BV_MiApp295

MICHIGAN APPEALS REPORTS

CASES DECIDED

IN THE

MICHIGAN

COURT OF APPEALS

FROM

December 6, 2011, through March 15, 2012

JOHN O. JUROSZEK

REPORTER OF DECISIONS

VOLUME 295

FIRST EDITION

2013

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

ERM

XPIRES

ANUARY

HIEF

UDGE

WILLIAM B. MURPHY................................................................. 2013

HIEF

UDGE

DAVID H. SAWYER....................................................................... 2017

UDGES

MARK J. CAVANAGH ................................................................... 2015

KATHLEEN JANSEN ................................................................... 2013

E. THOMAS FITZGERALD.......................................................... 2015

HENRY WILLIAM SAAD.............................................................. 2015

JOEL P. HOEKSTRA..................................................................... 2017

JANE E. MARKEY......................................................................... 2015

PETER D. O’CONNELL ............................................................... 2013

WILLIAM C. WHITBECK............................................................. 2017

MICHAEL J. TALBOT .................................................................. 2015

KURTIS T. WILDER...................................................................... 2017

PATRICK M. METER.................................................................... 2015

DONALD S. OWENS..................................................................... 2017

KIRSTEN FRANK KELLY............................................................ 2013

CHRISTOPHER M. MURRAY...................................................... 2015

PAT M. DONOFRIO ...................................................................... 2017

KAREN FORT HOOD ................................................................... 2015

STEPHEN L. BORRELLO............................................................ 2013

DEBORAH A. SERVITTO............................................................. 2013

JANE M. BECKERING ................................................................. 2013

ELIZABETH L. GLEICHER......................................................... 2013

CYNTHIA DIANE STEPHENS.................................................... 2017

MICHAEL J. KELLY...................................................................... 2015

DOUGLAS B. SHAPIRO ............................................................... 2013

AMY RONAYNE KRAUSE............................................................ 2013

HIEF

LERK

ESEARCH

IRECTOR:

LARRY S. ROYSTER

SUPREME COURT

ERM

XPIRES

ANUARY

HIEF

USTICE

ROBERT P. YOUNG, J

. .............................................................. 2019

USTICES

MICHAEL F. CAVANAGH............................................................ 2015

MARILYN KELLY......................................................................... 2013

STEPHEN J. MARKMAN............................................................ 2013

DIANE M. HATHAWAY............................................................... 2017

MARY BETH KELLY.................................................................... 2019

BRIAN K. ZAHRA ........................................................................ 2013

OMMISSIONERS

MICHAEL J. SCHMEDLEN, C

HIEF

OMMISSIONER

SHARI M. OBERG, D

EPUTY

HIEF

OMMISSIONER

TIMOTHY J. RAUBINGER MICHAEL S. WELLMAN

LYNN K. RICHARDSON GARY L. ROGERS

NELSON S. LEAVITT RICHARD B. LESLIE

DEBRA A. GUTIERREZ-M

GUIRE FREDERICK M. BAKER, J

ANNE-MARIE HYNOUS VOICE KATHLEEN M. DAWSON

DON W. ATKINS RUTH E. ZIMMERMAN

JÜRGEN O. SKOPPEK SAMUEL R. SMITH

DANIEL C. BRUBAKER ANNE E. ALBERS

TATE

OURT

DMINISTRATOR

CHAD C. SCHMUCKER

LERK:

CORBIN R. DAVIS

EPORTER OF

ECISIONS:

JOHN O. JUROSZEK

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.)

AGE

Alfieri v Bertorelli ................................................ 189

Allen, People v ..................................................... 277

Armisted, People v ............................................... 32

Auto-Owners Ins Co, Bronson Methodist

Hospital v ......................................................... 431

Barrett, Hoffman v (On Remand) ...................... 649

Bertorelli, Alfieri v ............................................... 189

Bronson Methodist Hospital v Auto-Owners

Ins Co ................................................................ 431

Bronson Methodist Hospital v Home-Owners

Ins Co ................................................................ 431

Caspari, Yoost v .................................................... 209

Central Michigan Univ Trustees, International

Union, United Automobile, Aerospace &

Agricultural Implement Workers of

America v ............................................................... 486

Cherryland Mall Ltd Partnership, Wells Fargo

Bank, NA v ....................................................... 99

AGE

Chesser v Radisson Plaza Hotel at Kalamazoo Center....... 801

CitiMortgage, Inc v Mortgage Electronic

Registration Systems, Inc ............................... 72

City of Pontiac, Thurman v ................................ 381

Coalition for a Safer Detroit v Detroit City

Clerk ................................................................. 362

Corrections (Dep’t of), Groves v ......................... 1

Dep’t of Corrections, Groves v ........................... 1

Dep’t of Treasury, Malpass v .............................. 263

Detroit City Clerk, Coalition for a Safer

Detroit v ........................................................... 362

Detroit Entertainment, LLC, Parise v ............... 25

Douglas, People v ................................................. 129

Elliott, People v .................................................... 623

Engram, Lamkin v ............................................... 701

Ferrero v Walton Twp ......................................... 475

Flint Community Schools, Strozier v ................. 82

Gagnon v Glowacki .............................................. 557

Galui Construction, Inc, McCoig Materials,

LLC v ................................................................ 684

Gay v Select Specialty Hospital .......................... 284

Glenn, People v .................................................... 529

Glowacki, Gagnon v ............................................. 557

Gomez, People v ................................................... 411

Governor, Houston v ........................................... 588

ii 295 M

ICH

AGE

Great Lakes Foam Technologies, Inc, KBD &

Associates, Inc v ............................................... 666

Groves v Dep’t of Corrections ............................ 1

Hills & Dales General Hospital v Pantig ........... 14

Hoffman v Barrett (On Remand) ....................... 649

Home-Owners Ins Co, Bronson Methodist

Hospital v ......................................................... 431

Houston v Governor ............................................ 588

In re Kabanuk ...................................................... 252

In re Moroun ........................................................ 312

International Union, United Automobile,

Aerospace & Agricultural Implement

Workers of America v Central Michigan

Univ Trustees .................................................. 486

JPMorgan Chase Bank, NA, Kim v ................... 200

Johnson, People v ................................................ 165

KBD & Associates, Inc v Great Lakes Foam

Technologies, Inc ............................................. 666

Kabanuk, In re ..................................................... 252

Kalaj v Khan ........................................................ 420

Ken’s Service, Westfield Ins Co v ....................... 610

Kessler v Kessler .................................................. 54

Khan, Kalaj v ....................................................... 420

Kim v JPMorgan Chase Bank, NA .................... 200

Kloosterman, People v ......................................... 68

ABLE OF

ASES

EPORTED

iii

AGE

Lamkin v Engram ................................................ 701

Lockett, People v .................................................. 165

Malpass v Dep’t of Treasury ............................... 263

McCoig Materials, LLC v Galui Construction,

Inc ..................................................................... 684

Michigan American Federation of State,

County & Municipal Employees Council 25,

Local 917, 36th Dist Court v .......................... 502

Minch, People v .................................................... 92

Moroun, In re ....................................................... 312

Mortgage Electronic Registration Systems, Inc,

CitiMortgage, Inc v .......................................... 72

Mungo, People v (On Second Remand) ............. 537

Neville v Neville ................................................... 460

Pantig, Hills & Dales General Hospital v .......... 14

Parise v Detroit Entertainment, LLC ................ 25

People v Allen ...................................................... 277

People v Armisted ................................................ 32

People v Douglas .................................................. 129

People v Elliott ..................................................... 623

People v Glenn ..................................................... 529

People v Gomez .................................................... 411

People v Johnson ................................................. 165

People v Kloosterman .......................................... 68

People v Lockett ................................................... 165

People v Minch ..................................................... 92

People v Mungo (On Second Remand) .............. 537

iv 295 M

ICH

AGE

People v Ryan ....................................................... 388

People v Tavernier ............................................... 582

Pontiac (City of), Thurman v ............................. 381

Pontiac Ed Ass’n, Pontiac School Dist v ............ 147

Pontiac School Dist v Pontiac Ed Ass’n ............. 147

Radisson Plaza Hotel at Kalamazoo Center, Chesser v ...... 801

Res-Care Premier, Inc, Woodbury v ................... 232

Ryan, People v ...................................................... 388

Select Specialty Hospital, Gay v ......................... 284

Strozier v Flint Community Schools .................. 82

Tavernier, People v .............................................. 582

36th Dist Court v Michigan American

Federation of State, County & Municipal

Employees Council 25, Local 917 ................... 502

Thurman v City of Pontiac ................................. 381

Treasury (Dep’t of), Malpass v ........................... 263

Walton Twp, Ferrero v ........................................ 475

Wells Fargo Bank, NA v Cherryland Mall Ltd

Partnership ....................................................... 99

Westfield Ins Co v Ken’s Service ........................ 610

Woodbury v Res-Care Premier, Inc .................... 232

Yoost v Caspari ..................................................... 209

ABLE OF

ASES

EPORTED

OURT OF

PPEALS

ASES

GROVES v DEPARTMENT OF CORRECTIONS

Docket No. 302640. Submitted June 10, 2011, at Lansing. Decided

December 6, 2011, at 9:00 a.m.

Securus Technologies, Inc., Ralph Groves, an employee of Securus, and

four other employees of Securus brought an action in the Ingham

Circuit Court against the Department of Corrections, the Depart-

ment of Technology, Management and Budget, and Public Commu-

nications Services, Inc. (PCS), challenging a contract bidding process

run by the state defendants. PCS was the winning bidder. Defendants

moved for summary disposition. The court, William E. Collette, J.,

granted the motion, concluding that plaintiffs lacked standing to

bring the case. Plaintiffs appealed.

The Court of Appeals held:

1. Recent Michigan caselaw uniformly conditions taxpayer

standing on the plaintiff taxpayers having suffered some harm

distinct from that inflicted on the general public. The individual

plaintiffs in this case asserted that they had suffered particular

harm because they could lose their jobs at Securus as a result of

the contract having been awarded to PCS, but that was not the

type of injury contemplated by the standing inquiry given that the

individual plaintiffs had no expectancy that the state would award

the contract to Securus. Nor did plaintiffs suffer a cognizable

injury as members of the general public because even if plaintiffs’

factual allegations were true, there would be no increased expen-

ditures by the state as a result of PCS’s winning bid.

2. The only circumstance that may provide a basis for an action to

review the bidding process is the presence of evidence of fraud, abuse,

or illegality, and such an action must be brought by the proper public

official.

3. When alleging fraud, the circumstances constituting fraud or

mistake must be stated with particularity, although conditions of

mind may be alleged generally. In this case, plaintiffs alleged fraud in

the bidding process and argued that the fraud claim established

standing to seek injunctive relief, but, in addition to plaintiffs’ not

being the proper party to bring a claim of fraud, plaintiffs’ allegations

failed to state a claim for fraud because there was no evidence

regarding defendants’ state of mind and the alleged errors in the

ROVES V

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process provided no implication of malice. Further, plaintiffs alleged

no cognizable injury arising from the fraud.

4. Under MCL 600.2041(3), an action to prevent the illegal

expenditure of state funds may be brought in the names of at least

five taxpaying residents. In this case, plaintiffs argued that they

had standing as taxpayers seeking the prevention of the illegal

expenditure of state funds. However, the expenditures referred to

by plaintiffs would occur regardless of the identity of the success-

ful bidder, so standing was not established.

5. To establish standing to seek a declaratory judgment under

MCR 2.605, there must be a case of actual controversy. An actual

controversy exists when a declaratory judgment or decree is

necessary to guide a plaintiff’s future conduct in order to preserve

his or her legal rights. In this case, a judgment was not necessary

to guide plaintiffs’ future conduct or preserve their legal rights

because the contract had already been awarded to PCS.

6. Under the Michigan Constitution, the right of all individuals,

firms, corporations, and voluntary associations to fair and just

treatment in the course of legislative and executive investigations

and hearings may not be infringed. An “investigation” is the act or

process of investigating, or the condition of being investigated; to

“investigate” is to search or examine into the particulars of, or

examine in detail. In this case, the state defendants collected infor-

mation voluntarily provided by bidders as part of a preliminary

information gathering process; the passive efforts of the state did not

constitute an investigation under Const 1963, art 1, § 17. Because

plaintiffs failed to state a claim for fraud, declaratory judgment, or a

constitutional violation, and otherwise had no standing to object to

the outcome of the bidding process, the trial court properly granted

summary disposition.

Affirmed.

1. A

CTIONS —

TANDING —

UBLIC

ONTRACTS

To have taxpayer standing, a taxpayer must have suffered some harm

distinct from that inflicted on the general public; the fact that an

individual may lose his or her job because the individual’s employer

failed to secure the winning bid on a public contract is not the type of

injury contemplated by the standing inquiry because bidders for

public contracts generally have no expectancy in the contract to be

awarded.

2. A

CTIONS —

TANDING —

UBLIC

ONTRACTS —

RAUD

The only circumstance that may provide a basis for an action to

review the bidding process for a public contract is the presence of

2 295 M

ICH

1 [Dec

evidence of fraud, abuse, or illegality; such an action must be

brought by the proper public official.

3. C

ONSTITUTIONAL

AW —

AIR AND

UST

REATMENT —

NVESTIGATIONS

Under the Michigan Constitution, the right of all individuals, firms,

corporations, and voluntary associations to fair and just treatment

in the course of legislative and executive investigations and

hearings may not be infringed; an “investigation” is the act or

process of investigating, or the condition of being investigated; to

“investigate” is to search or examine into the particulars of, or

examine in detail; the passive collection of information by the state

from voluntary bidders for a state contract as part of a preliminary

information gathering process does not constitute an investigation

(Const 1963, art 1, § 17).

Varnum LLP (by Bryan R. Walters) for Ralph Groves,

Helen McCoy, William Scott, Michael Schnurer, Michael

Stump, and Securus Technologies, Inc.

Bill Schuette, Attorney General, John J. Bursch,

Solicitor General, Richard A. Bandstra, Chief Legal

Counsel, and Matthew C. Keck and Jennifer M. Jackson,

Assistant Attorneys General, for the Department of

Corrections and the Department of Technology, Man-

agement and Budget.

Dykema Gossett PLLC (by Gary P. Gordon, Leonard

C. Wolfe, and Courtney F. Kissel) for Public Communi-

cations Services, Inc.

Before: W

HITBECK

,P.J., and M

ARKEY

and K. F. K

ELLY

,JJ.

ARKEY

, J. Plaintiffs appeal by right from an order

granting defendants summary disposition and dismissing

plaintiffs’ case for lack of standing.

Plaintiffs challenged

a contract bidding process run by the Department of

Intervening plaintiffs are not parties to this appeal. Consequently,

when referring to “plaintiffs” in this opinion, we mean only Securus

Technologies, Inc., and the five individual plaintiffs who are identified as

its employees.

2011] G

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Corrections (DOC) and the Department of Technology,

Management and Budget (DTMB; collectively, the

state). We affirm.

The DTMB issued a request for proposal (RFP) on

behalf of the DOC, soliciting proposals for the installation

and maintenance of inmate telephone systems (ITS) at

the DOC’s facilities. The state would not directly pay the

ITS provider but would expend funds administering the

contract and monitoring inmate use of the system. Seven

companies submitted timely bids, including plaintiff Se-

curus Technologies, Inc., and defendant Public Commu-

nications Services, Inc. (PCS). A committee was to recom-

mend the bidder who offered the best value in terms of

technical criteria and price. Plaintiffs claim that the

committee allowed PCS to alter its pricing proposal after

the deadline without granting a similar opportunity to

other bidders. Plaintiffs further claim that the committee

erred in a number of ways in evaluating the bid proposals.

PCS won the contract, and plaintiffs filed suit requesting

an order nullifying the contract and requiring a rebid.

I. STANDARD OF REVIEW

This Court reviews de novo a trial court’s decision to

grant summary disposition. Maiden v Rozwood, 461

Mich 109, 118; 597 NW2d 817 (1999). Whether a party

has standing is a question of law subject to review de

novo. Manuel v Gill, 481 Mich 637, 642; 753 NW2d 48

(2008). Questions of statutory interpretation are also

subject to review de novo. Id. at 643.

II. STANDING

The general rule regarding standing is set forth in

Lansing Sch Ed Ass’n v Lansing Bd of Ed, 487 Mich

349, 372; 792 NW2d 686 (2010) (LSEA):

4 295 M

ICH

1 [Dec

[A] litigant has standing whenever there is a legal cause

of action. Further, whenever a litigant meets the require-

ments of MCR 2.605, it is sufficient to establish standing to

seek a declaratory judgment. Where a cause of action is not

provided at law, then a court should, in its discretion,

determine whether a litigant has standing. A litigant may

have standing in this context if the litigant has a special

injury or right, or substantial interest, that will be detri-

mentally affected in a manner different from the citizenry

at large or if the statutory scheme implies that the Legis-

lature intended to confer standing on the litigant.

Michigan jurisprudence has never recognized that a

disappointed bidder such as Securus has the right to

challenge the bidding process. See Talbot Paving Co v

Detroit, 109 Mich 657; 67 NW 979 (1896), and Rayford

v Detroit, 132 Mich App 248, 256-257; 347 NW2d 210

(1984).

Plaintiffs first argue that common law allows taxpay-

ers a cause of action to enforce Michigan’s public

bidding requirements; therefore, the individual plain-

tiffs have the requisite standing. Although early cases

appear to support this position, see, e.g., Berghage v

Grand Rapids, 261 Mich 176, 177; 246 NW 55 (1933),

more recent cases uniformly condition taxpayer stand-

ing on the plaintiff taxpayers having suffered some

harm distinct from that inflicted on the general public.

LSEA, 487 Mich at 372; Waterford Sch Dist v State Bd

of Ed, 98 Mich App 658, 662; 296 NW2d 328 (1980).

Plaintiffs have not alleged a cognizable injury. There is

no allegation in the complaint that Securus would have

won the contract but for the claimed errors in the bid

evaluations. Indeed, when the government has broad

discretion to choose its contractors, a bidder has no

expectancy in the contract to be awarded. See Cedroni

Assoc, Inc v Tomblinson, Harburn Assoc, Architects &

Planners, Inc, 290 Mich App 577, 590; 802 NW2d 682

2011] G

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(2010) (M

URPHY

, C.J.); id. at 621-624 (K. F. K

ELLY

,J.,

dissenting); see also Trepel v Pontiac Osteopathic Hosp,

135 Mich App 361, 378; 354 NW2d 341 (1984). The

committee evaluating the bids at issue here had sub-

stantial discretion to determine their technical and

financial merits.

Plaintiffs alleged that all taxpayers were harmed by

the faulty process and that the individual plaintiffs

suffered particular harm because they could lose their

jobs. This alleged harm is not the type of injury con-

templated by the standing inquiry. The individual plain-

tiffs had no expectancy that the state would award the

contract to their employer. Moreover, the state cannot

control the personnel decisions of bidders for its con-

tracts. Indeed, if this were considered a sufficient injury,

the general rule that a disappointed bidder does not

have standing would be completely eliminated. Disap-

pointed bidders could simply threaten to fire an em-

ployee if they did not win the contract and thereby

claim standing to bring suit.

Further, even if plaintiffs’ factual allegations are

true, there is no harm to the general public. There will

be no increased expenditures by the state that will have

an impact on taxpayers, including the taxpayer plain-

tiffs. Additional costs of the winning bid will instead be

charged only to inmates and the people they call from

prison. Plaintiffs, either as individuals or as members of

the general public, have not suffered a cognizable

injury.

In fact, while they ostensibly seek to rectify a public

wrong, in reality, as employees of the disappointed

bidder for a government contract, plaintiffs seek to

further their own interests and circumvent the century-

old rule that denies standing to disappointed bidders to

challenge the discretionary award of a public contract.

6 295 M

ICH

1 [Dec

Talbot, 109 Mich at 661-662; Rayford, 132 Mich App at

256. “Though the act accepting the second [lowest] bid

may have been against the interest of the citizens,

certainly the plaintiff[, the disappointed bidder,] could

have no action to redress that wrong and injury.”

Talbot, 109 Mich at 662. The rule recognizes that

competitive bidding on public contracts is designed for

the benefit of taxpayers and not those seeking the

contract. Id.; Rayford, 132 Mich App at 256. Put differ-

ently, the purpose of competitive bidding is to guard

against favoritism, fraud, corruption, and “to secure the

best work at the lowest price practicable....”Lasky v

City of Bad Axe, 352 Mich 272, 276; 89 NW2d 520 (1958)

(quotation marks and citation omitted). What is in the

public interest must be assessed by weighing numerous

factors, of which, price will be one of many that may

affect that determination. See e.g., Cedroni Assoc, 290

Mich App at 591-593 (concluding that under the school

district’s fiscal management policy, the district was

required to select the lowest responsible bidder), and

Berghage, 261 Mich at 181-182 (concluding that the

defendant city was not required to select the lowest

bidder for a printing contract when a higher bidder had

a larger circulation).

Litigation aimed at second-guessing the exercise of

discretion by the appropriate public officials in award-

ing a public contract will not further the public interest;

it will only add uncertainty, delay, and expense to

fulfilling the contract. See Great Lakes Heating, Cool-

ing, Refrigeration & Sheet Metal Corp v Troy Sch Dist,

197 Mich App 312, 314-315; 494 NW2d 863 (1992). The

only circumstance that may provide a basis for an

action to review the bidding process is the presence of

evidence of “fraud, abuse, or illegality.” Id. at 315. But

such an action must be brought by the proper public

official. Rayford, 132 Mich App at 257, citing Attorney

2011] G

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General ex rel Allis-Chalmers Co v Public Lighting

Comm of Detroit, 155 Mich 207; 118 NW 935 (1908).

Opening the floodgates of litigation to every disap-

pointed bidder that believes it has been aggrieved by the

bidding process would serve the interests of neither the

government nor the citizen-taxpayers that the bidding

process is designed to advance. Great Lakes Heating,

197 Mich App at 315.

Plaintiffs further assert that the allegations of fraud

set forth in the complaint provide both the taxpayers

and Securus with standing to seek injunctive relief

under the exception discussed in Great Lakes Heating.

We conclude, however, that in addition to not being

proper parties, Rayford, 132 Mich App at 257, plaintiffs

have failed to state a claim for fraud. When alleging

fraud, “the circumstances constituting fraud or mistake

must be stated with particularity,” although “condi-

tions of mind may be alleged generally.” MCR 2.112(B).

Although plaintiffs state with particularity a number of

errors the state allegedly made during the bidding

process, these allegations do not constitute fraud with-

out evidence of defendants’ state of mind. See Hord v

Environmental Research Institute of Mich (After Re-

mand), 463 Mich 399, 404; 617 NW2d 543 (2000).

Plaintiffs do not allege that defendants have agreed

that they made mistakes, nor is there any reason to

think that defendants intended to damage Securus’s

bid.

The alleged errors themselves provide no implication

of malice. For example, plaintiffs complain that defen-

dants considered a noncomparable system that Securus

operates in another state. But it is within the state’s

authority to determine whether a system is similar

enough to consider how well that system has worked

when evaluating a new proposal. Plaintiffs also com-

8 295 M

ICH

1 [Dec

plain that they did not receive credit for their past

satisfactory work for the DOC, but it is for the DOC to

determine the value of any prior work and whether and

to what extent the prior working relationship experi-

ence was positive. In the absence of allegations that the

state secretly agreed with plaintiffs’ assertions and

deliberately sabotaged plaintiffs’ bid, plaintiffs fail to

allege that defendants had the culpable mental state

necessary for fraud. In addition, a claim of fraud re-

quires the plaintiff to have suffered some injury. Hord,

463 Mich at 404. Plaintiffs in this case have not

properly alleged any cognizable injury.

Plaintiffs next contend that this suit is authorized by

MCL 600.2041(3). Under that subsection, “an action to

prevent the illegal expenditure of state funds or to test

the constitutionality of a statute relating thereto may

be brought” in the names of at least five taxpaying

residents. Id. The present case is not testing the con-

stitutionality of a statute. As for the expenditure of

funds, in House Speaker v Governor, 443 Mich 560, 573;

506 NW2d 190 (1993), our Supreme Court held that a

lawsuit seeking to enjoin the creation of a new executive

agency concerned the expenditure of state funds be-

cause running the agency would necessarily involve

expenditures. In this case, even if successful, litigation

will not prevent public expense. Plaintiffs argue that

the state will be forced to expend funds administering

the contract and monitoring inmate calls, but these

expenses will be necessary no matter which bidder is

awarded the contract. Plaintiffs also allege that the

transition to a new ITS provider will cost the state

money. The documentation submitted with the com-

plaint shows that the contractor will bear the cost of

installing a new system, not the state; therefore, plain-

tiffs do not have standing under MCL 600.2041(3).

2011] G

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Plaintiffs next seek standing under MCR 2.605.

“[W]henever a litigant meets the requirements of MCR

2.605, it is sufficient to establish standing to seek a

declaratory judgment.” LSEA, 487 Mich at 372. MCR

2.605(A)(1) requires “a case of actual controversy”

within the trial court’s jurisdiction brought by an

interested party. The key is that plaintiffs “ ‘ “plead and

prove facts which indicate an adverse interest necessi-

tating the sharpening of the issues raised.” ’ ” LSEA,

487 Mich at 372 n 20, quoting Associated Builders &

Contractors v Dep’t of Consumer & Indus Servs Dir, 472

Mich 117, 126; 693 NW2d 374 (2005),

quoting Shavers

v Attorney General, 402 Mich 554, 589; 267 NW2d 72

(1978). The “actual controversy” requirement prevents

courts from involving themselves in hypothetical issues,

but it does not prohibit them from deciding issues

before the occurrence of an actual injury. Shavers, 402

Mich at 589. An “ ‘actual controversy’ exists where a

declaratory judgment or decree is necessary to guide a

plaintiff’s future conduct in order to preserve his legal

rights.” Id. at 588.

In this case, a judgment is not necessary to guide

plaintiffs’ future conduct or preserve their legal rights.

Plaintiffs have not suffered a cognizable injury and will

not suffer such an injury in the future because the

contract has already been awarded to PCS; conse-

quently, we find no actual controversy. The declaratory

judgment rule does not provide plaintiffs with standing.

Plaintiffs next submit that the Legislature intended

to confer standing on taxpayers for issues brought

under the bidding provisions of the Management and

Budget Act, MCL 18.1101 et seq., as well as restrictions

on public officials’ accepting gifts to influence their

official actions, MCL 15.342. Plaintiffs reiterate the

Overruled in part by LSEA on other grounds, 487 Mich at 371 n 18.

10 295 M

ICH

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contention that taxpayers have standing to enforce

Michigan’s bidding requirements because the require-

ments are meant to benefit the general public. As

discussed earlier in this opinion, there is no such

taxpayer standing under current Michigan law. LSEA,

487 Mich at 372. Plaintiffs cite no caselaw to show that

the facts in this case are somehow different. “A party

may not merely announce a position and leave it to this

Court to discover and rationalize the basis for the

claim.” Nat’l Waterworks, Inc v Int’l Fidelity & Surety,

Ltd, 275 Mich App 256, 265; 739 NW2d 121 (2007).

III. THE FAIR AND JUST TREATMENT CLAUSE

Plaintiffs next maintain that they stated a cause of

action under Const 1963, art 1, § 17, which provides:

“The right of all individuals, firms, corporations and

voluntary associations to fair and just treatment in the

course of legislative and executive investigations and

hearings shall not be infringed.” Securus alleges that it

was unfairly treated and that the bidding process con-

stitutes an investigation. This Court considered the

meaning of the term “investigations” in the context of

the Fair and Just Treatment Clause in Carmacks Col-

lision, Inc v Detroit, 262 Mich App 207; 684 NW2d 910

(2004). The Court held that the plaintiff had failed to

allege an investigation. The Carmacks Court found

compelling the discussion of the term “investigation” in

Messenger v Dep’t of Consumer & Indus Servs, 238

Mich App 524; 606 NW2d 38 (1999), which considered

the meaning of that term in the context of a statute.

Examining a dictionary to determine the common

meaning of “investigation,” the Messenger Court de-

fined the term as “the act or process of investigating or

the condition of being investigated” and noted that to

“investigate” means “to search or examine into the

2011] G

ROVES V

’

TOF

ORRECTIONS

particulars of; examine in detail.” Id. at 534 (quotation

marks and citation omitted). The Messenger Court did

not find that there had been an investigation. The

defendant in that case did no more than collect docu-

ments from public agencies and monitor a criminal

proceeding against the plaintiff. Id. at 534-535. The

Court found that these passive efforts were merely

preparatory to a formal investigation. Id. at 535. The

defendant did not “engage in a searching inquiry for

ascertaining facts, nor did it conduct a detailed or

careful examination of the events surrounding plain-

tiff’s alleged misconduct.” Id. at 534.

In Carmacks, the defendant merely asked for certain

information and documentation to judge the bidders’

qualifications, including proof of residency and that

bidders’ taxes were up-to-date. Carmacks, 262 Mich

App at 211. It did not closely scrutinize the plaintiff or

its activities. Id. “This was merely a preliminary infor-

mation gathering process in which plaintiff voluntarily

participated by submitting a bid. The relatively passive

efforts by defendant in gathering innocuous and basic

information from prospective bidders do not rise to the

level of an ‘investigation’ as that term is properly

understood.” Id. at 211-212. The Court therefore held

that the plaintiff had failed to state a claim for a

violation of the Fair and Just Treatment Clause. Id. at

212.

We find the present case factually similar to Car-

macks. The bidders voluntarily provided data and ref-

erences. Defendants’ efforts consisted of gathering and

evaluating information the bidders and the bidders’

references provided; consequently, Securus has failed to

state a claim for a violation of the Fair and Just

Treatment Clause.

12 295 M

ICH

1 [Dec

Because plaintiffs failed to state a claim for fraud,

declaratory judgment, or a constitutional violation, and

otherwise had no standing to object to the outcome of

the bidding process, we agree that summary disposition

was appropriate under MCR 2.116(C)(5) and (8).

We affirm.

HITBECK

,P.J., and K. F. K

ELLY

, J., concurred with

ARKEY

,J.

The trial court’s decision appears to be based exclusively on MCR

2.116(C)(5), but this Court may affirm for reasons other than those

stated by the court below when there is sufficient support in the record.

Brown v Drake-Willock Int’l, Ltd, 209 Mich App 136, 143; 530 NW2d 510

(1995).

2011] G

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’

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ORRECTIONS

HILLS AND DALES GENERAL HOSPITAL v PANTIG

Docket No. 298237. Submitted August 10, 2011, at Detroit. Decided

December 6, 2011, at 9:05 a.m.

Hills and Dales General Hospital filed an action in the Tuscola

Circuit Court against Liberata J. Pantig, M.D., Avelina M. Oxholm-

Dababneh, D.O., and Huron Memorial Hospital, doing business as

Huron Medical Center, claiming that all three defendants had

violated a covenant to not compete. In 2007, both doctors signed

employment contracts with Hills and Dales that contained a clause

in which they agreed that in the event of separation from employ-

ment, they would not practice medicine within a 35-mile radius of

Cass City, Michigan. Both doctors had thereafter begun working

for Huron Medical, which Hills and Dales claimed to be within the

prohibited 35-mile radius. Huron Medical and Oxholm-Dababneh

moved for a change of venue to Huron County, arguing that Huron

Medical could not be sued in Tuscola County because it did not

conduct business in that county. Pantig subsequently joined the

motion. The court, Joslyn Patrick Reed, J., denied the motion,

reasoning that Huron Medical had conducted business in Tuscola

County through two joint ventures located in Tuscola County and

that defendants had waived any objection to venue because the

motion was not timely under MCR 2.221. Huron Medical and

Oxholm-Dabaneh appealed by leave granted, and Pantig cross-

appealed.

The Court of Appeals held:

1. Under MCR 2.221(A), a motion for change of venue must be

filed before or at the time the defendant files an answer. The

circuit court erred by finding that the defendants’ motion for

change of venue was untimely. In accordance with MCR 2.221(A),

Huron Medical and Oxholm-Dababneh appropriately filed their

answers to the complaint and their motion for change of venue on

the same day. Defendants did not waive their venue challenge by

failing to schedule the venue motion hearing in an expeditious

manner. The delay was mainly related to Pantig’s initial removal

of the case to federal court and settlement efforts.

2. Under MCL 600.1621(a), venue is proper in the county in

which (1) a defendant resides, (2) a defendant has a place of

14 295 M

ICH

14 [Dec

business, (3) a defendant conducts business, or (4) the registered

office of a defendant corporation is located. In Michigan, a corpo-

ration is an entity distinct and separate from its owners even when

it is owned by a single individual. For venue to be proper, there

must be a true business connection between the defendant and the

selected venue. Conducting business does not include the perfor-

mance of acts merely incidental to the business in which the

defendant is ordinarily engaged. Moreover, venue lies in the

county where a defendant conducts its usual and customary

business, and the activity must be of such a nature as to localize

the business and make it an operation within the county. Huron

Medical’s registered office was in Huron County, which was where

the hospital maintained a place of business and conducted its

systematic and regular activities. Huron Medical did not conduct

business in Tuscola County even though it had percentage inter-

ests through stock ownership in two Tuscola County-based medi-

cal enterprises, one a limited liability corporation and the other a

nonprofit corporation. As a shareholder in these medical enter-

prises, Huron Medical was a corporate entity separate and distinct

from them. There was no evidence that Huron Medical controlled

the daily business affairs of the joint venture medical enterprises,

and its stock ownership in those companies did not constitute

“conducting business” within the meaning of MCL 600.1621(a).

There was no true business connection between Huron Medical

and Tuscola County because it neither owned nor operated any

medical facility in that county, its solicitation of business for the

separate medical entities did not amount to conducting business,

and the business of those medical enterprises may not be attrib-

uted to Huron Medical.

Reversed and remanded.

1. V

ENUE —

ORPORATIONS —

ONDUCTING

USINESS —

RUE

USINESS

ONNEC-

TION

Under MCL 600.1621(a), venue is proper in the county in which (1)

a defendant resides, (2) a defendant has a place of business, (3) a

defendant conducts business, or (4) the registered office of a

defendant corporation is located; there must be a true business

connection between the defendant and the selected venue in order

for venue to be proper; for purposes of determining venue,

conducting business does not include the performance of acts

merely incidental to the business in which the defendant is

ordinarily engaged; venue lies in the county where the defendant

conducts its usual and customary business, and the activity must

be of such a nature as to localize the business and make it an

operation within the county.

2011] H

ILLS

ALES

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ANTIG

2. V

ENUE —

ORPORATIONS —

ONDUCTING

USINESS —

EPARATE

NTERPRISE

In Michigan, a corporation is an entity distinct and separate from its

owners even when it is owned by a single individual; under MCL

600.1621(a), ownership of a percentage interest in a separate

enterprise, without more, does not qualify as “conducting busi-

ness” for purposes of establishing venue; in the context of estab-

lishing venue, the conduct of a separate entity may not be

attributed to another entity through its percentage ownership

interest.

Miller Canfield Paddock and Stone, PLC (by Carolyn

Pollock Cary), for Hills and Dales General Hospital.

Rogers Mantese & Associates, P.C. (by Theresamarie

Mantese, Rolf E. Lowe, and Gregory M. Nowakowski),

for Liberata J. Pantig.

Smith Haughey Rice & Roegge (by Calvin Sterk and

Brian J. Kilbane) for Huron Medical Center and

Avelina M. Oxholm-Dababneh.

Before: M

ARKEY

,P.J., and S

AAD

and G

LEICHER

,JJ.

URIAM

. Hills and Dales General Hospital brought

this action against the Huron Medical Center and two

physicians, claiming that all three violated a covenant not

to compete. Not surprisingly, Hills and Dales elected to file

suit in Tuscola County, its home turf. The Huron Medical

Center maintains its principal place of business in nearby

Huron County and strenuously objected to the Tuscola

County venue. The circuit court found that Huron Medi-

cal’s partial ownership of two Tuscola County-based

health-care businesses justified Hills and Dales’ venue

selection. We reverse and remand.

In 2007, Hills and Dales hired defendants Avelina M.

Oxholm-Dababneh, D.O., and Liberata J. Pantig, M.D., “to

16 295 M

ICH

14 [Dec

provide medical services in the field of Internal Medicine

at the Hospital[.]” Both doctors signed employment agree-

ments containing identical covenants not to compete. The

covenant provided that “[i]n the event of separation from

Hills & Dales General Hospital, Physician will not practice

medicine within a 35-mile radius of Cass City, Michigan,

unless this requirement is waived in writing by the

hospital.” In July 2009, Hills and Dales filed suit in

Tuscola County against Oxholm-Dababneh, Pantig, and

Huron Medical, averring that Huron Medical had re-

cruited and employed Oxholm-Dababneh and Pantig in

violation of the covenant.

In August 2009, Huron Medical and Oxholm-Dababneh

timely answered the complaint and concomitantly filed a

motion for change of venue to Huron County. A few days

later, Pantig removed the matter to federal court, invoking

federal-question jurisdiction. Hills and Dales moved to

remand the case to the state court; Huron Medical and

Oxholm-Dababneh joined in Pantig’s removal petition. On

October 26, 2009, Judge Thomas L. Ludington of the

United States District Court for the Eastern District of

Michigan granted Hills and Dales’ remand motion.

When the case returned to the Tuscola Circuit Court,

the parties spent several months fighting legal battles

unconnected with venue. In January 2010, Hills and

Dales finally responded to defendants’ venue motion,

and on May 3, 2010, the circuit court entertained oral

argument concerning venue.

The parties focused their

dispute on whether Huron Medical could be sued in

Tuscola County.

In support of its venue selection, Hills

On November 25, 2009, Pantig filed a notice that she joined and

concurred with her codefendants’ motion for change of venue.

Oxholm-Dababneh and Pantig reside in Oakland and Lapeer coun-

ties, respectively, and no evidence suggests that either conducted busi-

ness in Tuscola County at the time the suit was filed.

2011] H

ILLS

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ANTIG

and Dales pointed out that Huron Medical “conducted

business” in two “joint ventures” located in Tuscola

County, Thumb MRI Center L.L.C. and Thumb Area

Dialysis Center, a nonprofit corporation. Huron Medical

countered that Thumb MRI and Thumb Area Dialysis

“are separate legal entities” in which Huron Medical

merely held stock. Huron Medical’s counsel queried, “If

stockholders could be dragged in for venue, do you hold

any GM stock? Can you be sued in Wayne County? Do

you hold any stock in Perrigo? Can you be sued in

Allegan County? I think not.”

In a written opinion and order, the circuit court

denied the motion for change of venue, reasoning:

Tuscola County is an appropriate venue since Huron

Medical conducts business in Tuscola County. Huron Medical

advertises in Tuscola County as well as provides medical care

as part of Thumb MRI and Thumb Area Dialysis—both

located in Tuscola County. Furthermore, the motion for

change of venue is not timely under MCR 2.221. Defendants

filed answers already and cannot claim that the motion is

based on facts that could not with reasonable diligence have

been known. Therefore Defendants have waived an objection

to venue.

This Court granted Huron Medical and Oxholm-

Dababneh’s application for leave to appeal. Hills &

Dales Gen Hosp v Pantig, unpublished order of the

Court of Appeals, entered June 29, 2010 (Docket No.

298237). Pantig cross-appealed.

We first consider the timeliness of defendants’ venue

motion by reviewing de novo the circuit court’s inter-

pretation and application of the relevant court rule.

Estes v Titus, 481 Mich 573, 578-579; 751 NW2d 493

(2008). MCR 2.221(A) provides, “A motion for change of

18 295 M

ICH

14 [Dec

venue must be filed before or at the time the defendant

files an answer.” Huron Medical and Oxholm-Dababneh

filed their motion to change venue on August 14, 2009,

the same day they answered the complaint. We decline

plaintiff’s invitation to hold that defendants waived

their venue challenge by failing to more expeditiously

schedule the motion for hearing. The removal proceed-

ings initiated by Pantig accounted for a substantial

portion of the delay in obtaining a venue ruling from

the circuit court. After the federal court remanded the

case, unsuccessful settlement efforts consumed addi-

tional time. While we encourage early resolution of

venue disputes, Huron Medical and Oxholm-Dababneh

filed their motion with their answer, in accordance with

MCR 2.221(A). Thus, the circuit court erred by finding

defendants’ change of venue motion untimely.

III

We now turn to the propriety of Tuscola County

venue. We review for clear error a circuit court’s deci-

sion to grant or deny a motion to change venue. Shock

Bros, Inc v Morbark Industries, Inc, 411 Mich 696,

698-699; 311 NW2d 722 (1981). Clear error exists when

some evidence supports the circuit court’s finding, but a

review of the entire record leaves this Court with the

definite and firm conviction that the circuit court made

a mistake. Schadewald v Brulé, 225 Mich App 26, 41;

570 NW2d 788 (1997).

The parties agree that MCL 600.1621(a) governs

whether Hills and Dales selected a proper venue. The

statute provides that venue is proper in “[t]he county in

which a defendant resides, has a place of business, or

conducts business, or in which the registered office of a

defendant corporation is located.” Huron Medical’s

registered office is situated in Huron County, where the

2011] H

ILLS

ALES

OSP V

ANTIG

hospital maintains a place of business. Hills and Dales

contends that Huron Medical’s participation in two

Tuscola County-based medical enterprises, the Thumb

Area Dialysis Center and the Thumb MRI Center

L.L.C., qualifies as “conducting business” in Tuscola

County. Huron Medical owns an 8 percent interest in

Thumb Area Dialysis and a 10 percent interest in

Thumb MRI. According to its website, Thumb Area

Dialysis “is a joint venture between Bay Regional

Medical Center, Hills & Dales General Hospital, Huron

Medical Center, MidMichigan Health and Scheurer

Hospital.” Several of the same hospitals also own shares

in Thumb MRI.

Ascertaining proper venue in a case involving a

natural person presents little difficulty. A person’s

residence is generally easy to establish, as are the

locations of a person’s business activities. But deter-

mining venue in an action against a corporation can be

troublesome. As Justice Felix Frankfurter observed:

“When the litigants are natural persons the conceptions

underlying venue present relatively few problems in

application. But in the case of corporate litigants these

procedural problems are enmeshed in the wider intri-

cacies touching the status of a corporation in our law.”

Neirbo Co v Bethlehem Shipbuilding Corp, Ltd, 308 US

165, 168; 60 S Ct 153; 84 L Ed 167 (1939).

A corporation is its own “person” under Michigan

law, an entity distinct and separate from its owners,

even when a single shareholder holds ownership of the

entire corporation. Jones v Martz & Meek Constr Co,

Inc, 362 Mich 451, 455; 107 NW2d 802 (1961); Bourne v

Muskegon Circuit Judge, 327 Mich 175, 191; 41 NW2d

515 (1950); Foodland Distrib v Al-Naimi, 220 Mich App

453, 456; 559 NW2d 379 (1996). Michigan law pre-

sumes that parent and subsidiary corporations con-

20 295 M

ICH

14 [Dec

stitute separate legal entities. Seasword v Hilti, Inc

(After Remand), 449 Mich 542, 547; 537 NW2d 221

(1995). Moreover, Michigan law does not recognize the

existence of a “joint venture” or “joint enterprise” as a

“distinct commercial business entity.” First Pub Corp v

Parfet, 468 Mich 101, 106-107; 658 NW2d 477 (2003).

The rules respecting the corporate form apply equally

to limited liability corporations. See Florence Cement Co

v Vettriano, 292 Mich App 461; 468-469; 807 NW2d 917

(2011). Thus, Huron Medical, as a shareholder in the

limited liability corporation of Thumb MRI and the

nonprofit corporation of Thumb Area Dialysis, is a

corporate entity separate and distinct from both clinics.

In essence, Hills and Dales asserts that we should

pierce the corporate veil of the two Tuscola County

clinics and impose on Huron Medical a form of “vicari-

ous venue.” No evidence suggests that Huron Medical

controls the daily business affairs of the two Tuscola

County clinics or that the clinics exist only as “alter

egos” or “mere instrumentalities” of Huron Medical. Id.

at 469; Foodland Distrib, 220 Mich App at 456-457. We

discern no legal or factual basis for disregarding Huron

Medical’s separate corporate form and decline to im-

pute to Huron Medical the business activities of the

Tuscola County clinics. Moreover, we share the objec-

tion of Huron Medical’s counsel to venue premised on

shareholder status. Equating stock ownership with

“conducting business” expands the statutory language

beyond the plain meaning of the term. Although Huron

Medical holds stock in two health facilities situated in

Tuscola County, we hold that it conducts no business in

Tuscola County and that the circuit court clearly erred

by concluding otherwise.

Hills and Dales insists that it properly fixed venue in

Tuscola County because Huron Medical’s website

2011] H

ILLS

ALES

OSP V

ANTIG

“takes credit” for the work of Thumb MRI and Thumb

Area Dialysis. According to Hills and Dales, Huron

Medical’s participation in the two Tuscola County clin-

ics demonstrates “real presence” in the county and

evidences “systematic, continuous business dealings”

sufficient to support venue. Hills and Dales premises its

flawed argument on a line of cases decided by this Court

that limit the reach of the language “conducting busi-

ness” found in MCL 600.1621(a).

In Saba v Gray, 111 Mich App 304, 312-313; 314

NW2d 597 (1981), the Court examined whether a real

estate agent assigned to sell property in Monroe County

could be sued in Wayne County. The agent advertised in

newspapers circulating in Wayne County and had re-

ceived a single referral from Wayne County. Id. at 314.

This Court determined that the defendant could not be

“properly characterized as conducting business in

Wayne County,” explaining that “the purpose behind

the venue statute [is] that an action should be insti-

tuted in a county in which the defendant has some real

presence such as might be shown by systematic or

continuous business dealings inside the county.” Id. at

314-315.

Subsequently, this Court fleshed out Saba’s “system-

atic and continuous business dealings” standard. In

Pulcini v Doctor’s Clinic, PC, 158 Mich App 56; 404

NW2d 702 (1987), the plaintiff sued a physician and his

professional corporation in Wayne County based solely

on the physician’s ability to admit patients to a Wayne

County hospital, a privilege he had never actually

exercised. Relying on Saba, this Court held the physi-

cian’s professional contact with Wayne County inad-

equate to support that he conducted business there

because the doctor lacked any “ ‘real presence’ or

systematic or continuous business dealings in Wayne

22 295 M

ICH

14 [Dec

County.” Id. at 59. The Court elaborated: “Conducting

business does not include the performance of acts

merely incidental to the business in which the defen-

dant is ordinarily engaged.” Id. In Chiarini v John

Deere Co, 184 Mich App 735; 458 NW2d 668 (1990), the

plaintiffs suffered snowblower-related injuries in Ma-

comb County and sued the defendant snowblower dis-

tributor in Wayne County. The plaintiffs defended their

selection of Wayne County venue by noting the presence

of several independent dealers within Wayne County

selling John Deere equipment and the defendant’s

contribution to the dealerships’ advertising and insur-

ance expenses. Id. at 737. In rejecting the plaintiffs’

argument, this Court adopted a rule established by the

Illinois Supreme Court in Stambaugh v Int’l Harvester

Co, 102 Ill 2d 250; 464 NE2d 1011 (1984), that proper

venue lies in the county where a defendant conducts

“its usual and customary business.... The activity

must be of such a nature as to localize the business and

make it an operation within the county.” Chiarini, 184

Mich App at 738. Applying Stambaugh, the Court found

the John Deere Company’s periodic visits and economic

contributions to Wayne County snowblower dealerships

insufficient to establish venue. Id. at 738-739.

We interpret this line of cases as requiring a true

business connection between the defendant and the

selected venue. Huron Medical, a full-service hospital,

carries out its systematic and regular activities in

Huron County. It neither owns nor operates any medi-

cal facility in Tuscola County. Huron Medical’s solicita-

tion of business for entirely separate entities in which it

holds stock does not amount to conducting business. In

Chiarini, this Court declined to treat the John Deere

Company and independent John Deere dealers as a

single business entity. We likewise reject that the busi-

ness of the Tuscola County clinics may be attributed to

2011] H

ILLS

ALES

OSP V

ANTIG

Huron Medical. As such, Huron Medical does not regu-

larly or systematically conduct business in Tuscola

County.

Reversed and remanded for further proceedings con-

sistent with this opinion. We do not retain jurisdiction.

ARKEY

,P.J., and S

AAD

and G

LEICHER

, JJ., concurred.

24 295 M

ICH

14 [Dec

PARISE v DETROIT ENTERTAINMENT, LLC

Docket No. 295183. Submitted September 13, 2011, at Detroit. Decided

September 20, 2011. Approved for publication December 6, 2011,

at 9:10 a.m. Leave to appeal denied, 491 Mich 915.

Italo M. Parise brought an action in the Wayne Circuit Court,

seeking to recover his gambling losses at Detroit Entertainment,

L.L.C., doing business as MotorCity Casino. Parise alleged that he

lost more than $600,000 at the casino between 2002 and 2009 and

asserted that he had a right to recover his gambling losses under

MCL 600.2939(1). The parties filed cross-motions for summary

disposition. MotorCity Casino argued that under § 3(3) of the

Michigan Gaming Control and Revenue Act (MGCRA), MCL

432.203(3), Parise was precluded from relying on MCL 600.2939(1)

to recover his losses. The court, Michael F. Sapala, J., agreed and

granted MotorCity’s motion. Parise appealed.

The Court of Appeals held:

When two statutes are in pari materia but conflict with one

another on a particular issue, the more specific statute controls

over the more general statute. In addition, a more recently enacted

law takes precedence over an older statute, especially when one

statute is both the more specific and the more recent. MCL

600.2939(1) is a general statute that allows a party to recover for

the loss of money or goods through gaming. The MGCRA, to which

MotorCity Casino is subject as a Detroit casino licensee, takes

precedence over the gaming-loss-recovery provision in MCL

600.2939(1) because it is a more specific act that applies directly to

legalized non-Indian casino gambling in Detroit. MCL 432.203(3)

provides that any law inconsistent with the MGCRA does not

apply to casino gaming as provided for by the MGCRA. Under

MCL 432.203(3), MotorCity Casino would not be subject to liabil-

ity for a patron’s gambling losses because it would be inconsistent

with the legalization of casino gambling provided for by the

MGCRA. The circuit court properly concluded that Parise, as a

participant in legalized casino gambling, could not claim the

remedy provided by MCL 600.2939(1).

Affirmed.

