great bodily harm less
than murder, and was sentenced for each conviction. Defendant
appealed, alleging that his constitutional protections against
double jeopardy were violated by his two convictions of first-degree
home invasion arising out of a single home invasion.
The Court of Appeals held:
1. It appears that defendant was convicted of one count of
first-degree home invasion because he broke into and entered the
victim’s apartment with the intent to commit larceny and was
convicted of another count of first-degree home invasion because
he broke into and entered the victim’s apartment and, while inside
her apartment, actually committed criminal sexual conduct.
2. MCL 750.110a identifies several ways in which first-degree
home invasion can be committed by providing alternative ele-
ments that must be established, that is, each element of first-
degree home invasion can be established by establishing one of two
alternatives set forth in the statute. Here, defendant’s first-degree
home invasion convictions arose from the same offense. The jury,
when presented with two counts of first-degree home invasion
arising from the same wrongful breaking and entering, was asked
to determine whether defendant was guilty under each of the two
theories for establishing the second element of the offense. The
Legislature did not intend to create a separate offense for home
invasion corresponding to each type of actual or intended under-
lying crime occurring within the dwelling during the same inva-
sion.
3. Defendant should have been convicted and sentenced for
one count of first-degree home invasion supported by two theories.
The matter must be remanded to the trial court with directions to
378 288 M
ICH
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vacate one of the defendant’s convictions and sentences for first-
degree home invasion and modify the judgment of sentence
accordingly.
Affirmed in part, reversed in part, and remanded.
C
RIMINAL
L
AW —
F
IRST
-D
EGREE
H
OME
I
NVASION —
E
LEMENTS —
D
OUBLE
J
EOPARDY
.
The statute prohibiting first-degree home invasion provides two
alternate methods of establishing each of the three elements of the
offense; the prohibition against double jeopardy forbids two sepa-
rate convictions of first-degree home invasion following a single
home invasion where each conviction is based on a different
alternate method of establishing the same element of first-degree
home invasion (US Const, Am V; Const 1963, art 1, § 15; MCL
750.110a[2]).
Michael A. Cox, Attorney General, B. Eric Restuccia,
Solicitor General, Kym L. Worthy, Prosecuting Attor-
ney, Timothy A. Baughman, Chief of Research, Train-
ing, and Appeals, and Ana I. Quiroz, Assistant Pros-
ecuting Attorney, for the people.
Daniel J. Rust for defendant.
Before: C
AVANAGH
,P.J., and O’C
ONNELL
and W
ILDER
,
JJ.
O’C
ONNELL
,J
.
After a jury trial, defendant, Richard
Lee Baker, was convicted of two counts of first-degree
criminal sexual conduct (CSC I), MCL 750.520b(1)(c)
(during any other felony) and MCL 750.520b(1)(e)
(weapon used), two counts of first-degree home inva-
sion, MCL 750.110a(2), and one count of assault with
intent to do great bodily harm less than murder, MCL
750.84. Defendant was sentenced as a fourth-offense
habitual offender, MCL 769.12, to concurrent sentences
of 30 to 50 years’ imprisonment for each CSC I convic-
tion, 10 to 20 years’ imprisonment for each first-degree
home invasion conviction, and 5 to 10 years’ imprison-
2010] P
EOPLE V
B
AKER
379
ment for the assault conviction. Defendant now appeals
as of right. We affirm in part, reverse in part, and
remand for further proceedings.
In the early morning hours of August 19, 2007,
defendant entered the victim’s apartment through an
open window, took a knife from her kitchen, covered her
eyes and bound her limbs, sexually assaulted her, and
stole her Bridge card and keys. When the victim man-
aged to free her hands and uncover her eyes, defendant
attacked her with the knife. The victim recognized
defendant, because she had hired him to install cable
television in her apartment a few days before. The
victim escaped from defendant and fled into the hallway
outside her apartment, where neighbors found her and
called the police. Defendant fled, but was apprehended
a few days later.
On appeal, defendant does not dispute the validity of
his CSC I and assault convictions. He only challenges
his convictions of first-degree home invasion, arguing
that his two convictions of first-degree home invasion
arose from the same offense and, consequently, violated
his constitutional protections against double jeopardy.
Instead, defendant claims that because “the home in-
vasion was continuous, involving both sexual acts and
committed with the intent to commit a larceny, while
armed with a knife,” his convictions of two separate
counts of home invasion constitute a double jeopardy
violation. Essentially, defendant argues that he has
been punished twice for the same offense.
1
We agree.
The United States and Michigan constitutions pro-
hibit placing a defendant twice in jeopardy for the same
offense. US Const, Am V; Const 1963, art 1, § 15; People
1
Because defendant failed to preserve this issue, we review it for plain
error affecting defendant’s substantial rights. People v Matuszak, 263
Mich App 42, 47; 687 NW2d 342 (2004).
380 288 M
ICH
A
PP
378 [May
v Herron, 464 Mich 593, 599; 628 NW2d 528 (2001). The
Double Jeopardy Clause protects a defendant from both
multiple prosecutions and multiple punishments for the
same offense. Herron, 464 Mich at 599. The purpose of
this prohibition, in a multiple-punishment context, is to
prevent a court from imposing a sentence greater than
that intended by the Legislature. Hawkins v Dep’t of
Corrections, 219 Mich App 523, 526; 557 NW2d 138
(1996).
In People v Smith, 478 Mich 292, 315; 733 NW2d 351
(2007), our Supreme Court held that the “same ele-
ments” test set forth in Blockburger v United States,
284 US 299, 304; 52 S Ct 180; 76 L Ed 306 (1932), is
“the appropriate test to determine whether multiple
punishments are barred by Const 1963, art 1, § 15.”
The Smith Court explained:
At the time of ratification [of Const 1963, art 1, § 15], we
had defined the language “same offense” in the context of
successive prosecutions by applying the federal “same
elements” test. In interpreting “same offense” in the
context of multiple punishments, federal courts first look
to determine whether the legislature expressed a clear
intention that multiple punishments be imposed. Missouri
v Hunter, 459 US 359, 368; 103 S Ct 673; 74 L Ed 2d 535
(1983); see also Wayne Co Prosecutor [v Recorder’s Court
Judge, 406 Mich 374; 280 NW2d 793 (1979)]. Where the
Legislature does clearly intend to impose such multiple
punishments, “ ‘imposition of such sentences does not
violate the Constitution,’ ” regardless of whether the of-
fenses share the “same elements.” Id. (citation and empha-
sis deleted). Where the Legislature has not clearly ex-
pressed its intention to authorize multiple punishments,
federal courts apply the “same elements” test of Block-
burger to determine whether multiple punishments are
permitted. Accordingly, we conclude that the “same ele-
ments” test set forth in Blockburger best gives effect to the
intentions of the ratifiers of our constitution. [Smith, 478
Mich at 316.]
2010] P
EOPLE V
B
AKER
381
The Blockburger test focuses on the statutory elements
of the offense, without considering whether a substan-
tial overlap exists in the proofs offered to establish the
offense. Id. at 307; People v Nutt, 469 Mich 565, 576;
677 NW2d 1 (2004). If each offense requires proof of
elements that the other does not, the Blockburger test is
satisfied and no double jeopardy violation is involved.
Smith, 478 Mich at 307.
In this case, defendant was convicted of two counts of
first-degree home invasion pursuant to MCL
750.110a(2), which states:
A person who breaks and enters a dwelling with intent
to commit a felony, larceny, or assault in the dwelling, a
person who enters a dwelling without permission with
intent to commit a felony, larceny, or assault in the dwell-
ing, or a person who breaks and enters a dwelling or enters
a dwelling without permission and, at any time while he or
she is entering, present in, or exiting the dwelling, commits
a felony, larceny, or assault is guilty of home invasion in the
first degree if at any time while the person is entering,
present in, or exiting the dwelling either of the following
circumstances exists:
(a) The person is armed with a dangerous weapon.
(b) Another person is lawfully present in the dwelling.
The parties do not dispute that the two first-degree
home invasion charges brought against defendant did
not correspond to two separate instances in which
defendant wrongfully entered the victim’s apartment.
Defendant broke into the victim’s apartment once, and
when he was in her apartment he sexually assaulted her
and tried to steal from her. Instead, the prosecution
argues that defendant’s two convictions of first-degree
home invasion do not violate double jeopardy protec-
tions because each of defendant’s convictions of first-
degree home invasion contains at least one element that
382 288 M
ICH
A
PP
378 [May
is not an element of the other first-degree home inva-
sion conviction. Specifically, the prosecution claims:
[I]n count three,
[
2
]
the prosecution was required to
prove (a) that Defendant entered the dwelling without
permission with the intent to commit a first-degree criminal
sexual conduct and (b) that Defendant was armed with a
knife and/or another person was lawfully present in the
dwelling; and in count four,
[
3
]
the prosecutor had to prove
(a) that Defendant entered the dwelling without permis-
sion, with the intent to commit a larceny, and (b) that
Defendant was armed with a knife and/or another person
was lawfully present in the dwelling. [Emphasis in origi-
nal.]
In making this statement, the prosecution appears to
argue that defendant committed two separate acts of
first-degree home invasion because he intended to com-
mit two separate crimes while inside the victim’s apart-
ment. However, the prosecution’s argument on appeal
does not comport precisely with the charges that the
prosecution actually brought to the jury. In count three,
the jury found defendant guilty of “Home Invasion—
First Degree while entering, present in, or exiting did
commit Criminal Sexual Conduct First Degree... ,”
while in count four, the jury found defendant guilty of
“Home Invasion—First Degree — with the intent to
commit a Larceny therein....”(Emphasis added.) Ac-
cordingly, it appears that defendant was actually con-
victed of one count of first-degree home invasion be-
cause he broke into and entered the victim’s apartment
with the intent to commit a larceny, and was convicted
2
This count corresponds to defendant’s conviction of first-degree home
invasion arising from his breaking and entering into the victim’s apart-
ment and committing an act of criminal sexual conduct therein.
3
This count corresponds to defendant’s conviction of first-degree home
invasion arising from his breaking and entering into the victim’s apart-
ment with the intent to commit a larceny therein.
2010] P
EOPLE V
B
AKER
383
of another count of first-degree home invasion because
he broke into and entered the victim’s apartment and,
while inside her apartment, actually committed crimi-
nal sexual conduct.
Yet despite whether defendant was charged with and
convicted of two separate counts of first-degree home
invasion because he intended to commit two separate
underlying crimes or because he intended to commit
one underlying crime and actually committed another,
neither distinction is sufficient to establish that defen-
dant committed two separate offenses of first-degree
home invasion. Instead, as our Supreme Court recently
noted in People v Wilder, 485 Mich 35, 43; 780 NW2d
265 (2010), MCL 750.110a identifies several ways in
which first-degree home invasion can be committed by
providing “alternative elements” that must be estab-
lished, i.e., each element of first-degree home invasion
can be established by satisfying one of two alternatives
set forth in the statute. The Wilder Court broke down
the alternative elements of first-degree home invasion
as follows:
Element One: The defendant either:
1. breaks and enters a dwelling or
2. enters a dwelling without permission.
Element Two: The defendant either:
1. intends when entering to commit a felony, larceny, or
assault in the dwelling or
2. at any time while entering, present in, or exiting the
dwelling commits a felony, larceny, or assault.
Element Three: While the defendant is entering,
present in, or exiting the dwelling, either:
1. the defendant is armed with a dangerous weapon or
2. another person is lawfully present in the dwelling.
[Wilder, 485 Mich. at 43 (emphasis omitted).]
384 288 M
ICH
A
PP
378 [May
Accordingly, intending to commit a felony, larceny, or
assault, and actually committing a felony, larceny, or
assault simply constitute two different methods of
establishing the same element of first-degree home
invasion. Therefore, the Blockburger test is not satis-
fied because defendant’s two first-degree home invasion
convictions are not premised on the establishment of
different sets of elements. See Smith, 478 Mich at 307.
Instead, defendant’s first-degree home invasion con-
victions arose from the same offense. The jury, when
presented with two counts of home invasion arising
from the same wrongful breaking and entering, was
essentially asked to determine whether defendant was
guilty of home invasion under each of the theories for
establishing the second element of this offense.
To the extent that the prosecution contends that a
separate home-invasion charge can be brought corre-
sponding to each felony, larceny, or assault that defen-
dant committed while in the dwelling, it has provided
no authority to support this argument and, for this
reason, we need not consider this argument. People v
Kelly, 231 Mich App 627, 640-641; 588 NW2d 480
(1998); People v Martin, 271 Mich App 280, 315; 721
NW2d 815 (2006), aff’d 482 Mich 851 (2008). Further,
the Legislature has not created separate statutes crimi-
nalizing home invasion when different underlying
wrongful acts committed during the home invasion are
at issue, and the statute itself does not support the
notion that the Legislature intended to create a sepa-
rate offense for home invasion corresponding to each
type of actual or intended underlying crime occurring
within the dwelling during the same invasion. See
Smith, 478 Mich at 316. Instead, the statute simply
indicates that establishing that defendant committed
(or intended to commit) at least one felony, larceny, or
2010] P
EOPLE V
B
AKER
385
assault while in the dwelling is sufficient to satisfy this
element. If anything, the claim that defendant intended
to commit two predicate offenses while in the victim’s
apartment simply constitutes two separate theories
under which his first-degree home-invasion conviction
could be established.
Accordingly, defendant’s convictions for two counts
of first-degree home invasion constitute plain error.
Instead, in light of the jury’s verdict, defendant should
have been convicted and sentenced for one count of
first-degree home invasion supported by two theories.
Therefore, following the example set forth in People v
Bigelow, 229 Mich App 218, 222; 581 NW2d 744 (1998),
we direct the trial court to vacate one of defendant’s
convictions and sentences for first-degree home inva-
sion and modify defendant’s judgment of sentence to
specify that defendant’s relevant conviction and sen-
tence is for one count of first-degree home invasion
supported by two theories.
4
Of course, the balance of
defendant’s judgment of sentence and conviction would
remain unaltered, meaning that defendant’s convic-
tions and sentences for two counts of CSC I and one
count of assault with intent to do great bodily harm less
than murder still stand.
Affirmed in part, reversed in part, and remanded for
further proceedings consistent with this opinion. We do
not retain jurisdiction.
4
We note that defendant has raised no additional claims of error.
386 288 M
ICH
A
PP
378 [May
PEOPLE v HUSTON
Docket No. 288843. Submitted April 13, 2010, at Grand Rapids. Decided
May 13, 2010, at 9:00 a.m.
Cecil D. Huston pleaded guilty in the Berrien Circuit Court of armed
robbery and was sentenced by the trial court, Dennis M. Wiley, J.,
to 180 to 600 months in prison. The Court of Appeals denied
defendant’s delayed application for leave to appeal and motion for
reconsideration in unpublished orders, entered December 9, 2008,
and January 28, 2009, respectively (Docket No. 288843). The
Supreme Court, in lieu of granting leave to appeal, remanded the
case to the Court of Appeals for consideration as on leave granted,
limited to defendant’s challenge to the scoring of offense variable
(OV) 10, MCL 777.40, exploitation of a vulnerable victim, in light
of People v Cannon, 481 Mich 152 (2008). 485 Mich 885 (2009).
The Court of Appeals held:
1. To score OV 10, there had to be evidence of exploitive
conduct directed at a vulnerable victim. The factors to be consid-
ered in deciding whether a victim was vulnerable, i.e., was suscep-
tible to injury, physical restraint, persuasion, or temptation, in-
clude (a) the victim’s physical disability, (b) the victim’s mental
disability, (c) the victim’s youth or agedness, (d) the existence of a
domestic relationship, (e) whether the offender abused his or her
authority status, (f) whether the offender exploited the victim by his
or her difference in size or strength or both, (g) whether the victim
was intoxicated or under the influence of drugs, or (h) whether the
victim was asleep or unconscious. The factors focus on the personal
susceptibility of the victim, not the victim’s circumstances. The mere
existence of any one of the factors does not automatically render the
victim vulnerable, and the absence of a factor does not preclude a
finding of victim vulnerability. Rather, the evidence must show
merely that it was readily apparent that the victim was susceptible to
injury, physical restraint, persuasion, or temptation. Subsections
(1)(b) and (c) of MCL 777.40 require the sentencing judge to deter-
mine if the offender exploited a victim. Subsection (1)(a) of MCL
777.40 does not explicitly require the judge to determine if the
offender exploited a victim, but does require the judge to determine if
there was preoffense conduct directed at a victim for the primary
2010] P
EOPLE V
H
USTON
387
purpose of victimization. Because preoffense conduct directed at a
victim for the primary purpose of victimization inherently involves
some level of exploitation, points may be assessed under OV 10 for
exploitation of a vulnerable victim when the offender has engaged in
conduct that is considered predatory under the statute.
2. Predatory conduct, for purposes of OV 10, is behavior that
precedes the offense and is directed at a person for the primary
purpose of causing that person to suffer from an injurious action or
to be deceived.
3. In determining whether 15 points may be assessed under
MCL 777.40(1)(a) for predatory conduct, a court must consider
whether the offender engaged in conduct before the commission of
the offense, whether this conduct was directed at one or more
specific victims who suffered from a readily apparent susceptibility
to injury, physical restraint, persuasion, or temptation, and
whether victimization was the offender’s primary purpose for
engaging in the preoffense conduct.
4. The purpose of defendant’s preoffense conduct of lying in
wait was to rob someone. Defendant then chose a specific victim
perceived to be weak. However, there was no evidence to indicate
that the victim was inherently personally vulnerable. Therefore,
OV 10 was improperly scored at 15 points and should have been
scored at zero points. The judgment of sentence must be reversed
and the case must be remanded for resentencing.
Judgment of sentence reversed; case remanded for resentencing.
Michael A. Cox, Attorney General, B. Eric Restuccia,
Solicitor General, Arthur J. Cotter, Prosecuting Attor-
ney, and Aaron J. Mead, Assistant Prosecuting Attor-
ney, for the people.
Ronald D. Ambrose for defendant.
Before: S
ERVITTO
,P.J., and F
ITZGERALD
and B
ECKERING
,
JJ.
P
ER
C
URIAM
. Defendant appeals the sentence imposed
upon him after his plea-based conviction of armed
robbery, MCL 750.529. This Court originally denied
plaintiff’s delayed application for leave to appeal in an
unpublished order, entered December 9, 2008 (Docket
388 288 M
ICH
A
PP
387 [May
No. 288843), but our Supreme Court, in lieu of
granting leave to appeal, remanded the case to this
Court for consideration as on leave granted, People v
Huston, 485 Mich 885 (2009), limited to “the chal-
lenge to the scoring of offense variable 10, MCL
777.40, in light of People v Cannon, 481 Mich 152 [749
NW2d 257] (2008).” Because offense variable 10 was
misscored, we reverse the judgment of sentence and
remand for resentencing.
A trial court’s findings of fact at sentencing are re-
viewed for clear error. People v Osantowski, 481 Mich 103,
111; 748 NW2d 799 (2008). This Court reviews a trial
court’s scoring decision under the sentencing guidelines
“ ‘to determine whether the trial court properly exercised
its discretion and whether the record evidence adequately
supports a particular score.’ ” People v Wilson, 265 Mich
App 386, 397; 695 NW2d 351 (2005), quoting People v
McLaughlin, 258 Mich App 635, 671; 672 NW2d 860
(2003). A trial court’s scoring decision for which there is
any evidence in support will be upheld. People v Endres,
269 Mich App 414, 417; 711 NW2d 398 (2006). This Court
reviews the interpretation of the statutory sentencing
guidelines de novo. People v Steele, 283 Mich App 472,
490; 769 NW2d 256 (2009).
In February 2005, defendant and another indi-
vidual approached a woman who had just pulled her
vehicle into a parking spot at a shopping mall and
robbed her. Defendant and the other individual were
armed with BB guns and pointed them at the woman,
demanding her purse and other items. They pushed
the woman to the ground, cut her purse from her
shoulder, and stole her vehicle, leaving the woman in
the dark parking lot.
In August 2005, defendant entered a plea of guilty to
a charge of armed robbery, MCL 750.529. Defendant’s
2010] P
EOPLE V
H
USTON
389
sentence was thereafter calculated under the Michigan
sentencing guidelines, with a score of 15 points being
assigned to offense variable (OV) 10. At sentencing,
defense counsel challenged the scoring of OV 10 at 15
points, arguing, “This was a random robbery. They
drove out there, the first person they found they
robbed. I don’t know what was predatory about it.” The
trial court determined that the OV 10 was properly
scored, opining: “I think predatory conduct can also
constitute lying-in-wait in the parking lot, or wherever
it is, which would also constitute predatory conduct, as
opposed to disparity in size or victim’s vulnerability
based upon age and those other factors.”
On February 8, 2006, the trial court sentenced defen-
dant to a term of 180 to 600 months in prison. Defen-
dant filed an application for leave to appeal, which this
Court denied on December 9, 2008, and a motion for
reconsideration, which this Court also denied in an
unpublished order, entered January 28, 2009 (Docket
No. 288843). As previously indicated, the Supreme
Court remanded the case to this Court for our consid-
eration of his challenge to the scoring of OV 10.
On appeal, defendant asserts that OV 10 was scored
improperly and that the improper scoring affected the
statutory sentencing guidelines range. Defendant thus
claims entitlement to resentencing. We agree.
Defendant was assessed 15 points for OV 10. This
offense variable, found at MCL 777.40, provides, in
pertinent part:
(1) Offense variable 10 is exploitation of a vulnerable
victim. Score offense variable 10 by determining which of
the following apply and by assigning the number of points
attributable to the one that has the highest number of
points:
390 288 M
ICH
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387 [May
(a) Predatory conduct was involved .................... 15 points
(b) The offender exploited a victim’s physical disability,
mental disability, youth or agedness, or a domestic relation-
ship, or the offender abused his or her authority sta-
tus ........................................................................... 10 points
(c) The offender exploited a victim by his or her differ-
ence in size or strength, or both, or exploited a victim who
was intoxicated, under the influence of drugs, asleep, or
unconscious .............................................................. 5 points
***
(3) As used in this section:
(a) “Predatory conduct” means preoffense conduct di-
rected at a victim for the primary purpose of victimization.
(b) “Exploit” means to manipulate a victim for selfish or
unethical purposes.
(c) “Vulnerability” means the readily apparent suscepti-
bility of a victim to injury, physical restraint, persuasion, or
temptation. [Emphasis added.]
In Cannon, 481 Mich at 157-158, our Supreme Court
held that to score OV 10 there had to be exploitive
conduct directed at a vulnerable victim. Regarding
vulnerability, the Cannon Court stated, in part:
Thus, we conclude that points should be assessed under
OV 10 only when it is readily apparent that a victim was
“vulnerable,” i.e., was susceptible to injury, physical re-
straint, persuasion, or temptation. Factors to be consid-
ered
11
in deciding whether a victim was vulnerable include
(1) the victim’s physical disability, (2) the victim’s mental
disability, (3) the victim’s youth or agedness, (4) the exist-
ence of a domestic relationship, (5) whether the offender
abused his or her authority status, (6) whether the offender
exploited a victim by his or her difference in size or
strength or both, (7) whether the victim was intoxicated or
under the influence of drugs, or (8) whether the victim was
2010] P
EOPLE V
H
USTON
391
asleep or unconscious. The mere existence of one of these
factors does not automatically render the victim vulnerable.
______________________________________________________
11
The absence of one of these factors does not preclude
a finding of victim vulnerability when determining
whether it is appropriate to assess 15 points for predatory
conduct. Rather, the evidence must show merely that it was
readily apparent that the victim was susceptible to injury,
physical restraint, persuasion, or temptation. MCL
777.40(3)(c).
______________________________________________________
[Id. at 158-159 (citations omitted).]
Regarding exploitation, the Cannon Court stated:
The subsections of the statute directing the assessment
of 5 and 10 points explicitly require the sentencing judge to
determine if the offender “exploited a victim.” The subsec-
tion directing the assessment of points for “predatory
conduct,” however, does not explicitly require the sentenc-
ing judge to determine if the offender exploited a victim.
Rather, the sentencing judge must determine if there was
“preoffense conduct directed at a victim for the primary
purpose of victimization.” Nonetheless, preoffense conduct
directed at a victim for the primary purpose of victimiza-
tion inherently involves some level of exploitation. Thus,
we conclude that points may be assessed under OV 10 for
exploitation of a vulnerable victim when the defendant has
engaged in conduct that is considered predatory under the
statute. [Id. at 159 (citations omitted).]
The Cannon Court defined “predatory conduct” as
“behavior that precedes the offense, [and is] directed at
a person for the primary purpose of causing that person
to suffer from an injurious action or to be deceived.” Id.
at 161. The Cannon Court further provided the follow-
ing guidance:
To aid lower courts in determining whether 15 points
are properly assessed under OV 10 [for predatory conduct],
we set forth the following analytical questions:
392 288 M
ICH
A
PP
387 [May
(1) Did the offender engage in conduct before the
commission of the offense?
(2) Was this conduct directed at one or more specific
victims who suffered from a readily apparent susceptibility
to injury, physical restraint, persuasion, or temptation?
(3) Was victimization the offender’s primary purpose for
engaging in the preoffense conduct?
If the court can answer all these questions affirmatively,
then it may properly assess 15 points for OV 10 because the
offender engaged in predatory conduct under MCL 777.40.
[Id. at 161-162].
Here, the trial court found that defendant was lying
in wait. Such an inference could be fairly drawn from
the evidence. Specifically, it is known that defendant
was hiding, that the female victim was alone, and that
no one was in the parking lot when the incident
occurred. Defendant could have robbed anyone in the
parking lot during the course of the evening, but
apparently hid until a choice victim appeared. One
could infer that he was waiting for such an isolated
victim. Accordingly, the trial court’s finding that defen-
dant was lying in wait was not clearly erroneous.
Defendant’s lying in wait was preoffense conduct. It
follows that the purpose of lying in wait was to rob
someone. The question therefore becomes whether de-
fendant’s lying in wait was sufficiently focused on the
victim, Ms. Flanagan, to be deemed directed at a
“specific” victim and whether the victim “suffered from
a readily apparent susceptibility to injury, physical
restraint, persuasion, or temptation.”
If the trial court made a determination as to whether
Ms. Flanagan was a “specific” victim, it is not clear from
the record. However, when discussion about the proper
scoring of OV 10 was taking place, the prosecutor
indicated that “although it may be the first person they
2010] P
EOPLE V
H
USTON
393
picked at a random pick, still they had a purpose to
victimize one particular individual, whether it was Jane
Doe or, in this particular case, Miss Flanagan.” Defense
counsel, disagreed, asserting, “[i]t’s stalking, in es-
sence. It’s—It is particularly picking out a very particu-
lar victim.” The trial court responded that stalking was
not required. If the trial court was concluding that focus
on a “specific” victim was not necessary, then, this
conclusion was erroneous. Pursuant to Cannon, focus
on a specific victim is required. Our Supreme Court
stated:
[T]he conduct must have been “directed at a victim”
before the offense was committed. A lion that waits near a
watering hole hoping that a herd of antelope will come to
drink is not engaging in conduct directed at a victim.
However, a lion that sees antelope, determines which is the
weakest, and stalks it until the opportunity arises to attack
it engages in conduct directed at a victim. Contrast that
with an individual who intends to shoplift and watches and
waits for the opportunity to commit the act when no one is
looking. The individual has not directed any action at a
victim. [Cannon, 481 Mich at 160.]
Nonetheless, in the instant matter, defendant did
choose a “specific” victim. As defendant argued, he was
initially looking for any victim fitting his criteria who
might have appeared in the parking lot on the night in
question. Choosing a lone and isolated victim was akin
to focusing on the weakest antelope in the herd. Defen-
dant waited for such a circumstance before he seized
the opportunity to attack. In other words, this was not
a random attack on just anyone in the parking lot but a
planned attack on an individual perceived to be weak.
The remaining question, as set forth in Cannon,is
whether Flanagan “suffered from a readily apparent
susceptibility to injury, physical restraint, persuasion,
394 288 M
ICH
A
PP
387 [May
or temptation.” As previously noted, factors to be
considered in deciding the vulnerability of the victim
include
(1) the victim’s physical disability, (2) the victim’s mental
disability, (3) the victim’s youth or agedness, (4) the exist-
ence of a domestic relationship, (5) whether the offender
abused his or her authority status, (6) whether the offender
exploited a victim by his or her difference in size or
strength or both, (7) whether the victim was intoxicated or
under the influence of drugs, or (8) whether the victim was
asleep or unconscious. [Id. at 158-159.]
While these factors are not exhaustive, the enumerated
factors focus on the victim, and the statute suggests
that susceptibility has to relate to the victim, not the
victim’s particular circumstances.
Here, there is nothing in the record to indicate that
Ms. Flanagan was inherently vulnerable. While the
prosecution contends that the timing (at night) and
location (an isolated parking lot, outside the victim’s
locked vehicle) essentially rendered Ms. Flanagan vul-
nerable, these are not inherent characteristics of Ms.
Flanagan, as contemplated by the statute and Cannon.
Once again, from the record before this Court, it ap-
pears Ms. Flanagan was vulnerable only in the sense
that she was in a location under circumstances that put
her at higher risk,
1
and circumstances such as timing
and location are part of a determination of preoffense
conduct directed at a specific victim. The cases decided
since Cannon underscore that these circumstances are
more properly aimed at a determination of preoffense
conduct and emphasize that the focus on whether a
1
There is nothing in the record concerning whether defendant and his
accomplice were greater in size and strength than Ms. Flanagan. In this
regard, defendant was only 15 years old at the time of this offense; such
a difference therefore cannot be presumed.
2010] P
EOPLE V
H
USTON
395
victim “suffered from a readily apparent susceptibility
to injury, physical restraint, persuasion, or temptation”
involves the personal vulnerability of the victim.
For example, in People v Miller, unpublished opinion
per curiam of the Court of Appeals, issued February 16,
2010 (Docket No. 287859), p 7, this Court noted that
the timing and location of the sexual assault are evidence of
predatory conduct....[T]he victim went with defendant
upon his request, defendant supplied intoxicants to her,
and defendant then took her to a separate and isolated
location to commit the sexual assault. However, predatory
conduct alone is not sufficient to score this offense variable;
rather, there must also be evidence that the victim was
vulnerable.
The Miller Court then went on to conclude that the
victim was susceptible to injury or physical restraint
because of the age difference between the defendant
and the victim (44 and 19 years old, respectively) and
the fact that the defendant provided the victim with,
and she consumed, two 40-ounce beers before she was
sexually assaulted.
Likewise, in People v Comtois, unpublished opinion
per curiam of the Court of Appeals, issued December
29, 2009 (Docket No. 286965), this Court concluded
that a 17-year-old victim met the definition of a
readily apparent vulnerable victim where she had
suffered a mental impairment to the degree that she
functioned as a 12 year old, and further had a speech
impediment that made her mental impairment readily
apparent. This Court further held that the record sub-
stantiated “the trial court’s finding that defendant en-
gaged in ‘predatory conduct’ by luring the obviously
vulnerable victim into the woods before the assault.” Id.
at 4. See, also, People v Murphy, unpublished opinion per
curiam of the Court of Appeals, decided December 22,
396 288 M
ICH
A
PP
387 [May
2009 (Docket No. 286016), p 4 (“The record supports
that [the victim] was vulnerable given his age and
feeble state.”).
2
While these cases are unpublished and
therefore not binding, we find their analyses sound and
consistent with Cannon.
Notably, MCL 777.40(1)(d) provides that zero points
are to be assessed where “[t]he offender did not exploit
a victim’s vulnerability.” Here, defendant did take ad-
vantage of the fact that it was dark and no one else was
in the parking lot. The darkness and the isolation may
have made the robbery easier because the victim was
less likely to resist physical restraint and there was no
one to come to the victim’s aid. However, as stated
earlier, the isolation and timing of the offense supported
the trial court’s finding of preoffense conduct. These
factors do not lead to a conclusion that Flanagan had a
readily apparent susceptibility to physical restraint,
and nothing else in the record suggests that Flanagan
was personally vulnerable. It appears, rather, that she
responded to the gun at the back of her head rather
than any physical restraint. On the basis of the charac-
teristics of vulnerability listed in Cannon, the focus
being on characteristics of the victim, rather than the
victim’s circumstances, and on the basis of the record
before this Court, we conclude that OV 10 was improp-
erly scored at 15 points. It should have been scored at
zero points.
If OV 10 is assigned zero points instead of 15 points,
defendant’s offense variable score would be reduced to
51. This would change his offense variable level from IV
to III, resulting in a recommended minimum sentence
2
While plaintiff cites People v Kimble, 252 Mich App 269, 274-275; 651
NW2d 798 (2002), and People v Witherspoon, 257 Mich App 329; 670
NW2d 434 (2003), as comparable to the instant case, those cases predate
Cannon.
2010] P
EOPLE V
H
USTON
397
range of 108 to 180 months, instead of 126 to 210
months. See MCL 777.62. Defendant’s minimum sen-
tence was at the maximum end of the new range.
Because there is a different recommended range, and
the trial court has not clearly indicated that it would
have imposed the same sentence regardless of the
scoring error, resentencing is required. See People v
Francisco, 474 Mich 82, 89 n 8; 711 NW2d 44 (2006).
Furthermore, our determination does not preclude the
trial court from evaluating the evidence and making
findings at resentencing regarding characteristics par-
ticular to the victim, consistent with Cannon.
Judgment of sentence reversed and case remanded
for resentencing consistent with this opinion. We do not
retain jurisdiction.
398 288 M
ICH
A
PP
387 [May
PEOPLE v GLASS
Docket No. 290278. Submitted April 7, 2010, at Detroit. Decided May 13,
2010, at 9:05 a.m.
Brent A. Glass, Jr., pleaded guilty in the Macomb Circuit Court to a
charge of larceny from a motor vehicle. He was sentenced in July
2004 to a two-year term of probation. In February 2008, the circuit
court, Donald G. Miller, J., determined that defendant was guilty of
violating the conditions of his probation and imposed a 25-month to
5-year term of imprisonment for the larceny conviction. Contending
that the circuit court lacked jurisdiction to revoke his probation and
sentence him to imprisonment because the warrant for the probation
violation was issued after his probation term had expired, defendant
filed a delayed application for leave to appeal, which the Court of
Appeals granted.
The Court of Appeals held:
1. A probation revocation must occur, or must at least have
been commenced, during the probation period. The “probation
period” constitutes the particular term of probation imposed by a
sentencing court, not the statutory maximum term of probation
that the court has authority to impose. The term “probation
period” in MCL 771.4 refers to the specific probation term that the
sentencing court has imposed on a particular defendant.
2. The circuit court lacked jurisdiction to revoke defendant’s
probation and impose a prison sentence because defendant’s
probation period had already expired before any probation revo-
cation proceedings had commenced. The prison sentence imposed
by the circuit court must be vacated and the case must be
remanded to the circuit court so that it may discharge defendant
from his probation sentence.
Sentence vacated; case remanded.
C
RIMINAL
L
AW —
P
ROBATION —
R
EVOCATION OF
P
ROBATION
.
A sentencing court may revoke a defendant’s probation if, during the
probation period, the court determines that the probationer is likely
again to engage in an offensive or criminal course of conduct or that
the public good requires revocation of probation; the “probation
2010] P
EOPLE V
G
LASS
399
period” constitutes the particular term of probation imposed by a
sentencing court, not the statutory maximum term of probation the
court has authority to impose; probation revocation must occur, or
must at least have been commenced, during the probation period
(MCL 771.4).
Michael A. Cox, Attorney General, B. Eric Restuccia,
Solicitor General, Eric J. Smith, Prosecuting Attorney,
Robert Berlin, Chief Appellate Lawyer, and Joshua D.
Abbott, Assistant Prosecuting Attorney, for the people.
State Appellate Defender (by Anne M. Yantus) for
defendant.
Before: M
ARKEY
,P.J., and Z
AHRA
and G
LEICHER
,JJ.
G
LEICHER
, J. In May 2004, defendant pleaded guilty of
larceny from a motor vehicle, MCL 750.356a(1). The
circuit court sentenced defendant in July 2004 to a two-
year term of probation. In February 2008, the circuit court
found defendant guilty of violating the conditions of his
probation and imposed a 25-month to 5-year term of
imprisonment for the larceny conviction. We granted
defendant’s delayed application for leave to appeal. We
vacate defendant’s February 2008 sentence and remand
for a discharge of defendant from his probation sentence.
Defendant avers that the circuit court lacked jurisdic-
tion to revoke his probation and sentence him to impris-
onment because the warrant for the probation violation
was issued after his probation term had expired. We
consider de novo the legal question whether a circuit court
possesses subject-matter jurisdiction and legal issues con-
cerning statutory interpretation. People v Lowe, 484 Mich
718, 720; 773 NW2d 1 (2009); Etefia v Credit Technol-
ogies, Inc, 245 Mich App 466, 472; 628 NW2d 577 (2001).
The Court’s responsibility in interpreting a statute is to
determine and give effect to the Legislature’s intent. The
statute’s words are the most reliable indicator of the
400 288 M
ICH
A
PP
399 [May
Legislature’s intent and should be interpreted based on
their ordinary meaning and the context within which they
are used in the statute. Once the Court discerns the
Legislature’s intent, no further judicial construction is
required or permitted “because the Legislature is pre-
sumed to have intended the meaning it plainly expressed.”
[Lowe, 484 Mich at 721-722 (citations omitted).]
The circuit court opined that it had jurisdiction to
revoke defendant’s probation and impose a prison
sentenced on the basis of People v Marks, 340 Mich
495, 498-502; 65 NW2d 698 (1954). Our Supreme
Court in Marks interpreted 1948 CL 771.2, the pre-
decessor to current MCL 771.2. The defendant in
Marks caused a motor vehicle accident and faced a
charge of felonious operation of an automobile. A jury
convicted the defendant, and the trial court sen-
tenced him to probation for three years, during which
the defendant could not drive a motor vehicle. Marks,
340 Mich at 496. The defendant complied with the
conditions of his probation over the course of his
three-year probation period. After two people who
were injured in the accident with the defendant
obtained civil judgments against him, and 4 months
and 14 days after the expiration of the defendant’s
three-year probation term, a probation officer filed a
petition to extend the defendant’s probation term for
two more years and requesting that the court order
the defendant to pay restitution to the injured par-
ties. Id. at 497. Ultimately, the trial court entered an
order extending the defendant’s probation term for
two years and requiring that he pay restitution. Id.at
497-498. The defendant challenged on appeal the trial
court’s jurisdiction to extend his probation period
and alter the conditions of probation “after the
original period of probation had expired[.]” Id. at 498.
2010] P
EOPLE V
G
LASS
401
In analyzing the issue regarding jurisdiction to
modify probation, our Supreme Court quoted the fol-
lowing portion of 1948 CL 771.2:
“If respondent is convicted of an offense not a felony the
period of probation shall not exceed 2 years, and if he is
convicted of a felony, it shall not exceed 5 years. The court
shall by order, to be filed or entered in the cause as the
court may direct by general rule or in each case fix and
determine the period and conditions of probation and such
order, whether it is filed or entered, shall be considered as
part of the record in the cause and shall be at all times
alterable and amendable, both in form and in substance, in
the court’s discretion.” [Marks, 340 Mich at 498-499.]
Relying on 1948 CL 771.2 and 771.3, and Michigan and
United States Supreme Court caselaw, the Michigan
Supreme Court held that the trial court had discretion
to “alter and amend” the original order of probation:
[W]e, therefore, hold that defendant’s rights were not
impinged by the alteration in the probation order made
within the statutory 5-year period, even though the condi-
tions of the original order had not been violated and its
term had expired.
The trial judge, under the statute hereinbefore cited,
was at liberty “at all times” within the 5-year period to
alter and amend the order “both in form and in substance.”
[Id. at 501-502.]
The Supreme Court reasoned that because 1948 CL
771.2 authorized a probation term of up to five years
and allowed a trial court to alter or amend a probation
order “at all times,” a trial court had the discretion to
amend an original order of probation at any time within
the statutory five-year period.
The language currently comprising MCL 771.2 bears
similarity to the relevant language of its predecessor
statute:
402 288 M
ICH
A
PP
399 [May
(1) Except as provided in [MCL 771.2a],
[
1
]
if the defen-
dant is convicted for an offense that is not a felony, the
probation period shall not exceed 2 years. Except as pro-
vided in [MCL 771.2a] of this chapter, if the defendant is
convicted of a felony, the probation period shall not exceed
5 years.
(2) The court shall by order, to be filed or entered in the
cause as the court may direct by general rule or in each
case, fix and determine the period and conditions of pro-
bation. The order is part of the record in the cause. The
court may amend the order in form or substance at any
time. [MCL 771.2.]
Therefore, MCL 771.2 sets forth the same rule as that
enacted in 1948 CL 771.2, and analyzed in Marks. See
People v Sherman, 38 Mich App 219, 220-221; 196
NW2d 15 (1972) (relying on MCL 771.2 and Marks in
holding that the trial court had authority to reinstate
the conditions of a defendant’s probation after the
original probation period ended, but within the five-
year statutory period).
In this case, the circuit court misplaced its reliance
on Marks because the court did not merely alter or
amend the conditions contained in defendant’s original
order of probation, as contemplated in MCL 771.2(2)
and Marks. Instead, the circuit court revoked alto-
gether defendant’s probation. The Michigan statutory
scheme governing probation and Michigan caselaw rec-
ognize that a probation revocation must occur, or must
at least have been commenced, during the probation
period. The Legislature in MCL 771.4 outlined that “[i]f
during the probation period the sentencing court deter-
1
MCL 771.2a does not apply to this case because it pertains to
convictions of stalking, aggravating stalking, child abuse, offenses listed
under MCL 28.722 of the Sex Offenders Registration Act, and juveniles
placed on probation and committed to an institution or agency described
in the Youth Rehabilitation Services Act, MCL 803.301 to 803.309.
2010] P
EOPLE V
G
LASS
403
mines that the probationer is likely again to engage in
an offensive or criminal course of conduct or that the
public good requires revocation of probation, the court
may revoke probation.” (Emphasis added.) Although
MCL 771.4 does not specifically define the term “pro-
bation period,” reference to surrounding, probation-
related statutes reflects that the “probation period”
constitutes the particular term of probation imposed by
a sentencing court. When interpreting statutory lan-
guage, the language in question “must be read as a
whole,” and individual words and phrases “should be
read in the context of the entire legislative scheme.”
Potter v McLeary, 484 Mich 397, 411; 774 NW2d 1
(2009). “[T]he statute must be interpreted in a manner
that ensures that it works in harmony with the entire
statutory scheme.” Id.
Probation-related statutes surrounding MCL 771.4
illustrate that the term “probation period” refers to the
particular period of probation that a sentencing court
has imposed, not the statutory maximum term of pro-
bation that a court has authorization to impose—either
two or five years under MCL 771.2(1). For example,
MCL 771.5(1) reads:
When the probation period terminates, the probation
officer shall report that fact and the probationer’s conduct
during the probation period to the court. Upon receiving
the report, the court may discharge the probationer from
further supervision and enter a judgment of suspended
sentence or extend the probation period as the circum-
stances require, so long as the maximum probation period
is not exceeded. [Emphasis added.]
Additionally, MCL 771.6 states, “When a probationer is
discharged upon the expiration of the probation period,
or upon its earlier termination by order of the court,
entry of the discharge shall be made in the records of
404 288 M
ICH
A
PP
399 [May
the court, and the probationer shall be entitled to a
certified copy thereof.” (Emphasis added.) Further-
more, as we previously stated, MCL 771.2(1) authorizes
the following “probation period[s]”:
Except as provided in [MCL 771.2a], if the defendant is
convicted for an offense that is not a felony, the probation
period shall not exceed 2 years. Except as provided in [MCL
771.2a], if the defendant is convicted of a felony, the
probation period shall not exceed 5 years. [Emphasis
added.]
A review of the statutory scheme as a whole confirms
that the term “probation period” in MCL 771.4 refers to
the specific probation term that the sentencing court
has imposed on a particular defendant.
In People v Hodges, 231 Mich 656, 660-661; 204 NW
801 (1925), the Michigan Supreme Court cautioned that
a revocation of probation under 1915 CL 2032, a prede-
cessor to MCL 771.4, could only occur if probation
revocation proceedings had commenced before the de-
fendant’s probation period concluded. The Supreme
Court summarized the following relevant procedural
facts, and offered the following analysis of the defen-
dant’s contention that “the sentence...imposed after
the period of probation had expired...was, therefore,
void”:
On April 9, 1923, Lewis Hodges, who had before that
pleaded guilty to a charge of breaking and entering, was
placed on probation (1 Comp. Laws 1915, § 2029 et seq.).
March 16, 1925, the sheriff of the county filed with the
clerk an application to have the probation revoked because
Hodges had violated the condition of his probation in that
he had upon his plea of guilty been convicted of a criminal
offense, that of contributing to the delinquency of one
Myrtle Miller, a minor under the age of 17 years. On the
same day of the filing of this petition, Hodges was in court
and... it appears that the probation officer was ill and
2010] P
EOPLE V
G
LASS
405
unable to appear in court and the hearing on the sheriff’s
petition was adjourned until April 13.... [Hodges] did
appear on the 13th and a hearing was had, and he was
sentenced on the original charge....
***
Counsel for defendant stresses the language found in
section 2032, 1 Comp. Laws 1915, being section 4 of the act
[1913 PA 105], that “at any time during the period of
probation” the court may revoke the probation, and points
out that the order was not actually made until after the
period of probation originally fixed had expired. If no action
had been taken during the period of probation a more
serious question would be presented. But here the petition to
revoke the probation was filed within the period of proba-
tion and we think it must be held that the filing of this
petition within the period of probation gave the court
jurisdiction which was not lost by a reasonable delay
incident to a hearing upon it. [Id. at 657-661 (emphasis
added).]
This Court repeatedly has reaffirmed the probation
revocation principles set forth in Hodges, 231 Mich at
660-661. In People v Wakefield, 46 Mich App 97, 98; 207
NW2d 461 (1973), the Court confronted a situation in
which the defendant was sentenced to a two-year pro-
bation period on November 6, 1964, and a “[n]otice of
probation violation dated November 4, 1966, [was]
apparently filed November 9, 1966....” The Court
concluded that “[a]bsent a showing that revocation
proceedings were pending at the end of the [defen-
dant’s] two-year period of probation, we are constrained
to rule that the trial court lost jurisdiction of the
defendant and could not thereafter sentence him to
prison.” Id. at 100.
The defendant in People v Ritter, 186 Mich App 701,
704; 464 NW2d 919 (1991), received a three-year term
of probation on August 17, 1982, which later “was
406 288 M
ICH
A
PP
399 [May
extended for an additional two years, until August 13,
1987.” The sentencing court issued “a petition and
bench warrant for” the defendant’s arrest on January
30, 1987, for violating the conditions of his probation,
the defendant fled Michigan in July 1987, “an amended
petition and bench warrant were filed” on October 26,
1988, and after a December 1988 hearing the sentenc-
ing court “found defendant guilty of all counts of
probation violation,” revoked his probation, and “sen-
tenced him to prison for the underlying conviction” in
January 1989. Id. at 704-705. This Court rejected the
defendant’s claim that “when his probation term ex-
pired on August 13, 1987, the sentencing court lost its
power to revoke his probation....” Id. at 705. The
Court quoted the version of MCL 771.4 then in effect,
id., and emphasized the following general rule appli-
cable in Michigan:
The original petition and bench warrant against defen-
dant alleging violation of the terms of his probation were
issued by the sentencing court on January 30, 1987, more
than seven months before defendant’s probation expired.
Michigan courts have traditionally held that the sentencing
court retains jurisdiction to revoke a defendant’s probation
if probation revocation proceedings are commenced within
the probation period and are pending when it expires. [Id.
at 706, citing Hodges, 231 Mich 656, and Wakefield,46
Mich App 97.]
The Court further stated:
[W]e may logically construe the statutory phrase [in
MCL 771.4] “[i]f during the period of probation it appears
to the sentencing court’s satisfaction” to require only that
during the probation period the court find that probable
cause exists to believe that the defendant has violated his
probation in order to justify issuance of a petition to revoke
probation and a warrant for the defendant’s arrest....[A]
petition was filed against defendant on January 30, 1987,
2010] P
EOPLE V
G
LASS
407
for violations of the probation order which occurred in
November and December 1986. Therefore, we conclude
that the trial court had jurisdiction to revoke defendant’s
probation in October 1988 despite the fact that his proba-
tion had expired on August 13, 1987.
2
______________________________________________________
2
Under the traditional rule set forth in Hodges, supra,
both the probation violation and the filing of the petition
must occur during the probation period. Because the
present case meets the requirements of that rule, we need
not discuss its validity....
______________________________________________________
[Id. at 708.]
See also People v Valentin, 220 Mich App 401, 407-408;
559 NW2d 396 (1996) (restating the traditional rule
that a sentencing court possesses jurisdiction to revoke
probation if the court initiates probation revocation
proceedings “before the probation period expired”),
aff’d 457 Mich 1 (1998).
The authorities we have examined, MCL 771.4,
Hodges, 231 Mich at 660-661, Wakefield, 46 Mich App at
98-100, Ritter, 186 Mich App at 705-708, and Valentin,
220 Mich App at 407-408, lead us to the inexorable
conclusion in this case that the circuit court lacked
jurisdiction to revoke defendant’s probation and impose
a prison sentence. The circuit court sentenced defen-
dant to a two-year probation period that expired on
June 23, 2006. The court did not sign the bench warrant
for defendant’s arrest for violating the conditions of his
probation until February 20, 2007, at the earliest, and
the court clerk did not file the warrant until March 2,
2007. Because defendant’s probation period had already
expired well before any probation revocation proceed-
ings had commenced, the circuit court did not possess
jurisdiction to revoke defendant’s probation and sen-
tence him to imprisonment. Therefore, we vacate de-
408 288 M
ICH
A
PP
399 [May
fendant’s prison sentence and remand this case to the
circuit court so that it may discharge defendant from
his probation sentence.
2
Sentence vacated and case remanded for further
proceedings consistent with this opinion. We do not
retain jurisdiction.
2
Given our resolution of this issue, we need not address defendant’s
remaining argument about the delay in executing the probation violation
warrant.
2010] P
EOPLE V
G
LASS
409
PEOPLE v EVANS
Docket No. 290833. Submitted May 5, 2010, at Detroit. Decided May 13,
2010, at 9:10 a.m.
Lamar Evans was charged in the Wayne Circuit Court with burning
other real property, MCL 750.73. The trial court, Deborah A.
Thomas, J., granted defendant’s motion for a directed verdict and
dismissed the case on the basis that the prosecution had failed to
produce evidence to establish that the building burned was not a
dwelling house. The prosecution appealed, contending that the
trial court erroneously granted defendant’s motion for a directed
verdict because the prosecution was not required to prove that the
burned building was not a dwelling house. The prosecution also
contended that principles of double jeopardy do not bar a retrial
because the trial court’s dismissal of the case did not constitute a
directed verdict of acquittal for double jeopardy purposes.
The Court of Appeals held:
1. The trial court misperceived the elements of the offense of
burning other real property. The crime of burning other real
property, MCL 750.73, i.e., property that is not a dwelling house, is
a lesser included offense of the crime of burning a dwelling house,
MCL 750.72. The necessary elements to prove either offense are
the same, except that to prove the greater offense it must be shown
that the building is a dwelling house, while to prove the lesser
offense it is not necessary to prove that the building is not a
dwelling house. The trial court incorrectly determined that proof
that the burned building was not a dwelling house is an element of
the offense of burning other real property, and erred by directing
a verdict.
2. An actual acquittal occurs, for double jeopardy purposes,
only when the trial court’s action, whatever its form, is a resolu-
tion in the defendant’s favor, correct or not, of a factual element
necessary for a criminal conviction. The directed verdict in this
case did not constitute an acquittal for double jeopardy purposes
because the trial court failed to address any of the elements that
actually must be satisfied to establish the offense of burning other
real property. The trial court’s ruling did not constitute a resolu-
tion of some or all of the factual elements of the offense of burning
410 288 M
ICH
A
PP
410 [May
other real property and constituted nothing more than a determi-
nation that the prosecution had failed to provide sufficient evi-
dence to establish a factor that is not an element of the charged
offense, premised on an incorrect legal determination regarding
the elements that needed to be established. Double jeopardy
principles do not preclude further prosecution of the charged
offense.
Reversed and remanded.
1. C
RIMINAL
L
AW —
A
RSON —
B
URNING
O
THER
R
EAL
P
ROPERTY —
B
URNING A
D
WELLING
H
OUSE
.
The crime of burning other real property, i.e., property that is not a
dwelling house, is a lesser included offense of the crime of burning
a dwelling house; the necessary elements to prove either offense
are the same, except that to prove the greater offense it must be
shown that the building is a dwelling house, while to prove the
lesser offense it is not necessary to prove that the building is not a
dwelling house (MCL 750.72, 750.73).
2. C
ONSTITUTIONAL
L
AW —
D
OUBLE
J
EOPARDY —
A
CQUITTALS
.
An acquittal occurs for double jeopardy purposes only when the trial
court’s action, whatever its form, is a resolution in the defendant’s
favor, correct or not, of a factual element necessary for a criminal
conviction.
Michael A. Cox, Attorney General, B. Eric Restuccia,
Solicitor General, Kym L. Worthy, Prosecuting Attor-
ney, and Timothy A. Baughman, Chief of Research,
Training, and Appeals, for the people.
Rose Mary C. Robinson for defendant.
Before: C
AVANAGH
,P.J., and O’C
ONNELL
and W
ILDER
,
JJ.
O’C
ONNELL
, J. The prosecution appeals as of right the
trial court’s order granting defendant’s motion for a
directed verdict and dismissing the case. We reverse and
remand.
Defendant was charged with burning other real prop-
erty. MCL 750.73 provides:
2010] P
EOPLE V
E
VANS
411
Any person who wilfully or maliciously burns any build-
ing or other real property, or the contents thereof, other
than those specified in the next preceding section of this
chapter, the property of himself or another, shall be guilty
of a felony, punishable by imprisonment in the state prison
for not more than 10 years.
MCL 750.72, which concerns burning a dwelling house,
provides:
Any person who wilfully or maliciously burns any dwell-
ing house, either occupied or unoccupied, or the contents
thereof, whether owned by himself or another, or any
building within the curtilage of such dwelling house, or the
contents thereof, shall be guilty of a felony, punishable by
imprisonment in the state prison for not more than 20
years.
Defendant was seen carrying a gasoline can and
running away from a burning house. An arson investi-
gator testified that he observed burn patterns that
indicated that a flammable liquid had been used to
ignite the fire. The investigator noted that the home
lacked gas, electricity, and water. The homeowner tes-
tified that he was in the process of purchasing the
home, which needed repairs, and that he and his family
had moved some belongings into the home.
At the close of the prosecution’s proofs, defendant
moved for a directed verdict. Defendant noted that the
crime with which he was charged pertained to the
burning of property other than a dwelling house and
argued that the prosecution had not established that
the building that burned was not a dwelling house.
Defendant referred the trial court to CJI2d 31.3, Burn-
ing Other Real Property, which provided before its
amendment in September 2009:
(1) [The defendant is charged with the crime of / You
may also consider the lesser charge of] burning a building
412 288 M
ICH
A
PP
410 [May
or any of its contents. To prove this charge, the prosecutor
must prove each of the following elements beyond a rea-
sonable doubt:
(2) First, that the defendant burned [describe property
alleged]. The term “burn” in this case means setting fire to
or doing anything that results in the starting of a fire, or
helping or persuading someone else to set a fire. If any part
of the [describe property] is burned, [no matter how small,]
that is all that is necessary to count as a burning; the
property does not have to be completely destroyed. [The
(describe property) is not burned if it is merely blackened by
smoke, but it is burned if it is charred so that any part of it
is destroyed.]
(3) Second, that the property that was burned was a
building or any of its contents. [It does not matter whether
the defendant owned or used the building.]
(4) Third, that when the defendant burned the building
or its contents, [he/she] intended to burn the building or
contents or intentionally committed an act that created a
very high risk of burning the building or contents and that,
while committing the act, the defendant knew of that risk
and disregarded it.
[(5) Fourth, that the building was not a dwelling house.
A dwelling house is a structure that is actually being lived
in or that could reasonably be presumed to be capable of
being lived in at the time of the fire. (A business that is
located very close to and used in connection with a dwelling
may be considered to be a dwelling.)]
[
1
]
Defendant sought a directed verdict of acquittal on the
ground that the prosecution had failed to produce any
evidence to establish that the building that burned was
not a dwelling house. The trial court made the following
determination on the record, reproduced here in its
entirety:
1
A use note indicates that paragraph (5) “should be used when
instructing on the crime as a lesser included offense of burning a
building.”
2010] P
EOPLE V
E
VANS
413
The Court: The Court does not have an option of not
reading all of the required elements in a jury instruction,
and there are no optional elements in [CJI2d] 31.3. All of
them are required. And the instructions are not a guide.
They are what is required by law.
Looking at the commentary, it refers to a distinction
between [CJI2d] 31.2 and 31.3. [CJI2d] 31.2 is the instruc-
tion that is required for burning a dwelling house.
The commentary, speaking of CJI 2nd 31.1 [sic, 31.3],
Burning Other Real Property, the commentary: “This
offense is similar to the one described in CJI 2nd 31.2,
except that an essential element is that the structure
burned is not”—which is in italicized writing print—“a
dwelling house.” And then it cites People v Antonelli,
A-n-t-o-n-e-l-l-i, 64 Mich App 620, 238 NW 2nd 363 [1975],
and notes that it was reversed on other grounds, and gives
the citation as 66 Mich App 138, 238 NW 2nd 551 (1975).
And the commentary goes on to say: “As the Court
explained on rehearing, common law arson required that the
building be a dwelling. In creating the less serious crime of
burning buildings other than dwellings, the legislature simply
eliminated the element of habitation. Other real property is
all real property not included in MCL 750.72.”
And the People in this case have relied on MCL 750.73,
which specifically says it cannot be a dwelling.
[The Prosecutor]: Judge, could I have a moment to go
upstairs and pull the statute and make sure that the
statute addressed that. Because my understanding of the
law is that it doesn’t matter whether it’s a dwelling or not,
it just has to be a structure. And that’s the reason for the—
The Court: Other than a house, because the legislature
has imposed a higher penalty for one burning a house.
[MCL] 750.73 reads: “Burning of Other Real Property —
Any person who willfully or maliciously burns any building or
other real property, or the contents thereof, other than those
specified in the next preceding section of this chapter, the
property of himself or another, shall be guilty of a
felony...[.]” I won’t give the term of punishment.
414 288 M
ICH
A
PP
410 [May
And it says: “Other than those specified in the next
preceding.” Isn’t preceding before? The next preceding
section of this chapter would be [MCL] 750.72.
[MCL] 750.72 is entitled “Burning Dwelling House,”
and reads: “Any person who willfully or maliciously burns
any dwelling house, either occupied or unoccupied, or the
contents thereof, whether owned by him or another, or any
building within the curtilage of such dwelling house, or the
contents thereof, shall be guilty of a felony.” I will not read
the term of punishment, but it is twice that which is
specified in [MCL] 750.73.
So reading the language of [MCL] 750.73, which refers
back to [MCL] 750.72, a dwelling house, either occupied or
unoccupied, is excluded by law.
[The Prosecutor]: Judge, may I have a moment to go
upstairs and consult with my supervisors?
The Court: You can consult with them when you tell
them I’ve granted the motion.
[Defense Counsel]: Thank you, Judge.
The Court: As a matter of law.
The testimony was this was a dwelling house, paid for
for forty-some-odd thousand dollars. That the folks had
moved some stuff into it, even though it doesn’t matter.
Motion granted.
On appeal, the prosecution argues that the trial court
erroneously granted defendant’s motion for a directed
verdict because the prosecution was not required to
prove that the burned building was not a dwelling
house and that the principles of double jeopardy do not
bar a retrial because the trial court’s dismissal of the
case did not constitute a directed verdict of acquittal for
double jeopardy purposes. We agree.
We review a trial court’s decision on a motion for a
directed verdict de novo to determine whether the
evidence presented by the prosecution, viewed in a light
2010] P
EOPLE V
E
VANS
415
most favorable to the prosecution, could persuade a
rational fact-finder that the essential elements of the
offense were proved beyond a reasonable doubt. People
v Couzens, 480 Mich 240, 244; 747 NW2d 849 (2008).
The applicability of the Double Jeopardy Clause pre-
sents a question of law that we review de novo. People v
Herron, 464 Mich 593, 599; 628 NW2d 528 (2001).
It is undisputed that the trial court misperceived the
elements of the offense with which defendant was
charged and erred by directing a verdict.
2
In People v
Antonelli (On Rehearing), 66 Mich App 138, 140; 238
NW2d 551 (1975), this Court concluded that the crime
of burning other real property (i.e., property that is not
a dwelling) is a lesser included offense of the crime of
burning a dwelling. The Antonelli Court noted, “The
necessary elements to prove either offense are the
same, except to prove the greater it must be shown that
the building is a dwelling; to prove the lesser it is not
necessary to prove that the building is not a dwelling.”
Id. In this case, the trial court examined CJI2d 31.3 and
concluded from the language of paragraph (5) that it
must be proved that the building is not a dwelling in
order to establish the offense of burning other real
property.
3
However, as noted, paragraph (5) is read only
when the offense of burning other real property is
considered as a lesser included offense of the crime of
burning a dwelling. The crime of burning other real
property was not charged as a lesser included offense in
this case.
4
2
Even defendant admitted in his brief on appeal that the trial court’s
directed verdict of acquittal was “technically incorrect.”
3
Interestingly, paragraph (5) was removed from the latest version of
this jury instruction, amended in September 2009.
4
We note that the trial court’s stated belief that it was required by law
to rely on the Michigan Criminal Jury Instructions to determine the
elements of the offense of burning other real property was incorrect. The
416 288 M
ICH
A
PP
410 [May
The trial court incorrectly determined that proof that
the burned building was not a dwelling is an element of
the charged offense and directed a verdict of acquittal
on the ground that the prosecution had failed to present
evidence of that nonelement. Defendant argues that the
trial court’s order granting a directed verdict, though
erroneous, constituted an acquittal for double jeopardy
purposes, barring a retrial. We disagree.
The double jeopardy clauses of the United States and
Michigan constitutions prevent a defendant from being
prosecuted twice for the same offense. US Const, Am V;
Const 1963, art 1, § 15. If a trial court directs a verdict
of acquittal on a charge, the double jeopardy provisions
prohibit further proceedings on that charge. People v
Nix, 453 Mich 619, 626-627; 556 NW2d 866 (1996).
Specifically, “[a] defendant may not be retried after an
acquittal that is granted on the basis of insufficient
evidence.” People v Mehall, 454 Mich 1, 5; 557 NW2d
110 (1997). Whether a trial court’s decision constitutes
a verdict of acquittal depends on ‘ “whether the ruling
of the judge, whatever its label, actually represents a
resolution, correct or not, of some or all of the factual
elements of the offense charged.” ’ Nix, 453 Mich at
Michigan Criminal Jury Instructions are simply provided as guidance for
trial courts for the purpose of instructing a jury. In fact, a trial court is
not even required to use the Michigan Criminal Jury Instructions when
instructing the jury. In People v Vaughn, Justice B
RICKLEY
explained:
The Michigan Criminal Jury Instructions do not have the
official sanction of this Court, and their use is not mandatory but,
instead, remains discretionary with the capable trial judges of this
state.... Trial judges remain free to use all or part of those
standardized instructions that they deem proper for adequately
instructing a jury, and should not hesitate to modify or disregard a
standard instruction when presented with a clear or more accurate
instruction. [People v Vaughn, 447 Mich 217, 235 n 13; 524 NW2d
217 (1994) (opinion by B
RICKLEY
, J.), reh den 447 Mich 1202 (1994),
repudiated on other grounds People v Carines, 460 Mich 750; 597
NW2d 130 (1999) (citations omitted).]
2010] P
EOPLE V
E
VANS
417
625, quoting United States v Martin Linen Supply Co,
430 US 564, 571; 97 S Ct 1349; 51 L Ed 2d 642 (1977).
“ ‘There is an acquittal and retrial is impermissible
when the judge “evaluated the Government’s evidence
and determined that it was legally insufficient to sus-
tain a conviction.” ’ ” Nix, 453 Mich at 626, quoting
People v Anderson, 409 Mich 474, 486; 295 NW2d 482
(1980), quoting Martin Linen, 430 US at 572.
In Nix, the majority made an additional observation
in response to the dissent’s concerns that the trial court
had improperly determined that the prosecutor had
failed to establish that the defendant had a legal duty to
aid the murder victim, stating:
The dissent appears to read the Martin Linen standard as
if the phrase “correct or not” refers to the factual truth of the
prosecution’s evidence, a determination completely outside
the trial court’s purview in a jury trial when considering a
defendant’s motion for directed verdict. When ruling on a
motion for directed verdict, a trial court must, as this trial
court did, view the prosecution’s evidence in the light most
favorable to the prosecution. Accordingly, the trial court
cannot make an erroneous factual resolution. The phrase
“correct or not” refers to all aspects of the trial court’s
ultimate legal decision, including even cases where the trial
court is factually wrong with respect to whether a particular
factor is an element of the charged offense. As discussed
below, however, it is not clear that this situation even exists in
the case at bar. [Nix, 453 Mich at 628.]
Admittedly, the majority’s observation indicated that it
believed that the Double Jeopardy Clause precludes re-
trial of a defendant if charges against him are dismissed
because the prosecution failed to establish a nonelement
of the charged offense. In People v Howard, unpublished
opinion per curiam of the Court of Appeals, issued Decem-
ber 23, 2003 (Docket No. 240915),p3n2,apanel of this
Court discussed the illogic of such a position:
418 288 M
ICH
A
PP
410 [May
Statements in Nix, albeit arguably dicta, could be read
to mean that the double jeopardy clause applies to acquit-
tals resulting from “egregiously erroneous” determina-
tions that “a particular factor is an element of the charged
offense.” Nix, [453 Mich] at 625, 628. Thus a double
jeopardy bar would prevent retrial of a defendant acquitted
by a judge who concluded that the offense charged had as
one of its elements that the moon is made of green cheese
and that, the prosecutor having failed to prevent [sic] any
evidence to that effect, a directed verdict was required. To
state such a result is to show the deficiencies of the rule
that would even arguably allow it. That rule certainly does
not assure that the double jeopardy clause operates in a
manner that, while preventing the retrial of factual issues
properly determined in favor of a defendant, nonetheless
allows the public “its valued right to have one complete
opportunity to vindicate its laws.” Id. at 642. (J Boyle,
dissenting).
In addition, we note that the majority in Nix recognized
that its interpretation of the phrase “correct or not”
was dicta, acknowledging that it was unclear whether
the situation that concerned the dissent, that dismissal
of the case was premised on the prosecution’s failure to
establish a nonelement of an offense, had even oc-
curred.
5
Nix, 453 Mich at 628. See also People v Case,
220 Mich 379, 382-383; 190 NW 289 (1922) (“It is a
well-settled rule that any statements and comments in
an opinion concerning some rule of law or debated legal
proposition not necessarily involved nor essential to
determination of the case in hand are, however illumi-
nating, but obiter dicta and lack the force of an adjudi-
cation.”).
5
Instead, the majority in Nix noted that “in granting defendant’s
motion for directed verdict, the trial judge considered all the factual
evidence proffered by the prosecution and concluded that that factual
evidence, as a matter of law, was insufficient to permit the jury to convict
defendant of the charges brought....”Nix, 453 Mich at 628-629.
2010] P
EOPLE V
E
VANS
419
Yet, coincidentally, the acknowledgement by the ma-
jority in Nix that this determination was not intrinsic to
its holding in Nix frees us to consider the discussion by
the dissenters in Nix concerning the proper application
of the Double Jeopardy Clause in such circumstances.
The dissent in Nix wrote:
[A] judicial ruling is an acquittal “only when, in termi-
nating the proceeding, the trial court actually resolves in
favor of the defendant a factual element necessary for a
criminal conviction.” United States v Maker, 751 F2d 614,
622 (CA 3, 1984), cert den 472 US 1017 (1985) (emphasis
added). Thus, as Professor Wright’s treatise has construed
the Court’s jeopardy jurisprudence, “[s]o long as there has
not been a finding against the government on any issue of
fact required to establish guilt on the correct legal theory,
appeal could easily seem appropriate.” 15B Wright, Miller
& Cooper, Federal Practice & Procedure (2d ed), § 3919.5, p
662.
In Maker, the defendants were charged with a single
insurance fraud scheme related to two separate automobile
accidents. The district court concluded that the statute
required advanced planning of the second accident at the
time of the first and dismissed the charge during trial on
the basis of the insufficiency of the government’s evidence
to prove one scheme rather than two. Finding this to be an
“element of” the government’s case, the trial court decided
that the government did not have “sufficient evidence” to
prove this “element.” Maker [751 F2d] at 619. While
acknowledging that the United States Supreme Court did
not provide significant direction on how the test should be
applied, id. at 622, the United States Court of Appeals for
the Third Circuit read Martin Linen and its progeny,
[United States v Scott, 437 US 82; 98 S Ct 2187; 57 L Ed 2d
65 (1978)], to require an acquittal only when the trial
court’s action, whatever its form, is a resolution in the
defendant’s favor, correct or not, of “a factual element
necessary for a criminal conviction.” Maker [751 F2d] at
622. (Emphasis added.) As in the case before us, the trial
court had dismissed the charge because the government
420 288 M
ICH
A
PP
410 [May
had not alleged facts sufficient to prove all the legal
elements that it believed were necessary to sustain convic-
tion. Likewise, as in the case before us, the court then made
what is “at least arguably, a factual determination,” that
the government could not prove the legal element which
the trial court thought necessary for conviction. Id. at 623.
The court found that the trial court’s arguable factual
finding did not “actually determine in [the defendant’s]
favor any of the essential elements of the crime with which
he was charged,” because the trial court’s legal determina-
tion about the elements of the charge was incorrect. Id.
The court reasoned:
“Our conclusion that an appeal is not barred in this case
is consistent with the policies underlying the double jeop-
ardy clause. This is not a case in which a second trial is
permitted ‘for the purpose of affording the prosecution
another opportunity to supply evidence which it failed to
muster in the first proceeding.’ Burks v United States, 437
US 1, 11; 98 S Ct 2141, 2149; 57 L Ed 2d 1 (1978). Instead,
this is a case in which the district court, as the result of a
legal error, determined that the government could not
prove a fact that is not necessary to support a conviction.
To preclude an appeal in this case would deprive the public
of ‘its valued right to “one complete opportunity to convict
those who have violated its laws.” ’ Scott, [437 US] at 100,
quoting Arizona v Washington, 434 US 497, 509; 98 S Ct
824, 832; 54 L Ed 2d 717 (1975).” [Maker, (751 F2d) at
624.]
The district court had come to two conclusions, one legal
and the other apparently factual. Appeal and retrial were
not barred, however, because neither was relevant to an
essential element of the charge. [Nix, 453 Mich at 633-636
(B
OYLE
, J., dissenting).]
We find the analysis provided by the dissent in Nix, and
the dissent’s reliance on Maker, to be persuasive and
adopt this position. Accordingly, we conclude that an
actual acquittal occurs, for double jeopardy purposes,
“only when the trial court’s action, whatever its form, is
2010] P
EOPLE V
E
VANS
421
a resolution in the defendant’s favor, correct or not, of a
factual element necessary for a criminal conviction.” Id.
at 634-635 (emphasis, citation, and quotation marks
omitted).
In this case, we conclude that the trial court’s order
granting a directed verdict in favor of defendant does
not constitute an acquittal for double jeopardy pur-
poses, because the trial court failed to resolve any of the
elements that actually must be satisfied to establish the
offense of burning other real property. Again, the basis
for a trial court’s grant of a directed verdict is deter-
mined by examining “the substance of the deci-
sion....” Mehall, 454 Mich at 5. The trial court’s
written order was a standardized form and indicated
only that defendant’s motion for a directed verdict of
acquittal was granted. However, the trial court’s re-
marks made at the time defendant moved for a directed
verdict indicated that it granted a directed verdict
because the court erroneously believed that an element
of the charged offense of burning other real property is
that the property burned was not a dwelling. The trial
court then improperly concluded that the prosecution
did not present evidence to establish this nonelement
and granted defendant’s motion for a directed verdict of
acquittal as a matter of law. The trial court never
addressed any of the actual elements of burning other
real property when granting the directed verdict, in-
stead basing the directed verdict entirely on a determi-
nation that the prosecution had failed to establish a
nonelement.
The trial court’s ruling did not constitute a resolution
of some or all of the factual elements of the offense of
burning other real property. It was premised, instead,
on an error of law: the trial court ordered a directed
verdict because it believed that the prosecution was
422 288 M
ICH
A
PP
410 [May
required to establish that the building in question was
not a dwelling, when the applicable statute and relevant
caselaw make it quite clear that no such element must
be satisfied. The trial court’s ruling constituted nothing
more than a determination that the prosecution had
failed to provide sufficient evidence to establish a factor
that is not an element of the charged offense, premised
on an incorrect legal determination regarding the ele-
ments that needed to be established. In fact, no resolu-
tion regarding the actual elements of the charged
offense was even made. The trial court never mentioned
any actual element of the charged offense in its discus-
sion of the directed verdict, nor did it discuss any
evidence presented by either party except that which, in
the court’s mind, conclusively established that the
burned building was a dwelling. Because the trial court
never resolved, or even addressed, a factual element
necessary to establish a conviction for burning other
real property, and instead based the directed verdict
solely on the determination that the prosecution had
failed to present any evidence establishing a nonele-
ment of the offense, double jeopardy principles do not
preclude further prosecution of the charged offense.
Reversed and remanded for further proceedings con-
sistent with this opinion. We do not retain jurisdiction.
2010] P
EOPLE V
E
VANS
423
MILLER v CITIZENS INSURANCE COMPANY
Docket No. 290522. Submitted May 4, 2010, at Detroit. Decided May 13,
2010, at 9:15 a.m.
Gail Miller, guardian and conservator for Ryan S. Miller, a mentally
and physically incapacitated adult, brought an action in the
Macomb Circuit Court against Citizens Insurance Company and
April Buerkel, an employee of Citizens, seeking, in part, no-fault
motor vehicle insurance benefits for injuries Ryan received in a
motor vehicle accident. Citizens had denied plaintiff’s application
for such benefits following the accident. The parties reached a
settlement, and the trial court, Matthew S. Switalski, J., entered a
stipulated order of dismissal that settled the matter except, in
part, with regard to the entitlement of plaintiff’s attorneys to an
attorney lien. The court ordered plaintiff to give notice to Ryan’s
medical providers to appear at a scheduled conference to settle the
attorney fee issue. Thereafter, one of the providers, Detroit Medi-
cal Center (DMC), moved to intervene as a plaintiff, which the trial
court denied. Following further proceedings, plaintiff filed a mo-
tion regarding distribution of the no-fault benefits. The trial court
then entered an opinion and order denying plaintiff’s request that
the DMC be paid only $66,200, which is the amount that it would
have received from Medicaid for the services it provided, rather
than the total amount of its bill, $150,660.51. The trial court also
ordered that plaintiff’s attorneys were entitled to a reasonable
percentage of the DMC’s recovery and that
1
/3 of the DMC’s
recovery was a reasonable percentage as attorney fees. The DMC
appealed, alleging that the trial court erred by holding that
plaintiff’s attorneys were entitled to have attorney fees deducted
from the payment the DMC earned by providing services to Ryan.
Plaintiff cross-appealed, challenging the DMC’s right to appeal as
well as the amount that the DMC was allocated from the settle-
ment proceeds for the services it provided.
The Court of Appeals held:
1. Plaintiff’s attorneys were entitled to fees for the legal
services they provided on behalf of plaintiff as a consequence of the
contingency fee agreement between plaintiff and the attorneys in
which the attorneys agreed to accept as payment for their services
424 288 M
ICH
A
PP
424 [May
1
/3 of the amount of monies recovered on Ryan’s behalf. Moreover,
pursuant to the contingency fee agreement, plaintiff’s attorneys
had a right to be paid for their services from the amount recovered
from Citizens. The trial court did not abuse its discretion by
awarding plaintiff’s attorneys the fees provided for in the contin-
gency fee agreement.
2. The “common-fund exception,” an equitable, common-law
exception to the American rule regarding the payment of attorney
fees, applied in this case. The exception is premised on the
equitable principle that it is unfair to allow others to benefit at the
expense of the prevailing party without contribution to the costs
incurred in securing the common fund. Therefore, plaintiff’s
attorneys rightfully secured a charging lien against the settlement
proceeds—or common fund—pursuant to their contingency fee
contract.
3. The fact that the DMC’s bill for the services it provided to
Ryan was not overdue at the time the settlement was reached was
of no consequence in this case.
4. The DMC was an “interested person” with regard to the
apportionment of its bill for services rendered to Ryan. Because the
DMC contested the right of plaintiff’s attorneys to have their fees
deducted from the amount of the DMC’s billed services, the trial
court properly required the DMC to appear in court to settle the
attorney fee issue. The trial court did not err by providing the DMC
a forum in which to contest and resolve the matter. The Court of
Appeals did not lack jurisdiction over the appeal by the DMC.
5. The trial court properly denied plaintiff’s request that the
DMC only receive the amount that it would have received from
Medicaid. The DMC’s challenge to the apportionment of the
common fund was made in good faith and did not warrant punitive
action.
Affirmed.
1. A
TTORNEY AND
C
LIENT —
C
HARGING
L
IENS FOR
A
TTORNEY
F
EES
.
An attorney’s charging lien is an equitable right to have the fees and
costs due for services secured out of the judgment or recovery in a
particular suit; the charging lien creates a lien on a judgment,
settlement, or other money recovered as a result of the attorney’s
services.
2. A
TTORNEY AND
C
LIENT —
A
TTORNEY
F
EES —
A
MERICAN
R
ULE —
C
OMMON
-F
UND
E
XCEPTION
.
The common-fund exception is a common-law exception to the
American rule, which provides that, generally, each litigant must
2010] M
ILLER V
C
ITIZENS
I
NS
C
O
425
pay its own attorney’s fees, even if the party prevails in the
lawsuit; the common-fund exception only applies when a prevail-
ing party creates or protects a common fund that benefits the
prevailing party and others; the common-fund exception is pre-
mised on the equitable principle that it is unfair to allow others to
benefit at the expense of the prevailing party without contribution
to the costs incurred in securing the common fund.
Thomas, Garvey, Garvey & Sciotti, P. C . (by James
McKenna), for Gail Miller.
Charles N. Raimi and Miller & Tischler, P. C . (by
Mark Schreier), for the Detroit Medical Center.
Before: C
AVANAGH
,P.J., and O’C
ONNELL
and W
ILDER
,
JJ.
C
AVANAGH
,P.J. The Detroit Medical Center (DMC), an
aggrieved party, appeals as of right an order granting
attorney fees to plaintiff’s attorneys that had the effect
of proportionately reducing the amount the DMC recov-
ered for billed services in this no-fault motor vehicle
insurance case. We affirm. Plaintiff cross-appeals, chal-
lenging the DMC’s right to participate in this matter, as
well as the amount the DMC was allocated from the
settlement proceeds for services it provided. We affirm.
On December 17, 2007, plaintiff Gail Miller, as guard-
ian and conservator for Ryan Scott Miller, a mentally
and physically incapacitated adult, filed a lawsuit
against defendants, Citizens Insurance Company and
April Buerkel, an employee of Citizens. The complaint
alleged that on September 5, 2007, Ryan was in a
rollover motor vehicle accident from which he sustained
severe and permanent injuries, including a spinal cord
injury that rendered him a paraplegic, a severe closed
head injury, multiple facial fractures, multiple broken
ribs, and multiple fractures of vertebrae. The vehicle
involved in the accident was owned by Ryan’s father
426 288 M
ICH
A
PP
424 [May
and was insured by Citizens; thus, an application for
no-fault benefits dated September 13, 2007, was sub-
mitted to Citizens on Ryan’s behalf. The application
indicated that Ryan had no other medical insurance
coverage. On November 7, 2007, Citizens responded to
the application for benefits by rescinding the insurance
policy, claiming that in May 2002, a representation was
made that the vehicle at issue would not be used for
business purposes and that the representation was
false. By letter dated November 9, 2007, Citizens denied
Ryan’s application for no-fault benefits.
The complaint was filed after the failed efforts by
plaintiff’s attorneys to convince Citizens that Ryan—an
innocent third party—was entitled to no-fault benefits.
Count I was a breach of contract claim, count II was a
common-law fraud and misrepresentation claim, count
III was a fraudulent concealment claim, count IV was a
silent fraud claim, count V alleged a violation of the
Consumer Protection Act, MCL 445.901 et seq., count
VI was an estoppel claim, count VII alleged a violation
of the Uniform Trade Practices Act, MCL 500.2001 et
seq., count VIII was a conspiracy and fraud claim, and
count IX requested exemplary damages.
On January 11, 2008, plaintiff filed a motion for a
preliminary injunction under MCR 3.310(A), request-
ing that Citizens be ordered “to immediately begin
payment of Plaintiff’s no-fault benefits for his care,
rehabilitation and recovery that are reasonable, neces-
sary and related to this automobile accident.” Attached
to the motion was a letter dated January 9, 2008,
authored by a nurse case manager from Alpha Case
Management who had been appointed on Ryan’s behalf,
which detailed the severity of Ryan’s injuries as well as
his future, extensive medical needs. Because of the
extent of Ryan’s mental and physical injuries, place-
2010] M
ILLER V
C
ITIZENS
I
NS
C
O
427
ment in residential rehabilitation was discussed but,
the letter indicated, such placement “will not be pos-
sible if he does not have insurance coverage as no
appropriate TBI/spinal cord injury facility will admit
Ryan without proof of payment.” Citizens opposed
plaintiff’s motion.
On January 22, 2008, a stipulated order of dismissal
pursuant to settlement was entered by the trial court. The
order indicated that jurisdiction was retained only “for the
sole limited purpose of settlement of any attorney liens for
personal protection benefits accrued to date.” The order
also provided that count I was dismissed without prejudice
with regard to the personal protection insurance benefits
payable as alleged in count I, but with prejudice with
regard to interest and attorney fees owing under count I.
Counts II through IX were dismissed with prejudice.
Citizens was ordered to pay all allowable expenses accrued
between September 5, 2007, and January 22, 2008, as well
as those personal protection insurance benefits that fol-
lowed to the extent required by the no-fault act. With
regard to plaintiff’s attorneys’ entitlement to an attorney
lien, the court ordered plaintiff to provide notice to pro-
viders to appear at a scheduled conference to settle the
attorney liens.
On February 11, 2008, the conference was held, and
legal representation for the DMC was present. The
DMC argued that it had not received notice of the
litigation until after it was settled. The trial court
ordered an evidentiary hearing to be conducted with
regard to the issue. The court further ordered Citizens
to make payment to the other providers and that those
providers were subject to an attorney lien of
1
/
3
of their
invoices.
On February 15, 2008, the DMC moved to intervene
as a plaintiff pursuant to MCR 2.209. The DMC averred
428 288 M
ICH
A
PP
424 [May
that it had provided medical, surgical, and rehabilita-
tive services to Ryan at a cost of approximately
$150,651 from December 4, 2007, through January 25,
2008. The DMC averred that plaintiff’s attorneys were
seeking from the DMC a payment of
1
/
3
of its charges as
attorney fees, but the DMC had no such agreement with
plaintiff’s attorneys. The DMC also contended that
“Plaintiff’s counsel did not provide it with appropriate
notice of his representation, did not advise it of his
intention to pursue Intervening Plaintiff’s interests
and claim a one-third fee, and did not provide it an
opportunity to retain its own counsel.” On February 19,
2008, plaintiff responded to the DMC’s motion to inter-
vene, primarily arguing that there was no pending
action in which to intervene—the matter had been
settled by order entered on January 22, 2008. Following
a hearing, the trial court denied the motion to inter-
vene.
On March 14, 2008, an evidentiary hearing was
conducted. The only witness was Jane Ruppman, the
director of patient business services at Rehabilitation
Institute of Michigan (RIM), the DMC hospital where
Ryan received medical treatment. On direct examina-
tion, she testified that patients or third-party payers do
not receive a bill for services while still in the hospital,
but only after discharge. With regard to Ryan, she had
only spoken with an attorney for plaintiff on January
22, 2008, when he called to advise that he had secured
insurance proceeds from Citizens and sought
1
/
3
of the
$150,000 outstanding balance as his fee. That was her
first contact with plaintiff’s attorneys. She then re-
ceived a letter from plaintiff’s attorneys dated January
24, 2008, regarding their legal representation and claim
for
1
/
3
of the bill as their fees. Ryan was discharged on
January 25, 2008. On February 12, 2008, a bill was
submitted to Citizens, and payment was denied.