2011] P

ARISE V

ETROIT

NTERTAINMENT

, LLC 25

TATUTES —

AMING —

ICHIGAN

AMING

ONTROL AND

EVENUE

CT —

ECOVERY OF

AMBLING

OSSES

MCL 600.2939(1), which allows a party to recover for the loss of

money or goods through gaming, does not apply to casino gaming

in Detroit; § 3(3) of the Michigan Gaming Control and Revenue

Act (MGCRA), MCL 432.203(3), provides that any law inconsistent

with the MGCRA does not apply to casino gaming in Detroit as

provided for by the MGCRA; the MGCRA applies specifically to

legalized non-Indian casino gambling in Detroit and a casino

operating in Detroit under the MGCRA is not subject to liability

under MCL 600.2939(1) for a patron’s gambling losses because it

would be inconsistent with the legalization of casino gambling.

Italo M. Parise in propria persona.

Nemeth Burwell, P.C. (by Patricia Nemeth and Debo-

rah Brouwer), for Detroit Entertainment, L.L.C.

Before: R

ONAYNE

RAUSE

,P.J., and C

AVANAGH

and

ANSEN

,JJ.

URIAM

. Plaintiff brought this action to recover

his gambling losses at defendant’s casino pursuant to

MCL 600.2939(1). The parties filed cross-motions for

summary disposition. The trial court denied plaintiff’s

motion and granted defendant’s motion under MCR

2.116(C)(8). Plaintiff now appeals as of right and we

affirm.

Plaintiff alleges that between 2002 and 2009, he lost

more than $600,000 gambling at defendant MotorCity

Casino in Detroit. Plaintiff filed this action asserting a

right to recover his gambling losses under MCL

600.2939(1). In lieu of filing an answer to plaintiff’s

complaint, defendant, a casino subject to the Michigan

Gaming Control and Revenue Act (MGCRA), MCL

432.201 et seq., filed a motion for summary disposition

under MCR 2.116(C)(8). Defendant argued that § 3(3)

of the MGCRA, MCL 432.203(3), precluded plaintiff

from relying on MCL 600.2939(1) to recover his losses

26 295 M

ICH

25 [Dec

incurred while legally gambling at MotorCity Casino.

The trial court agreed and granted defendant’s motion.

A trial court’s decision on a motion for summary

disposition is reviewed de novo. Maiden v Rozwood, 461

Mich 109, 118; 597 NW2d 817 (1999). A motion for

summary disposition brought pursuant to MCR

2.116(C)(8) tests the legal sufficiency of a claim by the

pleadings alone. Newton v Bank West, 262 Mich App

434, 437; 686 NW2d 491 (2004). The motion should be

granted only if no factual development could justify

recovery. Feyz v Mercy Mem Hosp, 475 Mich 663, 672;

719 NW2d 1 (2006).

This appeal also involves a question of statutory

interpretation, which is reviewed de novo as a question

of law. Klooster v City of Charlevoix, 488 Mich 289, 295;

795 NW2d 578 (2011). 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). “When the

Legislature has unambiguously conveyed its intent in a

statute, the statute speaks for itself, and judicial con-

struction is not permitted.” Koontz v Ameritech Servs,

Inc, 466 Mich 304, 312; 645 NW2d 34 (2002). “Courts

must give effect to every word, phrase, and clause in a

statute, and must avoid an interpretation that would

render any part of the statute surplusage or nugatory.”

Id. “Statutes that relate to the same subject matter or

share a common purpose are in pari materia and must

be read together as one law...toeffectuate the legis-

lative purpose as found in harmonious statutes.” In re

Project Cost & Special Assessment Roll for Chappel

Dam, 282 Mich App 142, 148; 762 NW2d 192 (2009). “If

two statutes lend themselves to a construction that

avoids conflict, that construction should control.” Id.

“When two statutes are in pari materia but conflict

2011] P

ARISE V

ETROIT

NTERTAINMENT

, LLC 27

with one another on a particular issue, the more specific

statute must control over the more general statute.”

Donkers v Kovach, 277 Mich App 366, 371; 745 NW2d

154 (2007). “[T]he rules of statutory construction also

provide that a more recently enacted law has prece-

dence over the older statute.” Travelers Ins v U-Haul of

Mich, Inc, 235 Mich App 273, 280; 597 NW2d 235

(1999). “This rule is particularly persuasive when one

statute is both the more specific and the more recent.”

Id.

In 1996, Michigan voters passed the ballot initiative

Proposal E to allow the operation of up to three casinos

in qualifying cities. The Legislature implemented Pro-

posal E by passing the MGCRA to regulate legalized

casino gambling in Detroit. Defendant is one of the

three casino licensees permitted to operate a casino in

Detroit and is subject to the MGCRA. Plaintiff contends

that despite the passage of Proposal E and the enact-

ment of the MGCRA, he is entitled to recover his

gambling losses from defendant under § 2939(1) of the

Revised Judicature Act, MCL 600.2939(1), which pro-

vides:

In any suit brought by the person losing any money or

goods, against the person receiving the same, when it

appears from the complaint that the money or goods came

to the hands of the defendant by gaming, if the plaintiff

makes oath before the court in which such suit is pending,

that the money or goods were lost by gaming with the

defendant as alleged in the complaint, judgment shall be

rendered that the plaintiff recover damages to the amount

of the said money or goods, unless the defendant makes

oath that he did not obtain the same, or any part thereof by

gaming with the plaintiff; and if he so discharges himself,

he shall recover of the plaintiff his costs; but the plaintiff

may at his election, maintain and prosecute his action

according to the usual course of proceedings in such actions

at common law.

28 295 M

ICH

25 [Dec

Whereas MCL 600.2939(1) is a general statute that

purports to apply to money or goods lost through

gaming, the MGCRA is a specific act that governs

legalized non-Indian casino gambling in Detroit. It is

undisputed that defendant is a Detroit casino licensee

subject to the MGCRA. Section 3 of the MGCRA pro-

vides that “[a]ny other law that is inconsistent with this

act does not apply to casino gaming as provided for by

this act.” MCL 432.203(3). Subjecting defendant to

liability for patrons’ gambling losses under MCL

600.2939(1) would be plainly inconsistent with the

legalization of casino gambling as provided for by Pro-

posal E and the MGCRA.

Plaintiff contends that Proposal E must be strictly

construed to reflect the voters’ limited intention of

“tolerating” legalized casino gaming in Detroit, without

repealing or abrogating any gambling laws except

criminal statutes prohibiting casino gambling. Plaintiff

contends that the MGCRA provides a restrictive defini-

tion of “gaming,” see MCL 432.202(x), that is narrower

than the common-law definition and therefore has no

effect on MCL 600.2939(1), which incorporates the

common-law definition. Plaintiff asserts that because

the common-law and MGCRA definitions of gaming are

distinct, it is possible for a casino patron to engage in

“gaming” under MCL 600.2939(1) but not “casino gam-

ing” under the MGCRA. He maintains that in the

casino-gambling situation, the house (i.e., the casino

licensee) will always be engaged in casino gaming under

MCL 432.202(x), but the patron might be engaged in

common-law gaming of the type regulated by MCL

600.2939(1). Plaintiff also argues that the MGCRA

governs only the casinos, and not the casinos’ patrons.

We find no merit in plaintiff’s arguments. Plaintiff

does not contend that he was engaged in anything other

2011] P

ARISE V

ETROIT

NTERTAINMENT

, LLC 29

than statutorily approved casino gaming while gam-

bling in defendant’s casino, placing bets against the

casino licensee in games approved by the Michigan

Gaming Control Board (MGCB). See MCL 432.202(v).

Plaintiff’s assertion that only the casino licensee, and

not the patron, are engaged in casino gambling is

untenable. Although plaintiff suggests that casino pa-

trons are not governed by the MGCRA, we note that

MCL 432.204(17)(d)(iii) clearly provides that the

MGCB has the authority to promulgate rules to “[l]i-

cense and regulate persons participating in or involved

with casino gaming authorized in this act.” As a par-

ticipant in legalized casino gambling, plaintiff cannot

claim the remedy provided by MCL 600.2939(1), which

is clearly inconsistent with the MGCRA. MCL

432.203(3). Accordingly, the trial court did not err by

ruling that plaintiff had failed to state a claim for relief

under MCL 600.2939(1). Summary disposition was

properly granted. MCR 2.116(C)(8).

Plaintiff also argues that defendant was not entitled

to summary disposition on the ground that he failed to

exhaust his administrative remedies under the MGCRA

before filing his circuit court complaint. Although de-

fendant argued in its motion for summary disposition

that the trial court lacked subject-matter jurisdiction

over plaintiff’s action because plaintiff had failed to

exhaust his administrative remedies with the MGCB,

the trial court did not decide this issue. Instead, the

trial court dismissed plaintiff’s complaint solely for

failing to state a legally cognizable claim. In light of our

conclusion that plaintiff failed to state a legally cogni-

zable claim for relief under MCL 600.2939(1) and that

summary disposition was therefore proper under MCR

2.116(C)(8), it is unnecessary to consider this latter

issue.

30 295 M

ICH

25 [Dec

We likewise need not consider any of the other

remaining arguments raised by the parties on appeal.

Affirmed.

ONAYNE

RAUSE

,P.J., and C

AVANAGH

and J

ANSEN

,JJ.,

concurred.

2011] P

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ETROIT

NTERTAINMENT

, LLC 31

PEOPLE v ARMISTED

Docket No. 302902. Submitted October 12, 2011, at Detroit. Decided

December 6, 2011, at 9:15 a.m.

Jose Armisted pleaded no contest in the Tuscola Circuit Court,

Michael J. Matuzak, J., of furnishing a cellular telephone to a

prisoner, MCL 800.283a, and was sentenced as a fourth-offense

habitual offender, MCL 769.12, to 1 to 10 years’ imprisonment.

Defendant’s plea was conditioned on his ability to appeal his

conviction on the basis that the prohibition did not apply because,

according to defendant, the person to whom he had given the

telephone had been released on parole and had not been in a

correctional facility. Defendant appealed by delayed leave granted.

The Court of Appeals held:

1. Under MCL 800.283a, a person may not sell, give, or

furnish, or aid in the selling, giving, or furnishing of, a cellular

telephone or other wireless communication device to a prisoner in

a correctional facility, or dispose of a cellular telephone or other

wireless communication device in or on the grounds of a correc-

tional facility. Under MCL 800.281a(g), a “prisoner” is a person

committed to the jurisdiction of the Department of Corrections

who has not been released on parole or discharged. Because the

Legislature specifically excluded from the definition of “prisoner”

only those persons “released on parole,” as opposed to all parolees

or all persons on parole, the term “prisoner” includes all parolees

who have not been released. Release on parole requires release

into the community. In this case, defendant was assigned to an

intermediate facility while on parole, and he provided a cellular

telephone to another inmate of the facility. Because the inmates at

the intermediate facility had not been released into the commu-

nity, they remained prisoners within the meaning of MCL

800.281a(g) and MCL 800.283a.

2. In relevant part, MCL 800.281a(e) defines a “correctional

facility” as a state prison. A “state prison” is any facility operated

by the Department of Corrections to confine or involuntarily

restrain persons committed to its jurisdiction. It is the purpose for

which a facility is used, and not its label, that determines its

essential character as a state prison. The intermediate facility in

32 295 M

ICH

32 [Dec

which defendant was an inmate, the Tuscola Residential Reentry

Program, was operated by the Department of Corrections and was

a secure facility from which the inmates could not leave without

permission. Accordingly, it was a state prison for the purpose of the

prohibition against providing contraband to prisoners. The district

court did not abuse its discretion by binding defendant over to the

circuit court, and the circuit court did not abuse its discretion by

denying defendant’s motion to quash the information.

3. Defendant’s failure to move to withdraw his plea before the

circuit court within six months after sentencing in accord with

MCR 6.310(C), or to move for relief from the judgment under MCR

6.500 et seq., precluded appellate review of whether the plea was

“coerced.”

4. When ineffective assistance of counsel is claimed in the

context of a plea, the pertinent inquiry is whether the defendant

tendered the plea voluntarily and understandingly. In this case,

irrespective of any misstatements by counsel as to defendant’s

likely minimum sentence, defendant would have been subject to a

much greater maximum sentence than the one he actually re-

ceived had he been tried and convicted. And a party may not create

a factual dispute by submitting an affidavit that contradicts his or

her own sworn testimony or prior conduct. In this case, while

sworn during the plea proceedings, defendant stated that he fully

understood the plea and sentencing agreement. Defendant’s con-

trary assertion in his affidavit, submitted eight months after his

sentencing, could not establish a basis for appeal in contravention

of his earlier sworn statement. Under the circumstances, defen-

dant did not receive ineffective assistance of counsel.

5. Whenever any person is convicted of any crime and has

served time in jail before sentencing because of being denied or

unable to furnish bond for the offense of which he or she is

convicted, the trial court in imposing sentence must specifically

grant credit against the sentence for such time served in jail before

sentencing. However, upon arrest for a new felony, a parolee

continues to serve the unexpired portion of his or her earlier

sentence. The parolee is required to remain in jail pending the

resolution of the new criminal charge for reasons independent of

his or her eligibility for or ability to furnish bond for the new

offense. Therefore, when a person on parole commits a subsequent

felony and is detained, the time of detention continues to accrue

toward the fulfillment of the originally imposed sentence on which

parole was granted.

6. Absent an error in scoring the sentencing guidelines or

inaccurate information relied upon in determining the defendant’s

2011] P

EOPLE V

RMISTED

sentence, a minimum sentence that falls within the appropriate

guidelines range must be affirmed on appeal. In this case, defen-

dant argued that his sentence of 1 to 10 years in prison was,

although within the guidelines range, disproportionate. However,

appellate review of sentences imposed under the legislative sen-

tencing guidelines is limited and does not specifically encompass

proportionality. And even if a sentence within the appropriate

guidelines range could be deemed disproportionate in unusual

circumstances, defendant failed to demonstrate such circum-

stances.

7. Facts considered in calculating the sentencing guidelines

minimum range need not be admitted by the defendant or proven

to the trier of fact beyond a reasonable doubt. Defendant was

properly sentenced.

Affirmed.

1. P

RISONS AND

RISONERS —

ONTRABAND —

ELLULAR

ELEPHONES —

AROLEES

A person may not sell, give, or furnish, or aid in the selling, giving,

or furnishing of, a cellular telephone or other wireless communi-

cation device to a prisoner in a correctional facility, or dispose of a

cellular telephone or other wireless communication device in or on

the grounds of a correctional facility; a “prisoner” is a person

committed to the jurisdiction of the Department of Corrections

who has not been released on parole or discharged; release on

parole requires release into the community; a parolee confined in

a intermediate facility has not been released on parole and,

therefore, is a prisoner for the purpose of the prohibition against

providing cellular telephones to prisoners (MCL 800.281a[g], MCL

800.283a).

2. P

RISONS AND

RISONERS —

ONTRABAND —

ELLULAR

ELEPHONES —

ORREC-

TIONAL

ACILITIES —

TATE

RISONS —

NTERMEDIATE

ACILITIES

A person may not sell, give, or furnish, or aid in the selling, giving,

or furnishing of, a cellular telephone or other wireless communi-

cation device to a prisoner in a correctional facility, or dispose of a

cellular telephone or other wireless communication device in or on

the grounds of a correctional facility; the term “correctional

facility” includes a state prison; a “state prison” is any facility

operated by the Department of Corrections to confine or involun-

tarily restrain persons committed to its jurisdiction; it is the

purpose for which a facility is used, and not its label, that

determines its essential character as a state prison; a secure

intermediate facility operated by the Department of Corrections

from which the inmates cannot leave without permission is a

34 295 M

ICH

32 [Dec

state prison for the purpose of the prohibition against providing

cellular telephones to prisoners (MCL 800.281a[e], MCL

800.283a).

Bill Schuette, Attorney General, John J. Bursch,

Solicitor General, Mark E. Reene, Prosecuting Attorney,

and Ariana E. Hemerline, Assistant Prosecuting Attor-

ney, for the people.

Joseph L. Stewart for defendant.

Before: O

WENS

,P.J., and J

ANSEN

and O’C

ONNELL

,JJ.

URIAM

. Defendant appeals by delayed leave

granted following his conditional no-contest plea to the

offense of furnishing a cellular phone to a prisoner,

MCL 800.283a, for which he was sentenced as a fourth

habitual offender, MCL 769.12, to a prison term of 1 to

10 years. Defendant’s no-contest plea was conditioned

on the outcome of this appeal. We affirm.

On October 26, 2009, a corrections officer working at

the Tuscola Residential Reentry Program (TRRP)

searched an inmate room and found a cellular phone in

the trash can. Matthew Huggard, who was defendant’s

roommate at TRRP, told an officer at the facility that

defendant had given him the cellular phone and that he

had used it. Defendant later told the Michigan State

Police that it was his phone.

Defendant argued before the district court that he

had not furnished a cellular phone to a “prisoner in a

correctional facility” within the meaning of MCL

800.283a because the inmates at TRRP are “parolees”

rather than prisoners. Defendant thus asserted that he

should not be bound over to the circuit court. The

2011] P

EOPLE V

RMISTED

district court determined that there was sufficient

probable cause to believe that defendant had committed

the crime of furnishing a cellular phone to a prisoner

and bound defendant over to the circuit court for

further proceedings.

A motion hearing was held before the circuit court

judge. The parties stipulated that the inmates at TRRP

are classified by the Department of Corrections (the

Department) as parolees. Defendant again argued that

he had not given a cellular phone to a “prisoner”

because the inmates at TRRP are merely parolees.

Defendant also argued that TRRP was a community

relations program rather than a correctional facility.

The circuit court ruled that TRRP inmates are prison-

ers within the meaning of MCL 800.281a(g) and MCL

800.283a. Defendant then entered his conditional no-

contest plea. The parties acknowledged on the record

that they had reached a sentencing agreement of 1 to 10

years.

Defendant later submitted an affidavit in which he

averred that he was granted parole and released from

the Parnell Correctional Facility on September 24,

2009, and that he was subsequently transferred to

TRRP. Defendant claimed that he was the only person

who had used the cellular phone in question. Defendant

also averred that he was effectively coerced into accept-

ing the no-contest plea by his attorney, who had alleg-

edly informed him that he would likely be sentenced to

a term of 11 years to life in prison if he did not agree to

the plea deal.

Defendant first argues that he did not furnish a

cellular phone to a “prisoner in a correctional facility”

within the meaning of MCL 800.283a because the

inmates at TRRP are parolees rather than prisoners

36 295 M

ICH

32 [Dec

and because TRRP is not a correctional facility. There-

fore, he argues, the district court erred by binding him

over to the circuit court and the circuit court erred by

denying his motion to quash the information.

We review for an abuse of discretion the circuit

court’s ruling on a motion to quash the information and

the district court’s decision to bind over a defendant to

the circuit court. People v Hill, 269 Mich App 505,

513-514; 715 NW2d 301 (2006), overruled in part on

other grounds by People v Hill, 486 Mich 658; 786

NW2d 601 (2010). However, if the decision concerns

whether the alleged conduct falls within the scope of a

penal statute, the issue presents a question of law that

we review de novo. Hill, 269 Mich App at 514.

Our primary goal when interpreting a statute is to

ascertain and give effect to the intent of the Legislature.

People v Williams, 475 Mich 245, 250; 716 NW2d 208

(2006). The first step in determining legislative intent is

to examine the specific language of the statute. People v

Lively, 470 Mich 248, 253; 680 NW2d 878 (2004). The

Legislature is presumed to have intended the meaning

that it plainly expressed. Rowland v Washtenaw Co Rd

Comm, 477 Mich 197, 219; 731 NW2d 41 (2007). Judi-

cial construction is only appropriate if reasonable minds

could differ concerning the statute’s meaning. People v

Warren, 462 Mich 415, 427; 615 NW2d 691 (2000).

The Legislature has made it a felony to furnish

certain types of contraband to prisoners in correctional

facilities. See MCL 800.281 et seq. This includes a

prohibition against furnishing cellular phones to pris-

oners. MCL 800.283a. In the present case, defendant

entered a conditional no-contest plea to the offense of

furnishing a cellular phone to a prisoner in violation of

MCL 800.283a, which provides:

2011] P

EOPLE V

RMISTED

A person shall not sell, give, or furnish, or aid in the

selling, giving, or furnishing of, a cellular telephone or

other wireless communication device to a prisoner in a

correctional facility, or dispose of a cellular telephone or

other wireless communication device in or on the grounds

of a correctional facility.

There is no question that defendant possessed a cellular

phone while he was an inmate at TRRP. Instead, the

pertinent questions are whether the inmate to whom

defendant allegedly furnished the phone was a prisoner

and whether TRRP is a correctional facility.

For the reasons that follow, we conclude that the

inmates at TRRP are “prisoner[s]” within the meaning

of MCL 800.283a.

For purposes of MCL 800.281 et seq., the Legislature

has defined the term “prisoner” as “a person committed

to the jurisdiction of the department [of corrections]

who has not been released on parole or discharged.”

MCL 800.281a(g). It is undisputed that the persons

housed at TRRP have all been committed to the Depart-

ment’s jurisdiction and, as parolees, are subject to the

Department’s rules. See MCL 791.238(1) (stating that

prisoners on parole remain in the Department’s legal

custody); MCL 791.206(1)(c) (granting the Department

authority to promulgate rules concerning the supervi-

sion and control of parolees). Similarly, it is uncontested

that the persons housed at TRRP have not been “dis-

charged” from the Department’s jurisdiction. Thus the

only dispute concerns whether the persons housed at

TRRP have been “released on parole” as that phrase is

used in MCL 800.281a(g).

Michigan courts have long recognized that a grant of

parole generally constitutes permission to leave con-

38 295 M

ICH

32 [Dec

finement with certain restrictions. See In re Dawsett,

311 Mich 588, 595; 19 NW2d 110 (1945) (stating that

parole is simply a permit to leave the enclosure of the

prison, and not a release); see also People v Raihala, 199

Mich App 577, 579; 502 NW2d 755 (1993) (characteriz-

ing the grant of parole as a “conditional release” from

prison). However, it is noteworthy that in drafting MCL

800.281a(g), the Legislature did not exclude all parolees

or persons on parole from the definition of “prisoner.”

Instead, it excluded only those persons who have been

“released on parole.” This Court must, if possible, con-

strue the phrase “released on parole” by giving meaning

to each word in the phrase. Bush v Shabahang, 484 Mich

156, 167; 772 NW2d 272 (2009). Because the Legislature

specifically excluded from the definition persons “released

on parole”—as opposed to all parolees or all persons on

parole—we conclude that the Legislature intended to

limit the exclusion to a specific class of parolees rather

than apply it to parolees in general. That is, we construe

the term “prisoner” as defined in MCL 800.281a(g) to

include all parolees who have not yet been released. For

this reason, we reject the notion that any person who is on

parole is not a “prisoner” within the meaning of MCL

800.281a(g).

Our understanding of the phrase “released on pa-

role” is consistent with the Legislature’s decision to

place separate requirements on the grant of parole and

the release of a parolee. See MCL 791.233(1); MCL

791.238(6). In particular, MCL 791.238(6) provides that

“[a] parole shall be construed as a permit to the

prisoner to leave the prison, and not as a release.”

(Emphasis added.) Likewise, the Legislature has pro-

vided that a parolee may not be released from custody

until the parole board has satisfactory evidence that

arrangements have been made for the parolee’s employ-

ment, education, or care, MCL 791.233(1)(e), that pa-

2011] P

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RMISTED

rolees may be retained in custody under certain circum-

stances, MCL 791.233(2), and that the parole board has

the authority to rescind a parole order before a parolee

is released into the community, MCL 791.236(2). In

similar fashion, this Court has recognized the distinc-

tion between being granted parole and being released

on parole. See Wayne Co Prosecutor v Parole Bd, 210

Mich App 148, 154; 532 NW2d 899 (1995). Specifically,

we have observed that even after parole is granted, it is

not unreasonable to impose additional requirements

before the parolee is actually released. Id.; see also MCL

791.233(1)(e). Quite simply, the grant of parole and a

parolee’s release after being paroled are two different

things under Michigan law, which plainly recognizes

that a person who has been granted parole might

nevertheless remain in custody.

There is also a compelling policy reason for differ-

entiating between all parolees and parolees who have

been released into the community. The purpose un-

derlying MCL 800.281 et seq. is to keep contraband

out of state correctional facilities and to ensure order

and discipline within those facilities. See People v

Krajenka, 188 Mich App 661, 664; 470 NW2d 403

(1991). This purpose would be undermined if we were

to construe the phrase “released on parole” as includ-

ing all parolees, and, on that basis, to conclude that

parolees who remain in custody are not prisoners

within the meaning of MCL 800.281a(g). The Legis-

lature has determined that parolees who have not yet

been released into the community should be treated

as “prisoners” for purposes of the statutory ban on

contraband in correctional facilities, and this Court

will respect that policy choice.

Nor can we conclude that the statutory phrase

“released on parole” refers to a prisoner’s release to

40 295 M

ICH

32 [Dec

an intermediate facility such as TRRP rather than a

parolee’s ultimate release into the community. We

must construe the phrase “released on parole” ac-

cording to its plain and ordinary meaning. MCL 8.3a;

Brackett v Focus Hope, Inc, 482 Mich 269, 276; 753

NW2d 207 (2008). A person of ordinary intelligence

would understand the phrase “released on parole” to

mean released from confinement—that is, released

into the community—and would not consider a trans-

fer from one of the Department’s secured facilities to

another of the Department’s secured facilities to

constitute being “released on parole.” See Random

House Webster’s College Dictionary (1997) (defining

“release” to mean, in relevant part, “to free from

confinement [or] bondage”). This is true even if the

facility to which the prisoner is transferred has less

severe restrictions and is intended as an intermediate

step before release into the community at large. And

the statutes governing parole lend support to our

conclusion that being “released on parole” means

being released into the community. See MCL

791.237(1) (requiring the Department to provide a

prisoner who is released on parole with clothing and

a nontransferable ticket to the place where the pris-

oner is to reside and providing discretion to give the

prisoner an advance of money for a 2-week period). In

short, we conclude that the phrase “released on

parole” in MCL 800.281a(g) refers to a parolee’s

ultimate release into the community at large.

Although the inmates at TRRP are on parole, they have

not been released from confinement or sent into the

community at large. Therefore, TRRP inmates have not

been “released on parole” and they remain prisoners

within the meaning of MCL 800.281a(g) and MCL

800.283a.

2011] P

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RMISTED

We also conclude that TRRP is a “correctional facil-

ity” within the meaning of MCL 800.283a.

To be guilty of violating MCL 800.283a, a person

must have furnished a cellular phone or wireless device

to a prisoner in a “correctional facility.” MCL

800.281a(e) defines a “correctional facility” as:

(i) A state prison, reformatory, work camp, or commu-

nity corrections center.

(ii) A youth correctional facility operated by the depart-

ment or a private vendor....

(iii) A privately operated community corrections center

or resident home which houses prisoners committed to the

jurisdiction of the department.

(iv) The land on which a facility described in subpara-

graph (i), (ii), or (iii) is located.

TRRP is not a privately operated facility and is plainly

not a youth correctional facility. Thus, the pertinent

definition for purposes of this case is that provided by

MCL 800.281a(e)(i).

The Legislature has not defined the term “state

prison” within the text of MCL 800.281 et seq., but has

defined the term “prison” elsewhere. For example, MCL

750.193(2) defines “prison” as “a facility that houses

prisoners committed to the jurisdiction of the depart-

ment of corrections....” Immediately before its

amendment by way of 1998 PA 510, MCL 750.193(2)

defined “prison” in pertinent part as “a state prison,

penitentiary, reformatory, state house of correction,

community residential center either operated or leased

by the department of corrections, or a penal camp....”

Former MCL 750.193(2) (emphasis added). Similarly,

various Michigan courts have examined what consti-

tutes a prison for purposes of MCL 750.193, the prison

42 295 M

ICH

32 [Dec

escape statute. For instance, in People v Mayes, 95 Mich

App 188, 190; 290 NW2d 119 (1980), this Court con-

cluded that “a halfway house is a prison” for purposes

of the escape statute, and in People v Granquist, 183

Mich App 343, 346; 454 NW2d 207 (1990), this Court

determined that a defendant’s own place of residence

constituted a “prison” for purposes of the escape statute

because the defendant’s apartment was under the De-

partment’s surveillance by way of electronic monitor-

ing. This Court has also held that a YMCA corrections

program and a community corrections program can

constitute prisons within the meaning of the escape

statute. People v Johnson, 96 Mich App 84, 87-88; 292

NW2d 489 (1980); People v Strong, 53 Mich App 620,

624; 219 NW2d 804 (1974).

While these definitions may provide some evidence of

the Legislature’s intent, they are not dispositive for

purposes of interpreting the term “state prison” as it is

used in MCL 800.281a(e)(i). It therefore remains our

duty to interpret the term “state prison” in MCL

800.281a(e)(i) according to its ordinary and commonly

understood meaning. MCL 8.3a; Brackett, 482 Mich at

276. A “prison” is commonly understood to be “a

building for the confinement of accused persons await-

ing trial or persons sentenced after conviction” or “any

place of confinement or involuntary restraint.” Ran-

dom House Webster’s College Dictionary (1997). It fol-

lows that a “state prison” is a prison operated by the

state of Michigan—that is, by the Department. We

conclude that a “state prison” is any facility operated by

the Department to confine or involuntarily restrain

persons committed to its jurisdiction.

It is the purpose for which a facility is used, and not

its exact name or label, that determines its essential

character as a state prison. See People v Gobles, 67 Mich

2011] P

EOPLE V

RMISTED

475, 479; 35 NW 91 (1887) (observing that “[a]lthough

the prison at Ionia is called ‘a house of correction and

reformatory,’ it is no less than a [s]tate prison”). The

specific name given to TRRP is therefore irrelevant.

Instead, we must examine the actual purposes for

which the facility is used. TRRP is operated by the

Department and designed to involuntarily restrain or

confine persons committed to its jurisdiction while

those persons receive certain remedial services de-

signed to help them transition into the community at

large. The fact that the persons confined at TRRP are

parolees and will eventually be released into the com-

munity (assuming that they meet the requirements for

release) does not alter the fact that TRRP is a secure

facility from which the inmates cannot leave without

permission. We conclude that TRRP is a state prison

within the meaning of MCL 800.281a(e)(i), and there-

fore a correctional facility within the meaning of MCL

800.283a.

Before accepting defendant’s no-contest plea, the

circuit court was required to establish a factual basis for

the plea. MCR 6.302(D)(2)(b); see also People v Holmes,

181 Mich App 488, 490; 449 NW2d 917 (1989). Simi-

larly, to bind over defendant to the circuit court, the

In light of our conclusion that TRRP constitutes a state prison within

the meaning of MCL 800.281a(e)(i), we need not decide whether it is also

a reformatory or community corrections center within the meaning of the

statute. However, we note that a “community corrections center” is

defined merely as “a facility either contracted for or operated by the

department [of corrections] in which a security staff is on duty 7 days per

week, 24 hours per day.” MCL 791.265a(9)(a). It appears from the record

that the TRRP inmates are monitored or guarded 24 hours a day and

seven days a week. Thus, although we do not decide the issue, it would

appear that TRRP also qualifies as a community corrections center

within the meaning of MCL 800.281a(e)(i).

44 295 M

ICH

32 [Dec

district court was required to determine that there was

“probable cause to believe that a felony was committed

and that the defendant committed the offense.” People

v Jenkins, 244 Mich App 1, 14; 624 NW2d 457 (2000);

see also MCL 766.13; MCR 6.110(E). As noted earlier,

defendant does not deny that he possessed a cellular

phone while he was an inmate at TRRP. Rather, he

claims only that his conduct did not fall within the

prohibitions of MCL 800.283a.

As already explained, the inmate to whom defendant

allegedly provided the cellular phone at issue was a

“prisoner in a correctional facility” within the meaning

of MCL 800.283a. Accordingly, we conclude that there

was probable cause to believe that defendant had fur-

nished a cellular phone to a prisoner in violation of

MCL 800.283a and that there was a sufficient factual

basis to support defendant’s no-contest plea in this

case. The district court did not abuse its discretion by

binding over defendant to the circuit court and the

circuit court did not abuse its discretion by denying

defendant’s motion to quash the information. Hill, 269

Mich App at 513-514.

III

Defendant next argues that his no-contest plea was

involuntary as the result of “undue coercion” and that

he should therefore be permitted to withdraw the plea.

Defendant also claims that his trial attorney coerced

him into accepting the plea with threats of a long prison

sentence and that his attorney rendered ineffective

assistance of counsel in this regard.

Defendant did not timely seek to withdraw his plea or

challenge the voluntariness of his plea before the circuit

court. Nor did defendant challenge the effectiveness of

2011] P

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RMISTED

his trial attorney or seek a Ginther

hearing with regard

to his claim of ineffective assistance of counsel. These

issues are therefore unpreserved for appellate review.

MCR 6.310(D); People v Sabin (On Second Remand),

242 Mich App 656, 658-659; 620 NW2d 19 (2000); see

also People v Nowicki, 213 Mich App 383, 385; 539

NW2d 590 (1995).

We review unpreserved claims, both constitutional

and nonconstitutional, for outcome-determinative plain

error. People v Carines, 460 Mich 750, 763-764; 597

NW2d 130 (1999); People v Hanks, 276 Mich App 91, 92;

740 NW2d 530 (2007). We review unpreserved claims of

ineffective assistance of counsel for errors apparent on

the record. People v Unger, 278 Mich App 210, 253; 749

NW2d 272 (2008).

Defendant argues that he should be permitted to

withdraw his no-contest plea for the reason that it was

involuntary. Specifically, he contends that his trial at-

torney coerced him into accepting the plea by threaten-

ing him with the prospect of a longer prison sentence if

he did not agree to the plea deal.

In response to the circuit court’s questioning at the

plea proceeding, defendant stated on the record that he

understood that there was a sentencing agreement of 1

to 10 years, that he did not know what the court’s

actual sentence would be, and that he had not been

threatened or promised any favors or leniency in ex-

change for his plea. On appeal, defendant does not

argue that he did not understand the plea to which he

agreed. Instead, he contends merely that he was some-

how “coerced” into accepting the plea when his trial

People v Ginther, 390 Mich 436; 212 NW2d 922 (1973).

46 295 M

ICH

32 [Dec

attorney allegedly informed him that he would likely be

sentenced to a term of 11 years to life in prison if he was

tried and ultimately convicted of furnishing a cellular

phone to a prisoner.

Furnishing a cellular phone to a prisoner in violation

of MCL 800.283a is a Class E offense, for which the

statutory maximum sentence is five years. MCL

777.17g. However, as a fourth habitual offender, defen-

dant was subject to enhanced sentencing, including a

100 percent increase in the upper limit of the recom-

mended minimum sentence range, MCL 777.21(3)(c),

and a maximum sentence of any number of years or life,

MCL 769.12(1)(a).

As for defendant’s maximum sentence, defendant

alleges that his attorney informed him that he could

receive a maximum sentence of life in prison if con-

victed. As just set forth, counsel was correct in this

regard. As a fourth habitual offender, defendant was

subject to a maximum sentence of any number of years

or life. MCL 769.12(1)(a).

With respect to defendant’s minimum sentence, de-

fendant contends that his attorney informed him that

he would likely receive a minimum sentence of 11 years.

This information does not appear to be correct. The

sentencing information report contained in the circuit

court file indicates that defendant had a total prior

record variable (PRV) score of 50 and a total offense

variable (OV) score of 20. Thus, after doubling the

upper limit of the recommended minimum sentence

range on account of defendant’s status as a fourth

habitual offender, defendant was subject to a minimum

term of incarceration of between 10 and 46 months if

sentenced within the guidelines. MCL 777.21(3)(c);

MCL 777.66. In other words, if defendant were sen-

tenced within the guidelines, his minimum sentence

2011] P

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RMISTED

could not have exceeded 46 months (3 years and 10

months), and certainly would not have been 11 years.

The problem with defendant’s argument, of course, is

that he never sought to withdraw his plea in the circuit

court. Under MCR 6.310(C), defendant was required to

move to withdraw his plea within six months after

sentencing or to move for relief from judgment accord-

ing to the procedures set forth in MCR 6.500 et seq.

Defendant’s affidavit dated February 14, 2011, filed

eight months after his sentencing, did not comply with

this court rule. Because defendant failed to file a motion

to withdraw his plea in the circuit court, appellate

review of this issue is precluded. MCR 6.310(D); People

v Dixon, 217 Mich App 400, 410; 552 NW2d 663 (1996).

Defendant also argues that his trial attorney ren-

dered ineffective assistance of counsel by incorrectly

informing him that he would be subject to a minimum

sentence of 11 years if tried and convicted and by using

this misinformation to coerce him into accepting the

plea deal. We simply cannot agree.

“When ineffective assistance of counsel is claimed in

the context of a plea, the pertinent inquiry is whether the

defendant tendered the plea voluntarily and understand-

ingly.” People v Swirles (After Remand), 218 Mich App

133, 138; 553 NW2d 357 (1996). We fully acknowledge

that defendant averred in his affidavit that trial counsel

had informed him that, if convicted of the charge of

furnishing a cellular phone to a prisoner, he would likely

be sentenced to a term of 11 years to life in prison. As

noted previously, assuming that counsel actually made

this representation to defendant, it appears that counsel

was mistaken with respect to the minimum sentence.

48 295 M

ICH

32 [Dec

However, irrespective of any misstatements by counsel,

the fact remains that defendant would have been subject

to a much greater maximum sentence than the one he

actually received had he been tried and ultimately con-

victed. See MCL 769.12(1)(a). Moreover, defendant does

not argue that any failures of trial counsel actually kept

him from understanding the plea to which he agreed.

Indeed, defendant testified under oath at the plea proceed-

ing that he fully understood the plea and sentencing

agreement. Just as a party or witness may not create a

factual dispute by submitting an affidavit that contradicts

his or her own sworn testimony or prior conduct, Dykes v

William Beaumont Hosp, 246 Mich App 471, 480; 633

NW2d 440 (2001); Palazzola v Karmazin Products Corp,

223 Mich App 141, 155; 565 NW2d 868 (1997), we con-

clude that defendant’s affidavit dated February 14, 2011,

was insufficient to contradict or overcome his previous

sworn statements at the plea proceeding of April 12, 2010.

Given defendant’s unequivocal confirmation in open court

that he understood the plea and sentencing agreement,

we cannot conclude that defendant’s counsel was ineffec-

tive. See Swirles, 218 Mich App at 138-139.

Defendant next argues that the circuit court erred by

failing to award him credit for time served in jail. We

disagree.

Whether a defendant is entitled to credit for time

served in jail before sentencing is a question of law that

we review de novo. People v Waclawski, 286 Mich App

634, 688; 780 NW2d 321 (2009).

Defendant argues that he should have been credited

for time served before sentencing according to MCL

769.11b, which provides:

2011] P

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RMISTED

Whenever any person is hereafter convicted of any crime

within this state and has served any time in jail prior to

sentencing because of being denied or unable to furnish bond

for the offense of which he is convicted, the trial court in

imposing sentence shall specifically grant credit against the

sentence for such time served in jail prior to sentencing.

As explained earlier, although defendant had not yet

been released into the community, he was technically on

parole while he was an inmate at TRRP. Thus, it

necessarily follows that defendant was on parole at the

time he committed the instant offense of furnishing a

cellular phone to a prisoner.

MCL 768.7a(2) provides:

If a person is convicted and sentenced to a term of

imprisonment for a felony committed while the person was

on parole from a sentence for a previous offense, the term

of imprisonment imposed for the later offense shall begin

to run at the expiration of the remaining portion of the

term of imprisonment imposed for the previous offense.

MCL 769.11b, the jail credit statute, is not applicable

when a parolee is convicted and sentenced to a new

term of imprisonment for a felony committed while on

parole because, once arrested for the new felony, the

parolee continues to serve out the unexpired portion of

his or her earlier sentence. People v Idziak, 484 Mich

549, 562-563; 773 NW2d 616 (2009). When a person on

parole commits a subsequent felony and is detained, the

time of detention continues to accrue toward the fulfill-

ment of the originally imposed sentence on which

parole was granted. MCL 791.238(1), (2), and (6); People

v Johnson, 283 Mich App 303, 308-310; 769 NW2d 905

(2009). The parolee is required to remain in jail pending

the resolution of the new criminal charge for reasons

independent of his or her eligibility for or ability to furnish

bond for the new offense; therefore, the jail credit

50 295 M

ICH

32 [Dec

statute does not apply. Idziak, 484 Mich at 566-567.

Defendant is entitled to no relief on this issue.

Defendant next argues that even though his sentence

of 1 to 10 years in prison falls within the statutory

sentencing guidelines, it is disproportionate to the

relatively benign nature of the offense of which he was

convicted. We cannot agree.

We review for an abuse of discretion whether a

sentence is proportionate to the seriousness of the

offense. See People v Crawford, 232 Mich App 608,

621-622; 591 NW2d 669 (1998). A sentence that falls

within the appropriate sentencing guidelines range is

presumptively proportionate. People v Powell, 278 Mich

App 318, 323; 750 NW2d 607 (2008).

Under the judicial sentencing guidelines that were in

effect before 1999, the rule in Michigan was that even a

sentence falling within the guidelines could conceivably be

disproportionate in “unusual circumstances.” People v

Milbourn, 435 Mich 630, 661; 461 NW2d 1 (1990). How-

ever, it does not appear that this “unusual circumstances”

rule of Milbourn has survived the Legislature’s enact-

ment of the statutory sentencing guidelines, MCL 777.1 et

seq.

See People v Hegwood, 465 Mich 432, 439; 636 NW2d

127 (2001) (noting that the principles and ground rules

governing the application of the former judicial sentenc-

ing guidelines do not necessarily govern the application of

the statutory sentencing guidelines); People v Babcock,

244 Mich App 64, 73; 624 NW2d 479 (2000) (observing

that, in enacting the statutory guidelines, “the Legislature

The Legislature enacted the statutory sentencing guidelines in 1998,

and they took effect on January 1, 1999. 1998 PA 317; see also People v

Hegwood, 465 Mich 432, 438-439; 636 NW2d 127 (2001).

2011] P

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intended to preclude any appellate scrutiny of sentences

falling within the appropriate guidelines range absent

scoring errors or reliance on inaccurate information”).

Under the statutory sentencing guidelines, this Court

must affirm a minimum sentence that falls within the

appropriate guidelines range “absent an error in scoring

the sentencing guidelines or inaccurate information relied

upon in determining the defendant’s sentence.” MCL

769.34(10); see also People v Kimble, 470 Mich 305,

310-311; 684 NW2d 669 (2004). Conspicuously absent

from Michigan’s current sentencing statutes is any men-

tion of the principle of proportionality or any discussion of

factors that would render an otherwise proper sentence

disproportionate.

As noted earlier, considering defendant’s total PRV and

OV scores, and given his status as a fourth habitual

offender, defendant was subject to a recommended mini-

mum sentence of between 10 and 46 months. MCL

777.21(3)(c); MCL 777.66. Thus, defendant’s minimum

sentence of one year fell squarely within the statutory

sentencing guidelines range. Defendant does not argue on

appeal that the circuit court erred in scoring the guide-

lines or that the court relied on inaccurate information

during sentencing. We must therefore affirm defendant’s

minimum sentence in this case. MCL 769.34(10).

Nor do we perceive any error in the circuit court’s

determination of defendant’s maximum sentence.

Even assuming arguendo that the “unusual circumstances” rule of

Milbourn has survived the enactment of the statutory sentencing guide-

lines, defendant has simply failed to demonstrate the existence of any

unusual circumstances that would render his sentence disproportionate

to the crime of which he was convicted. See People v Lee, 243 Mich App

163, 187-188; 622 NW2d 71 (2000); People v Daniel, 207 Mich App 47, 54;

523 NW2d 830 (1994); People v Sharp, 192 Mich App 501, 505-506; 481

NW2d 773 (1992).

It is only the minimum sentence that must be within the appropriate

sentencing guidelines range. MCL 769.34(2); People v Babcock, 469 Mich

247, 255 n 7; 666 NW2d 231 (2003).

52 295 M

ICH

32 [Dec

already explained, the felony of furnishing a cellular

phone to a prisoner in violation of MCL 800.283a

carries a statutory maximum sentence of five years.

MCL 777.17g. However, as a fourth habitual offender,

defendant was subject to a maximum sentence of any

number of years or life. MCL 769.12(1)(a). We cannot

conclude that the circuit court abused its discretion by

setting defendant’s maximum sentence at 10 years. See

id.; see also People v Babcock, 469 Mich 247, 255 n 7;

666 NW2d 231 (2003).

Lastly, relying on Blakely v Washington, 542 US 296;

124 S Ct 2531; 159 L Ed 2d 403 (2004), and Apprendi v

New Jersey, 530 US 466; 120 S Ct 2348; 147 L Ed 2d 435

(2000), defendant argues that the circuit court erred to

the extent that it calculated his sentence on the basis of

certain facts that were not admitted by defendant or

proven to the trier of fact beyond a reasonable doubt.

Our Supreme Court has repeatedly rejected this very

argument. People v McCuller, 479 Mich 672, 683; 739

NW2d 563 (2007); People v Drohan, 475 Mich 140,

163-164; 715 NW2d 778 (2006). And although defen-

dant insists that McCuller and Drohan were wrongly

decided, this Court is without authority to reverse

decisions of the Michigan Supreme Court. People v

Mitchell, 428 Mich 364, 369-370; 408 NW2d 798 (1987);

Ratliff v Gen Motors Corp, 127 Mich App 410, 416; 339

NW2d 196 (1983).

Affirmed.

WENS

,P.J., and J

ANSEN

and O’C

ONNELL

, JJ., con-

curred.

2011] P

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RMISTED

KESSLER v KESSLER

Docket No. 302492. Submitted November 8, 2011, at Grand Rapids.

Decided December 6, 2011, at 9:20 a.m.

Stephanie Kessler brought an action for divorce from Robert Kessler in

the Oceana Circuit Court, Family Law Division. Both parties sought

primary physical custody of their three minor children, who were

living with both parents in the marital home during the divorce

proceedings. The court, Anthony A. Monton, J., did not determine

whether there was an established custodial environment pursuant to

MCL 722.27(1)(c), but proceeded to award the parties joint legal

custody and defendant primary physical custody after concluding

that the best-interest factors of MCL 722.23 favored this outcome by

a preponderance of the evidence. Plaintiff appealed.

The Court of Appeals held:

1. The trial court did not err by failing to apply the statutory

change-of-domicile factors set forth in MCL 722.31(4). Under the

plain language of MCL 722.31(1), these factors apply only to petitions

for a change of domicile in situations where there is already a custody

order governing the parties’ conduct, which there was not in this

case.

2. The trial court clearly erred by failing to address whether an

established custodial environment existed. MCL 722.27(1)(c) pro-

hibits a court from issuing an order that changes the established

custodial environment of a child without clear and convincing

evidence that it is in the child’s best interest. The plain language

of this provision indicates that it applies not only to modifications

and amendments of existing custody orders but also to new

custody orders. The trial court’s error was not harmless and

requires the matter to be remanded because this factual determi-

nation establishes the proper burden of proof in regard to the best

interests of the children.

3. The trial court’s findings with regard to factor (b), which

addresses the parties’ capacity and disposition to give the child love,

affection, and guidance and to continue the education and raising of

the child in his or her religion or creed, if any, were not insufficient on

the ground that they addressed only the religious component of that

factor. The court was not required to explicitly address all the

evidence presented and arguments raised with respect to each factor.

54 295 M

ICH

54 [Dec

4. The trial court’s finding that factor (d) favored defendant was

not against the great weight of the evidence. Factor (d) addresses the

length of time the child has lived in a stable, satisfactory environment

and the desirability of maintaining continuity. Although plaintiff had

a specific plan regarding the children’s home and school in Florida

and defendant was uncertain about whether he would be able to

afford the marital home and school tuition in Michigan on his own,

the children had never lived in Florida, so there was no continuity in

that environment to maintain.

5. The trial court’s finding that factor (e) was neutral was not

against the great weight of the evidence. Factor (e) addresses the

permanence, as a family unit, of the existing or proposed custodial

home or homes. While defendant’s future living arrangement was

not certain, plaintiff’s move to Florida would have removed the

children from an environment where they had extended family

and others who provided a support system.

6. The trial court’s finding that factor (h), which addresses the

child’s home, school, and community record, slightly favored

defendant was supported by evidence that he had more flexibility

in attending to the children’s needs.

7. The trial court’s finding that factor (j) was neutral was not

against the great weight of the evidence. This factor addresses the

willingness and ability of the parties to facilitate and encourage a

close and continuing parent-child relationship between the child

and the other parent or the child and the parents. Other parties,

including defendant, testified that both parents loved their chil-

dren and would do what was best for the children. The only basis

for plaintiff’s claims that defendant interfered with her relation-

ship with the children was plaintiff’s own testimony, and deference

is given to the trial court’s credibility determinations.

8. The trial court’s finding that factor (k), which addresses

domestic violence, was neutral was not against the great weight of

the evidence. Although plaintiff testified about three alleged

incidents of domestic violence, defendant’s testimony presented a

different version of each incident. Deference is given to the trial

court’s credibility determinations.

Judgment affirmed in part and reversed in part; case remanded.

1. D

IVORCE —

ARENT AND

HILD —

HILD

USTODY —

RIGINAL

HILD

USTODY

RDERS —

STABLISHED

USTODIAL

NVIRONMENT

A court may not issue an order that changes the established

custodial environment of a child without clear and convincing

evidence that it is in the best interest of the child; the court must

determine whether there is an established custodial environment

2011] K

ESSLER V

ESSLER

with either or both of the parties before making its original

custody determination (MCL 722.27[1][c]).

2. D

IVORCE —

ARENT AND

HILD —

HILD

USTODY —

EST

-I

NTEREST

ACTORS —

ACTUAL

INDINGS

A trial court rendering a custody decision must state on the record

its factual findings and conclusions regarding each of the statutory

factors for determining a child’s best interests; these findings and

conclusions need not explicitly address every aspect of a given

factor or consider every piece of evidence entered and argument

raised by the parties (MCL 722.23).

Law Office of Alisa A. Peskin-Shepherd PLLC (by

Alisa A. Peskin-Shepherd) for Stephanie Kessler.

Law Offices of James A. Marek (by James A. Marek)

for Robert Kessler.

Before: W

ILDER

,P.J., and H

OEKSTRA

and B

ORRELLO

,JJ.

URIAM

. In this custody dispute, plaintiff appeals

as of right the trial court’s order awarding the parties

joint legal custody and defendant primary physical

custody. For the reasons stated in this opinion, we

affirm in part, reverse in part, and remand.

Plaintiff and defendant have three minor children.

The parties were married in 1999, and moved to Mon-

tague, Michigan in 2002. The children have lived in

Montague their entire lives. Defendant grew up in

Montague, and at the time of the custody hearing his

parents still lived there. There is no indication that

plaintiff has family in Montague or ever lived in Mon-

tague before residing there with defendant. Plaintiff

filed for divorce in June 2010. There was no custody

order in place before the custody hearing, which was

held in December 2010, and the parties did not have an

informal custody arrangement. Rather, the parties con-

tinued to live together in the marital home during the

divorce and custody proceedings. During the custody

56 295 M

ICH

54 [Dec

hearing, both parties requested an award of primary

physical custody. Plaintiff, who earned a significantly

higher salary than defendant, began a new job in

Florida on November 1, 2011, and sought to move the

children to Florida at the end of the school year. Neither

party had relatives living in Florida at the time of the

hearing. Defendant intended to remain in Montague

and sought to have the children remain with him in the

marital home.

After hearing testimony and considering

the statutory best-interest factors, the trial court

awarded defendant primary physical custody. This ap-

peal followed the trial court’s order.

On appeal, plaintiff first argues that the trial court

erred by failing to apply the statutory change-of-

domicile factors set forth in MCL 722.31(4). Specifically,

plaintiff maintains that the trial court was required to

consider custody and change of domicile separately and

that the evidence before the trial court would have

compelled it to grant her petition for change of domicile.

In making its custody determination, the trial court

considered only the best-interest factors set forth in

MCL 722.23.

Questions of law, such as the applicability and inter-

pretation of a statute, are reviewed de novo. Hunter v

Hunter, 484 Mich 247, 257; 771 NW2d 694 (2009).

We hold that the trial court did not err by failing to

consider the change-of-domicile factors set forth in

MCL 722.31(4)(a) through (e). MCL 722.31 provides in

pertinent part:

(1) A child whose parental custody is governed by court

order has, for the purposes of this section, a legal residence

Defendant expressed uncertainty regarding whether he would be

financially able to remain in the marital home; however, defendant

testified that he intended to build a smaller, more affordable home in

Montague if he could not remain in the marital home.

2011] K

ESSLER V

ESSLER

with each parent. Except as otherwise provided in this

section, a parent of a child whose custody is governed by

court order shall not change a legal residence of the child to

a location that is more than 100 miles from the child’s legal

residence at the time of the commencement of the action in

which the order is issued.

***

(4) Before permitting a legal residence change otherwise

restricted by subsection (1), the court shall consider [the

five factors set forth in (a) through (e)]. [Emphasis added.]

According to the plain language of the statute, the

change-of-domicile factors specifically apply only to

petitions for change of domicile in situations where

there is already a custody order governing the parties’

conduct. MCL 722.31(1); Thompson v Thompson, 261

Mich App 353, 361 n 2; 683 NW2d 250 (2004) (noting

that this Court interprets statutory language according

to its plain and ordinary meaning). In this case, the

custody order at issue is the first and only custody order

governing the parties’ conduct. Consequently, the fac-

tors set forth in MCL 722.31 do not apply.

Next, plaintiff argues that the trial court erred by

failing to determine whether the children had an estab-

lished custodial environment with either party and by

applying a “preponderance of the evidence” standard

when making its custody determination. Additionally,

plaintiff argues that the trial court should have deter-

mined that there was only an established custodial

environment with her.

We affirm a custody order “unless the trial court’s

findings of fact were against the great weight of the

evidence, the court committed a palpable abuse of

discretion, or the court made a clear legal error on a

major issue.” Berger v Berger, 277 Mich App 700, 705;

747 NW2d 336 (2008); see also MCL 722.28.

58 295 M

ICH

54 [Dec

Initially, we address whether the trial court erred by

failing to consider whether an established custodial

environment existed with either or both of the parties.

In this case, the trial court did not make any factual

findings or otherwise address whether there was an

established custodial environment. Rather, the trial

court merely commented that the case did not present a

“situation where one party has...had custody; so

we’re dealing with the burden of proof here by the

preponderance of the evidence,” and proceeded to make

its custody determination on the basis of the prepon-

derance of the evidence after considering each of the

statutory best-interest factors.

In effect, the trial court operated on the premise that

because the parties were living together with the chil-

dren in the marital home up to the time of the custody

hearing and no custody order had been entered by the

court, it was not required to address whether an estab-

lished custodial environment existed.

The Child Custody Act governs child custody dis-

putes. MCL 722.21 et seq.; Berger, 277 Mich App at 705.

Determining whether the trial court erred by failing to

consider the existence of an established custodial envi-

ronment before making its custody ruling requires the

interpretation of § 7 of the Child Custody Act, MCL

722.27. Statutory interpretation is a question of law we

consider de novo. Thompson, 261 Mich App at 358. The

We reject defendant’s claim that the trial court’s statements that

neither party had custody and that the burden of proof was a preponder-

ance of the evidence constituted an adequate determination regarding

whether an established custodial environment existed with either party.

A trial court is required to provide a factual basis and articulate its

reasons in regard to its determination of whether an established custo-

dial environment exists. See Foskett v Foskett, 247 Mich App 1, 7-8; 634

NW2d 363 (2001). In this case, the trial court never even mentioned an

“established custodial environment.”

2011] K

ESSLER V

ESSLER

language of a statute must be accorded its plain and

ordinary meaning. Id. at 361 n 2. The primary goal of

judicial interpretation is to ascertain and give effect to

the intent of the Legislature. Id. The Child Custody Act

should be liberally construed and is intended to pro-

mote the best interests of the children. Berger, 277

Mich App at 705.

Custody awards are governed by MCL 722.27, which

provides in pertinent part:

(1) If a child custody dispute has been submitted to the

circuit court as an original action under this act or has

arisen incidentally from another action in the circuit court

or an order or judgment of the circuit court, for the best

interests of the child the court may do 1 or more of the

following:

(a) Award the custody of the child to 1 or more of the

parties involved or to others and provide for payment of

support for the child, until the child reaches 18 years of

age.

***

proper cause shown or because of change of circumstances

until the child reaches 18 years of age and, subject to

section 5b of the support and parenting time enforcement

act, 1982 PA 295, MCL 552.605b, until the child reaches 19

years and 6 months of age. The court shall not modify or

amend its previous judgments or orders or issue a new

order so as to change the established custodial environ-

ment of a child unless there is presented clear and convinc-

ing evidence that it is in the best interest of the child. The

custodial environment of a child is established if over an

appreciable time the child naturally looks to the custodian

in that environment for guidance, discipline, the necessi-

ties of life, and parental comfort. The age of the child, the

physical environment, and the inclination of the custodian

and the child as to permanency of the relationship shall

also be considered.

60 295 M

ICH

54 [Dec

In Thompson, 261 Mich App at 360-362, this Court

interpreted the language of MCL 722.27. The issue in

that case was whether the trial court was required to

find proper cause or a change of circumstances before

entering a custody award after the initial evidentiary

hearing regarding the best-interest factors when the

parties had stipulated to a temporary custody order

before the hearing. Id. at 358. This Court held that it

did not, explaining:

The first sentence of MCL 722.27(1)(c) only refers to

when a party is attempting to “[m]odify or amend,” while

the second sentence mandates that the trial court not

“modify or amend its previous judgments or orders or issue

a new order so as to change the established custodial

environment of a child unless there is presented clear and

convincing evidence that it is in the best interest of the

child.” (Emphasis added.) In light of the clear intention of

the Legislature, the first sentence of the MCL 722.27(1)(c)

[sic] does not apply [to] the trial court’s initial or “new”

custody order in this matter. The trial court’s award of

custody was not a modification or amendment; it was a new

order that is only subject to the limitation provided in the

second sentence of MCL 722.27(1)(c). [Id. at 361-362.]

Consistently with Thompson and the plain language of

MCL 722.27, a trial court is required to determine

whether there is an established custodial environment

with one or both parents before making any custody

determination. See also Bowers v Bowers, 190 Mich App

51, 53-54; 475 NW2d 394 (1991). Accordingly, a party

who seeks to change an established custodial environ-

ment of a child is required to show by clear and

convincing evidence that the change is in the child’s

best interests. We conclude that the trial court clearly

erred when it failed to determine whether there was an

established custodial environment with either or both

of the parties before making its custody determination.

2011] K

ESSLER V

ESSLER

Having agreed with plaintiff that the trial court

clearly erred when it failed to first address whether an

established custodial environment existed, we next ad-

dress plaintiff’s assertion that the evidence submitted

during the custody hearing demonstrated that the

children have an established custodial environment

with her alone. In Fletcher v Fletcher, 447 Mich 871,

882; 526 NW2d 889 (1994), our Supreme Court ex-

pressly stated that “review of custody orders is not de

novo.” The trial court’s failure to apply the law by not

first determining whether there was an established

custodial environment is clear legal error, and, accord-

ing to Fletcher, we must remand unless the error is

harmless. Id. The failure to determine whether there is

an established custodial environment is not harmless

because the trial court’s determination regarding

whether an established custodial environment exists

determines the proper burden of proof in regard to the

best interests of the children. Foskett v Foskett, 247

Mich App 1, 6-7; 634 NW2d 363 (2001). Accordingly, we

decline to decide whether the children had an estab-

lished custodial environment with plaintiff alone be-

cause that is a question of fact for the trial court,

Berger, 277 Mich App at 706, and we do not engage in

review de novo of custody orders, Fletcher, 447 Mich at

882.

On remand, the trial court must determine whether

an established custodial environment existed with

plaintiff, defendant, or both parties before it determines

the custody arrangement that serves the best interests

of the children. In this case, both parents seek primary

physical custody. Accordingly, if the trial court deter-

mines that an established custodial environment exists

with either plaintiff or defendant or both parties, the

party seeking to change that established custodial en-

vironment must demonstrate that the change is in the

62 295 M

ICH

54 [Dec

best interests of the children by clear and convincing

evidence. After making its determination regarding the

existence of an established custodial environment and

evaluating the best-interest factors, the trial court shall

determine whether either party has met its burden and

fashion its award of custody accordingly. On remand,

the trial court “should consider up-to-date information”

and “any other changes in circumstances arising since

the trial court’s original custody order.” Fletcher, 447

Mich at 889.

Lastly, plaintiff argues that the trial court’s findings

were against the great weight of the evidence when it

determined that the best interests of the children

required awarding defendant primary physical custody.

Specifically, plaintiff challenges the trial court’s find-

ings in regard to factors (b), (d), (e), (h), (j), and (k).

We review the trial court’s findings of fact in a

custody case under the “great weight of the evidence”

standard. Vodvarka v Grasmeyer, 259 Mich App 499,

507; 675 NW2d 847 (2003). Under this standard of

review, we affirm a trial court’s findings “unless the

evidence clearly preponderates in the opposite direc-

tion.” Berger, 277 Mich App at 705.

In making a custody determination, a trial court is

required to evaluate the best interests of the children

under the 12 statutorily enumerated factors.

MCL

The best-interest factors are codified at MCL 722.23, which provides:

As used in this act, “best interests of the child” means the sum

total of the following factors to be considered, evaluated, and

determined by the court:

(a) The love, affection, and other emotional ties existing

between the parties involved and the child.

(b) The capacity and disposition of the parties involved to give

the child love, affection, and guidance and to continue the educa-

tion and raising of the child in his or her religion or creed, if any.

2011] K

ESSLER V

ESSLER

722.23; Harvey v Harvey, 470 Mich 186, 187; 680 NW2d

835 (2004). We defer to the trial court’s credibility

determinations, and “the trial court has discretion to

accord differing weight to the best-interest factors.”

Berger, 277 Mich App at 705. We conclude that the trial

court’s findings regarding the best-interest factors chal-

lenged by plaintiff were not against the great weight of

the evidence.

Plaintiff first argues that the trial court should have

concluded that factor (b), the “capacity and disposition

of the parties involved to give the child love, affection,

and guidance and to continue the education and raising

of the child in his or her religion or creed, if any,” MCL

provide the child with food, clothing, medical care or other

remedial care recognized and permitted under the laws of this

state in place of medical care, and other material needs.

(d) The length of time the child has lived in a stable, satisfac-

tory environment, and the desirability of maintaining continuity.

(e) The permanence, as a family unit, of the existing or

proposed custodial home or homes.

(f) The moral fitness of the parties involved.

(g) The mental and physical health of the parties involved.

(h) The home, school, and community record of the child.

(i) The reasonable preference of the child, if the court considers

the child to be of sufficient age to express preference.

(j) The willingness and ability of each of the parties to facilitate

and encourage a close and continuing parent-child relationship

between the child and the other parent or the child and the

parents.

(k) Domestic violence, regardless of whether the violence was

directed against or witnessed by the child.

(l) Any other factor considered by the court to be relevant to a

particular child custody dispute.

64 295 M

ICH

54 [Dec

722.23(b), favored her instead of finding that it was

neutral. The trial court found that both parties were

committed to Christianity and that the factor therefore

favored neither party. Plaintiff argues that the trial

court’s finding was insufficient because it only refer-

enced religion. However, a trial court need not consider

“every piece of evidence entered and argument raised

by the parties” when it states its factual findings and

conclusions on each of the best interest factors. MacIn-

tyre v MacIntyre (On Remand), 267 Mich App 449, 452;

705 NW2d 144 (2005). A trial court’s failure to discuss

every fact in evidence that pertains to a factor “does not

suggest that the relevant among them were over-

looked.” Fletcher, 447 Mich at 884. Consequently, we

conclude that the trial court’s factual finding in regard

to factor (b) was not against the great weight of the

evidence.

Plaintiff argues that the trial court erred when it

determined that factor (d), the “length of time the child

has lived in a stable, satisfactory environment, and the

desirability of maintaining continuity,” MCL 722.23(d),

favored defendant because plaintiff had a specific plan

regarding the children’s home and school in Florida

while defendant was uncertain about whether he would

be able to afford the marital home and school tuition in

Michigan on his own. We conclude that the trial court’s

findings on this factor were not against the great weight

of the evidence. The children had never lived in Florida,

much less lived there for any “length of time,” so there

could be no continuity to maintain with respect to that

environment. For this reason, the environment in

Florida was not even relevant under this factor. Al-

though it is true that the divorce would change the

environment in Michigan, it was still the only environ-

ment the children knew. The children had family,

2011] K

ESSLER V

ESSLER

friends, school, church, a godmother, a daycare provider,

and others in Michigan.

Next, plaintiff challenges the trial court’s finding

that factor (e), the “permanence, as a family unit, of the

existing or proposed custodial home or homes,” MCL

722.23(e), did not favor either party. Plaintiff argues

that defendant’s future is uncertain because it was not

clear that defendant would be capable of maintaining

the marital home. We conclude that the trial court’s

finding that this factor was neutral was not against the

great weight of the evidence. While defendant’s future

living arrangement was not completely certain, plain-

tiff’s move to Florida would remove the children from

an environment in which they had extended family and

others that provided a support system.

Regarding factor (h), the “home, school, and commu-

nity record of the child,” MCL 722.23(h), the trial court

found that the children’s home, school, and community

record was excellent and that both parties were com-

mitted to maintaining it. The trial court also found that

this factor slightly favored defendant because he had

slightly more flexibility in attending to the children’s

needs. We conclude that the trial court’s factual find-

ings in regard to this factor were not against the great

weight of the evidence. The evidence presented during

the hearing clearly supports the trial court’s finding

that defendant has a more flexible work schedule than

plaintiff; both parties admitted that defendant’s flex-

ibility was the primary reason that he transported the

children to school and daycare the majority of the time.

The evidence also demonstrated that the children were

doing well in their schools and in the community.

Plaintiff next argues that factor (j), the “willingness

and ability of each of the parties to facilitate and encour-

age a close and continuing parent-child relationship be-

tween the child and the other parent or the child and the

66 295 M

ICH

54 [Dec

parents,” MCL 722.23(j), was improperly found by the

trial court to be neutral because substantial evidence

showed that defendant was interfering with her relation-

ship with the children. The trial court found the factor to

be neutral because it was given no reason to believe that

either parent would interfere with the other parent’s

relationship with the children. We conclude that the trial

court’s finding on this factor was not against the great

weight of the evidence. The only basis for plaintiff’s claims

that defendant interfered with her relationship with the

children was plaintiff’s own testimony, and we defer to the

trial court’s credibility determinations. Berger, 277 Mich

App at 705. There was sufficient evidence for the trial

court to find that this factor was neutral because other

parties, including defendant, testified that both parents

loved their children and would do what was best for the

children.

Lastly, plaintiff argues that factor (k), “[d]omestic vio-

lence, regardless of whether the violence was directed

against or witnessed by the child,” MCL 722.23(k), should

have favored her instead of being found neutral. Plaintiff

testified about three alleged incidents of domestic vio-

lence, but defendant’s testimony presented a different

version of each of the incidents. The trial court’s factual

finding that these incidents did not amount to domestic

violence was not against the great weight of the evidence,

specifically in light of the fact that we defer to the trial

court’s credibility determinations. Berger, 277 Mich App

at 705.

Affirmed in part, reversed in part, and remanded for

further proceedings consistent with this opinion. We do

not retain jurisdiction. No taxable costs pursuant to

MCR 7.219, neither party having prevailed in full.

ILDER

,P.J., and H

OEKSTRA

and B

ORRELLO

, JJ., con-

curred.

2011] K

ESSLER V

ESSLER

PEOPLE v KLOOSTERMAN

Docket No. 301283. Submitted December 6, 2011, at Grand Rapids.

Decided December 13, 2011, at 9:00 a.m.

Brett M. Kloosterman was convicted by a jury in the Kent Circuit

Court of breaking and entering a vehicle, causing damage, MCL

750.356a(3), and was sentenced to one to five years in prison as a

second-offense habitual offender. Defendant had moved for a

directed verdict at the close of the prosecution’s proofs, arguing

that the prosecution had not offered sufficient evidence to prove

beyond a reasonable doubt the damage element of MCL

750.356a(3). The court, George S. Buth, J., denied the motion.

Defendant appealed.

The Court of Appeals held:

MCL 750.356a(2) proscribes larceny from motor vehicles,

house trailers, trailers, and semitrailers. Under MCL 750.356a(3),

punishment is enhanced if damage is done to any part of a motor

vehicle, house trailer, trailer, or semitrailer in the commission of

the larceny, which includes damage done to all portions of the

trailer in whatever degree, or whatever separate or distinct pieces

of the trailer that were broken, torn, cut, or otherwise damaged.

The trial court properly denied defendant’s directed-verdict mo-

tion because there was sufficient evidence to prove the damage

element of MCL 750.356a(3). Defendant cut a padlock that secured

the trailer’s latches when he broke into the victim’s truck trailer.

The victim had purchased the padlocks and trailer on the same day

from the same trailer company to secure his tools while in the

trailer. Because the padlocks on the trailer were a distinct part of

the trailer and served the trailer’s function of transporting and

securing tools, cutting the padlock during the breaking and

entering constituted sufficient evidence to satisfy the damage

element of MCL 750.356a(3).

Affirmed.

ARCENY —

OTOR

EHICLES AND

RAILERS —

AMAGE —

EFINITION

The sentence for larceny from motor vehicles, house trailers, trail-

ers, and semi-trailers is enhanced if damage is done to any part of

a motor vehicle, house trailer, trailer, or semitrailer in the com-

68 295 M

ICH

68 [Dec

mission of the larceny; the phrase “any part” of the trailer includes

all portions of the trailer in whatever degree, or whatever separate

or distinct pieces of the trailer that were broken, torn, cut, or

otherwise damaged (MCL 750.356a[2][a] and [b], [3]).

Bill Schuette, Attorney General, John J. Bursch,

Solicitor General, William A. Forsyth, Prosecuting At-

torney, and Timothy K. McMorrow and Kimberly M.

Manns, Assistant Prosecuting Attorneys, for the people.

Laurel Kelly Young for defendant.

Before: M

ARKEY

,P.J., and F

ITZGERALD

and B

ORRELLO

JJ.

URIAM

. A jury convicted defendant of breaking

and entering a vehicle, causing damage, MCL

750.356a(3), and the trial court sentenced him as a

second-offense habitual offender to a prison term of one

to five years. Defendant appeals as of right. We affirm.

Defendant argues that the trial court erred when it

denied his motion for a directed verdict because the

prosecution did not offer sufficient evidence to prove

beyond a reasonable doubt the damage element of MCL

750.356a(3). We disagree.

MCL 750.356a(2) proscribes larceny from motor ve-

hicles or trailers. MCL 750.356a(2)(a) and (b) punish

the theft of property from motor vehicles, house trail-

ers, trailers, and semitrailers when the property’s value

is less than $1,000. However, MCL 750.356a(3) imposes

an enhanced sentence if damage is done to any part of a

motor vehicle, house trailer, trailer, or semitrailer in the

commission of a violation of MCL 750.356a(2)(a) or (b).

Defendant does not dispute that a padlock securing

the trailer’s latches was cut. Rather, defendant argues

that the padlock was not “any part” of the trailer and,

therefore, that under MCL 750.356a(3), the trailer was

2011] P

EOPLE V

LOOSTERMAN

not damaged. This argument presents a question of

statutory interpretation that we review de novo. People

v Pitts, 222 Mich App 260, 265; 564 NW2d 93 (1997).

The primary goal of judicial interpretation of stat-

utes is to ascertain and give effect to the intent of the

Michigan Legislature. People v Droog, 282 Mich App 68,

70; 761 NW2d 822 (2009). To accomplish that, we begin

by examining the language of the statute. People v

Davis, 468 Mich 77, 79; 658 NW2d 800 (2003). When

the Legislature has not expressly defined the terms in a

statute, we may use dictionary definitions to aid in

construing those terms in accordance with their ordi-

nary and generally accepted meanings. People v Morey,

461 Mich 325, 330-331; 603 NW2d 250 (1999).

“Any” is defined as including “whatever or whichever

it may be” and “every; all” and “in whatever degree; to

some extent; at all.” Random House Webster’s College

Dictionary (2000). “Part” is defined as “a portion or

division of a whole that is separate or distinct; piece,

fraction, or section.” Id. Therefore, “[a]ny part

of...[a]trailer” as used in MCL 750.356a(3) covers all

portions of the trailer in whatever degree, or whatever

separate or distinct pieces of the trailer that were

broken, torn, cut, or otherwise damaged.

The victim here purchased his trailer and the pad-

locks for the trailer on the same day from the same

trailer company. The latches on the trailer were com-

patible with the padlocks the victim purchased. The

padlocks were intended to be purchased with the trailer

in order to lock the trailer. The victim purchased the

trailer for the purpose of storing and transporting his

tools and used the locks to secure his tools while they

were in the trailer. The padlocks on the victim’s trailer

were a distinct piece of the trailer that served the

trailer’s function of transporting and securing tools.

70 295 M

ICH

68 [Dec

Accordingly, the trial court did not err by denying

defendant’s motion for a directed verdict because there

was sufficient evidence to prove the damage element of

MCL 750.356a(3).

Affirmed.

ARKEY

,P.J., and F

ITZGERALD

and B

ORRELLO

, JJ., con-

curred.

2011] P

EOPLE V

LOOSTERMAN

CITIMORTGAGE, INC v MORTGAGE ELECTRONIC

REGISTRATION SYSTEMS, INC

Docket No. 298004. Submitted November 9, 2011, at Detroit. Decided

December 15, 2011, at 9:00 a.m.

CitiMortgage, Inc., and Federal Home Loan Mortgage Corporation

(FHLMC) brought an action in the Wayne Circuit Court against

Sheryll D. Catton, Gregory J. Catton, and Mortgage Electronic

Registration Systems, Inc. (MERS), as nominee for GMAC Mortgage,

L.L.C., to quiet title to real property. In 2000, the Cattons purchased

property in Wayne County, assigning a mortgage to ABN AMRO

Mortgage Group, Inc., as security for a home loan. In 2001, the

Cattons refinanced that loan, discharging the original mortgage in

favor of a new mortgage, which was also assigned to ABN AMRO. On

July 11, 2002, the Cattons obtained a home-equity loan from GMAC,

and assigned MERS, as nominee for GMAC, a second mortgage on

the property. On November 5, 2002, the Cattons refinanced the loan

they obtained from ABN AMRO in 2001, discharging the 2001

mortgage in favor of a new mortgage granted to ABN AMRO. On

August 22, 2005, the Cattons filed for bankruptcy, and their property

was subsequently sold at a foreclosure sale to FHLMC. FHLMC filed

suit with ABN AMRO’s successor in interest, Citimortgage, to quiet

title to the property. The Cattons defaulted. The court, Jeanne

Stempien, J., denied plaintiffs’ motion for summary disposition and

granted MERS’s motion for summary disposition. Plaintiffs ap-

pealed.

The Court of Appeals held:

1. Under former MCL 565.25(1) and (4), a first-recorded mort-

gage had priority over a later-recorded mortgage, and according to

Ameriquest Mtg Co v Alton, 273 Mich App 84 (2006), the use of equity

by the courts to overcome the plain language of former MCL

565.25(1) and (4) was permitted only in the presence of unusual

circumstances such as fraud or mutual mistake. However, Michigan’s

recording statute was amended by 2008 PA 357, eliminating former

MCL 565.25(1) and (4). Because the analysis in Ameriquest relied on

those former subsections, Ameriquest is no longer controlling.

2. Equitable subrogation may be used when a senior mort-

gagee discharges its mortgage of record and contemporaneously

72 295 M

ICH

72 [Dec

takes and records a replacement mortgage, so that the lending

mortgagee may retain its seniority as against intervening lienhold-

ers. However, the lending mortgagee seeking subrogation must be

the same lender that held the original mortgage before the

intervening interests arose, or a bona fide successor in interest to

the original lender, and the application of equitable subrogation is

subject to a careful examination of the equities and of any

potential prejudice to the intervening lienholders. The trial court

is the forum best suited to evaluating any prejudice and the

competing equities; therefore, remand was required in this case.

3. The “mere volunteer” rule, which provides that equitable

subrogation may not be extended to a party that is a mere

volunteer, i.e., one who pays the mortgage but has no interest in

the land, does not apply when the new mortgagee and the original

mortgagee are the same.

Reversed and remanded.

1. M

ORTGAGES —

RIORITY OF

IENS —

QUITY —

QUITABLE

UBROGATION

Equitable subrogation may be used when a senior mortgagee dis-

charges its mortgage of record and contemporaneously takes and

records a replacement mortgage, so that the lending mortgagee

may retain its seniority as against intervening lienholders; how-

ever, the lending mortgagee seeking subrogation must be the same

lender that held the original mortgage before the intervening

interests arose, or a bona fide successor in interest to the original

lender, and the application of equitable subrogation is subject to a

careful examination of the equities and of any potential prejudice

to the intervening lienholders.

2. M

ORTGAGES —

RIORITY OF

IENS —

QUITY —

QUITABLE

UBROGATION —

ERE

OLUNTEERS

The “mere volunteer” rule, which provides that equitable subroga-

tion may not be extended to a party that is a mere volunteer who

pays the mortgage but has no interest in the land, does not apply

when the new mortgagee and the original mortgagee are the same.

Clark Hill PLC (by Richard A. Sundquist and Mat-

thew W. Heron) for CitiMortgage, Inc., and Federal

Home Loan Mortgage Corporation.

Schneiderman & Sherman, P.C. (by Erin R. Katz and

Andrew J. Hubbs), for Mortgage Electronic Registration

Systems, Inc.

2011] C

ITI

ORTGAGE V

MERS 73

Before: M

URPHY

, C.J., and B

ECKERING

and R

ONAYNE

RAUSE

,JJ.

URIAM

. Plaintiffs appeal as of right from the

trial court’s order denying plaintiffs’ motion for sum-

mary disposition and granting defendant’s

motion for

summary disposition. We reverse and remand for fur-

ther proceedings.

The facts of this case are not in dispute. On

September 6, 2000, Sheryll D. Catton and Gregory J.

Catton (the Cattons) purchased property in Wayne

County with a mortgage granted to ABN AMRO

Mortgage Group, Inc. On May 4, 2001, the Cattons

refinanced their loan, discharging the original mort-

gage in favor of a new mortgage also granted to ABN

AMRO. On July 11, 2002, the Cattons obtained a

home-equity loan from GMAC Mortgage, L.L.C.,

granting Mortgage Electronic Registration Systems,

Inc. (MERS), as nominee for GMAC, a second mort-

gage on the property. On November 25, 2002, the

Cattons refinanced their 2001 loan, discharging the

2001 ABN AMRO mortgage in favor of another mort-

gage granted to ABN AMRO. There is no dispute that

ABN AMRO was unaware of the MERS mortgage at

the time it took the new mortgage even though

MERS’s mortgage had been recorded. On August 22,

2005, the Cattons filed for bankruptcy, and their

property was subsequently sold at a foreclosure sale

to Federal Home Loan Mortgage Corporation

(FHLMC). FHLMC sued, along with ABN AMRO’s

successor in interest, CitiMortgage, Inc., to quiet

title.

Defendants Sheryll D. Catton and Gregory J. Catton defaulted in this

case and are not part of this appeal. References herein to “defendant” are

to defendant-appellee, Mortgage Electronic Registration Systems, Inc., as

nominee for GMAC Mortgage, L.L.C.

74 295 M

ICH

72 [Dec

The issue in this matter is, as between the two

lienholders, which of the two mortgage liens is superior.

CitiMortgage holds the refinanced mortgage lien, and

defendant holds the second mortgage, which would

have been the junior lien but for the subsequent refi-

nancing. More specifically, the issue is whether Citi-

Mortgage can place its lien in first priority over defen-

dant’s lien through application of the doctrine of

equitable subrogation. The trial court concluded that

CitiMortgage could not, and this appeal followed. We

review motions for summary disposition and questions

of law de novo. Maiden v Rozwood, 461 Mich 109, 118;

597 NW2d 817 (1999); Chapdelaine v Sochocki, 247

Mich App 167, 169; 635 NW2d 339 (2001).

Under Michigan’s former race-notice recording stat-

ute, MCL 565.25(1) and (4), as amended by 1996 PA

526, a first-recorded mortgage had priority over a

later-recorded mortgage, and equity—and therefore eq-

uitable subrogation—was used by the courts to over-

come the plain language of the statute only in the

presence of “ ‘ “unusual circumstances” ’ such as fraud

or mutual mistake.” Ameriquest Mtg Co v Alton, 273

Mich App 84, 93-94, 99-100; 731 NW2d 99 (2006),

quoting Devillers v Auto Club Ins Ass’n, 473 Mich 562,

590; 702 NW2d 539 (2005). See also Ameriquest, 273

Mich App at 100 (M

URPHY

, J., concurring). Other “un-

usual circumstances” that might have supported the

use of equitable relief included a “preexisting jumble of

convoluted case law through which the plaintiff was

forced to navigate” and misconduct by another party.

Devillers, 473 Mich at 590 nn 64-65. However, Michi-

gan’s recording statute was amended by 2008 PA 357,

eliminating the former MCL 565.25(1) and (4). Because

the analysis in Ameriquest relied on those former sub-

sections, Ameriquest is no longer controlling.

2011] C

ITI

ORTGAGE V

MERS 75

That being the case, we conclude that the caselaw on

point in Michigan is consistent with Restatement Prop-

erty, 3d, Mortgages, § 7.3, pp 472-473, which provides as

follows:

(a) If a senior mortgage is released of record and, as part

of the same transaction, is replaced with a new mortgage,

the latter mortgage retains the same priority as its prede-

cessor, except

(1) to the extent that any change in the terms of the

mortgage or the obligation it secures is materially prejudi-

cial to the holder of a junior interest in the real estate, or

(2) to the extent that one who is protected by the

recording act acquires an interest in the real estate at a

time that the senior mortgage is not of record.

(b) If a senior mortgage or the obligation it secures is

modified by the parties, the mortgage as modified retains

priority as against junior interests in the real estate, except to

the extent that the modification is materially prejudicial to

the holders of such interests and is not within the scope of a

reservation of right to modify as provided in Subsection (c).

a mortgage to modify the mortgage or the obligation it

secures, the mortgage as modified retains priority even if

the modification is materially prejudicial to the holders of

junior interests in the real estate, except as provided in

Subsection (d).

(d) If a mortgage contains a reservation of the right to

modify the mortgage or the obligation as described in

Subsection (c), the mortgagor may issue a notice to the

mortgagee terminating that right. Upon receipt of the

notice by the mortgagee, the right to modify with retention

of priority under Subsection (c) becomes ineffective against

persons taking any subsequent interests in the mortgaged

real estate, and any subsequent modifications are governed

by Subsection (b). Upon receipt of the notice, the mort-

gagee must provide the mortgagor with a certificate in

recordable form stating that the notice has been received.

76 295 M

ICH

72 [Dec

Of particular note, comment b to this section of the

Restatement provides that “[u]nder § 7.3(a) a senior

mortgagee that discharges its mortgage of record and

records a replacement mortgage does not lose its priority

as against the holder of an intervening interest unless

that holder suffers material prejudice.” Id. at p 474. The

associated Reporters’ Note, voluminously citing many

cases from other jurisdictions, explains that “[c]ourts

routinely adhere to the principle that a senior mortgagee

who discharges its mortgage of record and takes and

records a replacement mortgage, retains the predecessor’s

seniority as against intervening lienors unless the mort-

gagee intended a subordination of its mortgage or ‘para-

mount equities’ exist.” Id. at p 483.

For the reasons we discuss later in this opinion, we

conclude that § 7.3 of the Restatement, limited to the

situations described by the quoted commentary—

specifically, cases in which the senior mortgagee dis-

charges its mortgage of record and contemporaneously

takes a replacement mortgage, as often occurs in the

context of refinancing—is consistent with Michigan pre-

cedent. Thus limited, because § 7.3 of the Restatement

reflects the present state of the law in Michigan, we

hereby adopt it. We caution, however, that the lending

mortgagee seeking subrogation and priority over an inter-

vening interest relative to its newly recorded mortgage

must be the same lender that held the original mortgage

before the intervening interest arose; and, furthermore,

any application of equitable subrogation is subject to a

careful examination of the equities of all parties and

potential prejudice to the intervening lienholder.

Our Supreme Court discussed what it called the

doctrine of equitable mistake in Schanhite v Plymouth

United Savings Bank, 277 Mich 33, 39; 268 NW 801

(1936), stating:

2011] C

ITI

ORTGAGE V

MERS 77

It is a general rule that the cancellation of a mortgage on

the record is not conclusive as to its discharge, or as to the

payment of the indebtedness secured thereby. And where

the holder of a senior mortgage discharges it of record, and

contemporaneously therewith takes a new mortgage, he

will not, in the absence of paramount equities, be held to

have subordinated his security to an intervening lien

unless the circumstances of the transaction indicate this to

have been his intention, or such intention upon his part is

shown by extrinsic evidence. [Quotation marks and cita-

tion omitted.]

This reflects “the well-settled rule that the acceptance

by a mortgagee of a new mortgage and his cancellation

of the old mortgage do not deprive the mortgagee of

priority over intervening liens.” Washington Mut Bank

v ShoreBank Corp, 267 Mich App 111, 126; 703 NW2d

486 (2005).

In Washington Mut Bank, this Court rejected an

equitable-subrogation argument made by the plaintiff

bank. The plaintiff had provided refinancing on real

property that had earlier been encumbered by a first

mortgage, which was paid off with the proceeds from

the refinancing. However, the property had also been

encumbered by two intervening mortgages in favor of

other banks before the refinancing. Importantly, and

distinguishable from the facts here, the plaintiff was not

the original lender-mortgagee.

Id. at 112. After an

exhaustive examination of the caselaw regarding equi-

The descriptor “original mortgagee” might cause confusion and

therefore requires clarification. By “original mortgagee,” we mean not

only the originating mortgagee, but also any bona fide successor in

interest. In this case, CitiMortgage was not the original mortgagee, nor

was it the new mortgagee at the time of the refinancing transaction.

However, ABN AMRO was the original and new mortgagee, and Citi-

Mortgage is ABN AMRO’s successor in interest, so CitiMortgage stands

in the shoes of ABN AMRO for purposes of our analysis.

78 295 M

ICH

72 [Dec

table subrogation and citing the “well-settled rule”

from Schanhite, the Court stated:

[I]n this case, we are not presented with a new mortgage

being accepted by the holder of the old mortgage. That is,

had the new mortgage been given to Option One Mortgage

[the original lender], and Option One was before us rather

than plaintiff, Schanhite might provide the authority to

revive the original mortgage and give the new mortgage the

same priority as the one it replaced....

***

. . . [W]e are unaware of any authority regarding the

application of the doctrine of equitable subrogation to

support the general proposition that a new mortgage,

granted as part of a generic refinancing transaction, can

take the priority of the original mortgage, which is being

paid off, giving it priority over intervening liens....Such

bolstering of priority may be applicable where the new

mortgagee is the holder of the mortgage being paid off....

[Id. at 127-128 (emphasis added); see also Van Dyk Mtg

Corp v United States, 503 F Supp 2d 876 (WD Mich, 2007)

(applying Washington Mut Bank and Schanhite in granting

equitable subrogation under circumstances comparable to

those presented by this case).]

Washington Mut Bank does not permit us to extend

application of the Restatement to cases in which the

new mortgagee was not the holder of the original

mortgage being discharged through refinancing; conse-

quently, we cannot adopt the Restatement in its en-

tirety. But it does fully support, along with Schanhite,

applying the Restatement to cases, like this one, in

which the new mortgagee seeking priority and subro-

gation held the original mortgage, and we do so here.

We note also that the refinancing in Schanhite actu-

ally worked to the benefit of the second mortgagee,

because “the property would have been lost to the tax

2011] C

ITI

ORTGAGE V

MERS 79

man” otherwise, so restoring the original lien priority

was the equitable outcome for all parties. Washington

Mut Bank, 267 Mich App at 126-127. Our Supreme

Court has noted that “[t]he theory of equitable or

conventional subrogation is that the junior lienor’s

position is left unchanged by the conduct of the party

seeking subrogation and that he is not wronged any by

permitting subrogation.” Lentz v Stoflet, 280 Mich 446,

451; 273 NW 763 (1937). Consistent with § 7.3 of the

Restatement in the limited form in which we adopt it, a

refinanced mortgage maintains the priority position of

the original mortgage as long as any junior lienholder is

not prejudiced as a consequence.

Finally, we find it necessary to address the “mere

volunteer” rule, which provides that equitable subroga-

tion may not be extended to a party that is a mere

volunteer, i.e., one who pays the mortgage but has no

interest in the land. Ameriquest, 273 Mich App at 94-95.

Underlying the rejection of the plaintiff bank’s

equitable-subrogation argument in Washington Mut

Bank was the Court’s conclusion that the plaintiff was

a mere volunteer. Washington Mut Bank, 267 Mich App

at 119-120. The Court observed that

the doctrine of equitable subrogation does not allow a new

mortgagee to take the priority of the older mortgagee

merely because the proceeds of the new mortgage were

used to pay off the indebtedness secured by the old mort-

gage. [And] [i]t is clear to us that...plaintiff is a mere

volunteer and, therefore, is not entitled to equitable sub-

rogation. [Id.]

Importantly, Washington Mut Bank reflected that the

“mere volunteer” rule does not apply when the new

mortgagee and the old mortgagee are the same, even in

a standard refinancing transaction, otherwise the panel

would not have suggested a different outcome had the

80 295 M

ICH

72 [Dec

plaintiff bank held the original mortgage. See id.at

126-127. Indeed, the Schanhite Court did not indicate

that the rule allowing qualifying mortgagees to retain

priority could only be employed on a finding that a

mortgagee was not a mere volunteer. And the Restate-

ment contains no such restriction or limitation. We hold

that the “mere volunteer” rule has no applicability

when the new mortgagee was also the original mort-

gagee.

We conclude that equitable subrogation is available

to place a new mortgage in the same priority as a

discharged mortgage if the new mortgagee was the

original mortgagee and the holders of any junior liens

are not prejudiced as a consequence. We further con-

clude that the Restatement, in the limited form in

which we have adopted it, sets forth a reasonable and

proper framework for determining whether junior lien-

holders have been prejudiced and whether the equities

ultimately favor equitable subrogation. Because the

trial court is the forum best suited to evaluating any

prejudice and the competing equities, including making

any relevant factual determinations, we remand this

matter to the trial court to do so.

Reversed and remanded to the trial court for further

proceedings consistent with this opinion. We direct that

no taxable costs shall be awarded to any party under

MCR 7.219. We do not retain jurisdiction.

URPHY

, C.J., and B

ECKERING

and R

ONAYNE

RAUSE

JJ., concurred.

2011] C

ITI

ORTGAGE V

MERS 81

STROZIER v FLINT COMMUNITY SCHOOLS

Docket No. 299704. Submitted December 7, 2011, at Detroit. Decided

December 20, 2011, at 9:00 a.m.

Alexus Strozier, a minor, by her next friend, Abbey Strozier, brought

an action in the Genesee Circuit Court against Flint Community

Schools, Middle Cities Risk Management Trust, and Gallagher

Bassett Services, seeking damages for injuries sustained when a

city of Flint sanitation truck collided with the school bus in which

she was riding. The driver of the school bus and the driver of the

sanitation truck gave different versions of how the accident

occurred. Strozier later amended her complaint to add the City of

Flint Department of Sanitation, claiming that the garbage truck

driver had negligently operated the truck when the accident

occurred. The sanitation department moved for summary disposi-

tion pursuant to MCR 2.116(C)(7) and (10), arguing that Strozier’s

claim was barred by governmental immunity and that she had

failed to present sufficient evidence of the garbage truck driver’s

negligence. The court, Archie L. Hayman, J., denied the sanitation

department’s motion, holding that the conflicting testimony re-

garding whether the garbage truck was moving at the time of the

incident created a genuine issue of material fact, but did not

address the issue of governmental immunity. The sanitation

department appealed.

The Court of Appeals held:

1. Alexus’s deposition testimony that the garbage truck was

moving forward when it collided with the bus was not inadmissible

hearsay, MRE 602, because her references to remembering the

events reflected personal knowledge.

2. Under MCL 691.1407(1), a governmental agency is immune

from tort liability if the governmental agency is engaged in the

exercise or discharge of a governmental function. The motor-

vehicle exception to this rule, MCL 691.1405, allows a party to

maintain an action against a governmental agency for bodily

injury and property damage resulting from the negligent operation

by any officer, agent, or employee of the governmental agency, of a

motor vehicle that the governmental agency owns. Operation of a

motor vehicle means that the motor vehicle must have been

82 295 M

ICH

82 [Dec

operating as a motor vehicle and only encompasses activities that

are directly associated with the driving of a motor vehicle. Alexus’s

claim against the sanitation department was not barred by gov-

ernmental immunity because even if the garbage truck was

stopped at the time of the accident, it was carrying out its intended

function of picking up garbage. Because a garbage truck cannot

perform that function without periodically stopping to pick up

garbage, doing so is necessarily included within the “operation” of

the truck under the motor-vehicle exception. Summary disposition

under MCR 2.116(C)(7) was properly denied because the motor-

vehicle exception applied under either party’s version of the

accident.

Affirmed.

OVERNMENTAL

MMUNITY —

OTOR

-V

EHICLE

XCEPTION —

PERATION OF A

OTOR

EHICLE —

ARBAGE

RUCKS

A governmental agency is immune from tort liability if the agency is

engaged in the exercise or discharge of a governmental function;

under the motor-vehicle exception to governmental immunity,

however, a party can maintain an action against a governmental

agency for bodily injury and property damage resulting from the

negligent operation by any officer, agent, or employee of the

governmental agency, of a motor vehicle of which the governmen-

tal agency is owner; “operation” requires that the motor vehicle

must have been operating as a motor vehicle and only encompasses

activities that are directly associated with the driving of a motor

vehicle; temporary stops on the road to pick up garbage are

included within the operation of a garbage truck (MCL 691.1405,

691.1407[1]).

The Thurswell Law Firm, P.L.L.C.. (by Mark E.

Boegehold), for Alexus Strozier.

Foster, Swift, Collins & Smith, P.C. (by Scott L.

Mandel and Pamela C. Dausman), for Flint Community

Schools and Middle Cities Risk Management Trust.

Thomas L. Kent for the City of Flint Department of

Sanitation.

Before: M

URPHY

, C.J., and J

ANSEN

and O

WENS

,JJ.

2011] S

TROZIER V

LINT

OMMUNITY

URIAM

. Defendant-appellant City of Flint De-

partment of Sanitation

appeals as of right the trial

court’s order denying its motion for summary disposi-

tion under MCR 2.116(C)(7) and (10). We affirm.

I. FACTS

This case arose out of a collision between a school bus

and a garbage truck that injured Alexus Strozier,

passenger on the school bus. On April 2, 2007, city of Flint

sanitation department employee Mathew Dingel and his

partner, Aaron Slagg, were collecting garbage on Fleming

Road. Dingel drove the garbage truck, making periodic,

brief, temporary stops in the right lane to allow Slagg to

collect the garbage and deposit it into the back of the

garbage truck. As they collected garbage, a school bus

approached from behind the left side of the garbage truck

and then, according to Dingel, as it passed the truck,

merged into the lane in which the garbage truck was

sitting. Although he remembered thinking that the bus

had nearly hit his truck, Dingel initially thought that the

bus had missed the truck because he did not feel an

impact. Dingel and Slagg continued their garbage route.

About two hours later, Dingel received a call from his

supervisor, who told him that Dingel had been involved in

an accident with the bus. Dingel realized that the bus

driver had straightened out too quickly after merging,

which had caused the rear end of the bus to swing into the

truck. Dingel stated that the garbage truck had been

running and ready to proceed to the next stop, but was not

moving at the time of the collision, and that the bus ran

into the truck.

In this opinion, the term “defendant” will refer only to defendant-

appellant City of Flint Department of Sanitation.

Because Strozier is a minor, her mother, Abbey Strozier, brought this

action on her daughter’s behalf.

84 295 M

ICH

82 [Dec

Slagg described the events slightly differently. Slagg

stated:

Well, I was off of the truck when the bus passed by us,

okay? I was picking up the trash and he passed by at a

pretty -- at an excessive speed. And I was thinking to myself

if my kid was riding that bus I would be very upset at how

that guy was driving because there was a car coming -- see,

Fleming Road is a two lane road. There was a car coming

northbound and we were heading southbound so our

garbage truck takes up the full lane and he passed between

the cars, the bus driver, he cut the guy who was heading

northbound off and cut in front of us. And when I stepped

back on the truck to go my partner started to take off and

he jammed on the brakes, made me slam into the back of

the truck, you know, and I got pretty upset, I was yelling at

him. And he went like this and there was a bus, he stopped

right in front of us. And we stopped. And when the bus took

off, I guess, I don’t know if there was a collision or not, but

I didn’t feel any collision on the back of the truck, you

know, when I was standing on the back of the truck

so...[.]

The driver of the bus, Renzellus Brown, stated that he

felt a bump as he drove past the garbage truck. Brown

initially thought that the street had caused the bump he

felt, but a student on the bus told him that the bus had

been hit. Brown continued to drive for about a block

before pulling the bus to the side of the road. He then

inspected the bus and saw that it had been damaged in the

rear. Brown stated during his deposition that he had not

seen the collision with the truck and that he had not seen

the truck move. However, Brown wrote an accident report

on the day of the collision in which he stated that the

truck “started to take off and clipped” the bus.

Alexus Strozier also stated that the truck moved

forward and hit the bus. Strozier stated:

We was -- after we left my stop we went to some more

stops. We turned off Pasadena on to -- I can’t remember

2011] S

TROZIER V

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OMMUNITY

what street it was, but we turned on I think it’s Myrtle. If

I’m not mistaken it’s Myrtle Street on to Leerda and picked

up some kids.

And then we went down some more -- we was going --

the bus -- no, the garbage truck had stopped. So the bus

was going around the garbage truck. And then the garbage

truck started moving and then that’s when he had picked

up some speed and ended up hitting the school bus.

After the collision, Brown finished his bus route and

dropped the children off at school. After they arrived at

school, some of the children told a teacher what had

happened, and the teacher had them write out state-

ments. Several of these statements also support plain-

tiff’s contention that the garbage truck was moving at

the time of the collision.

As a result of the collision, plaintiff filed a complaint

against the Flint Community Schools and the school’s

insurer, alleging that Brown’s negligent driving had

caused the collision. Plaintiff later amended her complaint

to add the City of Flint Department of Sanitation as a

defendant, alleging that Dingel had negligently operated

the garbage truck. Defendant then filed a motion for

summary disposition under MCR 2.116(C)(7) and (10),

arguing that governmental immunity barred plaintiff’s

claim and that plaintiff had failed to produce sufficient

evidence of defendant’s negligence. The trial court denied

defendant’s motion for summary disposition, holding that

the conflicting testimony regarding whether the garbage

truck was moving at the time of the incident created a

genuine issue of material fact.

II. MOTOR-VEHICLE EXCEPTION TO GOVERNMENTAL IMMUNITY

Defendant argues that the trial court erred when it

declined to grant its motion for summary disposition

under MCR 2.116(C)(7) and (10). It contends that

86 295 M

ICH

82 [Dec

governmental immunity bars plaintiff’s claim and that

plaintiff did not present evidence sufficient to create a

question of fact regarding whether the garbage truck

driver, Dingel, negligently operated the garbage truck.

We disagree.

In this case, the parties disagree whether the use of

the garbage truck falls within the meaning of the

phrase “negligent operation” in MCL 691.1405. The

parties first dispute a factual question: whether the

garbage truck was moving at the time it collided with

the school bus. The parties also dispute a legal question:

whether the term “operation” requires the truck to

have been moving at the time of the collision or whether

a stationary vehicle may be operating within the mean-

ing of the statute.

Defendant briefly argues that this Court should not

consider Strozier’s deposition testimony that the truck

moved forward and hit the bus because the statement

was based on hearsay and plaintiff did not establish

that Strozier testified on the basis of personal knowl-

edge. See MRE 602. We disagree. Strozier’s statement

shows that her testimony reflected personal knowledge.

Throughout her testimony, she consistently referred to

what she could “remember” of the events, and plain-

tiff’s counsel consistently asked Strozier what she “re-

membered.” These references show that Strozier testi-

fied on the basis of personal knowledge, and

defendant’s assertions of hearsay are without merit.