2010] M
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On cross-examination, Ruppman testified that she
held a supervisory position and had no personal involve-
ment with Ryan’s billing or anything else related to his
hospitalization. She testified that when Ryan was ad-
mitted, a lien was not sought. She knew that if Ryan
were eligible for Medicaid, Medicaid would pay approxi-
mately $1,324 a day. The actual bill for Ryan’s care was
$150,000—which is about $3,000 a day for 50 days. If
Ryan were not eligible for insurance coverage or Med-
icaid, he would be billed, and liable, for RIM’s medical
services. On the back of the Medicaid application, which
was signed on the day Ryan was admitted, someone had
written the names and telephone numbers of Ryan’s
two attorneys. Thus, Ruppman admitted, at least as of
December 4, 2007, according to the DMC’s documents,
the DMC was aware of plaintiff’s attorneys.
Ruppman also testified that before Ryan was admit-
ted to RIM, a RIM employee, Kathleen Clawson, went to
see him to determine if he qualified for care at RIM.
Ruppman was aware that Clawson had testified in her
deposition that she first had contact with plaintiff’s
attorneys on November 29, 2007, a week before Ryan
was admitted to RIM. As of that date, the DMC was
aware that Citizens had denied coverage to Ryan and
that attorneys were pursuing this matter on Ryan’s
behalf. Ruppman admitted that she never interviewed
RIM or DMC employees who had direct contact with
plaintiff’s attorneys, Ryan’s family, or Ryan’s case man-
ager. There were also documents in Ryan’s file, includ-
ing documents from other medical providers, that iden-
tified Ryan’s attorneys by name and telephone number.
Further, on December 13, 2007, the DMC received a
request from plaintiff’s attorneys for billing informa-
tion. Ruppman admitted that the DMC did not contact
or send a lien notice to Citizens. And, when the bill was
sent to Citizens, the DMC did not advise it to pay the
430 288 M
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DMC directly or not to pay plaintiff’s attorneys. The
DMC also did not contact plaintiff’s attorneys or advise
them that it did not want them to pursue this matter on
its behalf or that their services were not wanted with
regard to this matter. Ruppman further testified that
the DMC used to send a form letter that advised those
persons inquiring about outstanding medical bills not
to collect money on its behalf, but the DMC stopped
doing that because the postage was expensive and “it
didn’t work”—liens were still filed and the DMC still
had to retain counsel.
On October 1, 2008, the trial court issued an opinion
and order, holding that, assuming without deciding that
the DMC was entitled to notice, the “DMC had abun-
dant notice that Ryan Miller had counsel who was
pursuing these claims.” The court noted that the DMC,
through its employees, was aware that plaintiff had
counsel on November 29, 2007, and was also aware on
that date that Citizens had denied insurance coverage.
Further, on December 13, 2007, plaintiff’s attorneys
had requested copies of bills for Ryan’s care. In spite of
this knowledge, the DMC did not take any measures
before plaintiff’s attorneys obtained insurance proceeds
to inform them to cease and desist any efforts on behalf
of the DMC.
On October 6, 2008, plaintiff moved for distribution
of no-fault benefits payments. Plaintiff requested that
the court order Citizens to pay plaintiff all monies owed
to the DMC. Plaintiff further requested that, pursuant
to the equitable provisions of MCL 500.3112, the DMC
receive only $66,200, which was the same amount that
the DMC would have received from Medicaid. Plaintiff
argued that the DMC
should not receive a windfall for contesting a settlement
that was agreeable to every other provider of medical care
2010] M
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and treatment to the Plaintiff and then causing Plaintiff to
incur additional expenses, costs and attorney fees as a
result of their challenging the settlement that was agree-
able to everyone but themselves.
The DMC opposed the motion, arguing that it was a
creditor and Ryan a debtor. At the time the case was
settled between plaintiff and Citizens, the DMC had not
even issued a bill for its services and plaintiff’s attor-
neys were not the DMC’s attorneys. Further, the DMC
argued, a hearing to determine the reasonableness of
the requested attorney fees was required.
On February 3, 2009, the trial court entered an
opinion and order denying plaintiff’s request that the
DMC be paid only $66,200, rather than its bill of
$150,660.51, on the ground that it was a good-faith
litigation for which the DMC should not be punished.
The order also provided that plaintiff’s attorneys were
entitled to their reasonable percentage of the DMC’s
recovery, which was
1
/
3
of that recovery. The court held
that no further hearing was necessary, because the fees
were reasonable.
On February 12, 2009, the DMC moved to stay
payment of the attorney fees or for other relief from the
February 3, 2009, order. Plaintiff opposed the motion.
On February 23, 2009, the trial court entered an order
denying the motion and ordering that Citizens issue a
check in the amount of $102,506.94 to the DMC and a
check in the amount of $48,153.57 to plaintiff’s attor-
neys.
On February 24, 2009, the DMC filed its claim of
appeal in this Court. On February 25, 2009, the DMC
filed in this Court a motion for a stay of proceedings,
which was denied. Miller v Citizens Ins Co, unpublished
order of the Court of Appeals, entered February 27,
432 288 M
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2009 (Docket No. 290522). On March 17, 2009, plaintiff
filed a claim of cross-appeal.
On appeal, the DMC argues that the trial court erred
by holding that plaintiff’s attorneys were entitled to
have attorney fees deducted from the payment the DMC
earned by providing services to Ryan. We disagree.
Issues of statutory interpretation are reviewed de novo
as questions of law. Detroit v Ambassador Bridge Co,
481 Mich 29, 35; 748 NW2d 221 (2008). We review the
amount and the award of attorney fees for an abuse of
discretion. Smith v Khouri, 481 Mich 519, 526; 751
NW2d 472 (2008). An abuse of discretion occurs when
the decision is outside the range of reasonable and
principled outcomes. Id.
First, the DMC argues that plaintiff’s attorneys were
not entitled to fees “from no-fault benefits earned by
the DMC when no attorney-client relationship existed
between them.” This argument is without merit. The
dispositive attorney-client relationship that entitled
plaintiff’s attorneys to fees for representing plaintiff in
this no-fault breach of contract action against Citizens
was the attorney-client relationship that existed be-
tween plaintiff and her attorneys. And plaintiff’s attor-
neys were entitled to fees for legal services provided on
behalf of plaintiff as a consequence of the contingency
fee agreement that existed between them.
MCL 500.3112 provides that “[p]ersonal protection
insurance benefits are payable to or for the benefit of an
injured person....”AndMCL500.3142 provides that
such benefits are payable as loss accrues. In this case,
plaintiff’s application to Citizens for no-fault insurance
benefits was denied. At that time, Ryan was receiving
medical care for extensive injuries he sustained in the
automobile accident at issue. In the absence of insur-
ance or other medical coverage, he would be personally
2010] M
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liable for those medical expenses. Thus, attorneys were
retained to represent Ryan’s interests against Citizens
and to challenge the denial of his application for no-
fault insurance benefits. It appears that a typical con-
tingency fee contract was entered into by which plain-
tiff’s attorneys agreed to accept as payment for their
services
1
/
3
of the amount of monies, if any, recovered on
Ryan’s behalf.
Thereafter, a lawsuit was filed, which included a breach
of contract action premised on Citizens’ refusal to pay
personal protection insurance benefits, including to Ry-
an’s health-care providers. From the record evidence it
appears that, before Ryan was admitted to RIM, on or
about November 29, 2007, RIM was aware that Citizens
had refused Ryan’s application for no-fault benefits and
that Ryan had attorneys who were pursuing legal action
in that regard. RIM admitted Ryan as a patient on
December 4, 2007, and the lawsuit was filed on December
17, 2007. The record is undisputed that the DMC never
advised plaintiff, or plaintiff’s attorneys, not to pursue
insurance proceeds for the payment of its medical ser-
vices. And although the DMC in past instances had
pursued its own claims against automobile insurance
providers, it had not done so in this case.
Consequently, when settlement negotiations com-
menced between plaintiff’s attorneys and Citizens re-
garding the no-fault case, plaintiff’s attorneys sought
payment for the medical services RIM provided to Ryan.
Although at the time Ryan was still a patient at RIM, he
was already liable for the cost of the medical services
that RIM had provided and that had accrued to that
date. The matter was successfully settled. By settling
plaintiff’s lawsuit, Citizens was relieved of the risk of
having penalty interest and penalty attorney fee sanc-
tions imposed on it for failing to provide personal
434 288 M
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protection insurance benefits from the date that Ryan
sustained his injuries through the settlement date.
Citizens also did not have to defend against the other
eight counts contained in plaintiff’s complaint. By op-
eration of the settlement, Ryan’s medical providers did
not have to establish that their charges for services
provided to Ryan were reasonable under MCL
500.3157. Apparently, plaintiff’s attorneys were able to
prove to Citizens’ satisfaction that such charges were
indeed reasonable.
The settlement that plaintiff’s attorneys eventually
reached with Citizens created, in effect, a common fund
that would benefit not only Ryan, but his medical
providers, which had not sought to litigate or pursue
their own right to payment through legal action. Under
MCL 500.3112, each medical provider could have
brought an action or intervened in this action against
Citizens. See Lakeland Neurocare Ctrs v State Farm
Mut Auto Ins Co, 250 Mich App 35, 39; 645 NW2d 59
(2002). None did, and thus they were spared the ex-
pense of litigating their own claims. Thus, as is custom-
ary, plaintiff’s attorneys sought to negotiate with Ry-
an’s medical providers, in effect, a reduction in their
bills proportionate to the amount of the fees that
plaintiff agreed to pay her attorneys for pursuing the
legal action against Citizens. All providers agreed to
accept as payment in full
2
/
3
of the amount of their
billed services except the DMC. The DMC claims, in
essence, that it does not have to pay for plaintiff’s
attorneys’ fees associated with securing payment for
medical services the DMC provided to Ryan—the DMC
had no contract to pay such fees. But plaintiff had a
contract that provided for such payment.
As this Court noted in Aetna Cas & Surety Co v
Starkey, 116 Mich App 640; 323 NW2d 325 (1982), the
2010] M
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existence of an attorney’s charging lien is recognized in
Michigan at common law. George v Sandor M Gelman,
PC, 201 Mich App 474, 477; 506 NW2d 583 (1993). A
charging lien is “an equitable right to have the fees and
costs due for services secured out of the judgment or
recovery in a particular suit.” Id. at 476. “The attor-
ney’s charging lien creates a lien on a judgment, settle-
ment, or other money recovered as a result of the
attorney’s services.” Id.
Specifically, in Aetna Cas & Surety Co, medical pro-
viders submitted their bills for services provided to an
automobile accident victim directly to the insured’s
insurance company. The insurance company refused
payment under the no-fault policy, presumably causing
the insured to be personally liable for the bills. The
insured retained an attorney under a contingency fee
agreement. Aetna Cas & Surety Co, 116 Mich App at
642. The matter was successfully resolved. Then the
insured’s attorney requested that the medical providers
receive
2
/
3
of the amount of their billing and that he
receive the remaining
1
/
3
of their billing. The trial court
denied the insured’s attorney’s request. This Court
reversed, holding that the insured’s attorney had a
valid attorney’s charging lien against the fund recov-
ered. In particular, this Court noted that Michigan law
creates an attorney’s lien—a specific encumbrance—on
a judgment or fund, including a personal protection
insurance fund that a client has recovered through the
professional services of that attorney. Id. at 644-645.
Although we are not bound by that decision because it
was decided before November 1, 1990, MCR 7.215(J),
we find its reasoning instructive and persuasive with
regard to the circumstances of this case.
Plaintiff’s attorneys had a right to be paid for their
services from the amount recovered from Citizens pur-
436 288 M
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suant to their contingency fee agreement with plaintiff.
This may appear at first blush to be unfair to the
medical providers, who provided medical care only to be
asked—almost required—to reduce their bills to pay, in
part, for the expense of litigation. It is not unfair. As a
consequence of plaintiff’s attorneys’ actions, Citizens,
which had denied the application for benefits entirely,
agreed to pay personal protection insurance benefits on
Ryan’s behalf. If Citizens had not agreed to do so, it is
doubtful that Ryan’s medical providers would have
received as much in settlement of their bills because
Medicaid, or Ryan, would have been the payer. And if
plaintiff had not retained attorneys to litigate this case,
it might have been incumbent on each medical provider
to retain counsel to litigate its claim on Ryan’s behalf
against Citizens, which would also cause them to incur
the expense of litigation.
Further, it appears to us that, with regard to the
payment of plaintiff’s attorneys’ fees, an equitable,
common-law exception to the American rule applies.
See Nemeth v Abonmarche Dev, Inc, 457 Mich 16, 37-38;
576 NW2d 641 (1998), citing Popma v Auto Club Ins
Ass’n, 446 Mich 460, 473-474; 521 NW2d 831 (1994).
That exception is the common-fund exception. This
exception “only applies when a prevailing party creates
or protects a common fund that benefits himself and
others.” Nemeth, 457 Mich at 38 n 11; see, also, Popma,
446 Mich at 475. This exception is premised on the
equitable principle that it is “unfair to allow others to
benefit at the expense of the prevailing party without
contribution to the costs incurred in securing the com-
mon fund.” Nemeth, 457 Mich at 38 n 11. Although the
common-fund exception usually applies to class actions,
litigation against automobile insurers for failure to pay
personal protection insurance benefits in breach of
their contract with their insured parallels a class action.
2010] M
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See, e.g., Terra Energy, Ltd v Michigan, 241 Mich App
393, 401-402; 616 NW2d 691 (2000). An insured plain-
tiff who prevails in a litigation against the plaintiff’s
insurer secures payment not only for the plaintiff’s
benefit, but for the benefit of the plaintiff’s medical
providers, which were at risk of either not being paid or
of receiving a smaller fraction of their billed amounts
for their services.
In this case, the DMC was one of several beneficiaries
of the settlement that plaintiff’s attorneys secured from
Citizens, which included payment for the medical ser-
vices that RIM provided to Ryan from the date of Ryan’s
admission through January 22, 2008. The DMC is
correct that it could have pursued a direct claim for
benefits on Ryan’s behalf, as discussed above. Before
Ryan was admitted to RIM, RIM was aware that Citi-
zens had denied coverage. The DMC could have pursued
a claim on Ryan’s behalf or intervened in this litigation
after it was commenced, but the DMC did not. See
Abston v Aetna Cas & Surety Co, 131 Mich App 26, 31;
346 NW2d 63 (1983). The DMC could have advised
plaintiff’s attorneys not to pursue payment for its
services or advised Citizens that plaintiff’s attorneys
did not represent its interests, but the DMC did neither.
Instead, the DMC, as well as other medical providers,
relied on the efforts of plaintiff’s attorneys to enforce
claims for payment of services rendered to Ryan. Be-
cause plaintiff pursued personal protection insurance
benefits through a successful litigation, her attorneys
rightfully secured a charging lien against the settle-
ment proceeds—or common fund—pursuant to their
contingency fee contract. It would be unfair to allow the
DMC, and other medical providers, to benefit from the
efforts of plaintiff’s attorneys without contributing to
the costs incurred in securing insurance proceeds and
the common fund.
438 288 M
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The DMC relies on Garcia v Butterworth Hosp, 226
Mich App 254; 573 NW2d 627 (1997), in support of its
position that plaintiff’s attorneys’ fees should not be
deducted from benefits payable to the DMC. That case,
however, is clearly distinguishable. The insurer in that
case paid benefits without contest, the plaintiff brought
the no-fault lawsuit only as a precautionary measure,
the lawsuit was dismissed before the complaint was
even served, and the insurer and health-care provider
actually resolved the matter without the assistance of
the plaintiff’s attorney. Thus, the attorney’s motion for
a determination of attorney fees owed to him was
properly rejected. In our case, (1) Citizens did contest
the payment of Ryan’s benefits, (2) a lawsuit was filed,
served, and litigated before a settlement was reached,
and (3) the medical providers had no involvement in the
resolution of the litigation. Similarly, the DMC’s reli-
ance on the proposition that it is improper to award
attorney fees “solely on the basis of equitable prin-
ciples” is inapposite because the award of attorney fees
here principally arises from the contingency agreement
between plaintiff and her attorneys, not merely “equi-
table principles.”
Second, the DMC argues that it should not have to
pay for plaintiff’s attorneys’ fees associated with secur-
ing payment for medical services the DMC provided to
Ryan because, at the time plaintiff settled the case with
Citizens, the DMC had not yet billed Ryan for its
services. In other words, the DMC argues, their bill was
not “overdue” under MCL 500.3142(2) and MCL
500.3148(1).
MCL 500.3142(2) and (3) provide for payment by the
no-fault insurer of penalty interest when personal pro-
tection insurance benefits are overdue, after an insurer
receives reasonable proof of the fact and of the amount
2010] M
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of loss sustained. See Morales v State Farm Mut Auto
Ins Co, 279 Mich App 720, 730; 761 NW2d 454 (2008).
The statute has no application to the facts of this case.
The issue here is whether plaintiff’s attorneys were
entitled to collect their fees, or charging lien, against
the proceeds of the settlement they obtained for plain-
tiff, not whether the DMC or plaintiff’s attorneys were
entitled to penalty interest from Citizens. When Ryan
was admitted to RIM and began receiving medical
services for which he could be personally liable to pay,
his loss accrued whether or not a final billing was
delivered. That the DMC’s bill was not “overdue” at the
time a settlement was reached is of no consequence
here.
Similarly, the DMC’s reliance on MCL 500.3148(1),
the no-fault penalty attorney fee provision, is mis-
placed. MCL 500.3148(1) provides for payment by the
no-fault insurer of the insured’s overdue personal pro-
tection insurance benefits, in addition to the insured’s
reasonable attorney fees if “the insurer unreasonably
refused to pay the claim or unreasonably delayed in
making proper payment.” This statute has no applica-
tion to the facts of this case. The issue here is whether
plaintiff’s attorneys were entitled to collect their fees,
or charging lien, against the proceeds of the settlement
they obtained for plaintiff, not whether Citizens was
also liable to pay penalty attorney fees.
Third, the DMC argues that it should not have to pay
for plaintiff’s attorneys’ fees associated with securing
payment for medical services the DMC provided to
Ryan because plaintiff’s attorneys “did not satisfy the
legal and ethical predicates for receiving an attorney fee
from payment earned by the DMC.” The DMC relies on
State Bar of Michigan Formal Ethics Opinion C-226
(September 1982) for the proposition that it is unethical
440 288 M
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for an attorney to charge a hospital a fee for medical
payments involuntarily paid by a client’s no-fault insur-
ance carrier unless the hospital is first notified of the
attorney’s contemplated legal action and the hospital is
given a reasonable opportunity to advise the attorney
that it wishes to pursue its own interests without that
attorney’s legal services. To the extent that the DMC
argues that Citizens voluntarily paid Ryan’s personal
protection insurance benefits, including the DMC’s bill
for services, that claim is without merit. The DMC was
aware that Citizens had denied Ryan’s application for
benefits even before Ryan was admitted to RIM. The
subsequent lawsuit was settled and along with it Ryan’s
claim for personal protection insurance benefits related
to his hospitalization at RIM.
Further, the DMC’s argument premised on a lack of
notice is untenable. The record evidence is clear: RIM
had notice that plaintiff’s attorneys were in the process
of pursuing legal action against Citizens even before
Ryan was admitted to RIM. As the trial court held, the
DMC was also aware that plaintiff’s attorneys were
seeking payment for the DMC’s services, even before
the matter was settled, but did not advise plaintiff’s
attorneys, or Citizens, that the DMC wished to pursue
its own interests. Thus, this issue is without merit.
And we reject the DMC’s argument that the claim by
plaintiff’s attorneys for fees from the payment earned
by the DMC is contrary to public policy. Citizens clearly
contested the claim that Ryan was entitled to no-fault
benefits, including at the time that he was admitted to
RIM. The DMC could have pursued this claim through
the use of its own attorneys, and thus would also have
incurred the expense of litigating such a claim. Under
the circumstances presented in this case, it would be
unfair to allow the DMC to receive the benefit of the
2010] M
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litigation without shouldering some of its burden.
Therefore, we conclude that the trial court did not
abuse its discretion when it held that plaintiff’s attor-
neys were entitled to have part of their attorney fees
deducted from the payment to be made to the DMC for
medical services provided to Ryan.
Next, the DMC argues that even if plaintiff’s attor-
neys were entitled to attorney fees, the trial court
abused its discretion by awarding them unreasonable
fees without any analysis of the reasonableness factors.
We disagree.
Plaintiff’s attorneys were retained to represent
plaintiff’s interests against Citizens and to challenge
the denial of Ryan’s application for no-fault insurance
benefits through a breach of contract claim. It appears
that a typical contingency fee contract was entered into
by which plaintiff’s attorneys agreed to accept as pay-
ment for their services
1
/
3
of the amount of monies, if
any, recovered on plaintiff’s behalf. Plaintiff is not
challenging the reasonableness of the fee to which
plaintiff’s attorneys claim entitlement through their
contract. It is well established that contracts must be
enforced as written. Coates v Bastian Bros, Inc, 276
Mich App 498, 503; 741 NW2d 539 (2007). The DMC
merely argues that the fees that plaintiff’s attorneys
sought were unreasonable, but the fees sought were
agreed to by the parties to the contract and plaintiff is
not challenging the contract. The DMC provides no
legal support for its unsubstantiated claim that it may
contest the amount of attorney fees to which plaintiff’s
attorneys are entitled pursuant to the contract the
attorneys had with plaintiff. We will not search for such
authority. See Yee v Shiawassee Co Bd of Comm’rs, 251
Mich App 379, 406; 651 NW2d 756 (2002).
442 288 M
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Further, the DMC’s reliance on the holdings of
Smith, 481 Mich 519, and Wood v Detroit Auto Inter-Ins
Exch, 413 Mich 573; 321 NW2d 653 (1982), in support
of its position is misplaced. Smith involved a determi-
nation of the reasonableness of the attorney fees re-
quested as case-evaluation sanctions under MCR
2.403(O)(6), and Wood involved the determination of
the reasonableness of attorney fees requested as pen-
alty attorney fee sanctions under MCL 500.3148(1).
Our case does not involve these issues; rather, this case
involves plaintiff’s obligation to pay her attorneys the
fees agreed to pursuant to a contingency fee agreement
that plaintiff is not challenging. Thus, the trial court
did not abuse its discretion by awarding plaintiff’s
attorneys the fees provided for in that contingency
agreement.
On cross-appeal, plaintiff argues that the trial court
erred by allowing the DMC to remain in the case as a
“constructive party” when the DMC had no standing.
We disagree. Whether a party has legal standing to
assert a claim constitutes a question of law that is
reviewed de novo. Heltzel v Heltzel, 248 Mich App 1, 28;
638 NW2d 123 (2001).
MCL 500.3112 provides, in relevant part:
Personal protection insurance benefits are payable to or
for the benefit of an injured person.... Payment by an
insurer in good faith of personal protection insurance
benefits, to or for the benefit of a person who it believes is
entitled to the benefits, discharges the insurer’s liability to
the extent of the payments unless the insurer has been
notified in writing of the claim of some other person. If
there is doubt about the proper person to receive the
benefits or the proper apportionment among the persons
entitled thereto, the insurer, the claimant or any other
interested person may apply to the circuit court for an
appropriate order. The court may designate the payees and
2010] M
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make an equitable apportionment, taking into account the
relationship of the payees to the injured person and other
factors as the court considers appropriate. [Emphasis
added.]
Thus, the DMC, which had provided medical services to
Ryan following the automobile accident, was an “inter-
ested person” with regard to the apportionment of its
bill for services rendered. Because the DMC contested
plaintiff’s attorneys’ right to have their fees deducted
from the amount of the DMC’s billed services, the trial
court properly required the DMC to appear in court to
settle the attorney liens. The trial court did not err by
providing the DMC with a forum in which to contest
and resolve the matter.
And we reject plaintiff’s jurisdictional challenge to
the DMC’s right to appeal in this Court for similar
reasons. To have standing to bring an appeal, one must
ordinarily be “aggrieved” by the lower court’s decision.
MCL 7.203(A). To be aggrieved, one must have suffered
a concrete and particularized injury. Spires v Bergman,
276 Mich App 432, 441-442; 741 NW2d 523 (2007). In
this case, the trial court’s ruling regarding plaintiff’s
attorneys’ entitlement to attorney fees resulted in the
reduction of the amount of money that the DMC
attempted to recover for services that it provided to
Ryan. Thus, plaintiff’s claim that this Court lacks
jurisdiction over this appeal by the DMC is without
merit.
Next, plaintiff argues on cross-appeal that the trial
court erred by denying plaintiff’s request to award the
DMC the amount that it would have received from
Medicaid, approximately $66,000, rather than its billed
amount. We disagree. Plaintiff argues that, but for
plaintiff’s attorneys’ actions in securing insurance ben-
efits from Citizens, the DMC would have accepted as
444 288 M
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full payment the amount that Medicaid would have
paid. However, the record does not support this claim.
Ruppman testified that a Medicaid application was
submitted on Ryan’s behalf after he was admitted to
RIM. However, when asked during the evidentiary
hearing whether the DMC would have “been willing to
accept from Medicaid $66,200,” Ruppman replied: “In
this case, no.” We agree with the trial court’s conclusion
that the DMC’s challenge to the apportionment was
made in good faith and does not warrant such a punitive
action. Accordingly, the trial court properly denied
plaintiff’s request in this regard.
Affirmed.
2010] M
ILLER V
C
ITIZENS
I
NS
C
O
445
PEOPLE v FYDA
Docket No. 288421. Submitted April 6, 2010, at Detroit. Decided May 18,
2010, at 9:00 a.m.
Theodore S. Fyda was convicted by a jury in the St. Clair Circuit
Court, James P. Adair, J., of solicitation of murder and possession
of a firearm during the commission of a felony. Defendant ap-
pealed, alleging ineffective assistance of counsel, entrapment, and
prosecutorial misconduct.
The Court of Appeals held:
1. Solicitation to commit murder is a specific intent crime that
requires proof that the defendant intended that a murder would in
fact be committed. A defendant cannot be found guilty of solicita-
tion to commit murder without a finding of the necessary specific
intent, that is, it is necessary to find that there was an actual
intent to kill. Intent to inflict great bodily harm or wanton and
willful disregard of the recklessness of one’s conduct is insufficient
to support a conviction of solicitation to commit murder.
2. When it instructed the jury on the elements of solicitation to
commit murder, the trial court erred by instructing the jury with
regard to the definition of murder that it requires an intent to kill,
an intent to do great bodily harm to another person, or an intent
to do an act that would create a very high risk of death or great
bodily harm knowing that death or great bodily harm would be the
likely outcome. Although defense counsel should have objected to
the instruction, the error did not influence the outcome of the
trial. The evidence showed a level of prior planning by defendant
that connoted premeditation. Therefore, it is not reasonably
probable that, but for counsel’s error, the result would have been
different.
3. The actions of the police were insufficient to induce or
instigate the commission of a crime by the average person simi-
larly situated to defendant who was not ready and willing to
commit it. The police did nothing more than present defendant
with the opportunity to commit the crime of which he was
convicted, which was insufficient to support defendant’s claim of
entrapment.
446 288 M
ICH
A
PP
446 [May
4. Although the prosecutor repeatedly characterized the de-
fense’s arguments as a distraction, the prosecutor was not sug-
gesting that defense counsel did not believe defendant. The
prosecutor properly addressed the weaknesses of defendant’s
theory of defense, that is, its singular focus on discrediting the
person who informed the police about defendant’s desire to hire
someone to commit a murder.
5. The prosecution’s comments regarding the weakness of
defendant’s theory of defense was not an attempt to shift the
burden of proof to defendant to demonstrate his innocence and did
not constitute prosecutorial misconduct.
Affirmed.
1. C
RIMINAL
L
AW —
S
OLICITATION TO
C
OMMIT
M
URDER
.
Solicitation to commit murder is a specific intent crime that requires
proof that the defendant intended that a murder would in fact be
committed; the crime of solicitation to commit murder does not
include solicitation to inflict great bodily harm or to act with a
wanton and willful disregard of the likelihood that one’s behavior
is likely to cause death or great bodily harm (MCL 750.157b[2]).
2. C
RIMINAL
L
AW —
E
NTRAPMENT
.
Entrapment occurs if the police engage in impermissible conduct
that would induce an otherwise law-abiding person to commit a
crime in similar circumstances or the police engage in conduct so
reprehensible that the court cannot tolerate it; reprehensible
conduct alone, without police instigation, can constitute entrap-
ment.
3. C
RIMINAL
L
AW —
E
NTRAPMENT —
I
MPERMISSIBLY
I
NDUCED
C
RIMINAL
C
ONDUCT
.
A court considering a defendant’s claim of entrapment should
consider the following factors in determining whether governmen-
tal activity impermissibly induced criminal conduct: (1) whether
there existed appeals to the defendant’s sympathy as a friend, (2)
whether the defendant had been known to commit the crime with
which he or she was charged, (3) whether there were any long time
lapses between the investigation and the arrest, (4) whether there
existed any inducements that would make the commission of a
crime unusually attractive to a hypothetical law-abiding citizen,
(5) whether there were offers of excessive consideration or other
enticement, (6) whether there was a guarantee that the acts
alleged as crimes were not illegal, (7) whether, and to what extent,
any governmental pressure existed, (8) whether there were sexual
favors, (9) whether there were any threats of arrest, (10) whether
2010] P
EOPLE V
F
YDA
447
there were any governmental procedures that tended to escalate
the criminal culpability of the defendant, (11) whether there was
police control over any informant, and (12) whether the investi-
gation was targeted.
4. C
RIMINAL
L
AW —
P
ROSECUTORIAL
M
ISCONDUCT —
C
OMMENTS BY
P
ROSECUTOR —
V
ERACITY OF
D
EFENSE
C
OUNSEL —
P
RESUMPTION OF
I
NNOCENCE
.
A prosecutor must be afforded great latitude regarding his or her
arguments and conduct at trial, but a prosecutor may not suggest
that defense counsel is intentionally attempting to mislead the
jury because such an argument undermines the defendant’s pre-
sumption of innocence by suggesting that defense counsel does not
believe the defendant, thereby impermissibly shifting the focus to
the defense counsel’s personality.
5. C
RIMINAL
L
AW —
P
ROSECUTORIAL
M
ISCONDUCT —
C
OMMENTS BY
P
ROSECUTOR —
P
RESUMPTION OF
I
NNOCENCE
.
A prosecutor may argue to the jury that the inculpatory evidence is
undisputed or that the evidence is uncontradicted, even if the
defendant is the only person who could have contradicted the
evidence; a prosecutor may not imply during closing argument
that the defendant must prove something or must present a
reasonable explanation for damaging evidence and may not com-
ment on the defendant’s failure to present evidence because such
arguments tend to shift the burden of proof.
Michael A. Cox, Attorney General, B. Eric Restuccia,
Solicitor General, Michael D. Wendling, Prosecuting
Attorney, and Timothy K. Morris, Chief of Appeals, for
the people.
Robin M. Lerg for defendant.
Before: W
HITBECK
,P.J., and M
ETER
and F
ORT
H
OOD
,JJ.
P
ER
C
URIAM.
Defendant, Theodore Fyda, appeals as of
right his jury conviction of solicitation of murder
1
and
possession of a firearm during the commission of a
felony (felony-firearm).
2
The trial court sentenced Fyda
1
MCL 750.157b(2).
2
MCL 750.227b.
448 288 M
ICH
A
PP
446 [May
to serve 7 to 15 years in prison for the solicitation
conviction, consecutively to 2 years in prison for the
felony-firearm conviction. We affirm.
I. BASIC FACTS AND PROCEDURAL HISTORY
After a 10-year marriage, Fyda and Deborah Cunnel-
lon were divorced in October 2005. Fyda met with his
friend, Robert Friederichs, regularly over the course of
the subsequent 1
1
/
2
to 2 years and complained about his
divorce. Fyda also often spoke of his desire to kill
Cunnellon. Friederichs initially believed that Fyda was
just “blowing off steam,” but he became concerned
when Fyda became more aggressive in his statements
after Cunnellon filed a motion seeking to recover $5,900
related to mortgage payments. The motion was sched-
uled to be heard in October 2007. Friederichs believed
that Cunnellon was in danger and contacted local law
enforcement officials. Friederichs then worked with the
law enforcement officials to arrange a meeting between
Fyda and an undercover officer who would be posing as
a killer for hire. At this meeting, Fyda asked the officer
to “pop” Cunnellon and provided the officer with the
following items: a handgun that Fyda portrayed as not
traceable, pictures of Cunnellon and her car, Cunnel-
lon’s work address, and a $200 down payment on a
negotiated contract price of $700. Fyda was arrested at
the conclusion of the meeting.
II. INEFFECTIVE ASSISTANCE OF COUNSEL
A. STANDARD OF REVIEW
Fyda argues that his trial counsel was ineffective for
failing to object to the trial court’s jury instructions
regarding the solicitation-of-murder charge. We review
de novo the constitutional question whether an attor-
2010] P
EOPLE V
F
YDA
449
ney’s ineffective assistance deprived a defendant of his
or her Sixth Amendment
3
right to counsel.
4
Because the
trial court did not conduct an evidentiary hearing, our
review of Fyda’s challenge to the effectiveness of de-
fense counsel is limited to mistakes apparent on the
record.
5
B. ANALYSIS
To establish a claim of ineffective assistance of coun-
sel a defendant must show that counsel’s performance
was deficient and that counsel’s deficient performance
prejudiced the defense.
6
A counsel’s performance was
deficient if it fell below an objective standard of profes-
sional reasonableness.
7
The performance prejudiced the
defense if it is reasonably probable that, but for coun-
sel’s error, the result of the proceeding would have been
different.
8
The jury found Fyda guilty of solicitation to commit
murder pursuant to MCL 750.157b(2), which provides:
“A person who solicits another person to commit mur-
der, or who solicits another person to do or omit to do an
act which if completed would constitute murder, is
guilty of a felony punishable by imprisonment for life or
any term of years.” The statute defines solicit as “to
offer to give, promise to give, or give any money,
services, or anything of value, or to forgive or promise to
forgive a debt or obligation.”
9
“Solicitation to commit
murder is a specific intent crime that requires proof
3
US Const, Am VI.
4
People v LeBlanc, 465 Mich 575, 579; 640 NW2d 246 (2002).
5
People v Nantelle, 215 Mich App 77, 87; 544 NW2d 667 (1996).
6
People v Taylor, 275 Mich App 177, 186; 737 NW2d 790 (2007).
7
People v Jordan, 275 Mich App 659, 667; 739 NW2d 706 (2007).
8
Id.
9
MCL 750.157b(1).
450 288 M
ICH
A
PP
446 [May
that the defendant intended that a murder would in fact
be committed.”
10
The statute, however, does not define
murder or differentiate between degrees of murder.
The trial court’s jury instructions regarding the
solicitation-of-murder charge were as follows:
First, that the defendant through words or actions
offered, promised, or gave money or anything of value to
another person.
Second, that the defendant intended that what he said
or did would cause murder to be committed. The crime of
murder occurs when:
First, an individual causes the death of another person.
Second, that the individual’s state of mind at the time of
the killing would have been either, one, an intent to kill, or
two, an intent to do great bodily harm to another person, or
three, an intent to do an act that would create a very high
risk of death or great bodily harm knowing that death or
great bodily harm would be the likely outcome.
The prosecutor does not have to prove that...the
person the defendant solicited actually committed, at-
tempted to commit, or intended to commit murder.
Fyda argues that the trial court’s jury instructions
defined murder consistently with second-degree mur-
der so that the jury was given the opportunity to convict
him without proof that he premeditated and deliberated
the solicited murder. More specifically, Fyda argues that
because Michigan statutory law does not define the
term “murder,” it is defined by reference to the common
law.
11
And the historical common-law definition of mur-
der is “ ‘where a person of sound memory and discre-
tion unlawfully kills any reasonable creature in being,
in the peace of the state, with malice prepense or
10
People v Crawford, 232 Mich App 608, 616; 591 NW2d 669 (1998).
11
People v Aaron, 409 Mich 672, 713-715; 299 NW2d 304 (1980).
2010] P
EOPLE V
F
YDA
451
aforethought, either express or implied.’ ”
12
In other
words, “malice aforethought is the ‘grand criterion’
which elevates a homicide...to murder.”
13
Fyda as-
serts that “malice aforethought” is synonymous with
premeditation and thus implies first-degree murder
only.
Contrary to Fyda’s assertion, the Michigan Supreme
Court has clearly held that malice aforethought, or
simply “malice,”
14
“is the intention to kill, the intention
to do great bodily harm, or the wanton and willful
disregard of the likelihood that the natural tendency of
defendant’s behavior is to cause death or great bodily
harm.”
15
These three mental states correspond to three
of the four types of murder recognized at common law:
“(1) intent-to-kill murder; (2) intent-to-do-serious-
bodily-injury murder; [and] (3) depraved-heart murder
[wanton and willful disregard that the natural tendency
of the defendant’s behavior is to cause death or great
bodily harm].”
16
Thus, Fyda’s argument that “malice
aforethought” is synonymous with premeditation and
thus implies first-degree murder only is without merit.
However, we conclude that the crime of solicitation to
commit murder does not include solicitation to inflict
12
Id. at 713, quoting People v Potter, 5 Mich 1, 6 (1858).
13
Aaron, 409 Mich at 714, quoting 4 Blackstone, Commentaries
(Hammond ed, 1898), p 198; see also People v Turner, 213 Mich App 558,
566; 540 NW2d 728 (1995).
14
Aaron, 409 Mich at 714 n 101.
15
Id. at 728; see also People v Neal, 201 Mich App 650, 654; 506 NW2d
618 (1993). The Aaron Court held “that malice is an essential element of
any murder, as that term is judicially defined....”Aaron, 409 Mich at
728.
16
Aaron, 409 Mich at 714 (citation and quotation marks omitted;
paragraph structure altered). The fourth recognized type of murder at
common law was felony murder predicated on the felony-murder doc-
trine. Id. However, Aaron abrogated the common-law felony-murder
doctrine. Id. at 733.
452 288 M
ICH
A
PP
446 [May
great bodily harm or to act with a wanton and willful
disregard of the likelihood that the natural tendency of
one’s behavior is to cause death or great bodily harm.
In People v Taylor,
17
the Michigan Supreme Court
considered the intent required to support a finding that
a defendant committed assault with intent to commit
murder. MCL 750.83 provides that “[a]ny person who
shall assault another with intent to commit the crime of
murder, shall be guilty of a felony, punishable by im-
prisonment in the state prison for life or any number of
years.” But like the statute prohibiting solicitation to
commit murder, the statute prohibiting assault with
intent to commit murder does not define murder.
Therefore, the Taylor Court first acknowledged that
there generally are “several intents which can support a
murder conviction. There can be an intent to kill, an
intent to inflict great bodily harm, or a wanton and
wilful disregard of the likelihood that the natural ten-
dency of the actor’s behavior is to cause death or great
bodily harm.”
18
But citing Maher v People,
19
the Taylor
Court concluded that in the context of assault with
intent to commit murder, “it is necessary to find that
there was an actual intent to kill.”
20
In Maher, the Court considered whether the evidence
supported the charge of assault with intent to commit
murder and explained that the answer
must depend upon the question whether the proposed evi-
dence would have tended to reduce the killing—had death
ensued—from murder to manslaughter, or rather, to have
given it the character of manslaughter instead of murder[.] If
the homicide—in case death had ensued—would have been
17
People v Taylor, 422 Mich 554; 375 NW2d 1 (1985).
18
Id. at 567, citing Aaron, 409 Mich at 722.
19
Maher v People, 10 Mich 212 (1862).
20
Taylor, 422 Mich at 567.
2010] P
EOPLE V
F
YDA
453
but manslaughter, then defendant could not be guilty of
the assault with intent to murder, but only of a simple
assault and battery. The question therefore involves
essentially the same principles as where evidence is
offered for a similar purpose in a prosecution for murder;
except that, in some cases of murder, an actual intention
to kill need not exist; but in a prosecution for an assault
with intent to murder, the actual intention to kill must be
found, and that under circumstances which would make
the killing murder.
[
21
]
Citing Taylor, this Court in People v Cochran clari-
fied that
[s]pecific intent to kill is the only form of malice which
supports the conviction of assault with intent to commit
murder. Intent to inflict great bodily harm or wanton and
wilful disregard of the recklessness of one’s conduct is
insufficient to support a conviction for assault with intent
to commit murder.
[
22
]
Similarly, this Court in People v Lipps stated:
Because the offense is a specific intent crime, a defendant
cannot be found guilty of it if conditions were such as to
preclude the forming of the necessary intent....[I]f a defen-
dant would have been guilty of manslaughter had the assault
resulted in death (due to an absence of malice), there can be
no conviction of assault with intent to murder.
[
23
]
Although these cases dealt with the crime of assault
with intent to commit murder, the same rationale
applies here. As stated, “[s]olicitation to commit mur-
der is a specific intent crime that requires proof that the
defendant intended that a murder would in fact be
21
Maher, 10 Mich at 216-217.
22
People v Cochran, 155 Mich App 191, 193-194; 399 NW2d 44 (1986)
(citations omitted).
23
People v Lipps, 167 Mich App 99, 106; 421 NW2d 586 (1988)
(citations omitted).
454 288 M
ICH
A
PP
446 [May
committed.”
24
Therefore, we conclude that a defendant
cannot be found guilty of solicitation to commit murder
without a finding of the necessary specific intent. That
is, it is necessary to find that there was an actual intent
to kill. Intent to inflict great bodily harm or wanton and
wilful disregard of the recklessness of one’s conduct is
insufficient to support a conviction of solicitation to
commit murder.
25
Accordingly, we conclude that the trial court’s in-
structions to the jury on the elements of solicitation to
commit murder were incorrect and that defense counsel
should have objected. However, we also conclude that
this error did not influence the outcome of the trial.
There was consistent testimony that Fyda requested
that Cunnellon, whom he identified with pictures, be
killed with a handgun that Fyda supplied, using time
and location information that Fyda supplied, for a price
that Fyda partially paid. These events indicate a level of
prior planning that connoted premeditation. Thus, it
24
Crawford, 232 Mich App at 616.
25
Accord People v Knasiak, unpublished opinion per curiam of the
Court of Appeals, issued July 2, 1999 (Docket No. 203826), p 5 (conclud-
ing that there is no such offense as solicitation to commit second-degree
murder).
Solicitation... involves actual advance planning and fore-
knowledge, as is reflected by the solicitor’s deciding to have some
criminal act performed by a third party on the solicitor’s behest,
searching out an individual to engage in a criminal act, and acting
to engage the third party to commit the criminal act. Further, the
solicitation statute...punishes the actual advance planning and
the acts taken in preparation for committing the substantive-
criminal acts and not the carrying out of the planned criminal
acts....[T]he planning involved in solicitation connotes premedi-
tation and deliberation. Accordingly, solicitation of murder shares
the elements of premeditation and deliberation with first-degree
murder. As such, solicitation of murder is inconsistent with
second-degree murder for the same reason that conspiracy is
inconsistent with second-degree murder, that being that “one does
not ‘plan’ to commit an ‘unplanned’ substantive crime.” [Id. at 5-6
(citations omitted).]
2010] P
EOPLE V
F
YDA
455
cannot be said that defense counsel’s failure to object
prejudiced Fyda’s case; that is, it is not reasonably
probable that, but for counsel’s error, the result of the
proceeding would have been different.
26
III. ENTRAPMENT
A. STANDARD OF REVIEW
Fyda argues that the trial court incorrectly concluded
that the police did not entrap him. Fyda argues that the
police exploited a friendship between Fyda and Frieder-
ichs, a longstanding police informant, to induce Fyda
into soliciting the officer to kill Cunnellon.
Whether entrapment occurred is determined by consid-
ering the facts of each case and is a question of law for this
Court to decide de novo.
27
The trial court must make
specific findings regarding entrapment, and this Court
reviews its findings under the clearly erroneous stan-
dard.
28
The findings are clearly erroneous if this Court is
left with a firm conviction that a mistake was made.
29
B. ANALYSIS
Entrapment occurs if (1) the police engage in imper-
missible conduct that would induce an otherwise law-
abiding person to commit a crime in similar circumstances
or (2) the police engage in conduct so reprehensible that
the court cannot tolerate it.
30
Reprehensible conduct
alone, without police instigation, can constitute entrap-
ment.
31
26
See Taylor, 275 Mich App at 186.
27
People v Milstead, 250 Mich App 391, 397; 648 NW2d 648 (2002).
28
Id.
29
Id.
30
People v Sexton, 250 Mich App 211, 217; 646 NW2d 875 (2002).
31
People v Fabiano, 192 Mich App 523, 529; 482 NW2d 467 (1992).
456 288 M
ICH
A
PP
446 [May
In People v Johnson,
32
the Michigan Supreme Court
enumerated the following factors for a court to consider
when examining whether governmental activity would
impermissibly induce criminal conduct:
(1) whether there existed appeals to the defendant’s
sympathy as a friend, (2) whether the defendant had been
known to commit the crime with which he was charged, (3)
whether there were any long time lapses between the
investigation and the arrest, (4) whether there existed any
inducements that would make the commission of a crime
unusually attractive to a hypothetical law-abiding citizen,
(5) whether there were offers of excessive consideration or
other enticement, (6) whether there was a guarantee that
the acts alleged as crimes were not illegal, (7) whether, and
to what extent, any government pressure existed, (8)
whether there existed sexual favors, (9) whether there
were any threats of arrest, (10) whether there existed any
government procedures that tended to escalate the crimi-
nal culpability of the defendant, (11) whether there was
police control over any informant, and (12) whether the
investigation was targeted.
Friederichs testified that he felt a sense of urgency
after Fyda reiterated his desire to kill Cunnellon follow-
ing her initiation of postjudgment proceedings in Octo-
ber 2007. It was then that he approached the police. The
undercover officer who dealt with Friederichs stated
that Friederichs told the officer that Fyda “made men-
tion of a stolen gun” and paying $500 to the “would-be
murderer,” and that Fyda told Friederichs that if the
subject was again brought up, Friederichs should in-
form Fyda that he found someone interested in being
hired. Eventually, Friederichs facilitated the scheduling
of a meeting between Fyda and the officer.
The officer testified that as he talked with Fyda alone
on October 22, 2007, Fyda spoke of preferring a man
32
People v Johnson, 466 Mich 491, 498-499; 647 NW2d 480 (2002).
2010] P
EOPLE V
F
YDA
457
from Detroit and of a different race to do the job near
Cunnellon’s work because he wanted it to look like a
carjacking to which Fyda did not have any connection.
The officer stated that Fyda provided him with photos
of Cunnellon and her car, her work address, and a
handgun that Fyda stated was untraceable. The officer
stated that Fyda also suggested killing Cunnellon after
the upcoming court date so it would be less suspicious.
We conclude that the police did not exploit the
long-existing friendship between Fyda and Friederichs
to manufacture a crime. They were involved only be-
cause Friederichs brought to their attention Fyda’s
threats and desire to hire someone to harm Cunnellon.
The police did not approach or use Friederichs because
of his friendship with Fyda. Instead, Friederichs ap-
proached the police because of his concern that Fyda’s
threats against Cunnellon had been exacerbated by
circumstances. There is no indication that Friederichs
appealed to any sense of sympathy Fyda might have had
for him or that the police instigated procedures that
would have likely escalated Fyda’s culpability. While
Fyda was the target of the investigation, he was made
so by his own actions. Further, the police were only
involved with Fyda for five days after Friederichs
contacted them, with no lapses in time between the
investigation and the arrest.
Fyda argues that he was offered an inducement that
would make the commission of this crime unusually
attractive to a law-abiding citizen. Specifically, Fyda
asserts that an affordable $700 price was his improper
inducement. The officer stated that Friederichs told
him that Fyda offered to provide a stolen gun and $500
to have Cunnellon murdered. The officer described
Fyda as being hesitant at their meeting about the initial
$1,000 demand that the officer made, but stated that
458 288 M
ICH
A
PP
446 [May
they eventually settled on a $700 price. That the officer
was willing to negotiate the price cannot be said to be an
attractive inducement for an otherwise law-abiding
citizen to ask that Cunnellon be murdered.
Fyda also argues that Friederichs was motivated by
personal benefit; that is, in return for acting as a
confidential informant for the police, Friederichs re-
ceived favorable resolution of outstanding unpaid traf-
fic tickets that could have resulted in significant jail
time for Friederichs. Friederichs acknowledged that his
possible jailing coincided with and influenced his con-
cern in reporting Fyda. However, Friederichs also said
that he was motivated by his desire to save Cunnellon’s
life and that he felt a sense of urgency after seeing
Fyda’s reaction to the postdivorce hearing regarding
the mortgage payments. Additionally, no matter what
motivated Friederichs or the extent of inducement
provided to him, the facts remain that Fyda had been
plainly and specifically speaking to him about finding
someone to murder Cunnellon and that Fyda had an
independent meeting with the officer at which he freely
made the same request.
Fyda further argues that a degree of governmental
pressure was placed on him through Friederichs, who
was motivated to stay out of jail and was not sufficiently
supervised by the police. As discussed above, there was
no evidence that Friederichs’s admitted desire to stay
out of jail somehow pressured Fyda to solicit the mur-
der of Cunnellon. The fact that more direct supervision
through documenting Fyda’s conversations with
Friederichs was possible (for example, audio record-
ings), does not mean that Friederichs was operating
without supervision. In fact, the officer involved testi-
fied that he gave Friederichs specific instructions on
how to approach and talk to Fyda. The officer also
2010] P
EOPLE V
F
YDA
459
monitored Fyda and Friederichs’s conversation
through Friederichs’s cell phone as they drove in
Friederichs’s truck on the way to meet with the officer.
In sum, the police actions were “insufficient to in-
duce or instigate the commission of a crime by the
average person, similarly situated to [defendant], who
[was] not ready and willing to commit it.”
33
The record
shows that the police did “nothing more than present
the defendant with the opportunity to commit the crime
of which he was convicted,” which is insufficient to
support a finding of entrapment.
34
IV. PROSECUTORIAL MISCONDUCT
A. STANDARD OF REVIEW
Fyda argues that the prosecutor committed miscon-
duct by denigrating the defense and improperly shifting
the burden of proof. Fyda preserved his burden-shifting
argument when his defense counsel objected on the
record;
35
however, he forfeited his “denigrating the
defense” argument by failing to object.
36
We generally review de novo claims of prosecutorial
misconduct on a case-by-case basis, in the context of the
issues raised at trial, to determine whether a defendant
was denied a fair and impartial trial.
37
This Court,
however, reviews forfeited claims of allegedly improper
33
People v Juillet, 439 Mich 34, 55; 475 NW2d 786 (1991) (opinion by
B
RICKLEY
, J.)(citation, quotation marks, and emphasis omitted).
34
Sexton, 250 Mich App at 220 (citation and quotation marks omitted).
35
Brown v Loveman, 260 Mich App 576, 599; 680 NW2d 432 (2004)
(stating that to preserve an issue for appeal, it must be raised by a party
and addressed by the trial court).
36
People v Carter, 462 Mich 206, 216; 612 NW2d 144 (2000) (stating
that defense counsel’s failure to object qualifies as a forfeiture).
37
People v Brown, 267 Mich App 141, 152; 703 NW2d 230 (2005).
460 288 M
ICH
A
PP
446 [May
conduct by the prosecutor for plain error that affected
the defendant’s substantial rights.
38
Reversal is war-
ranted only when plain error resulted in the conviction
of an actually innocent defendant or seriously affected
the fairness, integrity, or public reputation of judicial
proceedings.
39
B. DENIGRATING THE DEFENSE
Fyda argues that the prosecutor’s remarks charac-
terizing the defense as “a defense of distraction” imper-
missibly denigrated the defense by suggesting that
defense counsel was being disingenuous in questioning
Friederichs’s credibility.
A prosecutor is afforded great latitude regarding his
or her arguments and conduct at trial.
40
But the pros-
ecutor may not suggest that defense counsel is inten-
tionally attempting to mislead the jury.
41
This prohibi-
tion is based on the negative effect such an argument
has on the presumption of innocence:
When the prosecutor argues that the defense counsel
himself is intentionally trying to mislead the jury, he is in
effect stating that defense counsel does not believe his own
client. This argument undermines the defendant’s pre-
sumption of innocence. Such an argument impermissibly
shifts the focus from the evidence itself to the defense
counsel’s personality.
[
42
]
Fyda argued throughout the trial that Friederichs
could not be believed and had manipulated Fyda into
38
People v Odom, 276 Mich App 407, 413; 740 NW2d 557 (2007); People
v Barber, 255 Mich App 288, 296; 659 NW2d 674 (2003).
39
Odom, 276 Mich App at 413.
40
People v Unger, 278 Mich App 210, 236; 749 NW2d 272 (2008).
41
Id.
42
People v Wise, 134 Mich App 82, 102; 351 NW2d 255 (1984) (citation
omitted).
2010] P
EOPLE V
F
YDA
461
soliciting the officer so that Friederichs could avoid jail
time for his traffic tickets. When a defendant advances
a theory, the prosecutor may argue the inferences
flowing from that theory.
43
Although the prosecutor
here repeatedly characterized the defense’s arguments
as a distraction, the prosecutor was not suggesting that
defense counsel did not believe Fyda. Rather, the pros-
ecutor’s comments properly addressed the weaknesses
of Fyda’s theory of defense—that is, its singular focus
on discrediting Friederichs.
44
Further, the prosecutor’s
comments were responsive to Fyda’s arguments regard-
ing Friederichs that were made throughout the trial.
45
The fact that the prosecutor employed colorful rhetoric
does not make the response to Fyda’s arguments dis-
proportionate.
46
Fyda has not demonstrated any plain error that
resulted in the conviction of an actually innocent defen-
dant or seriously affected the fairness, integrity, or
public reputation of judicial proceedings.
47
C. SHIFTING THE BURDEN OF PROOF
Fyda also argues that the prosecutor impermissibly
shifted the burden of proof onto Fyda during closing
arguments by suggesting that Fyda had to prove a
defense to the charges. During rebuttal closing re-
marks, the prosecutor commented:
And when you think about the arguments that the
defense has raised in this case, these defenses of distrac-
tion, ask yourself: How many times, how many times
43
People v Reid, 233 Mich App 457, 477; 592 NW2d 767 (1999).
44
See People v McGhee, 268 Mich App 600, 635; 709 NW2d 595 (2005).
45
See People v Dobek, 274 Mich App 58, 64; 732 NW2d 546 (2007).
46
People v Jones, 468 Mich 345, 354; 662 NW2d 376 (2003).
47
Odom, 276 Mich App at 413.
462 288 M
ICH
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446 [May
during this case, during this closing argument, how much
time was spent criticizing or name-calling Robert Frieder-
ichs? How much time did the defense defend what the
defendant did? You never heard any argument during
closing argument that, gees, defendant never presented a
gun. Defendant never asked [the officer] to murder his
wife. My client never provided the pictures. You never
heard any of that. There’s been no defense to the crime
itself. Only the defenses of distraction.
The trial court stated that it was “alarmed” by the
prosecutor’s use of the word “defend,” then ruled as
follows:
I felt that it was not in the context of her argument...
presented in such a way that would be misleading to the
jury and/or, or that would do anything more than perhaps
compound a possible difficulty in, in instructing the
jury...when they already have had several references by
the court properly, so to point out to them that the
defendant does not have any of that burden, that in effect
[defense counsel], correctly so in his arguments, sug-
gested...hedidn’t even have to do anything, he could take
off and go and have lunch, I don’t remember exactly what
words, but all of that gives, you know, the court at least the
comfort to suggest that the jury has had sufficient instruc-
tions to understand that the burden, none of that burden
is...on thedefendant; that the entire burden is on the
prosecutor. Although the prosecutor... used that word,
and I’m—really apologize because I can’t remember pre-
cisely whether it was defend or defense, but it was, you
know, a, a form of the word defend that, that caught my
attention, but as I’ve already indicated in the context, in
my resolution in my own mind at that time, I do not find
that in the law it creates any error that would cause the
court to, to modify or, or, or, or give a different instruction
before the jury returns.
A prosecutor may not imply in closing argument that
the defendant must prove something or present a
reasonable explanation for damaging evidence because
2010] P
EOPLE V
F
YDA
463
such an argument tends to shift the burden of proof.
48
Also, a prosecutor may not comment on the defendant’s
failure to present evidence because it is an attempt to
shift the burden of proof.
49
However, a prosecutor’s
argument that inculpatory evidence is undisputed does
not constitute improper comment.
50
A prosecutor may
also argue that the evidence was uncontradicted even if
the defendant is the only person who could have con-
tradicted the evidence.
51
Although we conclude that the prosecutor’s remarks
did not impermissibly shift the burden to Fyda to
demonstrate his innocence, we share the trial court’s
unease with those remarks. The statement, “There’s
been no defense to the crime itself. Only the defenses of
distraction,” appears to suggest that Fyda has a burden
to provide a “defense to the crime” charged. However,
the remark must be considered in the context of the
whole closing arguments and in consideration of Fyda’s
arguments.
52
As discussed above, Fyda’s primary theory
of defense was that Friederichs had manipulated the
system for his own benefit and influenced Fyda to
solicit the officer. Even though the prosecutor used the
word “defense,” the statement in question directly
attacks Fyda’s theory and highlights that evidence of
the interaction between Fyda and the officer was not
disputed. Attacking the credibility of the theory ad-
vanced by Fyda did not shift the burden of proof.
53
The
prosecutor’s statements were proper commentary on
the weaknesses of Fyda’s theory of defense and did not
48
People v Green, 131 Mich App 232, 237; 345 NW2d 676 (1983).
49
People v Abraham, 256 Mich App 265, 273; 662 NW2d 836 (2003).
50
People v Callon, 256 Mich App 312, 331; 662 NW2d 501 (2003).
51
Green, 131 Mich App at 237.
52
People v Thomas, 260 Mich App 450, 454; 678 NW2d 631 (2004).
53
See Callon, 256 Mich App at 331.
464 288 M
ICH
A
PP
446 [May
constitute prosecutorial misconduct.
54
Moreover, the
trial court instructed the jury after closing arguments
that the burden of proof was on the prosecution to
prove each element beyond a reasonable doubt, that
Fyda was not required to prove his innocence or do
anything, and that the lawyers’ statements were not
evidence. We must presume that the jury followed these
instructions.
55
We affirm.
54
See McGhee, 268 Mich App at 634-635.
55
Unger, 278 Mich App at 235.
2010] P
EOPLE V
F
YDA
465
JONES v DETROIT MEDICAL CENTER
Docket No. 288710. Submitted March 2, 2010, at Detroit. Decided May
20, 2010, at 9:00 a.m.
Trenda, Booker T., and Margaret A. Jones, copersonal representa-
tives of the estate of Jamar C. Jones, deceased, brought a medical
malpractice action in the Wayne Circuit Court against Detroit
Medical Center and Sinai-Grace Hospital, Danny F. Watson, M.D.,
and William M. Leuchter, P.C., alleging, in part, that Watson was
negligent for prescribing carbamazepine, an anticonvulsant, for
Jamar without a sufficient basis to diagnose a seizure disorder and
that Watson failed to advise Jamar of the possibility of an allergic
reaction to the medication, of the warning signs of such a reaction,
and of the need to obtain immediate medical intervention if an
allergic reaction occurred. Jamar’s death occurred after he devel-
oped Stevens-Johnson syndrome from taking the carbamazepine.
The trial court, Robert L. Ziolkowski, J., granted plaintiffs’ motion
for partial summary disposition with regard to the issue of cause in
fact, holding that there was no dispute that the carbamazepine
taken by Jamar was the cause in fact of Jamar’s developing
Stevens-Johnson syndrome. The trial court also denied defen-
dants’ motion for summary disposition. Defendants appealed the
denial of their motion but not the grant of summary disposition in
favor of plaintiffs on the issue of cause in fact. The Court of
Appeals reversed the order denying defendants’ motion for sum-
mary disposition and remanded the case to the trial court in an
unpublished opinion per curiam, issued January 4, 2007 (Docket
Nos. 262343, 262347, and 263259). The Supreme Court, in lieu of
granting leave to appeal, reversed the judgment of the Court of
Appeals, reinstated the trial court’s order denying defendants’
motion, and remanded the case to the trial court. 480 Mich 980
(2007). On remand, the trial court considered the parties’ motions
for partial summary disposition with regard to the issue of
proximate causation and granted partial summary disposition in
favor of plaintiffs with regard to the issue of proximate cause.
Detroit Medical Center and Sinai-Grace Hospital sought leave to
appeal that order, and the Court of Appeals granted leave to appeal
466 288 M
ICH
A
PP
466 [May
in an unpublished order, entered December 30, 2008 (Docket No.
288710). The other defendants timely filed a cross-appeal.
The Court of Appeals held:
1. It was proper for the trial court to determine proximate
causation as a matter of law because the trial court had already
decided the cause in fact and the facts bearing on the proximate-
cause determination were not in dispute and, therefore, reason-
able minds could not differ about the application of the legal
concept of proximate causation to those facts.
2. The relevant issue was not whether defendants should have
foreseen that Jamar would develop Stevens-Johnson syndrome, but
whether defendants should have foreseen the possibility that as a
result of taking carbamazepine, Jamar, like any other patient being
prescribed the medication, bore a risk of developing the syndrome.
Because the prescribing information for carbamazepine contained
warnings that Stevens-Johnson syndrome might result from the use
of the drug, it was foreseeable that prescribing the drug created a risk
that Jamar could contract Stevens-Johnson syndrome. Reasonable
minds cannot differ that, if a physician prescribes a medication, it is
reasonably foreseeable that doing so could cause the patient to have
one of the known reactions to that medication.
3. There was no disagreement that it was Jamar’s taking of the
carbamazepine prescribed by Watson that caused Jamar to develop
Stevens-Johnson syndrome. Because it appears undisputed that
Jamar died as a result of contracting Stevens-Johnson syndrome,
which he contracted as a result of taking carbamazepine, and he
took the carbamazepine only because he was directed to do so by
Watson, all the evidence supports the conclusion that Watson’s
conduct was a proximate cause of Jamar’s Stevens-Johnson syn-
drome and resulting death.
4. With regard to plaintiffs’ theory of proximate causation that
Watson failed to advise Jamar of the warning signs of Stevens-
Johnson syndrome and what action to take should those warning
signs occur, there is a direct link between the alleged violation of
the standard of care and the injury, and a reasonable juror could
not conclude otherwise.
5. With regard to plaintiffs’ theory of proximate causation that
Watson negligently diagnosed a seizure disorder and, as a result of
that misdiagnosis, Jamar was given carbamazepine, a side effect of
which led to his death, the trial court properly concluded that a
reasonable juror could not find a failure of proximate cause.
Summary disposition in favor of plaintiffs on the issue of proxi-
mate causation was appropriate because a reasonable juror could
2010] J
ONES V
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ETROIT
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ED
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467
not conclude that an allegedly negligent diagnosis that was the
sole cause for prescribing the injury-causing medication was not a
proximate cause of the injury.
6. The trial court properly determined the issue of proximate
cause as a matter of law and properly decided, as a matter of law,
both that Watson’s alleged lack of giving advice regarding signs of
a reaction was a proximate cause of Jamar’s development of
Stevens-Johnson syndrome and that the allegedly negligent diag-
nosis was a proximate cause of Jamar’s development of Stevens-
Johnson syndrome.
Affirmed.
H
OEKSTRA
,P.J., dissenting, stated that reasonable persons could
differ regarding whether Jamar’s injuries were legally caused by
the alleged negligence of defendants. Reasonable minds could
differ regarding whether Jamar’s injuries were the natural and
probable result of Watson’s alleged negligence of failing to perform
additional diagnostic tests to confirm the preliminary diagnosis of
a seizure disorder. Given the rarity of Stevens-Johnson syndrome,
it was within the province of the jury to determine whether the
connection between Watson’s alleged negligence of failing to warn
Jamar of an allergic reaction to carbamazepine and Jamar’s
injuries was of such a nature that it is desirable to hold defendants
liable. Judge H
OEKSTRA
would conclude that the trial court erred by
granting summary disposition in favor of plaintiffs on the issue of
proximate causation. The order of the trial court granting that
motion should be reversed.
1. N
EGLIGENCE —
P
ROXIMATE
C
AUSE
.
Proximate cause is a factual question for the jury, but the court
determines the issue when the facts bearing on proximate cause
are not in dispute and reasonable persons could not differ about
the application of the legal concept of proximate cause to those
facts.
2. N
EGLIGENCE —
P
ROXIMATE
C
AUSE
.
The issue, for purposes of a proximate-cause analysis of foreseeabil-
ity, is whether the increased risk to the plaintiff is directly linked
to the defendant’s negligence, not how often the negligence will
result in an injury-causing event.
Fieger, Fieger, Kenney, Johnson & Giroux, P.C. (by
Victor S. Valenti and Thomas M. Lizza), for Trenda,
Booker T., and Margaret A. Jones.
468 288 M
ICH
A
PP
466 [May
Tanoury, Nauts, McKinney & Garbarino, P.L.L.C. (by
Linda M. Garbarino and Anita Comorski), for Detroit
Medical Center and Sinai-Grace Hospital.
Saurbier & Siegan, P. C . (by Debbie K. Taylor), for
Danny F. Watson, M.D., and William M. Leuchter, P.C.
Before: H
OEKSTRA
,P.J., and B
ECKERING
and S
HAPIRO
,
JJ.
S
HAPIRO
, J. This medical malpractice case returns to
this Court a second time, this time for defendants’
appeal by leave granted of the trial court’s grant of
partial summary disposition in favor of plaintiffs on the
element of proximate cause. We affirm.
I. SUMMARY OF FACTS AND PROCEEDINGS
On September 23, 1999, the decedent, Jamar Jones,
1
was involved in a single-vehicle rollover accident in
which he suffered contusions and lacerations. Jamar
was transported to the emergency room at defendants
Detroit Medical Center/Sinai-Grace Hospital (the hos-
pital) for treatment. Jamar was referred to defendant
Danny F. Watson, M.D., a neurologist, who saw Jamar
in the emergency room on September 24, 1999. Accord-
ing to Watson’s notes, Jamar could not recall how the
accident had occurred, and Jamar stated that over the
last few months “family members had told him that on
approximately three occasions, he was seen staring
blankly and that he was not easily aroused from these
spells.” On the basis of this information, Watson con-
cluded that Jamar had “[p]robable partial complex
seizure disorder” and prescribed Tegretol, an anticon-
1
Because plaintiffs share a last name with the decedent, we will refer
to individual plaintiffs and the decedent by their first names.
2010] J
ONES V
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vulsant. Watson also ordered an electroencephalogram
(EEG), which was performed the same day and was
reported as normal.
Jamar had the prescription filled with carbam-
azepine, a generic form of Tegretol,
2
and began taking
the medication as prescribed. A subsequent EEG was
performed by Watson on October 8, 1999, which, like
the first EEG, was reported as normal. However, Wat-
son concluded that he “cannot exclude a seizure disor-
der” and continued Jamar on the anticonvulsant.
Jamar began to experience a sore throat and had
trouble swallowing food around October 9, 1999. On
October 11, 1999, Jamar awoke with bloodshot eyes.
His father, Booker T. Jones, drove Jamar to work, but
returned about an hour later to pick Jamar up because
Jamar told his father that he was unable to see. Jamar
began to develop a rash and blisters on his face and
upper body. Booker took Jamar to the hospital emer-
gency room on October 12, 1999, where Jamar reported
the sore throat, inability to eat due to pain, and swollen
lips and mouth. Jamar also had a fever.
The hospital kept Jamar overnight and, on October
13, 1999, transferred him to the burn unit at Detroit
Receiving Hospital. Doctors there determined that
Jamar was suffering a rare allergic reaction to the
anticonvulsant and diagnosed him as having Stevens-
Johnson syndrome resulting from that reaction.
Stevens-Johnson syndrome is a life-threatening derma-
tological condition in which the top layer of skin dies
and is shed. Jamar died of Stevens-Johnson syndrome,
complicated by pneumonia, on October 21, 1999.
2
Because a difference between Tegretol and carbamazepine has not
been alleged to be relevant to this appeal, the term carbamazepine will be
used to refer to the drug prescribed for and taken by Jamar.
470 288 M
ICH
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466 [May
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On August 19, 2003, plaintiffs filed their complaint
alleging, among other things, that Watson was negli-
gent for prescribing carbamazepine, given the lack of a
sufficient basis to diagnose a seizure disorder, and that
Watson failed to advise Jamar of the possibility of an
allergic reaction to the medication, of the warning signs
of such a reaction, and of the need to obtain immediate
medical intervention should such occur. Plaintiffs also
filed claims against the hospital and defendant William
M. Leuchter, P.C., based on vicarious liability for Wat-
son’s alleged malpractice. Attached to their complaint,
plaintiffs provided an affidavit of merit from Dr. Jon
Glass, in which he opined that Watson breached the
standard of care in the two respects just described.
Plaintiffs requested summary disposition on the is-
sue of cause in fact, arguing that there was no dispute
that the carbamazepine was the cause in fact of Jamar’s
developing Stevens-Johnson syndrome. The trial court
granted the motion and that order is not at issue in this
appeal. In the same motion, plaintiffs also requested
summary disposition on the issue of proximate causa-
tion. The trial court took that motion under advise-
ment, but before the trial court issued any ruling,
defendants moved for summary disposition, arguing
that the statute of limitations barred the suit and that
the affidavit of plaintiffs’ expert had been improperly
notarized. The trial court denied the motion, and de-
fendants appealed. This Court reversed the order deny-
ing the motion and remanded the case to the trial court.
Jones v Detroit Med Ctr, unpublished opinion per cu-
riam of the Court of Appeals, issued January 4, 2007
(Docket Nos. 262343, 262347, and 263259). Our Supreme
Court, in lieu of granting leave to appeal, reversed this
Court’s opinion, reinstated the trial court’s order denying
the motion, and remanded the case to the trial court.
Jones v Detroit Med Ctr, 480 Mich 980 (2007).
2010] J
ONES V
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On remand, plaintiffs renewed their motion for par-
tial summary disposition as to proximate causation.
Defendants filed a countermotion, arguing that they
were entitled to summary disposition as to proximate
causation. The trial court concluded:
All the experts here indicated that it’s a very rare—
Stevens-Johnson Syndrome is a very rare but known
reaction to—to this drug in certain people. And, apparently,
those people can’t be identified prior to the taking of the
medication.
The argument here by the—by the defense is that this is
not foreseeable. Stevens-Johnson’s [sic] is not a foreseeable
result of—of taking this medication in that it is so rare, one
in a million. I guess, there’s been some testimony, you
know, from one to one hundred thousand to one in a million
people that take this medication would—would develop
Stevens-Johnson Syndrome.
And that to agree with the plaintiff would be somehow
to impose strict liability in—in prescribing this particular
medication.
***
. . . The focus by the defense is Stevens-Johnson Syn-
drom[e] and the fact that it’s rare and unpredictable.
But other not so rare and unpredictable results and—
and injuries may result from the use of this medication.
And it’s the argument here by the plaintiff that the
misdiagnosis and the misprescription of this violated the
standard of care and the person wouldn’t—the plaintiff
[sic] here wouldn’t otherwise, have taken this medication.
But for the—the negligence and the breach of the standard
of care by the defendants.
And, therefore, it was foreseeable that an injury could
result. The injury, perhaps, being bloodshot eyes, swelling
of the lips, which happened. Other swelling. Some rash,
which is much more common, indicated by all the doctors.
472 288 M
ICH
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PP
466 [May
O
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And because of his eggshell condition or pre-existing
susceptibility to this type of Stevens-Johnson Syndrome
that their—that the defendants ought to be responsible
under the eggshell plaintiff theory.
And, frankly, it seems to fit in this case. The issue being,
you know, whether the prescription was or this medication
was appropriate. Whether there was, in fact, negligence.
***
[C]ertainly, the argument by the defense that the case
ought to be dismissed... would be denied on the basis
that—that injury was foreseeable.
***
. . . I—I think the order is then the issue that will be
tried in this case is one of whether or not there was a
breach in the standard of care in—in—in prescribing this
medication.
The trial court then stayed the case to permit defen-
dants to pursue this issue on appeal. The hospital again
sought leave to appeal, which this Court granted on
December 30, 2008, in an unpublished order (Docket
No. 288710). Watson and Leuchter timely filed their
cross-appeal.
II. STANDARD OF REVIEW
We review de novo a court’s determination of a
motion for summary disposition. Ormsby v Capital
Welding, Inc, 471 Mich 45, 52; 684 NW2d 320 (2004).
Because the parties and the trial court relied on matters
outside the pleadings when arguing and deciding, re-
spectively, the motion for summary disposition, we
review under the rules applicable to MCR 2.116(C)(10).
Silberstein v Pro-Golf of America, Inc, 278 Mich App
446, 457; 750 NW2d 615 (2008). When reviewing a
2010] J
ONES V
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motion brought under MCR 2.116(C)(10), the court
considers the affidavits, depositions, pleadings, admis-
sions, and other evidence submitted by the parties in
the light most favorable to the nonmoving party. Rose v
Nat’l Auction Group, 466 Mich 453, 461; 646 NW2d 455
(2002). Summary disposition is appropriate if there is
no genuine issue regarding any material fact and the
moving party is entitled to judgment as a matter of law.
Id.
III. ANALYSIS
The sole question before this Court is whether the
trial court properly ruled on the issue of proximate
cause. On the basis of our review de novo of the
evidence, we conclude that it did.
Generally, proximate cause is a factual question for
the jury. Nichols v Dobler, 253 Mich App 530, 532; 655
NW2d 787 (2002). However, “[w]hen the facts bearing
upon proximate cause are not in dispute and reasonable
persons could not differ about the application of the
legal concept of proximate cause to those facts, the
court determines the issue.” Paddock v Tuscola&SB
RCo, Inc, 225 Mich App 526, 537; 571 NW2d 564
(1997). Here, the trial court has already decided the
cause in fact and defendants have not appealed that
ruling, and the facts bearing on proximate cause are not
in dispute. Thus, it was proper for the trial court to
determine proximate causation as a matter of law if it
found that reasonable minds could not differ. Id.
“[L]egal cause or ‘proximate cause’ normally in-
volves examining the foreseeability of consequences,
and whether a defendant should be held legally respon-
sible for such consequences.” Skinner v Square D Co,
445 Mich 153, 163; 516 NW2d 475 (1994). “To establish
legal cause, the plaintiff must show that it was foresee-
474 288 M
ICH
A
PP
466 [May
O
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able that the defendant’s conduct ‘may create a risk of
harm to the victim, and... [that] the result of that
conduct and intervening causes were foreseeable.’ ”
Weymers v Khera, 454 Mich 639, 648; 563 NW2d 647
(1997), quoting Moning v Alfono, 400 Mich 425, 439;
254 NW2d 759 (1977).
Defendants argue that the injury in this case,
Jamar’s development of Stevens-Johnson syndrome,
was not foreseeable because it is rare. All the parties
and their experts agree that Stevens-Johnson syndrome
is rare. However, the issue is not whether defendants
should have foreseen that Jamar would develop this
syndrome, but whether they should have foreseen the
possibility that as a result of taking the medication,
Jamar, like any other patient being prescribed the
medication, bore a risk of developing the syndrome.
The evidence shows that the prescribing information
for carbamazepine contained warnings that Stevens-
Johnson syndrome may result from the use of the drug.
Thus, it was foreseeable that prescribing the drug
created a risk, albeit a small one, that Jamar could
contract Stevens-Johnson syndrome. Weymers, 454
Mich at 648. Indeed, the fact that the drug warnings
specifically mention Stevens-Johnson syndrome sup-
ports the conclusion that it was a foreseeable risk.
Defendants emphasize that the experts testified that
doctors have no way to predict which patients will
suffer an allergic reaction to carbamazepine and de-
velop Stevens-Johnson syndrome. However, this is true
for all first-time allergic reactions and for many other
rare reactions. Indeed, this is true of many more
common conditions. Doctors are generally unable to
specifically foresee which patients will develop cancer
or suffer heart attacks or a stroke, even among those
who exhibit some predisposition for the conditions. The
2010] J
ONES V
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same is true in the context of automobile accidents.
While in the great majority of cases, speeding on the
highway does not cause an accident, we accept as a
matter of course that if the speeding resulted in an
accident, the proximate-cause threshold can be met. We
are unfamiliar with any body of law that would allow a
defendant to argue, let alone a jury to find, that because
there are thousands of incidents of speeding that do not
result in an auto accident for each incident that does, a
defendant’s excessive speed in a given case cannot be
considered a proximate cause of the given crash. Defen-
dants refer to the standard jury instruction require-
ment that the resulting injury be a “natural and prob-
able” result of the negligence. Under defendants’ view
of this instruction, speeding could never be the proxi-
mate cause of an accident because it is never “probable”
in a specific instance of speeding that it will cause an
accident.
We conclude that the question is not whether one can
predict which incident of such negligence will cause an
accident, but whether there is something innate about
the negligence that naturally and probably gives rise to
the risk of an accident, i.e., harm. A cause in fact, while
related to the ultimate outcome as part of the series of
events, need not innately give rise to the risk of the
injury-causing event. For example, the fact that a
commuter got out of bed in the morning is a cause in
fact of any accident that the commuter has on the
commute to work that day. However, there is nothing
about getting out of bed that innately creates a risk of
an automobile accident. By contrast, speeding during
the commute, while it may never cause an actual
accident, “naturally and probably” gives rise to the risk
of an accident and, absent special circumstances, a
reasonable juror could not conclude that a speed-related
accident was not, at least in part, proximately caused by
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the actions of the speeding driver. Similarly, if a driver
runs a red light, reasonable minds could not differ that
it is reasonably foreseeable that doing so could cause a
car accident, even if the chances are slim that it will
actually do so. The issue, at least for a proximate-cause
analysis, is not how often the negligence will result in
an injury-causing event, but whether the increased risk
is directly linked to the negligence. Therefore, if a
physician prescribes a medication, reasonable minds
could not differ that it is reasonably foreseeable that
doing so could cause the patient to have one of the
known reactions to that medication.
3
Thus, the real question is whether the doctor took
whatever precautions are necessary to prevent the
condition from occurring or to minimize its severity
insofar as those precautions are required by the stan-
dard of care. As noted above, plaintiffs argue that there
was never a sufficient diagnostic basis to conclude that
Jamar had a seizure disorder and, therefore, prescrib-
ing carbamazepine for him fell outside the standard of
care. Plaintiffs also argue that when prescribing car-
bamazepine, Watson was required to warn about the
signs of an allergic reaction and the necessity to obtain
immediate medical care if any of those signs should
occur and that Watson failed to do so.
Defendants can properly argue that the risk of devel-
oping Stevens-Johnson syndrome when taking carbam-
azepine is so small that it could be prescribed even in
the absence of conclusive diagnostic evidence of a sei-
zure disorder. Similarly, defendants can properly argue
that the risk is so small that the standard of care did not
3
If, on the other hand, there is debate in the medical community about
whether a certain reaction is linked to the use of the medication,
reasonable minds could differ about whether the reaction was foresee-
able.
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require discussing the possibility of the reaction with
the patient or directing the patient what to do in the
event signs of a reaction appeared. However, these
arguments relate to standard of care, not proximate
cause.
Defendants also rely on their experts’ testimony
regarding the difficulty in determining the cause of
Stevens-Johnson syndrome. For example, defendants
argue that one of their experts testified that Jamar also
took Tylenol and Ancef, an antiobiotic, both of which
have also been associated with Stevens-Johnson syn-
drome. However, this evidence relates to cause in fact;
that is, defendants are arguing that something other
than the carbamazepine could have caused Jamar’s
Stevens-Johnson syndrome. Because the trial court
already determined that the carbamazepine caused
Jamar’s Stevens-Johnson syndrome and defendants
elected not to appeal that determination, these argu-
ments have no bearing on the instant appeal.
In any event, although defendants identify some
testimony indicating that there are other possible
causes of Stevens-Johnson syndrome, defendants’ ex-
pert, Dr. Edward Domino, who is board-certified in
clinical pharmacology, indicated that he did not dispute
that Jamar developed Stevens-Johnson syndrome as a
result of taking carbamazepine or that Jamar’s death
resulted from his developing Stevens-Johnson syn-
drome. Dr. Domino also stated that “from all the
evidence, it appears that [Jamar’s development of
Stevens-Johnson syndrome] is due to the [carbam-
azepine].” Defendants’ other expert, Dr. Paul Cullis, a
neurologist, similarly testified that he had “no reason to
dispute” that Jamar’s taking of carbamazepine caused
his development of Stevens-Johnson syndrome. Thus,
regardless of whether it is generally difficult to deter-
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mine the cause of Stevens-Johnson syndrome or
whether Jamar took other medications that could cause
Stevens-Johnson syndrome, the record does not reveal
any real disagreement that it was Jamar’s taking of the
carbamazepine prescribed by Watson that caused him
to develop the syndrome. Because it appears undisputed
that Jamar died as a result of Stevens-Johnson syn-
drome, which he contracted as a result of taking car-
bamazepine, and he took the carbamazepine only be-
cause he was directed to do so by Watson, all the
evidence supports the conclusion that Watson’s conduct
was a proximate cause of Jamar’s Stevens-Johnson
syndrome and resulting death.
For this reason, we reject defendants’ reliance on
Domako v Rowe, 184 Mich App 137; 457 NW2d 107
(1990), in which the plaintiff wife developed a vesico-
vaginal fistula following a hysterectomy. In that case,
the parties disputed whether her injury was the proxi-
mate result of the negligent performance of the hyster-
ectomy or was the proximate “result of [a] fibroid tumor
pressing against the surface of the bladder which in
turn caused the depletion of the blood supply to the
affected area of the bladder wall and a consequent
weakening and death of the cell structure on the wall.”
Id. at 141. The Domako Court held that summary
disposition as to cause in fact was proper because it was
agreed that absent the hysterectomy, whether per-
formed properly or not, the weakness of the wall would
not have developed into a fistula. However, the plain-
tiffs did not claim that the surgery was not indicated,
only that its performance was technically deficient and
that this technical error, rather than simply the re-
moval of the uterus itself, triggered the development of
the fistula. The defendants argued that the surgery was
performed properly, but the indicated removal of the
uterus itself, not any technical error, caused the fistula.
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Thus, there was a question of fact whether the alleged
negligence, i.e., a technical error in surgery, was respon-
sible for the fistula. As discussed above, no such dispute
exists in this case about the cause of Jamar’s Stevens-
Johnson syndrome. The undisputed facts are that the
reaction was caused by the carbamazepine that Watson
prescribed.
Defendants also rely on this Court’s opinion in
Dooley v St Joseph Mercy Hosp, unpublished opinion
per curiam of the Court of Appeals, issued July 7, 1998
(Docket No. 198024), in which the majority determined
that there was a lack of proximate cause in a medical
malpractice case. Although we need not consider it
because it is nonbinding, MCR 7.215(C)(1), we find that
there are several important distinctions between Dooley
and the present case and do not believe it stands for the
proposition suggested by defendants: that the mere fact
that a reaction is rare vitiates proximate cause.
In Dooley, plaintiff Timothy Dooley suffered from a
clotting disorder and was required to take anticoagu-
lants for the rest of his life. The only two available
blood-thinning medications were heparin and Couma-
din. Timothy had twice been on heparin as an inpatient
and took Coumadin as an outpatient and suffered no
significant ill effects from either drug. When hospital-
ized for a third time, he was again switched from
Coumadin to heparin during his in-patient stay. This
time, however, he suffered an adrenal hemorrhage as a
reaction to the heparin and lost adrenal function as a
result. Defendants note that the Dooley opinion refers
to the risk of adrenal hemorrhage as “rare” and suggest
that this was why the Dooley majority concluded there
was no proximate cause. This is inaccurate. The central
point in Dooley’s proximate-cause analysis was that
there was absolutely no difference in the risk of suffer-
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ing an adrenal hemorrhage resulting from taking either
Coumadin or heparin. Thus, while it was clear that
Timothy’s adrenal hemorrhage was caused by his taking a
blood thinner, there was no evidence that it was connected
to the change from Coumadin to heparin. The reaction
was just as likely to have occurred if no change in
medication had taken place. Thus, the plaintiffs failed to
provide any evidence that the defendants could have
foreseen that the change from Coumadin to heparin could
result in an adrenal hemorrhage. By contrast, in the
instant case, the risk of Stevens-Johnson syndrome was a
direct result of the allegedly improper prescription of
carbamazepine and the increased risk from not seeking
immediate medical intervention in the event of experienc-
ing side effects was a direct result of the alleged failure by
Watson to properly counsel Jamar about side effects.
Moreover, unlike the physician in Dooley, Watson did not
make a decision resulting in a change from one drug to
another, either of which bore the same risk, but made a
decision between prescribing a drug that carried the risk
and not prescribing it.
The proximate-cause analysis relevant to each of
plaintiffs’ theories of liability is not, however, identical.
As noted above, plaintiffs have argued two distinct
theories. First, that Watson failed to advise Jamar of
the warning signs of Stevens-Johnson syndrome and
what action to take should those warning signs occur.