Next, we address defendant’s legal argument that

the garbage truck was not in “operation” for purposes

of the governmental-immunity statute because it was

stopped at the time of the accident. This issue involves

an interesting conundrum that arises when motions for

summary disposition are brought under both MCR

2.116(C)(10) and (7). Under MCR 2.116(C)(10), when a

2011] S

TROZIER V

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OMMUNITY

court determines that a genuine issue of material fact

exists, it must deny the motion for summary disposition

and allow the fact-finder to resolve the disputed issues

of fact at a trial. Dextrom v Wexford Co, 287 Mich App

406, 430; 789 NW2d 211 (2010). However, as this Court

stated in Dextrom, “[a] trial is not the proper remedial

avenue to take in resolving the factual questions under

MCR 2.116(C)(7) dealing with governmental immu-

nity.” Id. at 431. Whether the motor-vehicle exception

to governmental immunity applies here is a matter of

law, and it is a threshold matter of law at that. Id. at

431. When faced with a nearly identical procedural

issue, the Dextrom Court resolved this dilemma by

remanding the case to the trial court for a full eviden-

tiary hearing. We conclude that a remand is unneces-

sary in this case.

Even if the facts are exactly as asserted by defendant,

and the garbage truck was temporarily stopped on the

road when the collision occurred, we hold that tempo-

rary stops on the road to pick up garbage are included in

the meaning of “operation” of a garbage truck and that

the motor-vehicle exception to governmental immunity

applies. In general, “a governmental agency is immune

from tort liability if the governmental agency is en-

gaged in the exercise or discharge of a governmental

function.” MCL 691.1407(1). There are, however, six

exceptions to governmental immunity, including the

motor-vehicle exception, which allows a private party to

maintain an action against a governmental agency for

“bodily injury and property damage resulting from the

negligent operation by any officer, agent, or employee of

the governmental agency, of a motor vehicle of which

the governmental agency is owner....”MCL691.1405;

see also Robinson v City of Lansing, 486 Mich 1, 5-6;

782 NW2d 171 (2010).

88 295 M

ICH

82 [Dec

Our Supreme Court has defined “operation,” in the

context of the governmental-immunity statute, to mean

“ ‘an act or instance, process, or manner of functioning

or operating.’ ” Chandler v Muskegon Co, 467 Mich 315,

320; 652 NW2d 224 (2002) (citation omitted). In apply-

ing this definition, the Court held that “operation”

requires that the motor vehicle be operating as a motor

vehicle and only “encompasses activities that are di-

rectly associated with the driving of a motor vehicle.”

Id. at 321. The Court found this limitation necessary,

because to define the term otherwise would allow this

exception to apply overbroadly to include virtually any

situation in which a motor vehicle injured someone,

regardless of the use of the vehicle at the time of the

accident. Id. Defendant relies on Chandler to support

its assertion that because the garbage truck was

stopped, it could not be in “operation” at the time of the

incident. We disagree.

In Chandler, the Supreme Court held that the situ-

ation of a bus parked at a maintenance garage did not

fall within the statutory meaning of “operation.” Chan-

dler, 467 Mich at 316. While waiting to clean the bus,

the plaintiff saw the driver become trapped in the bus

doors as the driver attempted to exit it. Id. The plaintiff

tried to open the doors and injured his shoulder in the

process. Id. The Court held that because the bus was in

maintenance at the time of the injury, and bus mainte-

nance is distinct from bus operation, governmental

immunity barred the plaintiff’s claim. Id. at 316, 320-

322.

In Poppen v Tovey, 256 Mich App 351, 352, 355-356;

664 NW2d 269 (2003), this Court held that a water

truck parked on the curb lane of a two-lane street was

not in “operation.” The plaintiff in Poppen hit the truck

while it was parked with its warning lights flashing, as

2011] S

TROZIER V

LINT

OMMUNITY

the city employee in possession of the truck inspected a

nearby fire hydrant. Id. at 352. This Court held that the

truck was not in operation because it was not engaged

in an activity “ ‘directly associated with the driving’ of

that vehicle.” Id. at 355-356 (citation omitted). The

Court therefore upheld the trial court’s grant of sum-

mary disposition. Id. at 356.

In an order entered by our Supreme Court, in Martin

v Rapid Inter-Urban Partnership, 480 Mich 936 (2007),

the Court stated that “[t]he loading and unloading of

passengers is an action within the ‘operation’ of a

shuttle bus.” The Court provided no further facts and

provided no analysis regarding why the exception ap-

plied, even though the bus was apparently not moving.

Id. Justice C

ORRIGAN

provided further facts in her

dissent, indicating that the plaintiff claimed that the

defendant’s failure to install a heater to thaw the steps

or to properly scrape the steps had caused the plaintiff

to fall on an icy step. Id. at 936 (C

ORRIGAN

, J., dissent-

ing). She further noted that the majority’s order

seemed to confuse the Court’s previous definition of the

term “operation,” which had explicitly excluded bus

“maintenance.” Id. at 936-937. In her view, the Court

should have granted leave to fully discuss the implica-

tion of the majority’s opinion that “ ‘operation’ means

something more than driving” and answer the ques-

tion: “What precisely does ‘operation’ mean?” Id.at

937.

This case is factually similar to Martin and distinct

from Chandler and Poppen.InPoppen, the defendant

parked the truck on the road, with its hazard lights on,

for about five minutes, in a way that indicated it was

not currently in use as a vehicle. Similarly, in Chandler,

the bus was parked in a maintenance garage as the

driver got out of the vehicle, indicating that use of the

90 295 M

ICH

82 [Dec

bus as a vehicle had ended. In this case, even if the

garbage truck was stopped, it was stopped because it

was carrying out its intended function of picking up

garbage. As it is impossible for a garbage truck to

perform the function for which it was designed without

periodically stopping to pick up garbage, we conclude

that stopping to pick up garbage is necessarily included

within the “operation” of a garbage truck. Therefore,

summary disposition under MCR 2.116(C)(7) was not

warranted because the motor-vehicle exception to gov-

ernmental immunity would apply regardless of whether

the facts are as plaintiff contends or as defendant

contends.

Affirmed.

URPHY

, C.J., and J

ANSEN

and O

WENS

, JJ., concurred.

2011] S

TROZIER V

LINT

OMMUNITY

PEOPLE v MINCH

Docket No. 301316. Submitted December 14, 2011, at Grand Rapids.

Decided December 20, 2011, at 9:05 a.m. Reversed, 493 Mich 87.

Kurtis R. Minch pleaded guilty in the Muskegon Circuit Court to

charges of possessing a short-barreled shotgun, MCL 750.224b,

and possessing a firearm during the commission of a felony, MCL

750.227b. The trial court, Timothy G. Hicks, J., granted defen-

dant’s motion for the return of numerous firearms that were not

contraband and had been seized during a police raid of his home

and ordered the police department to return the firearms to his

designee. The prosecution appealed this order by leave granted.

The Court of Appeals held:

Allowing the police department to deliver the noncontraband

firearms to defendant’s designee would not violate MCL

750.224f(2), which prohibits a person convicted of a specified

felony from, among other things, distributing a firearm unless

certain conditions have been met. A criminal defendant is entitled

to the return of his or her property after the underlying case is

concluded unless there is a lawful reason to deny its return.

Denying defendant’s designee the right to take possession of the

weapons when they were not the subject of a forfeiture proceeding

would deprive defendant of his property without due process of

law.

Affirmed.

RIMINAL

AW —

EAPONS —

ETURN OF

EIZED

TEMS —

ROCESS

A criminal defendant is entitled to the return of property seized in

connection with his or her case after the case is concluded unless

there is a lawful reason to deny its return; a police department’s

return of noncontraband firearms to a defendant’s designee does

not violate MCL 750.224f(2).

Bill Schuette, Attorney General, John J. Bursch,

Solicitor General, Tony Tague, Prosecuting Attorney,

and Charles F. Justian, Chief Appellate Attorney, for

the people.

92 295 M

ICH

92 [Dec

Nolan Law Offices, PLLC (by Kevin J. Wistrom), for

defendant.

Before: H

OEKSTRA

,P.J., and K. F. K

ELLY

and B

ECKERING

JJ.

URIAM

. The prosecution appeals by leave

granted an order of the trial court directing the Fruit-

port Police Department to turn certain firearms over to

defendant’s designee, Carol L. Cutler, who is also his

mother. We affirm.

I. BASIC FACTS AND PROCEDURAL HISTORY

Defendant pleaded guilty to one count of possession

of a short-barreled shotgun, MCL 750.224b, and one

count of possessing a firearm during the commission of

a felony, MCL 750.227b. The trial court granted defen-

dant’s motion for the return of 86 noncontraband

firearms seized during a police raid of defendant’s home

and ordered the Fruitport Police Department to return

the firearms to defendant’s designee—his mother, Carol

L. Cutler. The police initially seized 87 firearms from

defendant, but only one firearm, the short-barreled

shotgun, was illegal to possess. The prosecution did not

bring forfeiture proceedings, nor did it intend to do so in

the future.

We granted the prosecution’s emergency application

for leave to appeal, People v Minch, unpublished order

of the Court of Appeals, entered December 1, 2010

(Docket No. 301316), as well as the prosecution’s mo-

tion to stay enforcement of the trial court’s order

pending the resolution of this appeal, People v Minch,

unpublished order of the Court of Appeals, entered

November 29, 2010 (Docket No. 301316).

2011] P

EOPLE V

INCH

II. ANALYSIS

Under the felon-in-possession statute, MCL 750.224f,

it is illegal for defendant to possess or distribute fire-

arms. The prosecution argues that allowing the police

to deliver the firearms to Cutler would be akin to

allowing defendant to distribute them and that this

action should be barred under MCL 750.224f. We dis-

agree. We review de novo the interpretation and appli-

cation of statutes. People v Waclawski, 286 Mich App

634, 645; 780 NW2d 321 (2009).

MCL 750.224f(2) provides, in relevant part:

A person convicted of a specified felony

[

]

shall not

possess, use, transport, sell, purchase, carry, ship, receive,

or distribute a firearm in this state until all of the following

circumstances exist:

(a) The expiration of 5 years after all of the following

circumstances exist:

(i) The person has paid all fines imposed for the viola-

tion.

(ii) The person has served all terms of imprisonment

imposed for the violation.

(iii) The person has successfully completed all condi-

tions of probation or parole imposed for the violation.

(b) The person’s right to possess, use, transport, sell,

purchase, carry, ship, receive, or distribute a firearm has

been restored pursuant to section 4 of Act No. 372 of the

Public Acts of 1927, being section 28.424

[

]

of the Michigan

Compiled Laws. [Emphasis added.]

A “specified felony” under the statute includes a felony for the

unlawful possession or distribution of a firearm. MCL 750.224f(6)(iii). In

this case, defendant’s possession of a short-barreled shotgun offense or

his felony-firearm offense qualifies as a “specified felony.”

MCL 28.424 allows a person to apply to the county concealed weapon

licensing board in his or her county of residence for a restoration of these

rights.

94 295 M

ICH

92 [Dec

Our primary obligation when interpreting a statute is

to ascertain the intent of the Legislature from the plain

language of the statute and to give effect to that intent.

People v Williams, 475 Mich 245, 250; 716 NW2d 208

(2006). “When interpreting statutes, this Court looks to

the plain meaning of terms unless those terms are

defined within the statute.” People v Osby, 291 Mich

App 412, 415; 804 NW2d 903 (2011). “ ‘[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.’ ” People v Breiden-

bach, 489 Mich 1, 10; 798 NW2d 738 (2011), quoting

People v Davis, 468 Mich 77, 79; 658 NW2d 800 (2003).

The Legislature is presumed to have intended its plain

meaning, and this Court should enforce unambiguous

statutes as written. People v Patton, 285 Mich App 229,

234; 775 NW2d 610 (2009).

The Michigan Penal Code does not specifically define

“distribute” in the context of firearms violations. We

may therefore consult a dictionary to determine the

meaning of “distribute.” See People v Haynes, 281 Mich

App 27, 29; 760 NW2d 283 (2008). The definition of

“distribute” includes “deliver.” Black’s Law Dictionary

(9th ed); Random House Webster’s College Dictionary

(1997). The prosecution argues that if defendant is

permitted to authorize the police department to dispose

of the weapons on his behalf, the department would

effectively be acting as defendant’s agent when it deliv-

ers the weapons to Cutler. However, the prosecution’s

position fails to account for defendant’s due-process

rights or previous decisions of this Court. The Fruitport

police have not instituted forfeiture proceedings, nor

have they asserted that forfeiture proceedings would be

proper. Therefore, denying defendant’s designee the

right to take possession of the weapons would deprive

defendant of his property without due process of law.

2011] P

EOPLE V

INCH

Banks v Detroit Police Dep’t, 183 Mich App 175, 180;

454 NW2d 198 (1990); People v Oklad, unpublished

opinion per curiam of the Court of Appeals, issued

March 3, 2000 (Docket No. 206589).

A criminal defendant is entitled to the return of his

or her property after the case is concluded unless there

is a lawful reason to deny its return. Banks, 183 Mich

App at 178. The party seeking to retain the property

“has the burden of proof to establish a lawful reason for

denying the return of the property to the person from

whom it was seized.” Id. However, while criminal de-

fendants are entitled to the return of property that is

legal to possess, they are not entitled to the return of

contraband. Id. at 181. Likewise, criminal defendants

are not entitled to property that has been forfeited. See

id. at 178.

In Banks, this Court addressed an issue similar to the

one raised in this appeal, although it was decided under

the federal felon-in-possession statute, not the Michi-

gan felon-in-possession statute. Banks, 183 Mich App at

179-180. In Banks, police officers had seized various

items from the plaintiff while executing a search war-

rant, including firearms that were not illegal to possess.

Id. at 177. The Detroit Police Department did not

institute forfeiture proceedings against the seized prop-

erty. Id. at 180. The plaintiff, who had been convicted on

felony charges in a previous criminal proceeding,

sought return of his property, including the firearms, to

a designated third party. Id. at 177-178. The police

department opposed his request with regard to the

firearms because the plaintiff was a convicted felon and,

While an unpublished opinion has no precedential value, this Court

may follow the opinion if it finds the reasoning persuasive. See People v

Green, 260 Mich App 710, 720 n 5; 680 NW2d 477 (2004); MCR

7.215(C)(1).

96 295 M

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92 [Dec

as such, was prohibited by federal law from possessing

or transporting firearms.

Id. at 179-180. This Court

acknowledged that under the federal felon-in-

possession statute, the plaintiff could not himself pos-

sess or transfer the firearms; however, it concluded that

allowing the police to retain possession of the firearms

without having instituted forfeiture proceedings would

violate the plaintiff’s due-process rights. Id. at 180.

Accordingly, this Court allowed the plaintiff to desig-

nate someone to receive the firearms, even though it

would have been illegal for the plaintiff to transfer or

possess them. Id.

While Banks addressed the federal felon-in-

possession statute, this Court applied the holding in

Banks to Michigan’s felon-in-possession statute in

Oklad, in which police officers had seized guns and

illegal contraband from the defendant’s home. Oklad,

unpub op at 2-3. As with the firearms seized in Banks,

the firearms seized were not illegal to possess and were

not the subject of forfeiture proceedings. Id. at 3-4. The

defendant, who was a convicted felon, moved for the

return of his firearms, arguing that withholding the

guns was a deprivation of property without due process.

Id. at 3. The prosecution objected to the return of the

firearms, citing MCL 750.224f and arguing that it

would be illegal for the defendant to possess them

because of his status as a convicted felon. Id. Consis-

tently with its holding in Banks, this Court held that

although the defendant could not legally possess, use,

transport, or distribute the firearms, he was nonethe-

less entitled to designate an individual to receive them.

Id. at 4. This Court determined that if the firearms

Under 18 USC 922(g), convicted felons are prohibited from possessing

or transporting firearms that affect or have been transported in inter-

state commerce.

2011] P

EOPLE V

INCH

were not the subject of forfeiture proceedings, the police

lacked a valid reason to retain possession of them and,

therefore, due process required that the firearms be

returned to the defendant’s designee. Id. at 3-4.

The prosecution attempts to distinguish these cases

by arguing that defendant’s due-process rights are not

implicated because the Fruitport Police Department is

not seeking to retain the firearms permanently. How-

ever, the prosecution explains neither what the depart-

ment will do with the firearms if it does not deliver

them to Cutler nor how any other action could be

consistent with defendant’s due-process rights. It fails

to acknowledge that any other action the department

could take, whether it be selling the weapons, melting

them down, or retaining possession of them perma-

nently, could only be accomplished through a forfeiture

proceeding. The trial court did not err by ordering the

Fruitport Police Department to deliver the firearms to

defendant’s designee.

Affirmed.

OEKSTRA

,P.J., and K. F. K

ELLY

and B

ECKERING

,JJ.,

concurred.

98 295 M

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92 [Dec

WELLS FARGO BANK, NA v CHERRYLAND MALL

LIMITED PARTNERSHIP

Docket No. 304682. Submitted December 14, 2011, at Lansing. Decided

December 27, 2011, at 9:00 a.m. Remanded, 493 Mich 859.

Wells Fargo Bank, N.A., brought an action in the Grand Traverse

Circuit Court against Cherryland Mall Limited Partnership, David

Schostak, and Schostak Brothers & Co., Inc., to recover a defi-

ciency owed under the terms of a mortgage. Cherryland had

obtained an $8.7 million commercial mortgage-backed securities

loan in 2002 from Archon Financial, LP, using a mall it owned as

collateral. David Schostak was the guarantor of the loan. Archon

transferred the Cherryland loan and attendant loan documents to

Wells Fargo. After Cherryland’s failure to make a loan payment,

Wells Fargo foreclosed on the property by advertisement in 2010.

Wells Fargo was the successful bidder at the foreclosure sale with

a bid of $6 million, which left a deficiency of $2.1 million. Wells

Fargo asserted that it was entitled to recover damages in the

amount of the loan deficiency from both Schostak and Cherryland

because Cherryland’s insolvency constituted a failure to maintain

its single-purpose-entity status as required by the loan documents.

Wells Fargo moved for summary disposition on multiple grounds.

The court, Philip E. Rodgers, Jr., J., granted Wells Fargo’s motions

in part, ruling that as guarantor on the mortgage, Schostak was

liable for the loan deficiency. In addition, the court awarded

attorney fees to Wells Fargo. Cherryland Mall and Schostak

appealed.

The Court of Appeals held:

1. Generally, foreclosure extinguishes a mortgage, and mort-

gages are nonrecourse in Michigan absent an agreement to the

contrary. A deficiency action for money owed under a mortgage

following foreclosure by sale is permissible if the note provides

that the loan was a recourse loan. Although the trial court decided

the issue on incorrect grounds, Wells Fargo was entitled to

maintain a mortgage deficiency action because the note provided

that the debt was fully recourse.

2. The failure of the mortgage to define “single purpose entity”

does not make the mortgage ambiguous. A term that is not defined

2011] W

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ANK V

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ALL

in a contract will be interpreted in accordance with its commonly

used meaning, and terms in a particular trade are given their

natural and ordinary meaning in that trade. Extrinsic evidence

may be used to define an undefined technical term because it

generally translates the language of the trade into ordinary

language. A single purpose entity is an entity formed concurrently

with or immediately before the transaction that is unlikely to

become insolvent as a result of its own activities and is adequately

insulated from the consequences of any related party’s insolvency.

The mortgage, as incorporated into the note, required Cherryland

to remain solvent to maintain its single-purpose-entity status. The

trial court properly determined that Cherryland breached the

covenants of the mortgage requiring it to be a single purpose entity

when it became insolvent, at which point the loan became fully

recourse.

Affirmed.

1. M

ORTGAGES —

ORECLOSURE BY

DVERTISEMENT —

EFICIENCY

CTION —

ECOURSE

Foreclosure generally extinguishes a mortgage, and mortgages are

nonrecourse absent an agreement to the contrary; a deficiency

action for money owed under a mortgage following foreclosure by

sale is permissible, however, if the note provides that the loan was

a recourse loan.

2. M

ORTGAGES —

REACH OF

OVENANT —

ECOURSE —

INGLE

URPOSE

NTITY

TATUS

IOLATED

A single purpose entity (SPE) is an entity formed concurrently with

or immediately before the subject transaction that is unlikely to

become insolvent as a result of its own activities and that is

adequately insulated from the consequences of any related party’s

insolvency; if remaining solvent is part of the SPE covenants in a

mortgage or loan document, an entity’s insolvency breaches that

covenant and may trigger provisions making a mortgage or loan

fully recourse.

Miller, Canfield, Paddock and Stone, P.L.C. (by James

L. Allen, Larry J. Saylor, and Dennis G. Bonucchi), for

Wells Fargo Bank, N.A.

Honigman Miller Schwartz and Cohn, LLP (by John

Pirich and I. W. Winsten), for Cherryland Mall Limited

Partnership and David Schostak.

100 295 M

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99 [Dec

Amici Curiae:

McClelland & Anderson, LLP (by Gregory L. McClel-

land and Melissa A. Hagen), for the Michigan Associa-

tion of Realtors.

Kupelian Ormond & Magy, P.C. (by Paul S. Magy and

Matthew W. Schlegel), and Fried, Frank, Harris, Shriver

& Jacobson LLP (by Greg L. Weiner, Shahzeb Lari, and

Nazar Altun) for the Building Owners and Managers

Association International, the Building Owners and Man-

agers Association of Metro Detroit, the International

Council of Shopping Centers, NAIOP – The Commercial

Real Estate Development Association, and the National

Association of Real Estate Investment Trusts.

Robert S. LaBrant for the Michigan Chamber of

Commerce.

Bill Schuette, Attorney General, John J. Bursch,

Solicitor General, Richard A. Bandstra, Chief Legal

Counsel, and Christopher W. Braverman, Assistant At-

torney General, for the Attorney General.

Before: C

AVANAGH

,P.J., and S

AWYER

and M

ETER

,JJ.

URIAM

. In this mortgage deficiency action, de-

fendants

Cherryland Mall Limited Partnership and

David Schostak (Schostak) appeal as of right the trial

court’s judgment awarding plaintiff, Wells Fargo Bank,

N.A., $2,142,697.86 on the mortgage deficiency claim

and $260,000 in stipulated attorney fees and costs, plus

interest. We affirm.

Defendant Schostak Brothers & Co., Inc. is not involved in this

appeal. Accordingly, references to “defendants” are only to Cherryland

and Schostak.

2011] W

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101

I. BASIC FACTS AND PROCEDURAL HISTORY

At the heart of this case lies a commercial mortgage-

backed securities (CMBS) loan. CMBS loans have a

unique structure, as described by the Commercial Mort-

gage Securities Association and the Mortgage Bankers

Association:

Prior to the development of the CMBS market, commer-

cial real estate was often financed on a recourse basis by

banks, thrifts, specialty finance companies and other lend-

ers. Such financing included a first mortgage lien on the

real estate and a recourse note or guaranty allowing the

lender to seek payment on the mortgage debt from the note

obligor (customarily the property owner) or its constituent

owner(s) as sureties. The holder of such a mortgage loan

might hold the loan in its own portfolio as a whole loan or

perhaps sell one or more pieces of it, often through tradi-

tional loan syndication or participation structures. With

the advent of the CMBS market came the greater availabil-

ity of non-recourse, asset specific financing for commercial

real estate through the use of capital markets, an expan-

sion that attracted new and varied sources of capital to this

sector and permitted property owners to acquire and more

easily finance real estate without putting their personal

balance sheets at risk. In a simple CMBS structure, a

lender would make a number of disparate mortgage loans

to unrelated entities, then deposit each of the loans into a

trust that would issue securities in the public or private

markets backed by the cash flow and collateral from the

pool of mortgage loans. These securities would be created

in a senior/junior structure such that the more senior

securities would have payment priority as to both interest

and principal during the term as well as at liquidation (and

hence a lower coupon rating reflecting the lower risk) over

the more junior securities....Asmany fixed income bond

investors—that would otherwise not be active real estate

lenders—could now participate in the commercial real

estate market through the purchase of CMBS, the flow of

capital to the commercial real estate mortgage markets

increased significantly and played a major role in leading

102 295 M

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99 [Dec

the country out of the nationwide real estate depression

caused by the savings and loan crisis of the late 1980s....

One of the bedrock elements of a CMBS financing is the

isolation of the asset to be financed. This is the essential

bargain between borrower and lender that permits financ-

ing on a non-recourse basis: the lender agrees not to pursue

recourse liability directly or indirectly against the borrower

or its owners, provided that the lender can comfortably rely

on the assurance that the financed asset will be “ring-

fenced” from all other endeavors, creditors and liens re-

lated to the parent of the property owner or affiliates, and

from the performance of any asset owned by such parent

entity or affiliates. More specifically, it is not just the

isolation of the real property asset, but the isolation of the

cash flows coming from the operation of the real property,

from which debt service is paid on the mortgage loan and

subsequently distributed to the holders of the securities

issued backed by such mortgages....

The twin components of asset isolation are (i) separate-

ness covenants (the “Separateness Covenants”) and (ii)

narrow limitations on the lender’s general agreement not

to pursue recourse liability (the “Limited Recourse Provi-

sions”)....

The Separateness Covenants, while often referred to

and discussed as a unitary concept, are really a package of

separate and independent covenants made by a borrower to

a CMBS lender. The following is a sample set of Separate-

ness Covenants, taken from the form documents for a

CMBS lender:

The borrower has not and, for so long as the mortgage

loan shall remain outstanding, shall not:

***

(xviii) fail to remain solvent or pay its own liabilities

(including, without limitation, salaries of its own employ-

ees) only from its own funds....

***

2011] W

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103

The Limited Recourse Provisions are the other key

element of asset isolation in CMBS financing. It is

important to note that the nature and purpose of this

limited recourse is different from a financing that relies

on recourse to the borrower, its parent or sponsor for

additional credit enhancement beyond the security of-

fered by the mortgaged property. In a CMBS financing,

in the event of certain “bad acts” (the “Recourse Trig-

gers”) on the part of the borrower and/or its affiliates,

the lender’s basic agreement not to pursue recourse

liability against a borrower or its owners or principals

has limited application, allowing the lender to pursue

recourse as part of its remedies. The Recourse Triggers

would typically be divided into two categories, with

differing recourse consequences. In the first category,

the recourse would be limited to the amount of any losses

incurred by the lender. These Recourse Triggers include

[fraud, intentional misrepresentation, misappropriation

of rents if the loan were in default, misappropriation of

insurance proceeds, actual waste or arson]. To pursue

recourse under any of the foregoing Recourse Triggers, a

lender would have to establish not only the existence of

the Recourse Trigger, but also determine the magnitude

of its resulting loss.

For the second category of Recourse Triggers, the lender

could seek recourse liability against the borrower in the

amount of the total outstanding balance of the mortgage

loan, plus any accrued and unpaid interest, regardless of

whether the lender had actually suffered a loss. These

Recourse Triggers are:

(i) a material breach by borrower [or] its affiliates of the

Separateness Covenants;

(ii) any breach of the due-on-transfer or due-on-

encumbrance provisions of the loan documents; or

(iii) any voluntary or collusive involuntary bankruptcy

or insolvency filing by or on behalf of the borrower.

This list of Recourse Triggers, taken from the document

template for a CMBS lender, is representative of the

104 295 M

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99 [Dec

limitations found in most CMBS loans. Both with respect

to the Recourse Triggers tied to actual losses and those

triggering full recourse liability for the entire loan amount,

the purpose is the same, namely to provide a credible and

enforceable disincentive for the borrower to engage in any

act that would constitute a Recourse Trigger. This is wholly

different in concept as compared to a recourse-based fi-

nancing that relies on a direct payment obligation by the

borrower or a payment guaranty from its parent as credit

support for the loan. [Amended brief of amici curiae

Commercial Mortgage Securities Association and Mortgage

Bankers Association, filed in In re Gen Growth Props, Inc,

409 BR 43 (SD NY, 2009), pp 4-14.]

In October 2002, Cherryland obtained an $8.7 mil-

lion CMBS loan from Archon Financial, LP, using the

mall it owned located at 1712 S. Garfield Road, Garfield

Township, Michigan, as collateral. Schostak was the

guarantor on the loan. At closing, Cherryland executed

the mortgage, note, and assignment, along with other

documents, and Schostak signed the guaranty (collec-

tively, the loan documents). Archon transferred the

Cherryland loan and the attendant loan documents to

plaintiff. The loan was then made a part of a real estate

mortgage investment conduit (REMIC) trust, which is

governed by a pooling and servicing agreement dated

December 1, 2002. Plaintiff is the trustee of the REMIC

trust, which contains the Cherryland loan as part of its

$685 million pool of CMBS loans.

In 2009, Cherryland failed to make the August 1,

2009, mortgage payment. Plaintiff ultimately com-

menced foreclosure by advertisement, and the sheriff’s

sale was conducted on August 18, 2010. Plaintiff was

the successful bidder with a bid of $6 million, leaving a

deficiency of roughly $2.1 million.

On August 19, 2010, the day after the foreclosure

sale, plaintiff filed the instant action against Cherry-

2011] W

ELLS

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ANK V

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105

land to enforce the loan documents. Plaintiff subse-

quently filed an amended complaint, adding Schostak

as a defendant as the guarantor of the loan. Plaintiff

asserted that it was entitled to recover damages in the

amount of the loan deficiency from both Cherryland

and Schostak because Cherryland’s insolvency consti-

tuted a failure to maintain its single purpose entity

(SPE) status.

On January 31, 2011, after the close of discovery,

plaintiff filed multiple summary disposition motions

under MCR 2.116(C)(10) and a motion to disgorge

attorney fees. Motion No. 1 sought a judgment against

Schostak, as the guarantor, for the entire loan defi-

ciency on the ground that Cherryland’s insolvency

constituted a failure to maintain its SPE status. Motion

No. 2 also sought a judgment against Schostak as the

guarantor for the entire loan deficiency, but on the

additional ground that Cherryland had entered into

unfair transactions with an affiliate, also an alleged

failure to maintain its SPE status. Motion No. 4

also

sought a judgment against Schostak, again as the

guarantor, for $61,958 for a distribution Cherryland

made to its owners in 2010. Motion No. 5 requested that

defendants’ attorneys disgorge $34,371 in attorney fees

that they received from Cherryland.

After hearing arguments from the parties, the trial

court ruled from the bench and found in favor of

plaintiff on Motion Nos. 1, 4, and 5, but in favor of

defendants on Motion No. 2. After the trial court’s

ruling, the parties placed several stipulations on the

record, one of which related to attorney fees. Subse-

quently, the parties disagreed about the order for Mo-

tion No. 4 (summary disposition for $61,958). Plaintiff

Motion No. 3 related solely to Schostak Brothers & Co., Inc., and is

accordingly not relevant to this appeal.

106 295 M

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99 [Dec

demanded that the order for that claim also include a

$260,000 attorney-fee award; defendants claimed that

the stipulation was for $260,000 for the entire action

related to the $2,142,697 mortgage deficiency, not just

the $61,958 claim, particularly because the $61,958

claim had only been asserted in the second amended

complaint, filed just one month before. After a hearing,

the trial court determined that the $260,000 attorney-

fee stipulation would also be included in the order for

Motion No. 4. The final judgment was then entered.

Defendants moved for reconsideration on March 28,

2011, which the trial court denied.

Defendants appeal only two of the trial court’s rul-

ings: (1) On Motion No. 1, they challenge the finding

that Schostak, as guarantor, was liable for the entire

loan deficiency on the basis of the trial court’s conclu-

sion that insolvency was a violation of Cherryland’s

SPE status, and (2) on Motion No. 4, they challenge the

attorney fee award of $260,000.

II. STANDARD OF REVIEW

We review de novo the trial court’s decision to grant

motions for summary disposition brought under MCR

2.116(C)(10). Dressel v Ameribank, 468 Mich 557, 561;

664 NW2d 151 (2003). The facts are considered in the

light most favorable to the nonmoving party. Id.We

review the record and the documentary evidence, but do

not make findings of fact or weigh credibility. Taylor v

Lenawee Co Bd of Co Rd Comm’rs, 216 Mich App 435,

437; 549 NW2d 80 (1996).

We also review de novo issues involving the proper

interpretation of a contract or the legal effect of a

contractual clause. McDonald v Farm Bureau Ins Co,

480 Mich 191, 197; 747 NW2d 811 (2008).

2011] W

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107

III. ANALYSIS

A. SUIT ON THE MORTGAGE

Defendants first contend that the mortgage was

extinguished upon its foreclosure, thereby barring

plaintiff’s lawsuit because it was initiated after the

foreclosure sale, at which time the mortgage—and,

thus, its terms and conditions—no longer existed. Gen-

erally speaking, defendants are correct that foreclosure

extinguishes a mortgage. See Senters v Ottawa Savings

Bank, FSB, 443 Mich 45, 56; 503 NW2d 639 (1993)

(“[P]laintiff and defendant were parties to a mortgage

agreement that was extinguished by the foreclosure

sale in August of 1989.”); New York Life Ins Co v Erb,

276 Mich 610, 615; 268 NW 754 (1936) (“A mortgage is

not extinguished by foreclosure until the sale.”). In

addition, MCL 565.6 provides that absent agreement to

the contrary, mortgages are nonrecourse in Michigan:

No mortgage shall be construed as implying a covenant

for the payment of the sum thereby intended to be secured;

and where there shall be no express covenant for such

payment contained in the mortgage, and no bond or other

separate instrument to secure such payment, shall have

been given, the remedies of the mortgagee shall be confined

to the lands mentioned in the mortgage.

See, also, 1 Cameron, Michigan Real Property Law (3d

ed), § 18.11, pp 687-688.

The trial court concluded that the terms and condi-

tions of the mortgage had not been extinguished by the

foreclosure because ¶ 36 of the mortgage provided for

indemnification for losses based on the failure of the

mortgagor to comply with the terms of the mortgage

and such indemnification survived any foreclosure. De-

fendants argue that ¶ 36 was inapplicable because

plaintiff’s cause of action was not for indemnification.

108 295 M

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99 [Dec

We find it unnecessary to determine whether the

mortgage was extinguished or whether the indemnifi-

cation provision in ¶ 36 was applicable because, even

accepting defendants’ arguments as true, plaintiff still

has a basis for its lawsuit.

Our Supreme Court has long held that actions at law

are permissible for deficiencies on foreclosures by ad-

vertisement:

“While it is true that a sale on statutory foreclosure

satisfies the debt secured by the foreclosed mortgage to the

extent of the proceeds of the sale, and thus far releases the

personal obligation, yet***.”

As the general rule has been recognized by our legisla-

ture and court and is fundamentally sound, we hold that an

action at law may be instituted for the deficiency on

statutory foreclosure of a mortgage. [New York Life, 276

Mich at 613, quoting Moore v Smith, 95 Mich 71, 76; 54 NW

701 (1893).]

The basis for such deficiency lawsuits is not the mort-

gage, as both parties assume, but the note:

When the borrower cannot repay a loan and the lender

pursues foreclosure, the lender may or may not be able to

sue the borrower to collect any shortfall commonly known

as a deficiency. The key difference is whether or not that

loan is classified as a recourse loan or a nonrecourse loan.

If the loan is recourse, the lender can attempt to collect a

deficiency, which must be done through a court action. This

can be done either as part of a judicial foreclosure or as a

separate action filed after a foreclosure by advertisement is

completed. In either event, it is based on the enforcement of

the covenants of the note signed by the borrower.

[Nathanson, Michigan Residential Real Estate Transac-

tions (ICLE) (2009 update), § 11.2, p 568 (emphasis

added).]

In this case, ¶ 49 of the mortgage, setting forth the

recourse provisions, is identical to ¶ 13 of the note

2011] W

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109

except that the mortgage uses the terms

“Mortgagor/Mortgagee” and the note uses the terms

“Borrower/Lender.” The note provides:

Notwithstanding anything to the contrary in this Note

or any of the Loan Documents,...theDebt shall be fully

recourse to Borrower in the event that...Borrower fails to

maintain its status as a single purpose entity as required

by, and in accordance with the terms and provisions of the

Mortgage....

The terms of the note thus entitled plaintiff to maintain

a suit for a deficiency judgment. Accordingly, we affirm

the trial court’s decision to permit plaintiff’s lawsuit,

albeit for different reasons. Gleason v Dep’t of Transp,

256 Mich App 1, 3; 662 NW2d 822 (2003).

B. SINGLE PURPOSE ENTITY REQUIREMENTS AND VIOLATIONS

Defendants next argue that the trial court erred by

holding defendants liable for the deficiency on the basis

of a violation of the mortgage’s SPE requirements.

They contend that either the mortgage was unambigu-

ously nonrecourse and insolvency was not a violation of

Cherryland’s SPE status or that the mortgage was

ambiguous and the extrinsic evidence presented showed

that solvency was not required to maintain SPE status.

The note, mortgage, and guaranty all provide, in

nearly identical language, that the loan debt becomes

fully recourse with respect to the borrower (mortgage

and note) or the guarantor (guaranty) in the event that

Cherryland “fails to maintain its status as a single

purpose entity as required by, and in accordance with

the terms and provisions of this Mortgage.” Indeed,

there is no dispute between the parties that the loan

documents provide for full recourse liability if Cherry-

land failed to maintain its “single purpose entity”

status. However, they do dispute what the language “as

110 295 M

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99 [Dec

required by, and in accordance with the terms and

provisions of the Mortgage” means. In other words, the

parties disagree about what Cherryland must do to

maintain that status, which presents a straightforward

question of contract interpretation.

“In interpreting a contract, our obligation is to

determine the intent of the contracting parties.” Qual-

ity Prod & Concepts Co v Nagel Precision, Inc, 469 Mich

362, 375; 666 NW2d 251 (2003). “[A]n unambiguous

contractual provision is reflective of the parties’ intent

as a matter of law.” Id. 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 v United Ins

Group Agency, Inc, 468 Mich 459, 468; 663 NW2d 447

(2003) (citation omitted). “[I]f the language of a con-

tract is clear and unambiguous, its construction is a

question of law for the court.” Mich Nat’l Bank v

Laskowski, 228 Mich App 710, 714; 580 NW2d 8 (1998).

However, “the meaning of an ambiguous contract is a

question of fact that must be decided by the jury” or

other trier of fact. Klapp, 468 Mich at 469. A “ ‘contract

is ambiguous when its provisions are capable of conflict-

ing interpretations.’ ” Id. at 467 (citation omitted). But

“[i]f the contract, although inartfully worded or clum-

sily arranged, fairly admits of but one interpretation, it

is not ambiguous.” Meagher v Wayne State Univ, 222

Mich App 700, 722; 565 NW2d 401 (1997).

As an initial matter, we observe that although the

suit is premised on the note, we must still interpret the

terms of the mortgage as they relate to SPE status

because the note and guaranty expressly incorporate

those provisions. See Forge v Smith, 458 Mich 198, 207;

580 NW2d 876 (1998) (“Where one writing references

another instrument for additional contract terms, the

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two writings should be read together.”). Accordingly,

the first question is whether the mortgage provisions

are unambiguous. If so, we may interpret the contract

as a matter of law. Mich Nat’l Bank, 228 Mich App at

714. If not, the case must be remanded for trial because

summary disposition was inappropriate. Klapp, 468

Mich at 469.

Paragraph 9 of the mortgage provides as follows:

9. Single Purpose Entity/Separateness. Mortgagor

covenants and agrees as follows:

(a) Mortgagor does not own and will not own any asset

or property other than (i) the Mortgaged Property, and (ii)

incidental personal property necessary for the ownership

and operation of the Mortgaged Property.

(b) Mortgagor will not engage in any business other

than the ownership, management and operation of the

Mortgaged Property.

ment with any affiliate of the Mortgagor, any constituent

party of the Mortgagor, Guarantor, or any affiliate of

Guarantor, or any constituent party of the Guarantor,

except upon terms and conditions that are intrinsically fair

and substantially similar to those that would be available

on an arms-length basis with third parties other than any

such party.

(d) Mortgagor does not have as of the date hereof and

will not after the date hereof incur any indebtedness,

secured or unsecured, direct or indirect, absolute or con-

tingent (including guaranteeing any obligation), other than

(i) the Debt, (ii) unsecured trade and operational debt

incurred in the ordinary course of business with trade

creditors and in amounts as are normal and reasonable

under the circumstances, (iii) debt incurred in the financ-

ing of equipment and other personal property used on the

Premises and (iv) debt incurred to obtain the Letter of

Credit and Replacement Letter of Credit. No indebtedness

other than the Debt may be secured (subordinate or pari

passu) by the Mortgaged Property.

112 295 M

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99 [Dec

(e) Mortgagor does not have oustanding as of the date

hereof and will not make after the date hereof any loans or

advances to any third party (including any affiliate or

constituent party of Mortgagor, Guarantor, or any affiliate

or any constituent party of Guarantor), and shall not

acquire obligations or securities of its affiliates or any

constituent party.

(f) Mortgagor is and will remain solvent and Mortgagor

will pay its debts and liabilities (including, as applicable,

shared personnel and overhead expenses) from its assets as

the same shall become due.

(g) Mortgagor has done or caused to be done and will do all

things necessary to observe organizational formalities and

preserve its existence, good standing and right to do business

in the state where it is organized or registered and in the state

where the Premises are located, and Mortgagor will not, and

will not permit any general partner, manager or managing

member, as the case may be, or Guarantor, to amend, modify

or otherwise change the partnership certificate, partnership

agreement, articles of incorporation and bylaws, articles of

organization and operating agreement, trust or other organi-

zational documents of Mortgagor or such other party in any

material respect or in any manner which violates or is

contrary to this Paragraph 9, without the prior written

consent of Mortgagee.

(h) Mortgagor will maintain all of its books, records,

financial statements and bank accounts separate from those

of its affiliates and any constituent party and Mortgagor will

file its own tax returns. Mortgagor shall maintain its books,

records, resolutions and agreements as official records.

(i) Mortgagor will be, and at all times will hold itself out to

the public as, a legal entity separate from any other entity

(including any affiliate or any constituent party of Mortgagor,

Guarantor, or any affiliate [or] any constituent party of

Guarantor), shall correct any known misunderstanding re-

garding its status as a separate entity, shall conduct business

in its own name, shall not identify itself or any of its affiliates

as a division or part of the other and shall maintain and

utilize a separate telephone number and separate stationery,

invoices and checks.

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(j) Mortgagor will maintain adequate capital for the

normal obligations reasonably foreseeable in a business of

its size and character and in light of its contemplated

business operations.

(k) Neither Mortgagor, Guarantor nor any general part-

ner, managing member or manager, as the case may be, of

Mortgagor or Guarantor, will seek the dissolution, winding

up, liquidation, consolidation or merger, in whole or in

part, of the Mortgagor, Guarantor or such entity’s general

partner, managing member or manager.

(l) Mortgagor will not commingle the funds and other

assets of Mortgagor with those of any affiliate or constitu-

ent party of Mortgagor, Guarantor, or any affiliate or any

constituent party of Guarantor, or any other person.

(m) Mortgagor will maintain its assets in such manner

that it will not be costly or difficult to segregate, ascertain or

identify its individual assets from those of any affiliate or

constituent party of Mortgagor, Guarantor, or any affiliate or

any constituent party of Guarantor, or any other person.

(n) Mortgagor will not hold itself out to be responsible

for the debts or obligations of any other person.

(o) If Mortgagor is a limited partnership or a limited

liability company, its general partner, manager or managing

member, as the case may be, shall be an entity whose sole

asset is its interest in Mortgagor and each such general

partner, manager or managing member will at all times

comply, and will cause Mortgagor to comply, with each of the

agreements and covenants contained in this Paragraph 9 as if

such agreement and covenant was made directly by such

general partner, manager or managing member. [Emphasis

added.]

Plaintiff asserts that Cherryland became insolvent in

violation of the dictates of ¶ 9(f) of the mortgage—

which required Cherryland to remain solvent to main-

tain its SPE status—and thus triggered full recourse

against the borrower and the guarantor pursuant to the

terms of the loan documents. Defendants contend that

¶ 9(f) is not a requirement to maintain SPE status.

114 295 M

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Defendants first point out that the mortgage does not

define “single purpose entity.” However, the failure to

define a contractual term does not render a contract

ambiguous. Henderson v State Farm Fire & Cas Co, 460

Mich 348, 354; 596 NW2d 190 (1999). “Rather, if a term

is not defined in a contract, we will interpret such term

in accordance with its ‘commonly used meaning.’ ”

Terrien v Zwit, 467 Mich 56, 76-77; 648 NW2d 602

(2002), quoting Henderson, 460 Mich at 354. “Terms in

a particular trade are given their natural and ordinary

meaning in that trade.” Ososki v St Paul Surplus Lines,

156 F Supp 2d 669, 675 (ED Mich, 2001). Furthermore,

“[p]arol evidence is always receivable to define and explain

the meaning of words or phrases in a written instrument

which are technical and not commonly known, or which

have two meanings—the one common and universal and

the other technical. Similarly, where a new and unusual

word or phrase is used in a written instrument, or where a

word or phrase is used in a peculiar sense as applicable to

a particular trade, business, or calling or to any particular

class of people, it is proper to receive extrinsic evidence to

explain or illustrate the meaning of that word or phrase.

Such evidence neither varies nor adds to the written

memorandum, but merely translates it from the language

of trade into the ordinary language of the people generally.”

[Moraine Prod, Inc v Parke, Davis & Co, 43 Mich App 210,

213; 203 NW2d 917 (1972) (citation omitted).]

The record makes clear that “single purpose entity”

is a specific, technical term in the mortgage business.

Accordingly, the trial court erred both by failing to

define “single purpose entity” and by failing to consider

extrinsic evidence to the extent necessary to determine

definitions for “single purpose entity” and “separate-

ness.”

Remand is unnecessary, however, because interpretation of an unam-

biguous contract is a matter of law. Mich Nat’l Bank, 228 Mich App at

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Quoting the integration clause of the guaranty,

¶ 5.12, plaintiff asserts that use of extrinsic evidence

was expressly excluded. The clause provides:

Entirety. THIS GUARANTY EMBODIES THE FINAL,

ENTIRE AGREEMENT OF GUARANTOR AND

LENDER WITH RESPECT TO GUARANTOR’S GUAR-

ANTY OF THE GUARANTEED OBLIGATIONS AND

SUPERSEDES ANY AND ALL PRIOR COMMITMENTS,

AGREEMENTS, REPRESENTATIONS, AND UNDER-

STANDINGS, WHETHER WRITTEN OR ORAL, RELAT-

ING TO THE SUBJECT MATTER HEREOF. THIS

GUARANTY IS INTENDED BY GUARANTOR AND

LENDER AS A FINAL AND COMPLETE EXPRESSION

OF THE TERMS OF THE GUARANTY, AND NO

COURSE OF DEALING BETWEEN GUARANTOR AND

LENDER, NO COURSE OF PERFORMANCE, NO

TRADE PRACTICES, AND NO EVIDENCE OF PRIOR,

CONTEMPORANEOUS OR SUBSEQUENT ORAL

AGREEMENTS OR DISCUSSIONS OR OTHER EX-

TRINSIC EVIDENCE OF ANY NATURE SHALL BE

USED TO CONTRADICT, VARY, SUPPLEMENT OR

MODIFY ANY TERM OF THIS GUARANTY AGREE-

MENT. THERE ARE NO ORAL AGREEMENTS BE-

TWEEN GUARANTOR AND LENDER.

Assuming, without deciding, that the integration

clause in the guaranty is controlling in this case,

plaintiff’s argument still fails. The integration clause

provides that no extrinsic evidence may be used “to

contradict, vary, supplement or modify any term of this

guaranty agreement.” (Formatting altered to lower-

case.) Here, however, extrinsic evidence is being used to

define an undefined technical term. Such a use “ ‘nei-

714. Accordingly, we may determine the definition of “single purpose

entity” and construe the mortgage accordingly.

Notably, the note does not contain an integration clause, and the one

in the mortgage does not contain any language expressly prohibiting

extrinsic evidence.

116 295 M

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99 [Dec

ther varies nor adds to the written memorandum, but

merely translates it from the language of trade into the

ordinary language of the people generally.’ ” Moraine

Prod, Inc, 43 Mich App at 213 (citation omitted); see,

also, 5 Corbin, Contracts (rev ed), § 24.12, p 108 (stating

that when “the court seeks merely to interpret a

contract term, which is to discern the meaning of a term

already contained in the contract, the question of

whether the parties intended their agreement to be

integrated is not relevant”). Therefore, we may and

must turn to the extrinsic evidence in the record to

determine the trade definition for “single purpose en-

tity.”

A “single purpose entity” “is an entity, formed con-

currently with or immediately prior to the subject

transaction, that is unlikely to become insolvent as a

result of its own activities and that is adequately

insulated from the consequences of any related party’s

insolvency.” U.S. CMBS Legal and Structured Finance

Criteria, Standard & Poors, May 1, 2003, at 89. Nothing

in this definition suggests, however, that all the items

found in ¶ 9 of the mortgage document are not required

to maintain SPE status. Indeed, a further review of the

extrinsic evidence provided by defendants actually

counsels against their interpretation.

In the New York bankruptcy amici curiae brief pro-

vided by defendants, the Commercial Mortgage Securi-

ties Association and the Mortgage Bankers Association

made no explicit reference to the term “single purpose

entity.” Rather they stated that “[o]ne of the bedrock

elements of a CMBS financing is the isolation of the

asset to be financed” and that “[t]he twin components

of asset isolation are (i) separateness covenants...and

(ii) narrow limitations on the lender’s general agree-

ment not to pursue recourse liability....”Inaddition,

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the sample separateness provisions set forth in the

brief contain most of the provisions included in ¶ 9 of

the mortgage document in this case, including the

solvency provision in ¶ 9(f).

Indeed, only the provi-

sion in ¶ 9(o) of the mortgage has no equivalent

provision in the list of separateness covenants found

in the brief. On the one hand, that could indicate that

defendants are correct and that there are, in fact, no

SPE covenants contained in the mortgage, only sepa-

rateness covenants. However, a different interpreta-

tion is more likely: that separateness is a component

part of SPE, so that maintaining SPE status requires

abiding by the separateness covenants. This interpre-

tation accepts that “single purpose entity” and “sepa-

rateness” are two different concepts, but recognizes

that they are intertwined, making the singular head-

ing “Single Purpose Entity/Separateness” in the

mortgage both logical and unambiguous.

This interpretation is also consistent with ¶ 43 of the

mortgage, which provides that headings and captions

“are for convenience of reference only and are not to be

construed as defining or limiting, in any way, the scope

or intent of the provisions hereof.” The heading at issue

here is simply being used as a reference. The note,

guaranty, and mortgage all refer to Cherryland’s need

to maintain its SPE status. The heading “Single Pur-

pose Entity/Separateness” simply provides a reference

point in the mortgage to where one should look for that

information.

Defendants and the amici curiae in this case argue

that this interpretation is inconsistent with ¶ 43 be-

The paragraphs of the mortgage matching provisions in the brief are:

9(a) = (ii); 9(b) = (i); 9(c) = (ix); 9(d) = (vii); 9(e) = (xii); 9(f) = (xviii);

9(g) = (iv); 9(h) = (viii); 9(i) = (xiv); 9(j) = (xv); 9(k) = (xvi); 9(l) = (vi);

9(m) = (x); and 9(n) = (xi).

118 295 M

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cause it results in the heading defining and limiting the

provisions of the mortgage. We disagree. If the mort-

gage contained provisions throughout that referred to

requirements for maintaining SPE status and the pro-

visions were interpreted as not being full recourse

triggers because they did not appear in ¶ 9, this inter-

pretation would violate ¶ 43 because the heading for ¶ 9

would limit or define the mortgage. That is not the case

here. Rather, the loan documents all refer to the need to

maintain “single purpose entity” status as provided in

the mortgage, rendering it necessary to look at the

mortgage and see what it requires. The logical and

reasonable approach is to find references in the mort-

gage to the term “single purpose entity.” As long as each

reference to the term contained in the mortgage is

considered, ¶ 43 is not violated. In this case, the only

reference is the heading. Therefore, it is natural and

logical to conclude that all of ¶ 9, and only ¶ 9, sets forth

the terms necessary to maintain SPE status.

Further, the interpretation suggested by defendants

and the amici curiae violates the rules of contract

construction because it renders multiple portions of the

loan documents nugatory. “A court 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.’ ” Laurel Woods

Apartments v Roumayah, 274 Mich App 631, 638; 734

NW2d 217 (2007), quoting Klapp, 468 Mich at 468.

Defendants rely on ¶ 43 to assert that the headings

must be ignored, resulting in there being no reference

to “single purpose entity” in the mortgage documents

and, therefore, nothing that defendants had to do to

maintain SPE status. This interpretation not only

renders the heading of ¶ 9 nugatory, which is not the

purpose of ¶ 43, but also renders nugatory the provi-

sions of the mortgage, note, and guaranty documents

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that provide that the loan would become fully recourse

in the event that Cherryland failed to maintain its SPE

status. Given that no fewer than three of the loan

documents at issue include the failure to maintain SPE

status as a full recourse trigger, it is unreasonable to

interpret the mortgage as having no such requirements.

Defendants are correct in their assertion that no

cases have held that insolvency is a violation of SPE

status. However, the interpretation adopted by the trial

court is supported by federal caselaw from Louisiana

and Massachusetts and is consistent with a 2001 trial

court ruling from Wayne County. The guaranties and

mortgages in those cases involved loan documents with

headings similar or identical to ¶ 9(f): Single Purpose

Entity/Separateness” or “Maintain Single-Purpose En-

tity Status.” Accordingly, those courts’ determinations

that all the covenants found below the heading were

required to maintain SPE status render them squarely

on point to the present case, regardless of which of the

listed covenants was actually breached.

In LaSalle Bank NA v Mobile Hotel Props, LLC, 367

F Supp 2d 1022, 1025-1026 (ED La, 2004), the plaintiff

lender sought a deficiency judgment against the defen-

dant borrower, alleging that the full recourse provisions

were triggered when the defendant amended its articles

of organization and incurred additional debt without

the lender’s consent. The court noted that the mortgage

provided, “(ii) the Debt shall become fully recourse to

Mortgagor in the event that:...(B)Mortgagor...fails

to maintain its status as a single purpose entity, [] as

required by, and in accordance with the provisions of,

this Mortgage....”Id. at 1029 (quotation marks omit-

ted; some alterations in original). The court then noted,

“The Single Purpose Entity/Separateness provision of

the mortgage, at ¶ 10, includes a list of fourteen sepa-

120 295 M

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rate conditions, representations, covenants or warran-

ties required of the mortgagor that describe and define

the scope and limits of the single purpose entity and

separateness requirements.” Id. Looking at ¶ 10 of the

LaSalle Bank mortgage, it is almost identical to ¶ 9 of

the mortgage in this case and included a provision

requiring solvency. The LaSalle Bank mortgage also

contained an identical provision regarding headings.

Because the court concluded that all 14 items in ¶ 10 of

the LaSalle Bank mortgage were requirements that, if

violated, resulted in full recourse liability, it made no

difference which of the 14 covenants were at issue:

In its memorandum in support of its motion for sum-

mary judgment, LaSalle argues that several additional

warranties and covenants were also violated by Borrower,

further compromising its status as a single purpose entity

and triggering the full recourse provision of the Mortgage

and Mortgage Note. Finding that the Borrower’s violation

of any one of the covenants listed [is] sufficient to make the

Mortgage a full recourse obligation, the Court does not

discuss these additional “violations”. [Id. at 1029 n 7.]

Thus, had the defendant in LaSalle been found to be

insolvent, rather than as having amended its articles of

organization, the result would have been identical to

the instant case.

In Blue Hills Office Park LLC v JP Morgan Chase

Bank, 477 F Supp 2d 366, 377 (D Mass, 2007), the

defendant lender filed a counterclaim against the plain-

tiff borrower for a $10.7 million deficiency under a

nonrecourse loan. The lender argued that, by transfer-

ring parts of the mortgaged property without prior

written consent from the lender, the borrower had

breached the mortgage agreement and became liable for

the deficiency. Id. The court also found a violation of the

guaranty because the borrower “failed to maintain its

status as a single purpose entity.” Id. at 382. It noted

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that the guaranty “unambiguously states that the

‘[g]uarantor shall be liable for the full amount of the

Debt in the event that...B)Borrower fails to maintain

its status as a single purpose entity, as required by, and

in accordance with, the Mortgage’ ” and concluded that

“[p]aragraph 12 of the mortgage agreement provides

the covenants to which [the borrower] agreed concern-

ing its single purpose entity status.” Id. (some alter-

ations in original). As was true of both the LaSalle

Bank mortgage and the mortgage in the instant case,

the Blue Hills mortgage contained a single section titled

“Single Purpose Entity/Separateness” that provided

multiple covenants, including one regarding remaining

solvent, as well as an identical headings section. Again,

different covenants were violated by the borrower—

¶ 12(l), (m), and (r)—but the result was the same:

“Consequently, [borrower] has failed to maintain its

status as a single purpose entity and, as a result,

violated section 1.2 of the guaranty.” Id. at 383. The

reasoning from Blue Hills is entirely consistent with

the trial court’s interpretation in the present case.

Finally, plaintiff has provided a copy of a transcript of

a 2001 hearing and some exhibits in Wells Fargo Bank

Minnesota, NA v Leisure Village Assoc, Wayne Circuit

Court, Docket No. 00-031860-CZ. The Leisure Village

documents are slightly different and, arguably, more

clearly written, but suggest the same result. The note

provided that “the agreement not to pursue recourse

liability shall become null and void in the event of

borrowers’ default under Section 13 or 25 of the mort-

gage.” Section 25 of the mortgage provided:

SINGLE PURPOSE ENTITY. Until the Indebtedness is

paid in full, Mortgagor shall maintain its status as a Single

Purpose Entity and comply with all those covenants with

respect to its status as a Single Purpose Entity as set forth

in Section 5.4 of the Loan Agreement.

122 295 M

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Section 5.4 of the loan agreement is titled “Maintain

Single-Purpose Entity Status,” and sets forth 19 cov-

enants, including a requirement that the borrower will

not “become insolvent or fail to pay its debts from its

assets as the same shall become due.” Although the

borrower was alleged to have violated a different sub-

section, the defendants made arguments identical to

those made to this Court, i.e., that only some of the

covenants listed pertained to single purpose entity

status. In Leisure Village, the trial court noted:

Defendant[s] argue that only a few of the 19 covenants

are directed toward the maintenance of a single purpose

entity and none of those have been violated. In other

words, defendants argue that Leisure Village Associates, in

order to avoid a default under Section 25 of the mortgage,

was only required to comply with those particular cov-

enants, the non-compliance with which would destroy its

status as a single purpose entity. The Court disagrees.

The important sentence in Section 25 has two parts,

separated with the word “and.” It states first that the

mortgagor shall maintain its status as a single purpose

[entity], then states, after the word and, a separate duty. To

comply with all those covenants with respect to its status

as a single purpose entity as set forth in Section 5.4 of the

loan agreement.

Defendants[’] reading of the sentence renders the sec-

ond clause superfluous for purposes of Section 25 of the

mortgage....

As set forth above, Section 25 states that the borrower

shall comply with all those covenants with respect to its

status as a single purpose entity, as set forth in Section 5.4

of the loan agreement. This is, obviously, a reference to the

fact that Section 5.4 is captioned “Maintain Single Purpose

Entity Status.”

Defendant [sic] states that the Court must disregard the

caption because mortgage section 29 states that the cap-

tions and headings of the sections of this instrument shall

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be disregarded in construing this instrument. However, 5.4

appears in the loan agreement, which states that headings

are for convenience of reference only, are not to be consid-

ered part thereof, and shall not limit or otherwise effect

[sic] any of the terms hereof.

In referencing the maintaining of single purpose entity

status, the mortgage references the section of the loan

agreement captioned “Maintain Single Purpose Entity

Status.” In other words, it references the entire section,

which it may do properly under the language of the loan

agreement.

***

The Court agrees with plaintiff that the language of the

agreement is clear as a matter of law, ultimately and after

much reading, and that to violate any of the provisions of

Section 5.4 is, in fact, a default under Section 25 of the

mortgage. Defendant[s] argue[] that this interpretation

would make no sense and must be improper, because

otherwise the loan would become recourse if, for example,

Leisure Village ever failed to pay any debt. I agree that

such relief seems extreme, but it should be remembered

that the lender stated specifically in the preamble that the

exceptions were being placed in that section in order to

induce the lender to make the loan. The borrowers were

apparently not able to negotiate for less strict language and

this Court declines to write it into the contract.

Thus, the trial court in Leisure Village dealt with,

and rejected, all the arguments made by defendants in

this case. Further, even ignoring the differences in the

documents and their interplay, what is clear in each of

these cases, but especially from the clarity in the

Leisure Village ¶ 5.4 reference, is that maintaining

solvency is always one of the covenants required to

maintain SPE status. Indeed, there is no reference at all

in the Leisure Village mortgage or loan agreement to

“separateness” covenants. Thus, cases interpreting

124 295 M

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similar loan documents do not support defendants’

position that all the covenants contained in ¶ 9 of the

mortgage do not relate to maintaining SPE status.

Defendants argue in the alternative that even if ¶ 9(f)

was an SPE requirement, it was not breached. Defen-

dants assert that the provision was intended to prevent

owners from removing all the money from Cherryland,

thereby leaving it without assets sufficient to pay its

debts. And because the owners did not remove any

assets in the three years predating the default, Cherry-

land’s insolvency was not created by the owners and

was therefore not a violation of ¶ 9(f).

First, defendants do not contend that ¶ 9(f) is am-

biguous; thus, there is no reason to resort to extrinsic

evidence to interpret it. Second, the parties agree that

Cherryland became insolvent. Cherryland’s only basis

for its contention that ¶ 9(f) was not violated is that the

insolvency was based not on its own actions, but on the

downward spiral of the market. Paragraph 9(f), how-

ever, does not require insolvency to occur in any specific

manner. Rather, any failure to remain solvent, no

matter what the cause, is a violation. As the court noted

in LaSalle Bank, 367 F Supp 2d at 1030:

It is irrelevant that [the borrower] did not ever actually

engage in, or for that matter, never intended to engage in,

any activity other than the operation of the hotel property.

Its motive for amending its Articles of Organization is also

irrelevant....

The language of the mortgage means what it says. [The

borrower]’s amendment of its Articles of Organization

breached the covenant to maintain its status as a single

purpose entity and triggered the full recourse provision of

the mortgage. [Emphasis added.]

Similarly, the mortgage in the instant case has no

scienter requirement. Cherryland was required to re-

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main solvent and it failed to do so. That failure

breached the covenant to maintain its status as an SPE

and triggered the full recourse provision of the mort-

gage.

We recognize that our interpretation seems incon-

gruent with the perceived nature of a nonrecourse debt

and are cognizant of the amici curiae’s arguments and

calculations that, if accurate, indicate economic disaster

for the business community in Michigan if this Court

upholds the trial court’s interpretation. Nevertheless,

the documents at issue appear to be fairly standardized

nationwide, and defendants elected to take that

risk—as did many other businesses in Michigan and

nationwide. It is not the job of this Court to save

litigants from their bad bargains or their failure to read

and understand the terms of a contract. See Farm

Bureau Mut Ins Co of Mich v Nikkel, 460 Mich 558, 567;

596 NW2d 915 (1999) (“ ‘This court has many times

held that one who signs a contract will not be heard to

say, when enforcement is sought, that he did not read it,

or that he supposed it was different in its terms.’ ”)

(citation omitted); Allied Supermarkets, Inc v Grocers’

Dairy Co, 391 Mich 729, 737; 219 NW2d 55 (1974) (“A

court of equity may not be used...as the means of

avoiding the consequences of a legal contract now

regarded as a bad bargain.”). Indeed, our Supreme

Court has made clear that

[t]his approach, where judges divine the parties’ reason-

able expectations and then rewrite the contract accord-

ingly, is contrary to the bedrock principle of American

contract law that parties are free to contract as they see fit,

and the courts are to enforce the agreement as written

absent some highly unusual circumstances, such as a

contract in violation of law or public policy. [Wilkie v

Auto-Owners Ins Co, 469 Mich 41, 51; 664 NW2d 776

(2003).]

126 295 M

ICH

99 [Dec

Defendants and the amici curiae attempt to invoke

this Court’s power to avoid enforcement by alleging

that these contracts violate public policy. However, our

Supreme Court has consistently stated that it is the role

of the Legislature to address matters of public policy:

“ ‘As a general rule, making social policy is a job for the

Legislature, not the courts. See In re Kurzyniec Estate, 207

Mich App 531, 543; 526 NW2d 191 (1994). This is especially

true when the determination or resolution requires placing

a premium on one societal interest at the expense of

another: “The responsibility for drawing lines in a society

as complex as ours—of identifying priorities, weighing the

relevant considerations and choosing between competing

alternatives—is the Legislature’s, not the judiciary’s.”

O’Donnell v State Farm Mut Automobile Ins Co, 404 Mich

524, 542; 273 NW2d 829 (1979).’ ”

***

This case illustrates why this Court should frequently

defer policy-based changes in the common law to the

Legislature. When formulating public policy for this state,

the Legislature possesses superior tools and means for

gathering facts, data, and opinion and assessing the will of

the public....

The judiciary, by contrast, is designed to accomplish the

discrete task of resolving disputes, typically between two

parties, each in pursuit of the party’s own narrow interests.

We are “ ‘limited to one set of facts in each lawsuit, which

is shaped and limited by arguments from opposing counsel

who seek to advance purely private interests.’ ” We do not

generally consider the views of nonparties on questions of

policy, and we are limited to the record developed by the

parties. The reality of our judicial institutional limitations

is a significant liability in regard to our ability to make

informed decisions when we are asked to create public

policy by changing the common law. [Woodman v Kera

LLC, 486 Mich 228, 245-247; 785 NW2d 1 (2010) (opinion

by Y

OUNG

, J.) (citations omitted).]

2011] W

ELLS

ARGO

ANK V

HERRYLAND

ALL

127

In summary, on the basis of the rules of contract

interpretation and the persuasive authority of decisions

of other courts that have interpreted nearly identical

loan documents, we agree with the trial court that the

mortgage, as incorporated into the note, unambigu-

ously required Cherryland to remain solvent in order to

maintain its SPE status. Having admittedly become

insolvent, Cherryland violated the SPE requirements,

resulting in the loan becoming fully recourse.

Affirmed. No costs, a significant question of public

interest being involved.

AVANAGH

,P.J., and S

AWYER

and M

ETER

, JJ., con-

curred.

In light of our affirmance, we need not consider defendants’ claims

related to the attorney-fee stipulation.

128 295 M

ICH

99 [Dec

PEOPLE v DOUGLAS

Docket No. 301233. Submitted December 14, 2011, at Detroit. Decided

December 29, 2011, at 9:00 a.m. Leave to appeal denied, 493 Mich

861.

Todd A. Douglas was charged in the Wayne Circuit Court with

copying audio and video recordings for gain in violation of MCL

752.1052(1)(d), which prohibits a person from selling, renting,

distributing, or transporting a recording with knowledge that it

does not contain the manufacturer’s name and address in a

prominent place as required by MCL 752.1053. The trial court,

Michael J. Callahan, J., dismissed the case after ruling that the

phrase “prominent place” rendered the statute unconstitutionally

vague. The prosecution appealed.

The Court of Appeals held:

1. A statute is void for vagueness if it does not provide fair

notice of the proscribed conduct, confers on the trier of fact

unstructured and unlimited discretion to decide when an offense

has been committed, or is overbroad and impinges on protected

First Amendment rights.

2. The trial court erred by ruling that the phrase “prominent

place” rendered the statute unconstitutionally vague. The statute

provides that a person shall not sell, rent, distribute, transport, or

possess for the purpose of selling, renting, distributing, or transport-

ing, or any combination thereof, a recording with knowledge that the

recording does not contain in a prominent place on its cover, box,

jacket, or label the true name and address of the manufacturer.

Although the possible vagueness of the term “prominent place”

might affect the manner in which a recording displays the required

information, the statute clearly and unequivocally requires the infor-

mation to be displayed, which defendant had made no attempt to do.

Further, the term “prominent place” provides adequate notice of the

prohibited or required conduct, given that a person of ordinary

intelligence would understand, by reference to prior judicial opinions,

the common law, dictionaries, or the common meaning of words, that

the statute requires the manufacturer’s name and address to be on a

particular portion of the cover, box, jacket, or label of the recording so

that the information would stand out and be easily seen.

2011] P

EOPLE V

OUGLAS

129

3. If a statute does not contain adequate standards to guide

those who are charged with its enforcement, the statute is void

because it impermissibly gives the trier of fact unstructured and

unlimited discretion in applying the law. However, a statute cannot

be held void on this ground unless the wording of the statute itself

is vague. Because the definition and common meaning of the

phrase “prominent place” sufficiently provides people of ordinary

intelligence with notice of what conduct the statute prohibits, the

statute’s wording itself is not vague. Even if its wording had been

vague, the statute would not have impermissibly conferred discre-

tion on the trier of fact. The statute sufficiently sets forth the

elements that the prosecution must prove, which are that a

defendant performed one of the specifically enumerated acts with

the requisite mental state and that the material lacked the

required information. The requirement that the prosecution prove

that a defendant knew the label lacked the manufacturer’s name

and address limits the potential reach of the statute to illegitimate

manufacturers and distributors.

4. To facially challenge a statute that regulates both speech

and conduct, a defendant must show that its overbreadth is real

and substantial in relation to its plainly legitimate sweep and that

it presents a realistic danger of significantly compromising the

recognized First Amendment protections of parties not before the

Court. The overbreadth doctrine does not apply to commercial

speech, but the statute at issue regulates both commercial and

noncommercial speech by requiring that all recordings distributed

or possessed for the purpose of distribution bear the manufactur-

er’s name and address, given that distribution does not require a

commercial transaction. Because freedom of expression includes

the right to distribute information anonymously, the statute

regulates substantially more noncommercial speech and conduct

than its plainly legitimate sweep allows. The statute must there-

fore be construed as limited to reach only those cases in which a

person has commercially distributed a recording or possessed a

recording for commercial distribution.

Reversed and remanded for further proceedings.

1. C

ONSTITUTIONAL

AW —

TATUTES —

AGUENESS

A statute is void for vagueness if it does not provide fair notice of the

proscribed conduct, is so indefinite as to confer on the trier of fact

unstructured and unlimited discretion to decide when an offense

has been committed, or is overbroad and impinges on protected

First Amendment rights.

130 295 M

ICH

129 [Dec

2. C

ONSTITUTIONAL

AW —

TATUTES —

AGUENESS —

ONFERRING OF

ISCRETION

ACT

-F

INDER

A statute may not be voided for conferring unstructured and

unlimited discretion on the fact-finder unless the wording of the

statute itself is vague; the wording of a statute is not vague if it

sufficiently provides people of ordinary intelligence with notice of

what conduct the statute prohibits; a statute that clearly and

plainly sets forth the elements that the prosecution must prove

does not confer unstructured and unlimited discretion on the

fact-finder.

3. C

ONSTITUTIONAL

AW —

TATUTES —

NAUTHORIZED

UPLICATION OF

ECORD-

INGS FOR

AIN —

AGUENESS —

VERBREADTH

The statutory requirement that all recordings distributed or pos-

sessed for the purpose of distribution bear the manufacturer’s

name and address applies only to cases in which a person has

commercially distributed a recording or possessed a recording for

commercial distribution (MCL 752.1052[1][d], 752.1053).

Bill Schuette, Attorney General, John J. Bursch,

Solicitor General, Kym L. Worthy, Prosecuting Attor-

ney, Timothy A. Baughman, Chief of Research, Train-

ing and Appeals, and Jason W. Williams, Assistant

Prosecuting Attorney, for the people.

John F. Royal for defendant.

Before: S

HAPIRO

,P.J., and W

HITBECK

and G

LEICHER

,JJ.

HITBECK

, J. The prosecution charged defendant

Todd Alan Douglas, Sr., with copying audio or video

recordings for gain. The trial court dismissed the case,

ruling that a provision of 1994 PA 210,

the statute

under which he was charged, was unconstitutional

because the statutory term “prominent place” was

vague. The prosecution appeals.

The statute provides that “[a] person shall not...

[s]ell, rent, distribute, transport, or possess for the

MCL 752.1051 through 752.1057.

2011] P

EOPLE V

OUGLAS

131

purpose of selling, renting, distributing, or transport-

ing, or any combination thereof, a recording with

knowledge that the recording”

does not “contain in a

prominent place on its cover, box, jacket, or label the

true name and address of the manufacturer.”

Because

we conclude that the statute gave Douglas constitution-

ally adequate notice of the conduct prohibited or re-

quired, we reverse. However, we confine the scope of the

statute to commercial speech to eliminate its applica-

tion to activities that the First Amendment protects.

I. BASIC FACTS

In late April 2010, Officers James Wiencek and Eric

Smielski of the Detroit Police Department observed a red

car stop for an unusually long time at an intersection.

While the car was stopped, Douglas, who was the driver of

the car, and the passenger, his son, talked with a woman in

another car parked on the side of the road. For several

minutes, the red car blocked the lane leading into the

intersection so that other cars could not pass through,

causing a traffic backup. The red car finally turned right

at the intersection. The officers pulled up next to the

woman in the parked car, and she told them, “Thank you.

You saved me.” The officers then activated the patrol car

lights and stopped the red car.

Upon approaching the red car, Officer Wiencek no-

ticed several digital video discs (DVDs) lying on the

floor by the passenger seat. Officer Wiencek realized

that the DVDs were marked with titles of movies that

were still playing in theaters. In addition, the DVDs

were not packaged and the titles were handwritten. The

officers ordered Douglas out of the car, and although he

initially refused to follow the officers’ orders, he even-

MCL 752.1052(1)(d).

MCL 752.1053 (emphasis added).

132 295 M

ICH

129 [Dec

tually got out of the car after backup and supervisory

officers arrived. The officers then arrested Douglas and

searched the car. In total, the officers confiscated two

compact disc (CD) and DVD burners, 334 counterfeit

CDs and DVDs, and 100 blank recordable discs. After

the officers arrested Douglas, he told them that he did

not want his son to get into trouble and that “[e]very-

thing in the car is mine....”

The officers later confirmed that some of the DVDs that

they found in Douglas’s car had not yet been released in

DVD format on the date that the officers confiscated

them. They also determined that the CDs and DVDs were

illegitimate copies made with a burner and that the CDs

and DVDs did in fact contain audio and video recordings.

Neither the DVDs nor the CDs contained any written

information on them besides the handwritten titles. They

did not contain the studio logo, the name or address of the

manufacturer, or the other markings that legitimate

manufacturers normally place on these labels.

Douglas moved to suppress the evidence and dismiss

the case for lack of evidence, claiming that the officers

unlawfully stopped his car. At the hearing on the motion,

the trial court expressed concern about the constitution-

ality of MCL 752.1053 and requested that the attorneys

research whether the statute was impermissibly vague or

overbroad. The trial court suggested to Douglas that he

move to dismiss the case on vagueness grounds.

At the subsequent hearing on Douglas’s motion to

dismiss, the trial court engaged in the following dia-

logue with the prosecutor:

The Court: Well, I indicated to the lawyers that I thought

that there was a constitutional problem with the words,

prominent place. As is evident now and on the basis of this

case, the charging [statute]... indicates, quote, recordings

did not contain in a prominent place on the cover box, jacket

or label the true name and address of the manufacturer.

2011] P

EOPLE V

OUGLAS

133

The problem that I have is, not that I am anti prosecu-

tor, but the state gets to decide if that statute is violated

and that I do not believe that that’s how the legislature can

work in enacting statutes. Therefore—

[The Prosecutor]: Your honor, I am sorry. In this case

with the CDs that the Defendant has the name is written in

marker on the CD or DVD. Obviously, that is in violation of

the statute.

The Court: Well, it would be a factual problem if the case

could go to the jury. However, I didn’t rent the DVDs from

whatever the video store is near my house, but my children

did and I looked at the box. The manufacturer’s detail is

typically in the lower left corner of the back of the DVD box.

I don’t see how anybody can consider that a prominent

place, leading me to the problem that this case brings to

fore that the prominent place is something decided as a

matter of law by the prosecution and I think that is void for

vagueness.

The matter is dismissed because I find that the statute

under which he has [been] charged is unconstitutional. Go

ahead.

[The Prosecutor]: Your Honor, only that this Defendant

didn’t have any boxes, just a CD that had a name written

on it in marker. So, I don’t know that is comparable to what

your Honor just described.

The trial court held the statute unconstitutional and,

as a result, dismissed the charge against Douglas. The

prosecution now appeals.

II. VAGUENESS

A. STANDARD OF REVIEW

The constitutionality of a statute is a question of law

that this Court reviews de novo.

People v Barton, 253 Mich App 601, 603; 659 NW2d 654 (2002).

134 295 M

ICH

129 [Dec

B. LEGAL STANDARDS

This Court must assume that a statute is constitu-

tional and construe that statute as constitutional unless

it is clearly unconstitutional.

“ ‘The party challenging

a statute has the burden of proving its invalidity.’ ”

defendant may challenge a statute for vagueness on

three grounds: (1) the statute does not provide fair

notice of the proscribed conduct, (2) the statute is so

indefinite as to confer on the trier of fact “ ‘unstruc-

tured and unlimited discretion’ ” to decide when an

offense has been committed, and (3) the statute is

overbroad and impinges on protected First Amendment

rights.

C. CONSTITUTIONALITY “AS APPLIED” AND ADEQUATE NOTICE

To challenge the statute on the ground that it did not

provide adequate notice, Douglas bore the burden to

identify specific facts that suggested he complied with

the statute and then argue that the term “prominent

place” was vague.

In People v Beam, this Court addressed the constitu-

tionality of a statute

that imposed criminal liability on

dog owners for their dogs’ attacks if the owner had

previously trained the dog to fight.

The statute, how-

ever, only held the owner liable if the victim had not

provoked the attack.

The defendant argued that the

People v Dipiazza, 286 Mich App 137, 144; 778 NW2d 264 (2009).

Id., quoting In re Ayres, 239 Mich App 8, 10; 608 NW2d 132 (1999).

People v Petrella, 424 Mich 221, 253; 380 NW2d 11 (1985), quoting

Woll v Attorney General, 409 Mich 500, 533; 297 NW2d 578 (1980).

See People v Beam, 244 Mich App 103, 107-108; 624 NW2d 764 (2000).

MCL 750.49(10).

Beam, 244 Mich App at 107.

Id.

2011] P

EOPLE V

OUGLAS

135

statutory term “provocation” was impermissibly vague,

rendering the statute void for vagueness.

The trial

court agreed and dismissed the case.

This Court

disagreed, held the statute constitutional as applied to

the defendant, and reinstated the charge.

The Court

held that, to mount a vagueness defense, the defendant

must “point to some facts suggesting ‘provocation’ and

argue that, because that term is so vague, the trier of

fact is granted unstructured and unlimited discretion in

determining whether it occurred.”

Because the facts

did not even arguably fall within the meaning of “provo-

cation,” the Court held the statute constitutional as

applied.

Douglas similarly fails to point to any facts indicating

that he complied with the statute at all—that is, that

his CDs and DVDs somewhere displayed the manufac-

turer’s true name and address. Therefore, he cannot

claim that vagueness in the words “prominent place”

caused him to violate the statute because, at a mini-

mum, MCL 752.1053 requires that the manufacturer’s

information be displayed somewhere on the item. Be-

cause the CDs and DVDs in Douglas’s car did not

contain this information anywhere, the issue of whether

the words “prominent place” provided him adequate

notice and instruction such that he could be expected to

follow the law does not actually arise.

Although, hypothetically, the meaning of “prominent

place” might be confusing, causing the distribution or

selling of CDs or DVDs that are labeled incorrectly, Dou-

glas cannot argue that this possible confusion caused him

Id. at 105.

Id.

Id. at 109-110.

Id. at 107-108.

Id.

136 295 M

ICH

129 [Dec

to violate the statute when his CDs and DVDs contained

absolutely no attempt to convey the required information.

Stated another way, the possible vagueness of the term

“prominent place” might affect how the recording must

display the required information—for example, in what

location, size, color, or font. But the term does not create

any doubt regarding whether the recording must state the

information; this the statute clearly, unequivocally, and

very directly requires.

Regardless, the term “prominent place” provides

adequate notice of the prohibited or required conduct.

It is a fundamental principle of due process that “ ‘[n]o

one may be required at peril of life, liberty or property

to speculate as to the meaning of penal statutes’.”

If,

because of the vagueness of the statutory language, a

person of ordinary intelligence would not understand

the statute’s meaning, this Court must hold the statute

void for vagueness.

But due process requires only that

a statute provide notice of what conduct “ ‘is probably

or certainly criminal.’ ”

“ ‘Provided that conduct is of

a sort widely known among the lay public to be crimi-

nal...aperson is not entitled to clear notice that the

conduct violates a particular criminal statute.’ ”

Ad-

ditionally, a statute provides fair notice if a person could

fairly ascertain its meaning by reference to prior judi-

cial opinions, the common law, dictionaries, or the

common meanings of words.

People v Lynch, 410 Mich 343, 359; 301 NW2d 796 (1981) (L

EVIN

,J.,

concurring), quoting Lanzetta v New Jersey, 306 US 451, 453; 59 S Ct

618; 83 L Ed 888 (1939).

People v Munn, 198 Mich App 726, 727; 499 NW2d 459 (1993).

People v Lino, 447 Mich 567, 576 n 4; 527 NW2d 434 (1994), quoting

United States v White, 882 F2d 250, 252 (CA 7, 1989).

Id.

Beam, 244 Mich App at 105, citing People v Noble, 238 Mich App 647,

651-652; 608 NW2d 123 (1999).

2011] P

EOPLE V

OUGLAS

137

Absent a statutory definition, this Court must give

each word of a statute its plain and ordinary meaning.

If a statute does not define its terms, this Court may

consult dictionary definitions to assist in determining

the ordinary meaning of the statutory terms.

In this

case, the statute does not provide a definition or other

direction regarding the meaning of the phrase “promi-

nent place.”

Random House Webster’s College Dictionary (2001)

defines the term “prominent” as “standing out as to be

seen easily; conspicuous.” It defines “place” as “a

particular portion of space, whether of definite or

indefinite extent.” Together with the wording of the

statute, these terms require the manufacturer’s true

name and address to be on a particular portion of the

cover, box, jacket, or label so that the information will

stand out and be easily seen. This language is suffi-

ciently clear to provide notice of what the statute

requires.

D. LIMITATION OF DISCRETION

If a statute does not contain adequate standards to

guide those who are charged with its enforcement, the

statute is void because it impermissibly gives the trier

of fact “unstructured and unlimited discretion” in ap-

plying the law.

However, this Court cannot determine

that a statute impermissibly confers unstructured and

unlimited discretion unless it first concludes that the

wording of the statute itself is vague.

As discussed

People v Nichols, 262 Mich App 408, 413; 686 NW2d 502 (2004),

citing People v Cathey, 261 Mich App 506; 681 NW2d 661 (2004).

Id.

West Bloomfield Charter Twp v Karchon, 209 Mich App 43, 54; 530

NW2d 99 (1995).

People v White, 212 Mich App 298, 313; 536 NW2d 876 (1995).

138 295 M

ICH

129 [Dec

earlier, the definition and common meaning of the

phrase “prominent place” sufficiently provides people

of ordinary intelligence with notice of what conduct the

statute prohibits. The wording of the statute, therefore,

is not so indefinite that it confers unstructured and

unlimited discretion on the trier of fact.

But even if this statutory language had been vague, the

statute would not have impermissibly conferred discretion

on the trier of fact. If a statute “clearly and plainly sets

forth the elements that the prosecutor must prove beyond

a reasonable doubt,” then “it does not leave the jury with

unstructured and unlimited discretion in finding guilt.”

In People v Russell, this Court held that, because the

criminal sexual conduct statute sufficiently defined

“sexual contact” and required the trier of fact to find that

the defendant had engaged in “sexual contact,” the stat-

ute met the constitutional threshold.

In contrast, this

Court held in People v Gagnon

that a statute proscribing

any intoxicated person from causing a “public distur-

bance” vested unlimited discretion in the trier of fact

because the statutory standard did not “elaborate on what

actions qualify as a public disturbance....”

Read together, MCL 752.1052 and MCL 752.1053

sufficiently set forth the elements that the prosecution

must prove. These provisions state that “[a] person

shall not...[s]ell, rent, distribute, transport, or possess

for the purpose of selling, renting, distributing, or trans-

porting, or any combination thereof, a recording with

Petrella, 424 Mich at 253.

People v Russell, 266 Mich App 307, 312; 703 NW2d 107 (2005); see

also id. at 311.

Id. at 311-312.

People v Gagnon, 129 Mich App 678, 684; 341 NW2d 867 (1983).

Id. at 683-684.

2011] P

EOPLE V

OUGLAS

139

knowledge that the recording”

does not “contain in a

prominent place on its cover, box, jacket, or label the

true name and address of the manufacturer.”

The

prosecution must therefore prove that a defendant

performed one of the specified acts with the requisite

mental state and that the material lacked the required

information.

Most importantly, the prosecution must prove that a

defendant knew the label lacked the manufacturer’s

name and address. This requirement substantially lim-

its the potential reach of the statute because, in general,

only illegitimate manufacturers and distributors of

these materials will have actual knowledge that the

items they sell or deal in do not contain the required

information. (The exception being the person who dis-

tributes original recordings to spread a message. This

exception will be discussed later.) Thus, the innocent

resale of legitimately bought items would generally not

violate the statute even if the manufacturer had failed

to place the required information on the item, because

the seller would lack such knowledge. For these reasons,

the limited amount of discretion the statute may confer

on the jury in interpreting the meaning of “prominent

place” is a far cry from the “unstructured and unlimited

discretion” that Russell and other cases prohibit.

E. OVERBREADTH

Generally, a defendant may only challenge a statute as

vague or overbroad in light of the facts of the case at

issue.

If the defendant’s conduct falls within the consti-

tutional scope of the statute, the charge may not be

defended on the basis that the statute is vague or over-

MCL 752.1052(1)(d).

MCL 752.1053.

People v Rogers, 249 Mich App 77, 95; 641 NW2d 595 (2001).

140 295 M

ICH

129 [Dec

broad.

However,

[t]his rule of standing is relaxed when First Amendment

rights are involved. Recognizing that the “First Amend-

ment needs breathing space,” the overbreadth doctrine

permits litigants “to challenge a statute not because their

own rights of free expression are violated, but because of a

judicial prediction or assumption that the statute’s very

existence may cause others not before the court to refrain

from constitutionally protected speech or expression.”

[

]

When a defendant challenges a statute that regulates

both speech and conduct, the defendant must show that

the overbreadth of the statute is not only “ ‘real, but

substantial as well, judged in relation to the statute’s

plainly legitimate sweep.’ ”

As the United States Su-

preme Court has explained, the “mere fact that one can

conceive of some impermissible applications of a statute is

not sufficient to render it susceptible to an overbreadth

challenge.”

Rather, “there must be a realistic danger

that the statute itself will significantly compromise recog-

nized First Amendment protections of parties not before

the Court for it to be facially challenged on overbreadth

grounds.”

The statute at issue regulates both speech and conduct.

It prohibits selling, renting, distributing, and possessing

certain recordings—which, reasonable minds would

agree, constitute conduct—as well as the dissemination of

the speech and ideas contained within those recordings.

Id.

Id. at 95, quoting Broadrick v Oklahoma, 413 US 601, 611-612; 93 S

Ct 2908; 37 L Ed 2d 830 (1973).

Rogers, 249 Mich App at 96, quoting Broadrick, 413 US at 615.

Los Angeles City Council v Taxpayers for Vincent, 466 US 789, 800;

104 S Ct 2118; 80 L Ed 2d 772 (1984).

Id. at 801.

See Briggs v State, 281 Ga 329, 336-337; 638 SE2d 292 (2006)

(Melton, J., dissenting); People v Anderson, 235 Cal App 3d 586, 588; 286

Cal Rptr 734 (1991).

2011] P

EOPLE V

OUGLAS

141

The overbreadth doctrine, however, does not apply to

commercial speech.

Commercial speech does not re-

quire the additional protection because “commercial

speech is more hardy, less likely to be ‘chilled,’ and not

in need of surrogate litigators.”

In essence, the law

presumes that the economic incentive to speak will

outweigh the chilling effect a law may have, removing

any need to allow a party to raise the rights of third

parties not before the court.

The statute here regulates both commercial and

noncommercial activity. Although the statute regulates

selling and renting, it goes further to regulate distribu-

tion and possession for the purpose of distribution.

Disregarding the parts of the statute that regulate

commercial activity, the statute requires labeling of all

recordings “distributed” or “possessed for the purpose

of...distribution....”

Because the statute does not

define the word “distribute,” and no case has yet

interpreted the meaning of “distribute” in MCL

752.1053, this Court may turn to dictionary definitions

in giving this statutory term its ordinary and generally

accepted meaning.

“Distribute” can mean several things, including (1)

“to divide and give out in shares; allot,” (2) “to spread

throughout a space or over an area; scatter,” (3) “to pass

out or deliver: to distribute pamphlets,” and (4) “to sell

(merchandise) in a specified area.”

Under the first

three of these definitions, a person may “distribute”

Hoffman Estates v Flipside, Hoffman Estates, 455 US 489, 497; 102

S Ct 1186; 71 L Ed 2d 362 (1982).

State Univ of New York Bd of Trustees v Fox, 492 US 469, 481; 109 S

Ct 3028; 106 L Ed 2d 388 (1989).

MCL 752.1053.

People v Tombs, 260 Mich App 201, 209; 679 NW2d 77 (2003).

Random House Webster’s College Dictionary (2001).

142 295 M

ICH

129 [Dec

recordings without conducting a commercial transac-

tion, because these definitions do not require the person

to engage in any type of sale.

We conclude that the statute regulates substantially

more noncommercial speech and conduct than its

plainly legitimate sweep allows. In Talley v California,

the United States Supreme Court struck down a law

that prohibited the distribution of any handbill that did

not contain the name of the person who “printed,

wrote, compiled or manufactured the same.” The Court

held that this identification requirement impermissibly

restricted the freedom of expression, which includes the

right to distribute information anonymously because

“ ‘[l]iberty of circulating is as essential to that freedom

as liberty of publishing; indeed, without the circulation,

the publication would be of little value.’ ”

The Court

explained:

Anonymous pamphlets, leaflets, brochures and even

books have played an important role in the progress of

mankind. Persecuted groups and sects from time to time

throughout history have been able to criticize oppressive

practices and laws either anonymously or not at all. The

obnoxious press licensing law of England, which was also

enforced on the Colonies[,] was due in part to the knowl-

edge that exposure of the names of printers, writers and

distributors would lessen the circulation of literature criti-

cal of the government....Itisplain that anonymity has

sometimes been assumed for the most constructive pur-

poses.

[

]

Although the state of California had a legitimate inter-

est in preventing fraud, false advertising, and libelous

Talley v California,362US60,61;80SCt536;4LEd2d559(1960).

Id. at 64, quoting Lovell v City of Griffen, 303 US 444, 452; 58 S Ct

666; 82 L Ed 949 (1938).

Talley, 362 US at 64-65.

2011] P

EOPLE V

OUGLAS

143

messages, in Talley, the Supreme Court held that the

legislature had regulated too much speech because the

statute did not limit its reach to materials containing

such statements.

The Supreme Court, therefore,

struck down the statute as facially overbroad.

MCL 752.1053 clearly, and impermissibly, prohibits

the anonymous distribution of CDs, DVDs, and other

recordings, and a defendant may therefore challenge

the statute on overbreadth grounds.

CDs and DVDs

today spread information in a way similar to the hand-

bills and pamphlets so common in England and colonial

America. People can, and do, create and record original

commentaries, speeches, documentaries, and other po-

litical and social communication on CDs and DVDs.

Because of their audio and visual format, these record-

ings may be even more effective in evoking a reaction

than the printed form. The Legislature designed the

statute at issue to prohibit and punish the unautho-

rized duplication of movies, music, and other so-called

“pirated” media. The statute as written, however, ap-

plies overbroadly to the innocent distribution of origi-

nal recordings containing political messages and social

commentary and of countless other noncommercial

recordings.

But this Court can construe MCL 752.1053 to limit

its reach to avoid the necessity of striking it down. “A

statute may be saved from being found to be facially

invalid on overbreadth grounds where it has been or

could be afforded a narrow and limiting construction by

state courts or if the unconstitutionally overbroad part

of the statute can be severed.”

A trial court has the

Id. at 64.

Id.at65.

See, e.g., Briggs, 281 Ga at 331.

Rogers, 249 Mich App at 96.

144 295 M

ICH

129 [Dec

“duty to uphold the constitutionality of a statute or

ordinance and, if necessary, to give...alimiting con-

struction if to do so would render it constitutional.”

the trial court can limit the construction of a statute

consistently with the Legislature’s ascertainable intent,

it must do so before holding the statute unconstitu-

tional.

We therefore limit the statute’s reach to those cases

in which a person has commercially distributed a re-

cording or possessed a recording for commercial distri-

bution.

This limitation adequately restricts the sweep

of the statute to commercial speech, which the state

may regulate more broadly.

Limiting the statute to

commercial speech allows innocent distributors of origi-

nal works to give away their original recordings and

prevents a potential First Amendment violation. This

result removes Douglas’s overbreadth challenge to the

statute, as the limitation required the prosecution to

show that he possessed the recordings for the purpose

of commercial distribution or, alternatively, to dismiss

the charges against him.

In summary, in enacting the statute, the Legislature

intended to prohibit the sale, distribution, and posses-

Barton, 253 Mich App at 606.

People v Johnson, 427 Mich 98, 137; 398 NW2d 219 (1986), quoting

People v O’Donnell, 127 Mich App 749, 757; 339 NW2d 540 (1983) (“ ‘[I]t

is the Court’s duty to give the statute a narrowing construction so as to

render it constitutional if such a construction is possible without doing

violence to the Legislature’s intent in enacting the statute.’ ”).

See also Briggs, 281 Ga at 331 (recognizing that a similar statute

“aims to protect the public and entertainment industry from piracy and

bootlegging”), and Anderson, 235 Cal App 3d at 590-591 (stating the

state’s interest in a similar statute was “the desire to protect the public

in general, and the many employees of the vast entertainment industry in

particular, from the hundreds of millions of dollars in losses suffered as a

result of ‘piracy and bootlegging’ of the industry’s products”).

Cf. Anderson, 235 Cal App 3d 586.

2011] P

EOPLE V

OUGLAS

145

sion of illegally manufactured CDs, DVDs, and other

recordings by making it a crime to take these actions

unless the manufacturer’s name and address were

printed on the label. The Legislature, however, chose an

impermissible way of achieving this goal when it made

the law applicable to all distribution and possession of

these recordings, whether commercial or noncommer-

cial in nature. Because this Court can narrowly con-

strue the statute consistently with the Legislature’s

intent, and thereby avoid the constitutional problem

presented, we do so rather than strike the statute as

unconstitutional.

We reverse and remand for further proceedings in

accordance with this opinion. We do not retain jurisdic-

tion.

HAPIRO

, P.J., and G

LEICHER

, J., concurred with

HITBECK

,J.

146 295 M

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129

PONTIAC SCHOOL DISTRICT v PONTIAC

EDUCATION ASSOCIATION

Docket No. 300555. Submitted December 7, 2011, at Detroit. Decided

January 5, 2012, at 9:00 a.m. Leave to appeal denied, 493 Mich

861.

The Pontiac Education Association (PEA) filed an unfair-labor-

practice complaint in the Michigan Employment Relations Com-

mission (MERC) after the Pontiac School District laid off occupa-

tional therapists (OTs) and physical therapists (PTs) employed by

the district who had been represented by the PEA and entered into

a contract with a private entity to provide OT and PT services. The

school district contended that the OTs and PTs provided “nonin-

structional support services” and, therefore, under MCL

423.15(3)(f), the school district was not required to enter into

collective bargaining with regard to its decision. The PEA con-

tended that the OTs and PTs provided instructional support

services and, therefore, the statute did not prevent collective

bargaining with regard to the subject. A hearing referee agreed

with the PEA and recommended that the charge be upheld. The

MERC issued a decision and order adopting the hearing referee’s

recommendation. The school district appealed.

The Court of Appeals held:

1. The words “noninstructional support services” are not de-

fined in MCL 423.215 and must be given their plain and ordinary

meaning. A dictionary defines “non” as a prefix meaning not. It

defines “instruction” as the act or practice of instructing or

teaching, education, knowledge or information imparted, or the

act of furnishing with authoritative directions. Therefore, the

term “instruction” is not ambiguous but, rather, is broad in

definition because it applies to knowledge or information imparted

without placing qualifications or restrictions on the type of knowl-

edge or information imparted. The term is not limited to knowl-

edge or information imparted with regard to the core curriculum

of the school. Therefore, positions in which individuals impart

knowledge or information to students may be subject to collective

bargaining under MCL 423.215(3)(f). The testimony of an OT and

a PT showed that they engaged in imparting knowledge and

information to students, teachers, and parents. Although the OTs

ONTIAC

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ONTIAC

’

147

and the PTs are not certified teachers of the core curriculum, they

do instruct certain students with respect to addressing and over-

coming problems associated with fine and gross motor skills and

work in conjunction with teachers to impart knowledge and

information. There was competent, material, and substantial

evidence to support the decision of the MERC.

2. The MERC did not rely on the legislative history of MCL

423.215 to reach its conclusion; instead it focused on the plain and

unambiguous language of the statute.

3. There is no indication that the Legislature intended state

and federal regulations governing special education to apply to

public schools generally for purposes of the statute.

4. If an error occurred with regard to the applicable burden of

proof, it was not relevant to the ultimate disposition of the case

and reversal is not warranted on this ground.

Affirmed.

ANSEN

, J., dissenting, stated her belief that the PTs and OTs

provide services that are not a component of the traditional,

instructional environment of a classroom. The functions per-

formed by the PTs and OTs are not “instructional” within the

commonly understood meaning of that term; the services they

provide are noninstructional in nature. In the context of special

education, the Superintendent of Public Instruction has deter-

mined that PTs and OTs provide services that are noninstruc-

tional in nature. The judgment of the MERC should be reversed

and the matter should be remanded to the MERC for the dismissal

of the charge.

1. S

CHOOLS —

OLLECTIVE

ARGAINING —

ONINSTRUCTIONAL

UPPORT

ERVICES

Positions in which individuals impart knowledge or information to

students may be subject to collective bargaining by a public school

employer under the provisions of MCL 423.215(3)(f); there is no

requirement that the knowledge or information imparted relate to

the core curriculum of the school; collective bargaining cannot

include matters pertaining to third-party contracts relative to

noninstructional support services.

2. S

CHOOLS —

OLLECTIVE

ARGAINING —

ORDS AND

HRASES —

ONINSTRUC-

TIONAL

UPPORT

ERVICES

There is no indication that the Legislature intended state and

federal regulations governing special education, which define

“instructional services” and “related services,” to apply in con-

struing the undefined term “noninstructional support services” in

MCL 423.215(3)(f).

148 295 M

ICH

147 [Jan

Secrest Wardle (by Dennis R. Pollard and Mark S.

Roberts) for the Pontiac School District.

Law Offices of Lee & Correll (by Michael K. Lee and

Erika P. Thorn) for the Pontiac Education Association.

Before: M

URPHY

, C.J., and J

ANSEN

and O

WENS

,JJ.

URPHY

, C.J. Respondent, Pontiac School District

(“school district” or “district”), appeals as of right the

decision by the Michigan Employment Relations Com-

mission (MERC) finding in favor of the charging party,

Pontiac Education Association (PEA), and against the

school district, with respect to the PEA’s unfair-labor-

practice complaint. We affirm.

In May 2004, the school district chose to privatize

services through a third-party contract with respect to

services that had been provided by occupational therapists

(OTs) and physical therapists (PTs) employed by the

district. The PEA, which represented the OTs and PTs,

asserted that the school district could not unilaterally act

because the issue was subject to bargaining under the

parties’ collective-bargaining agreement. Nonetheless, the

school district laid off the OTs and PTs and entered into a

contract with a private entity to provide OT and PT

services. Consequently, the PEA filed an unfair-labor-

practice complaint. The dispute in this case concerns the

interpretation of MCL 423.215(3)(f), which provides that

“[c]ollective bargaining between a public school employer

and a bargaining representative of its employees shall not

include...[t]he decision of whether or not to contract

with a third party for 1 or more noninstructional support

services ....” (Emphasis added.) Noninstructional sup-

port services could therefore be contracted out to third

parties without collective bargaining on the subject. The

PEA argues that OTs and PTs do not provide noninstruc-

2012] P

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’

149

PINION OF THE

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tional support services, or, stated otherwise, the PEA

contends that OTs and PTs provide instructional support

services. The school district contends that OTs and PTs

provide noninstructional support services; therefore, col-

lective bargaining played no role when the district chose

to privatize those services.