For this theory, the link between the alleged violation of
the standard of care and the injury is direct, and we do
not believe a reasonable juror could conclude otherwise.
Indeed, one could fairly say that under this theory the
issues of cause in fact and proximate cause collapse and
are essentially indistinguishable. The allegation is that
Watson failed to warn of exactly the condition that
occurred and failed to advise how to address the exact
condition that occurred.
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Plaintiffs’ other theory is that Watson negligently
diagnosed a seizure disorder and that, as a result of
that misdiagnosis, Jamar was given carbamazepine, a
side effect of which led to Jamar’s death. In the
context of this theory, cause in fact and proximate
cause do not completely collapse into each other
because the alleged negligence does not necessarily
cause injury; the prescribing of the medication con-
stitutes an intermediate step without which the al-
leged misdiagnosis does not cause injury. Further,
this intermediate step, i.e., prescribing the medica-
tion, is not alleged to be negligent in and of itself.
Indeed, it appears to be undisputed that the prescrip-
tion of carbamazepine for a seizure disorder is well
within the standard of care, except perhaps in special
circumstances involving a particular patient, and no
such claim is made here. Rather, plaintiffs allege that
Watson lacked sufficient diagnostic information to
diagnose a seizure disorder and that, as a result of
that negligent diagnosis, he prescribed a medication
and Jamar had a rare and fatal reaction to that
medication. We recognize that as the number of
intermediate steps increase, and as those steps grow
more attenuated from the final risk-creating event,
proximate cause becomes more and more tenuous.
There are cases in which that relationship is suffi-
ciently distant that a court may properly hold that a
reasonable juror could not find a proximate-cause
relationship between the alleged negligence and the
injury. And of course, in most cases, proximate cause
will remain a question for the jury because reason-
able minds may differ.
In this case, however, we conclude that the trial court
properly concluded that a reasonable juror could not
find a failure of proximate cause under the misdiagnosis
theory, just as we concluded in the context of the
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failure-to-advise theory. We so conclude because the
direct undisputed cause of death was the prescribing of
a drug, by Watson, which was a standard treatment in
the face of a seizure diagnosis. The diagnosis was not
merely an event in a chain of events that eventually led
to the prescription; it was the final and apparently sole
reason the medication was prescribed. While it is well
recognized that an event need not be the sole or final
cause of an injury to be a proximate cause of the injury,
in this case, the alleged misdiagnosis was the sole cause
and, if not the final cause of the injury, the final cause of
the injury-causing prescription. In these circumstances,
summary disposition on causation was appropriate. We
do not see how a reasonable juror could conclude that
an allegedly negligent diagnosis that was the sole cause
for prescribing the injury-causing medication was not a
proximate cause of the injury.
IV. CONCLUSION
Because there was no dispute about causation in fact,
no material dispute of fact, and reasonable jurors could
not find a lack of proximate cause on the basis of these
facts, we conclude that the trial court properly deter-
mined the issue of proximate causation as a matter of
law. Paddock, 225 Mich App at 537. Furthermore,
because the evidence is undisputed that, although
Stevens-Johnson syndrome is rare, it is well known that
it can occur from taking carbamazepine, and in this
case did so occur, the trial court properly decided, as a
matter of law, that Watson’s alleged lack of giving
advice regarding signs of a reaction was a proximate
cause of Jamar’s development of Stevens-Johnson syn-
drome. Finally, because the sole reason the medication
was given was because of a diagnosis that plaintiffs
assert was negligent and erroneous, the trial court
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properly decided, as a matter of law, that the allegedly
negligent misdiagnosis was a proximate cause of
Jamar’s development of the syndrome.
Although this forecloses causation arguments at
trial, it does not mean that the rarity of this reaction to
carbamazepine and the difficulty in determining which
patients will suffer such reactions is irrelevant. It
remains relevant to the issue of standard of care, and at
trial defendants may present proofs and argument that
these factors militate in favor of a finding that Watson
did not violate the standard of care.
Affirmed.
B
ECKERING
, J., concurred.
H
OEKSTRA
,P.J. (dissenting). In this medical malprac-
tice action, this Court granted defendants leave to appeal
the trial court’s order granting summary disposition to
plaintiffs on the issue of proximate or legal cause and
denying defendants’ cross-motion for summary disposi-
tion. Because I would conclude that reasonable persons
could differ regarding whether the injuries of plaintiffs’
decedent, Jamar Jones (hereafter Jones), were legally
caused by the alleged negligence, I respectfully dissent.
In a medical malpractice action the plaintiff must
establish proximate cause between the defendant’s al-
leged breach of the standard of care and his or her
injuries. Teal v Prasad, 283 Mich App 384, 391; 772
NW2d 57 (2009). “ ‘Proximate cause’ is a legal term of
art that incorporates both cause in fact and legal (or
‘proximate’) cause.” Craig v Oakwood Hosp, 471 Mich
67, 86; 684 NW2d 296 (2004). Proximate cause is
generally a question for the jury. Lockridge v Oakwood
Hosp, 285 Mich App 678, 684; 777 NW2d 511 (2009).
However, “[w]hen the facts bearing upon proximate
cause are not in dispute and reasonable persons could
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not differ about the application of the legal concept of
proximate cause to those facts, the court determines the
issue.” Paddock v Tuscola&SBRCo,Inc, 225 Mich
App 526, 537; 571 NW2d 564 (1997).
A court must first find that the defendant’s actions
were a cause in fact of the plaintiff’s injuries before it
may find that the actions of the defendant were a
proximate or legal cause of the injuries. Craig, 471 Mich
at 87. Cause in fact requires that “but for” the defen-
dant’s actions, the plaintiff’s injuries would not have
occurred. Martin v Ledingham, 282 Mich App 158, 161;
774 NW2d 328 (2009). The trial court granted summary
disposition to plaintiffs on the issue of cause in fact.
Defendants did not appeal this order in their applica-
tion for leave to appeal; therefore, the issue of cause in
fact is not before us. Jones v Detroit Med Ctr, unpub-
lished order of the Court of Appeals, entered December
30, 2008 (Docket No. 288710); see also MCR
7.205(D)(4); Detroit Free Press, Inc v Southfield, 269
Mich App 275, 290; 713 NW2d 28 (2005).
At issue is legal or proximate cause. Legal causation
involves “judg[ing] whether the plaintiff’s injuries were
too insignificantly related to or too remotely effected by
the defendant’s negligence.” Davis v Thornton, 384
Mich 138, 145; 180 NW2d 11 (1970). “To find proximate
cause, it must be determined that the connection be-
tween the wrongful conduct and the injury is of such a
nature that it is socially and economically desirable to
hold the wrongdoer liable.” Helmus v Dep’t of Transp,
238 Mich App 250, 256; 604 NW2d 793 (1999). Our
Supreme Court has defined a proximate cause as “a
foreseeable, natural, and probable cause of the plain-
tiff’s injury and damages.” Kaiser v Allen, 480 Mich 31,
38; 746 NW2d 92 (2008) (quotation marks and citation
omitted).
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The concept of foreseeability pervades any discussion
of proximate cause. See, e.g., id.; Weymers v Khera, 454
Mich 639, 648; 563 NW2d 647 (1997) (“To establish
legal cause, the plaintiff must show that it was foresee-
able that the defendant’s conduct may create a risk of
harm to the victim, and... that the result of that
conduct and intervening causes were foreseeable.”)
(quotation marks, citation, and alternation omitted);
Skinner v Square D Co, 445 Mich 153, 163; 516 NW2d
475 (1994) (“[L]egal cause or ‘proximate cause’ nor-
mally involves examining the foreseeability of conse-
quences, and whether a defendant should be held
legally responsible for such consequences.”); Nielsen v
Henry H Stevens, Inc, 368 Mich 216, 220-221; 118
NW2d 397 (1962) (“To make negligence the proximate
cause of an injury,... an ordinary prudent person
ought reasonably to have foreseen [that the injury]
might probably occur as the result of his negligent
act.”).
However, our Supreme Court has instructed that in a
case in which there is no intervening cause, and there is
none alleged in the present case, the foreseeability of
the plaintiff’s injury is not to be used as a test to
determine whether proximate cause exists. McMillian v
Vliet, 422 Mich 570, 576-577; 374 NW2d 679 (1985);
Davis, 384 Mich at 147.
“It appears that the modern trend of judicial opinion is
in favor of eliminating foreseeable consequences as a test of
proximate cause, except where an independent, respon-
sible, intervening cause is involved. The view is that once it
is determined that a defendant was negligent, he is to be
held responsible for injurious consequences of his negligent
act or omission which occur naturally and directly, without
reference to whether he anticipated, or reasonably might
have foreseen such consequences....There is no need for
discussing proximate cause in a case where the negligence
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of the defendant is not established, but when his negligence
has been established, the proximate result and amount of
recovery depend upon the evidence of direct sequences, and
not upon defendant’s foresight.” [Davis, 384 Mich at 147,
quoting 38 Am Jur, Negligence, §§ 58, 709, 710.]
Indeed, the Michigan Model Civil Jury Instructions
define legal or proximate cause as “a natural and
probable result of the negligent conduct.” M Civ JI
15.01. The words “natural” and “probable,” rather than
legal terms of art, are words susceptible of ordinary
comprehension and need not be defined for a jury. See
People v Martin, 271 Mich App 280, 352-353; 721 NW2d
815 (2006), aff’d 482 Mich 851 (2008). Accordingly,
being instructed on proximate cause, jurors would af-
ford the terms “natural” and “probable” their ordinary
meanings. In the context of determining proximate
cause, “natural” means “in accordance with the nature
of things; to be expected,” and “probable” means “likely
to occur or prove true.” Random House Webster’s Col-
lege Dictionary (1992).
In the complaint, plaintiffs alleged two distinct acts
of negligence. First, plaintiffs claimed that Dr. Danny
Watson breached the applicable standard of care by
prescribing carbamazepine
1
on the basis of the limited
personal medical history provided by Jamar Jones.
According to plaintiffs, Watson should not have pre-
scribed carbamazepine without performing additional
diagnostic tests to confirm the preliminary diagnosis of
a seizure disorder. Second, plaintiffs alleged that Wat-
son breached the applicable standard of care by failing
to inform Jones of the possibility of an allergic reaction,
1
Watson prescribed Tegretol, but the prescription was filled with
carbamazepine, the generic form of Tegretol. No allegation has been
made, however, that any difference between the drugs is relevant to this
case.
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the signs of an allergic reaction, and the necessity to
immediately seek medical attention for an allergic re-
action.
In determining that reasonable minds could not
differ that Watson’s conduct was a proximate cause of
Jones’s injuries, the majority focuses on whether the
injuries were foreseeable. For example, it reasons that,
because Jones died as a result of Stevens-Johnson
syndrome, which is a known side effect of taking
carbamazepine, and because Jones contracted Stevens-
Johnson syndrome from taking carbamazepine, which
was prescribed by Watson, the injuries were foresee-
able. Respectfully, I disagree with the approach taken
by the majority. The issue is not simply whether rea-
sonable minds cannot differ that a straight line can be
drawn from point A, the defendant’s alleged negligence,
to point F, the plaintiff’s injuries. Rather, for a plaintiff
to prevail on the issue of proximate cause at the
summary disposition stage, it must be shown that
reasonable minds cannot differ that the injuries were
the natural and probable consequence of the defen-
dant’s negligence. In other words, reasonable minds
could not differ that the injuries were “expected” and
“likely to occur” or on whether the injuries were too
insignificantly related or too remotely affected by the
alleged negligence. Davis, 384 Mich at 145. Further,
consideration must also be given to whether the con-
nection between the alleged negligence and the injuries
is of such a nature that it is socially and economically
desirable to hold the defendant liable. Helmus, 238
Mich App at 256.
Reviewing the trial court’s decision de novo and the
evidence in the light most favorable to defendants, Lee
v Detroit Med Ctr, 285 Mich App 51, 58-59; 775 NW2d
326 (2009), I would conclude that this case presents
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issues that must be resolved at trial. It is undisputed
that Stevens-Johnson syndrome is a known, but very
rare, side effect of taking carbamazepine. One expert
testified that only one in a million of those who take
carbamazepine develop Stevens-Johnson syndrome. In
addition, there is no claim by plaintiffs that carbam-
azepine is not an anticonvulsant commonly prescribed
for a seizure disorder. Under these circumstances, I am
of the opinion that reasonable minds could differ re-
garding whether Jones’s injuries were the natural and
probable result of Watson’s alleged negligence of failing
to perform additional diagnostic tests to confirm the
preliminary diagnosis of a seizure disorder. Admittedly,
the link between Watson’s alleged failure to warn Jones
of an allergic reaction to carbamazepine and Jones’s
injuries is much closer than the link between the
injuries and Watson’s alleged failure to confirm the
preliminary diagnosis. However, given the rarity of
Stevens-Johnson syndrome, I believe that even on this
claim it was within the province of the jury to determine
whether the connection between Watson’s alleged neg-
ligence and Jones’s injuries was of such a nature that it
is desirable to hold defendants liable. Accordingly, I
would conclude that the trial court erred by granting
summary disposition to plaintiffs on the issue of proxi-
mate cause.
Defendants also argue that it was error for the trial
court to deny their cross-motion for summary disposi-
tion. They argue that because Stevens-Johnson syn-
drome is a rare and unpredictable side effect of taking
carbamazepine, plaintiffs cannot establish that taking
carbamazepine was a foreseeable, natural, and probable
cause of Jones’s death. Defendants rely primarily on
Dooley v St Joseph Mercy Hosp, unpublished opinion
per curiam of the Court of Appeals, issued July 7, 1998
(Docket No. 198024). I agree with the majority that
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Dooley is factually distinguishable. In addition, the
record shows that although Stevens-Johnson syndrome
is a rare side effect, it is a known side effect. Conse-
quently, reasonable minds could differ regarding
whether it is a natural and probable consequence that,
if a physician prescribes a medication with a known
rare side effect, a patient will suffer the side effect.
Therefore, I would also conclude that defendants are
not entitled to summary disposition.
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FORD MOTOR COMPANY v DEPARTMENT OF TREASURY
Docket No. 283925. Submitted June 10, 2009, at Lansing. Decided May
20, 2010, at 9:05 a.m.
Ford Motor Company brought an action in the Court of Claims
against the Department of Treasury, seeking a refund of single
business tax and interest that plaintiff paid under protest. Plain-
tiff had established a voluntary employees’ beneficiary association
(VEBA) trust from which it received reimbursement for amounts
it paid for bills for health-care services submitted by its employees.
Plaintiff alleged that defendant improperly classified contribu-
tions plaintiff made to the trust as “compensation” under the
former Single Business Tax Act (SBTA), MCL 208.1 et seq. The
court, Paula J. M. Manderfield, J., held that defendant correctly
classified the payments as compensation and granted summary
disposition in favor of defendant. Plaintiff appealed.
The Court of Appeals held:
Plaintiff’s contributions to the VEBA trust in the tax years in
question did not constitute compensation under the SBTA. MCL
208.4(3) defined taxable “compensation” as including “payments
made in the taxable year on behalf of or for the benefit of
employees....” Contributions to a VEBA trust created for the
purpose of paying future health-care costs were not compensation
taxable under the SBTA because the contributions only represent
potential compensation to employees. In this context, compensa-
tion equates with the payment of actual health-care costs incurred
by plaintiff’s employees, not the setting aside of money intended to
serve as a source of proceeds for the payment of future health-care
costs. While the VEBA assets may be held for the benefit of the
employees, the employees receive no substantive benefit until
plaintiff or the VEBA trust directly pays the costs for the employ-
ees’ health-care services. Defendant’s method of determining that
contributions to the VEBA trust were taxable compensation and
then, to avoid double-taxation, offsetting that figure by the
amounts that the VEBA trust reimbursed plaintiff for payments it
made for health-care services rendered to employees was inconsis-
tent with the statute. Nor were contributions to the VEBA trust
2010] F
ORD
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OTOR V
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’
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REASURY
491
akin to the purchase of health insurance. Therefore, defendant
improperly taxed the contributions as compensation under the
SBTA.
Reversed and remanded.
T
AXATION —
S
INGLE
B
USINESS
T
AX
A
CT —
C
OMPENSATION —
V
OLUNTARY
E
MPLOY-
EES’
B
ENEFICIARY
A
SSOCIATION
T
RUSTS
Contributions by an employer to a voluntary employees’ beneficiary
association trust created for the purpose of receiving reimburse-
ment for the payment of employees’ future health-care costs did
not constitute compensation to employees that was taxable under
the former Single Business Tax Act (26 USC 501[c][9]; MCL
208.4[3]).
Miller, Canfield, Paddock, and Stone, PLC (by Sam-
uel J. McKim III, Joanne B. Faycurry, and Loren M.
Opper), for plaintiff.
Michael A. Cox, Attorney General, B. Eric Restuccia,
Solicitor General, and Bruce C. Johnson, Assistant
Attorney General, for defendant.
Before: Z
AHRA
,P.J., and W
HITBECK
and M. J. K
ELLY
,JJ.
Z
AHRA
,P.J. This is a tax case arising under Michigan’s
repealed Single Business Tax Act (SBTA), MCL 208.1 et
seq.
1
Defendant the Department of Treasury, conducted
an audit of plaintiff Ford Motor Company, to determine
the tax due under the SBTA for the years 1997 through
1999. Defendant assessed plaintiff a tax liability of
$21,726,713 above the single business taxes already
paid by plaintiff. Defendant determined that voluntary
contributions made to an irrevocable trust created
under a voluntary employees’ beneficiary association
(VEBA), 26 USC 501(c)(9), amounted to employee com-
pensation that was taxable under the SBTA. Plaintiff
1
The SBTA was repealed by 2006 PA 325.
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paid the additional tax liability under protest and
brought suit in the Court of Claims, arguing that
contributions made to the VEBA trust were not com-
pensation for purposes of the SBTA. The Court of
Claims rejected plaintiff’s claim and granted summary
disposition to defendant. Plaintiff appeals as of right.
We hold that contributions plaintiff made to the VEBA
trust in the tax years in question did not constitute
compensation under the SBTA. Therefore, these contri-
butions were not subject to the single business tax. We
reverse.
I. BASIC FACTS AND PROCEEDINGS
The facts are not in dispute. Under the SBTA in
effect during the tax years at issue, employee compen-
sation paid by a business was taxable. MCL 208.9(1)
and (5). The SBTA definition of “compensation” during
the time at issue included “payments for insurance for
which employees are the beneficiaries, including pay-
ments under health and welfare and noninsured benefit
plans....”MCL208.4(3) as amended by 1995 PA 285.
2
Before the creation of the VEBA trust, plaintiff paid for
health-care services rendered to employees as required
by plaintiff’s employee health-care plan. Both litigants
treated the payments made for health-care services
rendered on behalf of plaintiff’s employees as compen-
sation under the SBTA. On June 27, 1997, plaintiff
established the VEBA trust and began to make volun-
tary, periodic contributions into it. Plaintiff made con-
tributions to the VEBA trust in the following amounts:
$1.59 billion (1997), $1.7 billion (1998), and $2.287
billion (1999). For the tax years at issue, employees
2
The definition of “compensation” was revised by 1999 PA 115,
effective July 14, 1999. However, the changes were minor and do not
affect our analysis.
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submitted bills for health-care services covered under
the employee health-care plan to plaintiff, and plaintiff
would pay the bills and receive reimbursement from the
VEBA trust. When calculating its SBTA liability for
those years, plaintiff included as compensation the
payments it made for health-care services rendered to
employees for which it later received reimbursement
from the VEBA trust.
Defendant audited plaintiff and concluded that the
contributions made into the VEBA trust during the
years 1997 through 1999 were taxable compensation
and should have been added to plaintiff’s tax base and
then “offset” by the amounts the VEBA trust reim-
bursed plaintiff for payments it made for health-care
services rendered to employees. Plaintiff paid the addi-
tional tax liability under protest and brought suit in the
Court of Claims. At the heart of plaintiff’s complaint
was the assertion that contributions made to the VEBA
trust were not compensation for purposes of the SBTA.
The Court of Claims rejected plaintiff’s assertion. This
appeal ensued.
II. STANDARD OF REVIEW
This Court reviews de novo a trial court’s decision to
grant or deny a motion for summary disposition. Spiek
v Dep’t of Transp, 456 Mich 331, 337; 572 NW2d 201
(1998). Statutory interpretation is also reviewed de
novo on appeal. Detroit v Ambassador Bridge Co, 481
Mich 29, 35; 748 NW2d 221 (2008).
III. ANALYSIS
The Court of Claims incorrectly determined that the
contributions plaintiff made to the VEBA trust were
compensation under the SBTA.
494 288 M
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The single business tax “ ‘is a business activity tax
that was enacted “to provide for the imposition, levy,
computation, collection, assessment and enforce-
ment...oftaxes on certain commercial, business, and
financial activities....”1975 PA 228.’ ” TMW Enter-
prises, Inc v Dep’t of Treasury, 285 Mich App 167, 173;
775 NW2d 342 (2009), quoting Fluor Enterprises, Inc v
Dep’t of Treasury, 477 Mich 170, 174; 730 NW2d 722
(2007). The SBTA imposes a value added tax. TMW, 285
Mich App at 173. A value added tax differs from an
income tax because it is a tax on economic activity,
whereas an income tax is a tax on what has been
received from the economy. Id., citing ANR Pipeline Co
v Dep’t of Treasury, 266 Mich App 190, 199; 699 NW2d
707 (2005). Before its repeal, any person engaged in
business activity in Michigan was subject to the SBTA.
MCL 208.31.
Compensation paid to employees was one of the
many activities taxed under the SBTA. “Compensation”
was defined under MCL 208.4(3), at the relevant time,
as follows:
Except as otherwise provided in this section, “compen-
sation” means all wages, salaries, fees, bonuses, commis-
sions, or other payments made in the taxable year on behalf
of or for the benefit of employees, officers, or directors of
the taxpayers and subject to or specifically exempt from
withholding under chapter 24, sections 3401 to 3406 of the
internal revenue code. Compensation includes, on a cash or
accrual basis consistent with the taxpayer’s method of
accounting for federal income tax purposes, payments to
state and federal unemployment compensation funds, pay-
ments under the federal insurance contribution act and
similar social insurance programs, payments, including
self-insurance, for worker’s compensation insurance, pay-
ments to individuals not currently working, payments to
dependents and heirs of individuals because of current or
former labor services rendered by those individuals, pay-
2010] F
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ments to a pension, retirement, or profit sharing plan, and
payments for insurance for which employees are the ben-
eficiaries, including payments under health and welfare
and noninsured benefit plans and payments of fees for the
administration of health and welfare and noninsured ben-
efit plans.
[
3
]
The controlling question presented in this matter is
whether contributions to the VEBA trust were “com-
pensation” within this definition. The primary goal of
judicial interpretation of statutes is to ascertain and
give effect to the intent of the Legislature. Booker v
Shannon, 285 Mich App 573, 575; 776 NW2d 411
(2009). “ ‘Statutory language should be construed rea-
sonably, keeping in mind the purpose of the act.’ ”
Twentieth Century Fox Home Entertainment, Inc v Dep’t
of Treasury, 270 Mich App 539, 544; 716 NW2d 598
(2006) (citations omitted). The first criterion in deter-
mining intent is the specific language of the statute. In
re MCI Telecom Complaint, 460 Mich 396, 411; 596
NW2d 164 (1999). If the plain and ordinary meaning of
the language is clear, judicial construction is normally
neither necessary nor permitted. Nastal v Henderson &
Assoc Investigations, Inc, 471 Mich 712, 720; 691 NW2d
1 (2005). “[E]very word or phrase of a statute should be
accorded its plain and ordinary meaning, taking into
account the context in which the words are used.”
Priority Health v Office of Fin & Ins Servs Comm’r, 284
Mich App 40, 43; 770 NW2d 457 (2009) (citations and
quotation marks omitted).
For many reasons, we conclude that plaintiff’s con-
tributions to the VEBA trust were not “compensation”
to employees taxable under the SBTA. Central to this
conclusion is the premise that plaintiff’s contributions
to the VEBA trust represent only potential compensa-
3
See footnote 2.
496 288 M
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tion to its employees. Thus, the contributions cannot
yet reasonably be considered compensation “for the
benefit of employees.” Defendant directs this Court to
the language establishing the VEBA trust, which pro-
vides that the assets are held “for the benefit of the
employees....” However, this fact actually works
against defendant’s claim. While the VEBA assets may
be held for the benefit of the employees, the employees
receive no substantive benefit until plaintiff or the
VEBA trust directly pays the costs for the employees’
health-care services as required by plaintiff’s employee
health-care benefit plan. The only benefit plaintiff’s
employees receive from plaintiff’s VEBA trust contri-
butions is the peace of mind associated with knowing
that plaintiff’s contributions to the VEBA trust are
earmarked to address future medical claims under the
employee health-care benefit plan. However, this peace
of mind does not fall within the statutory definition of
“compensation” under the SBTA.
Moreover, there is no dispute that the monies paid
into the VEBA trust did not secure any medical care
and could be significantly depleted as a result of market
forces. In such a case, plaintiff would still be required
pursuant to its employee health-care benefit plan to pay
for its employees’ health-care costs. This scenario dem-
onstrates that the VEBA trust merely serves as a
savings fund implemented to facilitate the payment of
plaintiff’s employees’ future health-care services.
“Compensation” taxable under the SBTA was defined
to include “payments made in the taxable year on
behalf of or for the benefit of employees....” MCL
208.4(3). In this context, “compensation” equates with
the payment of actual health-care costs incurred by
plaintiff’s employees, not the setting aside of money
intended to serve as a source of proceeds for the
payment of future health-care costs.
2010] F
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This conclusion is further supported by the method
defendant employed, as maintained at oral argument,
to determine the “actual” and “real” tax. As mentioned,
defendant determined that contributions made into the
VEBA trust were taxable compensation under the
SBTA and then “offset” the amounts the VEBA trust
reimbursed plaintiff for payments it made for health-
care services rendered to employees. However, nothing
under the SBTA provided for subtraction from compen-
sation of a payment made to an employer from any
fund. Yet, the SBTA did specifically provide for other
offsets. For instance, the SBTA expressly allowed for
“offsets” of business losses. MCL 208.23b(h). In sharp
contrast to this express provision allowing an offset of
business losses, the SBTA’s silence in regard to the
offset of compensation that was taxed but never actu-
ally paid is notable. Defendant recognized that pay-
ments by plaintiff made directly for health-care services
provided to employees pursuant to plaintiff’s employee
health-care benefit plan were compensation under the
SBTA. Defendant further recognized that to include
those payments in plaintiff’s tax base would have
resulted in double taxation. Thus, defendant invented
this offset fiction to justify its continued stream of tax
revenue based on VEBA trust contributions. Signifi-
cantly, this method of taxation also reflects that defen-
dant knew that some of the contributions to the VEBA
trust were not to be used to pay for health benefits in
the tax year in which they were paid. Such a tax policy
is irreconcilably inconsistent with the express authority
under the statute, which limited compensation subject
to the single business tax to payments made on behalf of
the employees in the tax year.
We also find significant that plaintiff’s contributions
to the VEBA trust exceeded the compensation required
under the UAW-Ford Motor Company contract. Defen-
498 288 M
ICH
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dant argues that the contributions to the VEBA trust
are akin to purchasing health insurance, which eventu-
ally would be used by employees. Again, the payment of
proceeds into the VEBA trust was not in any way
tantamount to the purchase of health insurance. Sig-
nificantly, payments into the VEBA trust were not
required by a contractual obligation and were not paid
in order to procure insurance to cover medical services
due to employees under plaintiff’s health-care benefit
plan.
We conclude that defendant improperly taxed contri-
butions to the VEBA trust as compensation under the
SBTA. We reverse and remand for further proceedings
consistent with this opinion. We do not retain jurisdic-
tion.
2010] F
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PEOPLE v PARKER
Docket No. 289357. Submitted May 12, 2010, at Lansing. Decided May
20, 2010, at 9:10 a.m.
Benny R. Parker was convicted by a jury in the Saginaw Circuit
Court, Darnell Jackson, J., of felonious assault, MCL 750.82, and
carrying a dangerous weapon with unlawful intent, MCL 750.226.
He appealed, alleging that the prosecution failed to present
sufficient evidence to support his conviction of carrying a danger-
ous weapon with unlawful intent, because it had not proved that
the knife in question had a blade of at least three inches in length,
and that the prosecution made statements to the jury that were
unsupported by the evidence.
The Court of Appeals held:
1. MCL 750.226 prohibits carrying a firearm, “dagger, dirk,
razor, stiletto, or knife having a blade over 3 inches in length, or
any dangerous or deadly weapon or instrument” with unlawful
intent. The statute expressly targets the combination of an unlaw-
ful intent with its list of what are dangerous weapons per se.
Therefore, the carrier’s intent is not a factor in determining
whether an instrument carried is covered by the statute. The
phrase “any other dangerous or deadly weapon or instrument,”
following as it does a list of varied weapons that have in common
that they are all dangerous per se, includes only other weapons
that are dangerous per se. The specification of knives having
blades more than three inches in length indicates that they are
dangerous weapons per se, but knives with shorter blades are not
included because they are not weapons that are dangerous per se.
In specifying unlawful intent, MCL 750.226 does not by its own
terms prohibit the carrying of any weapon for purposes of self-
defense. In prosecutions under the statute that involve a knife, an
element of the crime is that the knife’s blade be more than three
inches in length. Defendant’s conviction of carrying a dangerous
weapon with unlawful intent must be vacated.
2. Defendant claimed that the prosecutor’s argument concern-
ing the condition of the knife was unsupported by the evidence.
The argument was sufficiently reflective of matters in evidence
500 288 M
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that it did not constitute plain error. Defendant’s conviction of
felonious assault must be affirmed.
Vacated in part, affirmed in part, and remanded for correction
of the judgment of sentence.
C
RIMINAL
L
AW —
C
ARRYING
D
ANGEROUS
W
EAPONS
W
ITH
U
NLAWFUL
I
NTENT —
W
ORDS AND
P
HRASES —
D
ANGEROUS OR
D
EADLY
W
EAPONS OR
I
NSTRU-
MENTS
.
MCL 750.226 prohibits carrying a dangerous weapon with unlawful
intent; the carrier’s intent is not a factor in determining whether
an instrument carried is covered by the statute; the phrase “any
other dangerous or deadly weapon or instrument” following the
list in the statute of weapons that are dangerous per se includes
only other weapons that are dangerous per se within the statute’s
prohibition; the statute provides that knives with blades of more
than three inches in length are dangerous weapons per se, while
knives with shorter blades are not weapons that are dangerous per
se; a blade length of more than three inches is an element of the
crime in a prosecution involving a knife under MCL 750.226.
Michael A. Cox, Attorney General, B. Eric Restuccia,
Solicitor General, Michael D. Thomas, Prosecuting At-
torney, and J. Thomas Horiszny, Assistant Prosecuting
Attorney, for the people.
Neil C. Szabo for defendant.
Before: S
HAPIRO
,P.J., and J
ANSEN
and D
ONOFRIO
,JJ.
P
ER
C
URIAM.
Defendant appeals as of right his jury
trial convictions of felonious assault, MCL 750.82, and
carrying a dangerous weapon with unlawful intent,
MCL 750.226. Because the prosecution failed to present
sufficient evidence to support defendant’s conviction of
carrying a dangerous weapon with unlawful intent for
the reason that it did not present evidence that the
knife in question had a blade of at least three inches in
length, we vacate that conviction. Because defendant
has not established any plain error with regard to his
2010] P
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argument concerning prosecutorial misconduct, we af-
firm defendant’s felonious-assault conviction.
I
Defendant’s convictions arise from an incident that
took place at the Gibby’s Pub in Bridgeport on the
evening of December 3, 2006. At trial, the owner of the
bar testified that a bartender reported having problems
with defendant, in response to which the owner asked
defendant to leave the premises. Instead of leaving,
defendant cursed and produced a knife in its open
position, meaning blade out. The owner yelled that
defendant had a knife, struggled with him, and com-
manded defendant to drop the knife. After others joined
the owner in the fracas, defendant was finally disarmed
and subdued.
At the close of the prosecution’s proofs, defense
counsel asked that the charge of carrying a dangerous
weapon with unlawful intent be dismissed, on the
ground that the prosecution had failed to prove that the
knife in question had a blade of at least three inches in
length. The prosecutor argued that any dangerous
weapon satisfied the requirements of the statute. The
trial court adopted the prosecutor’s position, explain-
ing, “I believe that the evidence is sufficient to show
that it is a dangerous weapon at this point in time, and
the jury can determine whether or not what his inten-
tion was in terms of carrying it.”
Defendant testified that he had owned the knife for
three months and carried it daily for such purposes as
cutting open boxes. Defendant added that he typically cut
open about 10 boxes each day. Describing the incident
underlying this case, defendant said of the knife, “I felt
stupid having it out because I wasn’t going to use it, so,
you know, I felt ridiculous. They called my bluff.”
502 288 M
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The trial court instructed the jury that, among the
elements necessary to find defendant guilty of carrying
a dangerous weapon with unlawful intent, the prosecu-
tion had to prove that defendant was “armed with a
knife” and “intended to use this weapon illegally
against someone else.” The trial court further stated:
A dangerous weapon is any object that is used in a way
that is likely to cause serious physical injury or death.
Some objects, such as guns or bombs, are dangerous
because they are specifically designed to be dangerous.
Other objects are designed for peaceful purposes but may
be used as dangerous weapons.
The way an object is used or intended to be used in an
assault determines whether or not it is a dangerous
weapon. If an object is used in any way that is likely to
cause serious physical injury or death, it is a dangerous
weapon. You must decide from all of the facts and circum-
stances whether the evidence showed that the defendant in
question here had a dangerous weapon.
The trial court additionally instructed the jury to decide
the facts solely on the basis of the evidence and that the
statements of counsel were not evidence. The jury
found defendant guilty as charged.
II
On appeal, defendant argues that the trial court
erred by denying his motion to dismiss the charge of
carrying a dangerous weapon with unlawful intent
because the prosecution presented absolutely no evi-
dence with regard to the length of the knife, contrary to
the statutory language, which requires that a knife
have a blade of at least three inches in length in order
to qualify as a dangerous weapon. The prosecution
responds that the trial court correctly focused on the
potential dangerousness of the knife, rather than the
2010] P
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length of its blade, and that, in any event, the knife was
admitted into evidence, the jury saw it, and one witness
testified that it was roughly the size of a hand.
When reviewing a trial court’s decision on a motion
for a directed verdict, this Court reviews the record de
novo to determine whether the evidence, viewed in the
light most favorable to the prosecution, could persuade
a rational trier of fact that the essential elements of the
crime charged were proved beyond a reasonable doubt.
People v Mayhew, 236 Mich App 112, 124-125; 600
NW2d 370 (1999). Statutory interpretation presents a
question of law, calling for review de novo. People v
Denio, 454 Mich 691, 698-699; 564 NW2d 13 (1997).
Defendant was convicted of violating MCL 750.226,
which provides, in pertinent part:
Any person who, with intent to use the same unlaw-
fully against the person of another, goes armed with a
pistol or other firearm or dagger, dirk, razor, stiletto, or
knife having a blade over 3 inches in length, or any other
dangerous or deadly weapon or instrument, shall be
guilty of a felony ....
In this case, the knife in question was admitted into
evidence and apparently displayed to the jury, but was
not given to the jurors to inspect. There was no testi-
mony, discussion, or argument presented to the jury
concerning the length of its blade. One witness de-
scribed the weapon as “a hand-sized knife” with the
blade open, but given that the size of that witness’s
hand was not in evidence and that she did not indicate
precisely how the knife might align with her hand, that
description does not answer the question. As a result,
on this record, we are left with simply no basis for
ascertaining whether the knife’s blade was longer than
three inches.
504 288 M
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In 1945, our Supreme Court held that it was error to
apply the three-inch specification found in the version
of the statute prohibiting carrying a dangerous weapon
then in effect to determine the dangerousness of a knife
for purposes of the concealed-weapons statute then in
effect. People v Vaines, 310 Mich 500, 502-504; 17 NW2d
729 (1945). The Court, further construing the
concealed-weapons statute, noted that many cutting
tools are manufactured and used for peaceful purposes
and opined that “[w]hether or not such articles are
dangerous weapons . . . would depend upon the use
which the carrier made of them.” Id. at 505. The Court
thus called for distinguishing between items “designed
for the purpose of bodily assault or defense,” which are
thus “dangerous weapons per se,” and items that “be-
come dangerous weapons only when they are used or
carried for use as weapons.” Id. The Court concluded
that “[t]he legislature certainly did not intend to in-
clude as a dangerous weapon the ordinary type of
jackknife commonly carried by many people, unless
there was evidence establishing that it was used, or was
carried for the purpose of use, as a weapon.” Id. at 506.
In People v Brown, 406 Mich 215, 222; 277 NW2d 155
(1979), the Supreme Court reiterated that
where a defendant is charged with carrying a “dangerous
weapon” contrary to MCL 750.227...,the burden is on
the prosecution to prove that the instrument... is a
dangerous weapon per se or that the instrument was used,
or intended for use, as a weapon for bodily assault or
defense.
Because they construed the concealed-weapons statute,
MCL 750.227, not the statute prohibiting carrying a
dangerous weapon with unlawful intent, MCL 750.226,
or an earlier version thereof, Brown and Vaines are
instructive, but not dispositive.
2010] P
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But in Acrey v Dep’t of Corrections, 152 Mich App
554, 558; 394 NW2d 415 (1986), this Court, quoting the
trial court’s decision that cited Brown, 406 Mich at
222-223, stated, “ ‘To support the weapon element of
either of these charges requires finding that an article
or instrument not included in the statute’s list of per se
weapons must have been used or carried for use as a
weapon or for purposes of assault or defense.’ ” Acrey
thus stated that, for both MCL 750.226 and MCL
750.227, the statutorily specified weapons were danger-
ous per se and that any other potentially dangerous
item carried for assaultive or defensive use likewise
satisfied those respective statutes. But Brown, in fact,
was not construing MCL 750.226, and so Acrey’s state-
ment that Brown’s dictates covered it was overreach-
ing.
Brown quoted MCL 750.227 to present its list of
prohibited weapons: “ ‘dagger, dirk, stiletto or other
dangerous weapon except hunting knives adapted
and carried as such....’”Brown, 406 Mich at 219.
Brown then quoted approvingly from Vaines in listing
several examples, beyond those set forth in MCL
750.227, of instruments “ ‘generally recognized’ ” as
dangerous weapons per se: “ ‘Daggers, dirks, stilet-
tos, metallic knuckles, slungshots, pistols, and simi-
lar articles, designed for the purpose of bodily assault
or defense....’”Brown, 406 Mich at 220-221, quot-
ing Vaines, 310 Mich at 505. By including in the list
items other than those set forth in MCL 750.227 that
were also dangerous weapons per se, Vaines, and thus
Brown, treated the statutory list as merely instruc-
tive.
In People v Smith, 393 Mich 432, 436; 225 NW2d 165
(1975), our Supreme Court refined the list by applying
the principle of ejusdem generis,
506 288 M
ICH
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500 [May
whereby in a statute in which general words follow a
designation of particular subjects, the meaning of the
general words will ordinarily be presumed to be and
construed as restricted by the particular designation and as
including only things of the same kind, class, character or
nature as those specifically enumerated.
Accordingly, the phrase “or other dangerous weapon
except hunting knives adapted and carried as such”
after a list of stabbing weapons is limited to only
additional stabbing weapons. Id., citing MCL 750.227.
We are therefore of the opinion that because, as
Smith noted, MCL 750.226 expressly requires proof of
intent to use a weapon unlawfully, Smith, 393 Mich at
437, but MCL 750.227 does not, their respective lists of
weapons should be interpreted differently.
Because MCL 750.227 presents an incomplete list of
instruments generally recognized as dangerous weap-
ons per se, along with the etcetera “any other danger-
ous weapon,” some inquiry into intent is needed to
determine whether an instrument that is not a danger-
ous weapon per se nonetheless constitutes a dangerous
weapon for purposes of that statute. See Brown, 406
Mich at 222-223; Acrey, 152 Mich App at 558. Concealed
carrying of weapons that are dangerous per se, then, is
prohibited without regard to intent, while concealed
carrying of other weapons is prohibited only when
carried with assaultive or defensive intent.
In contrast, MCL 750.226 begins with an unlawful
intent element, followed by a list of what are dangerous
weapons per se, and thus, no separate consideration of
intent should inform the general provision “any other
dangerous or deadly weapon or instrument....” Be-
cause MCL 750.227 sets forth dangerous weapons, in
specific and then general terms, but no intent element,
a person’s intent in possessing a potential weapon that
is not dangerous per se is a factor in determining
2010] P
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whether that object qualifies for purposes of that stat-
ute. But because MCL 750.226 expressly targets the
combination of an unlawful intent with its list of what
are dangerous weapons per se, the carrier’s intent is not
a factor in determining whether an instrument carried
is covered by that statute. For purposes of the latter,
then, the principle of ejusdem generis suggests that the
phrase “any other dangerous or deadly weapon or
instrument,” following as it does a list of varied weap-
ons that have in common that they are all dangerous
per se, includes only other dangerous weapons per se.
The specification of knives with blades more than three
inches in length, then, indicates that they are included
as dangerous weapons per se, but knives with shorter
blades are not included because they are not dangerous
weapons per se.
MCL 750.227 makes an exception for a “hunting
knife adapted and carried as such” in apparent recog-
nition that hunting knives are dangerous per se but
nonetheless manufactured and normally used for pur-
poses other than aggression against humans. MCL
750.226 needs to set forth no such exception, because it
specifically prohibits the carrying of dangerous weap-
ons, no doubt including hunting knives, with unlawful
intent. Further, in specifying unlawful intent, MCL
750.226 does not by its own terms prohibit the carrying
of any weapon for purposes of self-defense.
The prosecution, citing Vaines, argues that the
length of a knife’s blade is not dispositive of the
question of its dangerousness. The prosecution, in fact,
seems to suggest that the length of the blade is of no
consequence. But when construing a statute, a court
should presume that every word has some meaning.
People v Seiders, 262 Mich App 702, 705; 686 NW2d 821
(2004). Accordingly, a construction rendering some part
508 288 M
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nugatory or surplusage should be avoided. Id. Further,
when a specific statutory provision conflicts with a
related general one, the specific one controls. People v
Houston, 237 Mich App 707, 714; 604 NW2d 706 (1999).
Hence, the statute’s specification of three-inch knife
blades must be given force. But that force is wholly
lacking if the statute criminalizes the carrying of any
knife when carried for unlawful reasons. To put it
another way, reading the statute as targeting any knife
carried for an unlawful purpose would render the
three-inch specification surplusage or nugatory. See
Seiders, 262 Mich App at 705.
For these reasons, we hold that in prosecutions under
MCL 750.226 involving a knife, an element of the crime
is that the knife’s blade be more than three inches in
length. The lack of such proof in this instance invali-
dates the conviction. Acquittal, not retrial, is the proper
remedy, as dictated by double jeopardy principles.
People v Thompson, 424 Mich 118, 130; 379 NW2d 49
(1985).
III
Defendant also argued that the prosecutor commit-
ted misconduct and denied defendant a fair trial by
going outside the scope of the evidence and arguing
matters not on record about the knife. Defendant did
not object to the prosecutor’s comments during trial;
thus, his argument on appeal is not preserved. A
defendant pressing an unpreserved claim of error must
show a plain error that affected substantial rights, and
the reviewing court should reverse only when the
defendant is actually innocent or the error seriously
affected the fairness, integrity, or public reputation of
judicial proceedings. People v Carines, 460 Mich 750,
763; 597 NW2d 130 (1999).
2010] P
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In closing argument, the prosecutor stated:
[W]ell, why did you have the knife? Well, now I got to
come up with a reason. Some people carry a knife and use
it every day.
This knife’s never been used for anything. The blade is
as pristine—there’s not a wear of paint off the blade
anywhere. That’s as sharp as the day it was sold. Ninety
days, 10 boxes a day, there would be tape—sticky tape all
over the outside of this knife. And we don’t clean the
evidence when we get it. We don’t buff it up. We present it
to you the way it was taken that night. There’s not a fleck
on that knife. That knife is as sharp as the day it came out
of the manufacturer’s warehouse, and there’s not so much
as a scratch or a wear of paint from the 90 days times 10.
I didn’t do my math. You guys can do that in the jury room.
How many boxes has this thing supposedly opened?
Defendant specifically makes issue of the prosecu-
tor’s comments admonishing the jury that the knife was
too sharp, or otherwise unworn, to have been used in
the benign ways defendant had described. “Prosecutors
may not make a statement of fact to the jury that is
unsupported by the evidence, but they are free to argue
the evidence and all reasonable inferences arising from
it as they relate to the theory of the case.” People v
Schutte, 240 Mich App 713, 721; 613 NW2d 370 (2000),
criticized on other grounds in Crawford v Washington,
541 US 36, 64; 124 S Ct 1354; 158 L Ed 2d 177 (2004).
When defendant took the stand in his own defense,
the prosecutor elicited from him that he had owned the
knife for about three months, that he carried it for such
purposes as cutting boxes open, and that he typically
cut open about 10 boxes a day. The exchange continued
as follows:
Q. So three months, that’s 90 days, times 10; lot a [sic]
boxes you’ve cut open with that knife?
510 288 M
ICH
A
PP
500 [May
A. Yeah.
Q. I’m looking at this knife, and you show me one mark
on this knife shows me any wear.
A. Right here, whole knife.
Q. You’re saying that knife’s all worn?
A. No.
Q. Well, when you’re cutting—but when you’re cutting
boxes, you’re going to dull the knife over three months?
A. Tape.
Q. Huh?
A. Cutting tape on boxes. You know, I ain’t cutting boxes
I’m cutting tape.
Q. Well, I mean 90 days of 10 boxes a day, this knife’s
going to show some wear, something; right?
A. Mm-hmm.
Q. Are you telling me this knife shows a fleck of wear on
it anywhere?
A. Let me see.
Q. I’m not going to hand it to you. If I’m not going to
hand it to the jury, I’m sure not going to hand it to you. Do
you see any wear on it?
A. No.
Q. None.
This exchange thus did put into evidence the degree
of wear the knife displayed. Further, eliciting that the
knife displayed no signs of wear could reasonably be
taken as eliciting that the knife appeared sharp. Al-
though the best way to ascertain a knife’s sharpness is
to try to cut with it, sharpness may also be adjudged by
feeling the blade or, even if to a lesser extent, by visual
observation—the latter of which was available in court
to defendant, and apparently also to the jury. The
prosecutorial argument with which defendant takes
2010] P
EOPLE V
P
ARKER
511
issue, then, was sufficiently reflective of matters in
evidence as to not constitute plain error. See Schutte,
240 Mich App at 721.
Moreover, to the extent that the prosecutor may have
stepped into argument beyond what the evidence prop-
erly allowed, the trial court’s instructions that the jury
decide the case solely on the basis of the evidence and
that the statements of counsel were not evidence should
have cured any prejudice. “It is well established that
jurors are presumed to follow their instructions.”
People v Graves, 458 Mich 476, 486; 581 NW2d 229
(1998). For these reasons, we reject this claim of error.
IV
In conclusion, we hold that by failing to present
evidence that the knife in question had a blade of at
least three inches in length, the prosecution did not
present sufficient evidence to support defendant’s con-
viction of carrying a dangerous weapon with unlawful
intent, MCL 750.226. With regard to his prosecutorial
misconduct argument, defendant failed to establish any
plain error.
Vacated in part, affirmed in part, and remanded for
correction of the judgment of sentence with respect to
the vacated conviction. We do not retain jurisdiction.
512 288 M
ICH
A
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500 [May
PEOPLE
V
KERN
Docket No. 289478. Submitted May 6, 2010, at Detroit. Decided May 25,
2010, at 9:00 a.m.
Sean M. Kern pleaded guilty in the Macomb Circuit Court of
second-degree criminal sexual conduct involving a victim under 13
years of age. The trial court, Donald G. Miller, J., sentenced him to
five years’ probation, with 365 days to be served in jail, and
ordered defendant to register as required by the Sex Offenders
Registration Act, MCL 28.721 et seq. The probation officer as-
signed to defendant then requested that the trial court amend the
judgment of sentence to require lifetime electronic monitoring.
Following a resentencing hearing, the trial court denied the
request, concluding that such monitoring applies only to persons
who have been released on parole or from prison, or both. The
Court of Appeals granted the prosecution’s delayed application for
leave to appeal the trial court’s refusal to sentence defendant to
lifetime electronic monitoring.
The Court of Appeals held:
1. Standing alone, MCL 750.520c and MCL 750.520n both
indicate that all defendants convicted of second-degree criminal
sexual conduct for conduct committed by an individual 17 years of
age or older against an individual less than 13 years old are subject
to lifetime electronic monitoring. MCL 750.520c(2)(b) states that
defendants shall be sentenced to lifetime electronic monitoring
under MCL 750.520n, however, and MCL 750.520n(1) states that
defendants shall be sentenced to lifetime monitoring as provided
under MCL 791.285. Therefore, the scope of the requirement of
lifetime electronic monitoring is limited to the dictates of MCL
791.285.
2. MCL 791.285(1) requires the Department of Corrections,
through the lifetime electronic monitoring program, to implement
a system of monitoring individuals released on parole or from
prison, or both, who are sentenced to lifetime electronic monitor-
ing. And MCL 791.285(1)(a) provides that the monitoring is to
occur from the time the individual is released on parole or from
prison until the time of the individual’s death. Therefore, under
MCL 791.285, the department must implement the program only
2010] P
EOPLE V
K
ERN
513
for those persons who are released on parole or from prison, or
both. Because only persons who are sentenced to prison can be
released from prison or released on parole, such monitoring does
not apply to persons placed on probation or sent to jail. The trial
court properly determined defendant is not subject to lifetime
electronic monitoring.
Affirmed.
C
RIMINAL
L
AW —
S
ECOND
-D
EGREE
C
RIMINAL
S
EXUAL
C
ONDUCT —
S
ENTENCES —
L
IFETIME
E
LECTRONIC
M
ONITORING
.
A defendant who is convicted of second-degree criminal sexual
conduct for conduct committed while the defendant was 17 years
of age or older against an individual less than 13 years old and who
is sentenced to probation or a jail term, or both, may not be
sentenced to lifetime electronic monitoring; only persons who are
released on parole or from prison, or both, may be sentenced to
lifetime electronic monitoring (MCL 750.520c, 750.520n, 791.285).
Michael A. Cox, Attorney General, B. Eric Restuccia,
Solicitor General, Eric J. Smith, Prosecuting Attorney,
and Jean M. Femminineo, Assistant Prosecuting Attor-
ney, for the people.
Donald R. Cook for defendant.
Before: M
ETER
,P.J., and M
URRAY
and B
ECKERING
,JJ.
P
ER
C
URIAM
. This case involves the interplay of pro-
visions in the Michigan Penal Code, MCL 750.1 et seq.,
and the Corrections Code, MCL 791.201 et seq., pertain-
ing to lifetime electronic monitoring. Defendant
pleaded guilty of second-degree criminal sexual conduct
(CSC), MCL 750.520c(1)(a) (victim under 13 years of
age), arising out of a January 13, 2008, incident. The
trial court sentenced him to five years’ probation, with
365 days to be served in jail. Defendant was also ordered
to register as required by the Sex Offenders Registra-
tion Act (SORA), MCL 28.721 et seq. We granted the
prosecution’s delayed application for leave to appeal the
trial court’s refusal to sentence defendant to lifetime
514 288 M
ICH
A
PP
513 [May
electronic monitoring and, more specifically, the court’s
conclusion that such monitoring applies only to persons
who have been released on parole or from prison, or
both. We affirm.
I. PERTINENT FACTS AND PROCEDURAL HISTORY
Defendant pleaded guilty to one count of second-
degree CSC pursuant to a plea agreement under which
the prosecution agreed to dismiss a second count of
second-degree CSC and an additional count of selling or
furnishing alcohol to a minor, MCL 436.1701(1), and to
recommend that defendant receive a five-year proba-
tionary sentence with no more than one year to be
served in jail. The trial court also granted the prosecu-
tion’s motion to amend the information to state that a
second-degree CSC conviction carries an additional
penalty of lifetime electronic monitoring. At the sen-
tencing hearing, the court adopted the prosecution’s
recommended sentence of five years’ probation, with
365 days to be served in jail.
The probation officer assigned to defendant subse-
quently requested that the trial court amend the judg-
ment of sentence to require lifetime electronic monitor-
ing. At a resentencing hearing, the court denied the
request. The court considered the statutes at issue, an
opinion by Kent Circuit Court Judge Dennis Kolenda in
an unrelated case, which held that lifetime electronic
monitoring does not apply to probationers under the
current statutory scheme, and the legislative analysis
undertaken by the prosecution. The trial court took
note of the severity of the offense by commenting that
“I think we can all agree that the, we find any sexual
attack on a child 13 years or younger is an abhorrent
attack against not only the child, but against society
and needs to be punished severely. There’s no question
2010] P
EOPLE V
K
ERN
515
about that.” The court expressed concerns, however,
about funding the monitoring and the issue of lifetime
sanctions. In conclusion, the court stated:
I think the whole thing is in a tremendous state of flux.
Certainly we appreciate your efforts to get through this
cloud, but I have to balance your analysis against Judge
Kolenda’s analysis.
I don’t think, I don’t think anybody in the state at this
point is prepared to either affirm or deny, absent another
look at these various positions. It is very clouded at this
point.
So at this point I’m going to deny the motion to install
this lifetime tether without prejudice, and we’ll take an-
other look at it and you can bring it later as well.
The trial court subsequently entered a sentence dispo-
sition specifying that defendant is not subject to life-
time electronic monitoring.
II. STANDARD OF REVIEW AND RULES
FOR STATUTORY CONSTRUCTION
Whether defendant is subject to the statutory require-
ment of lifetime electronic monitoring involves statutory
construction, which is reviewed de novo. People v Osan-
towski, 481 Mich 103, 107; 748 NW2d 799 (2008).
“[T]he primary goal of statutory construction is to give
effect to the Legislature’s intent.” Id. (quotation marks
and citation omitted). “The statute’s words are the most
reliable indicator of the Legislature’s intent and should be
interpreted based on their ordinary meaning and the
context within which they are used in the statute.” People
v Lowe, 484 Mich 718, 721-722; 773 NW2d 1 (2009). An
unambiguous statute is enforced as written. People v
Holder, 483 Mich 168, 172; 767 NW2d 423 (2009). It is
only when statutory language is ambiguous that a court
may look outside the statute to ascertain legislative in-
516 288 M
ICH
A
PP
513 [May
tent. Id. A statutory provision is ambiguous if it irrecon-
cilably conflicts with another provision or is equally sus-
ceptible to more than one meaning. People v Gardner, 482
Mich 41, 50 n 12; 753 NW2d 78 (2008).
In general, “[s]tatutes that address the same subject or
share a common purpose are in pari materia and must be
read together as a whole.” People v Harper, 479 Mich 599,
621; 739 NW2d 523 (2007). No one provision may be
viewed in a vacuum. See Jansson v Dep’t of Corrections,
147 Mich App 774, 777; 383 NW2d 152 (1985). “The object
of the in pari materia rule is to give effect to the legislative
purpose as found in harmonious statutes.” People v Webb,
458 Mich 265, 274; 580 NW2d 884 (1998).
III. APPLICABLE LAW
The Michigan Penal Code expressly provides for its
provisions to be “construed according to the fair import
of their terms, to promote justice and to effect the
objects of the law.” MCL 750.2. Before August 2006,
MCL 750.520c(2) provided that a second-degree CSC
conviction was punishable by “imprisonment for not
more than 15 years.” As amended by 2006 PA 171,
effective August 28, 2006, subsection (2) provides:
Criminal sexual conduct in the second degree is a felony
punishable as follows:
(a) By imprisonment for not more than 15 years.
(b) In addition to the penalty specified in subdivision (a),
the court shall sentence the defendant to lifetime electronic
monitoring under section 520n if the violation involved
sexual contact committed by an individual 17 years of age
or older against an individual less than 13 years of age.
[
1
]
[MCL 750.520c(2) (emphasis added).]
1
A similar provision was added by 2006 PA 169 to MCL 750.520b, the
statute governing first-degree CSC. MCL 750.520b(2)(d). Because a
defendant convicted of first-degree CSC may not be sentenced to proba-
2010] P
EOPLE V
K
ERN
517
Section 520n of the Michigan Penal Code, MCL
750.520n, was added by 2006 PA 171, effective August
28, 2006. MCL 750.520n(1) provides:
A person convicted under [MCL 750.520b or 750.520c]
for criminal sexual conduct committed by an individual 17
years old or older against an individual less than 13 years
of age shall be sentenced to lifetime electronic monitoring as
provided under section 85 of the corrections code of 1953,
1953 PA 232, MCL 791.285. [Emphasis added.]
The Department of Corrections was created under
the Corrections Code. MCL 791.201. Its exclusive juris-
diction includes, but is not limited to, probation officers,
the administration of probation orders, paroles, penal
institutions, and the “lifetime electronic monitoring
program established under [MCL 791.285].” MCL
791.204. The lifetime electronic monitoring program
was established by 2006 PA 172, effective August 28,
2006. MCL 791.285 provides:
(1) The lifetime electronic monitoring program is estab-
lished in the department. The lifetime electronic monitor-
ing program shall implement a system of monitoring
individuals released from parole, prison, or both parole and
prison who are sentenced by the court to lifetime electronic
monitoring. The lifetime electronic monitoring program
shall accomplish all of the following:
(a) By electronic means, track the movement and loca-
tion of each individual from the time the individual is
released on parole or from prison until the time of the
individual’s death.
(b) Develop methods by which the individual’s move-
ment and location may be determined, both in real time
and recorded time, and recorded information retrieved
upon request by the court or a law enforcement agency.
tion, however, the concerns addressed herein do not apply to that statute.
See People v Nyx, 479 Mich 112, 117 n 8; 734 NW2d 548 (2007); People v
Wells, 138 Mich App 450, 451; 360 NW2d 219 (1984).
518 288 M
ICH
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513 [May
(2) An individual who is sentenced to lifetime electronic
monitoring shall wear or otherwise carry an electronic
monitoring device as determined by the department under
the lifetime electronic monitoring program in the manner
prescribed by that program and shall reimburse the depart-
ment or its agent for the actual cost of electronically
monitoring the individual.
(3) As used in this section, “electronic monitoring”
means a device by which, through global positioning sys-
tem satellite or other means, an individual’s movement and
location are tracked and recorded. [Emphasis added.]
IV. ANALYSIS
Considering MCL 750.520c, MCL 750.520n, and
MCL 791.285 together, we agree with the trial court
that lifetime electronic monitoring applies only to per-
sons who have been released on parole or from prison,
or both, and, therefore, does not apply to defendant,
who was sentenced to five years’ probation, with 365
days to be served in jail.
Standing alone, the terms of MCL 750.520c and MCL
750.520n indicate that all defendants convicted of
second-degree CSC for conduct committed by an indi-
vidual 17 years of age or older against an individual less
than 13 years old are subject to lifetime electronic
monitoring, without exception. Both statutes unam-
biguously state that such defendants shall be sentenced
to lifetime electronic monitoring. MCL 750.520c(2)(b);
MCL 750.520n(1). The term “shall” in a statute gener-
ally indicates a mandatory, rather than permissive,
duty. People v Francisco, 474 Mich 82, 87; 711 NW2d 44
(2006).
But MCL 750.520c(2)(b) and 750.520n(1) are only
portions of longer statutes. When one statute explicitly
refers to provisions of another statute, those provisions
are applicable and binding as though they had been
2010] P
EOPLE V
K
ERN
519
incorporated and reenacted in the statute under consid-
eration. Attorney General ex rel Dep’t of Natural Re-
sources v Sanilac Co Drain Comm’r, 173 Mich App 526,
531; 434 NW2d 181 (1988). The referenced provisions
must be treated as though they are part of the statute at
issue. Id. MCL 750.520c(2)(b) states that defendants
shall be sentenced to lifetime electronic monitoring
“under section 520n,” and MCL 750.520n(1) states that
defendants “shall be sentenced to lifetime electronic
monitoring as provided under section 85 of the correc-
tions code of 1953, 1953 PA 232, MCL 791.285.” Those
phrases define the scope of the requirement of lifetime
electronic monitoring, meaning that the requirement is
limited to the dictates of MCL 791.285. See People v
Perks (On Remand), 259 Mich App 100, 106; 672 NW2d
902 (2003); Sanilac Co Drain Comm’r, 173 Mich App at
531.
MCL 791.285(1) requires the Department of Correc-
tions, through the lifetime electronic monitoring pro-
gram, to “implement a system of monitoring individuals
released from parole, prison, or both parole and prison
who are sentenced by the court to lifetime electronic
monitoring.” Likewise, MCL 791.285(1)(a) provides
that the monitoring is to occur “from the time the
individual is released on parole or from prison until the
time of the individual’s death.” Under MCL 791.285,
the Department of Corrections must implement a life-
time electronic monitoring program only for those
persons who are released on parole or from prison, or
both. Only persons who are sentenced to prison can be
released from prison or released on parole. Accordingly,
as will be explained further, such monitoring does not
apply to persons put on probation or sent to jail.
The Legislature often uses the term “imprisonment”
to mean confinement in jail or confinement in prison.
520 288 M
ICH
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PP
513 [May
People v Spann, 469 Mich 904 (2003). But it is clear that
the terms “jail” and “prison” have distinct legal mean-
ings. See Kent Co Prosecutor v Kent Co Sheriff, 425
Mich 718, 730 n 10; 391 NW2d 341 (1986). A “jail” is
defined in the Corrections Code as “a facility that is
operated by a local unit of government....” MCL
791.262(1)(c). “Prison” is synonymous with a peniten-
tiary, not a city or county jail. See People v Harper,83
Mich App 390, 398; 269 NW2d 470 (1978).
Similarly, the terms “probation” and “parole” have
distinct legal meanings. Probation is, by definition, a
matter of grace imposed by a sentencing court. Harper,
479 Mich at 626. Under the Code of Criminal Proce-
dure, MCL 760.1 et seq., probation is available in
all prosecutions for felonies, misdemeanors, or ordinance
violations other than murder, treason, criminal sexual
conduct in the first or third degree, armed robbery, or
major controlled substance offenses, if the defendant has
been found guilty upon verdict or plea and the court
determines that the defendant is not likely again to engage
in an offensive or criminal course of conduct and that the
public good does not require that the defendant suffer the
penalty imposed by law....[MCL 771.1(1).]
It is treated as an intermediate sanction for purposes of
the sentencing guidelines, with “intermediate sanction”
defined in MCL 769.31(b) as “probation or any sanc-
tion, other than imprisonment in a state prison or state
reformatory....” Parole matters, by contrast, fall
within the Department of Corrections’ exclusive juris-
diction, subject to limited judicial review. Hopkins v
Parole Bd, 237 Mich App 629, 646; 604 NW2d 686
(1999). “Parole is a conditional release; a paroled pris-
oner is technically still in the custody of the Depart-
ment of Corrections, which is executing the sentence
imposed by the court.” People v Raihala, 199 Mich App
577, 579; 502 NW2d 755 (1993).
2010] P
EOPLE V
K
ERN
521
Further, the Legislature has repeatedly demonstrated
its ability to use the terms “probation” and “parole” when
it intends that a statute apply to both. This is evident from
the Legislature’s grant of exclusive jurisdiction to the
Department of Corrections in the Corrections Code with
respect to both “paroles” and the “administration of all
orders of probation.” MCL 791.204(a) and (b). See also
MCL 333.5129(11) (providing for the allocation of pay-
ments if “an individual is ordered to pay a combination of
fines, costs, restitution, assessments, probation or parole
supervision fees, or other payments upon conviction”);
MCL 750.110a(4)(b)(i) and (ii) (providing that the ele-
ments of one form of third-degree home invasion include
violation of a “probation term or condition” or “parole
term or condition”); MCL 769.1a(11) (stating that “[i]f the
defendant is placed on probation or paroled or the court
imposes a conditional sentence under [MCL 769.3], any
restitution ordered under this section shall be a condition
of that probation, parole, or sentence”).
In MCL 791.285, the Legislature used the terms
“parole” and “prison” and did not use the terms “pro-
bation” or “jail.” A court may not engraft on a statutory
provision a term that the Legislature might have added
to a statute but did not. People v Jahner, 433 Mich 490,
504; 446 NW2d 151 (1989). The Legislature’s distinc-
tion between “parole” and “probation,” and “prison”
and “jail,” must be respected. Cf. People v Poole, 218
Mich App 702, 712; 555 NW2d 485 (1996) (explaining
that the legislative distinction between “conviction”
and terms such as “commit” or “violation” in repeat
offender statutes must be respected). MCL 750.520n(1)
of the Michigan Penal Code directs that defendants
shall be sentenced to lifetime electronic monitoring as
provided under MCL 791.285 of the Corrections Code.
Because the latter statute only provides for the imple-
522 288 M
ICH
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513 [May
mentation of a lifetime electronic monitoring program
for those defendants who are released on parole or from
prison, or both, defendants given probation or sent to
jail are not subject to such monitoring.
Because there is no ambiguity in the statutes at
issue, we must decline to consider the legislative analy-
sis on which the prosecution relies on appeal. A “resort
to legislative history of any form is proper only where a
genuine ambiguity exists in the statute. Legislative
history cannot be used to create an ambiguity where
one does not otherwise exist.” In re Certified Question,
468 Mich 109, 115 n 5; 659 NW2d 597 (2003). In any
event, “not all legislative history is of equal value....”
Id. As explained in Gardner, 482 Mich at 58:
Some historical facts may allow courts to draw reason-
able inferences about the Legislature’s intent because the
facts shed light on the Legislature’s affirmative acts. For
instance, we may consider that an enactment was intended
to repudiate the judicial construction of a statute, or we
may find it helpful to compare multiple drafts debated by
the Legislature before settling on the language actually
enacted. Other facts, however, such as staff analyses of
legislation, are significantly less useful because they do not
necessarily reflect the intent of the Legislature as a body.
The prosecution relies on a staff analysis of four House
bills to amend provisions of the Michigan Penal Code
and the Corrections Code, Senate Legislative Analysis,
HB 5421 (Substitute H-2), HB 5422 (Substitute H-2),
HB 5531 (Substitute H-3), and HB 5532 (Substitute
H-1), May 9, 2006. The analysis states that it “was
prepared by nonpartisan Senate staff for use by the
Senate in its deliberations and does not constitute an
official statement of legislative intent.” Id. at 5. Argu-
ably, the analysis assumes that lifetime electronic moni-
toring would apply to probationers convicted of second-
degree CSC. It states, in part:
2010] P
EOPLE V
K
ERN
523
In the case of an offender convicted of second-degree
CSC and sentenced to a term of probation, it is unclear
whether the lifetime electronic monitoring sentence would
run concurrently with the term of probation, or consecu-
tively to the term of probation. The minimum probation
term for an offender convicted of second degree CSC is five
years. If the lifetime electronic monitoring sentence ran
after imprisonment and probation sentences, the DOC
would not incur the cost of operating the monitoring
program until the first offender convicted after the effec-
tive date of the bills was released from imprisonment or
probation. [Id. at 4.]
Examined in the context of the statutory scheme, the
lack of clarity noted in the analysis appears to reflect
nothing more than that the lifetime electronic monitor-
ing program established by MCL 791.285 contains no
provision for probationers and, hence, no startup date
for monitoring.
The prosecution persuasively argues that persons
convicted of second-degree CSC for conduct committed
by an individual 17 years of age or older against an
individual less than 13 years old and sentenced to
probation or jail time present a similar, if not the same,
risk to the public as those sentenced to time in prison
and, therefore, should be subject to lifetime electronic
monitoring. But “arguments that a statute is unwise or
results in bad policy should be addressed to the Legis-
lature.” People v Kirby, 440 Mich 485, 493-494; 487
NW2d 404 (1992). Whether the Legislature’s actions
are due to concerns about taxing county resources, a
strategic decision that crimes resulting in sentences to
jail or probation
2
do not merit the time and expense
involved with lifetime electronic monitoring in addition
to maintaining the defendant’s listing on the Michigan
2
As stated earlier, a trial court may grant probation if the court
determines that the defendant is “not likely again to engage in an
524 288 M
ICH
A
PP
513 [May
public sex offender registry, or a mere drafting over-
sight is not for us to decide. While the Legislature may
deem it necessary to make changes to the statutory
scheme to provide for the monitoring of persons sen-
tenced to probation or jail time, such changes are not
within the province of the judicial branch. Because this
is a particularly important matter of public interest, we
urge the Legislature to review whether it was indeed
the intent of that body to exclude from lifetime elec-
tronic monitoring individuals convicted of second-
degree criminal sexual conduct who are sentenced to
probation or jail time.
V. CONCLUSION
Because MCL 791.285 only provides for the imple-
mentation of lifetime electronic monitoring of persons
who have been released on parole or from prison, or
both, defendant, who was sentenced to five years’
probation, with 365 days to be served in jail, is not
subject to lifetime electronic monitoring.
Affirmed.
offensive or criminal course of conduct” and “the public good does not
require that the defendant suffer the penalty imposed by law....”MCL
771.1(1).
2010] P
EOPLE V
K
ERN
525
PATTERSON v CITIFINANCIAL MORTGAGE CORPORATION
Docket No. 287370. Submitted April 14, 2010, at Detroit. Decided May
25, 2010, at 9:05 a.m.
Jacqueline Patterson and others brought an action in the Genesee
Circuit Court against CitiFinancial Mortgage Corporation and
others, including ABN AMRO and several of its subsidiaries.
CitiFinancial was dismissed by stipulation. With regard to ABN
AMRO and its subsidiaries (collectively defendant), plaintiffs
alleged that defendant benefited from misrepresentations and
fraudulent statements made to plaintiffs by Concept One Mort-
gage Corporation when plaintiffs entered into mortgage transac-
tions with defendant in which the loans were originated and
brokered by Concept One. Plaintiffs alleged that Concept One was
not licensed or registered under, and failed to comply with, a
number of state statutes and that defendant failed to properly
oversee Concept One and was unjustly enriched because of the
transactions. The court, Archie L. Hayman, J., granted defen-
dant’s motion for summary disposition, ruling that plaintiffs’
claims were preempted by federal law. Plaintiffs appealed.
The Court of Appeals held:
1. Federal law may expressly or impliedly preempt state law,
and federal regulations have the same preemptive effect as federal
statutes. Express preemption occurs when federal law explicitly
indicates that a specific state law is preempted. The fact that
plaintiffs’ allegations against defendant were based on the conduct
of a third party working for defendant did not alter the preemptive
effect of the federal regulations at issue. The focus of the preemp-
tion inquiry is on the activity being regulated rather than the actor
that is being regulated. Defendant’s use of Concept One’s services
was authorized by a federal regulation, 12 CFR 7.1004, and
Concept One’s conduct was done in furtherance of defendant’s
power as a national bank to make real estate loans. Defendant is
entitled to the protection afforded by the preemption doctrine
regardless of the fact that plaintiffs’ claims are based on alleged
misconduct by Concept One.
2. Under 12 CFR 34.4(a)(1) and (10), defendant was broadly
permitted to make real estate loans without regard to state laws
526 288 M
ICH
A
PP
526 [May
governing licensing or registration or the manner in which its
mortgages are originated or processed. To the extent that plaintiffs’
claims were based on Concept One’s failure to observe Michigan
licensing and registration statutes in the initiation and processing of
the mortgages at issue, they were expressly preempted. Plaintiffs’
claims based on the common law, including fraud, misrepresentation,
and unjust enrichment, were similarly preempted under 12 CFR
34.4(b)(1), (2), and (9) because if successfully pursued, they would
have more than an incidental effect on the exercise of defendant’s
federally granted real estate lending powers.
Affirmed.
1. B
ANKS AND
B
ANKING —
F
EDERAL
P
REEMPTION —
N
ATIONAL
B
ANKS —
A
FFILIATES
AND
S
UBSIDIARIES OF
N
ATIONAL
B
ANKS —
S
TATE AND
F
EDERAL
R
EGULA-
TION
.
A state law action against a national bank and its affiliates may be
preempted by federal law even though the allegations against the
national bank and its affiliates are based on the actions of a third
party working for the national bank; the focus of the preemption
inquiry is on the activity being regulated rather than the actor
that is being regulated.
2. B
ANKS AND
B
ANKING —
F
EDERAL
P
REEMPTION —
N
ATIONAL
B
ANKS —
A
FFILIATES
AND
S
UBSIDIARIES OF
N
ATIONAL
B
ANKS —
M
ORTGAGE
L
ENDING —
S
TATE
AND
F
EDERAL
R
EGULATION
.
Federal law permits a national bank to make real estate loans
without regard to state laws governing licensing and registration
or the manner in which its mortgages are originated or processed;
an action based on the failure of independent agents working for a
national bank to observe Michigan licensing and registration
statutes in the initiation and processing of mortgages is expressly
preempted (12 CFR 34.4[a][1], [10]).
3. B
ANKS AND
B
ANKING —
F
EDERAL
P
REEMPTION —
N
ATIONAL
B
ANKS —
A
FFILIATES
AND
S
UBSIDIARIES OF
N
ATIONAL
B
ANKS —
M
ORTGAGE
L
ENDING —
F
RAUD —
M
ISREPRESENTATION —
U
NJUST
E
NRICHMENT
.
A common-law action for fraud, misrepresentation, or unjust enrich-
ment based on the actions of independent agents working for a
national bank is preempted by federal law (12 CFR 34.4[b][1], [2],
[9]).
Constitutional Litigation Associates, P.C. (by Hugh M.
Davis, Jr.), and Attorneys Against Predatory Lending,
PLC (by Robert C. Horvath), for Jacqueline Patterson and
others.
2010] P
ATTERSON V
C
ITI
F
INANCIAL
M
TG
C
ORP
527
RJ Landau Partners PLLC (by Richard J. Landau
and Kristen M. Tsangaris) for ABN AMRO, Standard
Federal Bank, LaSalle Bank, and Interfirst Wholesale
Mortgage Lending.
Before: B
ANDSTRA
,P.J., and B
ORRELLO
and S
HAPIRO
,JJ.
B
ANDSTRA
,P.J. Plaintiffs brought this action against
ABN AMRO (a national bank) and its subsidiaries
(defendant), seeking damages arising out of mortgages
that were allegedly initiated by independent agents
working for defendant who were not properly licensed
under state law.
1
The trial court granted summary
disposition to defendant, concluding that this action is
preempted by federal law, the National Bank Act, and
attendant regulations. We agree with that conclusion,
and we affirm.
Defendant brought its motion for summary disposition
under MCR 2.116(C)(7), arguing that plaintiffs’ claim is
barred under the preemption doctrine. We review de novo
the trial court’s decision granting that motion. Grimes v
Dep’t of Transp, 475 Mich 72, 76; 715 NW2d 275 (2006).
Defendant’s motion was also brought under MCR
2.116(C)(8), which bars claims for which no relief can be
granted, in this case because of federal preemption. Our
review of the trial court’s decision granting summary
disposition under this rule is also de novo. Teel v
Meredith, 284 Mich App 660, 662; 774 NW2d 527 (2009).
With respect to either basis for summary disposition, we
accept plaintiffs’ allegations as true and must determine
whether the claims based on those allegations are barred
under the federal preemption doctrine. Adair v Michigan,
1
Defendant CitiFinancial Mortgage was dismissed from this action by
stipulation. References in this opinion to “defendant” are to ABN AMRO
and its subsidiaries.
528 288 M
ICH
A
PP
526 [May
470 Mich 105, 119; 680 NW2d 386 (2004); Fane v Detroit
Library Comm, 465 Mich 68, 74; 631 NW2d 678 (2001).
The allegations necessary for consideration of the
preemption question can be briefly stated. Plaintiffs
alleged that they entered into mortgage transactions
with defendant in which the loans were originated and
brokered by Concept One Mortgage Corporation and
affiliated entities (collectively Concept One). Plaintiffs
alleged that Concept One was not licensed or registered
under, and failed to comply with, a number of state
statutes. Plaintiffs alleged that defendant failed to
properly oversee Concept One and that defendant ben-
efited from misrepresentations and fraudulent state-
ments made to plaintiffs by Concept One in initiating
and processing loan and mortgage applications. As a
result, plaintiffs sought damages from defendant,
claiming that defendant was unjustly enriched because
of the transactions.
The doctrine of preemption “is rooted in the Su-
premacy Clause of the United States Constitution,” and
to determine whether federal law preempts a state law
claim, we examine federal law. Betty v Brooks & Per-
kins, 446 Mich 270, 276; 521 NW2d 518 (1994). Federal
law may expressly or impliedly preempt state laws;
express preemption occurs when federal law explicitly
indicates that a specific state law is preempted. Fidelity
Fed S&L Ass’n v de la Cuesta, 458 US 141, 152-153; 102
S Ct 3014; 73 L Ed 2d 664 (1982). Further, “[f]ederal
regulations have no less pre-emptive effect than federal
statutes.” Id. at 153.
Administration of the federal statute at issue here,
the National Bank Act, 12 USC 21 et seq., has been
granted to the Office of the Comptroller of the Currency
(OCC). In pertinent part, regulations promulgated by
the OCC provide that
2010] P
ATTERSON V
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ITI
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INANCIAL
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TG
C
ORP
529
state laws that obstruct, impair, or condition a national
bank’s ability to fully exercise its Federally authorized real
estate lending powers do not apply to national banks.
Specifically, a national bank may make real estate loans...
without regard to state law limitations concerning:
(1) Licensing, registration,...[orthe]
***
(10) Processing [or] origination...of...mortgages[.]
[12 CFR 34.4(a)(1) and (10).]
Further, the Code of Federal Regulations provides that:
State laws on the following subjects are not inconsistent
with the real estate lending powers of national banks and
apply to national banks to the extent that they only inciden-
tally affect the exercise of national banks’ real estate lending
powers:
(1) Contracts;
(2) Torts;
***
(9) Any other law the effect of which the OCC deter-
mines to be incidental to the real estate lending operations
of national banks ....[12CFR34.4(b) (emphasis added).]
Virtually identical regulations, promulgated by the Of-
fice of Thrift Supervision (OTS) with respect to federal
savings associations, were recently considered by the
United States Court of Appeals for the Sixth Circuit in
State Farm Bank, FSB v Reardon, 539 F3d 336 (CA6,
2008). The Superintendent of the Ohio Division of Finan-
cial Institutions challenged the system by which State
Farm Bank marketed its mortgage products and services,
through an existing network of insurance agents, because
those agents were not licensed and did not otherwise
submit to regulation under a state statute.
530 288 M
ICH
A
PP
526 [May
Initially, the superintendent claimed that, while the
federal regulatory scheme might preempt application of
the Ohio statute to “State Farm Bank, its employees,
and its subsidiaries who engage in the solicitation and
marketing of mortgage products, the regulation does
not apply to State Farm Bank’s exclusive agents who
perform the same tasks on behalf of the bank.” Id.at
344-345. The Reardon court rejected that argument:
First, nothing in the text of [the regulation] indicates
that it only preempts state laws that directly regulate
federal savings associations. Rather, the regulation pro-
vides that it preempts laws “affecting the operations of
federal savings associations,” which indicates that the
scope of the regulation is much broader than the Superin-
tendent would have it. Second, the Superintendent’s posi-
tion is inconsistent with the Supreme Court’s decision in
Watters [v Wachovia Bank, NA, 550 US 1; 127 S Ct 1559;
167 L Ed 2d 389 (2007)].
The Court in Watters recently rejected an argument
similar to that advanced by the Superintendent today. See
Watters, [550 US at 17-18] 127 S.Ct. at 1570. The precise
issue in Watters was whether the National Banking Act and
regulations promulgated by the OCC preempted state
regulation of a national bank’s mortgage lending activities
where those activities were performed by a bank’s operat-
ing subsidiary. Id. at [7; 127 S Ct at] 1564. The Commis-
sioner of Insurance and Financial Services for the State of
Michigan argued in Watters that Wachovia Mortgage, a
Wachovia Bank operating subsidiary, was subject to Michi-
gan’s licensing and registration requirements. Id. at [9-10;
127 S Ct at] 1565. The Commissioner reasoned that federal
law did not preempt the application of the Michigan
requirements to Wachovia Mortgage because it was not a
national bank. Id. at [15; 127 S Ct at] 1569.
The Watters Court was unpersuaded by the Commis-
sioner’s narrow interpretation of federal banking law, and
we are likewise unpersuaded by the Superintendent’s
interpretation of [the regulation] in this case. According to
2010] P
ATTERSON V
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INANCIAL
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ORP
531
the Court in Watters, federal banking law preempted the
application of Michigan’s requirements to Wachovia Mort-
gage because “[w]e have never held that the preemptive
reach of [federal banking laws] extends only to a national
bank itself. Rather, in analyzing whether state law ham-
pers the federally permitted activities of a national bank,
we have focused on the exercise of a national bank’s
powers, not on its corporate structure.” Id. at [18; 127 S Ct
at] 1570. Further illustrating that, for preemption pur-
poses, it is the activity being regulated rather than the
actor who is being regulated that matters, the Court stated
that federal law protects “from state hindrance a national
bank’s engagement in the ‘business of banking’ whether
conducted by the bank itself or by an operating subsidiary,
empowered to do only what the bank itself could do.” Id.at
[21; 127 S Ct at] 1572.
Continuing with the theme of interpreting things in an
overly narrow fashion, the Superintendent says Watters is
inapposite because the Court’s opinion only addressed
preemption of state laws that regulate operating subsidiar-
ies of a national bank, not exclusive agents of a federal
savings association. The Superintendent is correct that
Watters involved an operating subsidiary soliciting and
marketing mortgages on behalf of a national bank, and this
case involves an exclusive agent soliciting and marketing
mortgages on behalf of a federal savings association. The
distinction, however, is one without a difference and fails to
appreciate the principle set forth by the Court in Watters.
Properly understood, Watters stands for the proposition
that when considering whether a state law is preempted by
federal banking law, the courts should focus on whether the
state law is regulating “the exercise of a national bank’s
power” not on whether the entity exercising that power is
the bank itself. Id. at [18; 127 S Ct at] 1570. The Superin-
tendent urges us to do the inverse; his argument focuses on
the fact that the individuals being regulated are State Farm
Bank’s exclusive agents while ignoring the fact that the
power being exercised is clearly that of a federal savings
association. [Id. at 345-346.]
532 288 M
ICH
A
PP
526 [May
Plaintiffs here make an argument similar to that of
the superintendent rejected in Reardon. They claim
that any preemption protection that might otherwise be
afforded to defendant would not be available because
their allegations against defendant are based on the
actions of a third party, Concept One, which worked for
defendant. For reasons similar to those employed by
Reardon, we reject plaintiffs’ claim in this regard. The
OCC regulations at issue here provide that defendant
may make real estate loans “without regard to” state
laws governing licensing or registration or the manner
in which its mortgages are originated or processed. 12
CFR 34.4(a)(1) and (10). Thus, the scope of the regula-
tion is much broader than plaintiffs would have it.
Following Watters, we focus on the exercise of defen-
dant’s power, granted by federal law, to make real estate
transactions, not on defendant’s corporate or agency
structure. “[I]t is the activity being regulated rather
than the actor who is being regulated that mat-
ters....”Id. at 345. As we consider whether state law
is preempted by federal banking law, we must focus on
“whether the state law is regulating ‘the exercise of a
national bank’s power’ not on whether the entity exer-
cising that power is the bank itself.” Id., quoting
Watters, 550 US at 18. Plaintiffs’ argument ignores the
fact that the complained-of conduct by Concept One
was done in furtherance of defendant’s power, as a
national bank, to make real estate loans. Defendant’s
use of Concept One’s services was specifically autho-
rized by an OCC regulation. 12 CFR 7.1004. As did the
court in Reardon, we conclude that defendant here is
entitled to whatever protection might be afforded by the
preemption doctrine, regardless of the fact that plain-
tiffs’ action is based on alleged misconduct by Concept
One.
2010] P
ATTERSON V
C
ITI
F
INANCIAL
M
TG
C
ORP
533
With respect to the protection provided by the pre-
emption doctrine, we again find guidance in Reardon,in
which the court reasoned that the statute requiring the
state licensing and regulation of State Farm Bank’s
agents was preempted by the OTS regulations at issue:
[T]he Ohio Act’s licensing and certification require-
ments fall within the category of state laws that [the
regulation] specifically says are preempted; not only does
the Ohio Act constitute a law regarding “licensing” or
“registration”,...italso affects—in more than an inciden-
tal manner—the “processing” and “origination” of mort-
gages....Even if the Ohio Act were held not to fall within
the class of state laws preempted [by those provisions],
preemption would still be appropriate here because the
Ohio Act does not fit into any of the categories that [the
regulation] excludes from preemption, and the Ohio Act
has more than an “incidental effect”... on State Farm
Bank’s mortgage lending operations. [Reardon, 539 F3d at
347-348.]