An evidentiary hearing was held before a hearing

referee. The PEA presented testimony from an OT and

PT regarding their responsibilities while employed by

The school district has filed a supplemental authority, asserting that a

recent amendment of MCL 423.215, pursuant to 2011 PA 103, requires us to

reject the MERC’s remedy. The newly enacted MCL 423.215(3)(k) precludes

collective bargaining with respect to decisions concerning a “reduction in

force” or “any other personnel determination resulting in the elimination of

a position....”MCL423.215(3)(f), with which we are concerned, was not

amended under 2011 PA 103. Given that subsection (3)(f) was not amended

and that, perhaps arguably, this case does not truly involve a reduction in

force or the elimination of positions but rather the replacement or substi-

tution of school OTs and PTs with privately contracted OTs and PTs at a

lesser cost, we question whether MCL 423.215(3)(k) has the effect argued by

the school district. Regardless, we need not resolve the proper construction

of the amendatory language, because we hold that MCL 423.215(3)(k)

operates prospectively only. Whether an amendment to a statute applies

retroactively presents a question of law subject to review de novo. Brewer v

A D Transp Express, Inc, 486 Mich 50, 53; 782 NW2d 475 (2010). To

determine whether a statute should be applied retroactively or prospectively

only, the primary rule is that the legislative intent must govern. Id. at 55-56.

This principle prevails over all other rules of construction and operation. Id.

at 56. An amendment to a statute is presumed to operate prospectively only.

Davis v State Employees’ Retirement Bd, 272 Mich App 151, 155; 725 NW2d

56 (2006). “The Legislature’s expression of an intent to have a statute apply

retroactively must be clear, direct, and unequivocal as appears from the

context of the statute itself.” Id. at 155-156. Retroactive application of a

statute may not occur if the amendment “abrogates or impairs vested rights,

creates new obligations, or attaches new disabilities concerning transactions

or considerations occurring in the past.” Id. at 158. In the present case, the

effective date of 2011 PA 103 is stated as July 19, 2011, and there is no clear,

direct, and unequivocal evidence of the Legislature’s intent to abrogate the

rights and remedies for this unfair-labor charge filed in 2004. Accordingly,

we will address the merits of the school district’s claim of appeal.

150 295 M

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147 [Jan

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the school district. These individuals testified that they

identified students’ needs with regard to physical limi-

tations and fine motor skills, identified the manner in

which to treat or correct the problem, obtained the

necessary materials to alleviate the problem, addressed

the problem in therapy, and recruited teachers and

parents to continue the therapy in the classroom or

home setting. The OTs and PTs had continual contact

with teachers and parents regarding student difficulties

and the manner in which to address the obstacles. The

testimony reflected that OTs and PTs provided stu-

dents with training and instruction in the skills neces-

sary for them to learn core-curriculum subjects. On the

contrary, the school district presented testimony from

its administrators that OTs and PTs were not certified

teachers, could not provide instruction, and did not aid

in the core curriculum. The school district also asserted

that state and federal regulations did not include OTs

and PTs as individuals providing instructional services.

The hearing referee weighed the testimony, utilized the

rules of statutory construction, and examined the leg-

islative history and the regulations. The hearing ref-

eree, in recommending that the unfair-labor charge be

upheld, concluded that the services provided by OTs

and PTs were subject to collective bargaining, because

they did not provide noninstructional support services;

rather, the OTs and PTs provided instructional support

services. The MERC issued its decision and order,

adopting the hearing referee’s recommendation. The

school district appeals as of right pursuant to MCL

423.216(e).

The school district contends that the MERC erred by

concluding that OTs and PTs did not constitute “non-

instructional support staff” and that the negative em-

ployment action should have been the subject of collec-

tive bargaining. We disagree. The standards governing

2012] P

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151

PINION OF THE

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our review of MERC rulings were set forth in Branch Co

Bd of Comm’rs v Int’l Union, United Auto, Aerospace &

Agriculture Implement Workers of America, UAW, 260

Mich App 189, 192-193; 677 NW2d 333 (2003):

We review MERC decisions pursuant to Const 1963, art

6, § 28, and MCL 423.216(e). MERC’s findings of fact are

conclusive if they are supported by competent, material,

and substantial evidence on the record considered as a

whole. MERC’s legal determinations may not be disturbed

unless they violate a constitutional or statutory provision

or they are based on a substantial and material error of law.

In contrast to...MERC’s factual findings, its legal rulings

are afforded a lesser degree of deference because review of

legal questions remains de novo, even in MERC cases.

[Citations and quotation marks omitted.]

An agency’s interpretation of a statute is not binding

on the courts, and that interpretation cannot conflict

with the Legislature’s intent as expressed in the plain

language of the statute. In re Complaint of Rovas

Against SBC Mich, 482 Mich 90, 103; 754 NW2d 259

(2008). The reviewing court, however, must give “ ‘re-

spectful consideration’ ” to the agency’s construction of

the statute and provide “ ‘cogent reasons’ ” for overrul-

ing the agency’s interpretation. Id.

An issue involving statutory interpretation presents

a question of law reviewed de novo. Klooster v City of

Charlevoix, 488 Mich 289, 295-296; 795 NW2d 578

(2011). In Krohn v Home-Owners Ins Co, 490 Mich 145,

156-157; 802 NW2d 281 (2011), our Supreme Court,

reiterating the well-established principles of statutory

construction, recently stated:

The primary goal of statutory interpretation is to ascer-

tain the legislative intent that may reasonably be inferred

from the statutory language. The first step in that deter-

mination is to review the language of the statute itself.

152 295 M

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147 [Jan

PINION OF THE

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Unless statutorily defined, every 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. We may consult dictionary definitions to give words

their common and ordinary meaning. When given their

common and ordinary meaning, the words of a statute

provide the most reliable evidence of its intent[.] [Citations

and quotation marks omitted.]

Here, the disputed statutory language is found in

MCL 423.215, which, at the time of the events at issue,

provided, in relevant part, as follows:

(3) Collective bargaining between a public school em-

ployer and a bargaining representative of its employees

shall not include any of the following subjects:

***

(f) The decision of whether or not to contract with a

third party for 1 or more noninstructional support services;

or the procedures for obtaining the contract; or the identity

of the third party; or the impact of the contract on

individual employees or the bargaining unit.

***

(4) The matters described in subsection (3) are prohib-

ited subjects of bargaining between a public school em-

ployer and a bargaining representative of its employees,

and, for the purposes of this act, are within the sole

authority of the public school employer to decide.

Therefore, collective bargaining cannot include matters

pertaining to third-party contracts relative to noninstruc-

tional support services, because such matters would be

within the sole authority of the public school employer.

Because the statute does not define what constitutes

“noninstructional support services,” the words should be

given their plain and ordinary meaning, which may be

ascertained through use of a dictionary. Krohn, 490 Mich

2012] P

ONTIAC

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153

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at 156. The word “non” is defined as “a prefix meaning

‘not,’ usu. having a simple negative force, as implying a

mere negation or absence of something[.]” Random

House Webster’s College Dictionary (2000). The word

“instruction” is defined as “the act or practice of instruc-

tion or teaching[,] education...[;]knowledge or informa-

tion imparted...[;] [or] the act of furnishing with au-

thoritative directions.” Id. Consequently, the term

“instruction” is not ambiguous, but rather is broad in

definition because it applies to “knowledge or information

imparted” without placing qualifications or restrictions on

the type of knowledge or information imparted. It fails to

limit the knowledge or information imparted to the core

curriculum, as inaccurately contended by the school dis-

trict. In sum, positions in which individuals impart

knowledge or information to students may be subject to

collective bargaining under MCL 423.215(3)(f). We shall

now review the testimony of an OT and a PT, which

shows that they engaged in imparting knowledge and

information to students, teachers, and parents.

Roseanne Bartush was employed by the school dis-

trict from 1982 to 2004 as an OT. She was a department

head from 1994 to 2004, overseeing individuals with

teaching certificates. In fact, she oversaw 25 staff

members, including paraprofessionals, teachers, OTs,

PTs, and speech pathologists. Bartush worked at an

elementary school for the last 10 years of her employ-

ment with the district. She testified that the beginning

of an average day was spent on one or more of the

following matters: preparation time (preparing for

therapy sessions with students); meetings with teach-

ers; attending Individualized Education Planning (IEP)

meetings; answering phone calls from parents; or ad-

dressing other related matters. Once school started,

Bartush would see students as they arrived for group or

154 295 M

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147 [Jan

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individual therapy sessions. She had 50 to 60 students

on her caseload. The informal meetings with teachers

usually involved questions about students, classroom

activities, progress reports, or concerns. There were a

variety and different types of IEP meetings. One type

was a review meeting to go over a student’s progress

through the year involving teachers, therapists, and

any others who worked with the student. Bartush was

also involved in initial IEP meetings for students iden-

tified as having special education needs. The IEP meet-

ings involved sharing reports, making recommenda-

tions for therapy, and constructing goals and objectives.

Bartush would personally offer goals and objectives and

had input into an IEP form or document, which was

created or crafted as a result of the meetings and

constituted a legal document containing Bartush’s ob-

jectives along with a teacher’s objectives. Bartush had

direct contact with parents; she was not required to

make contact through a certified teacher. She had daily

contact with parents, either informally in the hall when

the parents brought the students in to school or when

returning the two to three phone calls from parents

received during a typical week.

According to Bartush, a student was directed to

occupational therapy in different ways. A diagnostic

team, that included Bartush, would conduct an initial

evaluation to determine if a student was eligible for

special education. Also, a student, teacher, parent, or

anyone who was concerned about a student’s progress

or difficulties could ask her to conduct an evaluation.

The end result would be a formal plan to share infor-

mation and determine if therapy was necessary. At

Bartush’s school, the diagnostic team typically con-

sisted of a speech pathologist and an OT. If there was a

physical impairment or significant motor-skills delay, a

PT would become involved.

2012] P

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As an OT, Bartush evaluated students for fine motor

skills, self care, and sensory processing disorders, and

then she would prepare a report. For the data collection

and observation, Bartush employed standardized test-

ing. If a student was added to her caseload for treat-

ment, Bartush prepared objectives with the teacher and

implemented them on a weekly basis. When treating a

group, she prepared activities geared toward the

group’s needs, and she worked with both the teacher

and the paraprofessional in the classroom setting in the

hopes that the activities would carry over through the

week. For example, Bartush worked in preschool where

there were a number of children with physical impair-

ments, such as deficiencies in cutting skills. Bartush

would modify the scissors or build an adaptation and

leave it in the classroom so the students could work on

their skills. Bartush would periodically visit the class to

check on the children’s progress. Bartush testified that

skills such as cutting with scissors served to elevate

children in preschool from simple to complex tasks.

Bartush testified that there was also a large popula-

tion with autism. She played a major role in managing

behavior, designing sensory diets, and devising other

approaches in order to allow the students to function in

the classroom and to allow the staff to manage the

students. A fair assessment of Bartush’s responsibilities

was that she assisted the student in being able to

receive instruction from the classroom teacher. During

her career, Bartush did provide classroom instruction

when she worked with physically impaired high school

students for a year or two. The class was not a “core”

subject, but rather addressed daily living skills on such

matters as cooking and computer usage. Bartush de-

scribed her duties as an OT as follows: “To make

[students] as independent as possible and to function

within the classroom to the best of their ability[.]”

156 295 M

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Annmarie Kammann worked for the school district

as a PT from 1986 until she was laid off in May or June

of 2004. When she worked for the school district, her

average day started by examining her chart of students

who were scheduled for appointments that day. She

would identify treatment goals and plans, discuss issues

with teachers, and gather any necessary equipment

before the children arrived. She aided the children in

walking from the bus to the classroom to work on their

gait and then she would start individualized treatment.

On a typical day, Kammann treated 8 to 10 children

with sessions lasting for 30 to 45 minutes. She regularly

consulted with teachers, particularly when bringing a

new piece of equipment into a classroom. She showed

teachers how to use the equipment and when to use it.

Kammann also consulted with teachers if students had

difficulties. For example, if a child had a posture prob-

lem, she might explore wedges or a therapy ball as a

solution. Kammann also prepared evaluations at the

beginning of the school year, reports for IEP meetings,

progress notes for physicians, letters of medical neces-

sity relative to equipment for students, and general

correspondence directed to physicians. She also identi-

fied short-term and long-term goals and objectives for

IEP meetings. Kammann had personal contact with

parents of students four to five times a week plus

telephone contacts, and these contacts did not occur

with a certified teacher as an intermediary. Kammann

opined that she contributed from an instructional

standpoint because children with attention deficiencies

and physical limitations could not learn their academics

from teachers until those problems were addressed.

Kammann testified that she had daily contacts with

teachers to address what was best for the students. She

was on the IEP team and had to assess whether her

goals and objectives were met.

2012] P

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In her job, Kammann examined a child’s head con-

trol, trunk control, movement from one place to an-

other, and use of the body to manipulate different

things; it was hands-on physical therapy. For example,

she would address head control in a sitting position on

a therapy ball, address the prone position to allow a

child to write, and address walking and balance to allow

a student to be mainstreamed in the most efficient

manner. Kammann testified that PTs prepare treat-

ment plans that contain short- and long-term goals.

When setting these goals, the treatment plan sets forth

different activities to perform. It may include instruc-

tions for the parents to perform at home. It also

involves advising the teachers of how to carry out

activities in the classroom. In her therapy room, Kam-

mann had equipment such as crutches, balls, canes,

weights, wedges, splints, bikes, standers, and extra

walkers. When asked to differentiate between an OT

and a PT, she testified that PTs worked on the overall

gross motor picture of the child, whereas an OT ad-

dressed fine motor skills. Kammann was familiar with

what transpired in the classrooms. In her view, there

was no difference between the function she performed

and classroom teaching.

It is abundantly clear from the record that OTs and

PTs, while not being certified teachers of core curriculum,

instruct certain students with respect to addressing and

overcoming problems associated with fine and gross mo-

tor skills. They work in conjunction with teachers to

impart knowledge and information. We agree with the

observations made by the MERC in the following passage

from its ruling, which is supported by competent, mate-

rial, and substantial evidence on the record:

The [OTs] and [PTs] are not certified teachers. How-

ever, they work closely with certified teachers and other

158 295 M

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147 [Jan

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professional staff, as well as with paraprofessionals in

evaluating the needs of students and providing the stu-

dents with activities and tools that would assist them in the

educational process. An [OT] and a [PT], who were previ-

ously employed by [the school district], testified at length

about their job duties. Their testimony identified a wide

range of services that they provided to assist schoolchildren

in acquiring and developing skills necessary for them to

achieve educational goals. As explained in detail in the

[hearing referee’s] decision, the therapists would prepare

activities for students to assist them in developing certain

skills. In addition to working with the students on those

activities, the therapists would explain those activities to

the classroom teacher and paraprofessionals, so, in the

therapists’ absence, those employees could continue to

assist the students with the activities that were designed to

aid the students in acquiring skills necessary to reach their

academic goals. While the therapists did not teach the core

curriculum, they provided the students with training and

instruction in skills necessary for them to learn those

subjects taught as part of the core curriculum.

[

]

Moreover, like the [hearing referee], we find it particu-

larly relevant that the request for proposals (RFP) pre-

pared by [the school district] in seeking to subcontract the

services of the [OTs] and [PTs] stated that the services it

sought to obtain from a private contractor were to include:

“physical therapy/occupational therapy services” to ad-

dress disabilities “that interfere with learning in the edu-

cational environment.” The therapists whose services were

sought under [the school district’s] RFP were to: plan

therapy services “for each individualized education pro-

gram (IEP) as a member of the multidisciplinary

The school district complains that OTs and PTs simply provide

services that are physical and not instructional in nature. While there is

clearly a physical component to their work, the district’s argument fails

to appreciate the instructional elements of the work performed by OTs

and PTs in the school setting. And again, the school district’s argument

is based more on a restrictive reading of the statute that confines

instruction to instruction on core curriculum, but there is no basis in the

statutory language to place such a restriction.

2012] P

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educational/assessment team;” to engage in “consultation

and education;” and to “administer...therapy services

within the educational environment.” Accordingly, we con-

clude that the services [the school board] sought to con-

tract for in the RFP, and the services previously provided by

the [OTs] and [PTs] in this case, were services of an

instructional nature. Whether they were instructional ser-

vices, or instructional support services, we need not decide,

as they were clearly not “noninstructional support ser-

vices.” [Omission in original.]

While the school district’s expert witnesses con-

cluded that the OTs and PTs did not provide “instruc-

tion,” the duty to interpret and apply the law is allo-

cated to the courts, not the parties’ expert witnesses.

Hottmann v Hottmann, 226 Mich App 171, 179-180; 572

NW2d 259 (1997). Moreover, regardless of any conflict-

ing evidence, there was nonetheless competent, mate-

rial, and substantial evidence supporting the MERC’s

decision.

The school district argues that the hearing referee

and the MERC misinterpreted the legislative history

and failed to apply state and federal regulations govern-

ing special education that define “instructional ser-

vices” and “related services” separately. With respect to

the legislative history of the act, legislative history of

any type is not to be utilized as a tool of interpretation

unless a statute is ambiguous. In re Certified Question

from the United States Court of Appeals for the Sixth

Circuit, 468 Mich 109, 115 n 5; 659 NW2d 597 (2003). A

review of the MERC’s decision and order reveals that it

did not rely on the legislative history—an early house

bill version of the statute—to reach its conclusion.

Instead, the MERC correctly focused on the plain and

unambiguous language of the statute. Again, the school

district seeks to place limitations on the terms at issue

by arguing that instructional means part of the curricu-

160 295 M

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147 [Jan

PINION OF THE

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lum, such as teaching a core subject. The Legislature,

however, could have defined the phrase “noninstruc-

tional support services” in that manner, but chose not

to do so.

We also reject the school district’s contention that

state and federal regulations regarding special educa-

tion, which define “instructional services” and “related

services,” should be applied. There is no indication

whatsoever in MCL 423.215 that the Legislature in-

tended state and federal regulations governing special

education to apply to public schools generally for pur-

poses of the statute.

Moreover, the cited regulatory

terms are not even the same terms at issue here, and

our terms are also being examined in a different con-

text. The school district also points to state and federal

regulations defining “physical therapy” and “occupa-

tional therapy”; however, these general definitions pro-

vide no insight to construing the statute, even assuming

that they are contextually relevant, especially where

testimony was the crucial determinative factor regard-

ing the parameters of the job duties actually performed

by the OTs and PTs in the school district on a day-to-

day basis.

Finally, the school district maintains that the MERC

erred in its application of the burden of proof. This

argument does not entitle the district to appellate relief.

“The applicable burden of proof presents a question of

law that is reviewed de novo on appeal.” FACE Trading,

Inc v Dep’t of Consumer & Indus Servs, 270 Mich App

653, 661; 717 NW2d 377 (2006). “The charging party,

The argument premised on the regulation defining “instructional

services” would require us to find that only teachers provide such

services. The Legislature could easily have used limiting language if it

intended for all school personnel but teachers to fall into the collective-

bargaining exception in MCL 423.215(3)(f), but the Legislature did not do

so.

2012] P

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and not MERC, has the burden of establishing the

unfair labor practice.” Mich Employment Relations

Comm v Reeths-Puffer Sch Dist, 391 Mich 253, 267 n 20;

215 NW2d 672 (1974). Assuming that there was an

error with respect to the applicable burden of proof, it

was not relevant to the ultimate disposition of the case.

The MERC did not predicate its holding on the school

district’s failure to meet its alleged burden of proof.

Rather, the hearing referee and the MERC appropri-

ately applied the rules of statutory construction. In-

deed, the MERC essentially found that the PEA pro-

vided evidence establishing that the OTs and PTs did

not provide noninstructional support services. Reversal

is unwarranted.

Affirmed. The PEA, having fully prevailed on appeal,

is awarded taxable costs pursuant to MCR 7.219.

WENS

, J., concurred with M

URPHY

, C.J.

ANSEN

,J.(dissenting). Because I believe that physi-

cal therapists (PTs) and occupational therapists (OTs)

constitute “noninstructional support staff” within the

meaning of MCL 423.215(3)(f), I respectfully dissent.

MCL 423.215(3)(f) provided at the time of the events

at issue:

Collective bargaining between a public school employer

and a bargaining representative of its employees shall not

include any of the following subjects:

***

(f) The decision of whether or not to contract with a

third party for 1 or more noninstructional support services;

or the procedures for obtaining the contract; or the identity

of the third party; or the impact of the contract on

individual employees or the bargaining unit.

162 295 M

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147 [Jan

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,J.

It is clear that contracting for “noninstructional

support services” is a prohibited subject of collective

bargaining between public schools and their employees.

MCL 423.215(3)(f); MCL 423.215(4); see also Mich

State AFL-CIO v Employment Relations Comm, 453

Mich 362, 380; 551 NW2d 165 (1996) (opinion by

RICKLEY

, C.J.). However, the Legislature has not de-

fined the phrase “noninstructional support services.”

When a term or phrase has not been defined by the

Legislature, this Court must give the term or phrase its

ordinary and commonly understood meaning. MCL

8.3a; Stanton v Battle Creek, 466 Mich 611, 617; 647

NW2d 508 (2002).

Although not directly germane to the case at bar,

MCL 380.761(1) provides a list of various “noninstruc-

tional services” that intermediate school districts are

required to address when issuing their reports on the

sharing of services. Among others, the statute requires

that intermediate school districts consider “[a]ny other

noninstructional services identified by the superinten-

dent of public instruction.” MCL 380.761(1)(m) (em-

phasis added). Within the context of special education,

the Superintendent of Public Instruction has differen-

tiated between “[i]nstructional services,” “[o]ccupa-

tional therapy,” and “[p]hysical therapy.” Mich Admin

Code, R 340.1701b(a), (c), and (f). In particular, Rule

340.1701b(a) provides that “[i]nstructional services”

include only those “services provided by teaching per-

sonnel....”

PTs and OTs are not teachers. Instead, they are

licensed under part 178 of Michigan’s Public Health

Code, MCL 333.17801 et seq., and part 183 of Michi-

gan’s Public Health Code, MCL 333.18301 et seq.,

respectively. In other words, at least in the context of

special education, the Superintendent of Public Instruc-

2012] P

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,J.

tion has determined that PTs and OTs provide services

that are noninstructional in nature.

I find persuasive this differentiation between in-

structional services, physical therapy services, and oc-

cupational therapy services. Quite simply, the services

provided by PTs and OTs are not a component of the

traditional, instructional environment of the classroom.

Instead, they are specialized services that are provided

only for certain students with specific types of disabili-

ties. In short, the functions performed by PTs and OTs

are not instructional within the commonly understood

meaning of that term. It follows, in my opinion, that

these services are noninstructional in nature.

I conclude that the MERC committed a substantial and

material error of law when it determined that physical

therapy services and occupational therapy services are not

“noninstructional support services” within the meaning

of MCL 423.215(3)(f). See Oak Park Pub Safety Officers

Ass’n v Oak Park, 277 Mich App 317, 324; 745 NW2d 527

(2007). Because physical therapy services and occupa-

tional therapy services are “noninstructional support ser-

vices,” MCL 423.215(3)(f), the Pontiac School District was

not required to collectively bargain with the Pontiac

Education Association before contracting with a private

entity to provide PT and OT services. I would reverse the

judgment of the MERC and remand for a dismissal of the

unfair-labor-practice charge.

164 295 M

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147 [Jan

ISSENTING

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,J.

PEOPLE v LOCKETT

PEOPLE v JOHNSON

Docket Nos. 296747 and 296848. Submitted June 8, 2011, at Detroit.

Decided January 10, 2012, at 9:00 a.m. Leave to appeal denied, 493

Mich 852.

Ashanti B. Lockett and Tadarius R. Johnson were tried together before

separate juries in the Wayne Circuit Court. Lockett was convicted of

first-degree criminal sexual conduct (CSC-I), MCL 750.520b(1)(c)

(penetration under circumstances involving another felony), and

accosting a minor for immoral purposes, MCL 750.145a. Johnson was

convicted of two counts of CSC-I, MCL 750.520b(1)(a) (penetration

involving a person under 13) and MCL 750.520b(1)(c) (penetration

under circumstances involving another felony). The “other felony”

supporting defendants’ convictions for violating MCL 750.520b(1)(c)

was disseminating sexually explicit matter to a minor, MCL

722.675(1)(b). The convictions involved two separate incidents. In the

first incident, Johnson and another man entered a home where four

siblings lived with their mother. Johnson attempted to have sex with

J., the youngest sister, who was 12 years old. The second incident

occurred several days later when defendants picked up J. and her

sisters S. and G., respectively aged 17 and 14, in Lockett’s van and

took them to a park where defendants engaged in sexual intercourse

with S. in the presence of J. The court, Patricia Fresard, J., sentenced

Lockett as a fourth-offense habitual offender to concurrent terms of

25 to 45 years’ imprisonment for the CSC-I conviction and to 5 to 15

years’ imprisonment for the accosting conviction. The court sen-

tenced Johnson to concurrent terms of 25 to 37

/2 years’ imprison-

ment for the CSC-I conviction under MCL 750.520b(1)(a) and to 5 to

15 years’ imprisonment for the CSC-I conviction under MCL

750.520b(1)(c). Lockett (Docket No. 296747) and Johnson (Docket

No. 296848) appealed separately. The Court of Appeals consolidated

the appeals.

The Court of Appeals held:

1. A statute might be unconstitutionally vague if it fails to

provide fair notice of the conduct proscribed or is so indefinite that

it confers unlimited and unstructured discretion on the trier of

fact to determine whether an offense has occurred. MCL

2012] P

EOPLE V

OCKETT

165

750.520b(1)(c) requires the prosecution to prove that (1) sexual

penetration occurred and (2) it occurred under circumstances

involving the commission of any other felony. To establish CSC-I

under MCL 750.520b(1)(c), there must be a direct relationship

between the felony and the penetration. Examining the statute’s

language and scheme as a whole, it is reasonable to conclude that

the Legislature intended that the circumstances involving the

commission of the other felony directly impact a victim, or

recipient, of the sexual penetration. When construed in that

manner, the statute is not unconstitutionally vague. However, the

statute unconstitutionally invites arbitrary and abusive enforce-

ment when it is applied to situations where, as here, engaging in

consensual legal sexual penetration is elevated to CSC-I solely

because a minor was present and the “victim” of the sexual

penetration was not impacted by the other felony. Thus, the

defendants were improperly convicted of CSC-I under MCL

750.520b(1)(c) because S., the “victim” of the sexual penetration in

the park, was not affected by the other felony: disseminating

sexually explicit matter to a minor, J. Accordingly, the convictions

had to be reversed.

2. Under MCL 722.675(1)(b), a person is guilty of disseminat-

ing sexually explicit matter to a minor if that person knowingly

exhibits to a minor a sexually explicit performance that is harmful

to minors. For the purpose of the offense of disseminating sexually

explicit matter to a minor, to “disseminate” is to sell, lend, give,

exhibit, show, or allow to examine. And to “exhibit” is to present a

performance. A “sexually explicit performance” is a motion pic-

ture, video game, exhibition, show, representation, or other pre-

sentation that, in whole or in part, depicts nudity, sexual excite-

ment, erotic fondling, sexual intercourse, or sadomasochistic

abuse. Therefore, a person commits the offense of disseminating

sexually explicit matter to a minor if he or she knowingly exhibits

to a minor a depiction of nudity, sexual excitement, erotic fondling,

sexual intercourse, or sadomasochistic abuse which is harmful to

minors. In this case, defendants knew that J., aged 12, was present

when they engaged in intercourse with her sister, and given J.’s

age and her close proximity to the sexual acts, a jury could have

reasonably inferred that defendants were presenting a perfor-

mance that J. could see and that they knew J. was a minor. There

was sufficient evidence to convict defendants of disseminating

sexually explicit matter to a minor.

3. A necessarily included lesser offense is an offense whose

elements are subsumed within the elements of a greater offense.

When evaluating whether an offense is a lesser included offense,

166 295 M

ICH

165 [Jan

the crimes are to be analyzed with an eye toward how the crimes

were actually charged. If the elements at issue are subsumed

within the charged offense, the crime is a necessarily included

lesser offense. When a conviction for a greater offense is reversed

on grounds affecting only the greater offense, an appellate court

may remand for entry of judgments of conviction on necessarily

included lesser offenses. In this case, the jury could not have

convicted the defendants of CSC-I under MCL 750.520b(1)(c)

without finding that they had disseminated sexually explicit

matter to a minor. Thus, the latter offense was a necessarily

included offense and remand for entry of convictions of dissemi-

nating sexually explicit matter to a minor, MCL 722.675(1)(b), was

appropriate.

4. Under offense variable (OV) 4 of the sentencing guidelines,

MCL 777.34, a court must assess 10 points if the victim suffered a

serious psychological injury that might require professional treat-

ment. That the victim did not seek professional treatment is not

conclusive when scoring the variable, but there must be some

evidence of psychological injury on the record to justify the

assessment of the points. In this case, the trial court assessed 10

points under OV 4 when scoring Lockett’s OVs, stating that the

circumstances of the crime would cause any normal person to have

suffered psychological injury. However, the record was devoid of

evidence that J. had suffered any such injury. Therefore, OV 4 was

improperly scored.

5. Under OV 10 of the sentencing guidelines, MCL 777.40, a

court must assess 15 points if predatory conduct was involved.

“Predatory conduct” is conduct which occurred before the com-

mission of the offense and which was directed at the victim for the

primary purpose of victimization. In this case, Lockett picked up

the girls in his van in the middle of the night, drove to a liquor

store, and then drove to a city park and parked the vehicle.

Lockett’s actions permitted an inference that he had engaged in

this preoffense conduct for the purpose of victimization, and

because of J.’s age, she was susceptible to injury, physical restraint,

or temptation. The trial court properly assessed 15 points to

Lockett under OV 10.

6. Under OV 14 of the sentencing guidelines, MCL 777.44, a

trial court must assess 10 points if the defendant was a leader in a

multiple-offender situation. The entire criminal episode must be

evaluated to determine whether a defendant was a leader. In this

case, Lockett argued that it was Johnson who knew the girls and

who had coordinated with S. regarding picking the girls up.

However, Lockett was significantly older than Johnson, who was

2012] P

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OCKETT

167

only 18, Lockett owned the van, and it is reasonable to assume that

Lockett purchased the alcohol. Thus, there was evidence support-

ing the trial court’s determination that Lockett was a leader in a

multiple-offender situation.

7. For reversal to be warranted because the trial court did not

give a cautionary accomplice instruction, a defendant must show

that it was more probable than not that the error affected the

outcome of the proceedings. In this case, the trial court gave the

jury a cautionary instruction regarding witness immunity because

S. had been given immunity in exchange for her testimony. But the

court declined to give the cautionary accomplice instruction,

concluding that giving both instructions would confuse the jury.

The trial court did not abuse its discretion by denying the request

to give both instructions because the instructions given fairly

presented the issues and sufficiently protected defendants’ rights.

8. To establish an ineffective assistance of counsel claim, a

defendant must show that counsel’s performance was below an

objective standard of reasonableness under prevailing professional

norms, that there is a reasonable probability that, but for counsel’s

error, the result of the proceedings would have been different, and

that the result was fundamentally unfair or unreliable. In this

case, Johnson argued that he had received ineffective assistance of

counsel because his attorney chose to have the court give the

witness-immunity instruction rather than the accomplice instruc-

tion, but there was no record evidence to show that the result of

the proceedings would have been different if trial counsel had

chosen the accomplice instruction over the immunity instruction.

9. A defendant is guilty of CSC-I under MCL 750.520b(1)(a) if

he or she engaged in sexual penetration with another person and

the other person was under 13 years of age. “Sexual penetration”

includes sexual intercourse, cunnilingus, fellatio, anal intercourse,

or any other intrusion, however slight, of any part of a person’s

body or of any object into the genital or anal openings of another

person’s body. Penetration includes any intrusion into the vagina

or labia majora. In this case, Johnson had gone to the siblings’

home and attempted to have sex with J. Although J. testified that

no penetration occurred, she also testified that their genitals had

touched and that she had felt pain and told Johnson to stop. Under

the circumstances a rational trier of fact could conclude that

Johnson’s penis had intruded into J.’s vagina or labia majora and,

thus, sufficient evidence was presented to sustain Johnson’s

conviction of CSC-I under MCL 750.520b(1)(a).

Affirmed in part, reversed in part, and remanded.

168 295 M

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165 [Jan

1. C

RIMINAL

AW —

RIMINAL

EXUAL

ONDUCT —

IRCUMSTANCES

NVOLVING

THER

ELONY —

ONSTITUTIONALITY —

AGUENESS

To convict a defendant of first-degree criminal sexual conduct for

penetration under circumstances involving any other felony, the

prosecution must prove that (1) sexual penetration occurred and

(2) it occurred under circumstances involving the commission of

any other felony; there must be a direct relationship between the

felony and the penetration; the Legislature intended that the

circumstances involving the commission of the other felony di-

rectly impact a victim, or recipient, of the sexual penetration, and

when construed in that manner, the statute is not unconstitution-

ally vague; however, the statute unconstitutionally invites arbi-

trary and abusive enforcement when it is applied to situations in

which engaging in consensual legal sexual penetration is elevated

to first-degree criminal sexual conduct solely because a minor was

present and the “victim” of the sexual penetration was not

impacted by the other felony (MCL 750.520b[1][c]).

2. C

RIMINAL

AW —

ISSEMINATION OF

EXUALLY

XPLICIT

ATTER TO A

INOR —

EXUALLY

XPLICIT

ERFORMANCES

A person is guilty of disseminating sexually explicit matter to a

minor if that person knowingly exhibits to a minor a sexually

explicit performance that is harmful to minors; for the purpose of

the offense of disseminating sexually explicit matter to a minor, to

“disseminate” is to sell, lend, give, exhibit, show, or allow to

examine; and to “exhibit” is to present a performance; a “sexually

explicit performance” is a motion picture, video game, exhibition,

show, representation, or other presentation that, in whole or in

part, depicts nudity, sexual excitement, erotic fondling, sexual

intercourse, or sadomasochistic abuse; therefore, a person com-

mits the offense of disseminating sexually explicit matter to a

minor if he or she knowingly exhibits to a minor a depiction of

nudity, sexual excitement, erotic fondling, sexual intercourse, or

sadomasochistic abuse which is harmful to minors (MCL

722.675[1][b]).

3. C

RIMINAL

AW —

ECESSARILY

NCLUDED

ESSER

FFENSES —

IRST

-D

EGREE

RIMINAL

EXUAL

ONDUCT —

ISSEMINATING

EXUALLY

XPLICIT

AT-

TER TO A

INOR

A necessarily included lesser offense is an offense whose elements

are subsumed within the elements of a greater offense; when

evaluating whether an offense is a lesser included offense, the

crimes are to be analyzed with an eye toward how the crimes were

actually charged; if the elements at issue are subsumed within the

charged offense, the crime is a necessarily included lesser offense;

2012] P

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OCKETT

169

when a conviction for a greater offense is reversed on grounds

affecting only the greater offense, an appellate court may remand

for entry of judgments of conviction on necessarily included lesser

offenses; when a jury cannot convict a defendant of first-degree

criminal sexual conduct without finding that the defendant dis-

seminated sexually explicit matter to a minor, the latter offense is

a necessarily included lesser offense (MCL 722.675[1][b], MCL

750.520b[1][c]).

Bill Schuette, Attorney General, John J. Bursch,

Solicitor General, Kym L. Worthy, Prosecuting Attor-

ney, Timothy A. Baughman, Chief of Research, Train-

ing, and Appeals, and Jason W. Williams, Assistant

Prosecuting Attorney, for the people.

State Appellate Defender (by Michael L. Mittlestat)

for Ashanti B. Lockett.

Neil J. Leithauser for Tadarius R. Johnson.

Before: M

ETER

,P.J., and C

AVANAGH

and S

ERVITTO

,JJ.

URIAM

. Defendant Ashanti Bryant Lockett ap-

peals as of right from his convictions by a jury of first-

degree criminal sexual conduct (CSC-I), MCL

750.520b(1)(c) (penetration under circumstances involv-

ing another felony), and accosting a minor for immoral

purposes, MCL 750.145a. The trial court, applying a

fourth-offense habitual offender enhancement under

MCL 769.12, sentenced Lockett to 25 to 45 years’ impris-

onment for the CSC-I conviction and to a concurrent term

of 5 to 15 years’ imprisonment for the accosting convic-

tion. Defendant Tadarius Rashard Johnson appeals as of

right from his convictions by a jury of two counts of CSC-I,

MCL 750.520b(1)(a) and (c) (penetration involving a per-

son under 13; penetration under circumstances involving

another felony). The trial court sentenced Johnson to

concurrent terms of 25 to 37

years’ imprisonment for

170 295 M

ICH

165 [Jan

the conviction under subdivision (a) and to 5 to 15 years’

imprisonment for the conviction under subdivision (c). We

affirm Johnson’s conviction of CSC-I under MCL

750.520b(1)(a) and affirm Lockett’s conviction of accost-

ing a minor for immoral purposes. We reverse both defen-

dants’ convictions of CSC-I under MCL 750.520b(1)(c)

and remand this case for entry of convictions on the lesser

included offense of disseminating sexually explicit matter

to a minor, MCL 722.675(1)(b).

I. FACTS AND PROCEDURAL HISTORY

During the early morning hours of September 6,

2009, Johnson and another man entered the home

where S. (17 years old), N. (16 years old), G. (14 years

old), and J. (12 years old) lived with their mother. The

men entered by climbing up a metal awning outside of

the building. After Johnson woke J. from her sleep, J.

walked to a different room where she saw G. with

another man. J. did not recognize the other man and

eventually returned to her bed. J. removed her pajamas

and Johnson removed his clothing and J.’s underwear.

Johnson and J. attempted to have sex. J. testified that

there was no penetration, but that she felt pain “where

she pees” and she told Johnson to stop. Johnson

stopped and got dressed. Johnson and the other man

stayed until approximately 8:00 a.m. before leaving.

The girls’ mother noticed damage to her awning that

morning and questioned the children about it. She

learned that two men had been over during the night,

and she took G. and J. to the police station. J. told the

police that no penetration had occurred between her

and Johnson. The mother subsequently took J. to the

hospital for an examination, which revealed nothing out

of the ordinary. No DNA evidence was found.

2012] P

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OCKETT

171

G. and J. decided to run away from home with S.

because of punishments imposed by their mother. S., G.,

and J. left their mother’s home and stayed at a friend’s

house. Very early on September 9, 2009, S., G., and J.

left the friend’s house. Johnson called S. on her cellular

telephone, and S. told Johnson where to pick up the

girls. Johnson and Lockett arrived in a van. The girls

got in and then drove with defendants to a liquor store,

where defendants acquired liquor. Lockett then drove

the van to a park and parked the vehicle.

The interior of the van had three rows of seats,

including a driver’s and passenger’s seat in the front

row, two “captain-style” seats in the second row, and a

bench seat in the third row that had been folded down

to resemble a bed. While G. and J. were seated in the

van’s front driver’s and passenger’s seats, Lockett and

S. moved to the rear of the van, disrobed, and engaged

in sexual intercourse. After Lockett and S. had finished,

Johnson moved to the rear row of the van and engaged

in sexual intercourse with S. At some point Lockett

asked G. and J. to go into the rear of the van with him.

J. refused, but G. eventually agreed to go. J. testified

that Lockett grabbed her arm at one point while trying

to persuade her to go into the back of the van with him.

Officer Michael Garrison of the Detroit Police De-

partment was on patrol with his partner at around 1:30

a.m. on September 9 when he saw a van parked after

hours in a city park. Officer Garrison saw a girl he later

identified as G. sitting on a park bench near the van. As

Officer Garrison approached the van, G. ran into the

van. When Officer Garrison arrived at the van, he could

see through the front and driver’s side windows. He saw

that no one was in the front seats, S. was straddling

Lockett in the nude on one of the captain’s seats, and

172 295 M

ICH

165 [Jan

Johnson and J. were lying in the rear row. J.’s shirt was

pulled down and her breasts were exposed.

Lockett was eventually charged with CSC-I under

MCL 750.520b(1)(c), for penetration of S. committed

under circumstances involving a felony, where the

felony was disseminating sexually explicit matter to J.,

a minor who was in plain view, under MCL

722.675(1)(b). The trial court found that there was a

sufficient nexus between Lockett’s sexual penetration

of S. and the crime of disseminating sexually explicit

matter to J. to justify the charge of CSC-I. Lockett was

also charged with accosting a minor for immoral pur-

poses, MCL 750.145a.

Johnson was eventually charged with CSC-I under

MCL 750.520b(1)(a) for penetrating J. at her home.

Johnson was charged with a second count of CSC-I

under MCL 750.520b(1)(c) for penetration of S. commit-

ted under circumstances involving a felony, where the

felony was, as with Lockett, disseminating sexually

explicit matter to J., a minor who was in plain view,

under MCL 722.675(1)(b). The trial court once again

found that there was a sufficient nexus between the

sexual penetration of S. and the crime of disseminating

sexually explicit matter to J. to justify the charge of

CSC-I.

Lockett and Johnson were tried together but with

separate juries. At the conclusion of the trial, both

Lockett and Johnson were convicted as charged.

II. ANALYSIS

A. SEXUAL PENETRATION UNDER CIRCUMSTANCES

INVOLVING ANOTHER FELONY

Defendants first argue that MCL 750.520b(1)(c) is

unconstitutionally vague and that it invites arbitrary and

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173

abusive enforcement by prosecutors, police, and juries

when applied to situations such as the instant one.

This Court determines de novo whether a statute is

unconstitutionally vague. People v Rogers, 249 Mich App

77, 94; 641 NW2d 595 (2001). This Court also reviews de

novo issues of statutory interpretation. People v Giovan-

nini, 271 Mich App 409, 411; 722 NW2d 237 (2006). A

statute might be unconstitutionally vague if, among other

reasons, it “fails to provide fair notice of the conduct

proscribed” or “is so indefinite that it confers unlimited

and unstructured discretion on the trier of fact to deter-

mine whether an offense has occurred.” People v Hrlic,

277 Mich App 260, 263; 744 NW2d 221 (2007). To deter-

mine whether a statute is unconstitutionally vague, this

Court examines the entire text of the statute and gives the

words of the statute their ordinary meanings. Id. The

meanings of all terms contained in the statute “must be

fairly ascertainable by reference to judicial interpreta-

tions, the common law, dictionaries, treatises, or the

commonly accepted meanings of words.” Id. (quotation

marks and citations omitted).

Defendants challenge MCL 750.520b(1)(c), which

states:

(1) A person is guilty of criminal sexual conduct in the

first degree if he or she engages in sexual penetration with

another person and if any of the following circumstances

exists:

***

volving the commission of any other felony.

The plain language of the statute requires the pros-

ecution to prove that (1) sexual penetration occurred

and (2) it occurred “under circumstances involving the

174 295 M

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165 [Jan

commission of any other felony.” This Court has previ-

ously held that there must be a sufficient nexus be-

tween the “other felony” and the sexual penetration;

specifically, there must be a “direct interrelationship”

between the felony and the penetration. People v Wal-

tonen, 272 Mich App 678, 691-693; 728 NW2d 881

(2006).

In Waltonen, this Court found that the other felony,

also referred to as the underlying felony, was directly

related to the sexual penetration when the defendant

demanded and received sex in exchange for providing

Oxycontin. Id. at 682, 693. Oxycontin contains oxy-

codone, a controlled substance, and the unauthorized

delivery of Oxycontin is a felony. Id. at 679-680. Thus,

the other felony was committed when the defendant

provided the Oxycontin. Id. This Court found that the

other felony and the sexual penetration were directly

related because “the only reason the victim engaged

in sexual penetration was to acquire the drugs,” and

the controlled substance “would be delivered to the

victim after the sexual act and only because of the

sexual act.” Id. at 693.

In this case, the trial court found a sufficient nexus

between the other felony and the sexual penetration.

The court found that the other felony occurred when

Lockett and Johnson engaged in sexual penetration

with S. in plain view of J., a minor. Under MCL

722.675(1)(b), a person is guilty of the felony of dissemi-

nating sexually explicit matter to a minor if that person

knowingly exhibits a sexually explicit performance to a

minor that is harmful to the minor. The prosecution

argues that there was a sufficient nexus between the

sexual penetration and the other felony because the

exhibition would not have occurred had there not been

sexual penetration. Defendants argue, however, that

2012] P

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175

the statute invites arbitrary and abusive enforcement

when the victim of the other felony is not the “victim”

of the sexual penetration.

Defendants point out a number of “ridiculous” cir-

cumstances in which a sexual penetration could occur

during the commission of another felony. Many of the

circumstances defendants cite involve situations in

which the underlying felony would not have a sufficient

nexus to the sexual penetration. While this Court, in

discussing the broad scope of MCL 750.520b(1)(c) and

urging the Legislature to revisit the statute, has previ-

ously noted that “a voluminous number of felonious

acts can be found in the Penal Code,” Waltonen, 272

Mich App at 694 n 8, and there may very well be a

number of “ridiculous” hypothetical circumstances to

which the statute could apply,

defendants cannot argue

that a statute is unconstitutionally vague when First

Amendment freedoms are not involved and when the

argument is based on hypotheticals. People v Knapp,

244 Mich App 361, 374 n 4; 624 NW2d 227 (2001). The

focus must instead be on the specifics of the case at

hand. Id. Therefore, this Court is only concerned with

whether defendants’ specific conduct was fairly within

the constitutional scope of the statute.

MCL 750.520b(1)(c) prohibits engaging in sexual

penetration with another person under circumstances

involving the commission of any other felony, as long as

that felony is directly related to the sexual penetration.

Waltonen, 272 Mich App at 691. Arguably, the sexual

penetration and the other felony were directly related

in this case, because the other felony likely would not

have occurred had there not been a sexual penetration.

For instance, a person could commit CSC-I by engaging in adultery

because adultery is prohibited as a felony under MCL 750.30. See

Waltonen, 272 Mich App at 694 n 8.

176 295 M

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165 [Jan

However, we find that MCL 750.520b(1)(c) unconstitu-

tionally invites arbitrary and abusive enforcement

when it is applied to situations where, as here, engaging

in consensual, legal sexual penetration is elevated to

CSC-I solely because a minor was present and the

“victim” of the penetration was not impacted by the

additional felony. When a general class of offenses is

plainly within a statute’s terms but marginal cases may

lead to unconstitutionality, this Court has a duty to give

a reasonable statutory construction to the statute to

prevent the entire statute from being rendered uncon-

stitutional. People v Gagnon, 129 Mich App 678, 684;

341 NW2d 867 (1983). A paramount principle in statu-

tory construction is that this Court reads the statute

“as a whole” rather than reading each provision alone.

People v Jackson, 487 Mich 783, 791; 790 NW2d 340

(2010). While individual words and phrases are impor-

tant, they must be read in context so that the legislative

intent is given effect. Id. at 790-791.

MCL 750.520b(1)(c) can be made constitutionally

definite by a reasonable construction. MCL 750.520b(1)

provides that “[a] person is guilty of criminal sexual

conduct in the first degree if he or she engages in sexual

penetration with another person” and certain other

conditions are met. These other conditions are subse-

quently set forth in eight subdivisions, MCL

750.520b(1)(a) through (h). While subdivision (a) does

not use the term “victim,” there can be no dispute that

this subdivision’s purpose is to protect minors under 13

years of age. Subdivision (b) uses the term “other

person” rather than “victim,” but immediately after-

ward, subparagraphs (b)(i) through (iii) refer to the

“other person” as “the victim.” Subdivisions (d)

through (h) all refer to “the victim.” The references to

“the victim” in these subdivisions clearly refer back to

the language in the first sentence of subsection (1)

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177

concerning “another person.” Further, in describing the

penalties for violating subsection (1), subsection (2)

indicates that a violation of the statute is a crime

against the other person:

Criminal sexual conduct in the first degree is a felony

punishable as follows:

(a) Except as provided in subdivisions (b) and (c), by

imprisonment for life or for any term of years.

(b) For a violation that is committed by an individual 17

years of age or older against an individual less than 13

years of age by imprisonment for life or any term of years,

but not less than 25 years.

years of age or older against an individual less than 13

years of age, by imprisonment for life without the possibil-

ity of parole if the person was previously convicted of a

violation of this section or section 520c, 520d, 520e, or 520g

committed against an individual less than 13 years of age

or a violation of law of the United States, another state or

political subdivision substantially corresponding to a viola-

tion of this section or section 520c, 520d, 520e, or 520g

committed against an individual less than 13 years of age.

[MCL 750.520b(2).]

When this Court examines the statute’s language

and scheme as a whole, it is clear that when referring to

“another person” in MCL 750.520b(1) the Legislature

thought that the “person” would be a victim and that a

violation of the statute would be a crime against that

“person.” It is reasonable to conclude that, in enacting

MCL 750.520b(1)(c), the Legislature intended that the

“circumstances involving the commission of [the] other

felony” directly impact a “victim,” or recipient, of the

sexual penetration.

This reading is consistent with other cases that have

interpreted MCL 750.520b(1)(c). In Waltonen, this

Court repeatedly referred to the other person as “the

178 295 M

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165 [Jan

victim” of the sexual penetration. Waltonen, 272 Mich

App at 680-693. In addition, the victim of the sexual

penetration was directly impacted by the circumstances

of the other felony because the defendant delivered the

Oxycontin to the victim. Id. at 682, 693. In People v

Pettway, 94 Mich App 812, 814; 290 NW2d 77 (1980),

the defendant was convicted of CSC-I after he broke

into a home and sexually penetrated a victim. The

victim of the sexual penetration was also a victim of the

other felony because the victim was an occupant of the

home that the defendant broke into and entered. Id.at

818. In People v Wilkens, 267 Mich App 728, 736; 705

NW2d 728 (2005), the defendant was convicted of CSC-I

after he produced sexually abusive material involving a

minor. The penetration “victims”

were the children

with whom the defendant produced the sexually abu-

sive material. See id. at 732, 737-738. The victims of the

sexual penetration were also victims of the underlying

felony because they were involved in the production of

the sexually abusive material. Id.