Construing the virtually identical language of the
OCC regulation at issue here, we come to the same
conclusion. As a national bank, defendant “may make
real estate loans...without regard to state law limita-
tions concerning...[l]icensing [or] registration” or the
“[p]rocessing” or “origination” of mortgages. 12 CFR
34.4(a)(1) and (10). To the extent that plaintiffs’ claims
against defendant are based on Concept One’s failure to
observe licensing and registration provisions of Michi-
gan statutes in the initiation and processing of the
mortgages at issue, they are expressly and directly
preempted; defendant was free to proceed “without
regard” to the Michigan statutory scheme. Further,
defendant can be subject to suit under common-law
theories arising out of contracts or torts or “any other
law” only if such claims merely “incidentally affect the
exercise of [defendant’s] real estate lending pow-
534 288 M
ICH
A
PP
526 [May
ers....”12CFR34.4(b)(1), (2), and (9). To the extent
that plaintiffs’ claims are based on common-law theo-
ries of fraud, misrepresentation, or unjust enrichment
or other theories, they would, if successfully pursued,
have far more than an “incidental” effect on defen-
dant’s exercise of the real estate lending powers granted
under the federal scheme. In this regard, the Reardon
court made a number of observations that are equally
apposite here:
Were this court to agree with the Superintendent that
the Ohio Act may be applied to State Farm Bank’s exclusive
agents, we would be opening the door to subjecting State
Farm Bank and its exclusive agents to fifty separate and
distinct licensing and regulatory schemes, all with their
own requirements and procedural hurdles. Subjecting
State Farm Bank and its exclusive agents to such a veri-
table “hodgepodge” of state regulation would not only be
unduly burdensome, it would also be at odds with the very
purpose behind federal regulation of federal savings asso-
ciations....
. . . Regardless of the gloss that the Superintendent
attempts to place on the issue, the practical effect of the
Ohio Act is that State Farm Bank must either change its
structure or forego mortgage lending in Ohio....Thestate
of Ohio is not—nor is any state for that matter—entitled to
impose such regulations on the powers of a federal savings
association. [Reardon, 539 F 3d at 348-349.]
The same analysis requires preemption here.
The trial court properly concluded that plaintiffs’
claims against defendant were preempted under federal
law. Having made that determination, we need not
consider the other issues raised on appeal. We affirm.
Defendant, the prevailing party, may tax costs. MCR
7.219.
2010] P
ATTERSON V
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ITI
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INANCIAL
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535
HOFFMAN
V
BARRETT
Docket No. 289011. Submitted April 7, 2010, at Lansing. Decided June 3,
2010, at 9:00 a.m.
Beth Hoffman was appointed personal representative of the estate of
Edgar Brown, deceased, on July 27, 2001. Hoffman provided
defendants, Peter Barrett, M.D., and Battle Creek Health Systems,
a notice of intent to file a medical malpractice action on March 3,
2003, and filed the action on October 16, 2003. On August 27,
2004, the trial court, James C. Kingsley, J., granted summary
disposition in favor of defendants because, at the time, the Court
of Appeals had held in Mullins v St Joseph Mercy Hosp, 271 Mich
App 503 (2006) (Mullins I), that the Supreme Court’s decision in
Waltz v Wyse, 469 Mich 642 (2004), applied retroactively. Under
the retroactive application of Waltz, plaintiff’s action had been
filed after the wrongful death saving period had expired. The
Court of Appeals, M
ETER
,P.J., and K. F. K
ELLY
and F
ORT
H
OOD
, JJ.,
affirmed the trial court’s determination in an unpublished opinion
per curiam, issued May 22, 2007 (Docket No. 258982). The
Supreme Court held plaintiff’s application for leave to appeal in
abeyance pending the outcome of an appeal in the Supreme Court
of the Mullins action. The Supreme Court subsequently reversed
the judgment of the Court of Appeals in Mullins, concluding that
Waltz “does not apply to any causes of action filed after Omelen-
chuk v City of Warren, 461 Mich 567 (2000), was decided in which
the saving period expired, i.e., two years had elapsed since the
personal representative was appointed, sometime between the
date that Omelenchuk was decided and within 182 days after Waltz
was decided. All other causes of action are controlled by Waltz.”
Mullins v St Joseph Mercy Hosp, 480 Mich 948 (2007) (Mullins II).
Subsequently, the Supreme Court, in lieu of granting plaintiff’s
application for leave to appeal in this case, reversed the judgment
of the Court of Appeals and remanded the case to the trial court for
the entry of an order denying defendants’ motion for summary
disposition and for further proceedings. 480 Mich 981 (2007). On
remand in the trial court, Battle Creek Health Systems was
dismissed as a defendant. Barrett moved for summary disposition,
asserting that plaintiff’s notice of intent and affidavit of merit
were deficient. Plaintiff conceded that the affidavit of merit was
536 288 M
ICH
A
PP
536 [June
defective. The trial court found the notice of intent to be adequate
and granted summary disposition without prejudice in favor of
Barrett. Barrett appealed, contending that the dismissal should
have been with prejudice.
The Court of Appeals held:
1. The trial court properly held that plaintiff’s notice of intent
was sufficient. Read as a whole, it provided all the information
required by MCL 600.2912b.
2. The two-year statutory limitations period had already ex-
pired and could not thereafter be tolled when this suit was filed on
October 16, 2003. The saving period of MCL 600.5852, which
provides an additional two years for filing after the appointment of
a personal representative, would have expired on July 27, 2003, if
it had not been tolled by the application of Mullins II. Because
Mullins II applied, plaintiff’s notice of intent, which was filed on
March 3, 2003, and was valid, tolled the running of the saving
period. The action was timely filed.
3. Waltz did not apply in this case because this case was filed
after Omelenchuk was decided and the saving period expired
within 182 days after Waltz was decided. Because Waltz did not
apply but Omelenchuk did, plaintiff’s filing of the notice of intent
tolled the saving period.
4. Filing a complaint and an affidavit of merit, even a defective
one, tolls the limitations period until the affidavit is successfully
challenged. The filing of the notice of intent on March 3, 2003,
tolled the saving period for 182 days, but there were 146 days
remaining in the saving period at that time. Therefore, when this
suit was filed on October 16, 2003, there remained 101 days within
which plaintiff could have filed. Plaintiff still had this time
available upon the successful challenge to the affidavit of merit,
and, therefore, the dismissal was properly without prejudice.
5. Plaintiff’s expert was qualified to sign the affidavit of merit.
Although Barrett is a board-certified general surgeon and a
board-certified thoracic surgeon and plaintiff’s expert is only
board-certified in general surgery, the claims against Barrett,
when viewed on the basis of the affidavit of merit, do not appear to
require any specialized testimony pertaining to thoracic surgery.
Affirmed.
Charfoos & Christensen, P.C. (by David R. Parker, J.
Douglas Peters, and Ann K. Mandt), for Beth Hoffman.
2010] H
OFFMAN V
B
ARRETT
537
Aardema, Whitelaw & Sears-Ewald, PLLC (by Do-
lores Sears-Ewald and Timothy P. Buchalski), for Peter
Barrett, M.D.
Before: D
AVIS
,P.J., and D
ONOFRIO
and S
TEPHENS
,JJ.
D
AVIS
,P.J. Defendant appeals as of right the dismissal
without prejudice of plaintiff’s medical malpractice ac-
tion. Defendant moved for summary disposition, assert-
ing that plaintiff’s notice of intent to file her claim and
affidavit of merit were deficient. Plaintiff conceded that
the affidavit of merit was defective. The trial court
found that the notice of intent “could be better, but [is]
adequate,” and therefore granted summary disposition
without prejudice. This Court reviews de novo a trial
court’s interpretation of a statute and decision on a
motion for summary disposition. Esselman v Garden
City Hosp, 284 Mich App 209, 215-216; 772 NW2d 438
(2009). Defendant contends that dismissal should have
been with prejudice. We disagree, and we affirm.
The decedent, Edgar Brown, fell from the roof of his
house onto a cement driveway on January 13, 2001, and
he was taken to the emergency room at Battle Creek
Health Systems
1
(BCHS). Defendant, Dr. Peter Barrett,
was assigned to care for the decedent. The decedent’s
treatment entailed, among other things, insertion of a
chest tube to reinflate a lung. He was discharged from
BCHS and returned to his home on January 24, 2001.
The decedent developed problems at home the next day.
Emergency medical services were summoned, and the
decedent went into full arrest in the ambulance. He was
pronounced dead at the hospital.
1
Battle Creek Health Systems was originally a named defendant, but
was dismissed before the summary disposition order at issue in this
appeal.
538 288 M
ICH
A
PP
536 [June
This matter has been before this Court previously, in
Docket No. 258982. Plaintiff was appointed personal
representative on July 27, 2001. Plaintiff provided
defendants
2
with a notice of intent to sue, pursuant to
MCL 600.2912b(1), on March 3, 2003. Plaintiff com-
menced the instant suit on October 16, 2003. On August
27, 2004, the trial court granted a prior summary
disposition motion in favor of defendants because, at
the time, this Court had held that our Supreme Court’s
decision in Waltz v Wyse, 469 Mich 642; 677 NW2d 813
(2004), applied retroactively. Mullins v St Joseph Mercy
Hosp, 271 Mich App 503; 722 NW2d 666 (2006) (Mul-
lins I), rev’d Mullins v St Joseph Mercy Hosp, 480 Mich
948 (2007) (Mullins II). Under a retroactive application
of Waltz, plaintiff’s suit had been filed after the wrong-
ful death saving period had expired. The Court of
Appeals affirmed the trial court’s determination. Hoff-
man v Barrett, unpublished opinion per curiam of the
Court of Appeals, issued May 22, 2007 (Docket No.
258982). Plaintiff applied for leave to appeal in our
Supreme Court, which held the application for leave to
appeal in abeyance pending the outcome of the appeal
in Mullins. After Mullins II was decided, our Supreme
Court, in lieu of granting leave to appeal, reversed the
judgment of the Court Appeals and remanded the case
to the trial court for the entry of an order denying
defendants’ motion for summary disposition and for
further proceedings. Hoffman v Barrett, 480 Mich 981
(2007).
3
2
Battle Creek Health Systems was still a defendant at the time of the
prior appeal.
3
In Mullins II, our Supreme Court held that Waltz did not apply to any
actions filed after the decision in Omelenchuk v City of Warren, 461 Mich
567; 609 NW2d 177 (2000), and before 182 days after the decision in
Waltz. Omelenchuk was decided on March 28, 2000, and Waltz was
decided on April 14, 2004; the date 182 days later would be October 13,
2010] H
OFFMAN V
B
ARRETT
539
Defendant’s first argument is that this matter should
have been dismissed with prejudice, rather than with-
out prejudice, because plaintiff no longer has time to
refile. While this might be true for some cases, it is not
true here.
The malpractice presumably happened on or before
January 24, 2001. There is a two-year statutory limita-
tions period, and an additional possible three years
under the “saving provision.” The limitations period is
tolled if a complaint is filed with a defective affidavit of
merit, but the saving period is not. The limitations
period would have expired on, at the latest, January 24,
2003. Suit was filed on October 16, 2003, so the limita-
tions period had already expired and could not thereaf-
ter be tolled. The saving period,
4
MCL 600.5852, pro-
vides an additional two years after the appointment of a
personal representative; plaintiff was appointed per-
sonal representative on July 27, 2001, so the saving
period would have expired on July 27, 2003, see, gener-
ally, Ligons v Crittenton Hosp, 285 Mich App 337,
351-355; 776 NW2d 361 (2009),
5
if it had not been tolled
by the application of Mullins II. Because Mullins II
applies, plaintiff’s notice of intent, which was filed on
March 3, 2003, and which we conclude is valid, tolled
the running of the saving period. This action was
therefore timely filed.
2004. This matter was filed between those dates, so Waltz does not apply.
4
“Saving period” or “saving provision” is a term created by our
Supreme Court. See, e.g., Justice C
AVANAGH
’s dissenting opinion in Waltz,
469 Mich at 662-672.
5
While we cite this case for several legal propositions conveniently
summarized therein, we offer no opinion as to the correctness of Ligons.
Ligons is not controlling in this matter because the action in Ligons was
filed on April 7, 2006, which, unlike the filing in the instant matter, was
more than 182 days after Waltz was decided. Therefore, Waltz was
applicable in Ligons but is not applicable here. See footnote 3 of this
opinion.
540 288 M
ICH
A
PP
536 [June
We observe that the legal framework established by
Waltz and Ligons affirmatively encourages defendants—
who would obviously know whether an affidavit of merit is
insufficient simply by casually reading it and determining
that they do not see therein all the required elements—to
engage in delaying tactics until the saving period expires
and then simply arrange to have the matter dismissed on
a procedural technicality instead of any substantive basis.
Therefore, this framework runs directly and poisonously
contrary to the longstanding policy in this state and its
predecessor legal systems of resolving controversies on
substantive grounds, not procedural gamesmanship and
trickery. See, e.g., Walters v Arenac Circuit Judge, 377
Mich 37, 47; 138 NW2d 751 (1966) (opinion by O’H
ARA
,J.)
(“The trend of our jurisprudence is toward meritorious
determination of issues.”); White v Mich Consol Gas Co,
352 Mich 201, 213; 89 NW2d 439 (1958) (“ ‘The courts
have construed [statutes of journey’s accounts, longstand-
ing statutes enabling plaintiffs to obtain a new writ within
some number of days after an original writ is abated]
liberally in furtherance of their purpose—to enable con-
troversies to be decided upon substantive questions
rather than upon procedural technicalities.’ ”), disap-
proved of on other grounds in Sanford v Ryerson &
Haynes, Inc, 396 Mich 630, 637; (1976), quoting with
approval Wilt v Smack, 147 F Supp 700 (ED Pa, 1957);
Crowther v Ross Chem & Mfg Co, 42 Mich App 426,
430; 202 NW2d 577 (1972) (observing, albeit in a
different context, that “the policy under modern
rules of procedure to dispose of cases according to
their merits, rather than by applying technical rules
formalistically to bar meritorious claims”).
But, as observed, this case was filed after Omelen-
chuk v City of Warren, 461 Mich 567; 609 NW2d 177
(2000), was decided, and the saving period expired
2010] H
OFFMAN V
B
ARRETT
541
before 182 days after Waltz was decided. Therefore,
Waltz does not apply to this case. Mullins II, 480 Mich
at 948. Before the decision in Waltz, the saving period
was understood to be tolled by filing a notice of intent
exactly the same way in which the period of limitations
would be tolled. Waltz, 469 Mich at 653-654; see also
Judge O’C
ONNELL
’s dissenting opinion in McLean v
McElhaney, 269 Mich App 196, 206-207; 711 NW2d 775
(2005). Indeed, “it was the Court, and not the Legisla-
ture, that labeled [MCL 600.5852] a ‘saving statute’ ”
instead of a special-purpose limitations period. Mullins
I, 271 Mich App at 527 (M
URPHY
, J., dissenting) (empha-
sis in original). Because Waltz does not apply, but
Omelenchuk does, plaintiff’s filing of the notice of
intent tolled the saving period. As we discuss, the trial
court correctly found the notice of intent to be suffi-
cient, so dismissal without prejudice was proper.
Plaintiff conceded that the affidavit of merit was
defective. Nevertheless, filing a complaint and an affi-
davit of merit—even a defective one—tolls the limita-
tions period until the affidavit is successfully chal-
lenged. Kirkaldy v Rim, 478 Mich 581, 585-586; 734
NW2d 201 (2007). After our Supreme Court’s transmu-
tation of the extended limitations period in MCL
600.5852 into a “saving period,” see Waltz, 469 Mich at
662-672 (C
AVANAGH
, J., dissenting), the saving period
would not be so tolled. Ligons, 285 Mich App at 353-
354. However, again, Waltz does not apply to this
matter. Pursuant to Omelenchuk, Mullins II, and a
rational reading of MCL 600.5852 as providing a limi-
tations period, the running of the additional time pro-
vided by that statute would have been tolled here by the
filing of the complaint and affidavit of merit. Filing the
notice of intent on March 3, 2003, tolled the saving
period for 182 days, but there were in addition 146 days
remaining in the saving period at that time. When this
542 288 M
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suit was filed on October 16, 2003, there remained 101
days within which plaintiff could have filed. Plaintiff
still had this time available upon the successful chal-
lenge to the affidavit of merit, and therefore dismissal
was properly without prejudice.
Defendant next argues that the notice of intent was
insufficient because it failed to contain a statement
explaining the manner in which defendant’s alleged
breach of the standard of care resulted in plaintiff’s
decedent’s injuries.
6
We agree with the trial court that
the notice of intent could have been better, but was
sufficient.
Under MCL 600.2912b, commencement of a medical
malpractice claim requires a plaintiff to provide an
advance “notice of intent” to the intended defendant;
that notice must provide certain specific pieces of infor-
mation, although no particular format is required.
Ligons, 285 Mich App at 343. The information in the
notice of intent must be provided in good faith, but it
need not eventually be proven to be completely accu-
rate. Boodt v Borgess Med Ctr, 481 Mich 558, 561; 751
NW2d 44 (2008). Furthermore, the information need
only be detailed enough to “allow the potential defen-
dants to understand the claimed basis of the impending
malpractice action,” particularly given that it is being
provided before discovery would ordinarily have begun.
Roberts v Mecosta Co Gen Hosp (After Remand), 470
Mich 679, 691, 692 n 7; 684 NW2d 711 (2004). A bare
statement that the alleged negligence caused the harm
is insufficient, Boodt, 481 Mich at 560, but the entire
6
Defendant also argues that the notice of intent failed to separate the
standards of care applicable to the different defendants, but because
there were only two named defendants, one of which is no longer a party,
and because the only articulated failures pertain to Dr. Barrett, we do not
believe that the notice is deficient on this basis.
2010] H
OFFMAN V
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ARRETT
543
notice must be read and considered as a whole, rather
than piecemeal, Ligons, 285 Mich App at 344.
Plaintiff’s notice of intent provided,
7
in relevant part,
as follows:
SECTION 2912b NOTICE OF INTENT TO FILE CLAIM
RE: EDGAR BROWN, DECEASED
This Notice is intended to apply to the following health-
care professionals, entities and/or facilities as well as their
employees or agents, actual or ostensible, who were in-
volved in the evaluation, care and/or treatment of EDGAR
BROWN, DECEASED.
DR. PETER BARRETT, BATTLE CREEK HEALTH
SYSTEMS, AND ANY AND ALL PROFESSIONAL COR-
PORATIONS AND ALL AGENTS AND EMPLOYEES,
ACTUAL OR OSTENSIBLE, THEREOF.
I. FACTUAL BASIS OF THE CLAIM
On January 13, 2001, Edgar Brown fell from a ladder and
was brought to Battle Creek Health Systems Emergency
Room. He was found to have multiple rib fractures and a right
pneumothorax.
[
8
]
Dr. Peter Barrett was assigned to care for
Mr. Brown and he was admitted to the hospital.
A chest tube was inserted and was removed on
January 19, 2001. Mr. Brown developed an ileus
[
9
]
and a
nasogastric tube
[
10
]
was inserted. Between the time of his
admission and his discharge, Mr. Brown continued to
have diminished breath sounds. His last chest x-ray was
7
We have added footnotes explaining medical terms used. These
definitions have been culled from Stedman’s Medical Dictionary (26th
ed); 1 Schmidt, Attorneys’ Dictionary of Medicine (2000 rev); and
<http://emedicine.medscape.com> (accessed May 5, 2010).
8
Abnormal presence of air inside the pleural cavity, which is the
membrane-lined cavity in the thorax surrounding the lungs.
9
An obstruction or blockage of the intestine or bowel.
10
A tube inserted into the stomach through the nose, used for feeding
or for removing fluids.
544 288 M
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536 [June
taken on January 20, 2001 and his last abdominal x-ray
was taken on January 19, 2001. Mr. Brown was dis-
charged home on January 24, 2001. He had a distended
abdomen and was still having difficulty breathing.
Within 24 hours of discharge, Mr. Brown became
short of breath while talking, his abdomen remained
distended and his daughter called for an ambulance. Mr.
Brown went into full arrest in the ambulance. The cause
of death was determined to be complications of multiple
injuries from [sic]. On autopsy, Mr. Brown was found to
have right pulmonary atelectasis
[
11
]
and right
empyema/pleuritis,
[
12
]
as well as an intestinal ileus.
[
13
]
II. APPLICABLE STANDARD OF PRACTICE OR CARE ALLEGED
A reasonable and prudent physician and/or hospital
staff would have:
a. Monitored a patient such as Mr. Brown carefully and
regularly, including, but not limited to, having performed
full diagnostic tests such as regular chest x-rays and
abdominal films when the patient was exhibiting pulmo-
nary and gastrointestinal problems.
b. Performed full physical examinations of a patient in
circumstances such as Edgar Brown, including respiratory
and abdominal assessments on a regular basis.
c. Adequately assessed and intervened for respiratory
compromise in a patient such as Edgar Brown.
d. Refrained from discharging a patient such as Edgar
Brown without having performed a complete, full and
adequate assessment, including all diagnostic tests to make
sure that his pulmonary status and gastrointestinal status
were stable.
e. Refrained from discharging a patient in the condition
of Edgar Brown.
11
A collapsed lung.
12
Empyema is an accumulation of pus in the body cavity. Pleuritis is an
inflammation of the lining around the lungs.
13
Again, an obstruction or blockage of the intestine.
2010] H
OFFMAN V
B
ARRETT
545
f. Refrained from discharging a patient such as Edgar
Brown without appropriate home care follow-up and
equipment, including, but not limited to, oxygen.
g. Provided appropriate treatment for a patient such as
Edgar Brown who obviously, while in the hospital, contin-
ued to have respiratory distress and gastrointestinal prob-
lems.
III. THE MANNER IN WHICH IT IS CLAIMED THAT
THE STANDARDS OF PRACTICE OR CARE WERE BREACHED
The defendant physician and/or hospital staff did not:
a. Monitor a patient such as Mr. Brown carefully and
regularly, including, but not limited to, perform full diag-
nostic tests such as regular chest x-rays and abdominal
films when the patient was exhibiting pulmonary and
gastrointestinal problems.
b. Perform full physical examinations of a patient in
circumstances such as Edgar Brown, including respira-
tory and abdominal assessments on a regular basis.
c. Adequately assess and intervene for respiratory com-
promise in a patient such as Edgar Brown.
d. Refrain from discharging a patient such as Edgar
Brown without having performed a complete, full and
adequate assessment, including all diagnostic tests to make
sure that his pulmonary status and gastrointestinal status
were stable.
e. Refrain from discharging a patient in the condition of
Edgar Brown.
f. Refrain from discharging a patient such as Edgar
Brown without appropriate home care follow-up and equip-
ment, including, but not limited to, oxygen.
g. Provide appropriate treatment for a patient such as
Edgar Brown who obviously, while in the hospital, continu-
ing [sic] to have respiratory distress and gastrointestinal
problems.
546 288 M
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536 [June
IV. THE ACTION THAT SHOULD HAVE BEEN TAKEN TO ACHIEVE
COMPLIANCE WITH THE STANDARD OF PRACTICE OR CARE
A reasonable and prudent physician and/or hospital
staff should have:
a. Monitored a patient such as Mr. Brown carefully and
regularly, including, but not limited to, having performed
full diagnostic tests such as regular chest x-rays and
abdominal films when the patient was exhibiting pulmo-
nary and gastrointestinal problems.
b. Performed full physical examinations of a patient in
circumstances such as Edgar Brown, including respiratory
and abdominal assessments on a regular basis.
c. Adequately assessed and intervened for respiratory
compromise in a patient such as Edgar Brown.
d. Refrained from discharging a patient such as Edgar
Brown without having performed a complete, full and
adequate assessment, including all diagnostic tests to make
sure that his pulmonary status and gastrointestinal status
were stable.
e. Refrained from discharging a patient in the condition
of Edgar Brown.
f. Refrained from discharging a patient such as Edgar
Brown without appropriate home care follow-up and equip-
ment, including, but not limited to, oxygen.
g. Provided appropriate treatment for a patient such as
Edgar Brown who obviously, while in the hospital, contin-
ued to have respiratory distress and gastrointestinal prob-
lems.
V. THE MANNER IN WHICH THE BREACH WAS
THE PROXIMATE CAUSE OF CLAIMED INJURY
As a proximate result of the defendants’ conduct, Edgar
Brown died prematurely from his injuries.
When the final statement is viewed in isolation, it does
in fact amount to no more than a bare statement that
the alleged negligence caused the decedent’s injuries.
2010] H
OFFMAN V
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ARRETT
547
However, the proper way to review the notice of intent
is as a whole, rather than viewing one part in isolation.
Ligons, 285 Mich App at 344. Significantly, a notice of
intent is insufficient if it “only provides notice or only
provides ‘a statement.’ It must do both.” Esselman, 284
Mich App at 220. The required notification need only to
be set forth with the same level of specificity as “would
be required of allegations in a complaint or other
pleading: [the statement] must only give fair notice to
the other party.” Id. at 219.
As was the situation in Esselman, the statement here
is not sufficient to provide the requisite notice all by
itself, but it is also not a tautology. See id. at 217. A
plain reading of plaintiff’s notice of intent as a whole
does not leave the reader guessing about how the
decedent died as a proximate result of defendant’s
alleged inaction, at least when some of the technical
medical terms are explained. The decedent, while under
defendant’s care, was suffering from readily diagnos-
able life-threatening conditions that inevitably became
fatal because defendant simply failed to do anything
about those conditions. The manner in which the
breach of the standard of care proximately caused the
harm is just that simple and straightforward: defendant
did not investigate the significance of the decedent’s
symptoms and did not discover or properly deal with the
causes of those symptoms, and because those causes are
fatal if not dealt with, the decedent died. All the
required information is plainly apparent from reading
the notice of intent as a whole.
Defendant finally argues that plaintiff’s expert was
not qualified to sign the affidavit of merit or render
standard-of-care testimony against him.
14
Defendant
14
This issue is moot in the instant appeal, given plaintiff’s concession
that the affidavit of merit was otherwise defective, but we address the
548 288 M
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536 [June
bases this argument on the fact that he is a board-
certified general surgeon and a board-certified thoracic
surgeon, whereas plaintiff’s expert is only board-
certified in general surgery. We decline to address
whether plaintiff’s expert is qualified to render
standard-of-care testimony at trial, such considerations
being premature at the affidavit-of-merit stage of pro-
ceedings. Grossman v Brown, 470 Mich 593, 600; 685
NW2d 198 (2004). We conclude that plaintiff’s expert
was qualified to sign the affidavit of merit.
Pursuant to MCL 600.2912d(1) and MCL 600.2169,
a plaintiff must “file an affidavit of merit signed by a
physician who counsel reasonably believes specializes
in the same specialty as the defendant physician,”
including a reasonable belief that the expert holds an
identical board certification as the defendant physi-
cian, if the defendant physician is so certified. Gross-
man, 470 Mich at 596. Dr. Barrett is board-certified
by the American Board of Thoracic Surgery, which
defines its specialty as “the operative, perioperative,
and surgical critical care of patients with acquired
and congenital pathologic conditions within the
chest,” including the heart, lungs, airways, and chest
injuries.
15
Plaintiff’s expert is not.
However, “not all specialties and board certificates
must match.” Woodard v Custer, 476 Mich 545, 558; 719
NW2d 842 (2006). Because irrelevant testimony is gen-
erally inadmissible, id. at 568-572, the plaintiff’s expert
need only specialize or be certified in subfields relevant
to the expert’s intended testimony, id. at 559. There-
fore, a plaintiff’s expert need only match “the specialty
engaged in by the defendant physician during the
matter because it will become relevant upon plaintiff’s refiling the action.
15
<http://www.abts.org/sections/Definition_of_Thorac/index.html>
(accessed May 5, 2010).
2010] H
OFFMAN V
B
ARRETT
549
course of the alleged malpractice, and, if the defendant
physician is board certified in that specialty, the plain-
tiff’s expert must also be board certified in that spe-
cialty.” Id. at 560; see also Gonzalez v St John Hosp &
Med Ctr (On Reconsideration), 275 Mich App 290,
302-303; 739 NW2d 392 (2007). The mere fact that
defendant has a specialty that plaintiff’s expert lacks
does not automatically disqualify plaintiff’s expert from
properly signing plaintiff’s affidavit of merit.
Defendant’s position seems superficially meritorious,
because the decedent did suffer injuries to his ribs, the
decedent was later determined to have a collapsed lung,
and the pleural cavity, from which 850 milliters
16
of
brown pus was removed, surrounds the lungs. A signifi-
cant portion of the decedent’s injuries were indeed
located in a part of the body that would fall in the
“thoracic” category. However, the decedent was also
found to have a lacerated spleen, a necrotic
17
gallblad-
der, a necrotic liver, intestinal ileus, and acalculous
cholecystitis.
18
Clearly, a significant portion of the dece-
dent’s injuries did not fall under the thoracic category.
Moreover, the obvious import of the affidavit of merit is
not that defendant failed to do anything particularly
relevant to thoracic surgery or medicine, but that
defendant failed generally to treat the decedent prop-
erly.
At least on the basis of the affidavit of merit, the
claims against defendant do not appear to require any
16
Slightly less than 3
2
/3 cups.
17
Necrosis refers to localized death of cells or tissue because of injury
or disease, rather than as a result of natural causes.
18
Cholecystitis is an inflammation of the gallbladder; “acalculous”
refers to the absence of stones. Acalculous cholecystitis apparently has a
relatively high mortality rate and is commonly observed in patients who
have suffered trauma.
550 288 M
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specialized testimony pertaining to thoracic surgery.
Therefore, plaintiff’s expert was qualified to sign the
affidavit of merit.
Affirmed.
2010] H
OFFMAN V
B
ARRETT
551
MICHIGAN BASIC PROPERTY INSURANCE ASSOCIATION
v OFFICE OF FINANCIAL AND INSURANCE REGULATION
Docket No. 293766. Submitted May 4, 2010, at Lansing. Decided June 8,
2010, at 9:00 a.m.
The Michigan Basic Property Insurance Association filed a petition
for review in the Ingham Circuit Court against the Office of
Financial and Insurance Regulation and the Commissioner of the
Office of Financial and Insurance Regulation. Petitioner alleged
that the commissioner exceeded his authority by rejecting its
requested rate increase of 18.9 percent for some of its lines of home
insurance and that the commissioner’s order was contrary to law
and not supported by the record. The court, Joyce Draganchuk, J.,
agreed with petitioner and reversed the commissioner’s order of
disapproval. Respondents appealed.
The Court of Appeals held:
1. MCL 500.2930a(1) addresses how petitioner must calculate
the rates it charges for home insurance. It provides that the rates
charged in each territory “shall be equal to the weighted average
of the 10 voluntary market insurer groups with the largest
premium volume in this state.” The statutory language is ambigu-
ous because it fails to specify the subject matter of the weighted
average and is equally susceptible to more than one meaning.
2. In his expertise, the commissioner concluded that petition-
er’s rate calculation under MCL 500.2930a(1) was improper be-
cause it was premised on a weighted average of “base rates.” The
commissioner acknowledged that base rates had been used in the
past, but noted that in recent years base rates had become inflated
to account for discounts that ultimately led to the premium
actually charged to the insured. Therefore, when individuals
sought insurance from petitioner, as a last resort, the use of base
rates to calculate their premiums was no longer fair, reasonable,
equitable, and nondiscriminatory, as required by MCL
500.2920(2), and the commissioner ordered petitioner to calculate
its rates using a weighted average of premiums charged. Respon-
dents’ construction of the statute was in accordance with the
intent of the Legislature, and no cogent reasons existed for
552 288 M
ICH
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552 [June
overruling respondents’ interpretation. The circuit court erred by
reversing the commissioner’s decision.
Reversed.
B
ANDSTRA
,P.J., concurred with the majority and wrote sepa-
rately to note that while the statutory language of MCL
500.2930a(1) is ambiguous, a close reading of that language
suggests that the subject matter of the weighted average is the
“rates charged,” i.e., the actual premiums that result from base
rates reduced by applicable discounts, referred to earlier in the
same clause of the statute.
I
NSURANCE —
I
NSURANCE
C
OMMISSIONER —
B
ASIC
P
ROPERTY
I
NSURANCE
A
SSOCIA-
TION —
H
OME
I
NSURANCE —
R
ATES —
C
ALCULATION
.
The rates charged by the Michigan Basic Property Insurance Asso-
ciation for home insurance generally must be equal to the
weighted average of the 10 voluntary market insurer groups with
the largest premium volume in Michigan; the weighted average
must be based on premiums charged rather than base rates (MCL
500.2930a[1]).
Dykema Gossett PLLC (by Lori McAllister) for peti-
tioner.
Michael A. Cox, Attorney General, B. Eric Restuccia,
Solicitor General, and Christopher L. Kerr and M.
Elizabeth Lippitt, Assistant Attorneys General, for re-
spondents.
Before: B
ANDSTRA
,P.J., and F
ORT
H
OOD
and D
AVIS
,JJ.
F
ORT
H
OOD
, J. Respondents appeal by leave granted
the circuit court’s order concluding that the insurance
commissioner exceeded his authority by disapproving
petitioner’s requested rate increase. We reverse.
Petitioner, the Michigan Basic Property Association,
is a legislative creation. MCL 500.2920. It provides
property insurance to qualified persons who have been
unable to obtain insurance in the regular market. MCL
500.2901 et seq. Respondent Commissioner of the Office
of Financial and Insurance Regulation (insurance com-
2010] B
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missioner) must approve petitioner’s plan of operation
and any changes to that plan. MCL 500.2920(2).
On March 11, 2008, petitioner submitted a rate level
adjustment for its home insurance program addressing
rate levels for its HO-2 (home), HO-4 (apartment), and
HO-6 (condominium) lines of insurance. Specifically,
petitioner requested a rate increase of 18.9 percent
based on a report prepared by its actuary. The report
stated that the rate increase was premised on the
actuarial method employed and that the use of a differ-
ent accepted actuarial method would have resulted in a
rate decrease:
The Association respectfully wishes to advise your office
that further investigation and research by our actuaries
has determined that had the Association followed other
actuarially accepted methods for determining its rate levels
(like the Form 3 methodology currently in the statute), the
change now being requested would have been, in fact, an
overall statewide decrease in rates.
An analyst for respondents contacted petitioner’s presi-
dent, noting that the calculation of rates was premised on
the weighted base rate average of the top 10 insurer
groups, when the appropriate computation would use the
“weighted average of actual charged premium [sic] which
would include discounts.” Consequently, petitioner was
asked to submit actuarial data to determine the rate levels
based on the “weighted average of charged, fully dis-
counted premium rates.” Petitioner responded that its
rate increase was in accordance with the statutory lan-
guage for computing the appropriate rate. Petitioner also
asserted that the application of discounts was a voluntary
method of product marketing, and some insurance com-
panies offered discounts premised on the sale of multiple
forms of insurance, but petitioner only dealt in home
insurance, not automobile insurance.
554 288 M
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552 [June
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The insurance commissioner issued an order disap-
proving the proposed rate increase. The rejection of the
rate increase was premised on multiple considerations.
First, the commissioner rejected the assertion that the
rate increase was consistent with the weighted-average
language of MCL 500.2930a:
In determining the “weighted average,” [petitioner] has
traditionally averaged the base rates of the top 10 insurer
groups. This is reflected in the rates filed by [petitioner] on
March 12, 2008 for HO-2 (traditional home), HO-4 (apart-
ment), and HO-6 (condominium) lines of insurance. How-
ever, rates calculated in this manner are no longer appro-
priate or lawful.
An insurer begins calculating an individual’s premium
with the base rate and then applies factors that it has
determined relate to the frequency or severity of losses,
such as age of dwelling, type of construction, and safety
devices. Several years ago, final premiums charged were
not, on average, greatly disparate from the base rates.
This is no longer true. New rating factors, especially the
use of insurance credit scoring, have greatly influenced the
calculation of premiums. Base rates have been driven up so
that insurers may deeply discount the rates of persons with
high insurance credit scores. Base rates, which once had
some meaningful correlation with expected losses, have
now become just a starting point in a methodology that
arrives at expected losses.
Next, the commissioner held that petitioner was
required to conform to the requirements of MCL
500.2109(1)(c), which provides that rates may not be
unfairly discriminatory in relation to another rate for
the same coverage. A rate was not unfairly discrimina-
tory if supported by a reasonable justification for any
disparity, a reasonable classification system, sound ac-
tuarial principles, and loss and expense statistics. The
insurance commissioner held that a reasonable justifi-
cation had not been established:
2010] B
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With regard to the current rate filing, because of its
reliance on base rates, the differential between the rates is
not reasonably justified by differences in losses. There is
not a reasonable justification because there is not a rea-
sonable classification system or support by actual and
credible loss statistics. According to information from
[petitioner], actual and credible loss statistics would sup-
port a reduction in rates by 6% rather than the proposed
increase of 18.9%.
Because the justification was deficient, the insurance
commissioner ordered petitioner to bring its rates in
conformity with MCL 500.2109(1)(c).
Lastly, the insurance commissioner held that the
rates, as computed by petitioner, did not conform to the
requirement that the insurance pool adopt a plan of
operation that ensured “the fair, reasonable, equitable,
and nondiscriminatory manner of administering the
pool....”
1
MCL 500.2920(2). Consequently, the insur-
ance commissioner ordered amendment of the plan of
operation to provide that home insurance rates in the
future would be calculated using the average premium
charged by the top 10 insurer groups rather than the
base rates of the top 10 insurer groups.
On July 10, 2008, petitioner filed its petition for
review in the circuit court, alleging that the insurance
commissioner’s order was contrary to law, exceeded his
statutory authority, and was not supported by the
record and competent evidence. The circuit court con-
cluded that MCL 500.2930a(1) was ambiguous and,
following a review of other statutory provisions includ-
ing those concerning automobile insurance rates, con-
cluded that the Legislature understood the difference
between “premiums” and “base rates.” The circuit
1
Petitioner is composed of most insurers authorized to transact basic
property and home insurance business in Michigan and is also known as
“the pool.” MCL 500.2920(1).
556 288 M
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O
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court also held that the insurance commissioner was
unable to alter a longstanding interpretation premised
on changed circumstances in order to avoid “any per-
ceived excessiveness or unfair discrimination.” There-
fore, the circuit court reversed the insurance commis-
sioner’s disapproval of the 18.9 percent rate increase.
We granted respondents’ application for leave to appeal.
I. STANDARD OF REVIEW AND ADMINISTRATIVE AGENCIES
The Michigan Constitution provides for judicial re-
view of administrative decisions, providing in relevant
part:
All final decisions, findings, rulings and orders of any
administrative officer or agency existing under the consti-
tution or by law, which are judicial or quasi-judicial and
affect private rights or licenses, shall be subject to direct
review by the courts as provided by law. This review shall
include, as a minimum, the determination whether such
final decisions, findings, rulings and orders are authorized
by law; and, in cases in which a hearing is required,
whether the same are supported by competent, material
and substantial evidence on the whole record. Findings of
fact in workmen’s compensation proceedings shall be con-
clusive in the absence of fraud unless otherwise provided
by law. [Const 1963, art 6, § 28.]
However, the application of the standard of review is
contingent on the type of challenge at issue and must be
in accordance with separation-of-power principles. In re
Complaint of Rovas Against SBC Mich, 482 Mich 90,
97-100; 754 NW2d 259 (2008). If a rulemaking function
is at issue, the reviewing court must first determine
whether the Legislature properly delegated authority to
the agency to promulgate the rule at issue. The legality
of the delegation is subject to review de novo. If the
delegation was proper, the reviewing court must exam-
ine whether the agency exceeded the authority granted
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by the statute. Id. If the examining court is asked to
review the agency’s fact-finding function in contested
cases, the court examines whether the findings were
supported by competent, material, and substantial evi-
dence on the entire record. The factual findings, par-
ticularly the review of credibility of witnesses and the
weight of the evidence, are entitled to deference by the
reviewing court. Id.
However, the agency’s interpretation of a statute “is
not binding on the courts, and it cannot conflict with
the Legislature’s intent as expressed in the language of
the statute at issue.” Id. Rather, a reviewing court must
give “respectful consideration” to the agency’s con-
struction of the statute and provide “cogent reasons”
for overruling an agency’s interpretation. Id. However,
“when the law is ‘doubtful or obscure,’ the agency’s
interpretation is an aid in discerning the Legislature’s
intent.” Id. (citation omitted). Thus, when a reviewing
court examines an agency interpretation of a statute,
“the primary question presented is whether the inter-
pretation is consistent with or contrary to the plain
language of the statute.” Id. Respectful consideration is
not equal to deference. Statutory construction is the
domain of the judiciary, and therefore, the agency’s
interpretation is not entitled to more weight. Id.
Rather, “the agency’s interpretation can be particularly
helpful for ‘doubtful or obscure’ provisions.” Id. (cita-
tion omitted).
The rules regarding judicial review of statutory lan-
guage are well established. Statutory interpretation
presents questions of law subject to review de novo.
Hunter v Hunter, 484 Mich 247, 257; 771 NW2d 694
(2009). “The fundamental purpose of judicial construc-
tion of statutes is to ascertain and give effect to the
intent of the Legislature.” Amburgey v Sauder, 238
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Mich App 228, 231-232; 605 NW2d 84 (1999). Once the
intent of the Legislature is discovered, it must prevail
regardless of any rule of statutory construction to the
contrary. In re Certified Question, 433 Mich 710, 722;
449 MW2d 660 (1989). The language of the statute
expresses the legislative intent. Dep’t of Transp v
Tomkins, 481 Mich 184, 191; 749 NW2d 716 (2008). A
clear and unambiguous statute is not subject to judicial
construction or interpretation. Id. Stated otherwise,
when a statute plainly and unambiguously expresses
the legislative intent, the role of the court is limited to
applying the terms of the statute to the circumstances
in a particular case. Id. Yet “a dogged literalism should
not be employed to defeat the Legislature’s intent.”
Goodridge v Ypsilanti Twp Bd, 451 Mich 446, 453 n 8;
547 NW2d 668 (1996).
A statutory provision is ambiguous if it irreconcilably
conflicts with another provision or when it is equally
susceptible to more than one meaning. Fluor Enter-
prises, Inc v Dep’t of Treasury, 477 Mich 170, 177-178 n
3; 730 NW2d 722 (2007). A statutory provision should
be viewed as ambiguous only after all other conven-
tional means of interpretation have been applied and
found wanting. Id. at 178 n 3. If a statute is ambiguous,
judicial construction is appropriate. Capitol Props
Group, LLC v 1247 Ctr Street, LLC, 283 Mich App 422,
434; 770 NW2d 105 (2009). “Where the language of a
statute is of doubtful meaning, a court must look to the
object of the statute in light of the harm it is designed to
remedy, and strive to apply a reasonable construction
that will best accomplish the Legislature’s purpose.”
Marquis v Hartford Accident & Indemnity (After Re-
mand), 444 Mich 638, 644; 513 NW2d 799 (1994). When
construing statutes, the terms of statutory provisions
with a common purpose should be read in pari materia.
World Book, Inc v Dep’t of Treasury, 459 Mich 403, 416;
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590 NW2d 293 (1999). The objective of this rule is to
give effect to the legislative purpose as found in statutes
addressing a particular subject. Id. “Conflicting provi-
sions of a statute must be read together to produce an
harmonious whole and to reconcile any inconsistencies
wherever possible.” Id.
When construing a statute, “a court should not
abandon the canons of common sense.” Marquis, 444
Mich at 644. “We may not read into the law a require-
ment that the lawmaking body has seen fit to omit.” In
re Hurd-Marvin Drain, 331 Mich 504, 509; 50 NW2d
143 (1951). When the Legislature fails to address a
concern in the statute with a specific provision, the
courts “cannot insert a provision simply because it
would have been wise of the Legislature to do so to
effect the statute’s purpose.” Houghton Lake Area
Tourism & Convention Bureau v Wood, 255 Mich App
127, 142; 662 NW2d 758 (2003). Therefore, when nec-
essary to interpret an ambiguous statute, the appellate
courts must determine the reasonable construction that
best effects the Legislature’s intent. Id. The insurance
industry is of great public interest, and insurance laws
are to be liberally construed in the interests of the
public, policyholders, and creditors. Attorney General v
Mich Surety Co, 364 Mich 299, 325, 337; 110 NW2d 677
(1961); Tevis v Amex Assurance Co, 283 Mich App 76,
81; 770 NW2d 16 (2009); Mich Life Ins Co v Comm’r of
Ins, 120 Mich App 552, 558; 328 NW2d 82 (1982). “To
that end we are bound to give full effect to legislative
efforts to regulate the business of insurance.” Mich
Surety, 364 Mich at 337.
Administrative agencies are created by the Legisla-
ture as “ ‘repositories of special competence and exper-
tise uniquely equipped to examine the facts and develop
public policy within a particular field.’ ” Travelers Ins
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Co v Detroit Edison Co, 465 Mich 185, 198; 631 NW2d
733 (2001) (citation omitted). “[A]dministrative agen-
cies possess specialized and expert knowledge to ad-
dress issues of a regulatory nature. Use of an agency’s
expertise is necessary in regulatory matters in which
judges and juries have little familiarity.” Id. at 198-199.
The relationship between the courts and administrative
agencies is one of restraint, and courts must exercise
caution when called upon to interfere with the jurisdic-
tion of an administrative agency. 74th Judicial Dist
Judges v Bay Co, 385 Mich 710, 727; 190 NW2d 219
(1971). “Judicial restraint tends to permit the fullest
utilization of the technical fact-finding expertise of the
administrative agency and permits the fullest expres-
sion of the policy of the statute, while minimizing the
burden on court resources.” Id. at 728. “Where a
statute creates and regulates, and prescribes the mode
and names the parties granted right to invoke its
provisions that mode must be followed and none other,
and such parties only may act.” Taylor v Pub Utilities
Comm, 217 Mich 400, 403; 186 NW 485 (1922).
II. INSURANCE COMMISSIONER
A separate and distinct state department was estab-
lished in 1956 and charged with the execution of the
laws regarding insurance and surety business. MCL
500.200. It succeeded the insurance bureau, and is now
within the Office of Financial and Insurance Regula-
tion. See MCL 500.102(2). The chief officer of the
department was originally known as the Commissioner
of Insurance and is now the Commissioner of the Office
of Financial and Insurance Regulation, and the com-
missioner personally superintends the duties of the
office. MCL 500.202. The purpose of the office is to
supervise the business of insurance, and the Legislature
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gave the insurance commissioner very large powers and
assumed that the commissioner had the qualifications
to assess issues affecting the industry. See Mich Mut
Life-Ins Co v Hartz, 129 Mich 104, 109; 88 NW 405
(1901). “Orders, decisions, findings, rulings, determina-
tions, opinions, actions, and inactions of the commis-
sioner in this act shall be made or reached in the
reasonable exercise of discretion.” MCL 500.205. “In
the reasonable exercise of discretion” is defined to mean
“that an order, decision, determination, finding, ruling,
opinion, action, or inaction was based upon facts rea-
sonably found to exist and was not inconsistent with
generally acceptable standards and practices of those
knowledgeable in the field in question.” MCL
500.116(c). The commissioner or the commissioner’s
representative “may examine any or all of the books,
records, documents, and papers of any insurer at any
time after its articles of incorporation have been ex-
ecuted and filed, or after it has been authorized to do
business in this state.” MCL 500.222(1). In his discre-
tion, the commissioner may examine the affairs of any
domestic insurer. Id. The commissioner shall supervise
and regulate the actions of petitioner. MCL 500.2941.
The commissioner has the power to visit and examine
the affairs of petitioner with free access to all documen-
tation maintained by petitioner. Id.
III. THE INSURANCE CODE
The Insurance Code was enacted, in part, “to provide
for the continued availability and affordability of auto-
mobile insurance and homeowners insurance in this
state and to facilitate the purchase of that insurance by
all residents of this state at fair and reasonable
rates....”Title of 1956 PA 218, the Insurance Code,
MCL 500.100 et seq. As noted earlier, petitioner “was
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created to provide property insurance to qualified per-
sons who cannot get insurance in the regular market.”
2
Petitioner’s membership consists of most insurers au-
thorized to transact basic property and home insurance
in Michigan. MCL 500.2920(1). Petitioner is also known
as the “pool.” Id. The pool shall adopt a plan of
operation designed to ensure “the fair, reasonable,
equitable, and nondiscriminatory manner of adminis-
tering the pool....” MCL 500.2920(2). The plan of
operation and any amendments to the plan must be
submitted to the commissioner for approval. MCL
500.2920(2). The commissioner is charged with moni-
toring the pool and its plan of operation:
If for any reason the pool fails to adopt suitable needed
amendments to the plan, the commissioner shall adopt and
promulgate such reasonable rules as are necessary or
advisable to effectuate the provisions of this chapter, which
rules shall continue in force until modified by the commis-
sioner or superseded by a plan of operation adopted by the
pool and approved by the commissioner. [MCL
500.2920(4).]
Any person with an insurable interest in real or tan-
gible personal property may apply to the pool for basic
property insurance, MCL 500.2925(1), and any quali-
fied applicant may apply to the pool for home insurance,
MCL 500.2925a(1). If the pool concludes that it is
unable to accept the risk of insuring the property, the
applicant is entitled to a written statement setting forth
the features or conditions of the property that prevent
it from being insured. Further, the applicant is entitled
to a statement regarding the measures that must be
taken in order to qualify for the insurance. MCL
2
Insurance Counselor, Insurance Consumer Information Sheet, The
Michigan Basic Property Insurance Association <www.michigan.gov/
documents/cis_ofis_ip209_24995_7.pdf> (accessed June 7, 2010).
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500.2925(3); MCL 500.2925a(3). A person aggrieved by
an action or decision by the pool may appeal to the
commissioner within 30 days. MCL 500.2943.
As part of its plan of operation, the pool shall adopt
reasonable underwriting standards to determine
whether a risk is acceptable for basic property insur-
ance by the pool. MCL 500.2924(1). The standards for
determining an acceptable risk include, but are not
limited to, “protective devices, deductibles, coinsurance
provisions, appropriate record keeping and limitations,
not inconsistent with this chapter, on the amount of
insurance that may be provided with respect to any 1
risk.” Id. However, “[t]he standards shall be relevant to
the perils insured against and shall be consistent with
the definition of qualified property, for basic property
insurance, contained in [MCL 500.2901].” Id.
IV. MCL 500.2930a
MCL 500.2930a addresses home insurance policies
issued by the pool and provides in relevant part:
(1) Except as otherwise provided in subsection (4)(c),
rates charged in each territory by the pool for home
insurance shall be equal to the weighted average of the 10
voluntary market insurer groups with the largest premium
volume in this state. Rating territories for home insurance
established by the pool shall be the same as those utilized
by the largest number of insurers by premium volume
writing home insurance in this state. Any change in the
rates for an HO-2 form replacement cost policy by those
insurers that would produce a change in excess of 5% in the
HO-2 pool rates for any territory shall be reflected as soon
as reasonably practicable in the HO-2 pool rates. HO-2 pool
rates shall be reviewed at least annually, but shall not be
revised more often than quarterly.
***
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(4) The pool shall offer at least the following home
insurance policy forms:
(a) An HO-2 form replacement cost policy equivalent to
the HO-2 form replacement cost policy filed and in effect in
this state for a licensed rating organization.
(b) A repair cost policy providing the deductibles, terms
and conditions, perils insured against, and types and
amounts of coverage equivalent to those provided by the
HO-2 replacement cost policy filed and in effect for a
licensed rating organization.
(c) An HO-3 form replacement cost policy equivalent to
the HO-3 form replacement cost policy filed and in effect in
this state for a licensed rating organization. The rates
established by the pool for the HO-3 form replacement cost
policy offered pursuant to this subdivision shall be calcu-
lated to generate a total premium sufficient to cover the
expected losses and expenses of the pool related to the
HO-3 replacement cost policy that the pool will likely incur
during the period for which the premium is applicable. The
premium shall include an amount to cover incurred but not
reported losses for the period and shall be adjusted for any
excess or deficient premiums from previous periods. Ex-
cesses or deficiencies from previous periods shall be fully
adjusted in a single period or over several periods in a
manner provided for in the plan of operation. Rates estab-
lished by the pool under this subdivision shall not be based
upon the weighted average methodology provided for in
subsection (1).
The present dispute arises from the language of the
first sentence of MCL 500.2930a(1), addressing how to
calculate the rates charged in each territory. Petitioner
contends that historically the commissioner has ap-
proved a calculation using “base rates” and the base
rate is the starting point for the final premium after
factors are applied to increase or decrease the ultimate
premium. Respondents, however, contend that the
statutory language is ambiguous because it omits any
reference to the subject matter of the weighted average
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and the commissioner has the statutory authority to
interpret the provision consistently with the Legisla-
ture’s intent to provide affordable insurance with peti-
tioner as a last resort.
The sentence at issue identifies that an average is
obtained, but does not identify the subject matter of the
weighted average. It states, “Except as otherwise pro-
vided in subsection (4)(c), rates charged in each terri-
tory by the pool for home insurance shall be equal to the
weighted average of the 10 voluntary market insurer
groups with the largest premium volume in this state.”
MCL 500.2930a(1). Although petitioner contends that
the weighted average of “base rates,” a term of art
employed in the insurance industry, is to be utilized, the
statute at issue does not expressly use that term. In
fact, the statute at issue does not define “base rates,”
“rates charged,” or “premium.” Moreover, the statute
does not define the types of insurance that are avail-
able.
3
We conclude that the language at issue is ambigu-
ous because it is equally susceptible to more than one
meaning. Fluor Enterprises, 477 Mich at 177-178 n 3.
As previously stated, when construing a statute, this
Court cannot insert a provision because it would have
been wise of the Legislature to have done so in order to
effectuate the statute’s purpose. Houghton Lake, 255
Mich App at 142. Rather, an ambiguous statute must be
given a construction that best effects the Legislature’s
intent. Id. We conclude that the statute at issue is
ambiguous because it fails to specify the subject matter
of the weighted average. As a result of the ambiguity, we
must effect the Legislature’s intent by examining the
3
Although petitioner submitted a rate increase for its HO-2, HO-4, and
HO-6 lines of insurance, MCL 500.2930a only refers to HO-2 insurance
and HO-3 insurance. The statute does not define the types of insurance
that are available.
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object of the statute in light of the harm it is designed to
remedy, apply a reasonable construction to accomplish
the Legislature’s purpose, and read in pari materia
statutes to produce a harmonious whole and reconcile
inconsistencies. World Book, 459 Mich at 416; Marquis,
444 Mich at 644. Additionally, as a result of the ambi-
guity, we must give respectful consideration to the
agency’s construction of the statute and provide cogent
reasons for overruling the agency’s interpretation. Ro-
vas, 482 Mich at 103. The agency’s interpretation will
be particularly helpful when examining this doubtful
provision. Id. at 108.
As noted earlier, the Insurance Code was enacted to
ensure that automobile owners and homeowners could
purchase insurance at reasonable and fair rates. To
ensure that the public is protected, the insurance com-
missioner was created to examine issues affecting the
industry. MCL 500.202. The commissioner has broad
authority to examine the books of any insurer and
ensure that the companies operate under acceptable
standards and practices. Mich Mut Life, 129 Mich at
109; MCL 500.116(c); MCL 500.205; MCL 500.222(1).
Petitioner was created to provide property insurance to
qualified individuals who were unable to obtain insur-
ance in the regular market. See MCL 500.2901 et seq.
Petitioner’s plan of operation must ensure “the fair,
reasonable, equitable, and nondiscriminatory manner
of administering the pool....”MCL500.2920(2). The
insurance commissioner has the authority to supervise
and regulate the actions taken by petitioner. MCL
500.2941.
Reading the insurance statutes in pari materia,we
conclude that the insurance commissioner had the
authority to review the proposed rate increase and to
determine that petitioner’s interpretation did not con-
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form to the legislative intent. The purpose of the
Insurance Code is to provide fair and reasonable rates
of insurance. The actuary’s report in this case noted
that a decrease would have occurred using other accept-
able actuarial methods. However, when applying base
rates without any discounts to calculate the rates
charged by the pool, an increase of 18.9 percent was
proposed to the commissioner. The insurance commis-
sioner was entitled to determine that this method was
contrary to petitioner’s plan of operation because it
failed to ensure the fair, reasonable, equitable, and
nondiscriminatory manner of administering the pool.
When respondents’ analyst requested a different
method of calculation consistent with the actuary’s
report, petitioner did not demonstrate that its preferred
method of calculation was fair, reasonable, equitable,
and nondiscriminatory. On its face, the computation by
the actuary and the rate increase sought by petitioner
does not appear to be fair and equitable. Persons
seeking insurance in the regular market are quoted a
base rate, but then given discounts to arrive at the
ultimate premium that is charged. Petitioner’s rates
would be set on the weighted average of the base rate
charged, without taking into consideration that the
base rate was inflated to account for the discounts
given. Therefore, the circuit court erred by reversing
the commissioner’s decision.
Furthermore, affording the agency’s construction of
the statute respectful consideration, there are no cogent
reasons for overruling the agency interpretation. Ro-
vas, 482 Mich at 103. Review of the administrative
record
4
reveals that the commissioner received petition-
4
Petitioner repeatedly contends that respondents do not have record
evidence to support their position and that an administrative record does
not exist. On the contrary, the correspondence between petitioner and
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er’s request for a rate increase of 18.9 percent. In the
actuary’s report, it was noted that there were problems
arising from the methodology employed. Despite the
fact that the statute at issue required an average of the
10 voluntary market insurer groups with the largest
premium volume, none of those 10 writers of insurance
were currently using the same territorial definitions in
Michigan. Additionally, petitioner had recently revised
its territory ratings from 25 to 67.
5
The report also
noted that a number of the top 10 writers of insurance
did not write form two (HO-2) homeowners insurance
and, therefore, form three (HO-3) factors were applied
from companies that did not write form two insurance.
The actuary’s report was calculated using base rates
and did not account for discounts granted by the
industry.
In response to the actuary’s report, the commis-
sioner’s office requested information regarding the
use of the base rate as opposed to the ultimate
premium charged to the insured. When petitioner
refused to provide additional information or recalcu-
late the rates, the insurance commissioner issued an
order disapproving of the proposed rate increase. In
his order, the insurance commissioner noted that the
industry had altered its methodology for calculating
base rates and premiums. Specifically, the commis-
sioner stated that insurance companies deliberately
inflated the base rates and discounts were then
the commissioner and his office and the actuary’s report were transmit-
ted as part of the administrative record to this Court.
5
Although MCL 500.2930a provides that petitioner’s rating territories
would be the same as those used by the largest number of insurers by
premium volume, the actuary noted that the insurance companies did not
have consistent rating territories. The lack of consistency will affect the
calculation of rates, an area that the commissioner is charged with
regulating, and his authority to oversee the insurance industry.
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subtracted from the base rate. Because of this meth-
odology, the commissioner concluded that base rates
no longer had any meaningful correlation to expected
losses. Therefore, the commissioner opined that peti-
tioner’s use of base rates was improper, unfairly
discriminatory, and inconsistent with a plan of opera-
tion that is fair, reasonable, equitable, and nondis-
criminatory.
Giving respectful consideration to the agency’s
determination, we cannot find any cogent reasons to
reverse the insurance commissioner’s disapproval of
the rate increase. Rovas, 482 Mich at 103. Insurance
laws are to be liberally construed in favor of the
public. Mich Surety, 364 Mich at 325; Tevis, 283 Mich
App at 81. Administrative agencies were created so
that entities with specialized knowledge and exper-
tise would address regulatory matters, and this ex-
pertise is necessary to resolve regulatory issues.
Travelers Ins Co, 465 Mich at 198. Here, the insur-
ance commissioner was aware of the prior calcula-
tions and acceptance of rate approvals. Because of his
experience and expertise, the insurance commis-
sioner was aware of the fact that a disparity had been
created between base rates and premiums charged to
consumers because of the industry’s adoption of
inflated base rates. Additionally, data had to be
extrapolated because of the inconsistencies in the
number of rating territories and the number of
insurers that did not provide form two (HO-2) insur-
ance.
6
6
Although the Legislature referred to certain lines of insurance in
MCL 500.2930a, it did not define those terms. The insurance commis-
sioner is aware of the lines of insurance despite the lack of statutory
specifications. HO-2 (home) covers the dwelling and other structures,
but only insures against named perils. HO-3 (home) is the most
common policy and covers against a wide range of perils even if not
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Petitioner contends that the insurance commis-
sioner lacks the authority to disapprove of the use of
base rates for calculating the weighted average be-
cause use of base rates has been acceptable for the
last 28 years. However, the plain language of the
statutes at issue reveals that the insurance commis-
sioner has the continuing authority to examine the
practices of insurance companies to determine the
propriety of their rates. As noted, administrative
agencies are legislative creations staffed by individu-
als of special competence and expertise to address
issues of a regulatory nature. Id. An agency’s exper-
tise is necessary in areas of regulatory matters where
judges and juries have little familiarity. Id. The
insurance commissioner has the broad authority to
supervise and regulate the actions by petitioner. MCL
500.2941 (“The operation of the pool shall at all times
be subject to the supervision and regulation of the
commissioner.”). Petitioner’s plan of operation must
ensure “the fair, reasonable, equitable, and nondis-
criminatory manner of administering the pool....”
MCL 500.2920(2). The insurance commissioner was
placed in his position to ensure that applicants for
insurance are charged fair and reasonable rates. The
commissioner, in the course of his supervision, con-
specifically designated in the policy. HO-4 is for renters and covers
only the contents of the home. HO-6 is for condominium owners and
is similar to renters’ insurance in that the owner owns the building
jointly with other owners in the co-operative. This insurance covers
the specific unit and the contents therein. See The Truth About
Insurance.com, Types of Homeowners Insurance <www.
thetruthaboutinsurance.com/types-of-homeowners-insurance/> (accessed
May 20, 2010). This lack of specificity in the statute indicates the
Legislature’s intention to allow the insurance commissioner to apply
his expertise to regulate and supervise through the plan of adoption
and through rules and regulations. See MCL 500.2920(4) and MCL
500.2941.
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cluded that the industry had begun deliberately in-
flating its base rates to promote the use of discounts.
This shift resulted in base rates having little connec-
tion to the premiums actually paid in the regular
market. Therefore, when individuals sought insur-
ance from petitioner, as a last resort, the use of base
rates to calculate their premiums was no longer fair,
reasonable, equitable, and nondiscriminatory. We
note that when respondents’ analyst requested addi-
tional information, petitioner did not provide a justi-
fication for the rates charged to demonstrate that
they were fair, reasonable, and equitable. Rather,
petitioner merely asserted that this was the method-
ology previously employed and then filed suit to
obtain its rate increase. The position of insurance
commissioner was created to ensure that the insur-
ance industry does not skew the underlying method-
ology to increase its rates. Petitioner’s reliance on
prior rate approvals is misplaced and contrary to the
stated need for the Insurance Code.
7
In summary, the statutory provision at issue, MCL
500.2930a(1), is ambiguous because it fails to identify
the subject matter to be calculated as a weighted
7
We note that petitioner also contends that the insurance commis-
sioner “abandoned” his rationale for rejecting the rate increase and in
the circuit court, for the first time, alleged that the statute was
ambiguous. The insurance commissioner submitted his disapproval of
the rate increase in a written order. There is no indication that the
commissioner withdrew this order or altered his position. Rather,
petitioner did not provide further justification for its rate increase to
the commissioner’s analyst, as requested, but filed suit to obtain its
rate increase. In the circuit court petition, it was asserted that the
commissioner’s actions were contrary to law, exceeded his statutory
authority, and were not supported by the record and competent
evidence. Respondents’ argument regarding the ambiguity of the
statute was in response to the legal issues raised in the petition and
did not reflect “abandonment” of the commissioner’s reasons for
disapproving the rate increase.
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average. The insurance commissioner is charged with
oversight of the insurance industry to ensure fair and
reasonable rates to the general public. Petitioner was
created to allow qualified persons to obtain insurance
unavailable in the regular market. Petitioner is sub-
ject to supervision and regulation by the insurance
commissioner, and petitioner must follow a plan of
operation that ensures fair, reasonable, equitable,
and nondiscriminatory maintenance of the pool. In
his expertise, the insurance commissioner concluded
that petitioner’s calculation of territorial rates was
improper because it was premised on the base rates of
the 10 insurers with the largest premium volume in
this state. The insurance commissioner acknowl-
edged that base rates may have been used in the past,
but he also recognized that, in recent years, base
rates were deliberately inflated to account for dis-
counts that ultimately lead to the premium charged
to the insured.
Petitioner’s own actuary acknowledged that use of
other acceptable actuarial methods would result in a
decrease in rates, but the method employed in years
past led to the requested 18.9 percent increase. Despite
inquiry from the commissioner’s analyst regarding the
propriety of the calculation, petitioner did not defend
the fairness, reasonableness, equitableness, and man-
ner of administering the pool and the consistency with
its plan of operation. Rather, petitioner filed suit to
obtain its 18.9 percent increase. Although statutory
construction is the domain of the judiciary, MCL
500.2930a(1) is ambiguous because it omits the subject
matter from which the weighted average is computed.
After reviewing the Insurance Code, the authority of
the insurance commissioner, and the responsibilities of
the pool, we conclude that respondents’ construction of
the statute is in accordance with the intent of the
2010] B
ASIC
P
ROP
I
NS
A
SS
’
NV
OFIR 573
O
PINION OF THE
C
OURT
Legislature. Furthermore, cogent reasons
8
do not exist
for overruling respondents’ interpretation.
Reversed.
D
AVIS
, J., concurred.
B
ANDSTRA
,P.J. (concurring). I concur with the major-
ity that this matter must be reversed for the reasons
stated. In addition, I write separately to point out a
complementary reason that reversal is warranted. As
the majority notes, the statutory language at issue does
not specify the subject matter to be calculated as a
weighted average: “rates charged in each territory by
the pool for home insurance shall be equal to the
weighted average of” an unspecified variable pertaining
to certain market insurer groups. MCL 500.2930a(1).
While the statute is thus ambiguous, logically it seems
quite defensible to conclude that the subject matter of
the “weighted average” is the “rates charged” specified
earlier in this clause. The rates charged by the subject
insurer groups, again as a matter of logic, are the
amounts that people actually pay for their insurance,
i.e., the premiums, which result from base rates as they
have been reduced by applicable discounts. This is
8
At oral argument, counsel for petitioner asserted that the pool was
operating at a loss. Although we have the administrative record, there
is no documentary evidence contained in the file to demonstrate that
petitioner was operating at a deficit. Curiously, in response to respon-
dent’s analyst, petitioner failed to provide documentary evidence to
sustain its need for the requested increase. Finally, we recognize that
the commissioner concluded that a six percent decrease was appropri-
ate if rates were calculated properly. The underlying basis for the
amount of the decrease is not contained in the lower court record.
However, both petitioner’s actuary and the commissioner concluded
that a decrease was warranted. The amount is irrelevant to our
disposition on appeal. Rather, our conclusion is premised on the
statutory authority given to an agency charged with addressing
regulatory issues of a monitored industry.
574 288 M
ICH
A
PP
552 [June
C
ONCURRING
O
PINION BY
B
ANDSTRA
,P.J.
respondents’ position, and this analysis belies petition-
er’s argument that the missing variable to be averaged
is, simply, the base rates. Thus, the majority’s analysis
correctly leads us to conclude what a close reading of
the statutory language itself suggests.
2010] B
ASIC
P
ROP
I
NS
A
SS
’
NV
OFIR 575
C
ONCURRING
O
PINION BY
B
ANDSTRA
,P.J.
BC TILE & MARBLE CO, INC V MULTI BUILDING CO, INC
Docket No. 289258. Submitted April 6, 2010, at Detroit. Decided April 13,
2010. Approved for publication June 8, 2010, at 9:05 a.m.
BC Tile & Marble Co., Inc., brought an action in the Oakland
Circuit Court against Multi Building Co., Inc., Maybury Park,
L.L.C., and others, including Adriano Paciocco, who was both
the president and resident agent of Multi Building and a
member and the resident agent of Maybury Park. BC Tile
alleged, in part, a violation of the Michigan builders’ trust fund
act (MBTFA), MCL 570.151 et seq., as a result of defendants’
failure to pay BC Tile the amount of its recorded lien for labor
and materials it provided for improvements to real property
owned by Maybury Park that was sold by Maybury Park to
defendants Irfan and Maisa Haddad after the lien was recorded.
BC Tile claimed that Paciocco, Multi Building, and Maybury
Park received funds from the sale of the property and failed to
pay its lien in violation of the MBTFA. A default was entered
against Multi Building. Maybury Park, the Haddads, and other
defendants, but not Paciocco, were then dismissed from the
action. BC Tile moved for partial summary disposition against
Paciocco, alleging, in part, that as an officer of Multi Building,
he was personally responsible for the amount owed. Paciocco
responded that a lesser amount was due because the Haddads
had been given a closing credit, allegedly to compensate them
for BC Tile’s defective work and the delay in the closing caused
by attempts to correct the work. Paciocco also argued that to
hold a principal of a corporate contractor liable under the
MBTFA, there must be evidence that the principal knew about
or approved the alleged violation and that there was no such
evidence in this case. Paciocco requested that the court deny BC
Tile’s motion and grant summary disposition in his favor. The
court, Shalina D. Kumar, J., denied BC Tile’s motion and
granted summary disposition in favor of Paciocco, relying in
part on an uncontradicted affidavit provided by Paciocco in
which he denied making any decisions about what to do with the
money received from the sale and stated that he did not
misappropriate any funds. The court thereafter denied BC
Tile’s motion for reconsideration, and BC Tile appealed.
576 288 M
ICH
A
PP
576 [June
The Court of Appeals held:
1. The MBTFA imposes a trust on funds paid to contractors
and subcontractors for products and services provided under
construction contracts. It is a violation of MCL 570.152 if a
contractor or subcontractor, with intent to defraud, retains or
uses the proceeds of payments for any other purpose than first
paying laborers, subcontractors, and suppliers. BC Tile estab-
lished a prima facie case under the MBTFA against Multi
Building by showing that Multi Building was a contractor in the
building construction industry, the Haddads paid Multi Build-
ing for labor and materials used to construct the real property
they purchased, Multi Building made a profit on the project and
used the funds received from the Haddads to pay other expenses
but did not pay BC Tile, and Multi Building engaged BC Tile to
supply and install materials in the property sold to the Hadd-
ads.
2. The evidence created a question of fact regarding the
extent to which Paciocco was involved in causing Multi Building
to act in violation of the MBTFA. Officers of a corporation may
be held individually liable when they personally cause their
corporation to act unlawfully, even when those officers are not
involved in the day-to-day operations of the corporation. The
MBTFA indicates that intent to defraud is shown simply by the
contractor’s appropriation of any moneys paid to the contractor
for building operations before the contractor pays all moneys
due or to become due to laborers, subcontractors, suppliers, or
others entitled to payment. A reasonable inference of appropria-
tion arises under the MBTFA from the payment of construction
funds to a contractor and the contractor’s subsequent failure to
pay laborers, subcontractors, suppliers, or others entitled to
payment. The denial of BC Tile’s summary disposition motion
must be affirmed.
3. Paciocco’s mere denials without documentation were not
enough to overcome the presumption of appropriation and did
not entitle him to a judgment as a matter of law. The trial court
erred by granting summary disposition in favor of Paciocco.
Affirmed in part, reversed in part, and remanded.
1. T
RUSTS —
B
UILDERS
’T
RUST
F
UND
A
CT —
V
IOLATIONS —
P
RIMA
F
ACIE
C
ASE
.
A plaintiff must show the following elements to establish a prima
facie case of a violation of the builders’ trust fund act: (1) that the
defendant was a contractor or subcontractor engaged in the
building construction industry, (2) that the defendant was paid for
labor or materials provided on a construction project, (3) that the
2010] BC T
ILE V
M
ULTI
B
LDG
C
O
577
defendant retained or used those funds, or any part of those funds,
(4) that the funds were retained for any purpose other than to first
pay laborers, subcontractors, and suppliers, and (5) that the
laborers, subcontractors, and suppliers were engaged by the de-
fendant to perform labor or furnish material for the specific
construction project (MCL 570.151 et seq.).
2. C
ORPORATIONS —
L
IABILITY OF
O
FFICERS
.
An officer of a corporation may be held individually liable when the
officer personally causes the corporation to act unlawfully, regard-
less of whether the officer was acting on his or her own behalf or
on behalf of the corporation.
3. T
RUSTS —
B
UILDERS
’T
RUST
F
UND
A
CT —
I
NTENT TO
D
EFRAUD —
A
PPROPRIA-
TION OF
F
UNDS
.
An intent to defraud is shown for purposes of the builders’ trust
fund act simply by a contractor’s appropriation of any moneys paid
to the contractor for building operations before the contractor
pays all moneys due or to become due to laborers, subcontractors,
suppliers, or others entitled to payment; a reasonable inference of
appropriation arises from the payment of construction funds to a
contractor and the contractor’s subsequent failure to pay laborers,
subcontractors, suppliers, or others entitled to payment (MCL
570.153).
4. M
OTIONS AND
O
RDERS —
S
UMMARY
D
ISPOSITION
.
A nonmoving party may not rely on mere allegations or denials in
pleadings in response to a motion for summary disposition when
the burden of proof at trial on a dispositive issue rests on the
nonmoving party, but must go beyond the pleadings to set forth
specific facts showing that a genuine issue of material fact exists
with regard to the issue.
Abramson Law Offices, PLLC (by Jay A. Abramson),
for BC Tile & Marble Co., Inc.
Jaffe, Raitt, Heuer & Weiss, PC (by Peter M. Alter and
James W. Rose), for Adriano Paciocco.
Before: W
HITBECK
,P.J., and M
ETER
and F
ORT
H
OOD
,JJ.
578 288 M
ICH
A
PP
576 [June
P
ER
C
URIAM.
In this action brought pursuant to the
Michigan builders’ trust fund act (MBTFA),
1
plaintiff,
BC Tile & Marble Co., Inc., appeals as of right the trial
court’s denial of its motion for summary disposition and
the trial court’s order granting summary disposition to
defendant Adriano Paciocco. We affirm in part and
reverse in part.
I. BASIC FACTS AND PROCEDURAL HISTORY
Plaintiff BC Tile supplies and installs tile and marble
materials in construction projects. Defendant Paciocco
is the president and resident agent of defendant Multi
Building Co., Inc. Paciocco is also a member and resi-
dent agent of defendant Maybury Park, L.L.C.
In 2006, BC Tile provided labor and materials and
made improvements to the property located at 20838
Maybury Park Drive (Unit 5) in Novi, Michigan, which
at the time was owned by Maybury Park. In January
2006, BC Tile sent an invoice to Multi Building for its
labor and materials in the amount of $33,813, but the
invoice was not paid. Consequently, in November 2006,
BC Tile recorded a lien in the amount of $33,813 on
Unit 5, delivering a copy of the lien and a notice of
furnishing to defendant Metropolitan Title Company on
November 9, 2006. On November 13, 2006, Maybury
sold Unit 5 to defendants Irfan and Maisa Haddad for
$946,366.72. Paciocco, Multi Building, and Maybury
received funds from the sale of Unit 5.
In September 2007, BC Tile filed a complaint against
Multi Building, Maybury, Paciocco, the Haddads, Wal-
mar, Inc., D. West Construction, Inc., and Washington
Mutual Bank. BC Tile alleged claims for account stated,
breach of contract, breach of implied contract, quantum
1
MCL 570.151 et seq.
2010] BC T
ILE V
M
ULTI
B
LDG
C
O
579
meruit and unjust enrichment, promissory estoppel,
violation of the MBTFA, and conversion. The crux of BC
Tile’s claims was that defendants owed BC Tile money
for the labor, materials, and improvements that it made
to Unit 5. Subsequently, a default was entered against
Multi Building, and Maybury, the Haddads, Walmar, D.
West Construction, and Washington Mutual Bank were
all dismissed from the action.
BC Tile moved for partial summary disposition
against Paciocco, pursuant to MCR 2.116(C)(9) and
(10), arguing that there was no genuine issue of mate-
rial fact that Paciocco had violated the MBTFA when he
failed to pay BC Tile the $33,813 owed even after Unit
5 was sold to the Haddads. BC Tile argued that, as an
officer of Multi Building, Paciocco was personally liable
for the amount owed. BC Tile contended that, under the
MBTFA, a contractor was required to pay laborers and
suppliers before making any other payments, but Multi
Building violated this requirement by instead first
paying for other costs and expenses.
Paciocco responded to BC Tile’s partial motion for
summary disposition, contending that BC Tile’s work
was defective and that attempts to have it corrected had
delayed the closing on Unit 5. According to Paciocco, the
Haddads received a closing credit of approximately
$22,000, largely to account for BC Tile’s defective
workmanship. Paciocco asserted that Multi Building
incurred damages totaling not less than $47,000 as a
result of BC Tile’s defective workmanship. Paciocco
further contended that the true balance due was only
$10,000, not $33,813. Therefore, Paciocco argued that
BC Tile’s argument under MCR 2.116(C)(9) (failure to
state a valid defense) was without merit. Paciocco also
argued that to hold a principal of a corporate contractor
liable under the MBTFA, there must be evidence that
580 288 M
ICH
A
PP
576 [June
the principal knew about or approved the alleged viola-
tion; however, there was no such evidence in this case.
Accordingly, Paciocco requested that the trial court
deny BC Tile’s motion and instead grant Paciocco
summary disposition under MCR 2.116(I)(2).
After hearing oral arguments on the motion, the trial
court ruled:
As it pertains to your—to [BC Tile’s] summary disposi-
tion Motion, there’s certainly a question of fact established
on whether [BC Tile] is entitled to the money based upon
the allegations that there is delay and bad work, defective
work. However, I’m also going to respond to Paciocco’s
Motion pursuant to the Court Rules. And when Paciocco
provides me an affidavit saying he didn’t make any deci-
sions about what to do with the money received, didn’t
misappropriate the funds, that it was his partner who made
all the decisions, and I’m not given any evidence to contra-
dict that, I’m going—based on that, I’m going to grant
Paciocco’s summary disposition Motion.
Accordingly, the trial court entered an order denying
BC Tile’s motion for summary disposition and granting
summary disposition in favor of Paciocco, pursuant to
MCR 2.116(I)(2).
BC Tile then moved for reconsideration of the order
granting summary disposition in favor of Paciocco. BC
Tile argued that the trial court committed palpable
error by ruling that BC Tile had failed to provide
evidence rebutting Paciocco’s affidavit, which was not
required by law, and by accepting Paciocco’s argument
that he did not personally violate the MBTFA. The trial
court responded in a written opinion and order, relying
on this Court’s decision in James Lumber Co, IncvJ&
S Constr, Inc,
2
that a corporate principal “could not be
2
James Lumber Co, IncvJ&SConstr, Inc, 107 Mich App 793, 795; 309
NW2d 925 (1981) (citation omitted).
2010] BC T
ILE V
M
ULTI
B
LDG
C
O
581
held personally liable under MCL 570.151 et seq., with-
out proof of knowledge or approval of the misuse of the
money received by the construction company.” Accord-
ingly, the trial court denied BC Tile’s motion for recon-
sideration. BC Tile now appeals.
II. BC TILE’S MOTION FOR SUMMARY DISPOSITION
A. STANDARD OF REVIEW
BC Tile argues on appeal that the trial court erred by
denying its motion for summary disposition because it
presented sufficient evidence to establish a prima facie
case of a violation of the MBTFA.
A summary disposition motion under MCR
2.116(C)(9) tests the sufficiency of a defendant’s plead-
ings by accepting all well-pleaded allegations as true.
Summary disposition is proper if the defenses are so
clearly untenable as a matter of law that no factual
development could possibly support a plaintiff’s right to
recovery.
3
“ ‘[A] motion for summary disposition under
MCR 2.116(C)(9) is tested solely by reference to the
parties’ pleadings.’ ”
4
In this case, however, the trial
court considered Paciocco’s affidavit and other docu-
mentary evidence presented by the parties. “Where the
parties rely on documentary evidence, appellate courts
proceed under the standards of review applicable to a
motion made under MCR 2.116(C)(10).”
5
A motion for summary disposition under MCR
2.116(C)(10) tests the factual sufficiency of the com-
3
Allstate Ins Co v JJM, 254 Mich App 418, 421 n 2; 657 NW2d 181
(2002).
4
Glass v Goeckel, 473 Mich 667, 677; 703 NW2d 58 (2005) (citation
omitted).
5
Healing Place at North Oakland Med Ctr v Allstate Ins Co, 277 Mich
App 51, 55; 744 NW2d 174 (2007).
582 288 M
ICH
A
PP
576 [June
plaint.
6
This Court reviews “a motion brought under
MCR 2.116(C)(10) by considering the pleadings, admis-
sions, and other evidence submitted by the parties in
the light most favorable to the nonmoving party.”
7
Moreover, the Court considers only “what was properly
presented to the trial court before its decision on the
motion.”
8
Summary disposition “is appropriate if there
is no genuine issue regarding any material fact and the
moving party is entitled to judgment as a matter of
law.”
9
“There is a genuine issue of material fact when
reasonable minds could differ on an issue after viewing
the record in the light most favorable to the nonmoving
party.”
10
This Court reviews de novo a trial court’s decision on
a motion for summary disposition.
11
B. ANALYSIS
BC Tile brought this suit under the MBTFA, which
“imposes a trust on funds paid to contractors and
subcontractors for products and services provided un-
der construction contracts.”
12
Because the MBTFA is a
remedial statute, designed to protect people of the state
from fraud in the construction industry, it should be
construed liberally for the advancement of the remedy.
13
6
Corley v Detroit Bd of Ed, 470 Mich 274, 278; 681 NW2d 342 (2004).
7
Latham v Barton Malow Co, 480 Mich 105, 111; 746 NW2d 868 (2008).
8
Peña v Ingham Co Rd Comm, 255 Mich App 299, 310; 660 NW2d 351
(2003).
9
Latham, 480 Mich at 111.
10
Allison v AEW Capital Mgt, LLP, 481 Mich 419, 425; 751 NW2d 8
(2008).
11
Id. at 424.
12
Livonia Bldg Materials Co v Harrison Constr Co, 276 Mich App 514,
518; 742 NW2d 140 (2007).
13
People v Brown, 239 Mich App 735, 740; 610 NW2d 234 (2000).
2010] BC T
ILE V
M
ULTI
B
LDG
C
O
583
The MBTFA is a penal statute, but the Michigan
Supreme Court has recognized that a civil cause of
action may be brought for its violation.
14
MCL 570.151 provides:
In the building construction industry, the building con-
tract fund paid by any person to a contractor, or by such
person or contractor to a subcontractor, shall be considered
by this act to be a trust fund, for the benefit of the person
making the payment, contractors, laborers, subcontractors
or materialmen, and the contractor or subcontractor shall
be considered the trustee of all funds so paid to him for
building construction purposes.
MCL 570.152 provides:
Any contractor or subcontractor engaged in the building
construction business, who, with intent to defraud, shall
retain or use the proceeds or any part therefor [sic], of any
payment made to him, for any other purpose than to first
pay laborers, subcontractors and materialmen, engaged by
him to perform labor or furnish material for the specific
improvement, shall be guilty of a felony in appropriating
such funds to his own use while any amount for which he
may be liable or become liable under the terms of his
contract for such labor or material remains unpaid, and
may be prosecuted upon the complaint of any persons so
defrauded, and, upon conviction, shall be punished by a
fine of not less than 100 dollars or more than 5,000 dollars
and/or not less than 6 months nor more than 3 years
imprisonment in a state prison at the discretion of the
court.
[
15
]
And MCL 570.153 provides:
The appropriation by a contractor, or any subcontractor,
of any moneys paid to him for building operations before the
14
Livonia Bldg, 276 Mich App at 519; DiPonio Constr Co, Inc v Rosati
Masonry Co, Inc, 246 Mich App 43, 48; 631 NW2d 59 (2001), citing BF
Farnell Co v Monahan, 377 Mich 552, 555; 141 NW2d 58 (1966).
15
Emphasis added.
584 288 M
ICH
A
PP
576 [June
payment by him of all moneys due or so to become due
laborers, subcontractors, materialmen or others entitled to
payment, shall be evidence of intent to defraud.
[
16
]
Interpreting these statutory provisions, this Court
has stated that a plaintiff must show the following
elements to establish a prima facie case under the
MBTFA:
(1) that the defendant is a contractor or subcontractor
engaged in the building construction industry, (2) that the
defendant was paid for labor or materials provided on a
construction project, (3) that the defendant retained or
used those funds, or any part of those funds, (4) that the
funds were retained for any purpose other than to first pay
laborers, subcontractors, and materialmen, and (5) that
the laborers, subcontractors and materialmen were en-
gaged by the defendant to perform labor or furnish mate-
rial for the specific construction project.
[
17
]
Here, regarding the elements necessary to establish a
prima facie case for an MBTFA violation, the evidence
shows the following: (1) Multi Building, of which Pacio-
cco was the president, was a contractor in the building
construction industry, (2) the Haddads paid Multi
Building for labor and materials used to construct Unit
5, (3) Multi Building made a profit on the project and
used the funds received from the Haddads (4) to pay
other expenses, but did not pay BC Tile, and (5) Multi
Building engaged BC Tile to supply and install ceramic
tile in Unit 5. Thus, we conclude that BC Tile has made
out a prima facie case against Multi Building. However,
the salient question is whether those allegations extend
to Paciocco.
BC Tile asserts that Paciocco was personally liable
for all of the violations of the MBTFA. BC Tile points to
16
Emphasis added.
17
Livonia Bldg, 276 Mich App at 519 (citations omitted).
2010] BC T
ILE V
M
ULTI
B
LDG
C
O
585
evidence that Paciocco signed the closing documents
that allowed the payment of liens to other contractors
and that showed that Multi Building received funds
from the sale. BC Tile contends that once it estab-
lished that Multi Building received proceeds from the
Haddads yet failed to pay BC Tile and that, at all
relevant times, Paciocco was president of Multi Build-
ing and a participant in decision-making, a presump-
tion arose under MCL 570.153 that both Multi Build-
ing and Paciocco misappropriated funds and violated
the MBTFA.
“Officers of a corporation may be held individually
liable when they personally cause their corporation to
act unlawfully.”
18
In fact:
[A] corporate employee or official is personally liable for
all tortious or criminal acts in which he participates,
regardless of whether he was acting on his own behalf or on
behalf of the corporation. If a defendant personally misap-
propriates funds after they are received by the corporation,
he or she can be held personally responsible under the
MBTFA.
[
19
]
In People v Brown, the defendant corporate officer
argued that because her company was the actual “con-
tractor” for the project in question and “she did not
actively participate in the day-to-day operations” of the
company, she could not be held criminally responsible
under the MBTFA.
20
This Court disagreed, explaining
that there was evidence that the defendant withdrew
the homeowner’s funds from the company’s account
before subcontractors had been paid and, accordingly,
“there was sufficient evidence presented that defendant
personally caused the misappropriation of construction
18
Id., citing Brown, 239 Mich App at 739-740.
19
Livonia Bldg, 276 Mich App at 519 (citations and quotation marks
omitted).
20
Brown, 239 Mich App at 742.
586 288 M
ICH
A
PP
576 [June
funds under the MBTFA, and she therefore could be
prosecuted under the statute even though she techni-
cally was not the ‘contractor’ for the...project.”
21
The
Brown defendant also argued that “she could not have
violated the MBTFA because she did not personally
receive [the purchaser’s] payments....”
22
This Court
again disagreed, holding that
there is no requirement that contract payments be made
directly to the officer of a corporate contractor in order to
hold the officer individually responsible under the MBTFA.
Indeed, as long as defendant personally misappropriated
the funds after they had been received by the corporation,
she could be held responsible under the MBTFA.
[
23
]
There is no evidence here that Paciocco personally
used the funds owed to BC Tile as did the defendant in
Brown. However, as demonstrated in Livonia Bldg
Materials Co v Harrison Constr Co, such proof is not
necessary to find an officer liable for an MBTFA viola-
tion. In Livonia Bldg, the defendant contractor received
funds for a project but did not pay the plaintiff in full.
24
The corporate officers gave testimony regarding their
decision to put the funds received in various accounts
and, subsequently, their actions in writing checks to
entities other than the plaintiff.
25
This Court concluded
that the individual corporate officers “acted in direct
contravention of the MBTFA....”
26
According to this
Court, there was sufficient evidence to create a pre-
sumption of misappropriation and to find the corporate
21
Id. at 743.
22
Id.
23
Id. at 743-744.
24
Livonia Bldg, 276 Mich App at 521.
25
Id. at 522.
26
Id. at 516.
2010] BC T
ILE V
M
ULTI
B
LDG
C
O
587
officers individually liable.
27
This Court explained that
the plain language of the MBTFA indicates that “intent
to defraud is evidenced simply by ‘[t]he appropriation
by a contractor...of any moneys paid to him for
building operations before the payment by him of all
moneys due or so to become due laborers, subcontrac-
tors, materialmen or others entitled to payment.’ ”
28
Moreover, “ ‘a reasonable inference of appropriation
arises from the payment of construction funds to a
contractor and the subsequent failure of the contractor
to pay laborers, subcontractors, materialmen, or others
entitled to payment.’ ”
29
Multi Building received payment from the Haddads
for the Unit 5 project, but BC Tile was not paid.
Paciocco stated that the Haddads were not happy with
the tile work done by BC Tile, among other things, and
Multi Building therefore agreed to give them a closing
credit of $23,300. He claimed that at least $15,000
30
of
this credit was attributable to the defective tile work.
Paciocco also stated that $32,000 in interest and carry-
ing costs were attributable to a five-month delay on the
27
Id.
28
Id. at 520, quoting MCL 570.153.
29
Livonia Bldg, 276 Mich App at 520, quoting People v Whipple, 202
Mich App 428, 435; 509 NW2d 837 (1993).
30
Although the seller’s settlement statement showed a credit of
$23,300, Paciocco offered no supporting documentation to substantiate
his claim that BC Tile was responsible for $15,000 worth of this credit.
BC Tile, on the other hand, attached to its brief on appeal an addendum
to the purchase agreement that showed a $14,000 credit “as compensa-
tion for the purchaser[s’] accepting the ceramic tile as is, accepting the
sliding door installed in the nook as is and for the builder not being
required to install the burm....” Thus, this $14,000 credit was not
entirely attributable to BC Tile. However, this document was not
submitted to the trial court below. This Court considers only “what was
properly presented to the trial court before its decision on the motion.”
Peña, 255 Mich App at 310.
588 288 M
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part of BC Tile. As a result, Paciocco stated, “I have
believed and continue to believe that Multi [Building]
does not owe [BC Tile] any money for the labor and/or
materials that it provided, let alone $33,813....” It
should be noted that BC Tile submitted an affidavit
executed by the Haddads stating that they approved BC
Tile’s work and that the credit they received “was not
related to [BC Tile’s] labor and materials, and minor
problems were remedied.” This suggests a question of
fact regarding the extent to which the tile work was
defective and the amount of money to which BC Tile
was entitled.
Although Paciocco denies that he had day-to-day
involvement with or exercised decision-making for the
Unit 5 project, he does admit that he dealt personally
with the Haddads when they allegedly complained
about the tile work. Paciocco concludes that he “did not
personally receive, misapply, misappropriate, and/or
engage in any misappropriation of any construction
funds from or relating to the subject property or know
about and/or approve of any violation of the [MBTFA].”
Several of these latter statements are conclusions of
law, and further, pursuant to Brown, not having “day-
to-day” involvement in a project does not absolve a
corporate officer of individual liability.
31
The fact re-
mains that Paciocco’s signature is on the seller’s settle-
ment statement, which provided for the payment of
liens to contractors other than BC Tile and indicated
that Multi Building received $33,419.17 from the sale.
We conclude that this evidence creates at least a ques-
tion of fact regarding the extent to which Paciocco was
involved in causing Multi Building to act in violation of
the MBTFA.
31
Brown, 239 Mich App at 743.
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III. PACIOCCO’S MOTION FOR SUMMARY DISPOSITION
A. STANDARD OF REVIEW
BC Tile argues that the trial court erred by granting
summary disposition to Paciocco. Although BC Tile
brought a motion for summary disposition pursuant to
MCR 2.116(C)(9) and (10), the trial court granted
summary disposition in favor of Paciocco pursuant to
MCR 2.116(I)(2). “This Court’s review of a trial court’s
decision to deny or grant summary disposition is de
novo.”
32
“The trial court appropriately grants summary
disposition to the opposing party under MCR
2.116(I)(2) when it appears to the court that the oppos-
ing party, rather than the moving party, is entitled to
judgment as a matter of law.”
33
B. ANALYSIS
BC Tile argues that the trial court erred by granting
summary disposition to Paciocco on the basis of its
conclusion that BC Tile had the burden of proof and its
erroneous reliance on Paciocco’s affidavit as credible
and conclusive when BC Tile presented contradictory
evidence. We agree that summary disposition in Pacio-
cco’s favor was improper.
First, James Lumber
34
is not binding authority.
35
And, as discussed earlier, the plain language of MCL
570.153 “indicates that intent to defraud is evidenced
simply by ‘[t]he appropriation by a contractor...ofany
moneys paid to him for building operations before the
32
Rossow v Brentwood Farms Dev, Inc, 251 Mich App 652, 657; 651
NW2d 458 (2002).
33
Id. at 658.
34
James Lumber, 107 Mich App 793.
35
Livonia Bldg, 276 Mich App at 520, citing MCR 7.215(J)(1).
590 288 M
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payment by him of all moneys due or so to become due
laborers, subcontractors, materialmen or others en-
titled to payment.’ ”
36
Moreover, “ ‘a reasonable infer-
ence of appropriation arises from the payment of con-
struction funds to a contractor and the subsequent
failure of the contractor to pay laborers, subcontractors,
materialmen, or others entitled to payment.’ ”
37
Although Paciocco argues that the quoted passage
from Livonia Bldg proves only that there would be a
presumption of appropriation against Multi Building, it
is clear that Livonia Bldg addressed the personal liabil-
ity of corporate officers. This Court explained: “[T]he
appropriation of any monies paid to a contractor for
building operations before payment of the protected
parties—here, the materialman—is evidence of intent
to defraud. Accordingly, evidence was presented from
which the jury could reasonably have concluded that
[the corporate officers] violated the MBTFA....”
38
Thus, as previously stated, the simple fact that a
corporate officer wrote checks to make payments to
entities other than the contractor to whom money was
owed under the MBTFA was enough to establish a
presumption of appropriation, and further to find the
officer personally liable.
Paciocco’s denials, relied on by the trial court, simply
stated that he did not have “day-to-day involvement in
matters or decision-making relating to the subject prop-
erty.” Paciocco did, however, admit that he dealt with
the Haddads when they allegedly complained about the
tile work, and BC Tile presented evidence that Paciocco
36
Livonia Bldg, 276 Mich App at 520, quoting MCL 570.153 (emphasis
added).
37
Livonia Bldg, 276 Mich App at 520, quoting Whipple, 202 Mich App
at 435.
38
Livonia Bldg, 276 Mich App at 522 (citation omitted).
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signed the seller’s settlement statement at the closing,
which provided that liens to other contractors be paid
and further, along with the profit-and-loss statement,
indicated that Multi Building received funds from the
sale. Nevertheless, Paciocco further stated that he “did
not personally receive, misapply, misappropriate, and/or
engage in any misappropriation of any construction
funds from or relating to the subject property or know
about and/or approve of any violation of the [MBTFA].”
Even if Paciocco’s statements can be construed as a
denial of responsibility for writing checks after the
proceeds of the Unit 5 sale had been deposited, if “the
burden of proof at trial on a dispositive issue rests on a
nonmoving party, the nonmoving party may not rely on
mere allegations or denials in pleadings, but must go
beyond the pleadings to set forth specific facts showing
that a genuine issue of material fact exists.”
39
Paciocco’s
mere denials without documentation were not enough
to overcome the presumption of appropriation and,
likewise, did not entitle him to judgment as a matter of
law. Therefore, we conclude that the trial court erred by
granting summary disposition to Paciocco.
We affirm the trial court’s order denying BC Tile’s
motion for summary disposition, reverse the trial
court’s grant of summary disposition to Paciocco, and
remand for further proceedings in accordance with this
opinion. No taxable costs pursuant to MCR 7.219,
neither party having prevailed in full. We do not retain
jurisdiction.
39
Karbel v Comerica Bank, 247 Mich App 90, 97; 635 NW2d 69 (2001)
(citation, emphasis, and quotation marks omitted).
592 288 M
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HENRY FORD HEALTH SYSTEM
v ESURANCE INSURANCE COMPANY
Docket No. 288633. Submitted May 11, 2010, at Detroit. Decided June 8,
2010, at 9:10 a.m.
Henry Ford Health System brought an action in the Wayne Circuit
Court against Esurance Insurance Company and Citizens Insur-
ance Company of America to recover the cost of Travion Hamil-
ton’s medical treatment as a no-fault benefit. Hamilton was
severely injured when the stolen motor vehicle in which he was a
passenger struck a utility pole. The case against Citizens was
dismissed after the court, Prentis Edwards, J., determined that
Esurance had no-fault priority over Citizens. Esurance denied
liability, asserting that Hamilton, and thus plaintiff, was not
entitled to personal protection insurance benefits under MCL
500.3113(a), which excludes from coverage an injured person who
“was using a motor vehicle...which he or she had taken unlaw-
fully,” because he was using the vehicle knowing it had been
stolen. Esurance also filed a counterclaim seeking a declaratory
judgment that it was not required to pay no-fault benefits to
plaintiff. The court denied the parties’ cross-motions for summary
disposition, and the case proceeded to trial. The jury found that
Hamilton was using the vehicle at the time of the accident, that he
had unlawfully taken the vehicle, and that he did not reasonably
believe that he was entitled to take and use the vehicle. On the
basis of these findings, the court granted Esurance its requested
declaratory relief and also entered a judgment of no cause of action
in favor of Esurance. Plaintiff appealed.
The Court of Appeals held:
The trial court erred by denying plaintiff’s motion for summary
disposition because there was no evidence that Hamilton was
using a motor vehicle that he had taken unlawfully. MCL
500.3113(a) envisions the completed taking of a motor vehicle,
followed by its use during which an accident occurs giving rise to
injuries. Hamilton never engaged or participated in an act through
which he took possession or gained control of the vehicle, given
that he was a mere passenger in a vehicle that had been stolen
before his involvement. Hamilton’s mere use of the vehicle
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as a passenger did not establish that he had taken the vehicle,
which is a prerequisite for the exclusion from coverage under MCL
500.3113(a).
Reversed.
I
NSURANCE —
N
O
-F
AULT —
P
ERSONAL
P
ROTECTION
I
NSURANCE
B
ENEFITS —
M
OTOR
V
EHICLES —
U
NLAWFUL
T
AKING OF A
M
OTOR
V
EHICLE
.
The no-fault act excludes from entitlement to personal protection
insurance benefits for accidental bodily injury a person who at the
time of the accident was using a motor vehicle or motorcycle that
he or she had taken unlawfully; the exclusion does not apply to
situations in which the injured person was merely a passenger in
a vehicle that had been stolen before the injured person’s involve-
ment; use of the vehicle alone is insufficient; there must be
evidence that the injured person engaged or participated in the
unlawful taking for the statutory exclusion to apply (MCL
500.3113[a]).
Foster, Swift, Collins & Smith, P.C. (by Paul J.
Millenbach), for Henry Ford Health System.
Siemion Huckabay, P.C. (by Raymond W. Morganti),
for Esurance Insurance Company.
Before: M
URPHY
, C.J., and K. F. K
ELLY
and S
TEPHENS
,
JJ.
M
URPHY
, C.J. Plaintiff, Henry Ford Health System,
provided medical services to Travion Hamilton, who
was severely injured when a stolen Jeep Cherokee in
which he was a passenger struck a utility pole. Plaintiff
filed this action against defendant Esurance Insurance
Company, the insurer of the stolen vehicle, to recover
the cost of Hamilton’s medical treatment as a no-fault
benefit.
1
Relying on MCL 500.3113(a), Esurance denied
1
Plaintiff also sued Citizens Insurance Company of America, which
had been assigned the case by the Michigan Assigned Claims Facility.
After the trial court determined that Esurance had no-fault priority over
Citizens, the action against Citizens was dismissed. Citizens is not a
party to this appeal.
594 288 M
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liability, arguing that Hamilton, and thus plaintiff, was
not entitled to no-fault benefits because at the time of
the accident Hamilton was using the Jeep knowing it
had been stolen.
2
The trial court denied the parties’
cross-motions for summary disposition, and the case
proceeded to trial. The jury found that Hamilton was
using the Jeep at the time of the accident, that he had
unlawfully taken the vehicle, and that Hamilton did not
reasonably believe that he was entitled to take and use
the Jeep. Accordingly, the trial court entered a judg-
ment of no cause of action in favor of Esurance.
3
Plaintiff appeals as of right. We hold that the trial court
erred by denying plaintiff’s motion for summary dispo-
sition because there was an absolute dearth of evidence
that Hamilton was using a motor vehicle that “he...
had taken unlawfully....”MCL500.3113(a). We thus
reverse and remand for entry of judgment in favor of
plaintiff.
I. FACTS
The documentary evidence indicated that Hamilton’s
girlfriend, Chanda Profic, borrowed the Jeep from an
acquaintance for a small fee knowing that it was a stolen
vehicle. There is no dispute that the Jeep had been stolen
from its owner, and there is no claim that Hamilton
participated directly in taking the vehicle from the owner.
Profic was not provided with keys to operate the vehicle.
The Jeep’s ignition cylinder had been removed by damag-
ing the housing on the steering column. The door lock on
the driver’s side was also missing. The vehicle was given
to Profic with the engine running, and she did not know
2
Esurance also filed a counterclaim seeking a declaratory judgment
that it was not required to pay no-fault benefits to plaintiff.
3
The trial court also granted Esurance declaratory relief, stating that
it was not required to pay no-fault benefits to plaintiff.
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how to turn it off or restart it. Profic, who did not have a
driver’s license or own her own vehicle, later picked up
Hamilton in the vehicle, and the two of them drove
around and used the vehicle for three to five hours.
During this period, Profic and Hamilton stopped several
times to visit friends or to go inside a store. They would
leave the Jeep unattended with the engine running during
these stops. During one stop, a friend turned the engine
off and had to restart the vehicle for Profic because she did
not know how to start it without a key. Hamilton never
operated or drove the Jeep, but simply rode along as a
passenger. Profic and Hamilton were later involved in an
accident when the vehicle struck a utility pole, causing
severe and permanent injuries to Hamilton. Hamilton did
not have any automobile insurance of his own.
The trial court entertained cross-motions for summary
disposition in which the parties presented a variety of
arguments, including plaintiff’s argument that there was
no evidence that Hamilton himself had taken the vehicle
unlawfully and, thus, the no-fault coverage exclusion of
MCL 500.3113(a) was not implicated. The trial court
denied the motions, finding that there were genuine
issues of material fact that precluded summary disposi-
tion in favor of either party. The case proceeded to trial,
and a judgment of no cause of action predicated on the
jury’s verdict was entered. As noted, the jurors found that
Hamilton was using the Jeep at the time of the accident,
that he had unlawfully taken the vehicle, and that Hamil-
ton did not reasonably believe that he was entitled to take
and use the Jeep. Plaintiff appeals as of right.
II. ANALYSIS
Plaintiff argues, in part, that the trial court erred by
denying its motion for summary disposition under MCR
2.116(C)(10) because it was entitled to its claim for
596 288 M
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payment as a matter of law given that there was a
complete absence of evidence that Hamilton himself
had taken the stolen vehicle, let alone taken it unlaw-
fully. We agree.
A. STANDARD OF REVIEW AND PRINCIPLES
GOVERNING MCR
2.116(C)(10)
This Court reviews de novo a trial court’s decision on
a motion for summary disposition. West v Gen Motors
Corp, 469 Mich 177, 183; 665 NW2d 468 (2003). Also
reviewed de novo are issues of statutory interpretation.
Feyz v Mercy Mem Hosp, 475 Mich 663, 672; 719 NW2d
1 (2006).
MCR 2.116(C)(10) provides for summary disposition
when there is no genuine issue regarding any material
fact and the moving party is entitled to judgment or
partial judgment as a matter of law. A motion brought
under MCR 2.116(C)(10) tests the factual support for a
party’s cause of action. Skinner v Square D Co, 445
Mich 153, 161; 516 NW2d 475 (1994). A trial court may
grant a motion for summary disposition under MCR
2.116(C)(10) if the pleadings, affidavits, and other docu-
mentary evidence, when viewed in a light most favor-
able to the nonmovant, show that there is no genuine
issue with respect to any material fact. Quinto v Cross
& Peters Co, 451 Mich 358, 362; 547 NW2d 314 (1996),
citing MCR 2.116(G)(4) and (5). “A genuine issue of
material fact exists when the record, giving the benefit
of reasonable doubt to the opposing party, leaves open
an issue upon which reasonable minds might differ.”
West, 469 Mich at 183. A court may only consider
“substantively admissible evidence actually proffered”
relative to a motion for summary disposition under
MCR 2.116(C)(10). Maiden v Rozwood, 461 Mich 109,
121; 597 NW2d 817 (1999). The trial court is not
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permitted to assess credibility, to weigh the evidence, or
to determine the facts, and if material evidence con-
flicts, it is not appropriate to grant a motion for
summary disposition under MCR 2.116(C)(10). Skin-
ner, 445 Mich at 161; Hines v Volkswagen of America,
Inc, 265 Mich App 432, 437; 695 NW2d 84 (2005).
B. PRINCIPLES OF STATUTORY CONSTRUCTION
In Zwiers v Growney, 286 Mich App 38, 44; 778
NW2d 81 (2009), this Court set forth the well-
established principles of statutory construction:
Our primary task in construing a statute is to discern
and give effect to the intent of the Legislature. The words
contained in a statute provide us with the most reliable
evidence of the Legislature’s intent. In ascertaining legis-
lative intent, this Court gives effect to every word, phrase,
and clause in the statute. We must consider both the plain
meaning of the critical words or phrases as well as their
placement and purpose in the statutory scheme. This Court
must avoid a construction that would render any part of a
statute surplusage or nugatory. The statutory language
must be read and understood in its grammatical context,
unless it is clear that something different was intended. If
the wording or language of a statute is unambiguous, the
Legislature is deemed to have intended the meaning clearly
expressed, and we must enforce the statute as written. A
necessary corollary of these principles is that a court may
read nothing into an unambiguous statute that is not
within the manifest intent of the Legislature as derived
from the words of the statute itself. [Citations and quota-
tion marks omitted.]
C. DISCUSSION
Under the no-fault act, MCL 500.3101 et seq., and
with respect to personal protection insurance (PIP)
benefits, “an insurer is liable to pay benefits for acci-
dental bodily injury arising out of the ownership, op-
598 288 M
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eration, maintenance or use of a motor vehicle as a
motor vehicle, subject to the provisions of [the act].”
MCL 500.3105(1). With regard to PIP benefits, they are
payable for, in part, “[a]llowable expenses consisting of
all reasonable charges incurred for reasonably neces-
sary products, services and accommodations for an
injured person’s care, recovery, or rehabilitation.” MCL
500.3107(1)(a). Esurance argues that Hamilton was
barred from recovering no-fault PIP benefits under
MCL 500.3113(a), which provides:
A person is not entitled to be paid personal protection
insurance benefits for accidental bodily injury if at the time
of the accident any of the following circumstances existed:
(a) The person was using a motor vehicle or motorcycle
which he or she had taken unlawfully, unless the person
reasonably believed that he or she was entitled to take and
use the vehicle. [Emphasis added.]
Plaintiff argues that Hamilton never engaged in the
act of taking the Jeep from anyone; rather, it had
already been taken by the time he hopped into the
vehicle and rode along as a passenger.
Addressing the language of MCL 500.3113(a), this
Court observed in Amerisure Ins Co v Plumb, 282 Mich
App 417, 425; 766 NW2d 878 (2009):
Thus, PIP benefits will be denied if the taking of the
vehicle was unlawful and the person who took the vehicle
lacked “a reasonable basis for believing that he [or she]
could take and use the vehicle.” Bronson Methodist Hosp v
Forshee, 198 Mich App 617, 626; 499 NW2d 423 (1993).
When applying § 3113(a), the first level of inquiry will
always be whether the taking of the vehicle was unlawful.
If the taking was lawful, the inquiry ends because § 3113(a)
does not apply.
We would add that the inquiry into whether MCL
500.3113(a) is implicated must also necessarily entail
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ascertaining whether the injured individual seeking
coverage took the vehicle or engaged in the taking of the
vehicle.
The terminology “taken” or “had taken,” as used in
MCL 500.3113(a), is not defined in the statutory
scheme. With respect to statutory language, “[a]ll
words and phrases shall be construed and understood
according to the common and approved usage of the
language.” MCL 8.3a. The word “taken” is the past
participle of “take.” In Plumb, the panel construed the
word “take” as found in the “take and use” clause of
MCL 500.3113(a).
4
Plumb, 282 Mich App at 428. The
Court stated that “take” means to get something into
one’s hands or possession through a voluntary action.
Id. This would necessarily involve either a transfer of
possession or control of an object from one person to
another or the gaining of possession or control of an
unattended object that is not in anyone’s control or
possession. And the words “had taken” reflect a past or
completed action. Accordingly, MCL 500.3113(a) envi-
sions an accomplished or completed taking of a motor
vehicle followed by its use during which an accident
occurs giving rise to injuries.
Hamilton never engaged or participated in an act
through which he took possession or gained control of
the Jeep. There was no act transferring possession or
control of the Jeep from Profic or others to Hamilton,
nor did Hamilton take possession or control of a vehicle
that was unattended and not within anyone’s control or
possession. He never took the Jeep from anyone or
anyplace. On the evidence presented, we cannot find
that he “had taken” the vehicle, let alone that he took it
4
In MCL 500.3113(a), the exclusion bars a person from recovering PIP
benefits “unless the person reasonably believed that he or she was
entitled to take and use the vehicle.” (Emphasis added.)
600 288 M
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unlawfully. Rather, the thief who directly took the Jeep
away from the owner, or possibly Profic, would most
accurately be described as having taken the vehicle, and
Hamilton then merely joined in relative to the “use” of
the Jeep—a Jeep that had already been taken. The
taking had been completed by the time Hamilton came
into the picture, and he never thereafter took control or
possession of the vehicle away from Profic.
One might argue that Hamilton aided and abetted
Profic or the initial thief in an ongoing taking such that
it could be said that he “had taken” the Jeep. However,
this argument would circumvent the statutory lan-
guage and is inconsistent with the words “had taken,”
which reflect a completed act. Once Profic or the initial
thief took or gained control and possession of the Jeep,
the taking was completed. The ongoing-taking argu-
ment would also be inconsistent with the separate
treatment in MCL 500.3113(a) of the words “using” and
“taken.” Again, MCL 500.3113(a) precludes the recov-
ery of PIP benefits when the person seeking those
benefits “was using a motor vehicle or motorcycle
which he or she had taken unlawfully, unless the person
reasonably believed that he or she was entitled to take
and use the vehicle.” (Emphasis added.) Certainly, there
can be no reasonable dispute that Hamilton was using
or making use of the Jeep as a passenger for purposes of
transportation when the accident occurred, but, for the
reasons stated earlier, he was not involved in the taking
of the vehicle. Had the Legislature intended to preclude
the receipt of benefits by an injured person under the
circumstances presented here, it could simply have
provided that PIP benefits are not recoverable by a
person who was using a motor vehicle “which he or she
had taken or was using unlawfully.” Stating that a
person “had taken” a vehicle is not synonymous with
saying that a person “had used” the vehicle; the terms
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have different meanings. Indeed, this is reflected in the
language of the statute itself: MCL 500.3113(a) pro-
vides that the exclusion of coverage does not apply in
situations in which the person “reasonably believed
that he or she was entitled to take and use the vehicle.”
(Emphasis added.) This language shows that a person
must both take and use a vehicle. This understanding is
consistent with the preceding language in MCL
500.3113(a) that refers to “using” a vehicle that a
person “had taken.” Hamilton used the Jeep, but he did
not take the Jeep.
Our construction is in accord with the Plumb panel’s
discussion of the “take and use” clause:
Random House Webster’s College Dictionary (1997) de-
fines the word “take” as “to get into one’s hands or
possession by voluntary action” and the word “use” as “to
employ for some purpose; put into service[.]” Clearly, the
terms “take” and “use” are not interchangeable or even
synonymous; obtaining possession of an object is very
different from employing that object or putting it into
service. The term “and” is defined as a conjunction, and it
means “with; as well as; in addition to[.]” When given its
plain and ordinary meaning, the word “and” between two
phrases requires that both conditions be met....Constru-
ing the word “and” as a conjunction does not give the text
of § 3113(a) a dubious meaning. On the contrary, it is clear
that it requires a driver who obtains a vehicle unlawfully to
have (1) a reasonable belief that he or she was entitled to
take the vehicle and (2) a reasonable belief that he or she
was entitled to use the vehicle. The statute does not contain
any clear legislative intent that the term “and” was meant
to be applied as providing a choice or alternative between
taking the vehicle and using the vehicle....Therefore, in
circumstances in which the vehicle was unlawfully taken,
the injured party may obtain PIP benefits only if it can be
shown (1) that the injured party reasonably believed that
he or she was entitled to take the vehicle and (2) that the
injured party reasonably believed that he or she was
602 288 M
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entitled to use the vehicle. [Plumb, 282 Mich App at
428-429 (citations omitted; alterations in original).]
Accordingly, Hamilton’s mere use of the vehicle as a
passenger did not establish that he “had taken” the
vehicle, which is a prerequisite for imposition of the
coverage exclusion in MCL 500.3113(a). The vehicle
must be one that the injured person was “using” and
one that the injured person “had taken.” The evidence
presented in this case established use, not a taking.
The caselaw does not conflict with our resolution of this
case. In Mester v State Farm Mut Ins Co, 235 Mich App
84; 596 NW2d 205 (1999), three young girls skipped school
and went looking for a vehicle with keys in it so that they
could take the vehicle and drive away from the area. The
Court described what happened next:
Amanda...found a truck parked with keys inside and
got into the driver’s seat. Jessica
[
5
]
got into the passenger
seat, Edelfina got into the back seat, and Amanda drove the
vehicle away.
The girls used the truck to go to the upper peninsula,
stopping occasionally to purchase gas and to take turns
driving the truck in a field. After running out of money, the
girls used the truck to return to the lower peninsula on I-75
and headed back toward Cass City. At approximately 1:00
A.M.
on the morning of March 25, the girls were spotted in the
truck by a police officer in the village of Reese. A chase
ensued, and Amanda refused to pull over despite the pleas of
Edelfina and Jessica for her to stop. The truck went out of
control during the chase, resulting in a roll-over collision that
killed Edelfina and injured Jessica and Amanda. [Id. at
85-86.]
The plaintiff filed suit against State Farm Mutual
Insurance Company, seeking to recover no-fault PIP
5
The lawsuit was pursued by Jessica’s mother as her next friend.
Mester, 235 Mich App at 85-86.
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benefits, and the trial court granted State Farm’s
motion for summary disposition, finding “that there
was no question of fact that Jessica was actively in-
volved in unlawfully taking the truck and driving it
away.” Id. at 86. This Court affirmed, holding:
An unlawful taking does not require an intent to per-
manently deprive the owner of the vehicle to constitute an
offense. Indeed, the offense of unlawfully driving away a
motor vehicle, MCL 750.413; MSA 28.645, a felony com-
monly referred to as “joyriding,” requires an intent to take
or drive the vehicle away but not to steal the vehicle. The
offense requires the specific intent to take possession of the
vehicle unlawfully, and punishes conduct that does not rise
to the level of larceny where an intent to permanently
deprive the owner of the property is lacking. Had the
Legislature intended to exempt from subsection 3113(a) all
joyriding incidents, it would have chosen a different term
than “unlawful taking,” such as “steal” or “permanently
deprive.” Instead, the Legislature chose a term that encom-
passes the offense of joyriding. As explained above, the
justices of the Supreme Court who recognized a joyriding
exception in the Priesman
[
6
]
case did so not because joyrid-
ing does not involve an unlawful taking, but only because
of special considerations attendant to the joyriding use of a
family vehicle by a family member. Those considerations do
not warrant expansion of the exception beyond the family
context.
Here, on the basis of Jessica’s deposition testimony,
there is no question of fact that Jessica participated in the
unlawful taking of the truck, without permission and
without any reason to believe that she was entitled to take
or use the truck. On these undisputed facts, the clear
intent of the Legislature was to deny the payment of
no-fault PIP benefits. Hence, summary disposition was
properly granted under MCR 2.116(C)(10). [Id. at 88-89
(citations omitted).]
6
Priesman v Meridian Mut Ins Co, 441 Mich 60; 490 NW2d 314 (1992).
604 288 M
ICH
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593 [June
As is readily apparent, Mester is distinguishable from
the facts here because Jessica actually participated in
the act of taking the parked truck, along with the two
other girls, and once they had taken the vehicle, she was
injured while using the truck. Jessica engaged or par-
ticipated in an act through which she and the others
took possession or gained control of the unattended
truck. That was simply not the case in the instant
action.
With respect to the joyriding discussion in Mester,it
does not have any implication here because the discus-
sion was focused on the question whether the taking
was unlawful, not on whether there was a taking in the
first place. While Hamilton may well indeed have been
guilty of joyriding under MCL 750.414 for the unautho-
rized use of the Jeep, MCL 500.3113(a) requires a
taking by the person seeking PIP benefits, not mere
use.
In Plumb, 282 Mich App 417, this Court held that
summary disposition in favor of the no-fault insurer
was proper because the injured motorist seeking PIP
benefits, Plumb, unlawfully took the vehicle involved in
the underlying accident and did not have a reasonable
belief that she was entitled to use the vehicle within the
meaning of MCL 500.3113(a). The Court described the
facts of the case as follows:
Plumb arrived at a bar near Caro, Michigan, about 11:30
p.m. one evening, socializing and consuming alcohol with
several men. A couple of hours later, David Shelton drove a
Jeep Cherokee to the same bar and parked it in the parking
lot. Shelton did not maintain insurance on the Jeep, and
although he had entered into an agreement to purchase the
Jeep several months earlier, he was not the titled owner.
Shelton left his keys in the Jeep, and he did not usually lock
his car doors. Plumb and Shelton did not know one
another, and during the time they were both in the bar,
2010] H
ENRY
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ORD
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EALTH
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YS V
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they never spoke to one another. Shelton did not give
Plumb the keys or permission to drive the Jeep, and she did
not receive the keys or permission from the titled owner.
Plumb left the bar with two men, one of whom she
described as Caucasian and wearing a baseball cap and a
goatee. Plumb claimed that the unidentified man with the
baseball cap and goatee handed her the keys to the Jeep
and asked her to drive because he was on probation.
Plumb, who did not maintain automobile insurance and did
not reside with a relative who carried automobile insur-
ance, was intoxicated, and her driver’s license had been
suspended. Shelton left the bar shortly after Plumb and
discovered that the Jeep was missing.
Later that morning, Plumb was found lying in a field
near the bar, having sustained severe burn injuries. In a
deep drainage ditch about 250 yards away from Plumb, the
police found Shelton’s Jeep, which had been totally con-
sumed by fire. Plumb suffers from a closed-head injury and
posttraumatic stress disorder and does not recall all the
events leading up to the accident or the accident itself. The
police determined that the Jeep had been driven away from
the bar across a mowed field and an unmowed hayfield,
struck an electric transformer, and ultimately crashed into
the drainage ditch. In the mowed field near the parking lot,
there were several other sets of tire tracks. The police
concluded that Plumb had been driving the Jeep and was
its sole occupant. [Id. at 420-421.]
Plumb is distinguishable from the facts here because
it was uncontested that Plumb engaged or participated
in an unlawful taking when she took possession or
gained control of the vehicle and drove it away. Here,
again, Hamilton never took the Jeep.
In Butterworth Hosp v Farm Bureau Ins Co, 225 Mich
App 244, 246; 570 NW2d 304 (1997), the injured person
for whom PIP benefits were sought “telephoned his
mother at work, asked her permission to use her car,
and she refused. Nevertheless, [he] took the car keys
from his parents’ mobile home, drove the car, and was
606 288 M
ICH
A
PP
593 [June
involved in an accident in which he sustained inju-
ries....”InBronson Methodist Hosp, 198 Mich App at
620-621, the injured person seeking PIP benefits had
taken possession and control of a vehicle that had
earlier been driven by a friend, who had taken over the
driving from yet another friend, who in turn had been
stopped and arrested on a probation violation. In
Landon v Titan Ins Co, 251 Mich App 633, 635-636; 651
NW2d 93 (2002), the injured person seeking PIP ben-
efits drove off in a vehicle owned by a friend who, by
agreement, had parked the car on the injured person’s
property for the purpose of selling it. In Butterworth
Hosp and Bronson Methodist Hosp, this Court ulti-
mately held that the insured motorists were entitled to
PIP benefits, and in Landon, this Court held that the
trial court erred as a matter of law by finding that the
injured person unlawfully took her friend’s vehicle.
Landon, 251 Mich App at 642-643; Butterworth Hosp,
225 Mich App at 249; Bronson Methodist Hosp, 198
Mich App at 631. But even had the panels ruled against
the injured motorists, the cases clearly involved injured
persons who “had taken” a motor vehicle, which was
not the case here.
It is certainly arguable, on a practical level, that it
makes little sense to distinguish between a thief or
joyrider who directly participates in the taking of a
motor vehicle and a person who, while not involved in
the taking of the vehicle, later uses the vehicle for his or
her benefit knowing it had been stolen. It is clear that
the Legislature in drafting the statute was focused on
the person or persons engaged in taking a motor vehicle
for purposes of the PIP-benefits exclusion, apparently
without contemplating scenarios in which other per-
sons may also have been involved in criminal activity
associated with the use of the vehicle. We cannot,
however, go beyond the words of MCL 500.3113(a). If
2010] H
ENRY
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YS V
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607
the Legislature desires to preclude an award of PIP
benefits to persons engaged in criminal activity who did
not take a motor vehicle, it is for the Legislature to
amend the statute. It is certainly not within our author-
ity to do so.
III. CONCLUSION
The trial court erred by denying plaintiff’s motion for
summary disposition under MCR 2.116(C)(10) because
there was no evidence that Hamilton was using a motor
vehicle that “he... had taken unlawfully....” MCL
500.3113(a). In light of our ruling, it is unnecessary to
reach plaintiff’s alternative arguments.
Reversed and remanded for entry of judgment in
favor of plaintiff. We do not retain jurisdiction. Having
prevailed in full, plaintiff is awarded taxable costs
pursuant to MCR 7.219.
608 288 M
ICH
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593 [June
PEOPLE v SWAIN
Docket No. 293350. Submitted April 14, 2010, at Lansing. Decided June
8, 2010 at 9:15 am.
Lorinda I. Swain was convicted by a jury in the Calhoun Circuit
Court of four counts of first-degree criminal sexual conduct
involving a victim, her adopted son, under the age of 13. Defendant
moved for a new trial, claiming that the victim had recanted his
trial testimony and that the recantation constituted newly discov-
ered evidence. Defendant also alleged that her trial counsel had
rendered ineffective assistance. The court, Conrad J. Sindt, J.,
denied the motion based on newly discovered evidence and,
following a hearing pursuant to People v Ginther, 390 Mich 436
(1973), denied the motion based on ineffective assistance of counsel.
The Court of Appeals, S
AWYER
,P.J., and S
AAD
and B
ANDSTRA
,JJ.,
affirmed the convictions in an unpublished opinion per curiam,
issued February 24, 2004 (Docket No. 244804). Defendant then
moved in the trial court for relief from the judgment on the basis of
alleged newly discovered evidence and ineffective assistance of trial
counsel. The trial court denied the motion, holding that even if the
foundational elements for granting a new trial on the basis of newly
discovered evidence were met, the newly discovered evidence, if
admitted at a new trial, would not cause a different result. Defendant
did not appeal that order. Defendant again moved for a new trial, and
the trial court denied the motion. The Court of Appeals denied
defendant’s delayed application for leave to appeal the trial court’s
order in an unpublished order, entered May 20, 2005 (Docket No.
261667). Defendant, represented by new appellate counsel, again
moved for relief from her judgment on the basis of alleged newly
discovered evidence, the testimony of two witnesses, that defendant
asserted would make a different result at a new trial probable.
Defendant also asserted that if the trial court concluded that the
evidence could have been discovered at the time of her trial, her prior
appellate counsel was ineffective for failing to investigate and present
the witnesses’ testimony. The prosecution responded and, following
an evidentiary hearing, the trial court granted defendant’s motion
and set aside defendant’s convictions. The trial court concluded that
the witnesses’ testimony was not newly discovered and that defen-
2010] P
EOPLE V
S
WAIN
609
dant’s trial counsel could have produced the witnesses at trial or
her prior appellate counsel could have raised that claim of ineffec-
tive assistance on appeal or in a postconviction motion. The trial
court noted that MCR 6.502(G)(1) generally prohibits successive
motions for relief from judgment, but MCR 6.502(G)(2) provides
limited exceptions for newly discovered evidence and retroactive
changes in the law. The court stated that, although the exception
for newly discovered evidence did not apply, MCR 6.508(D)(3)
provides a limited additional exception when a defendant estab-
lishes both good cause for not raising an issue previously and
actual prejudice. The court concluded that the failure of defen-
dant’s trial counsel to investigate the witnesses and the failure of
her prior appellate counsel to pursue the issue of ineffective
assistance of counsel could not be characterized as competent
strategy. The court held that defendant had established actual
prejudice and, but for the error, defendant would have had a
reasonably likely chance of acquittal. The court stated that al-
though the prior appellate counsel’s failure did not establish good
cause, the good-cause requirement should be waived, pursuant to
MCR 6.508(D)(3), because, given the witnesses’ testimony, there
was a significant possibility that defendant was innocent. The
Court of Appeals denied the prosecution’s application for leave to
appeal in an unpublished amended order, entered September 10,
2009 (Docket No. 293350). The Supreme Court, in lieu of granting
leave to appeal, remanded the case to the Court of Appeals for
consideration as on leave granted, directing the Court of Appeals
to consider whether the successive motion for relief from judgment
was barred by MCR 6.502(G) and, if it was, whether defendant’s
constitutional rights are implicated given that the trial court
found a significant possibility that defendant was innocent on the
basis of evidence defendant’s attorney failed to present at trial.
485 Mich 997 (2009).
The Court of Appeals held:
1. MCR 6.502(G)(2) provides that a defendant may only file a
successive motion for relief from judgment when there is a
retroactive change in the law that occurred after the first motion
or there is new evidence that was not discovered before the first
motion. Reading the good-cause and actual-prejudice require-
ments of MCR 6.508(D)(3) as providing a third exception to the
general rule of MCR 6.502(G)(1) that a defendant may only file one
motion for relief from judgment, as the trial court did, contradicts
the clear language of MCR 6.502(G)(2). The good-cause and
actual-prejudice requirements of MCR 6.508(D)(3) are not rel-
evant until, and are only relevant if, the court determines that the
610 288 M
ICH
A
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609 [June
successive motion falls within one of the two exceptions of MCR
6.502(G)(2). Therefore, the trial court was required to deny
defendant’s successive motion once it determined that the wit-
nesses’ testimony was not new evidence discovered after defen-
dant’s first motion for relief from judgment.
2. The United States Supreme Court has provided that a defen-
dant may have an otherwise barred constitutional claim arising from
his or her trial heard on the merits in a federal habeas corpus action
if the defendant can make a gateway showing of actual innocence. To
satisfy the actual-innocence standard, a defendant must show that it
is more likely than not that no reasonable juror would have found the
defendant guilty beyond a reasonable doubt. The actual-innocence
standard requires a stronger showing than that needed to establish
prejudice in an ineffective-assistance-of-counsel claim. Considering
all the evidence, old and new, and the fact that the case rested on
credibility determinations, defendant did not establish that it is more
likely than not that no reasonable juror would have convicted her.
Defendant failed to make the gateway showing of actual innocence.
3. Even if defendant had made the necessary gateway showing,
it cannot be concluded that defendant’s trial counsel was ineffec-
tive for failing to investigate the witnesses and present them at
trial, and the trial court erred by holding he was. Defendant was
not denied the effective assistance of counsel. The order granting
defendant’s successive motion for relief from judgment must be
reversed.
Reversed.
1. M
OTIONS AND
O
RDERS —
R
ELIEF
F
ROM
J
UDGMENT —
C
RIMINAL
L
AW —
S
UBSEQUENT
M
OTIONS
.
MCR 6.502(G)(2) provides that a criminal defendant may not file a
second or subsequent motion for relief from judgment unless the
motion is based on either a retroactive change in law that occurred
after the first motion or new evidence that was not discovered
before the first motion; the good-cause and actual-prejudice re-
quirements of MCR 6.508(D)(3) do not provide a third exception
and are not relevant until, and are only relevant if, the court
determines that the successive motion falls within one of the two
exceptions provided in MCR 6.502(G)(2).
2. C
ONSTITUTIONAL
L
AW —
H
ABEAS
C
ORPUS
A
CTIONS —
G
ATEWAY
S
HOWINGS —
A
CTUAL
I
NNOCENCE
.
A defendant may have an otherwise barred constitutional claim
arising from his or her trial heard on the merits in a federal habeas
corpus action if the defendant makes a gateway showing of actual
2010] P
EOPLE V
S
WAIN
611
innocence by showing that it is more likely than not that no
reasonable juror would have found the defendant guilty beyond a
reasonable doubt.
Michael A. Cox, Attorney General, B. Eric Restuccia,
Solicitor General, Susan K. Mladenoff, Prosecuting
Attorney, and Jennifer Kay Clark, Assistant Prosecut-
ing Attorney, for the people.
Michigan Innocence Clinic (by Bridget McCormack
and David A. Moran) for defendant.
Before: S
AAD
,P.J., and H
OEKSTRA
and M
URRAY
,JJ.
H
OEKSTRA
, J. This matter is before us on remand from
the Michigan Supreme Court for consideration as on
leave granted. People v Swain, 485 Mich 997 (2009). On
appeal, the prosecution challenges the July 21, 2009,
order granting defendant’s successive motion for relief
from judgment of her four convictions of first-degree
criminal sexual conduct (CSC I), MCL 750.520b(1)(a).
In its remand order, the Supreme Court specified that
we “should address among the issues presented: (1)
whether [defendant’s] successive motion for relief from
judgment in this case was barred by MCR 6.502(G), and
(2) if it was, whether defendant’s constitutional rights
are implicated given that the trial court found a signifi-
cant possibility that defendant is innocent based on
evidence defendant’s attorney failed to present at trial.”
Swain, 485 Mich 997. Because we conclude that defen-
dant’s successive motion was barred by MCR 6.502(G)
and that, despite the motion’s being barred, defendant’s
constitutional rights are not implicated, we reverse.
I. FACTS AND PROCEDURAL HISTORY
Following a jury trial in August 2002 defendant was
convicted of four counts of CSC I for engaging in fellatio
612 288 M
ICH
A
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609 [June
with the victim, her adopted son. This Court affirmed
defendant’s convictions, and the trial court denied
two motions for a new trial and a motion for relief
from judgment. In 2009, represented by new appel-
late counsel, defendant filed a second motion for
relief from judgment, which was based, in part, on
two “newly discovered” witnesses. The trial court,
after hearing the testimony of the new witnesses,
concluded that there was a “significant possibility”
that defendant was innocent of the CSC I crimes, and
it granted the motion.
A. PERTINENT TRIAL TESTIMONY
The victim testified that when he was “[f]ive or
six” years old, while in the “young five[]s” class, he
lived in a trailer on Nine Mile Road with defendant
and his younger brother. Every day before school
while defendant helped the victim get dressed, defen-
dant would place her mouth on his penis. According
to the victim, his brother was not in the trailer when
the sexual abuse occurred, because defendant had
sent the brother outside to wait for the school bus.
The brother would knock on the trailer door when he
saw the school bus coming, and defendant would
quickly finish dressing the victim. The brother testi-
fied that he and the victim usually watched for the
school bus together. He remembered “[l]ike, three or
four times” when he waited for the bus by himself.
Those times, the brother yelled for the victim when
he saw the school bus coming.
Sometime in 1995 or 1996, defendant, the victim,
and the brother moved into defendant’s parents’
house on Oak Grove Road. The three of them slept in
one bedroom. The brother slept in one bed, while
defendant and the victim shared a second, larger bed.
2010] P
EOPLE V
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WAIN
613
According to the victim, when he was asleep and
defendant, who slept naked, was in bed with him, he
would feel “[s]omething wet,” like spit, on his penis.
This happened “[p]retty much all week.”
Both the victim and the brother testified that defen-
dant treated the two boys differently. Defendant treated
the victim like a “boyfriend” and the brother like a
“slave.” She gave the victim more money than the
brother, and she made the brother do most of the
household chores. She kissed the victim on the lips, but
kissed the brother on the cheek or forehead. The
brother testified that he never saw defendant do any-
thing bad to the victim.
The victim first disclosed the sexual abuse in June
2001 when his stepmother questioned him about inap-
propriate contact with a young cousin. The contact
involved the victim’s tongue, and when the victim’s
stepmother asked him where he got the idea, the victim
responded that defendant had done it to him. The
victim admitted that he was afraid of getting in trouble
when he was questioned by his stepmother about his
contact with the cousin. He explained that he did not
tell anyone about the abuse until June 2001 because he
did not want defendant to get in trouble. The victim
also admitted that he subsequently told relatives on two
occasions that defendant had not abused him.
Defendant testified that she did not sexually abuse
the victim. She denied that she ever sent the brother
outside to wait for the school bus by himself. According
to defendant, the victim and the brother waited for the
bus inside, and the two boys went outside together
when they saw the bus at “Little Willy’s” house, two
trailers down. Defendant testified that the “neighbor
and the bus stop — driver could verify it.”
614 288 M
ICH
A
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609 [June
B. PRIOR POSTCONVICTION MOTIONS
In March 2003, defendant, represented by her prior
appellate counsel, Patrick O’Connell, moved for a new
trial. The victim had recanted his trial testimony, and
defendant asserted that the recantation constituted
newly discovered evidence. Defendant also claimed that
she was denied effective assistance of trial counsel. She
argued that her trial counsel was ineffective for failing
to list and call Dr. Stephen Miller as an expert regarding
the sexual abuse of children to rebut the testimony of
the prosecution’s expert and for failing to object to
numerous instances when inadmissible and prejudicial
evidence was presented. The trial court denied the
motion for a new trial based on newly discovered
evidence and, after holding a Ginther
1
hearing, denied
the motion for a new trial based on ineffective assis-
tance of counsel.
This Court affirmed defendant’s convictions. People v
Swain, unpublished opinion per curiam of the Court of
Appeals, issued February 24, 2004 (Docket No. 244804).
The Court rejected defendant’s arguments that trial
counsel was ineffective for failing to respond to the
prosecution’s demand for a witness list until seven days
before trial; failing to call Dr. Miller as an expert
regarding the sexual abuse of children; failing to object
to, and even opening the door for, irrelevant and preju-
dicial testimony; questioning the prosecution’s expert
on the sexual abuse of children about his opinion
regarding whether the victim was abused; failing to
object to the expert’s testimony that the victim’s behav-
ior was consistent with that of sexually abused children;
and failing to introduce a videotape of the victim
denying the abuse allegations. The Court also rejected
1
People v Ginther, 390 Mich 436; 212 NW2d 922 (1973).
2010] P
EOPLE V
S
WAIN
615
defendant’s arguments that the testimony of the pros-
ecution’s expert exceeded the parameters set forth by
the Supreme Court and that the trial court abused its
discretion by denying the motion for a new trial based
on newly discovered evidence.
2
In September 2004, defendant, still represented by
O’Connell, moved for relief from judgment. The motion
was based on several pieces of newly discovered evi-
dence: (1) Deborah Charles, a prison inmate who testi-
fied at the trial that defendant confessed to her, had a
history of rummaging through other inmates’ files to
gain knowledge of their cases and had been investigated
by the Department of Corrections, (2) the victim and
the brother had viewed pornographic photographs and
videos, and this was how the victim learned about oral
sex, (3) Julia Johnson, the victim’s special education
teacher from the second and third grades, could have
testified that defendant treated the victim differently
because of defendant’s inadequate methods of disciplin-
ing him, and (4) two letters by the victim and the
brother that were introduced into evidence at trial were
actually written by the boys’ stepmother. Defendant
also argued that this newly discovered evidence estab-
lished that her trial counsel was ineffective because
counsel had failed to properly investigate and interview
potential witnesses. The trial court denied the motion,
holding that even if the “foundational elements” of
granting a new trial on the basis of newly discovered
evidence were met, the newly discovered evidence, if
admitted at a new trial, would not cause a different
result. Defendant did not appeal the trial court’s order.
2
The Court held that the victim’s recantation of his trial testimony
was cumulative of evidence presented at trial. It noted that defendant’s
trial counsel elicited testimony from the victim that he had told several
family members that the sexual abuse had not occurred.
616 288 M
ICH
A
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609 [June
Defendant moved again for a new trial in February
2005. O’Connell continued to represent defendant. De-
fendant asserted that the motion presented the “pro-
found question” of whether she would be condemned to
prison for the rest of her life when the victim had
recanted and admitted that he perjured himself at trial,
she and the victim had taken polygraph examinations
and each were deemed truthful when they denied the
sexual abuse, no physical evidence or testimony cor-
roborated the victim’s trial testimony, and she had
always maintained her innocence. The trial court de-
nied the motion. It concluded that the motion presented
no new evidence that would be admissible at trial and
likely to cause a different result. It noted that the
victim’s credibility had been “fully before the jury,”
explaining that the jury heard evidence that the victim
was hesitant to testify and that he had, on at least one
occasion, stated that the allegations against defendant
were not true. This Court denied for lack of jurisdiction
defendant’s delayed application for leave to appeal the
trial court’s order. People v Swain, unpublished order of
the Court of Appeals, entered May 20, 2005 (Docket No.
261667).
C. THE PRESENT POSTCONVICTION MOTION
In March 2009, now represented by her present
counsel from the Michigan Innocence Clinic, defendant
moved again for relief from her judgment of conviction
and sentence. The motion was based on newly discov-
ered evidence—the testimony of two witnesses, Tanya
Winterburn, who was the school bus driver, and William
Risk, a neighbor who rode the school bus with the
victim and the brother—that rebutted the prosecution’s
theory that defendant sent the brother outside to wait
for the school bus while she sexually abused the victim.
2010] P
EOPLE V
S
WAIN
617
Affidavits from Winterburn and Risk were attached to
the motion. According to Winterburn, the victim and
the brother either waited outside for the bus together or
ran out the door together to catch the bus. Risk “never
saw one of the boys without the other... they were
always together.” He averred that the victim and the
brother always ran out of the house together to catch
the bus. Defendant also noted that the brother had
recanted his trial testimony on that issue.
Defendant argued that this “successive motion for
relief from judgment” met the requirements of MCR
6.502(G)(2) because the motion alleged newly discov-
ered evidence. She also argued that the four require-
ments for granting a new trial on the basis of newly
discovered evidence were met. She pointed out that the
evidence was newly discovered and had not been dis-
covered at trial because the brother had refused to be
truthful and because her trial counsel and her prior
appellate counsel had failed to investigate Winterburn
and Risk, who had just recently been contacted by her
present counsel. Defendant also asserted that the new
evidence made a different result at a new trial probable
because the evidence established that the sexual abuse
could not have occurred as claimed by the prosecution.
In the alternative, defendant argued that, if the trial
court concluded that the newly discovered evidence
could have been discovered at the time of trial, her trial
counsel was ineffective for failing to investigate Winter-
burn and Risk and her prior appellate counsel was
ineffective for failing to investigate and raise an issue
regarding the trial counsel’s failure to investigate and
present the testimony of Winterburn and Risk.
The trial court ordered the prosecution to respond to
defendant’s motion. The prosecution responded by re-
questing the trial court, pursuant to MCR 6.502(G)(1),
618 288 M
ICH
A
PP
609 [June
to return the motion to defendant because it was a
successive motion for relief from judgment not allowed
by the court rules.
After defendant filed an amended motion for relief
from judgment, the trial court ordered the prosecution
to respond to the merits of the motion, which the
prosecution did. It argued that the testimony of Win-
terburn and Risk did not meet the four criteria for
granting a new trial on the basis of newly discovered
evidence. In addition, the prosecution claimed that its
case did not hinge on the school bus schedule, noting
that neither Winterburn nor Risk was present at defen-
dant’s parents’ house when defendant and the victim
shared a bed and the victim would feel something wet
on his penis. It also asserted that recanted testimony is
to be regarded with great caution and, because the jury
was able to see the victim and the brother as they
testified and were cross-examined, the trial court
should not discount the trial testimony of the victim
and the brother when analyzing defendant’s motion.
The prosecution further argued that the failure of
defendant’s trial counsel to procure the testimony of
Winterburn and Risk at trial did not constitute ineffec-
tive assistance of counsel because the testimony would
not have made a difference in the trial’s outcome. It
explained that Winterburn and Risk could not account
for every opportunity that defendant had to sexually
abuse the victim and that the jury heard evidence that
the victim had recantated, was angry with defendant,
and disclosed the abuse after he was confronted with his
inappropriate contact with a cousin.
The trial court ordered an evidentiary hearing. It
stated that an evidentiary hearing was necessary to
determine whether reasonable diligence by trial counsel
could have led to the discovery of Winterburn and Risk
2010] P
EOPLE V
S
WAIN
619
before trial. The evidentiary hearing would also cover
whether defendant’s trial counsel and her prior appel-
late counsel were ineffective. Winterburn and Risk
testified at the evidentiary hearing, as did Edwin Het-
tinger, defendant’s trial counsel, and O’Connell, defen-
dant’s prior appellate counsel. The victim and the
brother also testified, limited to whether they waited
for the school bus together.
1. EVIDENTIARY HEARING TESTIMONY
Winterburn confirmed that she drove the school bus
that picked up the victim and the brother when the boys
lived on Nine Mile Road. Risk lived two houses down
the road, approximately 250 to 400 feet, from defen-
dant’s trailer. The school bus first stopped at Risk’s
house, and then proceeded to pick up the victim and the
brother. Nine Mile Road in front of defendant’s trailer
and the Risk house was a straight road. Winterburn
testified that, even before she stopped the bus at the
Risk house, she was able to see the victim and the
brother, who were generally waiting for the bus to-
gether at the end of defendant’s driveway. Winterburn
did not remember ever seeing one of the boys without
the other. She never saw the brother wait by himself
and then run to get the victim when the bus arrived.
Risk testified that he often waited outside for the bus
at the end of his driveway. From his driveway, he could
see the victim and the brother, if they were waiting for
the bus outside. Risk acknowledged that the victim and
the brother sometimes waited inside the trailer. Risk
did not recall ever seeing the brother wait for the bus
and then run to get the victim. He would have noticed
if that had been a regular pattern.
Hettinger testified that he had hoped the victim, upon
being cross-examined at trial, would admit that the alle-
620 288 M
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609 [June
gations against defendant were false. Otherwise, his trial
strategy was to show that the victim was lying. He was
surprised by the victim’s testimony that, while living on
Nine Mile Road, defendant abused him every morning
and that the abuse occurred after defendant sent the
brother outside to wait for the bus. These specific allega-
tions were not in the police reports or in the victim’s
preliminary examination testimony. He admitted that the
testimony of Winterburn and Risk would have been con-
sistent with his strategy of proving that the victim was
lying, but he never had the opportunity to speak with
Winterburn and Risk. Hettinger did not learn of Winter-
burn and Risk until defendant testified that the school bus
driver and the neighbor could verify that the brother
never waited outside for the bus by himself. He explained
that he did not attempt to contact Winterburn and Risk
during trial because “it only came up at trial, and with all
the testimony and occurrence[s] at trial, it was just one of
many.” He did not recall “it standing out as so signifi-
cant...todoso.”
O’Connell testified that he interviewed defendant on a
number of occasions and that, during the interviews,
defendant brought up Winterburn and Risk. And he
looked into whether Winterburn and Risk could confirm
defendant’s testimony that she never sent the brother
outside to wait for the bus by himself. However, he never
spoke with Winterburn. An appointment was made with
Winterburn,
3
but O’Connell missed the appointment
when he was delayed in court. The meeting was never
rescheduled. O’Connell did speak with Risk, and Risk
told him that the brother never appeared at the bus
stop by himself; the victim and the brother always
3
Winterburn testified that the appointment was made when she
contacted O’Connell in October 2003 after learning that her name had
been mentioned at defendant’s trial.
2010] P
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arrived at the bus stop together. O’Connell did not view
Risk’s testimony as newly discovered evidence, because
the testimony was available to Hettinger before and
during trial. He did view Risk’s testimony as evidence
that Hettinger failed to conduct a proper investigation,
and he regretted not lumping Hettinger’s failure in
with the ineffective-assistance claims that he did raise.
The victim and the brother testified that they waited
inside the trailer for the school bus. They both denied
that defendant ever sent the brother to wait outside for
the bus by himself and that the brother would run back
to the house when the bus came.
2. THE TRIAL COURT’S RULING
The trial court granted defendant’s motion for relief
from judgment and set aside her four convictions of
CSC I. The court concluded that the testimony of
Winterburn and Risk was not newly discovered evi-
dence because, using reasonable diligence, Hettinger
could have identified and produced Winterburn and
Risk at trial or O’Connell could have raised Hettinger’s
failure in the form of a claim of ineffective assistance of
counsel either on appeal or in a postconviction motion.
It explained:
[Defendant], as proven by her trial testimony, obviously
knew of these witnesses. Furthermore, the trial lasted a
number of days. There was certainly the opportunity for
defense counsel to investigate, assuming he was unaware
of them previously, although no investigation occurred.
Nor was any request made to the Court during the trial for
time to investigate these witnesses. Trial counsel testified
at the evidentiary hearing that he made no effort to
identify or to investigate and produce these witnesses
during the trial.
***
622 288 M
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This Court has reviewed the police reports [provided by
stipulation] and the Preliminary Examination transcript.
Trial defense counsel is accurate that the police reports do
not contain information similar to the complainant’s trial
testimony about the alleged manner of commission of the
offenses occurring on 9 Mile Road. However, the complain-
ant’s testimony at the Preliminary Examination [page 12]
clearly refers to acts occurring while waiting for the bus,
inviting inquiry about the brother’s whereabouts at the
time and inviting investigation about corroboration or lack
thereof.
And [defendant’s] first appellate counsel testified that
he identified both witnesses at the time of the previous
post-trial motions, that he had contact with both of them at
that time, and that [he] knew of their proposed testimony
which would contradict [the victim’s].
The trial court noted that MCR 6.502(G)(1) generally
prohibits successive motions for relief from judgment,
but that MCR 6.502(G)(2) provides limited exceptions
for newly discovered evidence and retroactive changes
in the law. Although the exception for newly discovered
evidence did not apply, the trial court stated that “MCR
6.508 provides a limited additional exception when the
defendant establishes both ‘good cause’ for not raising
an issue previously and ‘actual prejudice’.”
The trial court concluded that the matter before it
was a claim of ineffective assistance of counsel. It
concluded that Hettinger’s failure to investigate Win-
terburn and Risk, as well as O’Connell’s failure to
pursue any issue concerning Winterburn and Risk,
could not be characterized as competent strategy. It
opined:
Trial defense counsel testified that his strategy in de-
fending [defendant] was to demonstrate that the complain-
ant was lying, certainly a sound strategy since the only
evidence against [defendant] was the complainant’s testi-
mony. He admitted that calling these two witnesses would
2010] P
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have been appropriate in carrying out his trial strategy
since their testimony would have tended to put in question
the accuracy and truthfulness of the complainant’s. He
offered no viable excuse for not pursuing the matter.
[Defendant’s] first appellate counsel testified that his
strategy in representing [defendant] was to explore all
possible trial errors, including any of defense counsel
which he could discover. This is certainly appropriate
appellate strategy; this Court can think of no other appel-
late strategy that meets the requirements of competent
representation. [Defendant’s] first appellate counsel of-
fered no viable reason for his failure to raise issues con-
cerning these witnesses during his representation.
The trial court further concluded that defendant
established “actual prejudice,” meaning that but for the
error, she would have had a reasonably likely chance of
acquittal. It explained:
[T]he People’s case against [defendant] consisted en-
tirely of the testimony of [the victim]. There was no other
witness to the alleged crime; there was no physical evi-
dence; there was no circumstantial evidence....
. . . These offenses either were committed as [the victim]
testified or they were not committed at all, as [defendant]
testified. The jury obviously had questions about [the
victim’s] credibility which explains the extraordinary
length of deliberations.... The jury deadlocked on one
occasion before finally reaching a unanimous decision.
The testimony of Ms. Winterburn and Mr. Risk would
clearly have been important to the jury’s consideration of
[the victim’s] credibility. These witnesses’ [testimony]
would have been the only testimony by independent wit-
nesses which the jury could have utilized to test [the
victim’s] testimony about events at the very moment he
said that these crimes were being committed. And their
testimony would have completely contradicted his testi-
mony about the alleged sexual assaults occurring on 9 Mile
Road. Their testimony would have been pivotal in the
624 288 M
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jury’s consideration of whether his testimony, even that
portion concerning alleged offenses occurring at his grand-
parents’ home, was credible.
***
This Court is mindful that Winterburn’s and Risk’s
testimony does not pertain in any way to the alleged crimes
which occurred at the grandparents’ home, the second
location where [the victim] testified he was sexually as-
saulted by his mother on numerous occasions. They have
no knowledge of what went on there. But this Court is
nonetheless convinced that their testimony is so potentially
damaging to [the victim’s] credibility about the events at 9
Mile Road that the jury would question his credibility as to
all the allegations in the entire case.
The trial court noted that the only reason that any
issue concerning Winterburn and Risk was not raised in
any previous posttrial proceeding was that O’Connell
had failed to pursue the matter. While O’Connell’s
failure did not establish “good cause,” the trial court
concluded that the “good cause” requirement should be
waived, pursuant to MCR 6.508(D)(3), because, given
the testimony of Winterburn and Risk, there is a
“significant possibility” that defendant is innocent of
the CSC I crimes.
The prosecution filed in this Court an application for
leave to appeal the trial court’s order, which was denied
“for lack of merit in the grounds presented.” People v
Swain, unpublished amended order of the Court of
Appeals, entered September 10, 2009 (Docket No.
293350). The prosecution then sought leave to appeal in
the Supreme Court. In lieu of granting leave to appeal,
the Supreme Court remanded the case to this Court for
consideration as on leave granted. Swain, 485 Mich 997.
The Supreme Court directed the Court to consider two
specific issues:
2010] P
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The Court of Appeals should address among the issues
presented: (1) whether the successive motion for relief
from judgment in this case was barred by MCR 6.502(G),
and (2) if it was, whether defendant’s constitutional rights
are implicated given that the trial court found a significant
possibility that defendant is innocent based on evidence
defendant’s attorney failed to present at trial. [Id.]
II. SUCCESSIVE MOTION FOR RELIEF FROM JUDGMENT
The Supreme Court has directed us to consider
“whether [defendant’s] successive motion for relief
from judgment... was barred by MCR 6.502(G)[.]”
Swain, 485 Mich 997. This directive requires us to
address whether the trial court erroneously concluded
that MCR 6.508(D)(3) provides a “limited additional
exception” for when a defendant may file a successive
motion for relief from judgment.
Following the evidentiary hearing, the trial court in its
written order held that the exception in MCR 6.502(G)(2)
for new evidence did not apply because, with reasonable
diligence, Hettinger could have discovered Winterburn
and Risk and produced them at trial and O’Connell could
have raised an ineffective-assistance claim regarding Het-
tinger’s failure. The trial court’s analysis was premised on
the rule applicable to motions for a new trial based on
newly discovered evidence that a defendant is not entitled
to a new trial if the defendant, using reasonable diligence,
could have discovered and produced the evidence at trial.
See People v Johnson, 451 Mich 115, 118 n 6; 545 NW2d
637 (1996). Despite its conclusion that defendant’s succes-
sive motion was barred under MCR 6.502(G)(2), the trial
court held that it could address and decide the merits of
defendant’s motion. It reasoned that MCR 6.508(D)(3)
provides “a limited additional exception” to MCR
6.502(G)’s bar on successive motions for relief from judg-
ment.
626 288 M
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On appeal, the prosecution agrees with the trial
court’s holding that defendant’s successive motion was
barred by MCR 6.502(G)(2) because it was not based on
new evidence. But it argues that the trial court erred by
concluding that MCR 6.508(D)(3) provides an addi-
tional limited exception for when a defendant may file a
successive motion for relief from judgment. It asserts
that a trial court may not engage in the analysis
contained in MCR 6.508(D)(3) unless the court first
determines that the defendant meets one of the two
exceptions in MCR 6.502(G)(2) for filing a successive
motion. According to the prosecution, once the trial
court determined that the testimony of Winterburn and
Risk was not new evidence, the trial court was required
to deny defendant’s successive motion for relief from
judgment.
Defendant agrees with the result reached by the trial
court. However, unlike the trial court, she claims that
MCR 6.502(G)(2) did not bar her successive motion.
According to defendant, MCR 6.502(G)(2) refers to
“new evidence that was not discovered,” as opposed to
evidence that could have been discovered. Thus, defen-
dant claims that the discoverability of the new evidence
is irrelevant to determining whether a defendant’s
successive motion falls within the new-evidence excep-
tion of MCR 6.502(G)(2). Defendant maintains that the
testimony of Winterburn and Risk was “new evidence
that was not discovered” because her present counsel
was the first to interview the two witnesses and learn
the details of their prospective testimony.
Defendant further asserts that the trial court did not
err by granting her relief from her CSC I convictions
because the testimony of Winterburn and Risk created
a significant possibility that she is innocent. According
to defendant, if the “new evidence that was not discov-
2010] P
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ered” could have been discovered before the first mo-
tion for relief from judgment, a defendant is generally
not entitled to relief under MCR 6.508(D)(3) because
the defendant cannot meet the “good cause” require-
ment. However, defendant notes that the “good cause”
requirement can be waived if there is a significant
possibility that the defendant is innocent. She therefore
claims that, if a successive motion for relief from
judgment is based on new evidence that was not, but
could have been, discovered before the first motion for
relief from judgment, a defendant is entitled to relief
under MCR 6.508(D)(3) only if the evidence creates a
significant possibility that the defendant is innocent.
4
A. STANDARD OF REVIEW AND APPLICABLE LAW
We review a trial court’s decision on a motion for relief
from judgment for an abuse of discretion and its findings
of facts supporting its decision for clear error. People v
McSwain, 259 Mich App 654, 681; 676 NW2d 236 (2003).
A trial court abuses its discretion when its decision falls
outside the range of reasonable and principled outcomes,
People v Unger, 278 Mich App 210, 217; 749 NW2d 272
4
Defendant also argues that the prosecution has waived the argument
that, once the trial court determined that the testimony of Winterburn and
Risk was not new evidence, the trial court could no longer consider her
successive motion for relief from judgment. Defendant asserts that the
prosecution agreed in the trial court that defendant could obtain relief if she
met the requirements of MCR 6.508(D)(3). We find no merit to defendant’s
waiver claim because the prosecution, before it was ordered to respond to the
merits of defendant’s successive motion, asserted that the motion was
improperly before the trial court. This objection to the successive motion
was sufficient to preserve the issue for appeal. In addition, the Supreme
Court has specifically directed us to consider “whether the successive motion
for relief from judgment in this case was barred by MCR 6.502(G).” Swain,
485 Mich 997. We are bound to follow the dictates of the Supreme Court.
Werkhoven v Grandville (On Remand), 65 Mich App 741, 744; 238 NW2d
392 (1975).
628 288 M
ICH
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(2008), or makes an error of law, People v Giovannini, 271
Mich App 409, 417; 722 NW2d 237 (2006). The interpre-
tation of a court rule is a question of law that is reviewed
de novo. People v Hawkins, 468 Mich 488, 497; 668 NW2d
602 (2003).
The interpretation of a court rule is governed by the
principles of statutory construction. People v Buie, 285
Mich App 401, 416; 775 NW2d 817 (2009). The goal of
court-rule interpretation is to give effect to the intent of
the Supreme Court, the author of the rules. Id.; People v
Orr, 275 Mich App 587, 595; 739 NW2d 385 (2007). We
begin with the language of the court rule. Buie, 285 Mich
App at 416. If the language is clear and unambiguous,
further interpretation is neither required nor permitted;
the rule must be enforced as written. Id.; Orr, 275 Mich
App at 595. We may not read into an unambiguous court
rule a provision not included by the Supreme Court. Orr,
275 Mich App at 595.
B. MCR SUBCHAPTER 6.500
A defendant in a criminal case may move for relief from
a judgment of conviction and sentence. MCR 6.502(A).
Such motions are governed by MCR 6.500 et seq. These
rules outline the procedure for how a trial court is to
consider a motion for relief from judgment, identify the
requirements that a defendant must establish to be en-
titled to relief, and limit the number of motions that a
defendant may file.
A motion for relief from judgment is to be presented to
the judge to whom the case was assigned at the time of the
defendant’s conviction. MCR 6.504(A). The court is re-
quired to “promptly examine” the motion and all files,
records, transcripts, and correspondence relating to the
judgment under attack. MCR 6.504(B)(1). If it is plainly
apparent that the defendant is not entitled to relief, the
court must deny the motion. MCR 6.504(B)(2). If the court
2010] P
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does not dismiss the entire motion, it must order the
prosecution “to file a response as provided in MCR 6.506,
and shall conduct further proceedings as provided in MCR
6.505-6.508.” MCR 6.504(B)(4).
5
The court, after reviewing the motion, response, record,
and any record expansion, must then decide whether an
evidentiary hearing is required. MCR 6.508(B). If it deter-
mines that a hearing is not required, the court may rule
on the motion for relief from judgment or afford the
parties an opportunity for oral argument. Id. If the court
decides that an evidentiary hearing is required, it shall
schedule and conduct a hearing. MCR 6.508(C).
A defendant has the burden to establish entitlement
to relief. MCR 6.508(D). Pursuant to MCR 6.508(D)(3),
a court is precluded from granting relief if the motion
alleges grounds for relief, other than jurisdictional defects,
which could have been raised on appeal from the conviction
and sentence or in a prior motion under this subchapter,
unless the defendant demonstrates
(a) good cause for failure to raise such grounds on appeal
or in the prior motion, and
(b) actual prejudice from the alleged irregularities that
support the claim for relief. As used in this subrule, “actual
prejudice” means that,
(i) in a conviction following a trial, but for the alleged
error, the defendant would have had a reasonably likely
chance of acquittal[.]
***
The court may waive the “good cause” requirement of
subrule (D)(3)(a) if it concludes that there is a significant
possibility that the defendant is innocent of the crime.
5
MCR 6.505 concerns the appointment of counsel for indigent defen-
dants. MCR 6.506 governs the prosecution’s response. MCR 6.507 allows
for expansion of the record at the trial court’s direction.
630 288 M
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The requirement of “good cause” can be established by
proving ineffective assistance of counsel. People v
Kimble, 470 Mich 305, 314; 684 NW2d 669 (2004).
A defendant is only entitled to file one motion for
relief from judgment. MCR 6.502(G)(1). However, this
rule is not absolute. MCR 6.502(G)(2) permits the filing
of a successive motion under two circumstances:
A defendant may file a second or subsequent motion
based on a retroactive change in law that occurred after the
first motion for relief from judgment or a claim of new
evidence that was not discovered before the first such
motion. The clerk shall refer a successive motion that
asserts that one of these exceptions is applicable to the
judge to whom the case is assigned for a determination
whether the motion is within one of the exceptions.
Any successive motion that does not assert one of these
two exceptions is to be returned to the defendant
without filing by the court. MCR 6.502(G)(1). No appeal
of the denial or rejection of a successive motion is
permitted. Id.
The court rules are silent on the procedure to be used
by a trial court for determining whether a successive
motion for relief from judgment falls within either of
the two exceptions of MCR 6.502(G)(2). However, MCR
6.508(A) provides that “[i]f the rules in this subchapter
do not prescribe the applicable procedure, the court
may proceed in any lawful manner. The court may apply
the rules applicable to civil or criminal proceedings, as it
deems appropriate.”
C. ANALYSIS
We begin by addressing the trial court’s conclusion
that the “good cause” and “actual prejudice” require-
ments of MCR 6.508(D)(3) provide “a limited additional
exception” to the rule prohibiting successive motions
2010] P
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for relief from judgment. We hold that MCR 6.502(G)(2)
provides the only two exceptions to the prohibition of
successive motions.
MCR 6.508(D)(3), by its own language, applies to
successive motions. It provides that if a motion for relief
from judgment “alleges grounds for relief... which
could have been raised on appeal from the conviction
and sentence or in a prior motion under this subchap-
ter,” a defendant is not entitled to relief unless the
defendant demonstrates “good cause” and “actual
prejudice.” However, MCR 6.502(G)(2) unambiguously
provides that a defendant may only file a successive
motion for relief from judgment in two circumstances:
(1) there is a retroactive change in the law that occurred
after the first motion or (2) there is new evidence that
was not discovered before the first motion. Reading the
“good cause” and “actual prejudice” requirements of
MCR 6.508(D)(3) as a third exception to the general
rule that a defendant may only file one motion for relief
from judgment, MCR 6.502(G)(1), as the trial court did,
contradicts the clear and unambiguous language of
MCR 6.502(G)(2). In addition, no part of a court rule
should be rendered nugatory. Johnson v White, 261
Mich App 332, 348; 682 NW2d 505 (2004). If a defen-
dant could obtain relief on a successive motion by only
establishing entitlement to relief under MCR
6.508(D)(3), then the prohibition against successive
motions, MCR 6.502(G)(1), and the two exceptions to
the prohibition, MCR 6.502(G)(2), would be rendered
nugatory.
Because a successive motion for relief from judgment
may only be filed if, after the first motion, there is a
retroactive change in the law or new evidence is discov-
ered, the “good cause” and “actual prejudice” require-
ments of MCR 6.508(D)(3) are not relevant until, and
632 288 M
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are only relevant if, the trial court determines that the
successive motion falls within one of the two exceptions
of MCR 6.502(G)(2). Thus, we agree with the prosecu-
tion that once the trial court determined that the
testimony of Winterburn and Risk was not new evi-
dence discovered after defendant’s first motion for
relief from judgment, the trial court was required to
deny defendant’s successive motion.
Our holding, contrary to defendant’s assertion, is not
inconsistent with People v Clark, 274 Mich App 248, 255;
732 NW2d 605 (2007), wherein the Court stated that, in
determining whether the defendant was entitled to relief
on his successive motion for relief from judgment, “the
trial court was required to apply MCR 6.508(D)(3).” The
Court made this statement in explaining that, because the
trial court did not find that there was a significant
possibility that the defendant was innocent, the trial court
erred by granting the defendant’s motion for relief with-
out requiring the defendant to show good cause for failing
to raise the grounds for relief in his direct appeal and
previous motions for relief from judgment. Id. The issue
in Clark was whether MCR 6.508(D)(3) requires a defen-
dant who files a successive motion to show good cause for
not raising the grounds for relief in his or her direct appeal
and in the defendant’s previous motions. Id. at 251. The
issue did not concern MCR 6.502(G). Thus, the Court’s
statement in Clark that “the trial court was required to
apply MCR 6.508(D)(3)” is not determinative of the cur-
rent issue.
6
As set forth previously, defendant offers an alterna-
tive interpretation of the new-evidence exception found
6
Similarly, the Supreme Court’s reversal of People v Williams, unpub-
lished opinion per curiam of the Court of Appeals, issued December 9,
2003 (Docket No. 244652), rev’d 471 Mich 928 (2004), is of no value. MCR
6.502(G) was not at issue in Williams.
2010] P
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in MCR 6.502(G)(2) and, relying on it, argues that the
trial court reached the right result. In essence, defen-
dant argues that the discoverability element of the
new-evidence test that the trial court relied on is
contrary to the plain language of the rule. Rather
defendant submits that the proper test is whether a
defendant’s successive motion is based on “new evi-
dence that was not discovered.” Defendant claims that
she has satisfied this test because Winterburn and Risk
were not interviewed until her present counsel spoke
with them. Because an unambiguous court rule is to be
enforced as written, Orr, 275 Mich App at 595, there is
merit to defendant’s claim regarding the proper test to
be applied. But even if defendant’s interpretation of the
phrase “new evidence that was not discovered” is cor-
rect, we conclude that under that test, defendant’s
successive motion is barred by MCR 6.502(G)(2) be-
cause Winterburn and Risk in fact were discovered
before defendant’s first motion for relief from judg-
ment.
At trial, defendant testified that the victim and the
brother waited inside for the school bus and when the
bus stopped at the Risk house, the two boys went
outside together to wait for the bus. According to
defendant, “the neighbor and the bus stop — driver
could verify it.” Defendant knew of Winterburn and
Risk at trial, and she identified them as two persons
who could corroborate her testimony that the brother
never waited outside for the bus by himself. Accord-
ingly, Winterburn and Risk, and their potential testi-
mony, were discovered before defendant filed her first
motion for relief from judgment.
Inherent in defendant’s argument is that evidence is
not discovered for purposes of MCR 6.502(G)(2) until
the evidence is known by counsel. However, the plain
634 288 M
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609 [June
language of MCR 6.502(G)(2) does not support such a
narrow reading of the court rule. But even if defendant
is correct, we would not conclude that the testimony of
Winterburn and Risk was new evidence. O’Connell
testified at the evidentiary hearing that he investigated
defendant’s claim that Winterburn and Risk could
corroborate her testimony. Despite having a scheduled
appointment with Winterburn, O’Connell never spoke
with her because he was delayed at court and missed
the appointment. However, O’Connell did meet with
Risk and learned that Risk always saw the victim and
the brother wait for the school bus together; Risk told
O’Connell that he never saw the brother arrive at the
bus stop by himself. Under these circumstances, we
conclude that O’Connell knew of the alleged new evi-
dence. Moreover, the evidence was known to O’Connell
before defendant filed her first motion for relief from
judgment. O’Connell testified that he regretted not
including Hettinger’s failure to investigate Winterburn
and Risk in the ineffective-assistance-of-counsel claim.
It was in the September 2004 motion for relief from
judgment that defendant argued that Hettinger was
ineffective for failing to adequately investigate and
interview potential witnesses.
In conclusion, the “good cause” and “actual preju-
dice” requirements of MCR 6.508(D)(3) do not provide a
“limited additional exception” to the general rule pro-
hibiting successive motions for relief from judgment.
There are only two exceptions to the general prohibi-
tion: the successive motion (1) is “based on a retroactive
change in the law that occurred after the first motion
for relief from judgment” or (2) is based on “a claim of
new evidence that was not discovered before the first
such motion.” MCR 6.502(G)(2). Only after the trial
court has determined that the successive motion falls
within one of the two exceptions do MCR 6.508 and the
2010] P
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“good cause” and “actual prejudice” requirements of
MCR 6.508(D)(3) become relevant. Because the evi-
dence on which defendant’s successive motion for relief
from judgment was based was not discovered after
defendant filed her first motion for relief, the trial court
was prohibited from granting defendant’s motion. Ac-
cordingly, the trial court abused its discretion when it
granted defendant relief from her CSC I convictions.
However, pursuant to the Supreme Court’s remand
order, our inquiry is not complete.
III. CONSTITUTIONAL RIGHTS
The Supreme Court has also directed us to consider,
if defendant’s successive motion was barred by MCR
6.502(G)(2), “whether defendant’s constitutional rights
are implicated given that the trial court found a signifi-
cant possibility that defendant is innocent based on
evidence defendant’s attorney failed to present at trial.”
Swain, 485 Mich 997. Despite this directive, neither
party specifically identifies a constitutional right of
defendant that is or could potentially be implicated as a
result of defendant’s being prohibited from bringing
her successive motion for relief from judgment despite,
as the trial court found, there being a significant
possibility that she is innocent of the CSC I crimes.
However, relying on caselaw from the United States
Supreme Court regarding federal habeas review of
procedurally defaulted claims, defendant does maintain
that the procedural bar of MCR 6.502(G) prohibiting
successive motions for relief from judgment must yield
in cases in which the defendant can show that his or her
constitutional rights were violated and that the defen-
dant is actually innocent. According to the United
States Supreme Court, a defendant may have an other-
wise barred constitutional claim arising from his or her
636 288 M
ICH
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PP
609 [June
trial heard on the merits in a federal habeas action
7
if
the defendant can make a “gateway” showing of actual
innocence. Schlup v Delo, 513 US 298, 314-315; 115 S
Ct 851; 130 L Ed 2d 808 (1995); Herrera v Collins, 506
US 390, 404; 113 S Ct 853; 122 L Ed 2d 203 (1993); see
also House v Bell, 547 US 518, 536-537; 126 S Ct 2064;
165 L Ed 2d 1 (2006). This “actual innocence” exception
is required by the “ends of justice” or, stated differently,
to prevent a “miscarriage of justice.” Schlup, 513 US at
319-320; Sawyer v Whitley, 505 US 333, 339; 112 S Ct
2514; 120 L Ed 2d 269 (1992). However, it is not readily
apparent that the “actual innocence” exception is
rooted in constitutional concerns. See Sawyer, 505 US
at 339 (stating that the “miscarriage of justice” excep-
tion developed from language of a federal habeas stat-
ute); Engle v Isaac, 456 US 107, 135; 102 S Ct 1558; 71
L Ed 2d 783 (1982) (stating that “[i]n appropriate cases
those principles [cause and prejudice] must yield to the
imperative of correcting a fundamentally unjust incar-
ceration,” but not providing any support or reasoning
for the statement). Consequently, it is not clear that the
exception for federal habeas review is rooted in consti-
tutional principles. Nonetheless, even assuming that
the federal limitation ought to apply in cases in which
successive motions are barred by MCR 6.502(G)(2), we
conclude that defendant is unable to establish the
requisite gateway showing of actual innocence. We also
disagree with the trial court’s finding that counsel’s
representation at trial was constitutionally ineffective.