In this case, defendants were convicted of CSC-I

when the underlying felony was disseminating sexually

explicit matter to a minor, J., who was then 12 years old.

J. was not the “victim” of the sexual penetration. Even

though the “explicit matter” would not have been

disseminated to J. without the sexual penetration of S.,

this Court cannot uphold a conviction of CSC-I when

the “victim” of the sexual penetration was not impacted

We use quotation marks here because one of the victims was 16, i.e.,

above the age of consent. See Wilkens, 267 Mich App at 732, MCL

750.520d(1)(a) (stating that sexual penetration with another person who

is at least 13 years of age and less than 16 years of age is third-degree

criminal sexual conduct), and MCL 750.520e(1)(a) (stating that sexual

contact with another person who is at least 13 years of age but less than

16 years of age by a person who is five or more years older than that

person is fourth-degree criminal sexual conduct).

2012] P

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179

by the circumstances of the underlying felony. This

Court reverses defendants’ convictions of CSC-I under

MCL 750.520b(1)(c).

B. DISSEMINATING SEXUALLY EXPLICIT MATTER TO A MINOR

Defendants next argue that there was insufficient

evidence to convict each of them of the underlying

felony of disseminating sexually explicit matter to a

minor under MCL 722.675(1)(b). This Court reviews de

novo challenges to the sufficiency of the evidence to

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 Cline, 276

Mich App 634, 642; 741 NW2d 563 (2007) (quotation

marks and citation omitted). This Court resolves all

conflicts regarding the evidence in favor of the prosecu-

tion, and “[c]ircumstantial evidence and reasonable

inferences drawn from it may be sufficient to prove the

elements of the crime.” Wilkens, 267 Mich App at 738.

MCL 722.675(1) provides that

[a] person is guilty of disseminating sexually explicit mat-

ter to a minor if that person...

***

(b) [k]nowingly exhibits to a minor a sexually explicit

performance that is harmful to minors.

MCL 722.671(b) defines “disseminate” as “to sell, lend,

give, exhibit, show, or allow to examine....”“Exhibit”

is defined, in part, as “[p]resent a performance,” MCL

722.671(c)(i), and “ ‘sexually explicit performance’

means a motion picture, video game, exhibition, show,

representation, or other presentation that, in whole or

in part, depicts nudity, sexual excitement, erotic fon-

dling, sexual intercourse, or sadomasochistic abuse,”

180 295 M

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165 [Jan

MCL 722.673(g). Therefore, a defendant violates MCL

722.675(1)(b) if he or she knowingly exhibits to a minor

a depiction of nudity, sexual excitement, erotic fondling,

sexual intercourse, or sadomasochistic abuse that is

harmful to minors.

When viewing the evidence in the light most favor-

able to the prosecution, we conclude that a rational trier

of fact could have found beyond a reasonable doubt that

defendants violated MCL 722.675(1)(b). Defendants

knew that J. was present in the van when each of them

disrobed and engaged in sexual intercourse with S.

Defendants argue that they were not “exhibiting” be-

cause each defendant and S. moved to the back of the

van and they were not attempting to stage a perfor-

mance or make their efforts visible. Defendants also

note that J. testified that it was “hard to see back there”

and that she only looked there once. However, given the

age of J. and her close proximity to the sexual acts, a

jury could have reasonably inferred that defendants

were presenting a performance that J. could see and

that they knew J. was a minor. A reasonable juror could

have found that even though defendants and S. moved

to the back of the van, they were still exhibiting to a

minor a sexually explicit performance that was harmful

to the minor. There was sufficient evidence to convict

defendants of disseminating sexually explicit matter to

a minor under MCL 722.675(1)(b).

“[W]hen a conviction for a greater offense is reversed

on grounds that affect only the greater offense,” this

Court may remand for entry of judgments of conviction

on necessarily included lesser offenses. People v Bearss,

463 Mich 623, 631; 625 NW2d 10 (2001) (quotation

marks and citation omitted). “A necessarily included

lesser offense” is an offense whose elements are sub-

sumed within the elements of a greater offense. People

2012] P

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181

v Wilder, 485 Mich 35, 41; 780 NW2d 265 (2010). When

evaluating whether an offense is a lesser included

offense, the crimes are to be analyzed with an eye

toward how the crimes were actually charged. See id. at

45. “As long as the elements at issue are subsumed

within the charged offense, the crime is a necessarily

included lesser offense.” Id. at 44.

Defendants were charged with committing CSC-I,

MCL 750.520b(1)(c), by sexually penetrating S. while

committing the felony of disseminating sexually explicit

matter to a minor, MCL 722.675(1)(b). Because a jury

could not have convicted defendants on the charged

counts of CSC-I under MCL 750.520b(1)(c) without

determining that defendants also committed the under-

lying felony, the underlying felony is a necessarily

included lesser offense. Thus, we remand this case for

entry of convictions on defendants’ lesser included

offenses under MCL 722.675(1)(b).

C. LOCKETT’S SENTENCING GUIDELINES

Lockett argues that the trial court incorrectly as-

sessed 10 points for offense variable (OV) 4 (psychologi-

cal injury to victim), 15 points for OV 10 (exploitation of

vulnerable victim), and 10 points for OV 14 (offender’s

role). This Court reviews a trial court’s scoring of a

sentencing guidelines variable for clear error. People v

Hicks, 259 Mich App 518, 522; 675 NW2d 599 (2003). A

scoring decision is not clearly erroneous if the record

contains “any evidence in support of the decision.” Id.

(quotation marks and citations omitted).

We agree that the court incorrectly assessed 10 points

for OV 4. OV 4 asks the court to determine whether a

serious psychological injury requiring professional

treatment occurred to a victim. MCL 777.34. The court

properly assesses 10 points when a victim suffers a

182 295 M

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165 [Jan

serious psychological injury that might require profes-

sional treatment. MCL 777.34(2). The fact that the victim

did not seek professional treatment is not conclusive when

scoring the variable. MCL 777.34(2); Wilkens, 267 Mich

App at 740. There must be some evidence of psychological

injury on the record to justify a 10-point score. Hicks, 259

Mich App at 535.

The record is devoid of evidence to indicate whether

J. suffered a serious psychological injury. There was no

testimony indicating that J. suffered a psychological

injury, the presentence report contains no information

that would indicate any victims suffered psychological

harm, and the record does not include a victim-impact

statement. The trial court’s entire statement on the

matter was that “[c]learly this type of situation, looking

at the whole circumstances of the sexual situation with

the sisters being involved, and these two defendants,

would cause any normal person of that age serious

psychological injury; whether there was treatment or

not, is not an issue.” The trial court may not simply

assume that someone in the victim’s position would

have suffered psychological harm because MCL 777.34

requires that serious psychological injury “occurred to a

victim.” (Emphasis added.) This Court cannot find any

evidence to support the trial court’s decision to assess

10 points for OV 4.

Lockett also argues that the trial court incorrectly

assessed 15 points for OV 10. OV 10 addresses the

exploitation of a vulnerable victim. MCL 777.40. The

court must assess 15 points when “[p]redatory conduct

was involved[.]” MCL 777.40(1)(a). “Predatory con-

duct” means conduct that occurred before the commis-

sion of the offense and that was directed at the victim

for the primary purpose of victimization. MCL

777.40(3)(a); People v Cannon, 481 Mich 152, 160-161;

749 NW2d 257 (2008).

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183

Evidence on the record supports the trial court’s

decision to assess Lockett 15 points for OV 10. Lockett

picked up J. in the middle of the night in his van.

Lockett drove to a liquor store to purchase alcohol. He

then drove the van to a city park and parked it. Because

of J.’s young age, she was susceptible to injury, physical

restraint, or temptation. Moreover, given Lockett’s ac-

tions that night, it is a reasonable inference that

victimization was his primary purpose for engaging in

the preoffense conduct. The trial court correctly scored

OV 10.

Finally, Lockett argues that the trial court errone-

ously assessed 10 points for OV 14. A trial court

appropriately assesses 10 points for OV 14 when the

defendant was a leader in a multiple-offender situation.

MCL 777.44(1)(a); People v Apgar, 264 Mich App 321,

330; 690 NW2d 312 (2004). The entire criminal episode

must be evaluated to determine whether a defendant

was a leader. MCL 777.44(2)(a); Apgar, 264 Mich App at

330.

Lockett argues that it was Johnson who had the

preexisting relationship and contact with the girls and

who coordinated with S. regarding when and where to

pick the girls up, and that even though Lockett was

older than Johnson, none of the participants showed

Lockett any deference based on his age. While we agree

that there are facts that may indicate that Johnson was

a leader, our review is limited to an evaluation for clear

error, and a scoring decision is not clearly erroneous if

the record contains any evidence supporting the deci-

sion. Hicks, 259 Mich App at 522. Lockett was 35 and

Johnson was 18, making Lockett significantly older

than Johnson; Lockett owned and drove the van in

which he picked the girls up and in which the sexual

acts occurred; and it is reasonable to assume that

184 295 M

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165 [Jan

Lockett purchased the alcohol. The trial court noted

that Johnson “could not even have done all this on his

own, with the lack of aid, and the van.” There is

evidence on the record to support the trial court’s

determination that Lockett was a leader in this situa-

tion.

D. ACCOMPLICE CAUTIONARY INSTRUCTION

Defendants next argue that the trial court abused its

discretion when it failed to give the jury the accomplice

cautionary instruction and instead only gave the jury

the immunity instruction regarding S.’s testimony. A

trial court’s decision whether to give a cautionary

accomplice instruction is reviewed for an abuse of

discretion. People v Young, 472 Mich 130, 135; 693

NW2d 801 (2005). “An abuse of discretion occurs when

the court chooses an outcome that falls outside the

range of reasonable and principled outcomes.” People v

Unger, 278 Mich App 210, 217; 749 NW2d 272 (2008).

Jury instructions are to be read as a whole and, even

if somewhat imperfect, no error exists if the instruc-

tions fairly presented the issues to be tried and suffi-

ciently protected the defendant’s rights. People v Bell,

209 Mich App 273, 276; 530 NW2d 167 (1995). For

reversal to be warranted based on the absence of a

cautionary accomplice instruction, a defendant has the

burden to show that it was more probable than not that

the error affected the outcome of the proceedings.

Young, 472 Mich at 141-142.

The trial court refused to give both the immunity

instruction contained in CJI2d 5.13 and the accomplice

instruction contained in CJI2d 5.6 because it deter-

mined that providing both instructions would be “very

confusing to the jury,” and instead it let defendants

choose which of the two instructions was to be given.

2012] P

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185

We conclude that the trial court did not abuse its

discretion in denying the request to have both instruc-

tions presented because the instructions as given fairly

presented the issues to the jury and sufficiently pro-

tected defendants’ rights. The primary purpose of both

instructions is to raise the jury’s awareness of the

potential ulterior motives of the witness. Both the

accomplice and immunity instructions caution the jury

that the witness may have some reason not to testify

truthfully. The immunity instruction’s cautions about

S.’s credibility were extensive enough to sufficiently

protect defendants’ rights. Defendants have also failed

to establish that a difference in jury instructions would

have affected the outcome of the case, given that S.’s

testimony that she had sexual intercourse with each

defendant in the back of the van was supported by other

testimony, including the testimony of J. and Officer

Garrison.

Johnson also argues that he was denied the effective

assistance of counsel when his trial counsel chose the

immunity instruction instead of the accomplice instruc-

tion. We disagree. Unpreserved issues concerning inef-

fective assistance of counsel are reviewed for errors

apparent on the record. People v Rodriguez, 251 Mich

App 10, 38; 650 NW2d 96 (2002). “If the record does not

contain sufficient detail to support defendant’s ineffec-

tive assistance claim, then he has effectively waived the

issue.” People v Davis, 250 Mich App 357, 368; 649

NW2d 94 (2002). The determination whether a defen-

dant has been deprived of the effective assistance of

counsel presents a mixed question of fact and constitu-

tional law. People v LeBlanc, 465 Mich 575, 579; 640

NW2d 246 (2002). The trial court’s factual findings are

reviewed for clear error, while its constitutional deter-

minations are reviewed de novo. Id.

186 295 M

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165 [Jan

Effective assistance of counsel is presumed, and the

defendant bears a heavy burden of proving otherwise.

See id. at 578. To establish an ineffective assistance of

counsel claim, a defendant must show that (1) counsel’s

performance was below an objective standard of reason-

ableness under prevailing professional norms and (2)

there is a reasonable probability that, but for counsel’s

error, the result of the proceedings would have been

different. People v Davenport, 280 Mich App 464, 468;

760 NW2d 743 (2008). A defendant must also show that

the result that did occur was fundamentally unfair or

unreliable. Id.

There is no evidence on the record to support

Johnson’s contention that his trial counsel’s perfor-

mance was objectively unreasonable, and there is no

evidence on the record to support Johnson’s contention

that the result of the proceedings would have been

different had his trial counsel chosen the accomplice

instruction over the immunity instruction.

E. SEXUAL PENETRATION OF A CHILD UNDER AGE 13

Johnson argues that the prosecution presented insuf-

ficient evidence to support his conviction of CSC-I

under MCL 750.520b(1)(a) (penetration of a person

under age 13). The elements of CSC-I under MCL

750.520b(1)(a) are that (1) the defendant engaged in

sexual penetration with another person and (2) the

other person was under 13 years of age. People v

Hammons, 210 Mich App 554, 556-557; 534 NW2d 183

(1995). “ ‘Sexual penetration’ means sexual inter-

course, cunnilingus, fellatio, anal intercourse, or any

other intrusion, however slight, of any part of a per-

son’s body or of any object into the genital or anal

openings of another person’s body....” MCL

750.520a(r). Johnson does not contest the second ele-

2012] P

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OCKETT

187

ment, that J. was 12 years old at the time of the alleged

penetration. Johnson argues that because J. repeatedly

denied that penetration occurred, no rational trier of

fact could have found beyond a reasonable doubt that

he engaged in sexual penetration with J. We disagree.

J. did deny that any penetration occurred. However,

J. was not given the legal definition of “penetration.”

According to the law, “penetration” is any intrusion,

however slight, into the vagina or the labia majora. Id.;

People v Whitfield, 425 Mich 116, 135 n 20; 388 NW2d

206 (1986). J. testified that she and Johnson were

attempting to have sexual intercourse and that

Johnson’s “private” was touching her “private.” She

testified that Johnson’s “private” was touching where

she would use tissue while wiping after urination, and

that she experienced pain going into her “private

parts.”

When viewing J.’s testimony in the light most favor-

able to the prosecution, the jury could have reasonably

inferred that Johnson’s penis intruded, however

slightly, into J.’s vagina or labia majora. Because a

rational trier of fact could have found that Johnson

engaged in sexual penetration with J., we affirm

Johnson’s conviction of CSC-I for engaging in sexual

penetration with a person under 13 years of age.

Affirmed in part, reversed in part, and remanded for

further proceedings consistent with this opinion. We do

not retain jurisdiction.

ETER

, P.J., and C

AVANAGH

and S

ERVITTO

, JJ., con-

curred.

188 295 M

ICH

165 [Jan

ALFIERI v BERTORELLI

Docket No. 297733. Submitted October 4, 2011, at Grand Rapids.

Decided January 10, 2012, at 9:05 a.m. Leave to appeal denied, 491

Mich 925.

Frank Alfieri, IV, and Tonya Alfieri brought an action in the Van

Buren Circuit Court against Marc and Brenda Bertorelli, Marc

Bertorelli Builder, LLC, Meryl Green, and Weber Seiler Real-

tors, Inc., alleging, in part, silent fraud and negligent misrep-

resentation pertaining to plaintiffs’ purchase of a condominium

unit that was contaminated with trichloroethylene. Plaintiffs

had been led to believe that the contamination had been cleaned

up, in part on the basis of a newspaper article and a sales

brochure that indicated that the site had been decontaminated,

and they, therefore, purchased the property without conducting

an independent analysis. The Bertorelli defendants were dis-

missed by stipulation of the parties. Defendants moved for

summary disposition, a directed verdict, and judgment notwith-

standing the verdict, alleging that they did not breach any legal

duty they owed to plaintiffs because they were sellers’ agents,

there was insufficient evidence of reliance by plaintiffs and any

reliance would have been unreasonable, and defendants did not

make any misrepresentations. The trial court, William C. Buhl,

J., gave the jury a comparative-negligence instruction over

plaintiffs’ objection. The jury found defendants liable for silent

fraud and negligent misrepresentation, but found plaintiffs to

be 35 percent at fault on the negligent-misrepresentation claim.

The trial court entered a judgment consistent with the verdict.

Defendants appealed the denial of their motions and plaintiffs

cross-appealed with regard to the comparative-negligence jury

instruction.

The Court of Appeals held:

1. The trial court correctly determined that there was a

genuine question of fact and that reasonable minds could differ on

whether defendants owed a duty of disclosure to plaintiffs because

the evidence showed that plaintiffs had made direct inquiries of

defendants about the condition of the property and the Depart-

ment of Environmental Quality had advised defendants that the

sales brochure contained inaccurate and misleading information.

2012] A

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189

2. Plaintiffs presented sufficient evidence to establish that

they reasonably relied on the sales brochure. No further inquiry on

their part was necessary. The trial court properly denied defen-

dants’ motions.

3. The trial court did not abuse its discretion by declining to

give defendants’ requested jury instruction that was based on facts

distinguishable from those of this case.

4. The trial court properly instructed the jury on comparative

negligence. The jury could have found some comparative fault on

the part of plaintiffs with respect to the negligent-

misrepresentation claim.

5. Plaintiffs engaged in a joint venture by purchasing the

condominium; therefore, it was appropriate to apply the doctrine

of imputed knowledge to plaintiffs and the trial court did not err

by declining to instruct the jury to consider each plaintiff’s

comparative negligence separately.

Affirmed.

1. F

RAUD —

ILENT

RAUD —

EGLIGENT

ISREPRESENTATION

Silent fraud and negligent misrepresentation both require a defen-

dant to owe a duty to the plaintiff; silent fraud is based on a

defendant suppressing a material fact that the defendant was

legally obligated to disclose, rather than making an affirmative

misrepresentation; a misleading incomplete response to an inquiry

can constitute silent fraud; a claim for negligent misrepresenta-

tion requires a plaintiff to prove that a party justifiably relied to

his or her detriment on information prepared without reasonable

care by one who owed the relying party a duty of care.

2. F

RAUD —

ILENT

RAUD —

UTY TO

ISCLOSE

A duty to disclose may be imposed on a seller’s agent to disclose

newly acquired information that is recognized by the agent as

rendering a prior affirmative statement untrue or misleading; this

is especially true when the agent knows that the buyer has a

particular concern with the subject matter of the statement; a duty

to disclose may arise solely because the buyer expresses a particu-

larized concern or directly inquires of the seller regarding the

subject matter.

3. F

RAUD —

EFRAUDED

ARTY

’

UTY TO

ONDUCT

URTHER

NQUIRY

The general rule that there cannot be any fraud if the party allegedly

defrauded has the means to determine for himself or herself the

truth of the matter only applies when the party allegedly de-

frauded was either presented with the information and chose to

190 295 M

ICH

189 [Jan

ignore it or had some other indication that further inquiry was

needed; when a defrauded party has troubled to examine some

extrinsic evidence supporting a false statement, that party owes no

duty to the defrauder to exercise diligence to uncover additional

evidence disapproving the defrauder’s representations.

Bolhouse, Vander Hulst, Risko & Baar, P.C. (by Mark

Hofstee), and Risko Law Office, P.C. (by Michael P.

Risko), for Frank Alfieri, IV, and Tonya Alfieri.

Kallas & Henk PC (by Leonard A. Henk) for Meryl

Greene and Weber Seiler Realtors, Inc.

Before: M

ARKEY

,P.J., and S

ERVITTO

and R

ONAYNE

RAUSE

,JJ.

URIAM

. Defendants

appeal as of right the trial

court’s denial of various motions for summary disposi-

tion, a directed verdict, and judgment notwithstanding

the verdict (JNOV). Plaintiffs cross-appeal as of right

certain of the jury instructions given by the trial court.

We affirm.

This matter arises out of plaintiffs’ purchase of a

condominium unit in what had once been an abandoned

factory. The factory had been contaminated with

trichloroethylene, and, in the process of converting it

into condominiums, a vapor barrier was installed, but

the site was never properly decontaminated. Plaintiffs

were led to believe that the contamination had been

cleaned up, in part on the basis of a newspaper article

and a sales brochure both indicating that the site had

been decontaminated, so they purchased the condo-

The Bertorelli defendants, Marc and Brenda Bertorelli and Marc

Bertorelli Builder, LLC, and some of the original claims were dismissed

by stipulation, so we refer only to the defendants remaining in this

matter as “defendants” and only discuss the legal theories remaining and

applicable to them.

2012] A

LFIERI V

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191

minium without conducting an independent analysis.

The site later turned out to be seriously contaminated.

Plaintiffs commenced this suit on theories of, in rel-

evant part, silent fraud and negligent misrepresenta-

tion against defendants. Defendants filed motions for

summary disposition, a directed verdict, and JNOV at

various stages in this litigation, all essentially making

the same arguments that they did not breach any legal

duty they owed to plaintiffs because they were sellers’

agents, there was insufficient evidence of reliance by

plaintiffs and any reliance would be unreasonable, and

defendants did not make any misrepresentations. The

trial court gave a comparative-negligence instruction

over plaintiffs’ objection. The jury found defendants

liable for silent fraud and negligent misrepresentation,

but found plaintiffs to be 35 percent at fault on the

negligent misrepresentation claim.

We review de novo a trial court’s ruling on a motion

for summary disposition and consider the evidence and

all legitimate inferences therefrom in the light most

favorable to the nonmoving party to determine whether

there exists any genuine issue of material fact.

Coblentz

v City of Novi, 475 Mich 558, 567-568; 719 NW2d 73

(2006). When reviewing a ruling on a motion for a

directed verdict, we likewise consider the evidence and

any reasonable inferences de novo in the light most

favorable to the nonmoving party to determine whether

there exists a question of fact on which reasonable

minds could differ. Hord v Environmental Research

Institute of Mich (After Remand), 463 Mich 399, 410;

617 NW2d 543 (2000); Thomas v McGinnis, 239 Mich

We presume that the motion here was granted pursuant to MCR

2.116(C)(10), which tests the factual sufficiency of a claim, because the

trial court considered material outside the pleadings. See Hughes v

Region VII Area Agency on Aging, 277 Mich App 268, 273; 744 NW2d 10

(2007).

192 295 M

ICH

189 [Jan

App 636, 643-644; 609 NW2d 222 (2000). We review a

denial of a motion for JNOV de novo as well, again

considering the evidence and any reasonable inferences

in the light most favorable to the nonmoving party to

determine whether the evidence fails to establish a

claim. Prime Fin Servs LLC v Vinton, 279 Mich App

245, 255-256; 761 NW2d 694 (2008). Thus, our standard

of review for all three of defendants’ motions is essen-

tially the same, so we will review them collectively as

defendants’ “motions.”

Defendants contend that the trial court should have

granted their motions because as sellers’ agents they

owed no duty to plaintiffs because plaintiffs’ reliance on

the sales brochure was unreasonable and because plain-

tiffs’ reliance on defendant Meryl Greene’s statements

was unreasonable. We conclude that the trial court

properly denied defendants’ motions.

Common-law fraud or fraudulent misrepresentation

entails a defendant making a false representation of

material fact with the intention that the plaintiff would

rely on it, the defendant either knowing at the time that

the representation was false or making it with reckless

disregard for its accuracy, and the plaintiff actually relying

on the representation and suffering damage as a result.

M&D, Inc v McConkey, 231 Mich App 22, 27; 585 NW2d

33 (1998). Silent fraud is essentially the same except that

it is based on a defendant suppressing a material fact that

he or she was legally obligated to disclose, rather than

making an affirmative misrepresentation. Id. at 28-29.

Such a duty may arise by law or by equity; an example of

the latter is a buyer making a direct inquiry or expressing

a particularized concern. The Mable Cleary Trust v The

Edward-Marlah Muzyl Trust, 262 Mich App 485, 500;

686 NW2d 770 (2004); M&D, Inc, 231 Mich App at 31, 33.

A misleadingly incomplete response to an inquiry can

2012] A

LFIERI V

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193

constitute silent fraud. The Mable Cleary Trust, 262 Mich

App at 500. “A claim for negligent misrepresentation

requires plaintiff to prove that a party justifiably relied to

his detriment on information prepared without reason-

able care by one who owed the relying party a duty of

care.” Unibar Maintenance Servs, Inc v Saigh, 283 Mich

App 609, 621; 769 NW2d 911 (2009) (citations and quota-

tion marks omitted).

Silent fraud and negligent misrepresentation both re-

quire a defendant to owe a duty to the plaintiff. Defen-

dants rely on this Court’s explanation in McMullen v

Joldersma, 174 Mich App 207, 212; 435 NW2d 428 (1988),

that Michigan jurisprudence had never imposed on sell-

ers’ agents a duty per se of disclosure to buyers, in

contrast to the duty it has imposed on sellers themselves.

However, a duty of disclosure may be imposed on a seller’s

agent to disclose newly acquired information that is rec-

ognized by the agent as rendering a prior affirmative

statement untrue or misleading. United States Fidelity &

Guaranty Co v Black, 412 Mich 99, 126-128; 313 NW2d 77

(1981). This is especially true when the agent knows that

the buyer has a particular concern with the subject matter

of that statement. Id. at 127. Indeed, a duty to disclose

may arise solely because “the buyers express a particular-

ized concern or directly inquire of the seller....”M&D,

Inc, 231 Mich App at 33. There is evidence that plaintiffs

made direct inquires of defendants about the condition of

the property and that the Department of Environmental

Quality advised defendants that the sales brochure con-

tained inaccurate and misleading information. The trial

court correctly determined that there was a genuine

question of fact and that reasonable minds could differ on

whether defendants owed a duty of disclosure to plaintiffs.

Defendants next rely on the general rule that there

cannot be any fraud if the party allegedly defrauded had

194 295 M

ICH

189 [Jan

the means to determine for him- or herself the truth of

the matter. Nieves v Bell Indus, Inc, 204 Mich App 459,

464; 517 NW2d 235 (1994). Although defendants accu-

rately state the general rule, it is not an absolute. As

this Court has explained, that general rule is only

applied when the plaintiffs “were either presented with

the information and chose to ignore it or had some

other indication that further inquiry was needed.” The

Mable Cleary Trust, 262 Mich App at 501. Furthermore,

it has long been the rule that, at least when a defrauded

party troubled to examine some extrinsic evidence

supporting a false statement, that party owes no duty to

the defrauder to exercise diligence to uncover additional

evidence disproving the defrauder’s representations.

Smith v Werkheiser, 152 Mich 177, 179-180; 115 NW

964 (1908); see also In re People v Jory, 443 Mich 403,

417 n 10; 505 NW2d 228 (1993). The case relied on by

defendants, Fejedelem v Kasco, 269 Mich App 499; 711

NW2d 436 (2006), is notable because in that case the

plaintiff was directly given considerable evidence that

certain financial information was incomplete and unre-

liable, making the plaintiff negligent for nonetheless

relying on it. Id. at 503-504.

Here plaintiff Frank Alfieri, IV, testified that it was

his understanding that the site had been cleaned up

based on general public discussions, conversations with

Marc Bertorelli and Meryl Greene, and local newspaper

articles. Plaintiffs directly inquired of Greene regarding

the condition of the property and whether it had been

cleaned up at the time they signed the purchase agree-

ment. Frank testified that he trusted Greene’s repre-

sentations, both oral and in the sales brochure, that the

site had been cleaned up. Greene testified that she

prepared the contents of the sales brochure, with direc-

tion from Marc, and that until plaintiffs filed suit, she

had no reason to believe that the sales brochure was

2012] A

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195

inaccurate. Frank also testified that he had no indica-

tion that the information in the sales brochure that the

contaminated condominium site had been cleaned up

was incomplete. Indeed, Greene confirmed the repre-

sentations in the sales brochure with the newspaper

article affirming that the site was no longer contami-

nated. While the facts set out in the sales brochure

could have been independently verified, plaintiffs actu-

ally alleged that the factual representations in the sales

brochure, i.e., that the contaminated condominium site

had been cleaned up, were false in themselves.

Viewing the evidence and all reasonable inferences that

can be drawn from it in the light most favorable to

plaintiffs, plaintiffs presented sufficient evidence to estab-

lish that they reasonably relied on the sales brochure

when numerous sources—including Marc, Greene, the

local newspaper, and public “buzz”—indicated that the

site had been cleaned up. No further inquiry was neces-

sary. The trial court properly denied all three of defen-

dants’ motions.

Defendants also argue that the trial court erred by

failing to give their requested instruction regarding

their duty as sellers’ agents. We review a trial court’s

decision regarding jury instructions for an abuse of

discretion. Hashem v Les Stanford Oldsmobile, Inc, 266

Mich App 61, 87; 697 NW2d 558 (2005). Defendants’

requested instruction was based on facts specific to

McMullen, 174 Mich App at 212, which were distin-

guishable from those in this case. Further, the given

instruction accurately reflected general caselaw. The

trial court did not abuse its discretion by declining to

give defendants’ requested instruction.

Defendants finally argue that their motion for JNOV

should have been granted on the negligent-

misrepresentation claim because the jury found plain-

196 295 M

ICH

189 [Jan

tiffs to be 35 percent at fault. Defendants appear to be

essentially asserting an argument premised on the

doctrine of contributory negligence, which has long and

properly been abandoned in Michigan in favor of com-

parative fault. Jimkoski v Shupe, 282 Mich App 1,8n3;

763 NW2d 1 (2008). The extent of a plaintiff’s fault is a

question for the jury. Id. Indeed, the trial court in-

structed the jury on comparative negligence at defen-

dants’ request. Denial of defendants’ motion for JNOV

on that basis was appropriate.

On cross-appeal, plaintiffs argue that the trial court

erred by instructing the jury on comparative negli-

gence, M Civ JI 11.01, because their negligent-

misrepresentation claim does not involve a claim seek-

ing damages for personal injury, property damage, or

wrongful death as set out in MCL 600.2959. We review

de novo claims of instructional error. Lewis v LeGrow,

258 Mich App 175, 211; 670 NW2d 675 (2003). We

review for an abuse of discretion a trial court’s deter-

mination whether a standard jury instruction is appli-

cable and accurate. Id. We find the trial court’s instruc-

tion appropriate.

Plaintiffs rely on Sweet v Shreve, 262 Mich 432, 435;

247 NW 711 (1933), in which “a suit brought for the

recovery of damages caused plaintiffs as a result of

fraudulent representations made by defendants” in a

real estate transaction was deemed not to be “one for

injuries to person or property.” However, Sweet ad-

dressed which of the then-existing limitations periods

applied, and it “was decided consistently with a long

line of Michigan cases which applied the six-year period

of limitations to fraud actions.” Nat’l Sand, Inc v Nagel

Constr, Inc, 182 Mich App 327, 333; 451 NW2d 618

(1990). Today, the statute of limitations for “injuries to

persons or property,” MCL 600.5805, “applies to several

2012] A

LFIERI V

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197

causes of action that rarely or never involve physical

injury.” Local 1064, RWDSU AFL-CIO v Ernst &

Young, 449 Mich 322, 328; 535 NW2d 187 (1995). Sweet

discussed which long-repealed statute of limitations an

action should be shoehorned into. We doubt it resolves

whether a particular claim of damages constitutes one

for “personal injury or property damage” for

comparative-negligence purposes today.

Indeed, this Court has observed that “what consti-

tutes ‘injuries to persons’ [includes] ‘invasions of rights

that inhere in man as a rational being.’ ” Nat’l Sand,

182 Mich App at 335 (citations and some quotation

marks omitted) (cited with approval in Local 1064, 449

Mich at 328). This is consistent with the modern

definition of a “personal injury” as potentially referring

to any invasion of a personal right, not only bodily

injuries. Black’s Law Dictionary (9th ed). Additionally,

“comparative negligence should be applied in all

common-law tort actions sounding in negligence where

the defendant’s misconduct falls short of being inten-

tional,” Vining v Detroit, 162 Mich App 720, 727; 413

NW2d 486 (1987), and “the question is whether, in

viewing the evidence most favorably to the defendant,

there is sufficient evidence for the jury to find negli-

gence on the part of the injured plaintiff.” Duke v

American Olean Tile Co, 155 Mich App 555, 566; 400

NW2d 677 (1986). Although both these cases predate

the Legislature’s adoption of MCL 600.2959, we think

both remain “good law” and comport with Michigan’s

public policy of fairly apportioning damages according

to each party’s fault.

Given plaintiffs’ decision not to obtain an environ-

mental inspection and execution of a purchase agree-

ment specifically stating that defendants had no know-

ledge of the property’s environmental conditions, we

198 295 M

ICH

189 [Jan

conclude that, when the evidence is viewed most favor-

ably to defendants, the jury could have found some

comparative fault on the part of plaintiffs with respect

to the negligent-misrepresentation claim. The trial

court’s instruction was proper.

Plaintiffs finally argue that the trial court should

have instructed the jury to consider each plaintiff’s

comparative negligence separately. We disagree. The

doctrine of imputed knowledge is applicable to joint

ventures, which have been defined as associations to

carry out a single business enterprise for a profit. Kay

Investment Co, LLC v Brody Realty No 1, LLC, 273 Mich

App 432, 437; 731 NW2d 777 (2006); Christy v Prestige

Builders, Inc, 94 Mich App 784, 796; 290 NW2d 395

(1980), rev’d on other grounds 415 Mich 684 (1982).

Plaintiffs purchased the condominium at a reduced

price as an investment; each contributed money toward

the down payment, did not intend to live there, and

planned to sell it for profit. Plaintiffs clearly engaged in

a joint venture, so it was appropriate to apply the

doctrine of imputed knowledge. Therefore, the trial

court did not err by declining to instruct the jury to

consider each plaintiff’s comparative negligence sepa-

rately.

Affirmed.

ARKEY

,P.J., and S

ERVITTO

and R

ONAYNE

RAUSE

,JJ.,

concurred.

2012] A

LFIERI V

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199

KIM v JPMORGAN CHASE BANK, NA

Docket No. 302528. Submitted January 5, 2012, at Detroit. Decided

January 12, 2012, at 9:00 a.m. Affirmed in part and reversed in

part, 493 Mich 98.

Euihyung Kim and In Sook Kim brought an action in the Macomb

Circuit Court against JPMorgan Chase Bank, N.A., seeking, in part,

to set aside a sheriff’s sale of their home. Plaintiffs had obtained a

loan from Washington Mutual Bank to refinance their home and

granted Washington Mutual a mortgage interest in the property to

secure the loan. The federal government subsequently closed Wash-

ington Mutual and appointed the Federal Deposit Insurance Corpo-

ration (FDIC) as receiver for the bank. Defendant acquired Washing-

ton Mutual’s loans and loan commitments pursuant to a purchase

and assumption agreement that it reached with the FDIC. After

plaintiffs defaulted on their loan payments, defendant foreclosed on

the property by advertisement and purchased the property at the

sheriff’s sale. Both plaintiffs and defendant sought summary dispo-

sition. In relevant part, plaintiffs asserted that defendant had failed

to satisfy the statutory prerequisites for foreclosure by advertisement

because it had not recorded its mortgage interest before the sheriff’s

sale. The court, Richard L. Caretti, J., concluded that defendant was

not required to record its interest before the sale and granted

summary disposition in favor of defendant. Plaintiffs appealed.

The Court of Appeals held:

The right to foreclose by advertisement is conferred by statute,

and strict compliance with the statutory provisions is required. At

the time of the foreclosure proceedings in this case, MCL 600.3204,

as amended by 2004 PA 186, provided that a party could foreclose

a mortgage by advertisement if (1) a default in a condition of the

mortgage had occurred by which the power to sell became opera-

tive, (2) an action or proceeding had not been instituted at law to

recover the debt secured by the mortgage or any part of the

mortgage; or, if an action or proceeding had been instituted, the

action or proceeding had been discontinued; or an execution on a

judgment rendered in an action or proceeding had been returned

unsatisfied, in whole or in part, (3) the mortgage containing the

power of sale had been properly recorded, and (4) the party

200 295 M

ICH

200 [Jan

foreclosing the mortgage was either the owner of the indebtedness

or of an interest in the indebtedness secured by the mortgage or

the servicing agent of the mortgage. If the party foreclosing a

mortgage by advertisement was not the original mortgagee, a

record chain of title must have existed before the date of sale

evidencing the assignment of the mortgage to the party foreclosing

the mortgage. Thus, under the plain language of MCL 600.3204(3),

defendant was required to record its interest before the date of the

sheriff’s sale. The statutory language made no exception for

mortgage interests acquired by operation of law and, in any event,

defendant did not acquire its mortgage interest by operation of

law. Rather, under federal law, the mortgage interest was acquired

by the FDIC, which later conveyed the interest to defendant

through a purchase agreement. Because defendant did not record

its interest before the sheriff’s sale, it was not statutorily autho-

rized to proceed with the sale, and the trial court erred by granting

summary disposition to defendant rather than to plaintiffs, who

were entitled to set aside the sheriff’s deed.

Reversed and remanded.

ORTGAGES —

ORECLOSURES BY

DVERTISEMENT —

TATUTORY

EQUIREMENTS —

ECORDED

NTERESTS

The right to foreclose by advertisement is conferred by statute, and

strict compliance with the statutory provisions is required; if the

party foreclosing a mortgage by advertisement is not the original

mortgagee, a record chain of title must have existed before the

date of sale evidencing the assignment of the mortgage to the party

foreclosing the mortgage; the statute makes no exception for

mortgage interests acquired by operation of law (MCL

600.3204[3]).

Christenson & Fiederlein, P.C. (by Bernhardt D.

Christenson), for plaintiffs.

Dykema Gossett PLLC (by Joseph H. Hickey, Joseph

A. Doerr, and Brandon M. Blazo) for defendant.

Before: D

ONOFRIO

,P.J., and S

TEPHENS

and R

ONAYNE

RAUSE

,JJ.

ONOFRIO

,P.J. Plaintiffs appeal as of right the trial

court’s order granting summary disposition in favor of

2012] K

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ORGAN

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ANK

201

defendant in this mortgage foreclosure dispute. Because

defendant was not authorized to proceed with the

sheriff’s sale, given that it had failed to record its

mortgage interest before the sale as required by MCL

600.3204(3), we reverse and remand.

On July 11, 2007, plaintiffs (husband and wife) ob-

tained a $615,000 loan from Washington Mutual Bank

(the Bank) to refinance their home. As security for their

indebtedness, plaintiffs granted the Bank a mortgage

interest in the property, and, on July 25, 2007, the Bank

recorded its interest with the Macomb County Register of

Deeds. On September 25, 2008, the Office of Thrift

Supervision within the United States Department of

Treasury closed the Bank and appointed the Federal

Deposit Insurance Corporation (FDIC) as receiver. Pursu-

ant to a purchase and assumption agreement between the

FDIC, as receiver, and defendant, defendant acquired all

of the Bank’s loans and loan commitments. When plain-

tiffs defaulted on their loan payments, defendant sought

to foreclose by advertisement. A notice of foreclosure was

published in the Macomb County Legal News on May 25,

2009, June 1, 2009, June 8, 2009, and June 15, 2009. On

June 26, 2009, defendant purchased the property at a

sheriff’s sale for $218,000.

On November 30, 2009, plaintiffs filed a complaint

against defendant seeking, among other relief, to set

aside the sheriff’s sale. Thereafter, defendant moved for

summary disposition; plaintiffs countered defendant’s

motion by asserting entitlement to summary disposi-

tion under MCR 2.116(I)(2). Pertinent to this appeal,

plaintiffs argued that defendant had failed to satisfy the

statutory requisites to foreclose by advertisement be-

cause it failed to record its mortgage interest before the

sheriff’s sale. Relying on an opinion of the Michigan

Attorney General, OAG, 2003-2004, No 7147, p 93

202 295 M

ICH

200 [Jan

(January 9, 2004), the trial court determined that

defendant was not required to record its interest before

the sale because it acquired its interest by operation of

law. For this and other reasons not relevant to this

appeal, the trial court granted summary disposition in

defendant’s favor.

We review de novo a trial court’s decision on a motion

for summary disposition. Coblentz v City of Novi, 475

Mich 558, 567; 719 NW2d 73 (2006). Defendant moved

for summary disposition pursuant to both MCR

2.116(C)(8) and (10). A motion under subrule (C)(8)

tests the legal sufficiency of the complaint using the

pleadings alone “to determine whether the claim is so

clearly unenforceable as a matter of law that no factual

development could establish the claim and justify recov-

ery.” Smith v Stolberg, 231 Mich App 256, 258; 586

NW2d 103 (1998). Summary disposition under subrule

(C)(10) is appropriate “if the affidavits or other docu-

mentary evidence demonstrate that there is no genuine

issue with respect to any material fact, and the moving

party is entitled to judgment as a matter of law.” Miller

v Purcell, 246 Mich App 244, 246; 631 NW2d 760 (2001).

Plaintiffs sought summary disposition pursuant to

MCR 2.116(I)(2), which is properly granted if the op-

posing party, rather than the moving party, is entitled to

judgment as a matter of law. Auto-Owners Ins Co v

Martin, 284 Mich App 427, 433; 773 NW2d 29 (2009).

Plaintiffs argue that the trial court erred by granting

summary disposition for defendant because chapter 32

of the Revised Judicature Act (RJA), MCL 600.3201 et

seq., concerning foreclosure by advertisement, required

defendant to record its mortgage interest “prior to” the

sheriff’s sale. When interpreting statutory language,

“[our] goal is to ascertain and give effect to the intent of

the Legislature by enforcing plain language as it is

2012] K

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203

written.” Detroit v Detroit Plaza Ltd Partnership, 273

Mich App 260, 276; 730 NW2d 523 (2006). Thus, our

analysis begins with the statutory language itself.

Ameritech Publishing, Inc v Dep’t of Treasury, 281 Mich

App 132, 147; 761 NW2d 470 (2008). When language is

clear and unambiguous, we must apply the terms of the

statute to the circumstances of the case, and judicial

construction is unnecessary. Dep’t of Transp v Tomkins,

481 Mich 184, 191; 749 NW2d 716 (2008).

At the time of the foreclosure proceedings at issue,

MCL 600.3204

provided, in relevant part:

(1) A party may foreclose a mortgage by advertisement

if all of the following circumstances exist:

(a) A default in a condition of the mortgage has oc-

curred, by which the power to sell became operative.

(b) An action or proceeding has not been instituted, at

law, to recover the debt secured by the mortgage or any

part of the mortgage; or, if an action or proceeding has been

instituted, the action or proceeding has been discontinued;

or an execution on a judgment rendered in an action or

proceeding has been returned unsatisfied, in whole or in

part.

properly recorded.

(d) The party foreclosing the mortgage is either the

owner of the indebtedness or of an interest in the indebted-

ness secured by the mortgage or the servicing agent of the

mortgage.

***

(3) If the party foreclosing a mortgage by advertisement

is not the original mortgagee, a record chain of title shall

As amended by 2004 PA 186. The statute was subsequently amended

by 2009 PA 29, effective July 5, 2009; 2011 PA 72, effective July 1, 2011;

and 2011 PA 301, effective December 22, 2011.

204 295 M

ICH

200 [Jan

exist prior to the date of sale under section 3216

[

]

evidencing

the assignment of the mortgage to the party foreclosing the

mortgage. [Emphasis added.]

In this case, defendant was not the original mort-

gagee and acquired its interest in the mortgage by

assignment.

Thus, pursuant to the plain language of

MCL 600.3204(3),

defendant was required to record its

interest “prior to” the date of the sheriff’s sale. Our

Supreme Court has recognized that “[t]he right to

foreclose by advertisement is conferred solely by the

statute” and that strict compliance with such statutory

provisions is required. Dohm v Haskin, 88 Mich 144,

147; 50 NW 108 (1891).

Defendant argues that the recording provision of

MCL 600.3204(3) is inapplicable because defendant

acquired its interest in the mortgage by operation of

law. The trial court granted summary disposition in

defendant’s favor on this basis. MCL 600.3204(3), how-

ever, makes no exception for mortgage interests ac-

quired “by operation of law.” “A court must not judi-

cially legislate by adding into a statute provisions that

the Legislature did not include.” In re Wayne Co Pros-

ecutor, 232 Mich App 482, 486; 591 NW2d 359 (1998).

Because the Attorney General’s opinion in OAG No

7147 did not comport with the plain statutory language

at issue here, the trial court’s reliance on the opinion

was misplaced. In pronouncing that assignments ef-

fected by operation of law need not be recorded before

MCL 600.3216 pertains to the time and place of sheriff’s foreclosure

sales.

Although defendant argues that it complied with MCL 600.3204(1)(d)

because it was the “owner of the indebtedness” before it initiated the

foreclosure, plaintiffs do not challenge that issue on appeal.

Although MCL 600.3204 has been amended since the time of the

foreclosure proceedings at issue here, the language of MCL 600.3204(3)

remains the same.

2012] K

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foreclosure by advertisement, the Attorney General was

addressing a previous version of chapter 32 of the RJA

and relied on conclusory statements in Michigan Land

Title Standards (5th ed), a publication of the Land Title

Standards Committee of the Real Property Law Section

of the State Bar of Michigan. The Attorney General’s

opinion simply did not address the statutory language

at issue in this case. The trial court’s reliance on the

Attorney General’s opinion was also misplaced because

opinions of the Attorney General are not binding on this

Court. Danse Corp v City of Madison Hts, 466 Mich 175,

182 n 6; 644 NW2d 721 (2002).

In any event, it does not appear that defendant

acquired its interest by operation of law. The FDIC was

appointed as the Bank’s receiver, and 12 USC 1821

governed the FDIC’s authority. That statute states, in

pertinent part:

The [FDIC] shall, as conservator or receiver, and by

operation of law, succeed to—

(i) all rights, titles, powers, and privileges of the insured

depository institution, and of any stockholder, member,

accountholder, depositor, officer, or director of such insti-

tution with respect to the institution and the assets of the

institution; and

(ii) title to the books, records, and assets of any previous

conservator or other legal custodian of such institution. [12

USC 1821(d)(2)(A)(i) and (ii) (emphasis added).]

The FDIC had the authority to dispose of the Bank’s

assets as set forth in 12 USC 1821(d)(2)(G), which pro-

vides:

ERGER

RANSFER OF ASSETS AND LIABILITIES

.—

(i) I

N GENERAL

.— The [FDIC] may, as conservator or

receiver—

206 295 M

ICH

200 [Jan

(I) merge the insured depository institution with an-

other insured depository institution; or

(II) subject to clause (ii), transfer any asset or liability of

the institution in default (including assets and liabilities

associated with any trust business) without any approval,

assignment, or consent with respect to such transfer.

(ii) A

PPROVAL BY APPROPRIATE

EDERAL BANKING AGENCY.—

transfer described in clause (i)(II) may be made to another

depository institution...without the approval of the ap-

propriate Federal banking agency for such institution.

Consistently with this authority, the FDIC and de-

fendant entered into the purchase and assumption

agreement, pursuant to which defendant acquired

plaintiffs’ indebtedness. The agreement states that de-

fendant, as the “Assuming Bank,” “desires to purchase

substantially all of the assets and assume all deposit

and substantially all other liabilities of the Failed

Bank....”Article III of the agreement, pertaining to

the “PURCHASE OF ASSETS,” provides, in relevant

part:

3.1 Assets Purchased by Assuming Bank. Subject to

Sections 3.5, 3.6 and 4.8, the Assuming Bank hereby

purchases from the Receiver, and the Receiver hereby sells,

assigns, transfers, conveys, and delivers to the Assuming

Bank, all right, title, and interest of the Receiver in and to

all of the assets...oftheFailed Bank....[T]he Assuming

Bank specifically purchases all mortgage servicing rights

and obligations of the Failed Bank.

Reading the agreement together with the federal statu-

tory provisions, it appears that the FDIC, as receiver,

rather than defendant, acquired the Bank’s rights,

titles, powers and privileges “by operation of law.”

Defendant simply purchased the loans from the FDIC

after they were transferred to the FDIC by operation of

law.

2012] K

IM V

JPM

ORGAN

HASE

ANK

207

Therefore, pursuant to the plain language of MCL

600.3204(3), defendant was required to record its mort-

gage interest before the sheriff’s sale. Because defen-

dant failed to do so, it was not statutorily authorized to

proceed with the sale. See MCL 600.3204(3) (“If the

party foreclosing a mortgage by advertisement is not

the original mortgagee, a record chain of title shall exist

prior to the date of sale....”(emphasis added); see also

Davenport v HSBC Bank USA, 275 Mich App 344,

347-348; 739 NW2d 383 (2007) (“Because defendant

lacked the statutory authority to foreclose, the foreclo-

sure proceedings were void ab initio.”). Accordingly, the

trial court erred by granting summary disposition for

defendant and denying summary disposition for plain-

tiffs when they were entitled to set aside the sheriff’s

deed. Given our resolution of this issue, it is unneces-

sary to address plaintiffs’ argument that the trial court

erred by prematurely disposing of their cause of action

without permitting discovery.

Reversed and remanded. We do not retain jurisdic-

tion. Plaintiffs, being the prevailing parties, may tax

costs pursuant to MCR 7.219.

TEPHENS

and R

ONAYNE

RAUSE

, JJ., concurred with

ONOFRIO

,P.J.

208 295 M

ICH

200 [Jan

YOOST v CASPARI

Docket No. 294299. Submitted February 1, 2011, at Grand Rapids.

Decided January 17, 2012, at 9:00 a.m. Leave to appeal denied, 491

Mich 944.

Wally Yoost brought an action in the Berrien Circuit Court against

Patricia E. Caspari and subsequently amended his complaint to

add Lawrence I. Frankle and Irwin C. Zalcberg. Yoost claimed that

Caspari had attempted to extort from Yoost half the value of a

residence he allegedly owned and that Frankle and Zalcberg had

encouraged her actions. He also sought damages for the inten-

tional infliction of emotional distress. Ellen Frankle, as personal

representative of the estate of Lawrence Frankle, was substituted

as a defendant. Zalcberg filed a counterclaim against Yoost and

Hank Asher, claiming that they had conspired to commit the tort

of abuse of process. Asher, a resident of Florida, moved for

summary disposition pursuant to MCR 2.116(C)(1), arguing that

the court lacked jurisdiction over him. The court, John E. DeWane,

J., denied the motion without prejudice, concluding that Michigan

had limited personal jurisdiction over Asher under MCL

600.705(2). Asher appealed by leave granted.