7
Unless a habeas petitioner establishes cause and prejudice, a federal
court may not reach the merits of (1) successive claims that raise grounds
identical to ones decided in a previous petition, (2) new claims not
previously raised, but which constitute an abuse of the habeas writ, and
(3) procedurally defaulted claims in which the petitioner failed to follow
state procedural rules in raising the claims. Sawyer v Whitley, 505 US
333, 338; 112 S Ct 2514; 120 L Ed 2d 269 (1992).
2010] P
EOPLE V
S
WAIN
637
A. ACTUAL INNOCENCE
To satisfy the “actual innocence” standard, a defen-
dant “must show that it is more likely than not that no
reasonable juror would have found [the defendant]
guilty beyond a reasonable doubt.” Schlup, 513 US at
327. This standard does not require absolute certainty
about the defendant’s guilt or innocence. House, 547 US
at 538. It is, however, a demanding standard and
permits review only in “extraordinary” cases. Id.;
Schlup, 513 US at 327.
For obvious reasons, the trial court did not address
the actual innocence standard in its order granting
defendant’s successive motion for relief from judgment.
However, it did find that defendant had met the “actual
prejudice” requirement of MCR 6.508(D)(3)(b)(i). It
reasoned that, because the testimony of the “relatively
independent” witnesses Winterburn and Risk was “so
potentially damaging” to the victim’s credibility, had
the testimony been presented at trial, defendant “would
have had a reasonably likely chance of acquittal.”
Defendant maintains that the “actual prejudice” stan-
dard is the equivalent of the “actual innocence” stan-
dard. The “actual prejudice” requirement is similar to
the prejudice standard in an ineffective-assistance-of-
counsel claim. See Strickland v Washington, 466 US
668, 694; 104 S Ct 2052; 80 L Ed 2d 674 (1984) (“The
defendant must show that there is a reasonable prob-
ability that, but for counsel’s unprofessional errors, the
result of the proceeding would have been different. A
reasonable probability is a probability sufficient to
undermine confidence in the outcome.”). The United
States Supreme Court has instructed that the “actual
innocence” standard requires “a stronger showing than
that needed to establish prejudice” in an ineffective-
assistance-of-counsel claim. Schlup, 513 US 327 & n 45.
638 288 M
ICH
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609 [June
Accordingly, the trial court’s conclusion that defendant
showed “actual prejudice” does not equate with a find-
ing by the trial court that defendant met the “actual
innocence” standard.
The trial court also concluded that, pursuant to MCR
6.508(D)(3), there was a “significant possibility” that
defendant was innocent of the CSC I crimes. The trial
court made this finding in determining that it was
proper to waive the good-cause requirement of MCR
6.508(D)(3). Generally, to relieve a defendant from a
judgment of conviction, a defendant must prove “good
cause” and “actual prejudice,” MCR 6.508(D)(3), but if
the trial court concludes that there is a “significant
possibility” that the defendant is innocent, the court
may waive the “good cause” requirement. The court
rule does not define the phrase “significant possibility,”
nor has this Court or our Supreme Court defined the
phrase. However, it is clear from a reading of MCR
6.508(D)(3) that the “significant possibility” standard is
a higher standard than the “actual prejudice” standard
of MCR 6.508(D)(3)(b)(i). Even without a definition of
what constitutes a “significant possibility,”
8
we discern
no meaningful distinction between it and the “actual
innocence” standard. Thus, for purposes of resolving
this issue, we assume that the trial court, when stating
that there was a “significant possibility that the defen-
dant is innocent of the crime,” essentially found that it
was more likely than not that no reasonable juror,
hearing the testimony of Winterburn and Risk, would
have found defendant guilty beyond a reasonable doubt.
No Michigan case has discussed an appellate court’s
review of a trial court’s conclusion that, under MCR
6.508(D)(3), there is a significant possibility that the
8
Defendant does not advocate any particular definition for the phrase
“significant possibility.”
2010] P
EOPLE V
S
WAIN
639
defendant is innocent. We find persuasive the United
States Supreme Court’s statement in House that defer-
ence is to be given to the trial court’s assessment of the
evidence, but that the inquiry “requires a holistic
judgment about all the evidence and its likely effect on
reasonable jurors applying the reasonable-doubt stan-
dard.” House, 547 US at 539 (quotation marks and
citations omitted).
Giving deference to the trial court’s assessment of
the new evidence, the trial court did not err by deter-
mining that the testimony of Winterburn and Risk
“would clearly have been important to the jury’s con-
sideration of [the victim’s] testimony.” The testimony
certainly would have impeached the victim’s testimony
that defendant sexually abused him every morning
after the brother was sent outside to wait for the school
bus. But all the evidence, old and new, incriminating
and exculpatory, must be considered, House, 547 US at
538, and this the trial court failed to do. Of the old
evidence, it only considered the testimony of the victim
and defendant. When all the evidence is considered, we
cannot agree with the trial court that it is more likely
than not that no reasonable juror, upon hearing the
testimony of Winterburn and Risk, would have found
defendant guilty beyond a reasonable doubt.
The testimony of Winterburn and Risk was inconsis-
tent, not only with the victim’s testimony, but also with
the testimony of defendant and the brother. Defendant
testified that the victim and the brother waited inside
the trailer for the school bus until they saw the bus at
“Little Willy’s” house. But Winterburn testified that,
even before she arrived at Risk’s house, she saw the
victim and the brother waiting by the road for the bus.
Similarly, while Risk acknowledged that the victim and
the brother sometimes waited inside the trailer for the
640 288 M
ICH
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609 [June
school bus, he testified that, when he was outside at the
end of his driveway waiting for the bus, he would see
the victim and the brother waiting for the bus. In
addition, the testimony of Winterburn and Risk that
they never saw the brother wait for the school bus by
himself was inconsistent with the brother’s admission
that on a limited number of occasions he waited for the
school bus by himself. The inconsistencies between
Winterburn’s and Risk’s testimony and the testimony
of defendant and the brother could have led a reason-
able juror to doubt the credibility of Winterburn and
Risk.
Even with the testimony of Winterburn and Risk, the
case would remain a credibility determination. And
there was evidence that could have led a reasonable
juror to believe the victim, at least to the extent that
two acts of CSC I occurred at the trailer on Nine Mile
Road and at the house on Oak Grove Road. Detective
Guy Picketts testified that when he interviewed defen-
dant, he only told defendant that she was being inves-
tigated for a CSC complaint involving oral sex and the
victim and that defendant then yelled, “I never sucked
my kid’s dick.” A reasonable juror, as the prosecutor
argued, may have found defendant’s statement to be
incriminating, given that Picketts had not informed
defendant of the specific allegations. Similarly, a rea-
sonable juror, again as argued by the prosecutor, may
have found that defendant’s inconsistent statements
during the interview with Picketts were evidence of a
lack of truthfulness. Moreover, Dr. Randall Haugen, an
expert regarding the sexual abuse of children and a
counselor of the victim, testified that the victim mani-
fested behavior, such as sexually reactive behavior to-
ward other children, compulsive masturbation, and a
hoarding of women’s underwear, that was consistent
with a child who had been sexually abused. Haugen also
2010] P
EOPLE V
S
WAIN
641
testified that the discovery of a child’s sexually inappro-
priate behavior can lead to a disclosure by the child of
prior sexual abuse, and Haugen noted that the victim
disclosed the abuse when he was confronted by his
stepmother concerning his actions toward a young
cousin. Haugen further testified that a sexual abuser of
children often grooms or forms a special relationship
with the child that might include granting the child
special privileges. The victim testified, and his testi-
mony was corroborated by the brother, that defendant
treated him better than the brother; defendant treated
the victim like a boyfriend, but the brother like a slave.
In addition, Haugen testified that children who make
false accusations are often not anxious, fearful, or
embarrassed when talking of the abuse and that the
victim was anxious, fearful, and embarrassed when the
victim spoke to him of the abuse.
Considering all the evidence, new and old,
9
and the
fact that the case rested on credibility determinations,
defendant has not established that, even though the
new testimony of Winterburn and Risk contradicted the
victim’s testimony, it is more likely than not that no
reasonable juror would have convicted her. Schlup, 513
US at 327. Accordingly, defendant has not made the
“gateway” showing of actual innocence.
B. INEFFECTIVE ASSISTANCE OF COUNSEL
However, even if defendant had made the necessary
“gateway” showing, we would not conclude that Het-
tinger was ineffective for failing to investigate Winter-
burn and Risk and present them as witnesses at trial.
We disagree with the trial court’s conclusion that Het-
9
The old evidence also included the testimony of Charles, an inmate
with defendant at the Scott Correctional Facility, that defendant con-
fessed to performing oral sex on the victim.
642 288 M
ICH
A
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609 [June
tinger rendered ineffective assistance of counsel. “A
claim of ineffective assistance of counsel is a mixed
question of law and fact. A trial court’s findings of fact,
if any, are reviewed for clear error, and this Court
reviews the ultimate constitutional issue arising from
an ineffective assistance of counsel claim de novo.”
People v Petri, 279 Mich App 407, 410; 760 NW2d 882
(2008) (citation omitted).
The right to counsel guaranteed by the United States
and Michigan constitutions, US Const, Am VI; Const
1963, art 1, § 20, includes the right to the effective
assistance of counsel. United States v Cronic, 466 US
648, 654; 104 S Ct 2039; 80 L Ed 2d 657 (1984); People
v Pubrat, 451 Mich 589, 594; 548 NW2d 595 (1996).
Effective assistance of counsel is presumed, and a
defendant bears a heavy burden to prove otherwise.
People v Seals, 285 Mich App 1, 17; 776 NW2d 314
(2009). To prove a claim of ineffective assistance of
counsel, a defendant must establish that counsel’s
performance fell below objective standards of reason-
ableness and that, but for counsel’s error, there is a
reasonable probability that the result of the proceed-
ings would have been different. People v Frazier, 478
Mich 231, 243; 733 NW2d 713 (2007).
At the evidentiary hearing, Hettinger testified that
he was surprised by the victim’s trial testimony that,
while the family lived at the trailer on Nine Mile Road,
defendant sexually abused him every morning after the
brother was sent outside to wait for the school bus. He
explained that these two specific accusations were not
in the police reports and that the victim had not
testified similarly at the preliminary examination. The
trial court reviewed the police reports and the victim’s
preliminary examination testimony. While it found that
Hettinger was correct about the police reports, the trial
2010] P
EOPLE V
S
WAIN
643
court concluded that the victim’s testimony at the
preliminary examination, which referred to defendant’s
abusing him while waiting for the bus, invited inquiry
into the brother’s whereabouts during the abuse and
investigation into corroboration.
At the preliminary examination, the victim testified,
in pertinent part:
Q. Okay. Did there come a time when something hap-
pened between you and your mom when you were living at
the trailer?
***
A. Um, yeah, she would always sleep naked with me but
not with—but not with [my brother].
Q. Okay. Did something ever happen when you were in
the bed with your mom?
***
A. Yeah. She would put her mouth over my private part.
***
Q. Did it ever happen in the morning?
A. Yeah.
Q. Tell me about in the morning.
A. In the morning she would get me undressed and she
would put her mouth over my wiggly.
***
Q. Okay. Were you getting dressed for school?
A. Yeah.
Q. Okay. And what would happen?
644 288 M
ICH
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609 [June
A. I’d be gettin’ undressed, she’d put her mouth over my
wiggly and then after that she’d put my clothes on [indis-
cernible] when it almost time to get to the bus.
***
Q. How many times did that happen?
A. More than 20.
Knowing the victim’s subsequent testimony at trial,
one could easily conclude that it would have been
prudent for Hettinger to investigate the brother’s
whereabouts when the abuse occurred. However, coun-
sel’s competence is not to be assessed with the benefit of
hindsight. People v Hill, 257 Mich App 126, 139; 667
NW2d 78 (2003). Considering solely the victim’s testi-
mony at the preliminary examination, Hettinger’s fail-
ure to conduct a pretrial investigation into the brother’s
whereabouts cannot be said to fall below objective
standards of reasonableness. Frazier, 478 Mich at 243.
The victim’s preliminary examination testimony gave
no indication that the brother was not in the trailer
when the abuse occurred or that corroboration, or a
lack thereof, of the brother’s whereabouts by a third
person would be anything more than marginally rel-
evant to the case.
10
Hettinger also testified at the evidentiary hearing
that he did not learn of Winterburn and Risk until trial.
The trial court faulted Hettinger for failing to investi-
gate Winterburn and Risk once he learned of the two
potential witnesses. However, Hettinger’s failure to
investigate Winterburn and Risk during the middle of
trial cannot be said to fall below objective standards of
reasonableness. Id. The testimony of Winterburn and
10
There is no claim that any other aspect of Hettinger’s pretrial
investigation was inadequate.
2010] P
EOPLE V
S
WAIN
645
Risk was not direct evidence that defendant was innocent
of the CSC I charges. Rather, the testimony would have
been impeachment evidence; the testimony would have
undermined the credibility of the victim’s testimony that
defendant abused him after sending the brother outside to
wait for the bus by himself. Hettinger’s trial strategy was
to show that the victim was lying. And although present-
ing the testimony of Winterburn and Risk may have been
consistent with that strategy, defendant has not shown
that Hettinger’s decision to focus on the impeachment
evidence that he planned to present and elicit at trial,
rather than attempt to identify and locate two new wit-
nesses during the course of trial, was not sound trial
strategy. People v Cline, 276 Mich App 634, 637; 741
NW2d 563 (2007). Hettinger presented and argued mean-
ingful impeachment evidence from which the jury could
have found that the victim was lying. The evidence
included the victim’s failure to disclose the sexual abuse
until he was questioned about his inappropriate actions
toward a cousin, his admission that he was mad at
defendant, his statements to family members that defen-
dant had not sexually abused him, his differing stories to
the forensic interviewer, and the inconsistencies in the
testimony of the victim and the brother regarding how
often the brother waited for the school bus by himself.
For the above reasons, we conclude that the trial
court erred by holding that Hettinger was ineffective
for failing to investigate Winterburn and Risk and to
present them as witnesses at trial.
11
Defendant was not
denied the effective assistance of counsel.
11
Because Hettinger was not ineffective, O’Connell’s failure to raise an
ineffective-assistance-of-counsel claim regarding Hettinger’s failure to
investigate Winterburn and Risk did not prejudice defendant’s appeal.
See People v Uphaus (On Remand), 278 Mich App 174, 186; 748 NW2d
899 (2008). Defendant was not denied effective assistance of counsel on
appeal.
646 288 M
ICH
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IV. CONCLUSION
The Supreme Court, in its remand order, directed us
to consider two issues, and we have done so. We
concluded that a defendant may not obtain relief on a
successive motion for relief from judgment unless the
motion falls within either of the two exceptions of MCR
6.502(G)(2). The “good cause” and “actual prejudice”
requirements of MCR 6.508(D)(3) do not provide a third
exception. Because defendant’s successive motion was
based on evidence discovered before defendant’s first
motion for relief from judgment, MCR 6.502(G) barred
defendant’s successive motion.
Then, pursuant to defendant’s argument, we ad-
dressed whether defendant can make a showing of
actual innocence as articulated by the United States
Supreme Court in Schlup and House, a showing that is
predicated on evidence that was not presented at trial
because of an alleged constitutional violation, and if so,
whether defendant was denied the effective assistance
of counsel. We concluded that when all the evidence is
considered, defendant cannot establish her actual inno-
cence and that the omission of Winterburn’s and Risk’s
testimony at trial was not the result of ineffective
assistance of counsel. Accordingly, we reverse the trial
court’s order granting defendant’s successive motion
for relief from judgment.
Reversed.
2010] P
EOPLE V
S
WAIN
647
PEOPLE v LIKINE
Docket No. 290218. Submitted February 9, 2010, at Lansing. Decided
April 20, 2010. Approved for publication June 8, 2010, at 9:20 a.m.
An Oakland Circuit Court jury convicted Selesa A. Likine of failing to
pay child support in violation of MCL 750.165. Before trial, the
court, John J. McDonald, J., granted the prosecution’s motion to
preclude defendant from offering any evidence pertaining to her
alleged inability to pay the ordered child support. The court
reasoned that inability to pay was not a defense to the strict-
liability crime. After she was convicted, defendant moved for
reconsideration of the court’s order granting the prosecution’s
motion in limine. She also moved for relief, contending that the
statute was unconstitutional because it did not require her to have
a morally culpable mental state. Finally, defendant moved for a
new trial, arguing that her rights under Michigan’s Due Process
Clause were violated because she was not allowed to present as a
defense her inability to pay. The court denied the motions, and
defendant appealed.
The Court of Appeals held:
1. The Michigan Constitution does not require that a defen-
dant be permitted to present an inability-to-pay defense to a
charge of felony nonsupport. Defendant had ample opportunity to
contest her ability to pay during the civil proceedings at which the
support was mandated.
2. Permitting defendant to present evidence of her inability to
pay would have permitted her to challenge the amount of support
ordered in the civil proceeding by the civil court that had sole,
exclusive, and continuing jurisdiction over the support order
under MCL 600.1021. The trial court properly denied defendant’s
attempt to make such an impermissible collateral attack on the
underlying support order.
3. The crime of felony nonsupport is complete at the time that
the individual fails to pay the ordered amount at the ordered time.
Thus, the actus reus is the failure to pay support as ordered.
4. The elements of the crime of felony nonsupport are (1) the
defendant was required to support a child or current or former
648 288 M
ICH
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648 [June
spouse, (2) the defendant appeared in or received notice by
personal service of the action in which the support order was
issued, and (3) the defendant failed to pay the support at the
required time. Evidence of inability to pay was not relevant to any
fact in issue, and the trial court did not abuse its discretion by
declining to admit the evidence.
5. The prosecutor did not commit prosecutorial misconduct
by stating in rebuttal closing arguments that defense counsel’s
strategy was to distract the jury from the evidence. The
comment was an appropriate response to defense counsel’s
emphasizing facts during closing argument that had no bearing
on the elements of the crime. It was not a personal attack on
defense counsel, and a timely objection could have cured any
perceived prejudice.
Affirmed.
1. C
RIMINAL
L
AW —
C
HILD
S
UPPORT —
N
ONSUPPORT —
S
TRICT
-L
IABILITY
O
F-
FENSES —
I
NABILITY TO
P
AY
C
HILD
S
UPPORT
.
A child support order imposed after the parent has been judicially
determined to be able to pay support subjects the parent to strict
liability for failure to pay the required support at the required
time; the parent may not defend against the criminal charge with
evidence of an inability to pay given that the parent had the
opportunity to contest the support order at the child support
proceedings (MCL 750.165).
2. C
RIMINAL
L
AW —
C
HILD
S
UPPORT —
N
ONSUPPORT —
E
LEMENTS OF
F
ELONY
N
ONSUPPORT
.
The elements of felony nonsupport are (1) the defendant was
required to support a child or current or former spouse; (2) the
defendant appeared in or received notice by personal service of the
action in which the support was ordered, and (3) the defendant
failed to pay the support at the time ordered or in the amount
ordered; the crime of felony nonsupport is not a continuing crime,
but is complete at the time that the individual fails to pay the
ordered amount at the ordered time; the actus reus is the failure to
pay the support as ordered (MCL 750.165).
Michael A. Cox, Attorney General, B. Eric Restuccia,
Solicitor General, and William E. Molner, Patrick J.
O’Brien, and George Stevenson, Assistant Attorneys
General, for the people.
2010] P
EOPLE V
L
IKINE
649
Michigan Innocence Clinic (by David Moran and
Bridget McCormack) and American Civil Liberties
Union Fund of Michigan, Inc. (by Michael J. Steinberg),
for defendant.
Before: F
ITZGERALD
,P.J., and C
AVANAGH
and D
AVIS
,JJ.
P
ER
C
URIAM.
Defendant appeals as of right her jury
conviction of failing to pay child support in violation of
MCL 750.165, for which she was sentenced to probation
for one year. We affirm.
Following a divorce in June 2003, defendant was
ordered to pay child support to her ex-husband, Elive
Likine, who was awarded physical custody of their three
minor children. The child support initially was $54 a
month, but was eventually raised to $181 a month.
Apparently, in March or May 2005, Elive sought an
increase in child support payments from defendant.
Elive was prompted to seek the increase in child sup-
port after he learned that defendant had purchased a
house worth about $500,000 by securing two mortgages
in her name, one for $2,000 a month and one for $1,000
a month. She had also purchased a new vehicle.
After hearings were held on the matter, the Friend of
the Court recommended that income consistent with
her standard of living, $5,000 a month, be imputed to
defendant and that her child support obligation be
increased to $1,131 a month, retroactively effective as
of June 1, 2005. The family division of the circuit court
adopted that recommendation after holding its own
hearing. Defendant’s motion for reconsideration was
denied. Thus, by order entered August 23, 2006, defen-
dant was obligated to pay $1,131 a month in child
support as of June 1, 2005. Defendant applied for
delayed leave to appeal in this Court, which ultimately
650 288 M
ICH
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PP
648 [June
denied leave “for failure to persuade the Court of the
need for immediate appellate review.” Likine v Likine,
unpublished order of the Court of Appeals, entered
March 14, 2008 (Docket No. 280148).
Defendant’s payment history was very sporadic. In
2006, she paid nothing. In 2007, she paid a total of
$488.85 for the year—$381.21 in February, $20 in June,
and $87.64 in December. Through March 2008, defen-
dant paid a total of $100. The amount of arrearage as of
February 29, 2008, was $40,182.71. In March 2008,
felony charges were filed against defendant for failure
to pay child support as ordered between February 2005
and March 2008, in violation of MCL 750.165. She stood
mute at her arraignment on May 19, 2008, and a plea of
not guilty was entered on her behalf.
On September 29, 2008, the prosecution filed a
motion in limine seeking to prevent defendant from
offering any evidence pertaining to her alleged inability
to pay the ordered child support. The prosecution
argued that, as this Court held in People v Adams, 262
Mich App 89; 683 NW2d 729 (2004), the failure to pay
child support in violation of MCL 750.165 is a strict-
liability offense; thus, evidence of an alleged inability to
pay is immaterial and irrelevant. The trial court agreed
and granted the motion in limine, holding that “inabil-
ity to pay is not a defense. Something should have been
raised earlier for a modification, but it wasn’t.” A jury
trial began on November 14, 2008, and defendant was
convicted as charged.
On November 25, 2008, defendant moved for relief
from an unconstitutional statute and for reconsidera-
tion of the order granting the prosecution’s motion in
limine precluding her from asserting as a defense the
inability to pay. Defendant primarily argued that MCL
750.165 is unconstitutional because, as a strict-liability
2010] P
EOPLE V
L
IKINE
651
offense, it does not require defendant to have a morally
culpable mental state regarding nonpayment of child
support. The motion was denied. On December 22,
2008, defendant was sentenced to probation for one
year. On February 2, 2009, defendant filed this appeal.
On March 16, 2009, defendant filed with the trial court
a motion for a new trial, primarily arguing that her
rights under Michigan’s Due Process Clause, as inter-
preted by Port Huron v Jenkinson, 77 Mich 414; 43 NW
923 (1889), were violated because she was not allowed
to present as a defense her inability to pay child
support. Relying on Adams, 262 Mich App at 99-100,
which made it clear that inability to pay is not a defense
to this strict-liability offense, the trial court denied the
motion.
On appeal, defendant first argues that she is entitled
to a new trial because her rights under Michigan’s Due
Process Cause were denied by the trial court’s order
prohibiting her from presenting as a defense her inabil-
ity to pay the ordered child support. We disagree.
This Court reviews de novo questions of constitu-
tional law. People v Keller, 479 Mich 467, 473-474; 739
NW2d 505 (2007). A trial court’s decision to admit or
exclude evidence is reviewed for an abuse of discretion
as is a trial court’s decision on a motion for a new trial.
People v Blackston, 481 Mich 451, 460; 751 NW2d 408
(2008); People v Katt, 468 Mich 272, 278; 662 NW2d 12
(2003). An abuse of discretion occurs when the trial
court’s decision falls outside the range of principled
outcomes. Blackston, 481 Mich at 460.
In her brief on appeal, defendant argues that, in
accordance with our Supreme Court’s decision in Jen-
kinson, 77 Mich at 419-420, “the Michigan Constitution
forbids the interpretation of MCL 750.165 as a statute
which prevents the presentation of an inability to pay
652 288 M
ICH
A
PP
648 [June
defense, thus criminalizing an involuntary omission.”
In Jenkinson, the impoverished defendant was pros-
ecuted for failing to comply with a local ordinance that
imposed a duty on property owners and occupants to
“ ‘keep and maintain good and sufficient sidewalks
along all streets and avenues in front of or adjacent to
such real estate’ ” and provided that “ ‘any such person
failing or refusing to build or repair any such side-
walk... for ten days after notice to him... shall be
deemed a violator of this ordinance.’ ” Id. at 416 (cita-
tion omitted). The Jenkinson Court found that the
ordinance was unconstitutional, and therefore void, on
the ground that “[n]o legislative or municipal body has
the power to impose the duty of performing an act upon
any person which it is impossible for him to perform,
and then make his non-performance of such duty a
crime, for which he may be punished by both fine and
imprisonment.” Id. at 419-420. Defendant’s reliance on
Jenkinson is misplaced.
Defendant claims that MCL 750.165 is unconstitu-
tional because, just as in Jenkinson, the government
imposed an impossible duty on her, specifically, the duty
of paying child support in the amount of $1,131 a month
despite her poverty. Defendant further contends that
she was unconstitutionally prevented from presenting
her defense of poverty to this strict-liability offense. But
unlike the defendant in Jenkinson, defendant was pros-
ecuted for failing to comply with a court order that was
entered after a judicial determination was made that
defendant had the financial means to comply with the
court order, i.e., the duty imposed on defendant was
adjudged possible for her to perform.
Defendant was a party to several civil proceedings in
which the family division modified her child support
obligation. Those proceedings afforded her ample op-
2010] P
EOPLE V
L
IKINE
653
portunity to present evidence of her ability or inability
to pay an increased amount of child support. During
those proceedings, evidence was adduced that while
defendant was paying $181 a month in support for her
three minor children, she purchased a house worth
about $500,000 by securing two mortgages in her name
that obligated her to pay $3,000 a month. She also
purchased a brand new vehicle. Thereafter, defendant
was adjudged, in accordance with the evidence of her
standard of living, to be capable of paying child support
in the amount of $1,131 a month for her three minor
children. Thus, unlike the situation in Jenkinson, the
government did not blindly impose on defendant a duty
that was impossible for her to perform. Rather, after a
full and fair hearing, the court determined what defen-
dant could pay and imposed on her an accordant duty to
do so.
Defendant’s claim of ineffective assistance of counsel
is premised on her attorney’s failure to “bring Jenkin-
son to the trial court’s attention and to raise a claim
under the Michigan Constitution....”Because defen-
dant’s constitutional argument is without merit, her
ineffective assistance of counsel claim, which is pre-
mised on that argument, also fails. See People v Mack,
265 Mich App 122, 130; 695 NW2d 342 (2005).
Defendant’s argument is actually an impermissible
collateral attack on the underlying support order. Pur-
suant to MCL 600.1021, the family division of circuit
court has sole and exclusive jurisdiction over cases of
divorce and ancillary matters, including those matters
set forth in the Support and Parenting Time Enforce-
ment Act, MCL 552.601 to 552.650. Under MCL
552.16(1), the court that enters a divorce judgment
“may enter the orders it considers just and proper
concerning the care, custody, and, as prescribed in
654 288 M
ICH
A
PP
648 [June
section 5 of the support and parenting time enforce-
ment act, 1982 PA 295, MCL 552.605, support of a
minor child of the parties.” Under MCL 552.605, the
court that orders the payment of child support must
generally order child support in an amount determined
by application of the child support formula, unless the
court specifically finds that its application would be
unjust or inappropriate. “[A] support order that is part
of a judgment or is an order in a domestic relations
matter is a judgment on and after the date the support
amount is due... with the full force, effect, and at-
tributes of a judgment of this state....” MCL
552.603(2). Pursuant to MCL 552.1224(1), the “tribu-
nal of this state that issues a support order consistent
with this state’s law has continuing, exclusive jurisdic-
tion over a child support order” if the parties and
children at issue remain residents of this state. Accord-
ingly, with regard to domestic relations actions, MCR
3.205(C) provides:
(1) Each provision of a prior order remains in effect
until the provision is superseded, changed, or terminated
by a subsequent order.
(2) A subsequent court must give due consideration to
prior continuing orders of other courts, and may not enter
orders contrary to or inconsistent with such orders, except
as provided by law.
Here, defendant was prosecuted for the criminal
offense of violating MCL 750.165, which states, in
pertinent part:
(1) If the court orders an individual to pay support for
the individual’s former or current spouse, or for a child of
the individual, and the individual does not pay the support
in the amount or at the time stated in the order, the
individual is guilty of a felony punishable by imprisonment
for not more than 4 years or by a fine of not more than
$2,000.00, or both.
2010] P
EOPLE V
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IKINE
655
(2) This section does not apply unless the individual
ordered to pay support appeared in, or received notice by
personal service of, the action in which the support order
was issued.
Defendant argues that she should have been permitted
to present the defense of inability to pay during her
criminal trial. However, such a defense merely attempts
to challenge the amount of the support ordered in the
civil proceeding by a court that has sole, exclusive, and
continuing jurisdiction over the support order—an or-
der that is a judgment having the “full force, effect, and
attributes of a judgment of this state....” MCL
552.603(2). “[A] collateral attack occurs wherever a
challenge is made to a judgment in any manner other
than through a direct appeal.” People v Howard, 212
Mich App 366, 369; 538 NW2d 44 (1995). Thus, defen-
dant’s attempt to challenge the child support order in
her criminal trial by claiming an inability to pay the
amount ordered was properly denied and did not con-
stitute an abuse of discretion. As simply stated in
Adams, 262 Mich App at 96, “ ‘[t]he Michigan nonsup-
port statutes generally reflect the rule that the offense
presupposes the ability to pay.’ ” (Citation omitted.)
Defendant also argues that her rights to due process
under the federal and state constitutions are offended
by characterization of the statute as a strict-liability
offense for which inability to pay is not a defense. See
id. at 99-100. She claims that her failure to pay the child
support as ordered could not have been a voluntary act
if “it was completely impossible for her to pay,” i.e., the
actus reus component of the crime would have been
lacking. This argument, too, fails. As our Supreme
Court held in People v Monaco, 474 Mich 48, 56-58; 710
NW2d 46 (2006), felony failure to pay child support is
not a continuing crime, but is complete at the time that
the individual fails to pay the ordered amount at the
656 288 M
ICH
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648 [June
ordered time. That is, the actus reus is the failure to pay
the support as ordered. As discussed earlier, defendant
was afforded numerous opportunities in the civil pro-
ceedings to establish her inability to pay the ordered
amount of child support. Those civil proceedings pro-
vided the proper forum and time to adjudicate such a
claim. Accordingly, defendant was not denied due pro-
cess on the ground that, because the offense imposes
strict liability, she was prevented from proving that her
failure to pay child support in compliance with the court
order was involuntary.
Further, the order that increased defendant’s child
support obligation was entered on August 23, 2006, and
was given retroactive effect to June 1, 2005. Defen-
dant’s motion for reconsideration was denied. Never-
theless, in 2006, defendant paid no child support. In
2007, she paid a total of $488.85 in child support. In
2008, through March, she paid $100. The charges of
felony nonsupport were not filed until March 2008.
During the extended period between the entry of the
child support order at issue and the filing of the
criminal charge, it does not appear from the record
evidence that defendant sought again to have the sup-
port order modified. And it does not appear, for ex-
ample, that she filed a motion in the circuit court under
MCL 552.605e for a payment plan to pay arrearages and
to discharge or abate arrearages, particularly after her
receipt of social security disability benefits. Had she
properly raised a challenge to her ability to pay the
ordered child support, as well as any of her bona fide
efforts to pay such support, they would have been
considered and adjudicated by the court that issued the
support order. However, defendant did not seek those,
or any other, remedies before she was prosecuted under
MCL 750.165.
2010] P
EOPLE V
L
IKINE
657
Defendant also seems to argue that she was denied
her due process right to present a defense because she
was prohibited from arguing that “it was impossible for
her to comply with her child support order....” We
disagree. Whether a defendant’s right to present a
defense was violated by the exclusion of evidence is a
constitutional question subject to review de novo.
People v Kurr, 253 Mich App 317, 327; 654 NW2d 651
(2002).
The right to present a defense is a fundamental
element of due process, but it is not an absolute right.
People v Hayes, 421 Mich 271, 279; 364 NW2d 635
(1984). The right extends only to relevant and admis-
sible evidence. People v Hackett, 421 Mich 338, 354; 365
NW2d 120 (1984). Evidence is relevant if it has “any
tendency to make the existence of any fact that is of
consequence to the determination of the action more
probable or less probable than it would be without the
evidence.” MRE 401. The elements of the crime of
felony nonsupport are
(1) the defendant was required by a decree of separate
maintenance or divorce order to support a child or current
or former spouse, (2) the defendant appeared in or received
notice by personal service of the action in which the order
was issued, and (3) the defendant failed to pay the required
support at the time ordered or in the amount ordered.
[People v Monaco, 262 Mich App 596, 606; 686 NW2d 790
(2004), aff’d in part and rev’d in part on other grounds 474
Mich 48 (2006).]
Clearly, evidence of the inability to pay was not relevant
to any fact at issue. Therefore, the trial court did not
abuse its discretion by declining to admit the evidence,
and defendant’s constitutional right to present a de-
fense was not implicated. See Katt, 468 Mich at 278;
Kurr, 253 Mich App at 327.
658 288 M
ICH
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648 [June
Finally, defendant argues that a new trial is required
because the prosecutor improperly attacked defense
counsel during closing rebuttal argument. Because de-
fendant did not object to the prosecutor’s remarks at
trial, this issue is unpreserved and our review is for
plain error affecting her substantial rights. See People v
Brown, 279 Mich App 116, 134; 755 NW2d 664 (2008).
“[T]he test for prosecutorial misconduct is whether a
defendant was denied a fair and impartial trial.” People
v Dobek, 274 Mich App 58, 63; 732 NW2d 546 (2007).
Error requiring reversal will not be found if a curative
instruction could have alleviated any prejudicial effect,
given that jurors are presumed to follow their instruc-
tions. People v Unger, 278 Mich App 210, 235; 749
NW2d 272 (2008).
Prosecutorial misconduct issues are decided on a
case-by-case basis, and the reviewing court must exam-
ine the record and evaluate a prosecutor’s remarks in
context. People v Thomas, 260 Mich App 450, 454; 678
NW2d 631 (2004). “The propriety of a prosecutor’s
remarks depends on all the facts of the case.” People v
Rodriguez, 251 Mich App 10, 30; 650 NW2d 96 (2002).
A prosecutor “may not personally attack defense coun-
sel.” People v McLaughlin, 258 Mich App 635, 646; 672
NW2d 860 (2003). The prosecutor may not suggest that
defense counsel is intentionally attempting to mislead
the jury, but reversal is not required if the prosecutor’s
remarks are responsive to defense counsel’s arguments.
People v Watson, 245 Mich App 572, 592-593; 629 NW2d
411 (2001).
In his closing argument, defense counsel emphasized
facts that had no bearing on the elements of the crime.
In response, the prosecutor argued that defense coun-
sel’s strategy was to distract the jury from the evidence.
The prosecutor’s remarks were an appropriate response
2010] P
EOPLE V
L
IKINE
659
to defense counsel’s argument and not a personal attack
on defense counsel. Thus, there was no plain error.
Moreover, a timely objection could have cured any
perceived prejudice. Therefore, reversal is not required.
Affirmed.
660 288 M
ICH
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PEOPLE v REID
Docket No. 286784. Submitted December 9, 2009, at Detroit. Decided
June 10, 2010, at 9:00 a.m.
Michael D. Reid was charged in Wayne Circuit Court with felony
drug possession and the misdemeanor of operating a motor vehicle
while intoxicated. On the day of trial, the prosecutor moved to
dismiss the felony drug possession charge, leaving only the misde-
meanor charge. The jury convicted defendant of the misdemeanor,
and defendant appealed.
The Court of Appeals held:
Because the felony charge was dismissed before trial com-
menced, the circuit court lacked jurisdiction over the misdemeanor
charge and should have remanded the case to the district court,
which had jurisdiction over the misdemeanor charge under MCL
600.8311(a), for trial on that charge.
Reversed.
Michael A. Cox, Attorney General, B. Eric Restuccia,
Solicitor General, Kim L. Worthy, Prosecuting Attorney,
Timothy A. Baughman, Chief of Research, Training,
and Appeals, and Janice M. Joyce Bartee, Assistant
Prosecuting Attorney, for the people.
Rubin & Shulman, PLC (by Allan S. Rubin and Neil
B. Pioch), for defendant.
Before: D
ONOFRIO
,P.J., and S
AWYER
and O
WENS
,JJ.
S
AWYER
, J. This case presents the question whether
the circuit court possesses the jurisdiction to try a
defendant on a misdemeanor charge when the accom-
panying felony charge was dismissed before the begin-
ning of trial. We hold that it does not and that the
2010] P
EOPLE V
R
EID
661
circuit court erred by trying defendant on the misde-
meanor charge rather than remanding the matter to
the district court for trial.
This case arises from a traffic stop by the Michigan
State Police in Wayne County. The traffic stop resulted in
defendant being arrested for operating a motor vehicle
while intoxicated (OWI).
1
A search of defendant’s vehicle
yielded pill bottles and pills, with one of the bottles
missing a label. Defendant was originally charged with
felony drug possession and misdemeanor OWI. On the day
of trial, however, the prosecutor moved to dismiss the
felony drug charge, apparently because it had been deter-
mined that defendant did, in fact, have a valid prescription
for the pills. Thus, only the misdemeanor charge re-
mained. Defendant was convicted on the misdemeanor
OWI charge and sentenced to 93 days in jail.
MCL 767.1 generally grants the circuit court juris-
diction over all criminal cases, felony and misdemeanor.
But MCL 600.8311(a) specifically grants the district
court jurisdiction over misdemeanors punishable by not
more than one year in jail. In People v Veling,
2
the
Supreme Court reviewed the circumstances under
which the circuit court may exercise jurisdiction over
criminal cases that otherwise belong in other courts.
Veling itself dealt with juveniles charged as adults
under the automatic-waiver statute but convicted of
lesser offenses not included within that statute. In
resolving that issue, the Court considered the historical
circumstances under which the circuit court maintains
jurisdiction over misdemeanors. The Court identified
three such circumstances.
3
1
MCL 257.625(1)
2
People v Veling, 443 Mich 23, 32-35; 504 NW2d 456 (1993).
3
Id.
662 288 M
ICH
A
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661 [June
First, relying on People v Schoeneth,
4
the Veling
Court noted that the circuit court maintains jurisdic-
tion to sentence a defendant charged with a felony but
convicted of a lesser included misdemeanor. Second,
relying on People v Loukas,
5
the Veling Court observed
that when a defendant is charged with multiple counts
involving both felony and misdemeanor charges arising
out of the same transaction, the circuit court possesses
jurisdiction over the misdemeanor as well as the felony
charges.
6
And, third, relying on People v Shackelford,
7
the Veling Court stated that when a posttrial action
eliminates a felony charge, the circuit court retains
jurisdiction to sentence on the remaining misde-
meanor.
8
None of these circumstances was present here. Had
trial commenced on both charges and the felony charge
been dismissed by motion or directed verdict, perhaps the
Schoeneth exception could be said to have applied. But
that is not what happened. The felony charge was dis-
missed before trial. Once that occurred and only a misde-
meanor charge that came within the district court’s juris-
diction under MCL 600.8311 remained, we believe that
under Veling the appropriate course of action for the
circuit court was to remand the matter to the district
court rather than for the circuit court to proceed to trial
solely on the misdemeanor charge.
4
People v Schoeneth, 44 Mich 489; 7 NW 70 (1880).
5
People v Loukas, 104 Mich App 204; 304 NW2d 532 (1981).
6
It is on this basis that both of the charges here were to be tried
together in circuit court. The misdemeanor followed the felony charge to
circuit court.
7
People v Schakelford, 146 Mich App 330; 379 NW2d 487 (1985).
8
In Shackelford, the defendant was tried on a misdemeanor marijuana
possession charge that was enhanced to a felony as a second offense.
Defendant was convicted of the felony possession charge, but thereafter
the prosecutor moved to dismiss the felony enhancement, leaving only
the misdemeanor possession charge. Id. at 332-333.
2010] P
EOPLE V
R
EID
663
Finally, we note that the prosecution’s reliance on
People v Goecke
9
is misplaced. Goecke dealt more with
the issue of personal jurisdiction than the issue of
subject-matter jurisdiction and, more specifically, the
question whether the prosecution must proceed by an
appeal in the circuit court or by a motion to amend the
information in the circuit court when challenging a
district court’s decision to bind a defendant over on one
felony charge but dismiss a different felony charge. This
is a significantly different issue from that presented in
this case.
In light of our resolution of this issue, we need not
address the remaining issues raised by defendant.
Reversed.
9
People v Goecke, 457 Mich 442; 579 NW2d 868 (1998).
664 288 M
ICH
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TICE ESTATE v TICE
Docket No. 290716. Submitted June 3, 2010, at Detroit. Decided June 10,
2010, at 9:05 a.m.
Robert Porter brought an action in his own name against Scott M.
Tice and Barbara E. Tice in the Muskegon Circuit Court. Porter
sought title to a parcel of property that his deceased mother, Gloria
Tice, had transferred to Barbara in a quitclaim deed before her
death. Barbara had subsequently transferred the property to her
son Scott. Porter alleged that the transfer to Barbara was fraudu-
lent and that the deed was insufficient. Defendants moved for
summary disposition, asserting that Porter was not the real party
in interest. The court, James M. Graves, Jr., J., agreed, but granted
Porter’s motion for leave to file an amended complaint. After
reopening the estate, Porter filed an amended complaint as per-
sonal representative, with the estate designated as the plaintiff.
Defendants then filed a second motion for summary disposition,
contending that the case was barred by the statute of limitations.
Plaintiff countered that the action was timely because the
amended complaint related back to the original filing under MCR
2.118(D). The court ruled that the relation-back doctrine did not
apply because the estate was a new party and granted defendants’
motion for summary disposition. Plaintiff appealed.
The Court of Appeals held:
1. The relation-back doctrine does not extend to the addition of
new parties, but when a plaintiff has brought an action in the
wrong capacity, a new plaintiff is allowed to take advantage of the
original action if the original plaintiff had an interest in the subject
matter of the controversy. In this case, the estate should have been
permitted to take advantage of the original filing because Porter,
as Gloria’s sole heir, had an interest in the subject matter of the
controversy.
2. MCL 700.3701 also supports application of the relation-back
doctrine in this case. The statute requires that a personal repre-
sentative’s powers relate back in time to give acts by the person
appointed that are beneficial to the estate occurring before ap-
pointment the same effect as acts occurring after appointment.
Under the statute, Porter’s act of commencing the suit should
2010] T
ICE
E
STATE V
T
ICE
665
have been given the same effect as if, at the time, he had been the
personal representative of the decedent.
Reversed and remanded.
1. P
LEADING —
A
MENDMENT OF
P
LEADINGS —
N
EW
P
ARTIES —
S
UBSTITUTION OF
P
ARTIES —
R
ELATION
-B
ACK
D
OCTRINE
.
The relation-back doctrine, which provides that an amended com-
plaint relates back in time to the filing of the original complaint,
does not extend to the addition of new parties, but when a plaintiff
has brought an action in the wrong capacity, a new plaintiff may
take advantage of the original action—for example, to avoid a
statute of limitations—if the original plaintiff had an interest in
the subject matter of the controversy (MCR 2.118[D]).
2. E
XECUTORS AND
A
DMINISTRATORS —
P
ERSONAL
R
EPRESENTATIVES —
P
OWERS OF
P
ERSONAL
R
EPRESENTATIVES —
R
ELATION
-B
ACK
D
OCTRINE
.
A personal representative’s powers relate back in time to give his or
her acts before appointment that were beneficial to the estate the
same effect as those occurring after appointment (MCL 700.3701).
Mary E. Farrell, PLLC (by Mary E. Farrell), for
plaintiff.
Ladas & Hoopes Law Offices, PLC (by Kenneth S.
Hoopes), for defendants.
Before: H
OEKSTRA
,P.J., and M
ARKEY
and D
AVIS
,JJ.
P
ER
C
URIAM
. In this dispute over a parcel of real
property, plaintiff, the estate of Gloria Tice, appeals as
of right the trial court’s order granting summary dis-
position to defendants on the basis of statute of limita-
tions. Because we conclude that the relation-back doc-
trine of MCR 2.118(D) applies to the amended
complaint, we reverse and remand. This appeal has
been decided without oral argument pursuant to MCR
7.214(E).
I. BASIC FACTS AND PROCEDURAL HISTORY
Gloria Tice was the owner of a five-acre parcel of real
666 288 M
ICH
A
PP
665 [June
property in Holton, Michigan. Defendant Barbara Tice,
who was related to Gloria’s deceased husband, served as
Gloria’s caregiver in 1999. On August 30, 1999, Gloria
executed a quitclaim deed transferring the property to
Barbara for $1. Barbara subsequently transferred the
property to her son, defendant Scott Tice.
Gloria died on January 24, 2004, leaving her son,
Robert Porter, as the personal representative of her
estate. Porter testified that he believed Gloria had
transferred either an acre or an acre and a half of the
parcel to Barbara, but he was unaware that she had
transferred the entire five-acre parcel to Barbara.
According to Porter, he discovered that defendants
were claiming title to the entire property in June
2006.
Porter brought suit in his own name against defen-
dants on April 16, 2008. He sought title to the
property, alleging that the transfer to Barbara was
fraudulent and that the quitclaim deed to her was
insufficient. Defendants moved for summary disposi-
tion under MCR 2.116(C)(5), arguing that Porter was
not the real party in interest and that Porter should
have brought the suit as the personal representative
of the decedent. The trial court agreed with defen-
dants that the case was improperly brought by Porter,
but granted Porter’s motion for leave to file an
amended complaint. After reopening the estate,
which had been administratively closed, Porter filed
an amended complaint on November 3, 2008, as the
personal representative, with the estate designated
as the plaintiff. Defendants filed a second motion for
summary disposition under MCR 2.116(C)(7), con-
tending that the case was barred by the statute of
limitations. The trial court agreed and granted sum-
mary disposition to defendants.
2010] T
ICE
E
STATE V
T
ICE
667
II. ANALYSIS
The estate argues that because the amended com-
plaint only changed the name of the plaintiff, rather
than adding a new plaintiff, the trial court erred by
holding that the amended complaint was barred by the
statute of limitations. We agree.
A trial court’s decision on a motion for summary
disposition is reviewed de novo. Ins Comm’r v Aageson
Thibo Agency, 226 Mich App 336, 340; 573 NW2d 637
(1997). Summary disposition is appropriate under MCR
2.116(C)(7) if “[t]he claim is barred because of...[the]
statute of limitations....”“Withregard to a motion for
summary disposition pursuant to MCR 2.116(C)(7), this
Court reviews the affidavits, pleadings, and other docu-
mentary evidence presented by the parties and ac-
cept[s] the plaintiff’s well-pleaded allegations, except
those contradicted by documentary evidence, as true.”
Young v Sellers, 254 Mich App 447, 450; 657 NW2d 555
(2002) (quotation marks and citation omitted).
Porter relied on MCL 600.5855 in asserting the
timeliness of the original complaint. MCL 600.5855
provides:
If a person who is or may be liable for any claim
fraudulently conceals the existence of the claim or the
identity of any person who is liable for the claim from the
knowledge of the person entitled to sue on the claim, the
action may be commenced at any time within 2 years after
the person who is entitled to bring the action discovers, or
should have discovered, the existence of the claim or the
identity of the person who is liable for the claim, although
the action would otherwise be barred by the period of
limitations.
The trial court found that there was an issue of fact
regarding whether Porter was aware of the alleged
fraudulent conveyance in 1999 or whether he discov-
668 288 M
ICH
A
PP
665 [June
ered it in June 2006. However, because the complaint
was not amended to reflect that the estate was the
plaintiff until after the two-year period arguably pro-
vided by MCL 600.5855 had expired, the trial court
determined that the action was not timely filed. In so
holding, the court ruled that the relation-back doctrine
of MCR 2.118(D) did not apply because the estate was a
new party.
MCR 2.118(D) provides:
An amendment that adds a claim or a defense relates
back to the date of the original pleading if the claim or
defense asserted in the amended pleading arose out of the
conduct, transaction, or occurrence set forth, or attempted
to be set forth, in the original pleading.
This Court has previously held that “the relation-back
doctrine does not extend to the addition of new parties.”
Employers Mut Cas Co v Petroleum Equip, Inc, 190
Mich App 57, 63; 475 NW2d 418 (1991); see also Hurt v
Michael’s Food Ctr, Inc, 220 Mich App 169, 179; 559
NW2d 660 (1996). We conclude, however, that the
present case is distinguishable from Employers Mut and
Hurt on the basis of Stamp v Mill Street Inn, 152 Mich
App 290; 393 NW2d 614 (1986). In Stamp, which
concerned the substitution of a party rather than the
addition of a new party, the Court held that
amendment of pleadings may be allowed to change the
identity of a party plaintiff where the plaintiff originally
brought an action in the wrong capacity and the new
plaintiff may be allowed to take advantage of the former
action if the original plaintiff had, in any capacity, either
before or after the commencement of the action, an interest
in the subject matter of the controversy. [Id. at 298.]
In this case, Porter, as Gloria’s sole heir, had an
interest in the subject matter of the controversy. Pre-
suming for the sake of analysis that the estate’s action
2010] T
ICE
E
STATE V
T
ICE
669
will be successful, Porter will be the ultimate benefi-
ciary. Thus, under the Stamp rule, the estate should
have been allowed to take advantage of Porter’s filing of
the original complaint.
Peculiar to this case, there is also statutory support
for such a holding. MCL 700.3701 provides:
A personal representative’s duties and powers com-
mence upon appointment. A personal representative’s
powers relate back in time to give acts by the person
appointed that are beneficial to the estate occurring before
appointment the same effect as those occurring after
appointment. Subject to [MCL 700.3206 to 700.3208],
before or after appointment, a person named as personal
representative in a will may carry out the decedent’s
written instructions relating to the decedent’s body, fu-
neral, and burial arrangements. A personal representative
may ratify and accept an act on behalf of the estate done by
another if the act would have been proper for a personal
representative.
Under this statute, it appears that Porter’s act of
commencing the suit should have been given the same
effect as if, in April 2008, he had been the personal
representative of the decedent. If Porter had been the
personal representative at the time that he filed suit,
then the only issue would have been that the case was
not properly captioned. This Court has held that the
form of the caption is generally not of particular impor-
tance. Howard v Bouwman, 251 Mich App 136, 145-146;
650 NW2d 114 (2002), citing Stamp, 152 Mich App at
296.
From the foregoing, we conclude that the amended
complaint related back in time to the filing of the
original complaint. The relation-back doctrine does not
extend to the addition of new parties, Employers Mut,
190 Mich App at 63, but when a plaintiff has brought an
action in the wrong capacity, a new plaintiff is allowed
670 288 M
ICH
A
PP
665 [June
to take advantage of the original action if the original
plaintiff had an interest in the subject matter of the
controversy, Stamp, 152 Mich App at 298. Under the
Stamp rule, the estate should have been allowed to
advantage of the original filing because Porter, as Gloria’s
heir, had an interest in the subject matter of the contro-
versy. Permitting relation back is also supported by MCL
700.3701, under which Porter’s act of commencing the
suit should have been given the same effect as if, at the
time, he was the decedent’s personal representative. No-
tably, defendants had notice within the statutory period
that they would have to defend against claims of a
fraudulent transfer and an insufficient deed. Thus, ruling
in the estate’s favor will not undermine the purpose of the
statute of limitations. See Stamp, 152 Mich App at 299,
citing 1 Honigman & Hawkins, Michigan Court Rules
Annotated (2d ed), p 416.
Reversed and remanded for further proceedings not
inconsistent with this opinion. We do not retain juris-
diction.
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671
WHITMAN v GALIEN TOWNSHIP
Docket No. 287991. Submitted June 2, 2010, at Grand Rapids. Decided
June 10, 2010, at 9:10 a.m.
The Galien Township Zoning Board of Appeals granted a special-use
permit allowing the owners of a parcel of property in the town-
ship’s agricultural zoning district to operate a snowmobile, dirt
bike, and ATV racetrack on that property. Daniel H. Whitman,
Larry and Mary Piccoli, and others appealed the zoning board’s
decision in the Berrien Circuit Court. The court, John E. Dewane,
J., affirmed the grant of the special-use permit. Plaintiffs sought
leave to appeal to the Court of Appeals, which denied leave. In lieu
of granting leave to appeal, the Supreme Court remanded the case
to the Court of Appeals for consideration as on leave granted. 485
Mich 859 (2009).
The Court of Appeals held:
Plaintiffs contended that the zoning board’s decision did not
comport with the law because the Galien Township Zoning
Ordinance did not comply with the Michigan Zoning Enabling
Act (MZEA), MCL 125.3101 et seq. A local unit of government
may only regulate land use through zoning to the limited extent
authorized by the Legislature. Under MCL 125.3502(1)(a), the
MZEA allows for special-use permits if the local ordinance
specifically identifies the special land uses and activities eligible
for approval. The township zoning ordinance failed to comply
with this requirement because it identified only general catego-
ries of uses or activities eligible for special-use status. Because
the zoning ordinance did not comply with the MZEA, the zoning
board’s decision to grant a special-use permit did not comport
with the law, and the circuit court erred by affirming the board’s
decision.
Reversed; special-use permit vacated.
Z
ONING —
M
ICHIGAN
Z
ONING
E
NABLING
A
CT —
S
PECIAL
-U
SE
P
ERMITS
.
The Michigan Zoning Enabling Act requires that a local zoning
ordinance specifically identify the land uses and activities that are
eligible for special-use status (MCL 125.3502[1][a]).
672 288 M
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Olson, Bzdok & Howard, P.C. (by Jeffrey L. Jocks and
James M. Olson), for Daniel H. Whitman, Larry Piccoli,
and Mary Piccoli.
Desenberg, Colip & Bell, P.C. (by Sara A. Bell and
Louis Desenberg), for Galien Township and the Galien
Township Zoning Board of Appeals.
Before: O
WENS
,P.J., and O’C
ONNELL
and T
ALBOT
,JJ.
O’C
ONNELL
, J. On September 30, 2008, plaintiffs filed
an application for leave to appeal the circuit court’s
September 9, 2008, order affirming defendant Galien
Township Zoning Board of Appeals’ grant of a special-use
permit to Timothy Richter and Corrine Hoetger (the
applicants). The permit was granted pursuant to the
Galien Township Zoning Ordinance. Specifically, the cir-
cuit court affirmed the zoning board’s grant of a special-
use permit to allow the operation of a snowmobile, dirt
bike, and ATV racetrack during the summer months in
the township’s agricultural zoning district. This Court
denied plaintiffs’ application for leave to appeal. Whitman
v Galien Twp, unpublished order of the Court of Appeals,
entered February 20, 2009 (Docket No. 287991). The
Supreme Court subsequently remanded the case to this
Court for consideration as on leave granted. Whitman v
Galien Twp, 485 Mich 859 (2009).
1
For the reasons stated
in this opinion, we reverse the circuit court’s order affirm-
ing the zoning board and vacate the special-use permit.
The applicants own a 70-acre parcel of property in
Galien Township located at the corner of Mt. Zion Road
1
By stipulation of the parties, George Klingspon, Etta Klingspon,
Edward Howard, and Lois Howard were dismissed from the application
for leave to appeal in the Michigan Supreme Court. Whitman v Galien
Twp, 764 NW2d 788 (Mich, 2009). As used in this opinion, the term
“plaintiffs” refers to Daniel H. Whitman, Larry Piccoli, and Mary Piccoli.
2010] W
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and US-12, a major highway in the township’s agricul-
tural zoning district. Several residential homes are located
near the property. The township’s agricultural zoning
district is governed by a zoning ordinance that provides in
pertinent part:
The following uses and regulations shall apply in the
Agricultural District.
SECTION 2.4 A – PERMITTED USES
1. Any use allowed in an “A” Residential District.
2. Farming, including the raising of livestock, raising
trees, and harvesting wood, excluding animal confinement
or production feeding operations.
3. Sale of products produced mainly on the premises.
4. Mobile homes subject to the provisions of Section 3.1.
SECTION 2.4 B – USES BY SPECIAL PERMIT AS
PROVIDED FOR BY SECTION 3.13
1. Rooming Houses or Boarding Houses, subject to the
provisions of Section 3.13
[
2
]
(Special Use Permits & Build-
ing Standards).
2
Section 3.13 provides, in relevant part:
Uses requiring special permits are those uses of land which are
not essentially incompatible with the uses permitted in a zoning
district, but possess characteristics or locational qualities which
require individual review and restriction in order to avoid incom-
patibility with the character of the surrounding area, public
services and facilities, and adjacent uses of land. Proposed uses will
be evaluated according to their compatibility with the nature,
extent and density of the surrounding area.
Special permit uses may be permitted only in those zoning
districts where they are designated by this Ordinance, and only
when specifically approved by the Galien Township Zoning Board
in accordance with the provisions of this Ordinance.
Prior to the approval of a Special Use Permit, the Zoning Board
shall insure that the standards specified in this Section, as well as
standards established elsewhere in this Ordinance shall be satisfied.
All uses by special permit shall comply with each of the following
standards and requirements:
674 288 M
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2. Establishments for the conducting of commercial or
industrial activities, subject to approval of the Zoning
Board.
3. Animal confinement or production feeding opera-
tions.
4. Outdoor display and advertising media as provided by
Section 3.17.
(a) The nature, location, and size of the special use shall not
change the essential character of the surrounding area, nor
disrupt the orderly and proper development of the district as a
whole. The use shall not be in conflict with, or discourage the
adjacent or neighboring lands or buildings.
(b) The special use shall not diminish the value of the land,
buildings or structures in the neighborhood.
(c) The special use shall not increase traffic hazards or cause
congestion on the public highways or streets of the area. Adequate
access to the parcel shall be furnished.
(d) The water supply and sewage disposal system shall be
adequate for the proposed special use by conforming to State and
County Health Department requirements, and the special use
shall not over-burden any existing services or facilities.
(e) Any agricultural use shall be conducted in conformity with
generally accepted agricultural practices and shall not be located
within 1000 feet of existing residential structures.
(f) Uses by special permit shall not be significantly more
objectionable to nearby properties by reason of traffic, noise,
vibrations, dust, fumes, odor, smoke glare, lights, or disposal of
waste than the operation of any principal permitted use, nor shall
the special use increase hazards from fire or other damages to
either the property or adjacent property.
(g) The Zoning Board may require that the premises be
permanently screened from adjoining or contiguous properties by
a wall, fence, plant screen and/or other approved enclosure when
deemed necessary to buffer the surrounding uses from objection-
able noise, light, etc., created by the special use.
(h) The special use shall be consistent with the intent and
purpose of this Ordinance. The special use shall be compatible
with the natural environment and shall not [be] inimical to the
public health, safety and general welfare. [Galien Township Zon-
ing Ordinance, art III, § 3.13.]
2010] W
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5. Automobile or travel trailers subject to the provisions
of Section 3.11. [Galien Township Zoning Ordinance, art II,
§ 2.4.]
On or about September 11, 2006, the applicants
applied for a special-use permit to construct and operate
a snowmobile, dirt bike, and ATV racetrack on their
property during the summer months. Specifically, the
applicants requested a special-use permit to allow the
operation of ATV and dirt bike drag races on dirt tracks
and snowmobile races on a pond that the applicants
planned to construct on the property.
3
The zoning board
granted the permit without making any findings of fact
or conclusions of law on the record. Plaintiffs, and
several neighboring landowners, appealed the board’s
decision in the circuit court. Thereafter, because the
board had failed to create a proper record for review, the
parties stipulated that the board would hold a rehear-
ing.
The zoning board concluded that the proposed race-
track was a permissible commercial use for purposes of
a special-use exception in the agricultural district, but
found that the applicants failed to submit a proper site
plan. After receiving the requested information and
holding another hearing, the board found that the
applicants’ plan satisfied all requirements listed in
§ 3.13 of the zoning ordinance for granting a special-use
permit.
After making findings on the record, the zoning
board approved the special-use permit with restric-
tions.
4
On appeal, the circuit court ruled that the board
3
The applicants referred to snowmobile racing in the summer over a
body of water as “watercross.”
4
In particular, the zoning board restricted operation of the racetrack to
four Saturdays a year in July, August, September, and October. The board
676 288 M
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had properly concluded that it had authority to grant a
special-use permit for the racetrack in the agricultural
district. The circuit court held that the zoning board
had authority under the ordinance to issue a special-use
permit because a racetrack qualified as a “commercial
use” under § 2.4B(2) of the ordinance. In so holding, the
circuit court determined that a zoning board may
authorize a special-use permit even if the proposed use
is not specifically enumerated in the applicable zoning
ordinance. The circuit court held that the board’s
findings with respect to seven of the eight factors listed
in § 3.13 of the zoning ordinance were supported by
competent, material, and substantial evidence on the
record, but remanded the case back to the zoning board
for further findings regarding whether the proposed
racetrack would diminish the value of the land, build-
ings, or structures in the surrounding neighborhood.
After another hearing and an opportunity for public
comment, the zoning board found that the racetrack
would not diminish the value of neighboring properties.
On appeal, the circuit court ruled that the board’s
findings were supported by competent, material, and
substantial evidence and affirmed the board’s decision
to grant the applicants a special-use permit.
On appeal, plaintiffs contend that the zoning ordi-
nance unlawfully delegates legislative power to the
zoning board by allowing the board to issue special-use
permits within the agricultural zoning district to any
establishment for “commercial or industrial activities.”
Galien Township Zoning Ordinance, art II, § 2.4B(2).
However, the question whether the zoning ordinance
restricted the timing of the races to 8:00 a.m. to 10:00 p.m. in July and
August and 8:00 a.m. to 8:00 p.m. in September and October. The board
allowed the applicants to hold races on Sunday if scheduled Saturday
races were rained out. In addition, the board required two weeks’ notice
of the races and prohibited commercial camping on the property.
2010] W
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unlawfully delegates legislative power to the zoning
board was not raised in the circuit court. Thus, plain-
tiffs failed to preserve this issue for our review. Polkton
Charter Twp v Pellegrom, 265 Mich App 88, 95; 693
NW2d 170 (2005). “[T]his Court may overlook preser-
vation requirements if the failure to consider the issue
would result in manifest injustice, if consideration is
necessary for a proper determination of the case, or if
the issue involves a question of law and the facts
necessary for its resolution have been presented.”
Smith v Foerster-Bolser Constr, Inc, 269 Mich App 424,
427; 711 NW2d 421 (2006) (citation omitted). Because
this Court is not obligated to address issues raised for
the first time on appeal, and considering that manifest
injustice would not result from our failure to consider
this issue, we decline to address it. See Polkton Charter
Twp, 265 Mich App at 95-96.
Next, plaintiffs claim that the zoning board’s deci-
sion did not comport with the law because the zoning
ordinance does not comply with the Michigan Zoning
Enabling Act (MZEA), MCL 125.3101 et seq. We agree.
Although this issue is also unpreserved, it involves a
question of law, and the facts necessary for its resolu-
tion have been presented. In addition, failure to con-
sider this issue would result in manifest injustice be-
cause the grant of the special-use permit did not
comport with the law. See Smith, 269 Mich App at 427.
Therefore, we will consider the issue on the merits.
We review de novo a circuit court’s decision in an
appeal from a zoning board. Risko v Grand Haven
Charter Twp Zoning Bd of Appeals, 284 Mich App 453,
458; 773 NW2d 730 (2009). When reviewing a zoning
board’s decision whether to issue an exception to a
zoning ordinance, “ ‘this Court must review the record
and...[the board’s decision]...todetermine whether
678 288 M
ICH
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it (1) comports with the law, (2) was the product of
proper procedure, (3) was supported by competent,
material, and substantial evidence on the record, and
(4) was a proper exercise of reasonable discretion.’ ” Id.
(citations omitted). A decision by a zoning board that
violates a statute or the constitution is not authorized
by the law. Northwestern Nat’l Cas Co v Ins Comm’r,
231 Mich App 483, 488; 586 NW2d 563 (1998). We
review de novo issues involving the construction of
statutes and ordinances. Soupal v Shady View, Inc, 469
Mich 458, 462; 672 NW2d 171 (2003).
Municipalities have no inherent power to regulate
land use through the enactment of zoning legislation;
instead, a local unit of government must be specifically
authorized by the Legislature to exercise any zoning
authority. Krajenke Buick Sales v Hamtramck City
Engineer, 322 Mich 250, 254; 33 NW2d 781 (1948). The
Legislature has granted municipalities the power to
zone through the enactment of enabling legislation.
Sun Communities v Leroy Twp, 241 Mich App 665, 669;
617 NW2d 42 (2000). A local unit of government may
regulate land use through zoning only to the limited
extent authorized by that legislation. Krajenke, 322
Mich at 254-255.
In 2006, the Legislature consolidated the three sepa-
rate zoning enabling acts for cities and villages, town-
ships, and counties into the MZEA. The MZEA governs
the creation and administration of local zoning ordi-
nances and provides in relevant part:
The legislative body of a local unit of government may
provide by ordinance for the manner in which the regula-
tions and boundaries of districts or zones shall be deter-
mined and enforced or amended or supplemented. Amend-
ments or supplements to the zoning ordinance shall be
adopted in the same manner as provided under this act for
the adoption of the original ordinance. [MCL 125.3202(1).]
2010] W
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The MZEA also provides that a local zoning ordinance
may include provisions for special-use permits within a
zoning district as follows:
The legislative body may provide in a zoning ordinance
for special land uses in a zoning district. A special land use
shall be subject to the review and approval of the zoning
commission, the planning commission, an official charged
with administering the zoning ordinance, or the legislative
body as required by the zoning ordinance. The zoning
ordinance shall specify all of the following:
(a) The special land uses and activities eligible for
approval and the body or official responsible for reviewing
and granting approval.
(b) The requirements and standards for approving a
request for a special land use.
(c) The procedures and supporting materials required
for the application, review, and approval of a special land
use. [MCL 125.3502(1).]
MCL 125.3504(1) further states that “[i]f the zoning
ordinance authorizes the consideration and approval of
special land uses... orotherwise provides for discre-
tionary decisions, the regulations and standards upon
which those decisions are made shall be specified in the
zoning ordinance.”
In this case, Galien Township apparently enacted its
zoning ordinance in 2001 pursuant to the MZEA’s prede-
cessor, the Township Zoning Act (TZA), MCL 125.271 et
seq., repealed by 2006 PA 110. Hughes v Almena Twp, 284
Mich App 50, 59; 771 NW2d 453 (2009); MCL
125.3702(1)(c). The provisions governing the issuance of
special-use permits under the TZA were substantively
identical to the language used in the MZEA. Compare
MCL 125.286b(1) and MCL 125.286d(1) with MCL
125.3502(1) and MCL 125.3504(1). In any event, because
this action arose after the effective date of the enactment
680 288 M
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of the MZEA, the MZEA governs the resolution of this
proceeding. Hughes, 284 Mich App at 59, citing MCL
125.3702(2).
The central issue in this case is whether § 2.4B(2) of
the zoning ordinance complies with MCL 125.3502(1),
which provides that if a zoning ordinance allows for
special-use permits, the ordinance “shall specify...
[t]he special land uses and activities eligible for ap-
proval....” Section 2.4B(2) of the zoning ordinance
provides that “[e]stablishments for the conducting of
commercial or industrial activities” are eligible for
special-use permits within the agricultural zoning dis-
trict, subject to the zoning board’s approval and com-
pliance with the requirements set forth in § 3.13 of the
ordinance. Plaintiffs contend that the zoning ordinance
fails to “specify” the land uses and activities that are
eligible for special-use permits because the ordinance
generalizes that any establishment for commercial or
industrial activities is eligible for special-use status.
Thus, we must determine whether the provision of the
ordinance conflicts with the MZEA. Resolution of this
question necessarily involves the interpretation of stat-
utes and ordinances.
For purposes of interpretation, ordinances and stat-
utes are reviewed in the same manner. Hughes, 284
Mich App at 61. “The primary goal of statutory inter-
pretation is to ascertain and give effect to the intent of
the Legislature....”USAA Ins Co v Houston Gen Ins
Co, 220 Mich App 386, 389; 559 NW2d 98 (1996). When
a statute’s language is clear, “we assume that the
Legislature intended the plainly expressed meaning,
and we enforce it as written.” Hughes, 284 Mich App at
62. However, when a statute’s language is ambiguous,
“we apply a reasonable construction that best accom-
plishes the intent of the Legislature.” Id. Unless other-
2010] W
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wise defined by statute, every word or phrase should be
accorded its plain and ordinary meaning. Risko, 284
Mich App at 460. Statutes granting power to Michigan
townships are construed liberally in the township’s
favor. Hughes, 284 Mich App at 62.
As stated earlier, the language from the MZEA at
issue provides that a zoning ordinance “shall specify...
[t]he special land uses and activities eligible for ap-
proval....”MCL125.3502(1). When used in a statute,
the term “shall” is considered to mandate conduct.
Hughes, 284 Mich App at 62. Because the terms at issue
are not defined in the statute, see MCL 125.3102,
consultation of dictionary definitions is appropriate.
Risko, 284 Mich App at 460. Random House Webster’s
College Dictionary (1997) defines “specify” as “to men-
tion or name specifically or definitely; state in detail”
and as “to give a specific character to.” It defines
“specific” as “having a special application, bearing, or
reference; explicit or definite” and as “specified, precise,
or particular.” Id. It defines “use” as “an instance or
way of using something,” as “a way of being used; a
purpose for which something is used,” as “continued,
habitual, or customary employment or practice; cus-
tom,” and as “the enjoyment of property, as by occupa-
tion or employment of it.” Id. It defines “activity” as “a
specific deed, action, function, or sphere of action[.]” Id.
When these definitions are considered together, the
statute can be read to mandate that a zoning ordinance
must set forth in explicit, precise, definite, and detailed
language both the customary uses and the specific
actions and functions that are eligible for special-use
permits. The legal definition of “special-use permit”
supports this reading of the statute. Black’s Law Dic-
tionary (9th ed) defines a “special-use permit” as “[a]
zoning board’s authorization to use property in a way
that is identified as a special exception in a zoning
682 288 M
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ordinance.” Accordingly, the MZEA’s specificity re-
quirement ensures that property uses and activities
eligible for special-use status are identified in the lan-
guage of the zoning ordinance.
The MZEA’s requirement that a zoning ordinance
specifically identify the land uses and activities that are
eligible for special-use status encourages uniformity
within a zoning district by placing limits on discretion-
ary zoning decisions. See MCL 125.3201(2) (“Except as
otherwise provided under this act, the regulations shall
be uniform for each class of land or buildings, dwellings,
and structures within a district.”). The MZEA’s speci-
ficity requirement encourages consistency within a zon-
ing district and guards against undesirable “spot zon-
ing,” which has been defined as “[a] zoning ordinance
or amendment...creating a small zone of inconsistent
use within a larger zone.”
5
Penning v Owens, 340 Mich
355, 367; 65 NW2d 831 (1954). By requiring a zoning
ordinance to specifically enumerate all land uses and
5
Michigan courts closely scrutinize instances of “spot zoning.” See
Raabe v City of Walker, 383 Mich 165, 168-170, 174-179; 174 NW2d 789
(1970) (invalidating rezoning of a 180-acre parcel within a residential
district from agricultural to industrial use when the industrial use was
inconsistent with the surrounding area and there was no showing of a
valid need for the rezoning for the sake of the public health, safety, and
welfare); Trenton Dev Co v Village of Trenton, 345 Mich 353, 357-358; 75
NW2d 814 (1956) (invalidating the rezoning of three city blocks to
single-family residential when the surrounding area was zoned for
multiple dwellings and commercial use and noting that the inconsistency
was invalid because there were no purported health, safety, or welfare
considerations); cf. Bruni v Farmington Hills, 96 Mich App 664; 293
NW2d 609 (1980) (affirming special-use permit for cluster housing within
low-density housing district because of unique character of the land);
Essexville v Carrollton Concrete Mix, Inc, 259 Mich App 257, 277-278; 673
NW2d 815 (2003) (concluding that rezoning of an area from industrial to
developmental despite the area’s being surrounded by industrial use was
not “spot zoning” when rezoning was in accordance with the master
land-use plan).
2010] W
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activities that are eligible for a special-use permit, the
MZEA guards against an administrative body’s ability
to haphazardly create small zones of inconsistent use
within a larger district.
The MZEA’s specificity requirement also operates to
prevent an administrative body from engaging in rezon-
ing by approving wholesale changes to the character of
a zoning district. Rezoning is exclusively a legislative
function. Sun Communities, 241 Mich App at 669. The
specificity requirement, when coupled with the MZEA’s
requirement that the zoning ordinance include stan-
dards governing a zoning board’s discretionary author-
ity, serves to ensure that the ordinance complies with
the Michigan Constitution and does not amount to an
improper delegation of legislative authority.
Finally, one of the purposes of the MZEA is to provide
for and facilitate the orderly development of land-use
districts, whether residential, agricultural, industrial,
or commercial. “The foundation of traditional zoning
has been the division of the municipality into one or
more land use districts. The intent is that these dis-
tricts will be separated, organized, and regulated to
achieve legitimate zoning objectives as set forth in the
[MZEA]....”Fisher et al., Michigan Zoning, Planning
& Land Use (2010), § 1.3, p 5. In order to effectuate this
intent, the MZEA provides:
A local unit of government may provide by zoning
ordinance for the regulation of land development and the
establishment of 1 or more districts within its zoning
jurisdiction which regulate the use of land and structures
to meet the needs of the state’s citizens for food, fiber,
energy, and other natural resources, places of residence,
recreation, industry, trade, service, and other uses of land,
to ensure that use of the land is situated in appropriate
locations and relationships, to limit the inappropriate
overcrowding of land and congestion of population, trans-
684 288 M
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portation systems, and other public facilities, to facilitate
adequate and efficient provision for transportation sys-
tems, sewage disposal, water, energy, education, recreation,
and other public service and facility requirements, and to
promote public health, safety, and welfare. [MCL
125.3201(1).]
By requiring that a zoning ordinance specifically enu-
merate the land uses and activities that are eligible for
special-use status, the MZEA helps to ensure that
land-use districts are separated and created in an
orderly manner.
Applying the interpretation of the language in the
MZEA to the zoning ordinance at issue in this case, we
conclude that the zoning ordinance does not comply
with the enabling legislation. The zoning ordinance
provides that “[e]stablishments for the conducting of
commercial or industrial activities” are eligible for
special-use status within the agricultural zoning dis-
trict. Galien Township Zoning Ordinance, art II,
§ 2.4B(2). The ordinance does not define “commercial”
or “industrial.” Random House Webster’s College Dic-
tionary (1997) defines “commercial” as “of, pertaining
to, or characteristic of commerce” and as “engaged in,
used for, or suitable to commerce or business, [espe-
cially] of a public or nonprivate nature[.]” It defines
“industrial” as “of or pertaining to a type of the nature
of, or resulting from industry” and as “used or appro-
priate for use in industry[.]” Id. It defines “industry” as
“any general business activity” and as “trade or manu-
facture in general[.]” Id. Considering these definitions,
the language in the zoning ordinance sweeps broadly
and makes all actions or functions (i.e., activities)
pertaining to commerce, business, trade, manufacture,
or industry in general eligible for special-use status
within the agricultural zoning district. Section 2.4B(2)
does not comply with MCL 125.3502(1) because it does
2010] W
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not specify the special land uses and activities eligible
for approval, but identifies only general categories of
uses or activities.
Section 3.13 of the ordinance does not change our
conclusion. Section 3.13 does not identify which land
uses or activities are eligible for special-use permits;
instead, it sets forth standards to govern the zoning
board’s decision whether to grant a special-use permit
to an eligible land use or activity. In addition to requir-
ing that an ordinance specifically enumerate the land
uses and activities that are eligible for special-use
status, the MZEA also requires that a zoning ordinance
specifically provide standards and criteria to govern a
zoning board’s discretionary decision whether to grant
a permit for an eligible special use. The MZEA provides
in relevant part that a zoning ordinance “shall specify”
both “[t]he special land uses and activities eligible for
approval and the body or official responsible for review-
ing and granting approval” and “[t]he requirements
and standards for approving a request for a special land
use.” MCL 125.3502(1). The fact that § 3.13 is specific
and detailed regarding the “requirements and stan-
dards for approving a request for a special land use”
does not save § 2.4B(2) from noncompliance with the
statute for failure to specify the special land uses and
activities eligible for approval.
Defendants’ reliance on Reilly v Marion Twp, 113
Mich App 584; 317 NW2d 693 (1982), is unpersuasive.
In Reilly, the plaintiffs appealed the zoning board’s
issuance of a special-use permit authorizing a commer-
cial trucking operation within the township’s
agricultural-residential zoning district, arguing that
the zoning board had acted outside the scope of its
authority under the township’s zoning ordinance. Id.at
585-587. This Court explained that the zoning ordi-
686 288 M
ICH
A
PP
672 [June
nance did not limit the zoning board’s authority to
grant special exceptions in cases involving only a use
specified in the ordinance. Id. at 588. It noted, “The
board is empowered under the ordinance to add to the
list of special use exceptions those exceptions deemed
necessary to protect adjacent properties, the general
neighborhood, and its residents and workers....”Id.
The central issue in Reilly involved the interpretation
of a zoning ordinance, while the central issue in this
case concerns whether the zoning ordinance complies
with the MZEA.
Because the zoning ordinance does not comply with
the MZEA, the zoning board’s decision to grant a
special-use permit did not comport with the law, and the
circuit court erred by affirming the board’s decision.
6
The circuit court’s order affirming the zoning board
is reversed. We vacate the special-use permit.
6
Plaintiffs also argue that the circuit court erred by affirming the
zoning board’s decision to grant the special-use permit because the
board’s conclusion that the racetrack qualified as a “commercial use” and
its application of the factors set forth in § 3.13 of the ordinance were not
supported by the evidence. Because we have determined that the zoning
ordinance in question does not comply with the MZEA, we need not
address this issue.
2010] W
HITMAN V
G
ALIEN
T
WP
687
JOHNSON v DETROIT EDISON COMPANY
Docket No. 289763. Submitted May 11, 2010, at Detroit. Decided June 15,
2010, at 9:00 a.m.
Sandra Johnson and Hiram Jones brought an action in the Wayne
Circuit Court against their employer, Detroit Edison Company,
alleging that it committed an intentional tort under MCL
418.131(1) of the Worker’s Disability Compensation Act (WDCA).
Plaintiffs were burned when hot ash exploded from a boiler they
were emptying. Plaintiffs contended that defendant knew the
boiler was in a dangerous condition but did nothing to correct the
problem. Defendant moved for summary disposition, asserting
that plaintiffs had failed to present sufficient evidence of an
intentional tort. The court, Wendy M. Baxter, J., denied defen-
dant’s motion. The Court of Appeals granted defendant’s inter-
locutory application for leave to appeal.
The Court of Appeals held:
1. Generally, an employee’s exclusive remedy against an em-
ployer for work-related personal injuries or occupational disease is
the benefits provided by the WDCA. The sole exception to the rule
allows recovery if the employee can prove that the employer
committed an intentional tort. To establish an intentional tort
pursuant to the WDCA, the evidence must show that the employer
deliberately acted or failed to act with the purpose of inflicting an
injury on the employee. In the absence of direct evidence to that
effect, the plaintiff must proffer evidence that the employer had
actual knowledge that an injury would follow from its actions or
omissions, that an injury was certain to occur, and that the
employer willfully disregarded its actual knowledge that an injury
was certain to occur.
2. A jury may conclude that a plaintiff’s employer knew the
injury was certain to occur under MCL 418.131(1) if the plaintiff
can show (1) that the employer subjected the plaintiff to a
continuously operative dangerous condition that it knew would
cause an injury, (2) that the employer knew that its employees
were taking insufficient precautions to protect themselves against
that danger, and (3) that the employer did nothing to remedy the
situation.
688 288 M
ICH
A
PP
688 [June
3. Plaintiffs made the requisite evidentiary showing in support
of their intentional tort claim for purposes of avoiding summary
disposition. Plaintiffs proffered evidence that numerous supervi-
sory employees and members of management were aware that the
boiler was in disrepair and, as a result, that hot ash was building
up and exploding. If believed, this evidence would demonstrate
defendant’s actual knowledge of the dangerous condition. Plain-
tiffs also proffered evidence that management was aware of
previous ash spews, some of which had caused injuries; that
defendant’s employees had run from previous ash spews in order
to avoid injury; and that management had discussed the need for
boiler repairs and more appropriate apparel for defendant’s em-
ployees. Viewed in the light most favorable to plaintiffs, this
circumstantial evidence would be sufficient to establish that
defendant had actual knowledge that an injury was certain to
occur. Plaintiffs also proffered sufficient evidence of willful disre-
gard by showing that defendant failed to remedy the dangerous
condition that caused plaintiffs’ injuries despite actual knowledge
of the condition and an opportunity to correct it. The trial court
properly denied defendant’s motion for summary disposition.
Affirmed.
W
ORKERS’
C
OMPENSATION —
I
NTENTIONAL
T
ORT
E
XCEPTION —
D
ANGEROUS
C
ON-
DITIONS —
I
NJURIES —
C
ERTAINTY OF
I
NJURIES
O
CCURRING
.
A jury may conclude that the plaintiff’s employer knew that an
injury was certain to occur under MCL 418.131(1) of the Worker’s
Disability Compensation Act for purposes of establishing that the
employer committed an intentional tort if the plaintiff establishes
(1) that the employer subjected the plaintiff to a continuously
operative dangerous condition that it knew would cause an injury,
(2) that the employer knew that its employees were taking
insufficient precautions to protect themselves from that danger,
and (3) that the employer did nothing to remedy the situation.
Edwards & Jennings, P.C. (by Carl R. Edwards), for
plaintiffs.
Miller, Canfield, Paddock & Stone, P.L.C. (by W. Mack
Faison, Douglas W. Crim, and Kimberly A. Berger), for
defendant.
Before: M
URPHY
, C.J., and K. F. K
ELLY
and S
TEPHENS
,
JJ.
2010] J
OHNSON V
D
ETROIT
E
DISON
C
O
689
P
ER
C
URIAM.
This action requires us to determine
whether plaintiffs, Sandra Johnson and Hiram Jones,
proffered sufficient circumstantial evidence that defen-
dant, Detroit Edison Company, committed an intentional
tort under the exception to the exclusive remedy of the
Worker’s Disability Compensation Act (WDCA) found in
MCL 418.131(1). For the purpose of summary disposition,
we conclude that plaintiffs met their burden. Specifically,
we hold that a jury may conclude that an employer knew
an injury was “certain to occur” under MCL 418.131(1) if
a plaintiff can show that (1) the employer subjected the
plaintiff to a continuously operative dangerous condition
that it knew would cause an injury, (2) that the employer
knew that its employees were taking insufficient precau-
tions to protect themselves against that danger, and (3)
that the employer did nothing to remedy the situation.
The trial court properly denied defendant’s motion for
summary disposition under MCR 2.116(C)(10).
I. BASIC FACTS
At the time relevant to this lawsuit, plaintiffs were
employed as power plant operators by Detroit Edison
Company. In this capacity, plaintiffs were required to
dump bottom ash from four industrial furnaces, or boilers,
including Boiler No. 19 (Boiler 19). The boilers’ by-
products, including hot ash and unburned coals, were
typically emptied once a day. An operator would open the
boiler’s ash gate, and the ash would fall through a sluice
trough and be carried away by running water. If, after
opening the boiler’s ash gate, large coals, or “clinkers,”
remained, the operator would be required to break them
loose with a long poker in order to sufficiently clear the
boiler. Employees engaged in bottom-ash dumping were
required to wear safety glasses, hardhats, earplugs, cotton
gloves, jeans, a shirt, and work shoes.
690 288 M
ICH
A
PP
688 [June
On April 28, 2007, plaintiffs were in the process of
emptying bottom ash from Boiler 19 when hot ash
exploded from it and covered plaintiffs. Johnson suf-
fered serious burns, and Jones suffered minor ones.
Plaintiffs then brought this action, alleging that defen-
dant was liable under the intentional tort exception to
the WDCA’s exclusive-remedy provision.
At her deposition, Johnson testified that at the time
of the incident, two of Boiler 19’s five ash gates, Nos. 2
and 3, had been broken for several months to a year and
that some of the doors’ seams were corroded and could
not be closed all the way.
1
According to Johnson and
other employees, this caused ash to build up behind the
improperly operating gates, which would then tumble
over to the gates that operated properly and build up
there as well; this buildup would cause a blowout, or
explosion, of ash through any opening, including the
defective boiler doors, which would be forced open.
Johnson testified that employees regularly suffered
minor “prickly” burns because of the mist of hot-ash
spew that would cover them as they operated the boilers
and that operators regularly ran from the boilers to
avoid getting burned. Johnson indicated that she suf-
fered a burn injury from operating a broken boiler in
1999 or 2000 that was reported to management. Accord-
ing to Johnson, in 2004 or 2005, one of her coworkers
also had to be hospitalized for a burn injury he received
as a result of a hot-ash spew from Boiler 19.
Johnson further testified that, before the incident,
she and other employees had expressed concerns re-
garding the broken ash gates to management on nu-
merous occasions at preshift meetings, that she had had
1
Other employees deposed for purposes of this litigation attested to
these same deficiencies and also indicated that Boiler 19 had broken or
missing latches on four of its doors.
2010] J
OHNSON V
D
ETROIT
E
DISON
C
O
691
individual discussions with Daniel Braker and Mary
Webb, plant manager and production manager, respec-
tively, regarding the safety issues caused by the broken
boiler doors, and that she had also specifically told her
shift supervisor, Melvin Werner, that Boiler 19’s ash
gates were broken. In addition, Johnson had informed
Webb of an injury she suffered in 2006 when the
corroded seams of a boiler caused ash to blow into her
eye and she had to go to the hospital. Thereafter,
Johnson and other employees, at Webb’s request,
showed Webb and other members of management the
safety problems in the ash-dumping process. According
to Johnson, management acknowledged the dangers
associated with the broken boilers, but later explained
that there was no money to fix the problem.
John Bost, defendant’s union field-safety specialist,
testified that he received many complaints from plant
operators regarding the safety issues associated with
bottom-ash dumping, that he had seen operators run from
hot-ash spews on multiple occasions, and that it was
common knowledge to anyone in the plant that the boilers
were broken and in need of repair. He informed manage-
ment of these complaints at least a year before plaintiffs’
injuries. Bost indicated that these problems were ad-
dressed in a Plant Safety Committee
2
meeting before the
April 2007 incident, at which it was discussed how to
repair the system and also how to complete the job in a
safer manner. According to Bost, management agreed
that something had to be done, but indicated that the
repairs were not in the budget. Bost also noted that
repairs for boilers were to be made only in the event of
an outage, i.e., when the system was “offline.” Bost
2
This committee is referred to alternatively throughout the record as
the “Plant Safety Committee” or the “Bottom Ash Subcommittee.” We
refer to it throughout our opinion as the “Plant Safety Committee.”
692 288 M
ICH
A
PP
688 [June
testified that such an outage occurred a month before
the incident, but Boiler 19’s broken doors were not
repaired at that time.
Edward Wacasey, another of defendant’s plant opera-
tors, participated in the Plant Safety Committee meet-
ing. Wacasey performed a demonstration for manage-
ment, showing them the broken condition of the boilers,
how ash would puff, and how employees attempted to
break up clinkers with long rods. According to Wacasey,
defendant’s fuel supply manager, Tara Daly, told him,
after viewing the demonstration, that she would not do
bottom-ash dumping because it was too dangerous.
Wacasey made numerous recommendations for safer
operation, including fixing the boilers, squirting water
into the boilers from a safer distance, and wearing safer
apparel, including face shields and high-cutoff gloves,
but management did not adopt any of these measures.
Notes from the meeting corroborated Wacasey’s depo-
sition testimony that management knew that Boiler 19
was in disrepair and that the hazards of the job included
hot material flying out of the boiler.
Defendant’s plant manager, Braker, averred that he
was not familiar with bottom-ash dumping and was
unaware of any complaints related to it. He indicated
that he was also not aware of any prior serious injuries
related to bottom-ash dumping. Webb attested that she
was aware of Johnson’s prior eye injury related to
bottom-ash dumping. Webb, however, indicated that she
believed bottom-ash dumping to be safe, on the basis of
her conversations with shift supervisors. Plaintiffs’
immediate supervisor on the day of the incident, Dou-
glas Struble, also attested that he did not believe the
condition of Boiler 19 to be unsafe.
Defendant moved for summary disposition under
MCR 2.116(C)(10). The trial court denied defendant’s
motion under the following reasoning:
2010] J
OHNSON V
D
ETROIT
E
DISON
C
O
693
As I understand TRAVIS [v Dreis & Krump Mfg Co, 453
Mich 149; 551 NW2d 132 (1996)], the only way for the
plaintiff[s] to maintain the tort action is if the facts that
plaintiff[s] plead make out actual knowledge on the part of
the employer that an injury was certain to occur that the
employer willfully disregarded. The facts Plaintiffs allege is
that boiler, Furnace Number 19, was in disrepair and that
there had been ash spew from Number 19 over a term of
years.
The exhibits show that management was aware, and
there had been meetings to deal with hot material flying
out and blowing out of Boiler Number 19, and the gate not
working according to Plaintiff[s]....That included mana-
gerial employees, supervisory employees. That would sat-
isfy the actual knowledge component that the plaintiff[s
were] required to allege and show.
***
The issue according to the analysis is, next, whether or
not an injury was certain to occur. And taking the evidence
in the light most favorable to the plaintiff[s], since the hot
coal and ash had already injured workers prior to April 28,
2006, I believe that plaintiff[s have] presented evidence
that, if believed by the jury, will establish that the injury
was certain to occur as required under the statute.
The last element is the specific intent or willful disre-
gard that would allow by circumstantial evidence that
plaintiff[s] to [sic] show the specific intent required under
the exception.
Plaintiff[s’] theory is that management took a tour of
the plant and confirmed that the gates on Furnace Number
19 were broken. I believe that on the evidentiary record,
they have established that there was a continuously dan-
gerous condition of which they were actually aware that
injury was certain to occur, specifically, a burn injury.
***
694 288 M
ICH
A
PP
688 [June
I think that looking at the evidence in the light most
favorable to the plaintiff[s], the plaintiff[s have] met the
burden of creating a genuine issue of material fact such
that if the jury should believe the facts as alleged by
plaintiff[s], [they have] made out a claim as an exception
under the statute.
This Court granted leave to appeal.
3
II. STANDARDS OF REVIEW
We review de novo a trial court’s summary disposi-
tion ruling. Walsh v Taylor, 263 Mich App 618, 621; 689
NW2d 506 (2004). “Summary disposition is appropriate
under MCR 2.116(C)(10) if there is no genuine issue
regarding any material fact and the moving party is
entitled to judgment as a matter of law.” West v Gen
Motors Corp, 469 Mich 177, 183; 665 NW2d 468 (2003).
“In reviewing a motion under MCR 2.116(C)(10), this
Court considers the pleadings, admissions, affidavits,
and other relevant documentary evidence of record in
the light most favorable to the nonmoving party to
determine whether any genuine issue of material fact
exists to warrant a trial.” Walsh, 263 Mich App at 621.
When the record leaves open an issue on which reason-
able minds could differ, a genuine issue of material fact
exists that precludes summary disposition. West, 469
Mich at 183. We also review de novo the interpretation
and application of statutes. Gilliam v Hi-Temp Prod,
Inc, 260 Mich App 98, 108; 677 NW2d 856 (2003).
III. APPLICABLE LAW
Typically, an employee’s exclusive remedy against an
employer for work-related personal injury, or occupa-
3
Johnson v Detroit Edison Co, unpublished order of the Court of
Appeals, entered April 23, 2009 (Docket No. 289763).
2010] J
OHNSON V
D
ETROIT
E
DISON
C
O
695
tional disease, is those benefits provided by the WDCA.
However, the sole exception to this rule provides recov-
ery if an employee can prove that the employer commit-
ted an intentional tort. The plaintiff’s burden, in such
cases, is not synonymous with the showing required for
a classic intentional tort. Rather, MCL 418.131(1) sets
forth the burden of proof a plaintiff must meet. That
section provides, in relevant part:
An intentional tort shall exist only when an employee is
injured as a result of a deliberate act of the employer and
the employer specifically intended an injury. An employer
shall be deemed to have intended to injure if the employer
had actual knowledge that an injury was certain to occur
and willfully disregarded that knowledge. [MCL
418.131(1).]
When a claim is brought under this provision, it is for
the court to determine as a matter of law whether the
plaintiff has alleged sufficient facts to sustain the
intentional tort claim. Travis v Dreis & Krump Mfg Co,
453 Mich 149, 154; 551 NW2d 132 (1996) (opinion by
B
OYLE
, J.). If sufficient facts are alleged, then whether
the facts are true, and other questions of credibility and
the weight of the evidence, become questions for the
jury to decide. Id.
In Travis, 453 Mich at 161-180, our Supreme Court
construed the meaning of MCL 418.131(1). In a lead
opinion by Justice B
OYLE
and an opinion concurring in
part and dissenting in part by Justice R
ILEY
, the Travis
Court interpreted the sentence of MCL 418.131(1)
setting forth when an intentional tort exists as requir-
ing direct evidence that “the employer...deliberately
act[ed] or fail[ed] to act with the purpose of inflicting an
injury upon the employee.” Id. at 172. The Court
recognized that the Legislature did not confine an
employer’s liability to traditional intentional torts and
696 288 M
ICH
A
PP
688 [June
construed the next sentence of MCL 418.131(1) as
permitting liability when direct evidence of an inten-
tional tort is unavailable, but could be inferred from the
surrounding circumstances. Id. at 173 Thus, the spe-
cific intent element may be satisfied in the absence of
direct evidence if the plaintiff can show that the em-
ployer had “actual knowledge that an injury is certain
to occur, yet disregards that knowledge.” Id. at 180.
Because plaintiffs did not proffer direct evidence in
this case, it is necessary for us to determine their
burden under the sentence of the statute permitting the
inference. Breaking that sentence down into its compo-
nents, it requires a plaintiff to make several showings.
First, a plaintiff must show that his or her employer
possessed the requisite knowledge. Under the statute,
“actual knowledge” cannot be constructive, implied, or
imputed; rather, a plaintiff must show that the em-
ployer had actual knowledge that an injury would
follow from the employer’s act or omission. Id.at
173-174. In the case of a corporate employer, a plaintiff
need only show that “a supervisory or managerial
employee had actual knowledge that an injury would
follow from what the employer deliberately did or did
not do.” Fries v Mavrick Metal Stamping, Inc, 285 Mich
App 706, 714; 777 NW2d 205 (2009) (citation and
quotation marks omitted).
Second, a plaintiff must show that an injury is
“certain to occur.” “An injury is certain to occur if there
is no doubt that it will occur....”Herman v Detroit,
261 Mich App 141, 148; 680 NW2d 71 (2004). Questions
of probability play no role in this inquiry. Travis, 453
Mich at 174; Palazzola v Karmazin Prod Corp, 223 Mich
App 141, 149-150; 565 NW2d 868 (1997). It is not
enough to satisfy this showing by demonstrating “an
employer’s awareness that a dangerous condition ex-
2010] J
OHNSON V
D
ETROIT
E
DISON
C
O
697
ist[ed],” Palazzola, 233 Mich App at 150, or that an
employer knew an accident was likely, Bazinau v Macki-
nac Island Carriage Tours, 233 Mich App 743, 756; 593
NW2d 219 (1999). A plaintiff may satisfy this prong
with circumstantial evidence. The Travis Court explic-
itly approved of one type of circumstantial evidence that
would satisfy this element:
When an employer subjects an employee to a continu-
ously operative dangerous condition that it knows will
cause an injury, yet refrains from informing the employee
about the dangerous condition so that he is unable to take
steps to keep from being injured, a factfinder may conclude
that the employer had knowledge that an injury [was]
certain to occur. [Travis, 453 Mich at 178 (opinion by
B
OYLE
, J.).]
Conversely, the Court indicated that an employer’s
attempts to repair a device and the employer’s repeated
warnings to its employees regarding the risk may
remove the injury from the realm of certainty. Id.at
177.
Third, and last, a plaintiff must also show that the
employer disregarded the employer’s actual knowledge
that an injury was certain to occur. This disregard must
have been “willful,” which denotes a state of mind that
amounts to more than mere negligence. Id. at 178-179.
IV. ANALYSIS
Defendant argues that plaintiffs have failed to meet
their burden of showing that it had actual knowledge
that an injury was certain to occur and willfully disre-
garded it. Specifically, defendant contends that it had no
actual knowledge that these particular plaintiffs would
be injured on the date of the incident and that the
injuries were merely foreseeable, not certain. We dis-
agree.
698 288 M
ICH
A
PP
688 [June
At the outset, we reject defendant’s implicit argu-
ment, made throughout their brief on appeal, that
plaintiffs are required to show that defendants had
actual knowledge that plaintiffs in particular would be
injured in a specific way on a certain date. There is no
requirement under the plain language of the statute
that requires a plaintiff to make such a showing.
Rather, the statute expressly uses the phrases “an
injury” and “an employee,” and it makes absolutely no
mention of the date of an injury. MCL 418.131(1)
(emphasis added). Had the Legislature wished injured
employees to prove their claims with additional particu-
larity, it could have so required by using the term “the”
rather than the indefinite article “an.” See Burise v City
of Pontiac, 282 Mich App 646, 654; 766 NW2d 311
(2009) (“ ‘[T]he’ is defined as a definite article...
used...before a noun, with a specifying or particular-
izing effect, as opposed to the indefinite or generalizing
force of the indefinite article a or an....”) (citations
and quotation marks omitted). We will not read addi-
tional terms into a plain and unambiguous statute.
Thus, adhering to the plain language of the statute and
its meaning as construed by Travis, we now consider
whether plaintiffs, for the purpose of avoiding summary
disposition, have met their burden of showing that
defendant had actual knowledge that an injury was
certain to occur and willfully disregarded it.
A. ACTUAL KNOWLEDGE
First, evidence on the record demonstrates that nu-
merous supervisory employees and members of man-
agement were aware that Boiler 19 was in disrepair.
Johnson told her immediate supervisor that two doors
to Boiler 19 were broken, causing a buildup of ash that
would explode. Numerous other operators informed
2010] J
OHNSON V
D
ETROIT
E
DISON
C
O
699
management of the same problem. The issue was also
discussed at length during the Plant Safety Committee
meeting, at which members of management observed
the broken ash gates of Boiler 19. Accordingly, we
conclude, that viewed in the light most favorable to
plaintiffs, the record establishes the actual-knowledge
prong.
B. INJURY CERTAIN TO OCCUR
Next, plaintiffs must establish that defendant had
actual knowledge that the injury was “certain to occur.”
Taking the facts most favorable to plaintiffs, as we must
do, it is our view that plaintiffs have also proffered
sufficient circumstantial evidence that injury was cer-
tain to occur. Boiler 19 was in disrepair and causing
dangerous ash spews for at least a year before the
incident. Management was aware of this through nu-
merous preshift briefings, reports from Bost, and its
own observations at the Plant Safety Committee dem-
onstration. Although many operators had been able to
avoid injury from ash blowouts in the past by running
from the boiler, management knew that Johnson had
suffered an eye injury from an ash blowout in 2006 and
that another employee had suffered a burn that re-
quired hospitalization in 2004 or 2005. Further evi-
dence that injury was certain to occur is the fact that
one member of management indicated that she would
not do the job because it was too dangerous. Moreover,
management dismissed Johnson’s, and several other
employees’, complaints about the dangerous condition
of Boiler 19 because a “fix” was not in defendant’s
budget. Management again offered this same budgetary
constraint as a reason not to fix the boiler after the
Plant Safety Committee meeting, although manage-
ment unequivocally agreed that something had to be
700 288 M
ICH
A
PP
688 [June
done. Numerous solutions had also been discussed at
this meeting, including safer ways to perform bottom-
ash dumping and more appropriate apparel, but defen-
dant’s then current recommended clothing for bottom-
ash dumping—none of which was fire-resistant—was
not replaced with safer garments, and the safer pro-
posed methods for performing bottom-ash dumping
were not implemented. Instead, management allegedly
did nothing. Additionally, about a month before the
incident, an outage occurred and the boiler was not
fixed, even though boilers had been slated for repair in
the event of an outage. These facts constitute circum-
stantial evidence, if believed by a jury, that defendant
knew injury was certain to occur: defendant knew of the
inherent dangers involved that would cause injury,
knew its employees were taking their own insufficient
precautions, as demonstrated by the knowledge of pre-
vious injuries and employee complaints, and yet did
nothing to remedy the problem. In other words, defen-
dant subjected its employees to a continuously operat-
ing dangerous condition. From this evidence, a fact-
finder could conclude that defendant had actual
knowledge that an injury was certain to occur.
Defendant, however, argues that because no em-
ployee operating Boiler 19 had been previously seri-
ously burned, the injury was not a certainty, but merely
a foreseeable risk. At best defendant’s argument merely
creates a question of fact, insufficient to avoid the trial
court’s denial of summary disposition. The absence of a
previous serious injury, or even the absence of previous
minor ones, does not necessarily eliminate certainty
that an injury will occur. Travis, 453 Mich at 186; Fries,
285 Mich App at 716 (explaining Travis). Similarly, the
fact that employees knew of the danger and had been
able to run safely from the exploding boiler in the past
does not support defendant’s position. Rather, it tends
2010] J
OHNSON V
D
ETROIT
E
DISON
C
O
701
to show that defendant’s employees knew the danger
was imminent and inherent in the absence of some
remedial measures, including running from the boiler,
and, further, because it can be inferred that defendant
knew its employees were running from the boiler, given
employees’ numerous complaints, and defendant’s ad-
mission that something needed to be done, that it too
was aware of the threat posed by Boiler 19. Thus, taking
all the evidence in the light most favorable to plaintiffs,
we conclude that plaintiffs have demonstrated, by way
of circumstantial evidence, a sufficient question of fact
that defendant had actual knowledge that an injury was
certain to occur.
Defendant also asserts that there needs to be a
failure to warn of a danger by the employer and a
concomitant lack of knowledge of the danger by an
employee before a court can find a continuously opera-
tive dangerous condition. However, the Supreme
Court’s ruling in Golec v Metal Exch Corp, the compan-
ion case to Travis, undermines defendant’s contention.
Golec involved an employee, the plaintiff, who was
loading a furnace with scrap metal in a smelting factory
when there was an explosion that resulted in the
plaintiff’s being showered with molten aluminum. The
plaintiff claimed that closed aerosol cans or water, or
both, contained in the scrap caused the explosion.
Before the explosion that caused the injuries for which
the plaintiff filed suit, there had been a minor explosion
involving the plaintiff, also while he was loading scrap,
and the plaintiff indicated his belief at the time that this
minor explosion was caused by closed aerosol cans or
water, or both, contained in the scrap. But he was told
to continue working. Travis, 453 Mich at 157-159.
Therefore, Golec presented a situation in which the
employee had knowledge of a potential hazard, pro-
ceeded to work, and was later injured because of that
702 288 M
ICH
A
PP
688 [June
same hazard. The Court held that a genuine issue of
material fact existed concerning whether the employer
committed an intentional tort, and the lead opinion
noted that “[i]f the facts as alleged by plaintiff are
established at trial, then plaintiff has proved the exist-
ence of a continually operative dangerous condition.”
Id. at 186. Accordingly, the “continually operative dan-
gerous condition” doctrine was invoked despite the
evidence that the employee had some knowledge of the
hazard before the injury, as was the case here.
We hold that an employee’s knowledge of a danger,
whether gained through information provided by the
employer or otherwise, does not preclude invocation of
the intentional tort exception based on the existence of
a continually operative dangerous condition. There are
situations in which, even when an employee has been
warned of a hazard or otherwise has knowledge of the
hazard, there remains a certainty of injury because
there is no reasonable and effective means by which the
employee can avoid the harm while still meeting his or
her obligation to properly perform the work demanded
by the employer. A reasonable juror could find that such
was the situation in the instant case and that an injury
was certain to occur.
We emphasize, however, that our conclusion must not
be understood to mean that evidence of a failure to
repair, despite warnings, is sufficient circumstantial
evidence that an employer knew an injury was certain
to occur. The trial court here found that “since the hot
coal and ash had already injured workers prior to April
28, 2006,...plaintiff[s have] presented evidence that, if
believed by the jury, will establish that the injury was
certain to occur as required under the statute.” A mere
allegation of a prior injury, standing alone, is not
enough to meet the rigorous standard set forth in MCL
2010] J
OHNSON V
D
ETROIT
E
DISON
C
O
703
418.131(1) because it does not demonstrate absolute
certainty. Thus, in this regard, the trial court’s ruling
was erroneous as a matter of law. However, while the
trial court’s reasoning on this element was in error, it
reached the right result, and we will not reverse its
ultimate decision. See Taylor v Laban, 241 Mich App
449, 458; 616 NW2d 229 (2000).
C. WILLFUL DISREGARD
Finally, plaintiffs must show that defendant willfully
disregarded its knowledge that injury was certain to
occur. As noted, plaintiffs presented evidence that de-
fendant failed to remedy the condition that caused
plaintiffs’ injuries, despite defendant’s knowledge of
the condition and the opportunity to remedy it during
an outage. Management was fully apprised of the dan-
ger, but cited budgetary constraints as a reason for not
repairing Boiler 19. Thus, viewing the evidence in a
light most favorable to plaintiffs, they have introduced
sufficient evidence that defendant knew of an inherent
danger and willfully disregarded it.
V. CONCLUSION
Under the particular circumstances of this case,
plaintiffs have made the requisite showing in support of
their intentional tort claim for purposes of avoiding
summary disposition. To state our holding succinctly, if
the plaintiff can show that the plaintiff’s employer
subjected the plaintiff to a continuously operative dan-
gerous condition that it knew would cause an injury,
that the employer knew that its employees were taking
insufficient precautions to protect themselves against
that inherent danger, and that the employer took no
action to remedy the situation, a jury may conclude that
the employer knew the injury was certain to occur
704 288 M
ICH
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688 [June
under MCL 418.131(1). This holding should not be
construed in any way as derogating from the rigorous
burden that the Legislature has imposed on plaintiffs
seeking redress under the intentional tort exception of
the WDCA.
The trial court did not err by denying defendant’s
motion for summary disposition.
Affirmed.
2010] J
OHNSON V
D
ETROIT
E
DISON
C
O
705
AMERICAN HOME ASSURANCE COMPANY
v MICHIGAN CATASTROPHIC CLAIMS ASSOCIATION
ACE AMERICAN INSURANCE COMPANY
v MICHIGAN CATASTROPHIC CLAIMS ASSOCIATION
Docket Nos. 287153 and 292539. Submitted April 13, 2010, at Detroit.
Decided June 15, 2010, at 9:05 a.m.
American Home Assurance Company brought an action in the Oakland
Circuit Court against the Michigan Catastrophic Claims Association
(MCCA), seeking indemnification pursuant to MCL 500.3104(2)(c)
for personal protection insurance (PIP) benefits it paid in excess of
$325,000 under a no-fault policy issued to the Cassens Transport
Company. The MCCA moved for summary disposition, contending
that American Home was not entitled to indemnification because its
“ultimate loss” did not meet the statutory threshold of $325,000.
According to the MCCA, because Cassens had paid a $500,000
deductible, American Home’s actual loss was only $205,863. The
MCCA further asserted that even if American Home’s losses had
initially exceeded the statutory threshold for indemnification, once
American Home received the deductible payment, American Home
would have been required under article X, § 10.06 of the MCCA’s plan
of operation to transfer the deductible payment to the MCCA until
American Home sustained an ultimate loss exceeding $325,000.
American Home also requested summary disposition. American
Home contended that the MCCA’s indemnification obligation had
been triggered irrespective of the deductible paid by Cassens, and
further asserted that § 10.06 was inapplicable because Cassens was
not a “third party” under that section. The court, Michael D. Warren,
Jr., J., granted the MCCA’s motion for summary disposition, conclud-
ing that the MCCA was permitted under MCL 500.3104 to consider
the deductible paid by a policyholder in calculating the insurer’s
ultimate loss, that an insured is a third party within the meaning of
§ 10.06, and that American Home’s ultimate loss was only $205,863
when its receipt of the deductible was properly considered—an
amount that did not meet the applicable statutory threshold for
indemnification. American Home appealed (Docket No. 287153).
ACE American Insurance Company (AAIC) brought an action in the
Oakland Circuit Court against the MCCA, seeking a declaratory
706 288 M
ICH
A
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706 [June
judgment that it was entitled to indemnification pursuant to MCL
500.3104(2)(e) for PIP benefits it paid in excess of $375,000 under
a no-fault policy issued to Waste Management, Inc. The MCCA
moved for summary disposition, contending that its statutory
indemnification obligation had not been triggered by an ultimate
loss exceeding the applicable statutory threshold given AAIC’s
decision not to enforce a large deductible provision in Waste
Management’s insurance policy and additional provisions that
rendered Waste Management responsible for paying a significant
portion of any PIP claim arising under the policy. AAIC also moved
for summary disposition, contending that the MCCA was obligated
to indemnify it without consideration of Waste Management’s
contractual obligations. The court, Mark Goldsmith, J., granted
summary disposition in favor of the MCCA, concluding that
AAIC’s ultimate loss was the actual financial detriment it suffered
and that AAIC’s financial detriment did not include the amount
that it was contractually entitled to receive from Waste Manage-
ment, but was limited to AAIC’s share of the claim exceeding the
statutory threshold of $375,000. AAIC appealed (Docket No.
292539). The appeals were consolidated.
The Court of Appeals held:
1. The MCCA is an indemnitor for its member insurers in the
event of catastrophic injury claims. Its duty to indemnify member
insurers is triggered by different threshold amounts, which are
based on the date the insurance policy was issued or renewed.
Under MCL 500.3104(2), when indemnification is triggered, the
MCCA must pay 100 percent of the insurer’s “ultimate loss” in
excess of the threshold amount.
2. MCL 500.3105(1) requires member insurers to pay PIP
benefits without regard to the existence of a deductible clause in
the insurance policy. Accordingly, an insurer’s ultimate loss in-
cludes amounts the insurer received from the policyholder as a
deductible. Thus, American Home’s ultimate loss was
$705,863.60, which exceeded the applicable statutory threshold for
indemnification, and the trial court erred by concluding otherwise.
3. The trial court, however, ultimately reached the correct
result in Docket No. 287153 because under article X, § 10.06 of the
MCCA’s plan of operation, a member insurer must transfer to the
MCCA any amount it recovers from a third party for which the
insurer had already been reimbursed by the MCCA. Thus, had the
MCCA indemnified American Home for its losses exceeding the
applicable statutory threshold, it would have been entitled to
receive that amount back in reimbursement from the $500,000
American Home received from Cassens. Cassens was a third party
under § 10.06 because the plan of operation addressed the rela-
2010] A
MERICAN
H
OME
A
SSURANCE
v MCCA 707
tionship between the MCCA and its member insurers rather than
the contractual relationship between an insurer and its policyhold-
ers. Because the parties’ obligations canceled each other out, the
trial court properly granted summary disposition to the MCCA,
having reached the right result, although for the wrong reason.
4. AAIC’s ultimate loss exceeded the applicable statutory
threshold because its ultimate loss included the full PIP amounts
payable to the claimant without regard to the existence of the
deductible and loss-sharing provisions in its insurance policy.
However, when an insurer elects not to enforce a deductible
provision rendering its policyholder responsible for paying a
significant portion of any PIP claim arising under the policy, the
MCCA is subrogated to the insurer’s rights and it may bring an
action against the policyholder to recover the amount of the
deductible. The MCCA may also recover the costs of that action
from the insurer. The trial court erred by granting summary
disposition to the MCCA because the MCCA was obligated to
indemnify AAIC for the amounts it paid in excess of the applicable
statutory threshold. The case must be remanded for the trial court
to determine whether AAIC can or will receive the contractually
required reimbursement from Waste Management and to enter an
order in accordance with its determination.
Order granting summary disposition in Docket No. 287153
affirmed; order granting summary disposition in Docket No.
292539 reversed and case remanded.
I
NSURANCE —
N
O
-F
AULT —
C
ATASTROPHIC
C
LAIMS —
I
NDEMNIFICATION BY
M
ICHI-
GAN
C
ATASTROPHIC
C
LAIMS
A
SSOCIATION —
C
ALCULATION OF
U
LTIMATE
L
OSS–
D
EDUCTIBLES
.
No-fault insurers may include amounts that a policyholder is re-
quired to pay as a deductible in calculating their ultimate loss for
purposes of indemnification by the Michigan Catastrophic Claims
Association (MCCA) of personal protection insurance benefits paid
in excess of the statutory threshold; under the MCCA’s plan of
operation, its member insurers must turn over to the MCCA all
deductible amounts received by those insurers, up to the amount
they received as reimbursement from the MCCA, and the MCCA
may initiate an action against a policyholder for payment of a
deductible if the insurer fails to do so and may seek reimburse-
ment for the costs of that action from the insurer (MCL
500.3104[2]).
Dean & Fulkerson, P.C. (by Jerry R. Swift), for
American Home Assurance Company.
708 288 M
ICH
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706 [June
Garan Lucow Miller, P.C. (by Daniel S. Saylor, David
N. Campos, and Caryn A. Gordon), for ACE American
Insurance Company.
Dykema Gossett PLLC (by Joseph K. Erhardt, K. J.
Miller, and Lauren M. London) for the Michigan Cata-
strophic Claims Association.
Before: B
ANDSTRA
,P.J., and B
ORRELLO
and S
HAPIRO
,JJ.
P
ER
C
URIAM.
These consolidated appeals involve the
extent to which defendant, the Michigan Catastrophic
Claims Association (MCCA), is required to indemnify
member insurers for no-fault personal protection insur-
ance (PIP) benefits paid to or on behalf of an injured
claimant when the policyholder is responsible to pay a
deductible pursuant to a term of the insurance contract
between the member insurer and the policyholder. In
each of these consolidated appeals, the trial court de-
termined that the member insurer cannot include
amounts that the policyholder is required to pay as a
deductible in calculating the member insurer’s “ulti-
mate loss” to determine if it has reached the statutory
threshold to be considered a catastrophic claim and
therefore eligible for indemnification from the MCCA.
In Docket No. 287153, plaintiff American Home Assur-
ance Company appeals as of right an order granting
summary disposition in favor of the MCCA under MCR
2.116(C)(10). In Docket No. 292539, plaintiff ACE
American Insurance Company (AAIC) also appeals as of
right an order granting summary disposition in favor of
the MCCA under MCR 2.116(C)(10). For the reasons set
forth in this opinion, we hold that member insurers
may include amounts that a policyholder is required to
pay as a deductible in calculating their ultimate loss.
However, the MCCA is entitled to reimbursement up to
2010] A
MERICAN
H
OME
A
SSURANCE
v MCCA 709
the entire amount paid to member insurers for all
deductible monies received by the member insurers,
and the MCCA may initiate an action against policy-
holders for payment of a deductible if the insurer fails
to do so. Accordingly, we affirm in Docket No. 287153,
but we reverse and remand for further proceedings
consistent with this opinion in Docket No. 292539.
I. FACTS AND PROCEDURAL HISTORY
A. DOCKET NO.
287153
On December 26, 2007, American Home filed a
complaint against the MCCA, seeking reimbursement
of $380,863.66 in PIP benefits paid to an injured
claimant. According to the complaint, American Home
issued a no-fault policy to Cassens Transport Company
for the period of September 30, 2003, through Septem-
ber 30, 2004. American Home alleged that between
August 23, 2004, and June 20, 2007, it paid PIP benefits
totaling $705,863.60 to claimant Jeffrey Olson after
Olson was injured when the motorcycle he was driving
struck a Cassens vehicle insured under the no-fault
policy. American Home alleged that pursuant to MCL
500.3104(2)(c), the MCCA was obligated to reimburse it
for the portion of the “ultimate loss” exceeding
$325,000 and that it was therefore entitled to reim-
bursement in the amount of $380,863.66. According to
American Home, the MCCA denied its claim for reim-
bursement because “the existence of a deductible in an
insurance policy decreases the ‘ultimate loss’ specified
in the No-Fault Act....” American Home sought a
judgment against the MCCA in the amount of
$380,863.66, which included the entire amount it paid
the claimant over the statutory threshold of $325,000
applicable to the policy at issue, without any reduction
for the deductible paid by Cassens.
710 288 M
ICH
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706 [June
In May 2008, the MCCA moved for summary dispo-
sition under MCR 2.116(C)(10), arguing that American
Home was not entitled to indemnification under MCL
500.3104(2)(c) because it had not incurred an ultimate
loss in excess of $325,000. According to the MCCA, the
no-fault policy issued by American Home to Cassens
required the insured to pay a $500,000 deductible. The
MCCA further asserted that American Home could not
include the amount of the deductible, which Cassens
had paid, to achieve the statutory threshold of $325,000
under MCL 500.3104(2)(c) and that because Cassens
paid the $500,000 deductible,
1
American Home’s finan-
cial loss was only $205,863. Thus, the MCCA argued
that it had no statutory responsibility to reimburse
American Home because American Home’s ultimate
loss did not reach the statutory threshold of $325,000.
The MCCA also argued that even if American Home
had initially paid PIP benefits to Olsen that exceeded
the $325,000 statutory threshold and had been reim-
bursed by the MCCA, once it received payment of the
deductible from Cassens, American Home would have
been required under article X, § 10.06 of the MCCA’s
plan of operation to turn the deductible payment over to
the MCCA until American Home sustained an ultimate
loss exceeding $325,000.
American Home filed a brief in response to the
MCCA’s motion for summary disposition, asserting that
it was obligated to pay PIP benefits to the claimant
irrespective of any deductible that Cassens was re-
quired to pay under the terms of the no-fault insurance
policy. Predicated on this analysis of its statutory obli-
gation, American Home asserted that it was entitled to
1
The MCCA submitted documentary evidence that American Home
admitted that the insurance policy had a $500,000 deductible and that
Cassens paid the deductible in full.
2010] A
MERICAN
H
OME
A
SSURANCE
v MCCA 711
summary disposition and entry of a judgment in the
amount of $380,863.66 against the MCCA because the
MCCA’s indemnification obligation under MCL
500.3104(2)(c) had been triggered. In addition, Ameri-
can Home argued that article X, § 10.06 of the MCCA’s
plan of operation did not apply to deductible reimburse-
ments that it received from Cassens because Cassens
was not a “third party” under § 10.06.
The trial court granted the MCCA’s motion for
summary disposition and denied summary disposition
for American Home. In so doing, the trial court deter-
mined that the MCCA’s indemnification obligation was
only owed to its member insurers and that the MCCA
was permitted, under MCL 500.3104, to consider the
deductible paid by a policyholder in calculating the
ultimate loss subject to indemnification. The trial court
reasoned that the insurer’s ultimate loss could not
include amounts that the insurer received from the
policyholder as payment for a deductible because the
deductible reduced the amounts actually paid by the
insurer. The trial court also determined that § 10.06 of
the MCCA’s plan of operation confirmed that a member
insurer must sustain an actual loss in excess of the
statutory threshold. In reaching that determination,
the trial court reasoned that an insured is a third party
within the meaning of § 10.06 because the plan of
operation addresses the relationship between the mem-
ber insurer and the MCCA, not the relationship be-
tween an insurer and its insured. Therefore, the trial
court stated, “Any other entity is a third party, includ-
ing the insured.” Ultimately, the trial court concluded
that American Home’s receipt of the $500,000 deduct-
ible reduced its ultimate loss to $205,863, which did not
meet the statutory threshold of $325,000 under MCL
500.3104(2)(c).
712 288 M
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B. DOCKET NO. 292539
On May 2, 2008, AAIC filed a complaint for declaratory
relief against the MCCA after the MCCA denied AAIC’s
claim for indemnity under MCL 500.3104(2). According to
the complaint, AAIC had issued a no-fault insurance
policy to Waste Management, Inc.
2
for a one-year period
on January 1, 2006. Alice Cobb, a pedestrian, was
injured on July 25, 2006, when a vehicle that was owned
and operated by Waste Management struck her. AAIC
alleged that it had paid more than $2 million in PIP
benefits to or on behalf of Cobb since 2006. AAIC sought
indemnification from the MCCA for amounts greater
that the $375,000 statutory threshold applicable to the
policy under MCL 500.3104(2)(e). However, the MCCA
denied AAIC’s claim. In a letter written to AAIC on
January 15, 2008, the MCCA stated, “Please note that
we do not reimburse for allocated loss expenses which
appear to be considered in your deductibles.” The
MCCA further stated that in light of the deductibles in
Waste Management’s insurance policy, AAIC had not
reached the statutory threshold, and the MCCA was not
yet required to begin reimbursements. In its complaint,
AAIC claimed that the MCCA was required under MCL
500.3104(2) and the MCCA’s plan of operation to reim-
burse it for payments over $375,000. Accordingly, AAIC
sought a declaratory judgment that it was entitled to
reimbursement from the MCCA.
The MCCA moved for summary disposition under
MCR 2.116(C)(10). It argued that it was not required to
reimburse member insurers for amounts that the in-
surer was not obligated to pay. According to the MCCA,
Waste Management’s insurance policy contained provi-
2
We observe that neither of the policyholders in this case, Cassens and
Waste Management, was self-insured.
2010] A
MERICAN
H
OME
A
SSURANCE
v MCCA 713
sions requiring it to pay a deductible, which AAIC
elected not to enforce. Thus, the MCCA contended
that to the extent that the deductible was not col-
lected because of AAIC’s decision not to enforce a
contractual right to reimbursement from Waste Man-
agement, AAIC’s statutory obligation to pay the
claimant’s PIP benefits was not triggered. The MCCA
also contended that AAIC’s decision not to enforce
the deductible meant that AAIC did not suffer an
“ultimate loss” that was reimbursable under MCL
500.3104(2).
The MCCA attached to its motion portions of the
insurance policy issued by AAIC to Waste Manage-
ment. According to the “quota share deductible en-
dorsement,” Waste Management was required to pay
a $1 million deductible for each accident. The en-
dorsement also provided that AAIC’s quota share
limit for the first $4 million per accident in excess of
the $1 million deductible was 40 percent, while Waste
Management’s corresponding quota share deductible
was 60 percent. The endorsement further stated that
for the next $5 million in excess of the $4 million,
AAIC’s quota share limit was 50 percent, and Waste
Management’s corresponding quota share deductible
was also 50 percent. Additionally the endorsement
provided that AAIC’s “obligation to pay damages
under this policy applies only to the amount of
‘losses’ in excess of the ‘Deductible per Accident’ and
within the ‘Quota Share Limit’ stated in the Sched-
ule....”Tosecure its deductible obligations under
the insurance policy, Waste Management agreed to
provide AAIC with an irrevocable letter of credit.
In support of its motion for summary disposition, the
MCCA also submitted documentary evidence in which
AAIC claimed a total loss of $2,168,193.22. According to
714 288 M
ICH
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706 [June
the MCCA, because of the $1 million deductible, and
because of Waste Management’s responsibility to pay its
quota share deductible of 60 percent of the first $4 million
after the $1 million deductible, AAIC was only obligated to
pay $467,277.29 of the claimed $2,168,193.22 loss.
3
Al-
though AAIC elected to pay the $1 million deductible and
Waste Management’s 60 percent of the first $4 million,
AAIC was under no legal obligation to do so. Therefore,
the MCCA argued, those amounts could not be included in
determining AAIC’s ultimate loss.
AAIC also moved for summary disposition. In rel-
evant part, AAIC argued that the MCCA was obligated
by MCL 500.3104(2) to indemnify it for PIP payments
paid or payable to or on behalf of the claimant, without
consideration of Waste Management’s contractual obli-
gation to pay a deductible. AAIC alleged that, at the
time of the motion, it had paid more than $2,659,883.76
to the claimant. AAIC further argued that the MCCA’s
plan of operation did not permit it to refuse to reim-
burse AAIC.
The trial court granted summary disposition in favor
of the MCCA. In so ruling, the trial court determined
that AAIC’s ultimate loss under MCL 500.3104 “re-
fer[s] to the no-fault insurer’s actual financial detri-
ment” and that “[b]ecause Plaintiff has the right to
seek reimbursement from its insured for most of the
PIP benefits it has paid for Ms. Cobb’s claim, Plaintiff
has suffered a financial detriment only for its share of
the claim, as determined by the Quota Share Deductible
endorsement, that exceeds $375,000.” The trial court
3
$2,168,193.22 less $1 million for Waste Management’s “Deductible
Per Accident” equals $1,168,193.22. AAIC’s 40 percent share of
$1,168,193.22 is $467,277.29. Waste Management’s 60 percent share of
$1,168,193.22 is $700,915.93.
2010] A
MERICAN
H
OME
A
SSURANCE
v MCCA 715
further stated that the language of the insurance policy
issued to Waste Management “places the ultimate fi-
nancial obligation for a significant portion of Ms. Cobb’s
benefits on Waste Management, not [AAIC],” and that
AAIC
would be obligated to pay the portion of the claim subject to
the deductibles only if [AAIC] is unable to obtain reim-
bursement from its insured—a scenario that is highly
unlikely given that the policy required Waste Management
to provide an irrevocable letter of credit as security for its
obligations.
The trial court also articulated the mathematical for-
mula to be used to calculate the MCCA’s obligation to
reimburse AAIC. However, because AAIC’s complaint
sought a declaratory judgment regarding the MCCA’s
obligation to reimburse it, not money damages, the trial
court did not calculate the amount of reimbursement
the MCCA owed AAIC.
II. STANDARD OF REVIEW
This Court’s review of a trial court’s grant of sum-
mary disposition pursuant to MCR 2.116(C)(10) is as
follows:
This Court reviews de novo a trial court’s grant or
denial of summary disposition under MCR 2.116(C)(10).
Spiek v Dep’t of Transportation, 456 Mich 331, 337; 572
NW2d 201 (1998). A motion brought under MCR
2.116(C)(10) tests the factual support for a claim. Downey
v Charlevoix Co Rd Comm’rs, 227 Mich App 621, 625; 576
NW2d 712 (1998). The pleadings, affidavits, depositions,
admissions, and any other documentary evidence submit-
ted by the parties must be considered by the court when
ruling on a motion brought under MCR 2.116(C)(10).
Downey, supra at 626; MCR 2.116(G)(5). When reviewing a
decision on a motion for summary disposition under MCR
2.116(C)(10), this Court “must consider the documentary
716 288 M
ICH
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706 [June
evidence presented to the trial court ‘in the light most
favorable to the nonmoving party.’ ” DeBrow v Century 21
Great Lakes, Inc (After Remand), 463 Mich 534, 539; 620
NW2d 836 (2001), quoting Harts v Farmers Ins Exch, 461
Mich 1, 5; 597 NW2d 47 (1999). A trial court has properly
granted a motion for summary disposition under MCR
2.116(C)(10) “if the affidavits or other documentary evi-
dence show that there is no genuine issue in respect to any
material fact, and the moving party is entitled to judgment
as a matter of law.” Quinto v Cross & Peters Co, 451 Mich
358, 362; 547 NW2d 314 (1996). [Clerc v Chippewa Co War
Mem Hosp, 267 Mich App 597, 601; 705 NW2d 703 (2005),
remanded on other grounds 477 Mich 1067 (2007).]
To the extent that the issues in this case require this
Court to interpret insurance contracts and engage in
statutory interpretation, these are questions of law that
we review de novo. Healing Place at North Oakland
Med Ctr v Allstate Ins Co, 277 Mich App 51, 55; 744
NW2d 174 (2007).
III. ANALYSIS
The first issue that this Court must decide involves
the scope of the MCCA’s statutory responsibility under
MCL 500.3104(2) to indemnify member insurers for
PIP benefits paid to or on behalf of their policyholders;
specifically, we must decide whether the MCCA can
consider the payment of a deductible by a policyholder
or the insurer’s failure to demand compliance with a
deductible provision in an insurance contract in deter-
mining whether the member insurer has sustained an
ultimate loss that meets the applicable statutory
threshold under MCL 500.3104(2).
The Michigan no-fault act, MCL 500.3101 et seq.,
requires Michigan drivers to maintain automobile in-
surance. MCL 500.3101(1) provides, “The owner or
registrant of a motor vehicle required to be registered in
2010] A
MERICAN
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OME
A
SSURANCE
v MCCA 717
this state shall maintain security for payment of ben-
efits under personal protection insurance, property
protection insurance, and residual liability insurance.”
Under the no-fault act, insurers are required to pay or
reimburse their insured’s lifetime medical expenses.
Farmers Ins Exch v Titan Ins Co, 251 Mich App 454,
456; 651 NW2d 428 (2002). Furthermore, “[t]here is no
dollar limit on an insurer’s liability for medical, hospi-
tal, and rehabilitation benefits under the statute[.]”
League Gen Ins Co v Mich Catastrophic Claims Ass’n,
435 Mich 338, 340; 458 NW2d 632 (1990). The lack of a
dollar limit on insurers’ liability for PIP benefits poten-
tially exposes insurers to enormous liability in cases in
which injuries are severe. Id. Therefore, the Legislature
created the MCCA “in response to concerns that Michi-
gan’s no-fault law provision for unlimited personal
injury protection benefits placed too great a burden on
insurers, particularly small insurers, in the event of
‘catastrophic’ injury claims.” In re Certified Question
(Preferred Risk Mut Ins Co v Mich Catastrophic Claims
Ass’n), 433 Mich 710, 714; 449 NW2d 660 (1989). The
MCCA is not a no-fault insurer of its member insurers;
rather, it is an indemnitor for benefits paid by member
insurers in excess of the statutory thresholds estab-
lished in MCL 500.3104(2). United States Fidelity &
Guaranty Co v Mich Catastrophic Claims Ass’n (On
Rehearing), 484 Mich 1, 17-18; 773 NW2d 243 (2009).
An insurer must belong to the MCCA in order to write
insurance in this state, MCL 500.3104(1); In re Certified
Question, 433 Mich at 715, and the insurer must pay
premiums to be a member of the MCCA, MCL
500.3104(7)(d) and (e).
The MCCA’s duty to indemnify its member insurers
is triggered by different threshold amounts, which are
based on the date the insurance policy was issued or
718 288 M
ICH
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706 [June
renewed. MCL 500.3104(2)(a) through (k). In relevant
part, MCL 500.3104(2) provides:
The [MCCA] shall provide and each member shall
accept indemnification for 100% of the amount of ultimate
loss sustained under personal protection insurance cover-
ages in excess of the following amounts in each loss
occurrence:
***
(c) For a motor vehicle accident policy issued or renewed
during the period July 1, 2003 to June 30, 2004,
$325,000.00.
***
(e) For a motor vehicle accident policy issued or renewed
during the period July 1, 2005 to June 30, 2006,
$375,000.00.
MCL 500.3104(7)(a) provides that “[t]he [MCCA]
shall... [a]ssume 100% of all liability as provided in
[MCL 500.3104(2)].” “Ultimate loss” is defined as “the
actual loss amounts that a member is obligated to pay
and that are paid or payable by the member, and do not
include claim expenses.” MCL 500.3104(25)(c).
We must construe portions of MCL 500.3104 in order
to determine whether the MCCA can consider payment
of a deductible by a policyholder or an insurer’s failure
to demand compliance with a deductible provision in an
insurance contract when calculating whether a member
insurer has sustained an ultimate loss sufficient to meet
the statutory threshold for indemnification.
A. DOCKET NO. 287153
In the case of American Home, American Home paid
the claimant PIP benefits totaling $705,863.60. Al-
2010] A
MERICAN
H
OME
A
SSURANCE
v MCCA 719
though the insurance policy between American Home and
Cassens contained a clause requiring Cassens to pay a
$500,000 deductible, MCL 500.3105(1)
4
obligates insur-
ers to pay PIP benefits regardless of a policyholder’s
payment of a deductible or the existence of a deductible
clause in the insurance policy. Because American Home
was obligated to pay and did pay $705,863.60, the
ultimate loss under MCL 500.3104(25)(c) was
$705,863.60. That amount clearly exceeded the
$325,000 statutory threshold, which would have obli-
gated the MCCA to pay American Home the excess
amount of $380,863.80. Thus, the trial court erred by
concluding that an insurer’s ultimate loss did not
include amounts the insurer received from the policy-
holder as payment for the deductible.
However, we conclude that the trial court’s result
was ultimately correct because under article X, § 10.06
of the MCCA’s plan of operation,
5
a member insurer
must turn over to the MCCA any amount it recovers
from a third party for which the member has already
been reimbursed by the MCCA. Section 10.06 provides:
Recovery from Other Sources. Whenever a Member
recovers from a third party an amount for which it has
already been reimbursed by the Association, the Member
4
“The no-fault act mandates that insurers ‘pay benefits for accidental
bodily injury arising out of the ownership, operation, maintenance or use
of a motor vehicle as a motor vehicle.’ ” Cruz v State Farm Mut Auto Ins
Co, 241 Mich App 159, 164; 614 NW2d 689 (2000), aff’d 466 Mich 588
(2002), quoting MCL 500.3105(1).
5
MCL 500.3104(17) provides:
Not more than 60 days after the initial organizational meeting
of the board [of directors of the MCCA], the board shall submit to
the commissioner for approval a proposed plan of operation
consistent with the objectives and provisions of this section, which
shall provide for the economical, fair, and nondiscriminatory
administration of the association and for the prompt and efficient
provision of indemnity.
720 288 M
ICH
A
PP
706 [June
shall promptly turn such recovered monies over to the
Association to the extent of any reimbursement theretofore
received, provided that the Board may permit a Member to
retain therefrom such amount as the Board deems reason-
able and necessary attorney fees and litigation costs in-
curred in connection with obtaining the recovery from the
third party.
Thus, because Cassens paid the $500,000 deductible
pursuant to its contract with American Home, had the
MCCA indemnified American Home for the $380,863.80
American Home paid above the statutory threshold, it
would have been entitled to receive that amount back in
reimbursement from the $500,000 American Home
received from Cassens.
We disagree with American Home’s argument that
Cassens is not a third party under § 10.06. We conclude
that for purposes of indemnification by the MCCA of a
member insurer, an insurer’s policyholder is a third
party and that member insurers are required to turn
over to the MCCA amounts received from their policy-
holders as payment of a deductible.
The plan of operation does not address the contractual
relationship between an insurer and a policyholder. The
plan of operation is required by statute and mandates that
the MCCA’s board establish a plan of operation to “pro-
vide for the economical, fair, and nondiscriminatory ad-
ministration of the association and for the prompt and
efficient provision of indemnity.” MCL 500.3104(17). Fur-
thermore, under MCL 500.3104(1), insurers in Michigan
“shall be a member of the [MCCA] and shall be bound by
the plan of operation of the [MCCA]....”Similarly, MCL
500.3104(20) provides that insurers in Michigan are
“bound by and shall formally subscribe to and participate
in the plan approved as a condition of maintaining [their]
authority to transact insurance in this state.” Thus, the
plan of operation addresses the relationship between the
2010] A
MERICAN
H
OME
A
SSURANCE
v MCCA 721
MCCA and its member insurers rather than the contrac-
tual relationship between an insurer and its policyholder.
Policyholders are not members of the MCCA and are
not bound by its plan of operation. Thus, at least for the
purposes of § 10.06, a policyholder constitutes a “third
party.”
6
Because policyholders are third parties under
§ 10.06, any amounts received by an insurer as a
deductible from a policyholder must be turned over to
the MCCA if it indemnified the insurer for an ultimate
loss amount that included amounts that the policy-
holder was required to pay as a deductible. Therefore,
Cassens is a third party and its payment of its deduct-
ible constituted recovered monies that American Home
was required to turn over to the MCCA up to the
amount that American Home was reimbursed.
Therefore, we hold that although American Home’s
ultimate loss was $705,863.60, which obligated the
MCCA to pay that portion of the loss above the
$325,000 statutory threshold, MCL 500.3104(2)(c), to
American Home, American Home’s receipt of the
$500,000 deductible from Cassens required American
Home to reimburse the same amount to the MCCA,
§ 10.06, thereby cancelling out both obligations. Accord-
ingly, we conclude that the trial court properly granted
summary disposition to the MCCA, having reached the
right result, albeit for the wrong reason. See Taylor v
Laban, 241 Mich App 449, 458; 616 NW2d 229 (2000).
B. DOCKET NO. 292539
The case involving AAIC is factually different from
the case involving American Home. The insurance
6
This Court has previously implicitly found that an insurer constitutes
a “third party” under § 10.06. See Farmers Ins Exch, 251 Mich App at
458-459 (holding that § 10.06 applies to an insurer’s recoupment of
money from another insurer).
722 288 M
ICH
A
PP
706 [June
contract between American Home and its policyholder
contained a deductible, and the insured in that case
paid the deductible as required by the insurance con-
tract. In contrast, although the insurance contract
between AAIC and its policyholder required the pay-
ment of a deductible, AAIC did not seek to enforce that
provision, and the policyholder did not, in fact, pay the
deductible.
AAIC argues that the deductible must be included in
calculating its ultimate loss because the full PIP
amounts are payable by AAIC to the claimant regard-
less of the existence of the deductible provision in the
insurance policy. As discussed above, this is the proper
understanding of “ultimate loss,” so AAIC’s ultimate
loss was the more than $2 million in benefits that it
paid. Thus, AAIC’s payments exceeded the $375,000
statutory threshold in MCL 500.3104(2)(e), thereby
triggering the MCCA obligation to repay AAIC the
amounts above that threshold. However, given that
AAIC elected not to recover these monies, this is not the
end of the analysis because such a result would allow
insurance companies to claim that they have no duty to
reimburse the MCCA for monies that the insurer is
legally entitled to receive pursuant to its contract with
its policyholder. This would permit insurers to offer
commercial policies with high deductibles and lower
premiums and advise potential insureds that they
would never have to pay the deductible because the
MCCA would ultimately be responsible for those
amounts. The MCCA was not set up to subsidize large
commercial deductibles, and we decline to create a
system that would require it to do so.
Insurers and policyholders are free to negotiate the
terms of their insurance contracts. In this case, AAIC
negotiated a policy that required the policyholder to pay
2010] A
MERICAN
H
OME
A
SSURANCE
v MCCA 723
a large deductible and to assume the risk of a large
percentage of any loss in excess of the deductible. AAIC
therefore negotiated a policy that rendered the policy-
holder responsible for paying a significant portion of
any PIP claim arising under the policy. The policyholder
was contractually bound to comply with these provi-
sions of the policy. Under such circumstances, we hold
that the MCCA is subrogated to the rights of the insurer
and may bring an action against the policyholder for the
amount of the deductible if the insurer fails to do so and
that the MCAA may recover the costs of such an action
from the insurer.
7
Because we hold that the MCCA was obligated to
repay AAIC for the amounts it paid out in excess of the
$375,000 statutory threshold, we must reverse the trial
court’s grant of summary disposition. Although the
trial court noted that Waste Management was required
to provide AAIC with an irrevocable letter of credit to
secure its contractual obligations under the insurance
policy, whether AAIC can or will receive reimbursement
has not been briefed, and we cannot determine this
issue on the record before us. Accordingly, we remand
this case back to the trial court for such a determina-
tion. If it is clear that AAIC will receive the $1 million
7
We believe that our holding is not only consistent with the statutory
and contractual provisions at issue, but carefully balances the interests of
the parties and protects both sides from various inequities. By our
concluding that the ultimate loss includes deductible amounts, the
MCCA is required to make payment regardless of the deductible provi-
sions, so that if a deductible is unrecoverable, the insurer has not lost
those funds. Thus, insurers are protected when they are unable to collect
a deductible because of the policyholder’s insolvency. At the same time,
however, by holding that deductible amounts received by an insurer are
reimbursable to the MCCA and that the MCCA may initiate an action to
recover the deductible from the policyholder if the insurer fails to do so,
we protect the MCCA from having to pay out amounts for which it is
rightfully entitled to reimbursement.
724 288 M
ICH
A
PP
706 [June
deductible and the additional 60 percent of the next
$4 million in benefits due from Waste Management
under its policy and, therefore, would be required to
reimburse the MCCA, the trial court may decline to
order the MCCA to make payment only to have it
reimbursed. In the event that it is not clear, the trial
court may order the MCCA to make payment to AAIC.
Using the formula articulated by the trial court to
calculate the MCCA’s obligation to indemnify AAIC,
AAIC would be entitled to indemnification from the
MCCA in the amount of $288,954.
8
Should AAIC fail to
seek its deductible from Waste Management, the MCCA
may elect to take action against Waste Management and
seek reimbursement of the costs of that action from
AAIC.
IV. CONCLUSION
For the reasons stated, we hold that the ultimate loss
to an insurer under MCL 500.3104 includes deductible
amounts due from the policyholder under the insurer’s
PIP policy. However, to the extent that the insurer has
received or in the future receives payment for the
deductible, article X, § 10.06 of the MCCA’s plan of
operation requires that those monies be returned to the
MCCA up to the amount that the MCCA reimbursed the
insurer. Finally, to the extent that an insurer fails to
8
The trial court ordered that the MCCA use the following formula to
determine its obligation to reimburse AAIC:
(i) subtracting the $1,000,000 Waste Management deductible;
(ii) calculating 40% of the next $4,000,000 in benefits; and
(iii) subtracting $375,000 from that 40% share.
Application of this formula is as follows: $2,659,883.76 minus $1,000,000
equals $1,659,883.76. Forty percent of $1,659,883.76 is $633,954;
$633,954 minus $375,000 equals $288,954.
2010] A
MERICAN
H
OME
A
SSURANCE
v MCCA 725
seek payment of a deductible due and owing under its
insurance contract, the MCCA is subrogated to the
rights of the insurer and may bring an action against
the policyholder for the amount of the deductible and
may seek reimbursement of the costs involved from the
insurer.
Accordingly, we affirm in Docket No. 287153 and
reverse and remand for additional proceedings consis-
tent with this opinion in Docket No. 292539. No taxable
costs are awarded under MCR 7.219, a question of
public significance being involved. We do not retain
jurisdiction.
726 288 M
ICH
A
PP
706 [June
BROWN v MARTIN
Docket No. 289030. Submitted April 13, 2010, at Grand Rapids. Decided
June 15, 2010, at 9:10 a.m.
Lloyd and Linda Brown and others brought an action in the Hillsdale
Circuit Court against Bradley J. and Lisa A. Martin, seeking
declaratory and injunctive relief to enforce a covenant contained in
the deeds for all lots in the parties’ subdivision, including the
parties’ respective deeds, that restricted the use of the real
property in the subdivision to single-family residential purposes
only. The initial 25-year effective period for the covenant ran until
June 27, 1997. It was automatically extended from that date until
June 27, 2007, and again automatically extended from that date
another 10 years. In November 2007 defendants began operating a
hair salon in their home, prompting complaints by plaintiffs. On
March 9, 2008, a majority of the then lot owners passed an
amendment of the covenant that allowed hair salons. Plaintiffs
contended that although the deeds allowed a majority of the then
lot owners to change the covenant, the change could not take effect
until the end of the current 10-year extension period in June 2017.
The trial court, Michael R. Smith, J., agreed with defendants that
the covenant could be changed effective any time after the initial
25-year period and granted summary disposition in favor of
defendants. The Browns appealed.
The Court of Appeals held:
The deeds provided for automatic 10-year renewals “unless an
instrument signed by a majority of the then owners of the lots has
been recorded,” thereby prescribing a definite period of 10 years
for modification by a majority of the then lot owners. The 10-year
automatic extension language would be rendered meaningless if
the covenant could be amended by a majority, but less than
unanimous, vote at anytime during an automatic 10-year exten-
sion. The reference to extensions for successive periods of 10 years
in the covenant is a restriction regarding the frequency of amend-
ment by less than a unanimous vote. The amendment will not be
effective until the end of the current 10-year extension in June
2017. The hair salon violates the covenant, and the court erred by
granting summary disposition in favor of defendants. That order
2010] B
ROWN V
M
ARTIN
727
must be reversed, and the case must be remanded to the trial court
for the entry of an order granting summary disposition in favor of
the Browns and enjoining defendants from operating the hair
salon until the expiration of the current 10-year covenant exten-
sion or a unanimous vote of the then lot owners that permits such
use.
Reversed and remanded.
Biringer, Hutchinson, Lillis, Bappert & Angell, P.C.
(by John D. Hutchinson), for Lloyd and Linda Brown.
Parker, Hayes & Lovinger, P.C. (by John P. Lovinger),
for Bradley J. and Lisa A. Martin.
Before: S
ERVITTO
,P.J., and F
ITZGERALD
and B
ECKERING
,
JJ.
F
ITZGERALD
, J. In this action to enforce a restrictive
covenant that was written into an original subdivision
deed, and continued through automatic 10-year exten-
sions of the covenant, plaintiffs Lloyd and Linda Brown
1
appeal as of right the trial court’s order granting
summary disposition under MCR 2.116(C)(10) in favor
of defendants. This case arose out of a dispute between
the parties concerning the effective date of an amend-
ment of the restrictive covenant that was approved by a
majority of the then owners of the subdivision lots
during the second automatic 10-year extension. We
reverse.
The essential facts are not in dispute. Plaintiffs own
lot 35 of Hilltop Terrace Number 2 Subdivision in
Hillsdale, Michigan, and defendants own lot 32 in the
same subdivision. All lots in the subdivision were origi-
nally subject to the following use restriction:
1
Gary and Carolyn Freese were plaintiffs at the trial court level but are
not parties to this appeal. References to “plaintiffs” throughout this
opinion will be to Lloyd and Linda Brown only.
728 288 M
ICH
A
PP
727 [June
1. USE Each lot in this subdivision and any structure
erected thereon shall be used as or in connection with a
private residence or a necessary outbuilding incidental
thereto and shall be used by the owner or the occupant for
single-family residential purposes only.
The restrictive covenant runs with the properties
and, pursuant to the covenant, may be amended as
follows:
11. GENERAL PROVISIONS
(A) Term: These covenants are to run with the land and
shall be binding on all parties and all persons claiming
under them for a period of twenty-five years from the date
these covenants are recorded, after which time said cov-
enants shall be automatically extended for successive peri-
ods of ten years unless an instrument signed by a majority
of the then owners of the lots has been recorded, agreeing
to change said covenants in whole or in part.
The deed restrictions were recorded on June 28,
1972. The initial 25-year period ran from that date until
June 27, 1997. The covenants were automatically ex-
tended for the first 10-year period from that date until
June 27, 2007, at which point the covenants were
automatically extended for an additional 10-year pe-
riod.
Defendants remodeled their home and began operat-
ing a hair salon in the home in November 2007.
Plaintiffs complained to defendants about the home-
based business, asserting that operation of the business
was in violation of the subdivision’s land-use restric-
tions. In response to plaintiffs’ complaints, on March 9,
2008, the required number of the then lot owners
passed an amendment of the covenant allowing for
certain home-based businesses, including hair salons.
2
2
There is no dispute that the subdivision’s original restrictive cov-
enant allowed the construction, and use, of structures for residential
2010] B
ROWN V
M
ARTIN
729
Plaintiffs filed a complaint seeking declaratory and
injunctive relief to enforce the original restrictive-use
covenant and to enjoin defendants from operating the
hair salon in their home. Plaintiffs claimed that the
covenant could be changed under ¶ 11(A) at the expira-
tion of any automatic 10-year extension period. Defen-
dants claimed that such changes could occur at any time
after the initial 25-year period when a majority of the
then owners of the lots agreed. Thereafter, both parties
filed motions for summary disposition. The trial court
agreed with defendants’ position and granted summary
disposition in favor of defendants.
Appellate review of a motion for summary disposition
is de novo. Brown v Brown, 478 Mich 545, 551; 739
NW2d 313 (2007); City of Taylor v Detroit Edison Co,
475 Mich 109, 115; 715 NW2d 28 (2006). A motion
brought under MCR 2.116(C)(10) tests the factual suf-
ficiency of a claim. This Court considers the pleadings,
admissions, and other evidence submitted in the light
most favorable to the nonmoving party to determine
whether a genuine issue of material fact exists. Brown,
478 Mich at 551-552; Lee v Detroit Med Ctr, 285 Mich
App 51, 59; 775 NW2d 326 (2009). In addition, the scope
of a deed restriction is a question of law that this Court
reviews de novo. Bloomfield Estates Improvement
Ass’n, Inc v Birmingham, 479 Mich 206, 212; 737 NW2d
670 (2007).
The issue before this Court is whether the amend-
ment of the covenant, which was passed by the majority
of then owners of the lots, took effect immediately upon
recording of the amendment, or upon the commence-
ment of the next 10-year automatic extension period.
purposes only. Defendants’ use of their home as a hair salon clearly
violated the original restrictive covenant.
730 288 M
ICH
A
PP
727 [June
We conclude that the trial court erred by determining
that the amendment took immediate effect.
In reviewing the language of restrictive covenants,
this Court recognizes that “[b]uilding and use restric-
tions in residential deeds are favored by public policy.”
Rofe v Robinson (On Second Remand),126 Mich App
151, 157; 336 NW2d 778 (1983). Judicial policy requires
that we seek to protect property values as well as
“aesthetic characteristics considered to be essential
constituents of a family environment.” Webb v Smith
(After Second Remand), 224 Mich App 203, 211; 568
NW2d 378 (1997), quoting Rofe, 126 Mich App at 157
(quotation marks and citation omitted). This Court
summarized the general rules for construing restrictive
covenants in Borowski v Welch, 117 Mich App 712,
716-717; 324 NW2d 144 (1982):
When interpreting a restrictive covenant, courts must
give effect to the instrument as a whole where the intent of
the parties is clearly ascertainable. Where the intent is
clear from the whole document, there is no ambiguous
restriction to interpret and the rules pertaining to the
resolution of doubts in favor of the free use of property are
therefore not applicable. In placing the proper construction
on restrictions, if there can be said to be any doubt about
their exact meaning, the courts must have in mind the
subdivider’s intention and purpose. The restrictions must
be construed in light of the general plan under which the
restrictive district was platted and developed. In attempt-
ing to give effect to restrictive covenants, courts are not so
much concerned with the grammatical rules or the strict
letter of the words used as with arriving at the intention of
the restrictor, if that can be gathered from the entire
language of the instrument. Moreover, the language em-
ployed in stating the restriction is to be taken in its
ordinary and generally understood or popular sense, and is
not to be subjected to technical refinement, nor the words
torn from their association and their separate meanings
sought in a lexicon. Covenants are to be construed with
2010] B
ROWN V
M
ARTIN
731
reference to the present and prospective use of property as
well as to the specific language employed and upon the
reading as a whole rather than from isolated words. [Cita-
tions omitted.]
The plain language used in ¶ 11(A) clearly and un-
ambiguously provides for automatic 10-year renewals
“unless an instrument signed by a majority of the then
owners of the lots has been recorded....” The cov-
enant prescribed a definite period of 10 years for
modification by a majority of the then lot owners. The
10-year automatic extension language would be ren-
dered meaningless if the covenant could be amended by
a majority vote (less than unanimous) at any time on or
after June 27, 1997. Thus, the plain language of the
covenant causes the reference to “periods of ten years”
to be a restriction regarding the frequency of amend-
ment by less than a unanimous vote. See Scholten v
Blackhawk Partners, 184 Ariz 326; 909 P2d 393 (Ariz
App, 1995) (holding that an amendment passed two
years into a 10-year automatic extension period was not
effective until the 10-year extension period expired and
stating that to hold otherwise would render the exten-
sion provision meaningless); Illini Fed S&L Ass’n v
Elsah Hills Corp, 112 Ill App 3d 356; 445 NE2d 1193
(1983) (holding that amendments of the restrictive
covenants passed during the initial 20-year term would
not take effect until the beginning of the automatic
10-year extension period); In re Wallace’s Fourth South-
moor Addition to the City of Enid v Rogers, 874 P2d 818
(Okla App, 1994) (holding that an amendment of re-
strictive covenants, passed during the running of an
automatic 10-year extension period, was not effective
until the end of the 10-year extension period); Mauldin
v Panella, 17 P3d 837 (Colo App, 2000) (holding that
restrictive covenants were extended for automatic 10-
year extension when the attempted amendment oc-
732 288 M
ICH
A
PP
727 [June
curred two days after the original term expired).
3
If,
however, every then lot owner voted to amend or change
the covenant, the restriction with regard to the fre-
quency of amendment by a majority vote would not
apply, and a change by unanimous vote could be made at
any time.
4
In sum, given that the amendment was by less than
the unanimous vote of the then lot owners, the amend-
ment will not take effect until the end of the current
10-year extension period, i.e., June 28, 2017. Thus,
defendants’ home-based hair salon violates the subdivi-
sion’s existing restrictive covenant, and the trial court
erred by granting summary disposition in favor of
defendants. Brown, 478 Mich at 552; Lee, 285 Mich App
at 59.
3
If the drafters of the initial restrictions had wished to allow amend-
ments at any time following the initial 25-year period, the restrictive
covenants could have simply been renewed in perpetuity unless an
amendment was agreed on by the proper percentage of the then lot
owners. Id.; Rory v Continental Ins Co, 473 Mich 457, 468; 703 NW2d 23
(2005).
4
Plaintiffs’ reliance on this Court’s prior rulings in Lake Isabella Prop
Owners Ass’n/Architectural Control Comm v Lake Isabella Dev, Inc,
unpublished opinion per curiam of the Court of Appeals, issued December
11, 1998 (Docket No. 204954), p 4, and Ardmore Park Subdivision Ass’n,
Inc v Simon, 117 Mich App 57, 59-62; 323 NW2d 591 (1982), is misplaced.
In Lake Isabella, unpub op at 4, this Court held that changes could not be
made to the restrictive covenants until after the initial 25-year period had
elapsed. While this Court noted that the restrictive covenants could be
modified after the initial 25-year period elapsed, the issue of the timing of
any changes through the amendment process was neither before nor
addressed by the Court. In Ardmore Park, 117 Mich App at 59, this Court
held that properly passed and recorded changes to restrictive covenants are
binding on all subdivision property owners in the same manner as those
contained in the original restrictive covenants. The original deed restrictions
ran with the land until January 1, 1975, and were “duly amended in 1975 by
a majority of those persons then owning the property in Ardmore Park.” Id.
The Court apparently assumed that the restrictions were properly amended
because the issue of the timing of any changes through the amendment
process was not addressed.
2010] B
ROWN V
M
ARTIN
733
We reverse the order granting summary disposition
in favor of defendants and remand for entry of an order
granting plaintiffs’ motion for summary disposition and
enjoining defendants from operating the hair salon in
their home until after the expiration of the current
10-year covenant extension or a unanimous vote of the
then lot owners that permits such use.
Reversed and remanded for proceedings consistent
with this opinion. We do not retain jurisdiction.
734 288 M
ICH
A
PP
727 [June
JANER v BARNES
Docket No. 298401. Submitted June 14, 2010, at Lansing. Decided June
17, 2010, at 9:00 a.m.
Mark Janer and Steven J. Jacobs brought an action in the Bay
Circuit Court against Jennifer Cass Barnes and others, seeking a
declaratory judgment, writ of mandamus, and injunctive relief to
prevent Barnes from being designated an incumbent on the ballot
for the position of 74th District Court Judge in the August 3, 2010,
primary election. Plaintiffs argued that because Barnes had filed
nominating petitions as a nonincumbent before the Governor
appointed her to replace the judge who resigned and she assumed
the duties of her office on June 1, 2010, Barnes was not entitled to
the incumbency designation. The trial court, Fred L. Borchard, J.,
denied the requested relief, ruled that Barnes would be designated
an incumbent, and dismissed the complaint with prejudice. Plain-
tiffs appealed.
The Court of Appeals held:
Const 1963, art 6, § 24, and MCL 168.467c(2) provide that
incumbent judges must be given the incumbency designation on
the ballot. They do not impose a time within which an incumbent
judge must act in order to qualify for the incumbency designation.
The only requirement for the incumbency designation on the
ballot is the incumbent status of the judge. It is undisputed that
Barnes attained that status on June 1, 2010, and was entitled to
the incumbency designation.
Affirmed.
E
LECTIONS —
J
UDGES —
D
ISTRICT
C
OURTS —
B
ALLOTS —
I
NCUMBENCY
D
ESIGNATION
.
An incumbent district court judge must be designated as an incum-
bent when a candidate for nomination or election to the same
office; the only requirement for the incumbency designation on the
ballot is the incumbent status of the judge; there is no time within
which an incumbent candidate must act in order to qualify for the
incumbency designation (Const 1963, art 6, § 24; MCL
168.467c[2]).
Kim A. Higgs for Mark Janer and Steven J. Jacobs.
2010] J
ANER V
B
ARNES
735
Miller, Canfield, Paddock and Stone, P.L.C. (by
Michael J. Hodge and Scott R. Eldridge), for Jennifer
Cass Barnes.
Michael A. Cox, Attorney General, B. Eric Restuccia,
Solicitor General, and Ann M. Sherman and Denise C.
Barton, Assistant Attorneys General, for the Secretary
of State and the Department of State, Bureau of Elec-
tions.
Braun Kendrick Finkbeiner P.L.C. (by C. Patrick
Kaltenbach and Matthew A. Tarrant) for the Bay
County Clerk.
Before: O’C
ONNELL
,P.J., and O
WENS
and B
ORRELLO
,JJ.
P
ER
C
URIAM
. Plaintiffs appeal as of right the trial
court’s order denying their request for a declaratory
judgment, mandamus, and injunctive relief in this elec-
tion case. We affirm.
In April 2010, plaintiffs and defendant Jennifer Cass
Barnes timely filed nominating petitions to become
candidates on the ballot for the position of 74th District
Court Judge in the August 3, 2010, primary election.
The position was designated a nonincumbent position,
because incumbent Judge Scott J. Newcombe had an-
nounced his intention to resign on May 31, 2010. On
April 23, 2010, Governor Jennifer M. Granholm ap-
pointed Barnes to replace Judge Newcombe and serve
the remainder of his term. Barnes assumed the duties of
her office on June 1, 2010.
Plaintiffs filed a complaint for a declaratory judg-
ment, seeking a writ of mandamus and injunctive relief
to prevent Barnes from receiving an incumbency desig-
nation on the primary election ballot. They argued that
because Barnes filed nominating petitions to access the
736 288 M
ICH
A
PP
735 [June
ballot as a nonincumbent, and because her appointment
occurred after the deadline for incumbent judges to
access the ballot, she is not entitled to the incumbency
designation on the ballot. The trial court denied the
requested relief, ruled that Barnes will have the incum-
bency designation on the August primary election bal-
lot, and dismissed the complaint with prejudice.
This Court reviews de novo a trial court’s ruling in a
declaratory judgment action. Toll Northville Ltd v
Northville Twp, 480 Mich 6, 10; 743 NW2d 902 (2008).
This Court also reviews de novo issues of constitutional
and statutory law. Wayne Co v Hathcock, 471 Mich 445,
455; 684 NW2d 765 (2004).
Incumbent judges must be given the incumbency
designation on the ballot as a matter of constitutional
and statutory law. Const 1963, art 6, § 24, provides:
“There shall be printed upon the ballot under the name
of each incumbent justice or judge who is a candidate
for nomination or election to the same office the desig-
nation of that office.” The Legislature codified this
provision to require the incumbency designation on the
ballot for incumbent district court judges: “There shall
be printed upon the ballot under the name of each
incumbent district judge who is a candidate for nomi-
nation or election to the same office the designation of
that office.” MCL 168.467c(2). The word “shall” de-
notes mandatory conduct. See Hughes v Almena Twp,
284 Mich App 50, 62; 771 NW2d 453 (2009) (“The word
‘shall’ as used in a statute is considered to require
mandatory conduct.”); Goldstone v Bloomfield Twp Pub
Library, 268 Mich App 642, 657; 708 NW2d 740 (2005)
(“[T]he term ‘shall’...is universally recognized as
requiring mandatory adherence.”), aff’d 479 Mich 554
(2007).
Const 1963, art 6, § 24, and MCL 168.467c(2) are
unqualified mandates. They do not impose a time
2010] J
ANER V
B
ARNES
737
within which an incumbent candidate must act in order
to qualify for the incumbency designation. Because the
language is clear and unambiguous, judicial interpreta-
tion is not permitted, and the provisions must be
enforced as written. Huggett v Dep’t of Natural Re-
sources, 464 Mich 711, 717; 629 NW2d 915 (2001). The
only requirement for the incumbency designation on
the ballot is the incumbent status of the judge, which it
is undisputed that Barnes attained on June 1, 2010.
Accordingly, she is entitled to the incumbency designa-
tion.
Lastly, we note that our affirmance of the trial court’s
decision in this matter does not alter the ballot lan-
guage and, accordingly, the issues presented by defen-
dant Bay County Clerk are moot.
Affirmed. No costs are to be assessed, a public ques-
tion being involved. This opinion shall have immediate
effect pursuant to MCR 7.215(F)(2).
738 288 M
ICH
A
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735 [June
PEOPLE v LEE
Docket No. 283778. Submitted June 2, 2010, at Grand Rapids. Decided
June 17, 2010, at 9:05 a.m.
Kent A. Lee pleaded no contest in the Allegan Circuit Court to a
charge of third-degree child abuse. At sentencing, the court, Harry
A. Beach, J., left open the possibility that the prosecutor could set
the matter for an evidentiary hearing so that the prosecutor could
present testimony concerning whether defendant should be re-
quired to register as a sex offender under the Sex Offenders
Registration Act (SORA), MCL 28.721 et seq. More than one year
after the sentencing, but while defendant was still on probation,
the prosecutor moved to have defendant placed on the sex offender
registry. At the evidentiary hearing, defendant admitted that he
was frustrated when the child in his care refused to put his
pajamas on following a bath, and he acknowledged that he flicked
the child’s penis in order to get him to cooperate. Following the
hearing, the court, William A. Baillargeon, J., ordered defendant to
register as a sex offender. Defendant appealed.
The Court of Appeals held:
1. The circuit court did not err by reserving the ability to
require defendant to register as a sex offender. Circuit courts have
a great deal of leeway in applying SORA, and additional proofs
may be presented if the evidence of record is insufficient to decide
the matter. Judicial fact-finding outside the avenues of trial and
admissions does not violate due process because SORA establishes
a remedial regulatory scheme that furthers a legitimate state
interest in public safety and requiring registration does not
constitute punishment.
2. Even though registration under SORA is not a punishment,
there must be an outside limit to its application. That outside limit
is at the end of the trial court’s jurisdiction over the case: as long
as the circuit court has jurisdiction over the defendant’s case, it
may order registration. In this case, the court had jurisdiction
because defendant was still on probation.
3. Defendant was not convicted of violating a statute that
automatically requires registration under SORA. Thus, his crime
must have fit within one of SORA’s catchall provisions for regis-
2010] P
EOPLE V
L
EE
739
tration to have been properly required. Under MCL 28.722(e)(xi),
registration was required if defendant’s crime constituted a sexual
offense against an individual who was less than 18 years of age.
The underlying facts of the crime govern whether an offense
constitutes a sexual offense against an individual who was less
than 18 years of age. In this case, defendant was originally charged
with second-degree criminal sexual conduct, which involves sexual
contact. The facts demonstrated that defendant intentionally
touched the minor victim’s intimate parts in a sexual manner for
the purpose of inflicting humiliation. This constituted “sexual
contact” under MCL 750.520a(q). Accordingly, the circuit court did
not err by requiring defendant to register under SORA.
Affirmed.
C
RIMINAL
L
AW —
S
EX
O
FFENDERS
R
EGISTRATION
A
CT —
T
IME
L
IMIT FOR
R
EQUIR-
ING
S
EX
O
FFENDER
R
EGISTRATION —
J
URISDICTION
O
VER
D
EFENDANTS
.
A circuit court may reserve its ability to require a defendant to
register as a sex offender under the Sex Offenders Registration
Act; as long as the court has jurisdiction over the defendant’s case,
it may order registration (MCL 28.721 et seq.).
Michael A. Cox, Attorney General, B. Eric Restuccia,
Solicitor General, Frederick Anderson, Prosecuting At-
torney, and Judy Hughes Astle, Assistant Prosecuting
Attorney, for the people.
Cunningham Dalman, P. C . (by David M. Zessin), for
defendant.
Before: O
WENS
,P.J., and O’C
ONNELL
and T
ALBOT
,JJ.
P
ER
C
URIAM
. In this third-degree child abuse case,
MCL 750.136b, defendant Kent Allen Lee appeals by
leave granted
1
the circuit court’s order granting the
prosecutor’s motion to require defendant to register as
1
Defendant originally filed a delayed application for leave to appeal
with this Court on February 19, 2008. This Court denied the motion on
April 18, 2008, for “lack of merit in the grounds presented.” On October
21, 2009, our Supreme Court, in lieu of granting leave to appeal,
remanded the case to this Court for consideration as on leave granted.
People v Lee, 485 Mich 914 (2009).
740 288 M
ICH
A
PP
739 [June
a sex offender under Michigan’s Sex Offenders Regis-
tration Act (SORA), MCL 28.721 et seq. We affirm.
I. FACTS
Defendant entered a plea of no contest to a charge of
third-degree child abuse as a second-offense habitual
offender. The circuit court accepted the no contest plea.
Defendant was sentenced to five years’ probation, with
the first 10 weekends to be served in jail. At sentencing,
the prosecutor argued on the basis of information that
she had received from the victim’s family that defen-
dant should be required to register as a sex offender.
The circuit court left
open to the prosecutor to set this matter for a hearing at
which time if they wish we’ll listen to testimony concerning
what the nature of this particular act was so the Court can
have a better basis to make a decision as to whether or not
this should be a sex registry offense.
More than a year after defendant’s original sentenc-
ing, the prosecutor filed a motion requesting that
defendant be required to register as a sex offender. After
hearing testimony on the motion, the circuit court
ordered defendant to register as a sex offender under
SORA.
II. ANALYSIS
Defendant argues that the circuit court erred by
reserving the ability to require defendant to register as
a sex offender. We disagree.
The construction and application of SORA presents a
question of law that the Court reviews de novo on
appeal. People v Golba, 273 Mich App 603, 605, 729
NW2d 916 (2007).
2010] P
EOPLE V
L
EE
741
SORA requires an individual who is convicted of a
listed offense after October 1, 1995, to be registered
under its provisions. MCL 28.723(1)(a); People v
Haynes, 281 Mich App 27, 30; 760 NW2d 283 (2008).
The term “listed offense” is defined by MCL 28.722(e)
to include violations of specific statutes. The definition
also has two catchall provisions, MCL 28.722(e)(xi) and
(xiv), that require registration:
(xi) Any other violation of a law of this state or a local
ordinance of a municipality that by its nature constitutes a
sexual offense against an individual who is less than 18
years of age.
***
(xiv) An offense substantially similar to an offense
described in subparagraphs (i)to(xiii) under a law of the
United States, any state, or any country or under tribal or
military law.
The prosecution urges this Court to view registration
under SORA not as a punishment or a part of the
sentence, but as “a remedial regulatory scheme further-
ing a legitimate state interest of protecting the pub-
lic[.]” Golba, 273 Mich App at 620. Indeed, circuit
courts have been given a great deal of leeway in the
application of SORA. For instance, at sentencing, the
court “may consider facts concerning uncharged of-
fenses, pending charges, and even acquittals, provided
that the defendant is afforded the opportunity to chal-
lenge the information and, if challenged, it is substan-
tiated by a preponderance of the evidence.” Id. at 614.
In In re Ayres, 239 Mich App 8; 608 NW2d 132 (1999),
this Court had to determine whether requiring juve-
niles who had been convicted of certain specified sex
offenses to register as sex offenders violated Michigan’s
prohibition against cruel or unusual punishment. This
742 288 M
ICH
A
PP
739 [June
Court found instructive “two recent federal court deci-
sions that have held that the registration and notifica-
tion requirements of Michigan’s Sex Offenders Regis-
tration Act, as applied to adult offenders, do not impose
‘punishment’ under the Eighth Amendment of the
United States Constitution.” Id. at 14. This Court
quoted Doe v Kelley, 961 F Supp 1105, 1109 (WD Mich,
1997):
“On its face, the notification scheme is purely regulatory
or remedial. It imposes no requirement on the registered
offender, inflicts no suffering, disability or restraint. It does
nothing more than create a mechanism for easier public
access to compiled information that is otherwise available
to the public only through arduous research in criminal
court files.” [Ayres, 239 Mich App at 15.]
This Court also quoted the following language from
Lanni v Engler, 994 F Supp 849, 854 (ED Mich, 1998):
“Dissemination of information about a person’s crimi-
nal involvement has always held the potential for negative
repercussions for those involved. However, public notifica-
tion in and of itself, has never been regarded as punish-
ment when done in furtherance of a legitimate government
interest.... The registration and notification require-
ments can be more closely analogized to quarantine notices
when public health is endangered by individuals with
infectious diseases....Whenever notification is directed to
a risk posed by individuals in the community, those indi-
viduals can expect to experience some embarrassment and
isolation. Nonetheless, it is generally recognized that the
state is well within its rights to issue such warnings and
the negative effects are not regarded as punishment.”
[Ayres, 239 Mich App at 18 (alterations in original).]
Therefore, caselaw clearly supports the circuit
court’s imposition of registration under SORA in a case
such as defendant’s, and even allows for presentation of
additional proofs if the evidence of record is insufficient
2010] P
EOPLE V
L
EE
743
to reach a determination on the matter. People v Althoff,
280 Mich App 524, 542; 760 NW2d 764 (2008). Judicial
fact-finding outside the avenues of trial or admissions
does not violate due process because SORA is a remedial
regulatory scheme that furthers a legitimate state in-
terest in public safety and compliance with the statute
is not a punishment. Id. at 540-542. Therefore, regis-
tration under SORA is not a part of defendant’s sen-
tence, nor is it a condition of probation; rather, it is a
ministerial function designed to protect the public from
sex offenders.
The issue then becomes procedural: When must the
circuit court make its decision requiring registration
under SORA? Current caselaw and statutes are silent
on this issue. However, we conclude that as long as the
circuit court has jurisdiction over defendant’s case, it
may order registration under SORA.
While caselaw clearly states that registration under
SORA is not a condition of probation, there is ample
caselaw that stands for the proposition that once a
defendant has been discharged from probation, a trial
court no longer has jurisdiction over that defendant.
See People v Hodges, 231 Mich 656, 660-661; 204 NW
801 (1925); People v Valentin, 220 Mich App 401,
407-408; 559 NW2d 396 (1996); People v Ritter, 186
Mich App 701, 706; 464 NW2d 919 (1991). Even though
registration under SORA is regulatory and not a pun-
ishment, there must be an outside limit to its applica-
tion. The most logical limit is at the end of the trial
court’s jurisdiction over the case. This way defendants
are not left wondering whether they may be subject to
sex offender registration at any time, even years after
the commission of their crimes.
Because defendant in the present case remains on
probation, the circuit court did not commit procedural
744 288 M
ICH
A
PP
739 [June
error when it ordered registration under SORA more
than a year after imposing its sentence.
Next, defendant argues that the circuit court’s fac-
tual findings were insufficient to establish that defen-
dant committed a “violation of a law... that by its
nature constitutes a sexual offense against an indi-
vidual who is less than 18 years of age” for purposes of
MCL 28.722(e)(xi). We disagree.
In Golba, 273 Mich App at 611, this Court concluded
“that the underlying factual basis for a conviction
governs whether the offense ‘by its nature constitutes a
sexual offense against an individual who is less than 18
years of age.’ ” (Citation omitted.) In other words, the
particular facts of a violation, and not just the elements
of the violation, are to be considered. Althoff, 280 Mich
App at 534. This determination can relate to uncharged
conduct if supported by a preponderance of the evi-
dence. Golba, 273 Mich App at 614.
Defendant was originally charged with second-degree
criminal sexual conduct, which involves sexual contact.
He later pleaded no contest to third-degree child abuse.
MCL 750.520a(q) defines “sexual contact” as
the intentional touching of the victim’s or actor’s intimate
parts or the intentional touching of the clothing covering
the immediate area of the victim’s or actor’s intimate
parts, if that intentional touching can reasonably be con-
strued as being for the purpose of sexual arousal or
gratification, done for a sexual purpose, or in a sexual
manner for:
(i) Revenge.
(ii) To inflict humiliation.
(iii) Out of anger.
The prosecution argues that defendant’s own testi-
mony supports a finding that defendant intentionally
2010] P
EOPLE V
L
EE
745
touched the victim’s penis in order to inflict humiliation
or out of anger. At the evidentiary hearing, the circuit
court found that sufficient facts had been presented to
require that defendant register under SORA.
At sentencing, the circuit court stated that defen-
dant’s crime was “a rather abusive assault on a young
man’s self-dignity and self value.” Random House Web-
ster’s College Dictionary (1997) defines “humiliate” as
“to cause (a person) a painful loss of pride, self-respect,
or dignity[.]” Therefore, the circuit court had already, in
essence, found that defendant inflicted humiliation
upon the victim.
2
Defendant himself acknowledged that
he flicked the victim’s penis as a form of “bullying” and
that the child cried as a result. Defendant also acknowl-
edged that he was frustrated that the child would not
put his pajamas on and that, as a result, defendant
flicked his penis in order to get him to cooperate. We
conclude that these facts demonstrated an intentional
touching of the victim’s intimate parts in a sexual
manner for the purpose of inflicting humiliation. There-
fore, we affirm the circuit court’s order requiring de-
fendant to register under SORA.
Affirmed.
2
Different circuit court judges presided over defendant’s sentencing
and the subsequent evidentiary hearing.
746 288 M
ICH
A
PP
739
S
PECIAL
O
RDERS
SPECIAL ORDERS
In this section are orders of the Court of general
interest to the bench and bar of the state.
Order Entered May 19, 2010:
K
ING V
M
C
P
HERSON
H
OSPITAL,
Docket No. 284436
*
. The Court orders
that a special panel will be convened pursuant to MCR 7.215(J) to resolve
the conflict between this case and Farley v Carp, 287 Mich App 1; 782
NW2d 508 (2010).
The Court further orders that the opinion in this case released on
April 27, 2010, is vacated in its entirety. MCR 7.215(J)(5).
Appellant may file a supplemental brief within 21 days of the clerk’s
certification of this order. Appellees may file a supplemental brief within
21 days of the service of appellant’s brief. Nine copies must be filed with
the Clerk of the Court.
G
LEICHER
, J., did not participate.
KING v McPHERSON HOSPITAL
Docket No. 284436. Released April 27, 2010, at 9:00 a.m. Vacated May
19, 2010.
Before: D
AVIS
,P.J., and D
ONOFRIO
and S
TEPHENS
,JJ.
D
ONOFRIO
, J. The issue in this case involves the wrongful death medical
malpractice statute of limitations. Plaintiff, Timothy King, successor per-
sonal representative of the estate of Andrew Baker, appeals a March 4, 2008,
order denying his motion to set aside the January 2007 dismissal of his
claims against defendants, McPherson Hospital, also known as Trinity
Health-Michigan (“McPherson”), Michael Briggs, D.O., Merle Hunter, M.D.,
and Emergency Physicians Medical Group, P.C. Plaintiff contends that the
trial court’s order is erroneous because his action was timely filed under
Mullins v St Joseph Mercy Hosp, 480 Mich 948 (2007) (Mullins II). This
Court initially denied plaintiff’s application for leave to appeal the March 4
order, King v McPherson Hosp, unpublished order of the Court of Appeals,
entered July 10, 2008 (Docket No. 284436), but our Supreme Court, in lieu
of granting leave to appeal, thereafter remanded the case to this Court for
consideration as on leave granted. King v McPherson Hosp, 482 Mich 1154
(2008).
Because this Court’s recent decision in Farley v Carp, 287 Mich App
1; 782 NW2d 508 (2010) (Farley II), is dispositive of this appeal, and we
are bound to follow it by operation of MCR 7.215(C)(2) and MCR
7.215(J)(1), plaintiff’s claim fails, and we affirm. However, in accordance
with MCR 7.215(J)(2), which provides that the conflict resolution proce-
dure is triggered when a panel of this Court “follows a prior published
decision only because it is required to do so by subrule (1)” we indicate
* Opinion by special panel reported at 290 Mich App 299 (2010)
—R
EPORTER
.
S
PECIAL
O
RDERS
801
our disagreement with the majority’s holding in Farley II, and call for the
convening of a special panel of this Court pursuant to MCR 7.215(J)(3).
I
Plaintiff’s predecessor, Diana King (“King”),
1
filed her complaint on
March 1, 2004, alleging that on September 6, 2001, her decedent, Baker,
presented at McPherson Hospital complaining of vomiting and a fever.
King alleged that defendants failed to diagnose Baker’s encephalomyeli-
tis, which led to his death on September 8, 2001. On March 12, 2004,
King filed a first amended complaint correcting the board certifications of
defendants Briggs and Hunter.
On September 20, 2004, defendants Hunter, Briggs, and Emergency
Physicians Medical Group, P.C. (“the EPMG defendants”), filed a motion
for summary disposition under MCR 2.116(C)(7), (8), and (10), arguing,
in relevant part, that the statute of limitations barred King’s complaint
because she failed to file her complaint within two years after being
appointed the personal representative of Baker’s estate. The EPMG
defendants relied on Waltz v Wyse, 469 Mich 642; 677 NW2d 813 (2004),
reh den 470 Mich 1204 (2004), which held that sending a notice of intent
under MCL 600.2912b does not toll the wrongful death saving period.
The EPMG defendants also argued that Waltz applied retroactively.
McPherson concurred with the EPMG defendants’ motion.
On September 20, 2004, plaintiff was appointed successor personal
representative. In response to the summary disposition motion, plaintiff
argued, in pertinent part, that this case is distinguishable from Waltz
because he mailed his notice of intent
2
within two years after the date of
defendants’ malpractice. Plaintiff also argued that Waltz cannot be
applied retroactively and that his complaint was timely filed under
Omelenchuk v City of Warren, 461 Mich 567; 609 NW2d 177 (2000),
clarified and overruled in part in Waltz, 469 Mich at 652-655. Plaintiff
further argued that the trial court should apply judicial tolling to the
limitations period to save his cause of action. On October 27, 2004, the
EPMG defendants filed a reply brief, arguing that plaintiff’s interpreta-
tion of Waltz was erroneous and that Waltz applied retroactively. On
October 28, 2004, the trial court denied defendants’ motion, stating, “I’m
satisfied that the case was timely filed.”
On November 18, 2004, both McPherson and the EPMG defendants
filed separate applications for leave to appeal with this Court in Docket
Nos. 259136 and 259229, respectively. On January 25, 2005, this Court
granted defendants’ applications and consolidated the appeals. King v
Briggs, unpublished order of the Court of Appeals, entered January 25,
2005 (Docket Nos. 259136 and 259229). On July 12, 2005, this Court
reversed the trial court’s decision on the basis that plaintiff’s complaint
1
Plaintiff Timothy King is the successor personal representative of
Andrew Baker’s estate.
2
For the sake of simplicity, we do not distinguish between actions
taken by King, as the initial personal representative, and plaintiff, as the
successor personal representative.
802 288 M
ICH
A
PP
was untimely pursuant to Waltz.
3
King v Briggs, unpublished opinion per
curiam of the Court of Appeals, issued July 12, 2005 (Docket Nos. 259136
and 259229), slip op at 1-2. On August 2, 2005, plaintiff filed with this
Court a motion for reconsideration, which this Court denied on August
25, 2005. King v McPherson Hosp, unpublished order of the Court of
Appeals, entered August 25, 2005 (Docket Nos. 259136 and 259229).
Thereafter, our Supreme Court denied plaintiff’s application for leave to
appeal, King v Briggs, 474 Mich 981 (2005), and his motion for recon-
sideration, King v Briggs, 474 Mich 1113 (2006).
On remand, the EPMG defendants filed a motion for entry of an order
of dismissal. McPherson concurred with the motion. On January 26,
2007, the trial court granted the motion and dismissed plaintiff’s claims.
On February 15, 2007, plaintiff filed a claim of appeal with this Court,
which this Court dismissed on jurisdictional grounds on April 11,
2007. King v McPherson Hosp, unpublished order of the Court of
Appeals, entered April 11, 2007 (Docket No. 276287). Thereafter, plaintiff
filed a motion for reconsideration, which this Court denied on June 1,
2007. King v McPherson Hosp, unpublished order of the Court of
Appeals, entered June 1, 2007 (Docket No. 276287).
On November 28, 2007, our Supreme Court decided Mullins II, 480
Mich 948, stating, in pertinent part:
We conclude that this Court’s decision in Waltz v Wyse, 469
Mich 642 [677 NW2d 813] (2004), does not apply to any causes of
action filed after Omelenchuk v City of Warren, 461 Mich 567 [609
NW2d 177] (2000), was decided in which the saving period expired,
i.e., two years had elapsed since the personal representative was
appointed, sometime between the date that Omelenchuk was
decided and within 182 days after Waltz was decided. All other
causes of action are controlled by Waltz.
On January 24, 2008, plaintiff filed a motion pursuant to MCR
2.612(C)(1) to set aside the trial court’s order dismissing his claims
relying on Mullins II and arguing that, with respect to this Court’s
previous opinion holding that plaintiff’s claims were time-barred, the law
of the case doctrine was inapplicable because an intervening change in
the law existed. In response, McPherson argued that the trial court was
required to deny plaintiff’s motion pursuant to the law of the case
doctrine, which it contended applied regardless of the intervening change
in the law. McPherson also argued that the trial court lacked jurisdiction
to grant relief under MCR 7.215(F)(1)(a) and that the holding in Mullins
II did not reverse the previous appellate decisions in this case. Finally,
McPherson argued that policy considerations favored the finality of
3
This Court also determined that plaintiff, as the successor personal
representative, did not have an additional two years under the wrongful
death saving statute within which to file a claim. King v Briggs,
unpublished opinion per curiam of the Court of Appeals, issued July 12,
2005 (Docket Nos. 259136 and 259229), slip op at 2. This issue, however,
is not relevant to this appeal.
S
PECIAL
O
RDERS
803
judgments. The EPMG defendants echoed McPherson’s arguments and,
in addition, contended that the trial court lacked authority to vacate a
previous judgment of this Court and that MCR 2.612(C)(1)(a), (e), and (f)
were inapplicable. At a February 21, 2008, hearing, the trial court denied
plaintiff’s motion, stating:
The appellate courts have created a fine mess of this and—this
case, it’s an ’04 case and it bounced around back and forth up and
down with the appellate decisions. I am going to leave it to the
appellate courts to tell me what—what to do. I do find that the law
of the case is the Court of Appeals order telling me to dismiss the
case. I am going to deny your relief. If the relief is to be granted it’s
going to be by the Court of Appeals, counsel.
Thereafter, the trial court entered a written order denying plaintiff’s
motion.
On March 25, 2008, plaintiff filed an application for leave to appeal,
which this Court denied on July 10, 2008. King v McPherson Hosp,
unpublished order of the Court of Appeals, entered July 10, 2008 (Docket
No. 284436). On December 23, 2008, our Supreme Court remanded this case
to this Court for consideration as on leave granted. King, 482 Mich 1154.
II
Plaintiff argues that the trial court erred by refusing to set aside its
previous order dismissing his claims because his action was timely filed
under Mullins II, 480 Mich 948. We review for an abuse of discretion a
trial court’s decision on a motion to set aside a judgment under MCR
2.612(C)(1). Peterson v Auto-Owners Ins Co, 274 Mich App 407, 412; 733
NW2d 413 (2007). “An abuse of discretion occurs when the decision
results in an outcome falling outside the principled range of outcomes.”
Woodard v Custer, 476 Mich 545, 557; 719 NW2d 842 (2006). In addition,
whether the law of the case doctrine applies in a particular case is a
question of law that we review de novo. Kasben v Hoffman, 278 Mich App
466, 470; 751 NW2d 520 (2008).
III
Under MCL 600.5805(6), a medical malpractice plaintiff has two years
from the date the cause of action accrued in which to file suit. A medical
malpractice claim generally “accrues at the time of the act or omission
that is the basis for the claim of medical malpractice....”MCL
600.5838a(1).
4
As recognized in Farley v Advanced Cardiovascular
4
Although MCL 600.5838a(2) also gives a medical malpractice plaintiff
until “6 months after the plaintiff discovers or should have discovered the
existence of the claim” to file suit, the discovery rule is not at issue in this
case.
804 288 M
ICH
A
PP
Health Specialists, PC, 266 Mich App 566, 571; 703 NW2d 115 (2005)
(Farley I), lv den 474 Mich 1020 (2006), reconsideration den 474 Mich
1132 (2006), “unless an exception applies, a malpractice action must be
brought within two years of when the claim first accrued.”
“The first exception involves the effect of filing a notice of intent to
sue, which all plaintiffs alleging medical malpractice are required to do
under MCL 600.2912b(1) ‘not less than 182 days before the action is
commenced.’ ” Farley I, 266 Mich App at 571. MCL 600.5856(c) provides:
The statutes of limitations or repose are tolled in any of the
following circumstances:
***
(c) At the time notice is given in compliance with the applicable
notice period under section 2912b, if during that period a claim
would be barred by the statute of limitations or repose; but in this
case, the statute is tolled not longer than the number of days equal
to the number of days remaining in the applicable notice period
after the date notice is given.
Thus, MCL 600.5856(c) “tolls the applicable ‘statute of limitations or
repose’ when a claimant, in compliance with MCL 600.2912b, provides
written notice of her intent to commence a medical malpractice action.”
Waltz, 469 Mich at 644 n 1. This provision is commonly referenced as the
“notice tolling provision.” See Farley I, 266 Mich App at 571.
In addition, in wrongful death actions, the Legislature has afforded
plaintiff personal representatives additional time in which to pursue legal
action on behalf of a decedent’s estate. The wrongful death saving
statute, MCL 600.5852, provides as follows:
If a person dies before the period of limitations has run or
within 30 days after the period of limitations has run, an action
which survives by law may be commenced by the personal repre-
sentative of the deceased person at any time within 2 years after
letters of authority are issued although the period of limitations
has run. But an action shall not be brought under this provision
unless the personal representative commences it within 3 years
after the period of limitations has run.
In Waltz, 469 Mich at 648-651, 655, our Supreme Court held that under
the clear and unambiguous language of MCL 600.5856, the giving of a
notice of intent to sue during the two-year malpractice period of
limitation in MCL 600.5805(6) operates to toll this period, but that the
giving of notice does not toll the period in MCL 600.5852, which
constitutes a wrongful death saving period, “an exception to the limita-
tion period” and not a period of limitation itself. (Emphasis in original.)
Waltz thus overruled Omelenchuk to the extent that Omelenchuk “might
S
PECIAL
O
RDERS
805
be viewed as sanctioning application of the notice tolling provision to the
wrongful death saving provision[.]” Waltz, 469 Mich at 655.
Following Waltz, our Supreme Court issued three separate orders
stating that Waltz is to be given full retroactive application. Wyatt v
Oakwood Hosp & Med Ctrs, 472 Mich 929 (2005), reconsideration den
474 Mich 913 (2005); Evans v Hallal, 472 Mich 929 (2005); Forsyth v
Hopper, 472 Mich 929 (2005). Thereafter, in Mullins v St Joseph Mercy
Hosp, 271 Mich App 503, 509; 722 NW2d 666 (2006) (Mullins I), rev’d 480
Mich 948 (2007), a special panel of this Court followed our Supreme
Court’s orders in Wyatt, Evans, and Forsyth, and concluded that Waltz
applies with full retroactive effect.
As we previously recognized in our statement of the facts, our
Supreme Court reversed this Court’s decision in Mullins I and provided
a window within which Waltz does not apply. Our Supreme Court’s order
in Mullins II, 480 Mich 948, states, in pertinent part:
We conclude that this Court’s decision in Waltz v Wyse, 469
Mich 642 [677 NW2d 813] (2004), does not apply to any causes of
action filed after Omelenchuk v City of Warren, 461 Mich 567 [609
NW2d 177] (2000), was decided in which the saving period expired,
i.e., two years had elapsed since the personal representative was
appointed, sometime between the date that Omelenchuk was
decided and within 182 days after Waltz was decided. All other
causes of action are controlled by Waltz.
The question presented in this appeal is whether the trial court abused
its discretion by declining to set aside its previous dismissal of plaintiff’s
claims because plaintiff filed his action within the window identified in
Mullins II, regarding which Waltz is inapplicable. This Court recently
addressed this issue in Kidder v Ptacin, 284 Mich App 166, 170-171; 771
NW2d 806 (2009).
In Kidder, the trial court initially denied summary disposition for the
defendants on statute of limitations grounds. Id. at 168. On appeal, this
Court reversed on the basis that Waltz applied retroactively and that
judicial tolling was not available to save the plaintiff’s cause of action.
5
Id. at 168-169. This Court therefore remanded the case for entry of an
order granting summary disposition for the defendants, and the trial
court complied with this Court’s directive on remand. Id. at 169. There-
after, our Supreme Court decided Mullins II, on which the plaintiff relied
in moving to reinstate her case pursuant to MCR 2.612(C)(1)(e) and (f).
The trial court granted the motion. Id.
On appeal, this Court reversed the trial court’s reinstatement of the
case. Id. at 170-171. This Court reasoned that MCR 2.612(C)(1)(e) was
inapplicable “because this Court’s decision ordering the grant of sum-
mary disposition in favor of defendants has not been reversed or
5
See Kidder v Ptacin, unpublished opinion per curiam of the Court of
Appeals, issued January 23, 2007 (Docket No. 257703), slip op at 2-3.
806 288 M
ICH
A
PP
otherwise vacated; its holding has been overruled by subsequent case-
law.” Id. at 170 (emphasis in original). This Court explained:
Reversing or vacating a decision changes the result in the
specific case before an appellate court. On the other hand, a
decision to overrule a particular rule of law affects not only the
specific case before the appellate court, but also future litigation. A
decision to overrule is an appellate court’s declaration that a rule
of law no longer has precedential value. See Sumner v Gen Motors
Corp (On Remand), 245 Mich App 653, 665; 633 NW2d 1 (2001).
However, an appellate court’s pronouncement that a rule of law no
longer applies does not change the result of an effective judgment.
Id. In the instant case, this Court’s decision was in effect, as the
time for filing an application with our Supreme Court had lapsed.
MCR 7.215(F)(1)(a). Accordingly, the fact that this Court’s deci-
sion in Mullins [I] was overruled, did not implicate this Court’s
earlier decision in the instant case. [Id. at 170-171.]
This Court also determined that MCR 2.612(C)(1)(f) was inapplicable
because the plaintiff failed to seek leave to appeal this Court’s decision
directing the trial court to grant summary disposition for the defendants.
Kidder, 284 Mich App at 171. Further, this Court opined that “MCR
2.612 envisions a court relieving a party from its own judgment, not the
judgment of a higher authority.” Id. This Court stated that nothing in the
court rule allowed the trial court to relieve the plaintiff from this Court’s
judgment. Thus, this Court reversed the trial court’s order reinstating
the plaintiff’s cause of action.
Recently, in Farley II, this Court determined the scope of Kidder,in
the context of three separate cases that were consolidated in this Court,
Farley v Carp (Docket Nos. 283405, 284681, and 283418), Wren v
Southfield Rehabilitation Co (Docket Nos. 283726 and 283727), and Ellis
v Henry Ford Health Sys (Docket No. 284319). Kidder involved the
application of Mullins II to a case that this Court previously determined
to be time-barred under Waltz. This Court determined that Kidder
directly controlled the outcome in Wren because the procedural facts of
both cases were nearly identical, including that neither plaintiff sought
leave to appeal this Court’s earlier adverse decision. Farley II, 287 Mich
App at 6.
With respect to Ellis, this Court recognized that the procedural
posture was different than Kidder and Wren because the plaintiffs in
Ellis never sought to appeal the trial court’s order dismissing their claims
in light of Waltz. Id. at 6-7. This Court recognized that, technically, the
law of the case doctrine did not apply because there did not exist a
decision of a higher court that was binding on the trial court. Id.at
7. This Court nonetheless determined that the plaintiffs in Ellis should
not be permitted to prevail when the plaintiffs in Wren and Kidder did
not prevail. This Court stated that
[i]f relief from judgment should not be granted under MCR
2.612(C)(1)(f) where a party sleeps on their appellate rights by
failing to seek leave to appeal in the Supreme Court from an
S
PECIAL
O
RDERS
807
adverse ruling in this Court, then certainly relief from judgment is
not appropriate where the party never even pursues an appeal
from the trial court’s ruling to this Court. [Id. at 8.]
Thus, this Court held that “relief from judgment under MCR
2.612(C)(1)(f) is inappropriate where a party has not sought appellate
review of a trial court’s final order and the basis for relief from judgment
is a subsequent appellate decision in a different case.” Id.
Turning to Farley, this Court recognized that the procedural posture
was different from Kidder and Wren in two primary respects. Id. First,
the plaintiff in Farley did not sit on her appellate rights, but rather
sought leave to appeal this Court’s adverse decision to our Supreme
Court, which denied leave to appeal. Second, the trial court in Farley did
not enter an order granting summary disposition in the defendants’ favor
as this Court had directed. Id. at 8-9. Accordingly, the trial court never
granted the plaintiff relief from judgment following Mullins II because
there existed no trial court judgment from which to grant relief. Id.at
9. Nevertheless, this Court concluded that neither of these factors
warranted a different result. This Court stated:
The fact that the Supreme Court denied leave to appeal means
that our earlier decision is now the final adjudication in this case and
may be enforced according to its terms. Furthermore, we cannot
endorse a process by which relief can be obtained because the lower
court chose to simply ignore the clear directive of the appellate court,
allowing the case to languish until there is a change in law to justify
the result that the lower court would like to apply.
Simply put, the trial court had no alternative in this case other
than to comply with the direction of this Court in our previous
opinion. And once the trial court so complies, as discussed above,
it is precluded from granting relief from judgment under the law of
the case doctrine. [Id. at 9 (citations omitted).]
Thus, this Court vacated the trial court’s orders reinstating the plain-
tiffs’ claims in Wren, Ellis, and Farley. Id.
Judge B
ORRELLO
dissented from the majority’s opinion in Farley II.
Judge B
ORRELLO
stated that although he believed that this Court was
bound by MCR 7.215(J)(1) to follow Kidder in Wren and Ellis, he would
declare a conflict under MCR 7.215(J)(2) because he believed that Kidder
was wrongly decided. Farley II, 287 Mich App at 10 (B
ORRELLO
,J.,
dissenting). Judge B
ORRELLO
opined that Farley was factually distinguish-
able from Kidder because the plaintiff in Farley did not sleep on her
appellate rights, but rather sought to appeal this Court’s decision to our
Supreme Court, which denied leave. Id. at 10-11. Thus, Judge B
ORRELLO
stated that Kidder’s reasoning for declining to apply MCR 2.612(C)(1)(f)
was inapplicable and that the interests of justice did not militate against
allowing the plaintiff to proceed with her cause of action. Id. at 11. Judge
B
ORRELLO
recognized that the trial court in Farley treated the plaintiff’s
motion as a motion to reinstate the case and concluded that the court did
808 288 M
ICH
A
PP
not abuse its discretion in granting the motion. Id at 12. Judge B
ORRELLO
’s
analysis in Farley II, states as follows in pertinent part:
[T]he majority’s reliance on Kidder in Farley is misplaced
because the facts in Farley are distinguishable from the facts in
Kidder. MCR 2.612(C)(1)(f) authorizes relief from judgment for
“[a]ny other reason justifying relief from the operation of the
judgment.” In Kidder, this Court ruled that MCR 2.612(C)(1)(f)
was inapplicable because the plaintiff in that case failed to
appeal the judgment of this Court. Kidder, [284 Mich App] at
169, 171. In declining to apply MCR 2.612(C)(1)(f), this Court
stated:
“Just as ‘equity aids the vigilant, not those who sleep on
their rights,’ Falk v State Bar of Michigan, 411 Mich 63, 113 n
27; 305 NW2d 201 (1981) (R
YAN
, J., joined by M
OODY
and
F
ITZGERALD
, JJ.) (quotation marks and citations omitted), so does
the appellate process. See Lothian v Detroit, 414 Mich 160, 175;
324 NW2d 9 (1982) (denying relief to an appellant who, ‘wholly
apprised of the facts which constituted his cause of action, chose
to sleep on his rights until a subsequent appellate court decision
roused him to action’).... Theinterests of justice truly mili-
tate against allowing a defeated party’s action to spring back to
life because others have availed themselves of the appellate
process.” [Kidder, 284 Mich App at 171.]
As the majority notes, plaintiff in Farley did not sleep or sit
on her appellate rights like the plaintiff in Kidder. To the
contrary, plaintiff in Farley moved for reconsideration in this
Court and appealed this Court’s decision to the Supreme Court,
which denied leave to appeal. Because plaintiff availed herself of
the appellate process in Farley, Kidder’s reasoning for declining
to apply MCR 2.612(C)(1)(f) is inapplicable here, and the
interests of justice do not militate against allowing plaintiff to
pursue her case. Rather, the interests of justice dictate a
contrary result from that reached by my colleagues in the
majority. Based on my review of the proceedings in the trial
court, any reliance on Kidder to reverse the trial court’s
reinstatement of plaintiff’s case in Farley is improper and
unjust.
***
Unlike the majority, I would conclude that the trial court’s
reinstatement of plaintiff’s case in Farley was not an abuse of
discretion. Given the trial court’s authority to relieve a party
from a judgment under MCR 2.612(C)(1)(f) and the fact that
plaintiff in Farley availed herself of the appellate process, I
would conclude that Kidder is distinguishable and hold that the
trial court’s reinstatement of plaintiff’s case in Farley did not
S
PECIAL
O
RDERS
809
fall outside the principled range of outcomes. [Farley II, 287
Mich App at 10-12 (B
ORRELLO
, J., dissenting) (citations omit-
ted).]
IV
The facts of the instant case are on all fours with Farley. In both cases,
the plaintiffs sought leave to appeal this Court’s adverse decisions and
our Supreme Court denied leave to appeal. King v Briggs, 474 Mich 981
(2005); Farley v Advanced Cardiovascular Health Specialists, PC, 474
Mich 1020 (2006). This Court stated in Farley II that the denial of leave
meant that this Court’s previous decision, directing that summary
disposition be granted for the defendants, became the final adjudication,
enforceable according to its terms. Farley II, 287 Mich App at 9; see also
MCR 7.302(H)(3). The denial of leave in the instant case had the same
effect. The Farley II Court also stated that once the trial court complied
with its directive to grant summary disposition for the defendants in
accordance with this Court’s previous opinion, it would be precluded
from granting relief from judgment under the law of the case doctrine.
Farley II, 287 Mich App at 9. Similarly, under the Farley II rationale, the
trial court in the instant case would be precluded from granting relief
from its January 26, 2007, order granting summary disposition for
defendants and dismissing plaintiff’s claims. This case is not distinguish-
able in any meaningful way from the facts of Farley.
But, like the plaintiff in Farley, the plaintiff here cannot be said to
have sat on his appellate rights. In fact, just the opposite occurred,
plaintiff availed himself of the appellate process just as the plaintiff in
Farley did. This being the case, like Judge B
ORRELLO
in his well-reasoned
dissent in Farley II, we would conclude that Kidder is distinguishable and
MCR 2.612(C)(1)(f) applies authorizing relief from judgment without
time limitation. Thus, we would hold that the trial court abused its
discretion when it declined to set aside its previous order dismissing
plaintiff’s claims for the reasons set forth in Judge B
ORRELLO
’s dissent in
Farley II.
Our Supreme Court’s order in Mullins II established without equivo-
cation a class of medical malpractice claimants entitled to relief from the
retroactive application of Waltz. Our Supreme Court’s order in Mullins
II, 480 Mich 948, states, in pertinent part:
We conclude that this Court’s decision in Waltz v Wyse, 469
Mich 642 [677 NW2d 813] (2004), does not apply to any causes of
action filed after Omelenchuk v City of Warren, 461 Mich 567 [609
NW2d 177] (2000), was decided in which the saving period expired,
i.e., two years had elapsed since the personal representative was
appointed, sometime between the date that Omelenchuk was
decided and within 182 days after Waltz was decided. All other
causes of action are controlled by Waltz. [Emphasis added.]
The Supreme Court in its use of the words, “any causes of action” did not
limit the palliative nature of its order to only those cases still pending.
810 288 M
ICH
A
PP
And it is incongruous to impose the use of a finality rule or law of the case
rule to prohibit the utilization of the discretion provided in MCR
2.612(C)(1)(f), to avoid the mandate of the Mullins II order. While it is
easy to understand the trial court’s frustration with the appellate courts,
it was still incumbent on the trial court to meaningfully exercise its
discretion, especially when the Supreme Court’s order provides its relief
and remedy to “any causes of action” that come within the defined
period. The Mullins II order requires the application of fairness, nothing
else. We fail to see the fairness in allowing only pending actions to receive
the benefit of the Supreme Court’s order while denying that benefit to
causes of action similarly situated but for the timing of the denial of the
application for leave to appeal to the Supreme Court by the same Court
that now provides the palliative relief of its order. Had the Supreme
Court so intended, it would have said so.
Further, fairness is not the only basis on which to grant plaintiff relief.
Both Kidder, 284 Mich App at 170, and Farley II, 287 Mich App at 9, rely
on the law of the case doctrine. In Kidder, this Court quoted Webb v
Smith (After Second Remand), 224 Mich App 203, 209; 568 NW2d 378
(1997), for the proposition that “ ‘[u]nder the law of the case doctrine, an
appellate court ruling on a particular issue binds...alllower tribunals
with regard to that issue. The law of the case mandates that a court may
not decide a legal question differently where the facts remain materially
the same.’ ” Kidder, 284 Mich App at 170. But, in Webb, this Court
continued explicitly setting forth two exceptions to the law of the case
doctrine. Webb, 224 Mich App at 210. Specifically, the Webb Court stated
that “[t]wo exceptions to the doctrine exist: (1) when the decision would
preclude the independent review of constitutional facts and (2) when
there has been an intervening change of law.” Id. (emphasis added). In the
instant matter, as in Farley, plaintiff did not sleep on his rights. Rather,
plaintiff pursued his rights continuously at every turn. Mullins II clearly
represented a change in the law and at the same time provided relief to
an identified class of claimants including plaintiff that were deserving of
and entitled to relief from the retroactive application of Waltz. Mullins II,
480 Mich 948. Because the law of the case doctrine does not impose its
bar when there has been an intervening change of law, we would conclude
that plaintiff is entitled to the exercise of discretion pursuant to MCR
2.612(C)(1)(e) and (f) and the trial court’s failure to provide relief from
judgment was an abuse of discretion.
In any event, this Court’s decision in Farley II is published and
therefore constitutes binding precedent on this Court. MCR 7.215(C)(2);
MCR 7.215(J)(1). Because the majority’s analysis in Farley II controls the
outcome of this case, we must decline to set aside the trial court’s order
dismissing plaintiff’s claims, but do so only because we are required to by
MCR 7.215(J)(1). MCR 7.215(J)(1) requires this Court to “follow the rule
of law established by a prior published decision of the Court of Appeals
issued on or after November 1, 1990, that has not been reversed or
modified by the Supreme Court, or by a special panel of the Court of
Appeals....”Therefore, in accordance with MCR 7.215(J)(2), which
provides that the conflict resolution procedure is triggered when a panel
S
PECIAL
O
RDERS
811
of this Court “follows a prior published decision only because it is
required to do so by subrule (1)” we indicate our disagreement with the
majority’s holding in Farley II with regard to the facts of Farley only.
Specifically, we believe that Farley II’s application of Kidder to the facts
of Farley is erroneous as not in the interests of justice and commands the
wrong decision on the nearly identical facts in the case at bar. We
therefore call for the convening of a special panel of this Court pursuant
to MCR 7.215(J)(3).
Affirmed.
812 288 M
ICH
A
PP
INDEX-DIGEST
INDEX–DIGEST
ACQUITTALS—See
C
ONSTITUTIONAL
L
AW
1
ACTIONS—See
D
IVORCE
1
ACTUAL INNOCENCE—See
C
ONSTITUTIONAL
L
AW
2
AFFIDAVITS OF MERIT—See
N
EGLIGENCE
1
AFFILIATED GROUPS—See
T
AXATION
1, 2, 3
AFFILIATES AND SUBSIDIARIES OF NATIONAL
BANKS—See
B
ANKS AND
B
ANKING
1, 2, 3
ALIMONY IN GROSS—See
D
IVORCE
2
AMENDMENT OF PLEADINGS—See
P
LEADING
1
AMENDMENTS OF RESTRICTIVE COVENANTS—See
D
EEDS
1
AMERICAN RULE—See
A
TTORNEY AND
C
LIENT
1
851
APPROPRIATION OF FUNDS—See
T
RUSTS
2
ARBITRATION
S
TATUTORY
A
RBITRATION
1. The court rule allowing judicial modification of statu-
tory arbitration awards on the basis of an evident
miscalculation of figures or an evident mistake in a
description does not extend to allegations that the
arbitrator misconstrued the underlying contract (MCR
3.602[K][2][a]). Nordlund & Associates, Inc v Village of
Hesperia, 288 Mich App 222.
ARMED ROBBERY—See
C
RIMINAL
L
AW
1
ARRESTS—See
S
EARCHES AND
S
EIZURES
1
ARSON—See
C
RIMINAL
L
AW
2
ASSAULT WITH INTENT TO COMMIT MURDER—See
C
RIMINAL
L
AW
3
ASSOCIATIONS—See
T
AXATION
2
ATTEMPTS TO COMMIT LARCENY—See
C
RIMINAL
L
AW
1
ATTORNEY AND CLIENT
A
TTORNEY
F
EES
1. The common-fund exception is a common-law exception
to the American rule, which provides that, generally,
each litigant must pay its own attorney’s fees, even if
the party prevails in the lawsuit; the common-fund
exception only applies when a prevailing party creates
or protects a common fund that benefits the prevailing
party and others; the common-fund exception is pre-
mised on the equitable principle that it is unfair to allow
others to benefit at the expense of the prevailing party
852 288 M
ICH
A
PP
without contribution to the costs incurred in securing
the common fund. Miller v Citizens Ins Co, 288 Mich
App 424.
C
HARGING
L
IENS FOR
A
TTORNEY
F
EES
2. An attorney’s charging lien is an equitable right to have
the fees and costs due for services secured out of the
judgment or recovery in a particular suit; the charging
lien creates a lien on a judgment, settlement, or other
money recovered as a result of the attorney’s services.
Miller v Citizens Ins Co, 288 Mich App 424.
ATTORNEY FEES—See
A
TTORNEY AND
C
LIENT
1
D
IVORCE
3
AUTOMOBILE SEARCHES—See
S
EARCHES AND
S
EIZURES
1
AUTOMOBILES—See
I
NSURANCE
1
BALLOTS—See
E
LECTIONS
1
BANKS AND BANKING
F
EDERAL
P
REEMPTION
1. A state law action against a national bank and its
affiliates may be preempted by federal law even though
the allegations against the national bank and its affili-
ates are based on the actions of a third party working for
the national bank; the focus of the preemption inquiry is
on the activity being regulated rather than the actor
that is being regulated. Patterson v CitiFinancial Mort-
gage Corp, 288 Mich App 526.
2. Federal law permits a national bank to make real estate
loans without regard to state laws governing licensing
and registration or the manner in which its mortgages
are originated or processed; an action based on the
failure of independent agents working for a national
bank to observe Michigan licensing and registration
statutes in the initiation and processing of mortgages is
expressly preempted (12 CFR 34.4[a][1], [10]). Patterson
v CitiFinancial Mortgage Corp, 288 Mich App 526.
I
NDEX
-D
IGEST
853
3. A common-law action for fraud, misrepresentation, or
unjust enrichment based on the actions of independent
agents working for a national bank is preempted by federal
law (12 CFR 34.4[b][1], [2], [9]). Patterson v CitiFinancial
Mortgage Corp, 288 Mich App 526.
BASIC PROPERTY INSURANCE ASSOCIATION—See
I
NSURANCE
3
BOARD-CERTIFICATION OF PHYSICIANS SIGNING
AFFIDAVITS OF MERIT—See
N
EGLIGENCE
1
BUILDERS’ TRUST FUND ACT—See
T
RUSTS
1,2
BURNING A DWELLING HOUSE—See
C
RIMINAL
L
AW
2
BURNING OTHER REAL PROPERTY—See
C
RIMINAL
L
AW
2
BUSINESS ACTIVITY—See
T
AXATION
3
CALCULATION OF INTEREST ON MONEY
JUDGMENTS—See
I
NTEREST
1
CALCULATION OF RATES—See
I
NSURANCE
3
CALCULATION OF ULTIMATE
LOSS–DEDUCTIBLES—See
I
NSURANCE
5
CARRYING DANGEROUS WEAPONS WITH
UNLAWFUL INTENT—See
C
RIMINAL
L
AW
4
CATASTROPHIC CLAIMS—See
I
NSURANCE
5
854 288 M
ICH
A
PP
CAUSING OBJECTS TO HIT INSURED
VEHICLES—See
I
NSURANCE
1
CERTAINTY OF INJURIES OCCURRING—See
W
ORKERS’
C
OMPENSATION
1
CHARGING LIENS FOR ATTORNEY FEES—See
A
TTORNEY AND
C
LIENT
2
CHILD SUPPORT—See
C
RIMINAL
L
AW
5, 6
CIRCUIT COURT JURISDICTION OVER
MISDEMEANORS—See
C
OURTS
1
CIRCUMSTANTIAL EVIDENCE—See
C
RIMINAL
L
AW
3
COMMENTS BY PROSECUTOR—See
C
RIMINAL
L
AW
13, 14
COMMON-FUND EXCEPTION—See
A
TTORNEY AND
C
LIENT
1
COMPENSATION—See
T
AXATION
5
CONSTITUTIONAL LAW
D
OUBLE
J
EOPARDY
1. An acquittal occurs for double jeopardy purposes only
when the trial court’s action, whatever its form, is a
resolution in the defendant’s favor, correct or not, of a
factual element necessary for a criminal conviction.
People v Evans, 288 Mich App 410.
H
ABEAS
C
ORPUS
A
CTIONS
2. A defendant may have an otherwise barred constitu-
tional claim arising from his or her trial heard on the
merits in a federal habeas corpus action if the defendant
makes a gateway showing of actual innocence by show-
ing that it is more likely than not that no reasonable
juror would have found the defendant guilty beyond a
reasonable doubt. People v Swain, 288 Mich App 609.
I
NDEX
-D
IGEST
855
CONTINUING PATTERN OF CRIMINAL
BEHAVIOR—See
S
ENTENCES
1
CONTRACTING BEFORE CORPORATE
EXISTENCE—See
C
ORPORATIONS
1
CONTRACTS—See
C
ORPORATIONS
1
I
NSURANCE
2
CORPORATIONS
C
ONTRACTS
1. A person who signs a contract on behalf of a company
that is not yet in existence generally becomes personally
liable on the contract; the company can become liable if,
after the company comes into existence, it either ratifies
or adopts the contract, a court determines that a de
facto corporation existed at the time of the contract, or
a court orders that the corporation by estoppel doctrine
prevented the opposing party from arguing against the
existence of a corporation. Duray Development, LLC v
Perrin, 288 Mich App 143.
D
E
F
ACTO
C
ORPORATIONS
2. The de facto corporation and the corporation by estoppel
doctrines are separate and distinct doctrines; the former
doctrine allows a defectively formed corporation to attain
the legal status of a corporation while the latter doctrine
prevents a party who dealt with an association as though it
were a corporation from denying its existence. Duray
Development, LLC v Perrin, 288 Mich App 143.
3. A de facto corporation instantly comes into being when its
incorporators have proceeded in good faith under a valid
statute for an authorized purpose and have executed and
acknowledged articles of association pursuant to that
purpose; a de facto corporation is an actual corporation
that, with respect to all the world except the state, enjoys
the status and powers of a de jure corporation. Duray
Development, LLC v Perrin, 288 Mich App 143.
L
IABILITY OF
O
FFICERS
4. An officer of a corporation may be held individually
856 288 M
ICH
A
PP
liable when the officer personally causes the corporation
to act unlawfully, regardless of whether the officer was
acting on his or her own behalf or on behalf of the
corporation. BC Tile & Marble Co, Inc v Multi Bldg Co,
Inc, 288 Mich App 576.
L
IMITED
L
IABILITY
C
OMPANIES
5. Limited liability applies once a limited liability company
comes into existence, and a member or manager is not
liable thereafter for the acts, debts, or obligations of the
company (MCL 450.4501[3]). Duray Development, LLC
v Perrin, 288 Mich App 143.
6. The doctrine of de facto corporation and the doctrine of
corporation by estoppel apply to limited liability compa-
nies (MCL 450.4101 et seq.). Duray Development, LLC v
Perrin, 288 Mich App 143.
CORPORATIONS BY ESTOPPEL—See
C
ORPORATIONS
2, 6
COSTS—See
D
IVORCE
3
COUNTY PRIMARY ROADS—See
S
TATUTES
2
COURTS
C
RIMINAL
L
AW
1. People v Reid, 288 Mich App 661.
COVENANTS—See
D
EEDS
1
CRIMINAL LAW
See, also,
C
OURTS
1
K
IDNAPPING
1
L
ARCENY
1
M
OTIONS AND
O
RDERS
1
A
RMED
R
OBBERY
1. The statutes defining armed robbery and robbery, after
their amendment by 2004 PA 128, encompass attempts;
a completed larceny is no longer required for a convic-
tion of armed robbery or robbery; the statutory lan-
guage specifically considers and incorporates acts taken
I
NDEX
-D
IGEST
857
in an attempt to commit a larceny, regardless of whether
the act is completed; acts taken in the process of
committing a larceny necessarily include steps or behav-
iors occurring at any point in the continuum, despite
whether they are successfully completed (MCL 750.529,
750.530). People v Williams, 288 Mich App 67.
A
RSON
2. The crime of burning other real property, i.e., property
that is not a dwelling house, is a lesser included offense
of the crime of burning a dwelling house; the necessary
elements to prove either offense are the same, except
that to prove the greater offense it must be shown that
the building is a dwelling house, while to prove the
lesser offense it is not necessary to prove that the
building is not a dwelling house (MCL 750.72, 750.73).
People v Evans, 288 Mich App 410.
A
SSAULT WITH
I
NTENT TO
C
OMMIT
M
URDER
3. The elements of assault with intent to commit murder
are (1) an assault (2) with an actual intent to kill, (3)
which, if successful, would make the killing murder;
the defendant’s intent can be inferred from any facts
in evidence, including the nature, extent, and location
of any wounds inflicted on the victim (MCL 750.83).
People v Ericksen, 288 Mich App 192.
C
ARRYING
D
ANGEROUS
W
EAPONS
W
ITH
U
NLAWFUL
I
NTENT
4. MCL 750.226 prohibits carrying a dangerous weapon
with unlawful intent; the carrier’s intent is not a
factor in determining whether an instrument carried
is covered by the statute; the phrase “any other
dangerous or deadly weapon or instrument” following
the list in the statute of weapons that are dangerous
per se includes only other weapons that are dangerous
per se within the statute’s prohibition; the statute
provides that knives with blades of more than three
inches in length are dangerous weapons per se, while
knives with shorter blades are not weapons that are
dangerous per se; a blade length of more than three
inches is an element of the crime in a prosecution
involving a knife under MCL 750.226. People v Parker,
288 Mich App 500.
C
HILD
S
UPPORT
5. A child support order imposed after the parent has been
judicially determined to be able to pay support subjects
858 288 M
ICH
A
PP
the parent to strict liability for failure to pay the
required support at the required time; the parent may
not defend against the criminal charge with evidence of
an inability to pay given that the parent had the
opportunity to contest the support order at the child
support proceedings (MCL 750.165). People v Likine,
288 Mich App 648.
6. The elements of felony nonsupport are (1) the defendant
was required to support a child or current or former
spouse; (2) the defendant appeared in or received notice
by personal service of the action in which the support
was ordered, and (3) the defendant failed to pay the
support at the time ordered or in the amount ordered;
the crime of felony nonsupport is not a continuing
crime, but is complete at the time that the individual
fails to pay the ordered amount at the ordered time; the
actus reus is the failure to pay the support as ordered
(MCL 750.165). People v Likine, 288 Mich App 648.
C
RIMINAL
S
EXUAL
C
ONDUCT
7. People v Phelps, 288 Mich App 123.
E
NTRAPMENT
8. Entrapment occurs if the police engage in impermissible
conduct that would induce an otherwise law-abiding
person to commit a crime in similar circumstances or
the police engage in conduct so reprehensible that the
court cannot tolerate it; reprehensible conduct alone,
without police instigation, can constitute entrapment.
People v Fyda, 288 Mich App 446.
9. A court considering a defendant’s claim of entrapment
should consider the following factors in determining
whether governmental activity impermissibly induced
criminal conduct: (1) whether there existed appeals to
the defendant’s sympathy as a friend, (2) whether the
defendant had been known to commit the crime with
which he or she was charged, (3) whether there were
any long time lapses between the investigation and the
arrest, (4) whether there existed any inducements that
would make the commission of a crime unusually attrac-
tive to a hypothetical law-abiding citizen, (5) whether
there were offers of excessive consideration or other
enticement, (6) whether there was a guarantee that the
acts alleged as crimes were not illegal, (7) whether, and
to what extent, any governmental pressure existed, (8)
whether there were sexual favors, (9) whether there
I
NDEX
-D
IGEST
859
were any threats of arrest, (10) whether there were any
governmental procedures that tended to escalate the
criminal culpability of the defendant, (11) whether there
was police control over any informant, and (12) whether
the investigation was targeted. People v Fyda, 288 Mich
App 446.
E
VIDENCE
10. People v Mann, 288 Mich App 114.
F
IRST
-D
EGREE
H
OME
I
NVASION
11. The statute prohibiting first-degree home invasion
provides two alternate methods of establishing each of
the three elements of the offense; the prohibition
against double jeopardy forbids two separate convic-
tions of first-degree home invasion following a single
home invasion where each conviction is based on a
different alternate method of establishing the same
element of first-degree home invasion (US Const, Am
V; Const 1963, art 1, § 15; MCL 750.110a[2]). People v
Baker, 288 Mich App 378.
P
ROBATION
12. A sentencing court may revoke a defendant’s probation
if, during the probation period, the court determines
that the probationer is likely again to engage in an
offensive or criminal course of conduct or that the
public good requires revocation of probation; the “pro-
bation period” constitutes the particular term of pro-
bation imposed by a sentencing court, not the statutory
maximum term of probation the court has authority to
impose; probation revocation must occur, or must at
least have been commenced, during the probation
period (MCL 771.4). People v Glass, 288 Mich App 399.
P
ROSECUTORIAL
M
ISCONDUCT
13. A prosecutor must be afforded great latitude regarding
his or her arguments and conduct at trial, but a
prosecutor may not suggest that defense counsel is
intentionally attempting to mislead the jury because
such an argument undermines the defendant’s pre-
sumption of innocence by suggesting that defense
counsel does not believe the defendant, thereby imper-
missibly shifting the focus to the defense counsel’s
personality. People v Fyda, 288 Mich App 446.
14. A prosecutor may argue to the jury that the inculpa-
tory evidence is undisputed or that the evidence is
860 288 M
ICH
A
PP
uncontradicted, even if the defendant is the only per-
son who could have contradicted the evidence; a pros-
ecutor may not imply during closing argument that the
defendant must prove something or must present a
reasonable explanation for damaging evidence and
may not comment on the defendant’s failure to present
evidence because such arguments tend to shift the
burden of proof. People v Fyda, 288 Mich App 446.
R
ETROACTIVITY OF
D
ECISIONS
15. A new rule for the conduct of criminal prosecutions
must be applied retroactively to all cases pending on
direct review or not yet final, even if the new rule
constitutes a clear break from prior law. People v
Mungo (On Rem), 288 Mich App 167.
S
ECOND
-D
EGREE
C
RIMINAL
S
EXUAL
C
ONDUCT
16. A defendant who is convicted of second-degree criminal
sexual conduct for conduct committed while the defen-
dant was 17 years of age or older against an individual
less than 13 years old and who is sentenced to proba-
tion or a jail term, or both, may not be sentenced to
lifetime electronic monitoring; only persons who are
released on parole or from prison, or both, may be
sentenced to lifetime electronic monitoring (MCL
750.520c, 750.520n, 791.285). People v Kern, 288 Mich
App 513.
S
EX
O
FFENDERS
R
EGISTRATION
A
CT
17. A circuit court may reserve its ability to require a
defendant to register as a sex offender under the Sex
Offenders Registration Act; as long as the court has
jurisdiction over the defendant’s case, it may order
registration (MCL 28.721 et seq.). People v Lee, 288
Mich App 739.
S
OLICITATION TO
C
OMMIT
M
URDER
18. Solicitation to commit murder is a specific intent crime
that requires proof that the defendant intended that a
murder would in fact be committed; the crime of solici-
tation to commit murder does not include solicitation to
inflict great bodily harm or to act with a wanton and
willful disregard of the likelihood that one’s behavior is
likely to cause death or great bodily harm (MCL
750.157b[2]). People v Fyda, 288 Mich App 446.
T
ORTURE
19. A victim’s special susceptibility to the type of injury a
I
NDEX
-D
IGEST
861
defendant caused does not constitute an independent
cause that exonerates the defendant from criminal
liability for torture (MCL 750.85). People v Schaw, 288
Mich App 231.
CRIMINAL SEXUAL CONDUCT—See
C
RIMINAL
L
AW
7, 16
DANGEROUS CONDITIONS—See
N
EGLIGENCE
2, 3
W
ORKERS’
C
OMPENSATION
1
DANGEROUS OR DEADLY WEAPONS OR
INSTRUMENTS—See
C
RIMINAL
L
AW
4
DE FACTO CORPORATIONS—See
C
ORPORATIONS
2, 3, 6
DEEDS
L
AND
-U
SE
R
ESTRICTIONS
1. Brown v Martin, 288 Mich App 727.
DISCOVERY—See
D
IVORCE
1
DISMISSAL OF FELONY CHARGES—See
C
OURTS
1
DISTRICT COURTS—See
E
LECTIONS
1
DIVORCE
A
CTIONS
1. Woodington v Shokoohi, 288 Mich App 352.
A
LIMONY
I
N
G
ROSS
2. Woodington v Shokoohi, 288 Mich App 352.
C
OSTS
3. Woodington v Shokoohi, 288 Mich App 352.
M
ARITAL
A
SSETS
4. Woodington v Shokoohi, 288 Mich App 352.
P
RENUPTIAL
A
GREEMENTS
5. Woodington v Shokoohi, 288 Mich App 352.
862 288 M
ICH
A
PP
DOCTRINE OF SCRIVENER’S ERROR—See
S
TATUTES
1, 2
DOUBLE JEOPARDY—See
C
ONSTITUTIONAL
L
AW
1
C
RIMINAL
L
AW
11
DRAINS
I
MPROVEMENTS
1. The Drain Code provides that when a landowner whose
property is in a drain district wants the drain to be
improved or repaired, the landowner must first institute
the filing of a petition with the drain commissioner; only
after a petition is filed and a determination is made that
the requested improvement or repair is needed may the
drain commissioner undertake the project (MCL 280.1
et seq.). Arath II, Inc v Heukels County Drain Dist, 288
Mich App 324.
EASEMENTS
P
RESCRIPTIVE
E
ASEMENTS
1. Privity of estate, for purposes of tacking on the
possessory periods of predecessors-in-interest and
successors-in-interest to determine if the period of
limitations for a prescriptive easement has been sat-
isfied, may be shown in one of two ways: by including
a description of the disputed acreage in the deed or by
an actual transfer or conveyance of possession of the
disputed acreage by parol statements made at the
time of the conveyance; the parol transfer require-
ment can also be satisfied in the limited circum-
stances where the successors-in-interest are well ac-
quainted with the predecessors-in-interest and there
is clear and cogent evidence that the predecessors-in-
interest undoubtedly intended to transfer their rights
to the successors-in-interest, for example, by showing
that the successors-in-interest had visited and re-
mained on the property and had used it for many
years before acquiring title to the property and,
therefore, it would not be reasonably expected for the
predecessors to expressly articulate to the successors
a right that all parties already believed they pos-
sessed. Matthews v Natural Resources Dep’t, 288 Mich
App 23.
I
NDEX
-D
IGEST
863
2. A property owner with a prescriptive easement has a
duty to follow any applicable laws and regulations
affecting the land over which the easement extends.
Matthews v Natural Resources Dep’t, 288 Mich App 23.
EFFECTIVE DATE OF AMENDMENTS OF
RESTRICTIVE COVENANTS—See
D
EEDS
1
ELECTIONS
J
UDGES
1. An incumbent district court judge must be designated
as an incumbent when a candidate for nomination or
election to the same office; the only requirement for
the incumbency designation on the ballot is the in-
cumbent status of the judge; there is no time within
which an incumbent candidate must act in order to
qualify for the incumbency designation (Const 1963,
art 6, § 24; MCL 168.467c[2]). Janer v Barnes, 288
Mich App 735.
ELEMENTS OF ASSAULT WITH INTENT TO COMMIT
MURDER—See
C
RIMINAL
L
AW
3
ELEMENTS OF FELONY NONSUPPORT—See
C
RIMINAL
L
AW
6
ELEMENTS OF FIRST-DEGREE HOME INVASION—See
C
RIMINAL
L
AW
11
ENTRAPMENT—See
C
RIMINAL
L
AW
8, 9
EVIDENCE
See, also,
C
RIMINAL
L
AW
3, 7, 10
O
THER
A
CTS OF
D
OMESTIC
V
IOLENCE
1. Evidence of other acts of domestic violence that occurred
within 10 years of the charged offense is admissible for any
purpose for which it is relevant, including to show a
defendant’s character or propensity to commit the same
act, if it is not otherwise excluded under MRE 403 (MCL
768.27b). People v Railer, 288 Mich App 213.
864 288 M
ICH
A
PP
EXCEPTIONS—See
G
OVERNMENTAL
I
MMUNITY
1
EXECUTION OF JUDGMENTS—See
J
UDGMENTS
1
EXECUTORS AND ADMINISTRATORS
P
ERSONAL
R
EPRESENTATIVES
1. A personal representative’s powers relate back in time to
give his or her acts before appointment that were benefi-
cial to the estate the same effect as those occurring after
appointment (MCL 700.3701). Tice Estate v Tice, 288
Mich App 665.
EXPERT WITNESSES IN MEDICAL
MALPRACTICE—See
N
EGLIGENCE
1
EXPLOITATION OF VULNERABLE VICTIMS—See
S
ENTENCES
1
FAILURE TO TIMELY SUBMIT WITNESS LISTS—See
T
RIAL
1
FEDERAL PREEMPTION—See
B
ANKS AND
B
ANKING
1, 2, 3
FELONY JURISDICTION—See
C
OURTS
1
FIFTH AMENDMENT—See
C
ONSTITUTIONAL
L
AW
1
C
RIMINAL
L
AW
11
FIRST-DEGREE HOME INVASION—See
C
RIMINAL
L
AW
11
FORCE OR COERCION IN CRIMINAL SEXUAL
CONDUCT—See
C
RIMINAL
L
AW
7
FORCIBLE CONFINEMENT—See
K
IDNAPPING
1
I
NDEX
-D
IGEST
865
FRAUD—See
B
ANKS AND
B
ANKING
3
GATEWAY SHOWINGS—See
C
ONSTITUTIONAL
L
AW
2
GOVERNMENTAL IMMUNITY
S
OVEREIGN
I
MMUNITY
1. There is no trespass-nuisance exception to the doctrine
of sovereign immunity for claims against the state (MCL
691.1407[1]). Blue Harvest, Inc v Dep’t of Transporta-
tion, 288 Mich App 267.
HABEAS CORPUS ACTIONS—See
C
ONSTITUTIONAL
L
AW
2
HIGHWAYS
See, also,
S
TATUTES
2
I
NVERSE
-C
ONDEMNATION
A
CTIONS
1. The right to just compensation, in the context of an
inverse-condemnation suit for diminution in value
caused by the alleged harmful effects to property abut-
ting a public highway, exists only where the landowner
can allege a unique or special injury that is different in
kind, not simply in degree, from the harm suffered by all
persons similarly situated. Blue Harvest, Inc v Dep’t of
Transportation, 288 Mich App 267.
HOME INSURANCE—See
I
NSURANCE
3
HOME INVASION—See
C
RIMINAL
L
AW
11
HOMICIDE—See
C
RIMINAL
L
AW
18
IMPERMISSIBLY INDUCED CRIMINAL
CONDUCT—See
C
RIMINAL
L
AW
9
IMPROVEMENTS—See
D
RAINS
1
866 288 M
ICH
A
PP
INABILITY TO PAY CHILD SUPPORT—See
C
RIMINAL
L
AW
5
INCUMBENCY DESIGNATION—See
E
LECTIONS
1
INDEMNIFICATION BY MICHIGAN CATASTROPHIC
CLAIMS ASSOCIATION—See
I
NSURANCE
5
INFERENCES FROM CIRCUMSTANTIAL
EVIDENCE—See
C
RIMINAL
L
AW
3
INJURIES—See
W
ORKERS’
C
OMPENSATION
1
INSURANCE
A
UTOMOBILES
1. Dancey v Travelers Prop Cas Co, 288 Mich App 1.
C
ONTRACTS
2. An insured’s notice of a claim for personal injury
protection insurance benefits under the no-fault au-
tomobile insurance act is not a notice of a claim for
uninsured motorist benefits under the act. Ulrich v
Farm Bureau Ins, 288 Mich App 310.
I
NSURANCE
C
OMMISSIONER
3. The rates charged by the Michigan Basic Property
Insurance Association for home insurance generally
must be equal to the weighted average of the 10 volun-
tary market insurer groups with the largest premium
volume in Michigan; the weighted average must be
based on premiums charged rather than base rates
(MCL 500.2930a[1]). Basic Property Ins Ass’n v Office of
Financial & Ins Regulation, 288 Mich App 552.
N
O
-F
AULT
4. The no-fault act excludes from entitlement to personal
protection insurance benefits for accidental bodily in-
jury a person who at the time of the accident was using
a motor vehicle or motorcycle that he or she had taken
unlawfully; the exclusion does not apply to situations in
which the injured person was merely a passenger in a
I
NDEX
-D
IGEST
867
vehicle that had been stolen before the injured person’s
involvement; use of the vehicle alone is insufficient;
there must be evidence that the injured person engaged
or participated in the unlawful taking for the statutory
exclusion to apply (MCL 500.3113[a]). Henry Ford
Health System v Esurance Ins Co, 288 Mich App 593.
5. No-fault insurers may include amounts that a policy-
holder is required to pay as a deductible in calculating
their ultimate loss for purposes of indemnification by
the Michigan Catastrophic Claims Association (MCCA)
of personal protection insurance benefits paid in excess
of the statutory threshold; under the MCCA’s plan of
operation, its member insurers must turn over to the
MCCA all deductible amounts received by those insur-
ers, up to the amount they received as reimbursement
from the MCCA, and the MCCA may initiate an action
against a policyholder for payment of a deductible if the
insurer fails to do so and may seek reimbursement for
the costs of that action from the insurer (MCL
500.3104[2]). American Home Assurance Co v Michigan
Catastrophic Claims Ass’n, 288 Mich App 706.
INSURANCE COMMISSIONER—See
I
NSURANCE
3
INTENT TO DEFRAUD—See
T
RUSTS
2
INTENT TO KILL—See
C
RIMINAL
L
AW
3
INTENTIONAL-TORT EXCEPTION—See
W
ORKERS’
C
OMPENSATION
1
INTEREST
M
ONEY
J
UDGMENTS
1. The statutory provision governing awards of interest on
money judgments requires interest to be calculated at
six-month intervals from the date of filing the complaint at
a rate of interest equal to one percent plus the average
interest rate paid at auctions of five-year United States
treasury notes during the six months immediately preced-
ing July 1 and January 1; for example, interest for a
complaint filed in August 2008 would be calculated in
868 288 M
ICH
A
PP
February 2009 using the January 1, 2009, rate, and would
be calculated again in August 2009, using the July 1, 2009,
rate (MCL 600.6013[8]). Chelsea Investment Group LLC v
City of Chelsea, 288 Mich App 239.
INTERFERENCE WITH THE ADMINISTRATION OF
JUSTICE—See
S
ENTENCES
3
INVERSE-CONDEMNATION ACTIONS—See
H
IGHWAYS
1
ITEMS NOT ATTACHED TO A MOTOR VEHICLE—See
L
ARCENY
1
JUDGES—See
E
LECTIONS
1
JUDGMENTS
E
XECUTION OF
J
UDGMENTS
1. The period of limitations for an action founded on a
judgment or decree is 10 years from the rendition of the
judgment or decree, but any payment on the judgment
extends the limitations period, regardless of whether
the person makes the payment before or after the
limitations period expires (MCL 600.5809[3]). Arkin
Distributing Co v Jones, 288 Mich App 185.
JURISDICTION OF CIRCUIT COURTS—See
C
OURTS
1
JURISDICTION OVER DEFENDANTS—See
C
RIMINAL
L
AW
17
JUST COMPENSATION—See
H
IGHWAYS
1
KIDNAPPING
U
NLAWFUL
I
MPRISONMENT
1. People v Railer, 288 Mich App 213.
LAND-USE RESTRICTIONS—See
D
EEDS
1
I
NDEX
-D
IGEST
869
LARCENY
L
ARCENY
F
ROM A
V
EHICLE
1. A person who steals or unlawfully removes or takes a
wheel, tire, air bag, catalytic converter, radio, stereo,
clock, telephone, computer, or other electronic device in
or on a motor vehicle, house trailer, trailer, or semi-
trailer is guilty of a felony under MCL 750.356a(1); the
statute applies to enumerated items that are not at-
tached to but are merely included within the space of
the vehicle. People v Miller, 288 Mich App 207.
LARCENY FROM A VEHICLE—See
L
ARCENY
1
LIABILITY—See
C
ORPORATIONS
1
LIABILITY OF MEMBERS—See
C
ORPORATIONS
5
LIABILITY OF OFFICERS—See
C
ORPORATIONS
4
LIFETIME ELECTRONIC MONITORING—See
C
RIMINAL
L
AW
16
LIMITATION OF ACTIONS—See
J
UDGMENTS
1
N
EGLIGENCE
1
LIMITED LIABILITY COMPANIES—See
C
ORPORATIONS
5, 6
LOCATION AND DESIGN OF TRAPDOOR—See
N
EGLIGENCE
3
MARITAL ASSETS—See
D
IVORCE
4, 5
MEDICAL MALPRACTICE—See
N
EGLIGENCE
1
870 288 M
ICH
A
PP
MICHIGAN CATASTROPHIC CLAIMS
ASSOCIATION—See
I
NSURANCE
5
MICHIGAN ZONING ENABLING ACT—See
Z
ONING
1
MISREPRESENTATION—See
B
ANKS AND
B
ANKING
3
MODIFICATION OF STATUTORY ARBITRATION
AWARDS—See
A
RBITRATION
1
MONEY JUDGMENTS—See
I
NTEREST
1
MORTGAGE LENDING—See
B
ANKS AND
B
ANKING
2, 3
MOTIONS AND ORDERS
R
ELIEF
F
ROM
J
UDGMENT
1. MCR 6.502(G)(2) provides that a criminal defendant
may not file a second or subsequent motion for relief
from judgment unless the motion is based on either a
retroactive change in law that occurred after the first
motion or new evidence that was not discovered before
the first motion; the good-cause and actual-prejudice
requirements of MCR 6.508(D)(3) do not provide a third
exception and are not relevant until, and are only
relevant if, the court determines that the successive
motion falls within one of the two exceptions provided in
MCR 6.502(G)(2). People v Swain, 288 Mich App 609.
S
UMMARY
D
ISPOSITION
2. A nonmoving party may not rely on mere allegations or
denials in pleadings in response to a motion for sum-
mary disposition when the burden of proof at trial on a
dispositive issue rests on the nonmoving party, but must
go beyond the pleadings to set forth specific facts
showing that a genuine issue of material fact exists with
regard to the issue. BC Tile & Marble Co, Inc v Multi
Bldg Co, Inc, 288 Mich App 576.
I
NDEX
-D
IGEST
871
MOTOR VEHICLES—See
I
NSURANCE
4
MURDER—See
C
RIMINAL
L
AW
18
NATIONAL BANKS—See
B
ANKS AND
B
ANKING
1, 2, 3
NEGLIGENCE
M
EDICAL
M
ALPRACTICE
1. Hoffman v Barrett, 288 Mich App 536.
P
REMISES
L
IABILITY
2. The creation of a temporary, unexpected dangerous
condition by employees of a contractor that has control
over a work site does not give rise to premises liability
where the owner of the work site had no knowledge or
notice of the condition. Jones v DaimlerChrysler Corp,
288 Mich App 99.
3. A claim that the location and design of a trapdoor makes
it a dangerous condition presents a factual question that
precludes summary disposition. Jones v Daimler-
Chrysler Corp, 288 Mich App 99.
P
ROXIMATE
C
AUSE
4. Proximate cause is a factual question for the jury, but
the court determines the issue when the facts bearing
on proximate cause are not in dispute and reasonable
persons could not differ about the application of the
legal concept of proximate cause to those facts. Jones v
Detroit Medical Center, 288 Mich App 466.
5. The issue, for purposes of a proximate-cause analysis of
foreseeability, is whether the increased risk to the plain-
tiff is directly linked to the defendant’s negligence, not
how often the negligence will result in an injury-causing
event. Jones v Detroit Medical Center, 288 Mich App
466.
NEW PARTIES—See
P
LEADING
1
NO-FAULT—See
I
NSURANCE
2, 4, 5
872 288 M
ICH
A
PP
NONSUPPORT—See
C
RIMINAL
L
AW
5, 6
NOTICE OF INTENT TO FILE SUIT—See
N
EGLIGENCE
1
OFFENSE VARIABLE 4—See
S
ENTENCES
2
OFFENSE VARIABLE 9—See
S
ENTENCES
1
OFFENSE VARIABLE 10—See
S
ENTENCES
1, 4
OFFENSE VARIABLE 13—See
S
ENTENCES
1
OFFENSE VARIABLE 19—See
S
ENTENCES
3
OTHER ACTS EVIDENCE—See
C
RIMINAL
L
AW
10
OTHER ACTS OF DOMESTIC VIOLENCE—See
E
VIDENCE
1
OTHERS AS AFFILIATED GROUP MEMBERS UNDER
SINGLE BUSINESS TAX—See
T
AXATION
3
PAYMENTS ON JUDGMENTS—See
J
UDGMENTS
1
PERSONAL PROTECTION INSURANCE
BENEFITS—See
I
NSURANCE
4
PERSONAL REPRESENTATIVES—See
E
XECUTORS AND
A
DMINISTRATORS
1
PETITIONS FOR IMPROVEMENTS OR
REPAIRS—See
D
RAINS
1
I
NDEX
-D
IGEST
873
PLEADING
A
MENDMENT OF
P
LEADINGS
1. The relation-back doctrine, which provides that an
amended complaint relates back in time to the filing of
the original complaint, does not extend to the addition
of new parties, but when a plaintiff has brought an
action in the wrong capacity, a new plaintiff may take
advantage of the original action—for example, to avoid a
statute of limitations—if the original plaintiff had an
interest in the subject matter of the controversy (MCR
2.118[D]). Tice Estate v Tice, 288 Mich App 665.
POWERS OF PERSONAL REPRESENTATIVES—See
E
XECUTORS AND
A
DMINISTRATORS
1
PREDATORY CONDUCT—See
S
ENTENCES
4
PREEMPTION—See
B
ANKS AND
B
ANKING
1, 2, 3
PREEXISTING CONDITIONS OF VICTIMS—See
C
RIMINAL
L
AW
19
PREMISES LIABILITY—See
N
EGLIGENCE
2, 3
PRENUPTIAL AGREEMENTS—See
D
IVORCE
5
PRESCRIPTIVE EASEMENTS—See
E
ASEMENTS
1, 2
PRESUMPTION OF INNOCENCE—See
C
RIMINAL
L
AW
13, 14
PRIMA FACIE CASE—See
T
RUSTS
1
PRIOR BAD ACTS—See
C
RIMINAL
L
AW
10
PRIVITY OF ESTATE—See
E
ASEMENTS
1
874 288 M
ICH
A
PP
PROBATION—See
C
RIMINAL
L
AW
12
PROPERTY DIVISIONS—See
D
IVORCE
4, 5
PROSECUTORIAL MISCONDUCT—See
C
RIMINAL
L
AW
13, 14
PROXIMATE CAUSE—See
N
EGLIGENCE
4, 5
PSYCHOLOGICAL INJURY TO VICTIMS—See
S
ENTENCES
1
RATES—See
I
NSURANCE
3
REGULATIONS—See
E
ASEMENTS
2
RELATION-BACK DOCTRINE—See
E
XECUTORS AND
A
DMINISTRATORS
1
P
LEADING
1
RELIEF FROM JUDGMENT—See
M
OTIONS AND
O
RDERS
1
REPAIRS—See
D
RAINS
1
RESTRICTIVE COVENANTS—See
D
EEDS
1
RETROACTIVITY OF DECISIONS—See
C
RIMINAL
L
AW
15
REVOCATION OF PROBATION—See
C
RIMINAL
L
AW
12
ROBBERY—See
C
RIMINAL
L
AW
1
I
NDEX
-D
IGEST
875
SALES INCIDENTAL TO SERVICES—See
T
AXATION
4
SANCTIONS—See
T
RIAL
1
SAVING PROVISIONS—See
N
EGLIGENCE
1
SEARCHES AND SEIZURES
A
RRESTS
1. A search incident to an arrest may include only the
person of the arrestee and the area within his or her
immediate control, that is, the area from which he or
she might gain a weapon or evidence that could be
destroyed; a law enforcement officer may search a
vehicle incident to a recent occupant’s arrest only when
the arrestee is unsecured and is within reaching dis-
tance of the passenger compartment at the time of the
search or when it is reasonable to believe that evidence
relevant to the crime of arrest might be found in the
vehicle (US Const, Am XIV). People v Mungo (On Rem),
288 Mich App 167.
SEARCHES INCIDENT TO AN ARREST—See
S
EARCHES AND
S
EIZURES
1
SECOND-DEGREE CRIMINAL SEXUAL
CONDUCT—See
C
RIMINAL
L
AW
16
SECRET CONFINEMENT—See
K
IDNAPPING
1
SENTENCES
See, also,
C
RIMINAL
L
AW
16
S
ENTENCING
G
UIDELINES
1. People v Phelps, 288 Mich App 123.
2. A sentencing court must assess points under offense
variable 4 of the sentencing guidelines if the victim
sustained serious psychological injury that may require
professional treatment; treatment, however, need not
876 288 M
ICH
A
PP
actually have been sought for these points to be assessed
(MCL 777.34). People v Ericksen, 288 Mich App 192.
3. A defendant’s attempts to create a false alibi, mislead
police investigators, or divert suspicion away from himself
or herself and onto others constitute attempts to interfere
with the administration of justice for purposes of scoring
offense variable 19 of the sentencing guidelines (MCL
777.49). People v Ericksen, 288 Mich App 192.
4. People v Huston, 288 Mich App 387.
SENTENCING GUIDELINES—See
S
ENTENCES
1, 2, 3, 4
SERVICES—See
T
AXATION
4
SEVERE MENTAL PAIN OR SUFFERING—See
C
RIMINAL
L
AW
19
SEX OFFENDERS REGISTRATION ACT—See
C
RIMINAL
L
AW
17
SINGLE BUSINESS TAX ACT—See
T
AXATION
1, 2, 3, 4, 5
SMALL BUSINESS TAX CREDIT—See
T
AXATION
1, 3
SOLICITATION TO COMMIT MURDER—See
C
RIMINAL
L
AW
18
SOVEREIGN IMMUNITY—See
G
OVERNMENTAL
I
MMUNITY
1
SPECIAL-USE PERMITS—See
Z
ONING
1
SPOUSAL SUPPORT—See
D
IVORCE
2
STATE AND FEDERAL REGULATION—See
B
ANKS AND
B
ANKING
1, 2
I
NDEX
-D
IGEST
877
STATUTES
See, also,
E
ASEMENTS
2
D
OCTRINE OF
S
CRIVENER’S
E
RROR
1. The interpretive doctrine of statutory construction
known as scrivener’s error may be applied when on the
face of a statute it is clear that a mistake of expression
or clerical error, rather than of legislative wisdom, has
been made; if the objective import of the statute is clear,
it is not contrary to sound principles of statutory inter-
pretation to give the totality of the context precedence
over a single mistake of expression or clerical error.
Oshtemo Charter Twp v Kalamazoo County Rd Comm,
288 Mich App 296.
2. Use of the phrase “MCL 247.671 to 247.675” in MCL
257.726(3), which was meant to incorporate the provi-
sions of 1951 PA 51 that pertain to the designation of
county primary roads, was a clerical error, but under the
interpretive doctrine of statutory construction known as
scrivener’s error, the text of MCL 257.726(3) may be
given effect if the phrase is interpreted instead as “MCL
247.651 to 247.675.” Oshtemo Charter Twp v Kalama-
zoo County Rd Comm, 288 Mich App 296.
STATUTORY ARBITRATION—See
A
RBITRATION
1
STRICT-LIABILITY OFFENSES—See
C
RIMINAL
L
AW
5
SUBSEQUENT MOTIONS—See
M
OTIONS AND
O
RDERS
1
SUBSTITUTION OF PARTIES—See
P
LEADING
1
SUFFICIENCY OF THE EVIDENCE—See
C
RIMINAL
L
AW
7
SUMMARY DISPOSITION—See
M
OTIONS AND
O
RDERS
2
TACKING—See
E
ASEMENTS
1
878 288 M
ICH
A
PP
TAKING—See
H
IGHWAYS
1
TAXATION
S
INGLE
B
USINESS
T
AX
A
CT
1. Entities that are part of a corporate structure in which the
parent is a state chartered credit union that is exempt
from taxation under the Single Business Tax Act must, for
purposes of determining their eligibility for the small
business tax credit provided by MCL 208.36, consolidate
their business activities with the business activities of
other members of their affiliated group, including the
parent credit union; only when the consolidated number
meets the threshold requirements of § 36(2) will the indi-
vidual entities qualify for the tax credit (MCL 208.1 et seq.,
repealed effective December 31, 2007). ONE’s Travel Ltd
v Dep’t of Treasury, 288 Mich App 48.
2. An “affiliated group” for purposes of MCL 208.36(7) and
MCL 208.3(1) of the Single Business Tax Act is two or
more United States corporations, one of which owns or
controls, directly or indirectly, 80 percent or more of the
capital stock with voting rights of the other or others; a
United States corporation, for such purposes, is an
association, joint-stock company, or an insurance com-
pany created or organized in or under the law of the
United States or under the laws of a state; an “associa-
tion” is a gathering of people for a common purpose, the
persons so joined, or an unincorporated organization
that is not a legal entity separate from the persons who
compose it (MCL 208.1 et seq., repealed effective Decem-
ber 31, 2007). ONE’s Travel Ltd v Dep’t of Treasury, 288
Mich App 48.
3. The Single Business Tax Act, in MCL 208.36(7), re-
quires a member of an affiliated group to consolidate its
business activities with the business activities of the
other members of the group in order to determine its
eligibility for the small business tax credit allowed by
MCL 208.36(2); “business activity,” for such purposes, is
a transfer of property or the performance of services
within the state with the object of gain, benefit, or
advantage to the taxpayer or to others; the term “oth-
ers” encompasses all those “others” than taxpayers; the
fact that a member of an affiliated group is exempt from
taxation under the act does not mean that it does not
I
NDEX
-D
IGEST
879
have business activities (MCL 208.1 et seq., repealed
effective December 31, 2007). ONE’s Travel Ltd v Dep’t
of Treasury, 288 Mich App 48.
4. An incidental-to-service test may be applied to deter-
mine, for purposes of establishing a taxpayer’s tax base
under the Single Business Tax Act, whether a business
transaction that involved both the transfer of tangible
personal property and the provision of a service involved
a transfer of tangible personal property that was inci-
dental to the rendering of personal services; the test
examines what the buyer sought as the object of the
transaction, what the seller or service provider was in
the business of doing, whether the goods were provided
as a retail enterprise with a profit-making motive,
whether the goods were available for sale without the
service, the extent to which intangible services have
contributed to the physical item that was transferred,
and any other relevant factors (MCL 208.1 et seq.,
repealed effective December 31, 2007). Midwest Bus
Corp v Dep’t of Treasury, 288 Mich App 334.
5. Contributions by an employer to a voluntary employees’
beneficiary association trust created for the purpose of
receiving reimbursement for the payment of employees’
future health-care costs did not constitute compensation
to employees that was taxable under the former Single
Business Tax Act (26 USC 501[c][9]; MCL 208.4[3]).
Ford Motor Co v Dep’t of Treasury, 288 Mich App 491.
TIME LIMIT FOR REQUIRING SEX OFFENDER
REGISTRATION—See
C
RIMINAL
L
AW
17
TORTURE—See
C
RIMINAL
L
AW
19
TRESPASS-NUISANCE—See
G
OVERNMENTAL
I
MMUNITY
1
TRIAL
W
ITNESSES
1. A trial court’s decision to bar witness testimony after a
party has failed to timely submit a witness list is
reviewed for an abuse of discretion; the record should
reflect that the trial court gave careful consideration to
880 288 M
ICH
A
PP
the relevant factors involved and considered all of its
options in determining what sanction was just and
proper in the context of the case. Duray Development,
LLC v Perrin, 288 Mich App 143.
TRUSTS
B
UILDERS’
T
RUST
F
UND
A
CT
1. A plaintiff must show the following elements to estab-
lish a prima facie case of a violation of the builders’ trust
fund act: (1) that the defendant was a contractor or
subcontractor engaged in the building construction in-
dustry, (2) that the defendant was paid for labor or
materials provided on a construction project, (3) that
the defendant retained or used those funds, or any part
of those funds, (4) that the funds were retained for any
purpose other than to first pay laborers, subcontractors,
and suppliers, and (5) that the laborers, subcontractors,
and suppliers were engaged by the defendant to perform
labor or furnish material for the specific construction
project (MCL 570.151 et seq.). BC Tile & Marble Co, Inc
v Multi Bldg Co, Inc, 288 Mich App 576.
2. An intent to defraud is shown for purposes of the
builders’ trust fund act simply by a contractor’s appro-
priation of any moneys paid to the contractor for build-
ing operations before the contractor pays all moneys due
or to become due to laborers, subcontractors, suppliers,
or others entitled to payment; a reasonable inference of
appropriation arises from the payment of construction
funds to a contractor and the contractor’s subsequent
failure to pay laborers, subcontractors, suppliers, or
others entitled to payment (MCL 570.153). BC Tile &
Marble Co, Inc v Multi Bldg Co, Inc, 288 Mich App 576.
UNINSURED-MOTORIST BENEFITS—See
I
NSURANCE
1, 2
UNIQUE OR SPECIAL INJURIES—See
H
IGHWAYS
1
UNITED STATES CORPORATIONS—See
T
AXATION
2
UNJUST ENRICHMENT—See
B
ANKS AND
B
ANKING
3
I
NDEX
-D
IGEST
881
UNLAWFUL IMPRISONMENT—See
K
IDNAPPING
1
UNLAWFUL TAKING OF A MOTOR VEHICLE—See
I
NSURANCE
4
VALUATION OF MARITAL PROPERTY—See
D
IVORCE
4
VERACITY OF DEFENSE COUNSEL—See
C
RIMINAL
L
AW
13
VICTIMS—See
S
ENTENCES
1, 2, 4
VIOLATIONS OF BUILDERS’ TRUST FUND ACT—See
T
RUSTS
1
VOLUNTARY EMPLOYEES’ BENEFICIARY
ASSOCIATION TRUSTS—See
T
AXATION
5
WEAPONS—See
C
RIMINAL
L
AW
4
WITNESSES—See
N
EGLIGENCE
1
T
RIAL
1
WORDS AND PHRASES—See
C
RIMINAL
L
AW
4
S
TATUTES
2
T
AXATION
2, 3
WORKERS’ COMPENSATION
I
NTENTIONAL
-T
ORT
E
XCEPTION
1. A jury may conclude that the plaintiff’s employer knew
that an injury was certain to occur under MCL
418.131(1) of the Worker’s Disability Compensation Act
for purposes of establishing that the employer commit-
ted an intentional tort if the plaintiff establishes (1) that
the employer subjected the plaintiff to a continuously
882 288 M
ICH
A
PP
operative dangerous condition that it knew would cause
an injury, (2) that the employer knew that its employees
were taking insufficient precautions to protect them-
selves from that danger, and (3) that the employer did
nothing to remedy the situation. Johnson v Detroit
Edison Co, 288 Mich App 688.
WRONGFUL-DEATH SAVING PROVISION—See
N
EGLIGENCE
1
ZONING
M
ICHIGAN
Z
ONING
E
NABLING
A
CT
1. The Michigan Zoning Enabling Act requires that a local
zoning ordinance specifically identify the land uses and
activities that are eligible for special-use status (MCL
125.3502[1][a]). Whitman v Galien Twp, 288 Mich App
672.
I
NDEX
-D
IGEST
883