The Court of Appeals held:

1. A court must have personal jurisdiction over a party before

it may require the party to comply with its orders. While the

plaintiff bears the burden of establishing jurisdiction over the

defendant, he or she need only make a prima facie showing of

jurisdiction to defeat a motion for summary disposition. If the

parties present conflicting affidavits, all factual disputes are

resolved in the plaintiff’s favor and the plaintiff’s prima facie

showing is sufficient notwithstanding the contrary presentation

by the moving party. To determine whether a Michigan court may

exercise limited personal jurisdiction over a defendant, the court

must determine (1) whether jurisdiction is authorized by Michi-

gan’s long-arm statute, and (2) whether the exercise of jurisdiction

is consistent with the requirements of the Due Process Clause of

the Fourteenth Amendment.

2. The trial court erred by concluding that it had jurisdiction

over Asher under MCL 600.705(2). Under subsection (2) of Michi-

gan’s long-arm statute, MCL 600.705(2), a court may exercise

2012] Y

OOST V

ASPARI

209

limited personal jurisdiction over an individual if a relationship

exists between an individual or his or her representative and the

state arising out of doing an act or causing an act to be done, or

consequences to occur, in this state resulting in a tort action. In the

case of an alleged conspiracy, a conspirator not within the forum

state may be subject to the jurisdiction of the forum state on the

basis of the acts the coconspirator committed there. To establish a

prima facie case, a party may not merely allege that a conspiracy

exists between the defendant and another party over whom the

court has jurisdiction; rather, evidence or facts must support the

allegations of conspiracy. A prima facie case may be established

using reasonable inferences provided there is sufficient evidence

introduced to take the inferences out of the realm of conjecture;

there must be evidence that supports one theory of causation,

indicating a logical sequence of cause and effect. Zalcberg failed to

establish a prima facie case that Asher committed the tort of abuse

of process in Michigan. In his affidavit, Asher denied that he had

conspired with Yoost to file this instant action and denied that he

had directed the litigation. Yoost also averred that Asher had no

involvement with the initiation of the action. Zalcberg failed to

establish limited personal jurisdiction over Asher under the long-

arm statute because he did not produce evidence to establish a

prima facie case that Asher had conspired with Yoost to initiate

and direct the litigation. The fact that Asher had paid Yoost’s legal

fees, that during his deposition Yoost did not recall reading the

complaint filed in this case, and that Yoost discussed with Asher

the details of a prior Indiana litigation involving him and Zalcberg

at some point did not establish a prima facie case. The circum-

stantial evidence presented was mere speculation and did not

establish a logical sequence of cause and effect to reach the

conclusion that Asher controlled the litigation through Yoost.

3. Under MCL 600.705(1), a court may exercise limited per-

sonal jurisdiction over a party for actions arising out of the

transaction of any business within the state. The trial court

properly held that MCL 600.705(1) could not provide a basis for

limited personal jurisdiction. There was no evidence that Asher

contracted for an attorney to represent Yoost in this Michigan

action, and there was no prima facie evidence that Asher con-

trolled or directed this litigation that would allow the trial court to

exercise limited personal jurisdiction over Asher under MCL

600.705(1).

4. It was unnecessary to reach the due process issue because of

Zalcberg’s failure to establish a prima facie case.

210 295 M

ICH

209 [Jan

Reversed and remanded for entry of an order granting Asher

summary disposition.

1. C

OURTS —

URISDICTION —

IMITED

ERSONAL

URISDICTION —

ONG

-A

TATUTE

A court must have personal jurisdiction over a party before it may

require the party to comply with its orders; while the plaintiff

bears the burden of establishing jurisdiction over the defendant,

he or she need only make a prima facie showing of jurisdiction to

defeat a motion for summary disposition; if the parties present

conflicting affidavits, all factual disputes are resolved in the

plaintiff’s favor, and the plaintiff’s prima facie showing is suffi-

cient notwithstanding the presentation of contrary evidence by the

moving party; to determine whether a Michigan court may exer-

cise limited personal jurisdiction over a defendant, this Court must

determine (1) whether jurisdiction is authorized by Michigan’s

long-arm statute and (2) whether the exercise of jurisdiction is

consistent with the requirements of the Due Process Clause of the

Fourteenth Amendment.

2. C

OURTS —

URISDICTION —

IMITED

ERSONAL

URISDICTION —

ONG

-A

TATUTE —

ONSPIRACY —

RIMA

ACIE

VIDENCE

A Michigan court may exercise limited personal jurisdiction over an

individual if a relationship exists between an individual or his or

her representative and the state arising out of doing an act or

causing an act to be done, or consequences to occur, in the state

resulting in an action for tort; if conspiracy is alleged as the basis

for jurisdiction, a conspirator not within the forum state may be

subject to the jurisdiction of the forum state on the basis of the acts

the coconspirator committed there; to establish a prima facie case

the party may not merely allege that a conspiracy exists between

the defendant and another party over whom the court has juris-

diction; rather, evidence or facts must support the allegations of

conspiracy; a prima facie case may be established using reasonable

inferences provided there is sufficient evidence introduced to take

the inferences out of the realm of conjecture; there must be

evidence that supports one theory of causation indicating a logical

sequence of cause and effect (MCL 600.705[2]).

Smietanka, Buckleitner, Steffes & Gezon (by Anne

Buckleitner) and Jones Day (by June K. Ghezzi, Brian J.

Murray, and Erin Shencopp) for Hank Asher.

2012] Y

OOST V

ASPARI

211

Burdick & Engeln, P.C. (by Carl R. Burdick), and

Hughes, Socol, Piers, Resnick & Dym, Ltd. (by José J.

Behar, Juliet Berger-White, and Matthew J. Piers), for

Irwin C. Zalcberg.

Before: O

WENS

,P.J., and M

ARKEY

and M

ETER

,JJ.

URIAM

. Counterdefendant Hank Asher appeals

by leave granted the trial court’s order denying his

motion for summary disposition under MCR

2.116(C)(1). He asserts that the trial court erred by

ruling it that had limited jurisdiction over him under

Michigan’s long-arm statute, MCL 600.705(2), on the

basis that defendant/counterplaintiff Irwin C. Zalcberg

(Zalcberg) made a prima facie showing that Asher

conspired with plaintiff, Wally Yoost, to commit the tort

of abuse of process in Michigan. We reverse and remand

for entry of an order granting Asher summary disposi-

tion.

I. SUMMARY OF FACTS AND PROCEEDINGS

Wally Yoost and Hank Asher are both citizens and

residents of Florida. Zalcberg and defendants Patricia

Caspari and Ellen Frankle are all residents of Michigan.

Zalcberg is the sole shareholder and officer of Zalcberg

Holdings, Inc, an Illinois corporation; he is in the

business of trading equities and options from his home.

Zalcberg employed Yoost from the fall of 1999 until

early 2005. Yoost contends he worked as a trader and

also provided estate management services for Zal-

cberg’s wife, Sari. Zalcberg describes Yoost’s employ-

ment as that of personal trainer, intern, and personal

assistant. During Yoost’s employment, Yoost met Patri-

cia Caspari. They became romantically involved and

began living together in 2001, in Michigan Shores,

212 295 M

ICH

209 [Jan

Indiana. Caspari often visited Yoost at Zalcberg’s resi-

dence and became acquainted with Zalcberg. Yoost

became acquainted with Lawrence Frankle, Zalcberg’s

personal friend, business partner, and legal counsel.

Yoost claims that he often sought legal advice from

Frankle.

In 2002, Zalcberg and Sari loaned Yoost $67,000,

secured by a note and mortgage executed October 29,

2002, to purchase a house on Fogarty Street in Michi-

gan City, Indiana. Also on October 29, 2002, Caspari

quitclaimed any interest in the Fogarty property to

Yoost. Yoost asserts that Frankle drafted the quitclaim

deed as a means of protecting Yoost’s interest in the

property while he cohabitated with Caspari. Yoost and

Caspari subsequently resided in the house on Fogarty

Street and began making improvements.

Yoost alleges that in 2003 he informed Zalcberg that

he was dissatisfied with his employment. Yoost asserts

that Zalcberg enticed his continued employment by

releasing him from any further obligations on the

Fogarty property note and mortgage. Yoost continued

working for Zalcberg and stopped making payments on

the note and mortgage.

In 2004, Yoost and Caspari moved to Galien, Michi-

gan, where they lived together. They rented out the

Fogarty property. Yoost worked for Zalcberg until

March 2005. Zalcberg filed for a divorce from Sari, who

was suffering from terminal cancer, in March 2005; the

divorce was final on March 28, 2006. Zalcberg contends

that Asher, his former brother-in-law, harbored ill will

against him since he filed for the divorce from Sari.

Yoost and Caspari’s relationship also ended in Decem-

ber 2005. Yoost subsequently moved to Florida and

worked for Asher. In August 2006, Zalcberg began

foreclosure proceedings on the Fogarty property in

2012] Y

OOST V

ASPARI

213

Indiana. Yoost defended the foreclosure action by assert-

ing his claim that Zalcberg had forgiven the debt. Yoost

also asserted other defenses, including that Zalcberg had

failed to fulfill his oral promise to share certain trading

profits with Yoost. See Yoost v Zalcberg, 925 NE2d 763

(Ind App, 2010). Yoost also attempted to assert a claim

for trading profits in a suit for an accounting filed in

Illinois against Zalcberg Holdings. That case was dis-

missed shortly after the instant case was initiated on

the basis of forum non conveniens because the claim for

profits concerned conduct that had occurred in Michi-

gan and Indiana and could be joined to the already

pending litigation in Indiana to which Zalcberg, the sole

shareholder of Zalcberg Holdings, was a party.

Yoost filed the instant lawsuit against Caspari on

April 8, 2008, alleging that she had attempted to extort

a 50 percent interest in the Fogarty property by threat-

ening to report Yoost to the IRS for not paying taxes on

his income while working for Zalcberg. The complaint

also alleged intentional infliction of emotional distress.

After the discovery of numerous e-mails between Cas-

pari and Zalcberg that suggested that Zalcberg and

Frankle had encouraged Caspari’s actions, Yoost was

permitted to file an amended complaint adding Zalcberg

and Frankle as defendants. By stipulation of the par-

ties, Yoost filed a second amended complaint that sub-

stituted Ellen Frankle as the personal representative of

the estate of Lawrence Frankle.

On January 28, 2009, Zalcberg filed a counterclaim in

this case against Yoost and Asher alleging abuse of

process and conspiracy to commit abuse of process.

Zalcberg’s counterclaim alleged, in part, that “Yoost

and Asher agreed to join together in the concerted

actions of Asher paying for and, on information and

214 295 M

ICH

209 [Jan

belief, directing a series of false and fraudulent legal

claims filed in Yoost’s name and against Zalcberg in the

Indiana litigation for ulterior purposes...including

punishing, humiliating and embarrassing Zalcberg, ex-

torting from him large sums of business profits,” and

interfering with “a proper mortgage foreclosure ac-

tion.” Zalcberg also alleged that Asher and Yoost had

filed other lawsuits in Yoost’s name in Illinois and

Michigan for similar purposes and to intimidate wit-

nesses favorable to Zalcberg and obtain discovery un-

available in Indiana. In this case, Zalcberg alleges that

“Asher and Yoost, in Yoost’s name,” assert “false and

fabricated claims and seek[] grossly overreaching and

irrelevant discovery.” With respect to discovery in the

instant case, Zalcberg alleges that the trial court “de-

nied [Yoost’s] request to hold Zalcberg in contempt and

entered a protective order denying the request for

production of Zalcberg’s trading and other business

records.” Zalcberg alleged that the abuse of process

caused him “financial losses, loss of business opportu-

nities, and the expense of defending against fraudulent

claims and abusive discovery.” Last, the counterclaim

alleges that the actions of Asher and Yoost amounted to

a civil conspiracy, resulting in the damages just de-

scribed.

On May 29, 2009, Asher moved for summary dispo-

sition of Zalcberg’s counterclaim pursuant to MCR

2.116(C)(1), asserting that the trial court lacked per-

sonal jurisdiction over him because he was a resident of

Florida and had neither engaged in any business in

Michigan nor had any qualifying contacts with the

state. Asher further argued that the trial court could

not exercise limited personal jurisdiction over him

under Michigan’s long-arm statute, MCL 600.705, and

that Michigan’s exercising jurisdiction over him would

violate due process.

2012] Y

OOST V

ASPARI

215

In support of his motion, Asher appended his own

affidavit, which averred that he was a Florida resident,

had not transacted any business in Michigan, and

denied having “done or caused an act to be done, or

caused consequences to occur in Michigan, resulting in

an action for tort.” Asher acknowledged that he had

employed Yoost since 2006, that he knew of litigation

between Yoost and Zalcberg, and that he had “advanced

money to Yoost’s counsel” in Illinois and Indiana.

However, Asher averred that he had “not caused litiga-

tion in Yoost’s name to be brought or consequences to

occur in any state against Irwin Zalcberg” and that he

had “not involved [himself] in the decisions that Yoost

and his lawyers have made with regard to how to

proceed in any of the litigation between Yoost, Irwin

Zalcberg, and the others.” Asher further averred that

he “did not execute a letter of retention with Yoost’s

attorneys in any state” and that with respect to Yoost’s

legal fees, “Yoost’s lawyers in Illinois and Indiana send

work invoices to my staff in Florida for payment.”

Zalcberg filed a response opposing the motion and

submitted excerpts of Yoost’s testimony from deposi-

tions in the Indiana litigation. Zalcberg also contended

that Asher’s affidavit failed to comply with MCR

2.119(B)(1)(c) because it did not show affirmatively that

Asher, if sworn as a witness, could testify competently

to the facts stated in the affidavit. The trial court denied

the motion. The court found that it lacked general

jurisdiction over Asher and rejected the argument that

it had limited jurisdiction under MCL 600.705(1) for the

“transaction of any business within the state.” But the

trial court ruled that it had limited jurisdiction under

MCL 600.705(2), which provides limited personal juris-

diction arising out of “doing or causing an act to be

done, or consequences to occur, in the state resulting in

an action for tort.” The court explained:

216 295 M

ICH

209 [Jan

[I]f the allegations in the complaint are true, there is no

doubt that Asher caused an act to be done and conse-

quences to occur in Michigan resulting in an action in tort,

if those allegations are true that he is using this law suit for

ulterior motives.

Here there is some documentary evidence...tosupport

the position of Zalcberg that the motion should not be

granted. And that’s the deposition testimony of Yoost

regarding Asher’s payment of legal fees under what I might

describe as curious circumstances and... Yoost’s lack of

recall as to whether he even read the complaint that was

filed in this case. And I believe that...this testimony, as

well as the testimony of Yoost, that he did discuss the

details of the Indiana case with Asher could support an

inference that Yoost in this case is the puppet and Asher is

the puppeteer.

***

Moreover, with regard to the affidavit that Asher filed,

and while I’m finding that even in the face of that affidavit

there would be sufficient evidence in this case to deny the

motion based on what I had previously said, I also find that

the affidavit is defective....[MCR] 2.119(B) governs the

form of the affidavit. And it must affirmatively show that if

sworn as a witness...theaffiant can competently testify

to the facts set forth, and it also...has to be made on

personal knowledge. And it does not aver that and it does

not aver that he can confidently [sic] testify to the facts set

forth therein. So I think technically it’s deficient. But even

if it weren’t I would deny the motion on the basis of what

I have previously said.

As far as the due process...isconcerned, the allegation

and the factual support inferences drawn there from are

sufficient to invoke the Michigan long arm statute as I have

previously ruled for limited personal jurisdiction and also it

would overcome any due process arguments.

In rendering its ruling, the trial court specifically

noted that it was without prejudice because “something

2012] Y

OOST V

ASPARI

217

might happen in the future that changes my ruling.”

Thereafter, Asher filed a renewed motion for summary

disposition pursuant to MCR 2.116(C)(1), again arguing

that the court lacked personal jurisdiction over him.

Asher also asserted that Zalcberg had not stated a claim

for abuse of process, MCR 2.116(C)(8). In support,

Asher provided the court with a new affidavit that

satisfied MCR 2.119(B) and contained all the same

averments as the first affidavit. In addition, Asher also

denied that he had caused or done anything resulting in

a tort in Michigan and, specifically, that he had not done

“the acts I am alleged to have done that gave rise to this

lawsuit.” Specifically, Asher denied that he had “caused

or induced [Yoost] to sue anyone in Michigan. I did not

cause this lawsuit to be filed.”

Asher also submitted an affidavit from Yoost, which

stated that Yoost “voluntarily brought the causes of

action against Zalcberg and Caspari” and that “Asher

did not tell me to start this lawsuit, and did not tell me

to add Zalcberg as a defendant.” Yoost admitted that

Asher “advanced money to pay my legal expenses in this

litigation.” Regarding his deposition testimony con-

cerning reviewing the complaint he filed, Yoost stated

that a recent review of the complaint and amended

complaint in this case had refreshed his memory and

averred that “I reviewed both the Complaint and

Amended Complaint before they were filed in this

case.”

The trial court characterized Asher’s renewed mo-

tion as being one for reconsideration and denied the

motion, explaining that “it merely rehashes what I

ruled on before.” As for Yoost’s affidavit, the trial court

considered it an impermissible attempt to contradict his

deposition testimony. The trial court also denied Ash-

er’s motion for summary disposition under MCR

218 295 M

ICH

209 [Jan

2.116(C)(8), ruling that Zalcberg had alleged a claim of

abuse of process that was supported by “one act alleged

in furtherance of these allegations of ill--of ulterior

motive and that is the discovery process.”

On November 6, 2009, this Court granted Asher’s

application for leave to appeal, limited to the issues

raised in the application, which were whether the trial

court had erred in ruling it had limited personal juris-

diction over Asher under Michigan’s long-arm statute

and, if so, whether the requirements of due process

were satisfied. This Court also granted Asher’s motion

for a stay of discovery pending resolution of this appeal.

II. STANDARD OF REVIEW

This Court reviews de novo a trial judge’s decision on

a motion for summary disposition. Dalley v Dykema

Gossett PLLC, 287 Mich App 296, 304; 788 NW2d 679

(2010). The legal question of whether a court possesses

personal jurisdiction over a party is also reviewed de

novo. W H Froh, Inc v Domanski, 252 Mich App 220,

225; 651 NW2d 470 (2002). This case also presents the

legal question of whether the exercise of personal

jurisdiction over a nonresident such as Asher is consis-

tent with the notions of fair play and substantial justice

required by the Due Process Clause of the Fourteenth

Amendment, which we likewise review de novo. Jeffrey

v Rapid American Corp, 448 Mich 178, 184-186; 529

NW2d 644 (1995).

The parties disagree regarding the standard of re-

view applicable to Asher’s renewed motion for summary

disposition. Zalcberg notes that the trial court properly

treated the renewed motion as one for reconsideration,

which is reviewed for an abuse of discretion. Woods v

SLB Property Mgt LLC, 277 Mich App 622, 629; 750

NW2d 228 (2008). “An abuse of discretion occurs when

2012] Y

OOST V

ASPARI

219

the decision results in an outcome falling outside the

principled range of outcomes.” Woodard v Custer, 476

Mich 545, 557; 719 NW2d 842 (2006). But Asher argues

that because the court’s jurisdiction is at issue, we must

review the renewed motion de novo. Jeffrey, 448 Mich at

184. We agree that our review of the trial court’s

ultimate determination that it possessed limited per-

sonal jurisdiction over Asher is de novo.

Ordinarily, a trial court has discretion on a motion for

reconsideration to decline to consider new legal theories

or evidence that could have been presented when the

motion was initially decided. MCR 2.119(F)(3); Woods,

277 Mich App at 629-630. But the trial court also has

the discretion to give a litigant a “second chance” even

if the motion for reconsideration presents nothing new.

Hill v City of Warren, 276 Mich App 299, 306-307; 740

NW2d 706 (2007); In re Moukalled Estate, 269 Mich

App 708, 714; 714 NW2d 400 (2006). In this case, the

trial court initially found that Asher’s affidavit was

defective, but indicated that even if it were not, the

court would still rule that it had limited personal

jurisdiction. At the hearing on the renewed motion, the

trial court again ruled that Asher’s corrected affidavit

was insufficient because Asher “merely rehashes what I

ruled on before.” Likewise, the trial court considered

but rejected Yoost’s affidavit, not only because it was

untimely, but also because the court determined that its

substance merely attempted to contradict Yoost’s depo-

sition testimony. Because the trial court considered the

affidavits in making its ruling, we include them in our

review de novo of the trial court’s ultimate determina-

tion that it possessed limited personal jurisdiction over

Asher.

Moreover, the question presented is jurisdictional

and of constitutional magnitude. “[A] court is continu-

220 295 M

ICH

209 [Jan

ally obliged to question sua sponte its own jurisdiction

over a person, the subject matter of an action, or the

limits of the relief it may afford....”Yee v Shiawassee

Co Bd of Comm’rs, 251 Mich App 379, 399; 651 NW2d

756 (2002). “Before a court may obligate a party to

comply with its orders, the court must have in per-

sonam jurisdiction over the party.” Oberlies v Search-

mont Resort, Inc, 246 Mich App 424, 427; 633 NW2d 408

(2001). In light of the importance of the issue, to the

extent that the trial court failed to consider the affida-

vits of Asher and Yoost in rendering its jurisdictional

ruling, MCR 2.116(G)(5)—even though they were filed

with a motion for reconsideration—we conclude that

the trial court abused its discretion.

III. ANALYSIS

When reviewing a trial court’s decision on a motion for

summary disposition brought under MCR 2.116(C)(1), the

trial court and this Court consider the pleadings and

documentary evidence submitted by the parties in a light

most favorable to the nonmoving party. MCR 2.116(G)(5);

Oberlies, 246 Mich App at 427. “The plaintiff bears the

burden of establishing jurisdiction over the defendant, but

need only make a prima facie showing of jurisdiction to

defeat a motion for summary disposition.” Jeffrey, 448

Mich at 184. The plaintiff’s complaint must be accepted as

true unless specifically contradicted by affidavits or other

evidence submitted by the parties. Patterson v Kleiman,

447 Mich 429, 434 n 6; 526 NW2d 879 (1994). Thus, when

allegations in the pleadings are contradicted by documen-

tary evidence, the plaintiff may not rest on mere allega-

tions but must produce admissible evidence of his or her

prima facie case establishing jurisdiction. MCR

2.116(G)(6); Mozdy v Lopez, 197 Mich App 356, 361; 494

NW2d 866 (1992). The protocol for reviewing the jurisdic-

2012] Y

OOST V

ASPARI

221

tional issues presented here is summarized well in Will-

iams v Bowman Livestock Equip Co, 927 F2d 1128,

1130-1131 (CA 10, 1991),

quoting Behagen v Amateur

Basketball Ass’n, 744 F2d 731, 733 (CA 10, 1984):

“The plaintiff bears the burden of establishing personal

jurisdiction over the defendant. Prior to trial, however,

when a motion to dismiss for lack of jurisdiction is decided

on the basis of affidavits and other written materials, the

plaintiff need only make a prima facie showing. The

allegations in the complaint must be taken as true to the

extent they are uncontroverted by the defendant’s affida-

vits. If the parties present conflicting affidavits, all factual

disputes are resolved in the plaintiff’s favor, and the

plaintiff’s prima facie showing is sufficient notwithstand-

ing the contrary presentation by the moving party.”

When examining whether a Michigan court may

exercise limited personal jurisdiction over a defendant,

this Court employs a two-step analysis. Jeffrey, 448

Mich at 184-185; Domanski, 252 Mich App at 226.

“First, this Court ascertains whether jurisdiction is

authorized by Michigan’s long-arm statute. Second, this

Court determines if the exercise of jurisdiction is con-

sistent with the requirements of the Due Process

Clause of the Fourteenth Amendment.” Electrolines,

Inc v Prudential Assurance Co, Ltd, 260 Mich App 144,

167; 677 NW2d 874 (2003) (citations omitted). Both

prongs of this analysis must be satisfied for a Michigan

court to properly exercise limited personal jurisdiction

over a nonresident. See Green v Wilson, 455 Mich 342,

350-351; 565 NW2d 813 (1997) (K

ELLY

, J.); id.at361

ALLETT

, C.J.). “Long-arm statutes establish the na-

ture, character, and types of contacts that must exist for

purposes of exercising personal jurisdiction. Due pro-

Williams and Mozdy are both cited by our Supreme Court in Jeffrey,

448 Mich at 184, when discussing the appropriate standard of review of

jurisdictional issues.

222 295 M

ICH

209 [Jan

cess, on the other hand, restricts permissible long-arm

jurisdiction by defining the quality of contacts neces-

sary to justify personal jurisdiction under the constitu-

tion.” Id. at 348.

In Mozdy, 197 Mich App at 359, this Court stated the

three-part test for determining if exercising limited

personal jurisdiction comports with due process:

First, the defendant must have purposefully availed

itself of the privilege of conducting activities in Michigan,

thus invoking the benefits and protections of this state’s

laws. Second, the cause of action must arise from the

defendant’s activities in the state. Third, the defendant’s

activities must be substantially connected with Michigan to

make the exercise of jurisdiction over the defendant rea-

sonable.

In the present case, we need not consider whether the

exercise of limited personal jurisdiction over Asher

comports with due process because we conclude that

Zalcberg failed to establish a prima facie case against

Asher that satisfied MCL 600.705. Consequently, the

trial court erred by not granting Asher’s motion for

summary disposition under MCR 2.116(C)(1).

The trial court determined that it had limited per-

sonal jurisdiction over Asher under MCL 600.705(2),

which provides:

The existence of any of the following relationships

between an individual or his agent and the state shall

constitute a sufficient basis of jurisdiction to enable a court

of record of this state to exercise limited personal jurisdic-

tion over the individual and to enable the court to render

personal judgments against the individual or his represen-

tative arising out of an act which creates any of the

following relationships:

***

2012] Y

OOST V

ASPARI

223

(2) The doing or causing an act to be done, or conse-

quences to occur, in the state resulting in an action for tort.

The trial court’s ruling that Zalcberg’s counterclaim

satisfied MCL 600.705(2) was based on two premises:

(1) Zalcberg’s counterclaim alleged a prima facie case

that Yoost committed the tort of abuse of process in

Michigan and (2) there was evidence to support an

inference that Asher controlled this litigation through

Yoost, i.e., in the trial court’s words, that “Yoost in this

case is the puppet and Asher is the puppeteer.” Our

review de novo of the pleadings and evidence submitted

by the parties convinces us that Zalcberg failed to

establish a prima facie case that Asher committed the

tort of abuse of process in Michigan. Moreover, Zalcberg

failed to present evidence to establish a prima facie case

that Asher directed, controlled, or conspired with Yoost

regarding this litigation or its conduct.

A. CONSPIRACY AND CAUSATION

Zalcberg failed to establish a prima facie case that

Asher conspired with Yoost to do an act, or otherwise

caused “an act to be done, or consequences to occur,” in

Michigan resulting in an action for tort.

MCL

600.705(2).

Under the “conspiracy theory” of jurisdiction, a

conspirator not within the forum state may neverthe-

less be subject to the jurisdiction of the forum state on

the basis of the acts a coconspirator committed there.

Chrysler Corp v Fedders Corp, 643 F2d 1229, 1236-1237

(CA 6, 1981). The rationale for this rule is that when

one member of a conspiracy “inflicts an actionable

We note there is no civil action for conspiracy alone; there must be an

underlying actionable tort. Earp v Detroit, 16 Mich App 271, 275; 167

NW2d 841 (1969).

224 295 M

ICH

209 [Jan

wrong in one jurisdiction, the other member should

not be allowed to escape being sued there by hiding in

another jurisdiction.” Stauffacher v Bennett, 969 F2d

455, 459 (CA 7, 1992). But mere allegations that a

conspiracy exists between the defendant and another

over whom the court has jurisdiction are insufficient.

Id. at 460; Chrysler Corp, 643 F2d at 1236-1237.

Rather, evidence or facts must support the allegations

of conspiracy. Chrysler Corp, 643 F2d at 1236-1237;

Ecclesiastical Order of the Ism of Am, Inc v Chasin,

845 F2d 113, 116 (CA 6, 1988); Coronet Dev Co v FSW,

Inc, 3 Mich App 364, 369; 142 NW2d 499 (1966).

In this case, Asher in his affidavits denied Zalcberg’s

allegations of conspiring with Yoost and also denied

directing this litigation. Yoost also averred that he

“voluntarily brought the causes of action against

Zalcberg and Caspari” and that “Asher did not tell me

to start this lawsuit, and did not tell me to add

Zalcberg as a defendant.”

Because Zalcberg’s allega-

tions that Asher conspired by Yoost or directed this

lawsuit were contradicted by evidence, Zalcberg was

required to produce evidence to establish a prima facie

case that Asher, in fact, conspired with Yoost or other-

wise directed this litigation in order to meet his burden

of establishing limited personal jurisdiction under MCL

600.705(2). Jeffrey, 448 Mich at 184; Mozdy, 197 Mich

at 361.

A “prima facie case” is defined in Black’s Law Dic-

tionary (5th ed) as “ ‘one that will entitle [a] party to

recover if no evidence to contrary is offered by [the]

opposite party.’ ” Dep’t of Environmental Quality v

Even if one paragraph of Yoost’s affidavit attempted to contradict

his deposition testimony, the remaining parts of the affidavit are not

thereby invalidated. Further, remembering a fact at a later time does

not contradict earlier lack of recall. It may, however, affect credibility.

2012] Y

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ASPARI

225

Worth Twp, 289 Mich App 414, 419; 808 NW2d 260

(2010). Similarly, our Supreme Court has defined a prima

facie case as “ ‘[a] case made out by proper and sufficient

testimony; one which is established by sufficient evidence,

and can be overthrown only by rebutting evidence ad-

duced on the other side.’ ” People v Licavoli, 264 Mich

643, 653; 250 NW 520 (1933) (citations omitted). “Prima

facie evidence” is defined as “ ‘[e]vidence good and suffi-

cient on its face...toestablish a given fact, or the group

or chain of facts constituting the party’s claim or defense,

and which if not rebutted or contradicted, will remain

sufficient.’ ” Worth Twp, 289 Mich App at 419, quoting

Black’s Law Dictionary (5th ed).

While Asher and Yoost submitted affidavits contradict-

ing Zalcberg’s claims regarding Asher’s directing this

litigation, factual disputes must be resolved in Zalcberg’s

favor on Asher’s motion for summary disposition under

MCR 2.116(C)(1). Jeffrey, 448 Mich at 184. Zalcberg need

only present evidence sufficient to establish prima facie

his jurisdictional claims “ ‘notwithstanding the contrary

presentation by the moving party.’ ” Williams, 927 F2d at

1131, quoting Behagen, 744 F2d at 733. A party may

establish a case with circumstantial evidence. Karbel v

Comerica Bank, 247 Mich App 90, 97; 635 NW2d 69

(2001). And a prima facie case may be established using

reasonable inferences provided sufficient evidence is in-

troduced to take the inferences out of the realm of

conjecture. Berryman v Kmart Corp, 193 Mich App 88, 92;

483 NW2d 642 (1992).

The trial court found a prima facie case for Zalcberg’s

jurisdictional claims on the basis of Yoost’s testimony in

depositions taken as part of the Indiana litigation that

provided evidence of three facts: (1) Asher paid Yoost’s

legal fees under “curious circumstances,” (2) Yoost did not

recall during his deposition reading the complaint filed in

226 295 M

ICH

209 [Jan

this case, and (3) Yoost at some point discussed the details

of the Indiana case with Asher. These three facts either

individually or combined do not provide a logical chain of

inference to conclude that Asher in fact conspired with

Yoost or otherwise directed this litigation. That Asher paid

Yoost’s legal fees does not establish that Asher exercised

control over Yoost in this litigation. Asher could have done

so because he liked and wanted to help Yoost or because he

disliked Zalcberg. But the mere fact that Asher paid

Yoost’s litigation expenses does not logically lead to the

conclusion that Asher controlled Yoost or the instant

litigation. Yoost’s poor memory or failure to read the

complaint in this case, even viewed in the light most

favorable to Zalcberg, does not bridge the gap to the

jurisdictionally required showing that Asher controlled

Yoost and through him this litigation. The fact that Yoost

discussed the Indiana litigation with Asher provides even

less evidence that Asher controlled this litigation through

Yoost. Moreover, under Michigan’s rules of professional

conduct, Yoost’s attorneys could not ethically have permit-

ted Asher to control Yoost’s litigation. MRPC 1.8(f) pro-

vides:

A lawyer shall not accept compensation for representing

a client from one other than the client unless:

(1) the client consents after consultation;

(2) there is no interference with the lawyer’s indepen-

dence of professional judgment or with the client-lawyer

relationship; and

(3) information relating to representation of a client is

protected....”

In short, a gap that can only be filled with specu-

lation exists with respect to the three facts that the

trial court relied on to reach the conclusion that

Asher controlled this litigation through Yoost, a con-

clusion that is necessary to obtain limited personal

2012] Y

OOST V

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227

jurisdiction over Asher. “To be adequate, a plaintiff’s

circumstantial proof must facilitate reasonable infer-

ences...,notmere speculation.” Skinner v Square D

Co, 445 Mich 153, 164; 516 NW2d 475 (1994). Ex-

plaining the difference between reasonable inference

and speculation and conjecture, the Skinner Court,

id., quoted Kaminski v Grand TrunkWRCo, 347

Mich 417, 422; 79 NW2d 899 (1956):

“[A] conjecture is simply an explanation consistent

with known facts or conditions, but not deducible from

them as a reasonable inference. There may be 2 or more

plausible explanations as to how an event happened or

what produced it; yet, if the evidence is without selective

application to any 1 of them, they remain conjectures

only. On the other hand, if there is evidence which points

to any 1 theory of causation, indicating a logical sequence

of cause and effect, then there is a juridical basis for such

a determination, notwithstanding the existence of other

plausible theories with or without support in the evi-

dence.” [Emphasis added; see also Karbel, 247 Mich App

at 98.]

Here, multiple explanations exist for the facts the

trial court relied on to assert jurisdiction. Evidence is

simply lacking to establish “a logical sequence of

cause and effect” to reach the conclusion that Asher

controlled this litigation through Yoost to the extent

that “Yoost in this case is the puppet and Asher is the

puppeteer.” Rather, this conclusion is reached only

through speculation and conjecture, which are insuf-

ficient to establish a prima facie case for limited

personal jurisdiction over Asher. Jeffrey, 448 Mich at

184; see Berryman, 193 Mich App at 92.

B. THE TRANSACTION OF ANY BUSINESS WITHIN THE STATE

In the trial court, Zalcberg asserted that the exercise

of limited personal jurisdiction over Asher was also

228 295 M

ICH

209 [Jan

proper under MCL 600.705(1) for actions “arising out

of” the “transaction of any business within the state.”

The trial court rejected this basis for asserting jurisdic-

tion because “payment of the legal fees, which may

ultimately go to lawyers in Michigan who represent

Yoost, is not a sufficient tie to Michigan to cause the

defendant Asher to submit himself to the jurisdiction of

this state.” Zalcberg did not file a cross-appeal regard-

ing the trial court’s rejection of this basis for long-arm

jurisdiction. When leave to appeal is granted, unless the

Court directs otherwise, the appeal is limited to the

issues raised in the application. MCR 7.205(D)(4); De-

troit Free Press, Inc v Southfield, 269 Mich App 275,

290; 713 NW2d 28 (2005). Zalcberg, however, asserts

that MCL 600.705(1) provides an alternative basis for

affirming the trial court. See Middlebrooks v Wayne Co,

446 Mich 151, 166 n 41; 521 NW2d 774 (1994). We

conclude that the trial court correctly ruled that MCL

600.705(1) does not provide a basis for limited personal

jurisdiction over Asher.

The word “any” within the statute has been inter-

preted to “include[] ‘each’ and ‘every.’ It comprehends

‘the slightest.’ ” Sifers v Horen, 385 Mich 195, 199 n 2;

188 NW2d 623 (1971) (citations omitted). In Sifers, the

Michigan plaintiff negotiated for the services of a Ken-

tucky attorney, while the attorney was in Michigan, to

bring a lawsuit in Kentucky. The plaintiff later sued the

Kentucky attorney in Michigan for malpractice. The

Sifers Court held that the negotiations in Michigan

resulting in the defendant’s retainer were within the

meaning of the transaction of any business. Id. at 199.

In Alan B McPheron, Inc v Koning, 125 Mich App 325;

336 NW2d 474 (1983), the defendant Michigan resident

sent his agent to Oklahoma to sell an airplane. When the

sales negotiations broke down, the agent tried to take the

2012] Y

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ASPARI

229

plane back to Michigan but was arrested. The defendant

then hired the plaintiff, an Oklahoma attorney, to repre-

sent the defendant’s agent. When the defendant failed to

pay for all the legal services provided, the plaintiff ob-

tained a default judgment against him in Oklahoma and

sought to enforce the judgment in Michigan. Id. at 327-

328. This Court held that because the defendant sought

and contracted for the plaintiff’s services to be performed

in Oklahoma, “it is reasonable to conclude that he ought

to have been prepared to travel to Oklahoma to challenge

these services if he felt they were rendered improperly.”

Id. at 331. This Court opined that the Oklahoma court

had properly exercised jurisdiction over the defendant

under its long-arm statute, which was similar to MCL

600.705(1), and that due process was also satisfied. Id.at

331-334.

Sifers and McPheron are the main cases on which

Zalcberg relies for his alternative argument that the

trial court’s jurisdictional ruling should be affirmed

under MCL 600.705(1). We find each case clearly dis-

tinguishable from the facts as established by the evi-

dence submitted on Asher’s motion for summary dispo-

sition. In each case, a resident of one state contracted

with an attorney in another state for legal services. In

each case, the subsequent legal action arose out of the

contract for legal services and was by or against the

attorney who had performed the legal services. In this

case, there is no evidence that Asher contracted for the

services of any attorney to represent Yoost in Michigan.

Although Asher admits making payments on Yoost’s

legal fees outside Michigan, Asher avers that he did not

contract for the services and did not control the litiga-

tion. Additionally, Zalcberg’s counterclaim is not an

action between the parties to the legal services contract

as in Sifers and McPheron. Finally, for the reasons

stated in part III(A) of this opinion, even if this litiga-

230 295 M

ICH

209 [Jan

tion constitutes the “transaction of any business within

the state,” there was no prima facie evidence that Asher

controlled or directed the litigation to permit the trial

court to exercise limited personal jurisdiction over

Asher under MCL 600.705(1). Consequently, we con-

clude the trial court correctly ruled that this subsection

did not authorize it to exercise limited personal juris-

diction over Asher.

IV. CONCLUSION

For these reasons, we conclude that the trial court

erred by ruling that it could exercise limited personal

jurisdiction over Asher under MCL 600.705(2). We also

conclude that MCL 600.705(1) does not provide an

alternative basis to affirm the trial court’s jurisdictional

ruling. Because Zalcberg did not establish a prima facie

case for the exercise of limited personal jurisdiction

over Asher under MCL 600.705, the trial court erred by

not granting his motion for summary disposition under

MCR 2.116(C)(1). Also, because Michigan’s long-arm

statute has not been satisfied, we need not consider

whether the exercise of limited personal jurisdiction

over Asher comports with the requirements of due

process. See Jeffrey, 448 Mich 184-185; Oberlies, 246

Mich App at 427-428, 432. We therefore reverse and

remand this matter for entry of an order granting Asher

summary disposition. We do not retain jurisdiction. As

the prevailing party, Asher may tax costs pursuant to

MCR 7.219.

WENS

,P.J., and M

ARKEY

and M

ETER

, JJ., concurred.

2012] Y

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231

WOODBURY v RES-CARE PREMIER, INC

Docket No. 297819. Submitted January 11, 2012, at Lansing. Decided

January 19, 2012, at 9:00 a.m. Leave to appeal granted, 493 Mich

881.

Scott and Jeanne Woodbury and Center Woods, Inc., brought an

action in October 2009 in the Saginaw Circuit Court against

Res-Care Premier, Inc., and Ruth Averill, alleging breach of

certain building and use restrictions regarding property in the

Center Woods Subdivision as a result of Averill’s September 2009

sale of her property to Res-Care. Plaintiffs alleged that Averill

violated the provisions requiring the noncommercial use of the

property and that Center Woods be provided the right of first

refusal to purchase the property. Plaintiffs requested a temporary

restraining order, preliminary injunction, and permanent injunc-

tion. Res-Care responded, claiming that Center Woods had waived

the right to enforce the right of first refusal, that Center Woods

had no standing, and that the articles of agreement containing the

restrictions were discriminatory and, therefore, invalid. Center

Woods, which was incorporated as a nonprofit corporation in 1941,

had been automatically dissolved under MCL 450.2922 in 1993

when it failed to file its annual report and pay the annual filing fee

for a second consecutive year. On October 13, 2009, the same day

it filed its action, Center Woods filed renewal-of-existence papers

with the state under MCL 450.2925. The court, William A. Crane,

J., granted a preliminary injunction preventing Res-Care from

occupying the property. The court then granted summary disposi-

tion to plaintiffs and voided the sale between Averill and Res-Care.

Res-Care moved for rehearing, reconsideration, or clarification of

the judgment related to its unaddressed discrimination counter-

claims. The court entered an amended judgment that expressly

stated that the judgment rendered the counterclaims moot and

that judgment was entered without prejudice to Res-Care’s right

to renew those claims. Res-Care appealed.

The Court of Appeals held:

1. The provision in the articles of agreement regarding the

right of first refusal required notice of a proposed sale only to

Center Woods, Inc. The trial court erred by holding that Averill

232 295 M

ICH

232 [Jan

should have provided notice to the other homeowners or a home-

owners’ association.

2. There is no question that Center Woods, Inc., did not exist at

the time of the sale. It is not reasonable to require persons to give

notice to a nonexistent corporation on the contingent basis that at

some unknown time in the future an unknown person might elect

to reinstate the corporation. Simply because someone can rein-

state a corporation under MCL 450.2925 does not mean that

anyone will, and the law should not require people to assume

otherwise. Averill had no obligation to provide notice of the

pending sale to Center Woods, Inc., a nonexistent corporation at

the time of the sale. The order granting summary disposition to

plaintiffs is reversed and the case is remanded to the trial court for

the entry of an order granting summary disposition to defendants.

Reversed and remanded.

Cobert, Shaw, Essad & Tucciarone, P.L.L.C. (by

Joshua O. Booth), and Shinners & Cook, P.C. (by

Thomas A. Basil, Jr.), for Scott and Jeanne Woodbury

and Center Woods, Inc.

Miller, Canfield, Paddock and Stone, PLC (by LeRoy

L. Asher, Jr., Carolyn P. Cary, and Joseph G. Vernon), for

Res-Care Premier, Inc.

Before: S

AWYER

,P.J., and W

HITBECK

and M. J. K

ELLY

JJ.

URIAM

. In this property action, defendant Res-

Care Premier, Inc., appeals as of right the trial court’s

grant of summary disposition to plaintiffs, Scott and

Jeanne Woodbury and Center Woods, Inc., after con-

cluding that Center Woods had the right of first refusal

to purchase the property known as #2 Center Woods

and that defendant Ruth Averill failed to provide suffi-

cient notice of the sale to Center Woods, as certain

building and use restrictions require. The trial court’s

decision thereby voided the sale between Averill and

Res-Care. We reverse and remand.

2012] W

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233

I. FACTS

A. THE PARTIES

Res-Care is a state-licensed operator of adult-foster-

care facilities. Its name is short for “Respect and Care,”

and its mission is “to assist people to reach their highest

level of independence.” Res-Care provides rehabilita-

tion and residential services to individuals with mental

or developmental disabilities.

Defendant Ruth Averill purchased the property com-

monly known as #2 Center Woods (the property) in

1991 and subsequently sold it to Res-Care on Septem-

ber 25, 2009. That sale is at the heart of this litigation.

Plaintiffs Scott and Jeanne Woodbury are the owners

of the property commonly known as #3 Center Woods,

which is next door to the property.

Plaintiff Center Woods was incorporated as a non-

profit corporation in 1941. It was automatically dis-

solved under MCL 450.2922 in 1993 when it failed to

file its annual report and failed to pay the annual filing

fee for the second consecutive year. On October 13,

2009, the same day this action was filed, Center Woods

filed renewal-of-existence papers with the state of

Michigan.

B. THE ARTICLES OF AGREEMENT

In 1941, articles of agreement were entered into by

the owners of the properties in the Center Woods

Subdivision and filed in the property records. The

articles provided, in relevant part, as follows:

NOW, THEREFORE, IT IS AGREED by and between

the parties hereto that all land in Center Woods, a subdi-

vision...consisting of Lots One (1) to Twelve (12), inclu-

sive, shall be subject to the following restrictions and

covenants:

234 295 M

ICH

232 [Jan

These covenants are to run with the land and shall be

binding on all parties and all persons claiming under them

and shall remain in full force and effect until such time as

they shall be modified or repealed by agreement entered

into by the owners of at least seventy-five per cent (75%) of

the lots contained in said plat.

If the parties hereto, or any of them, or their heirs or

assigns shall violate, or attempt to violate, any of the

covenants herein, it shall be lawful for any other person or

persons owning any real property situated in Center Woods

Subdivision to prosecute any proceedings at law or in

equity against the person or persons violating, or attempt-

ing to violate, any such covenant.

Invalidation of any one of these covenants, or any part

of any covenant, by judgment or court order shall in no way

invalidate any of the other provisions which shall remain in

full force and effect.

1. Center Woods shall be maintained as residential

property only and no property shall be used for any trade,

commercial, industrial, or any other use whether or not

herein specified, except for single family dwellings.

***

12. All property owners in Center Woods shall be mem-

bers of Center Woods, Inc., a non-profit corporation, orga-

nized to provide for the improvement and maintenance of

Center Woods as a desirable residential community.

***

15. No property in Center Woods may be sold, assigned,

mortgaged or conveyed to or let, leased, rented or occupied

by Hewbrews, [sic] or by any persons other than those of

the Caucasian (white) race.

16. No property in Center Woods shall be sold without

first giving Center Woods, Inc. thirty (30) days notice

thereof and first opportunity to purchase said property at a

price equal to a bonafide offer.

2012] W

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235

C. THE TRANSACTION

On July 10, 2009, Averill entered into a contract with

Moshen H. Zadeh for the purchase of the property for

$170,000. Closing was set for August 15, 2009. Zadeh

was an investor of Res-Care. On July 20, 2009, Averill

sent a memo addressed to Jack Short, the head of the

homeowner’s association, and “Center Woods Associa-

tion,” which provided:

My home is scheduled for “closing” of sale: August 14,

2009[.] And I expect to [be] moving on that date.

Since I have NOT received notification of three previous

sales in The Woods...I assume this stipulation is no

longer necessary.

I do not know the buyer,...myrealtor is Mary Klein,

and the buyer’s realtor is Keller Wms (Flint office)[.]

Thank you for all your TLC of The Woods...ithasbeen

a delightful place to live for eight years.

No one contacted Averill or her realtor regarding the

pending sale. Zadeh was unable to obtain financing, so

Res-Care decided to purchase the property on its own

without Zadeh under the exact same terms as the Zadeh

offer. Closing was scheduled to be on or before Septem-

ber 30, 2009, and actually occurred on September 25,

2009.

On October 7, 2009, Averill sent another memo to

Short and Center Woods Association, but this time also

addressed it to Suzanne Short and the Woodburys. The

memo provided, in relevant part:

Subject: The sale of my home was delayed until Septem-

ber 18th[.] I am scheduled to move Monday, October 12th.

New Owner: ResCare Premier, Inc.....

Local Manager: Laura L. Smith....

236 295 M

ICH

232 [Jan

When the identity of the buyers was revealed I talked

personally with both Ron Lee and Tim Braun regarding

zoning. They told me that “group homes” are exempt from

the law and cannot be refused or discriminated from a

neighborhood.

Tim Braun has enacted a Saginaw Township registry of

rental homes to keep aware of the percentage of non-

owners. I have sent him the names of the people who are

responsible for the property and the maximum of six

residents, who will have 24[-]hour supervision. They must

comply with State mandated safety measures which have

been installed.

During inspection, Laura emphasized that they expect

to be “good neighbors”, and plan to invite neighbors to an

open house when they are settled. Best Wishes.

When Jeanne Woodbury received the letter, she re-

searched Res-Care on the Internet. Concerned that the

home would be occupied by “troubled youth/sex offend-

ers,” she sent an e-mail to Smith at the address pro-

vided in the second notice. Two days later, an “emer-

gent” meeting of the homeowners in Center Woods and

a board of directors meeting for Center Woods were

held. Averill was not invited. At the meeting, the board

was authorized to take steps to prevent “this improper

use,” and the board authorized Woodbury to be “a

committee of one, to meet with” a real estate specialist

attorney, with legal action expected to be filed “within a

day or two.”

On October 12, 2009, the board’s counsel sent a letter

to Averill claiming that she violated paragraph 16 of the

articles of agreement and requesting the details of the

transaction “so [Center Woods] may consider exercising

its right to purchase the property.” The letter also

stated:

This correspondence also confirms that subsequent to

your July 20, 2009 correspondence to Jack Short on your

2012] W

OODBURY V

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237

previous potential sale, which did not ultimately close, you

were instructed that the Building and Use Restrictions

were still in effect and you were required to provide Center

Woods, Inc. formal notice and the terms and conditions of

the bonafide offer.

This is apparently a reference to a conversation that

Short testified that he had with Averill. According to

Short, Averill called him and asked “if she had to do the

right of first refusal,” and he told her “that if it was me

and I was selling my house, I would want to make sure

that everything was done properly.” Averill testified

that this conversation never occurred and that she

never spoke with Short.

The following day, on October 13, 2009, plaintiffs

filed suit against Res-Care and Averill, alleging two

counts of breach of “building and use restrictions,” one

for the right of first refusal and one for noncommercial

use, and requesting a permanent injunction preventing

Res-Care from occupying the property. Plaintiffs also

requested a temporary restraining order and prelimi-

nary injunction. Res-Care filed an answer that included

several affirmative defenses, including that Center

Woods waived the right to enforce the right of first

refusal, that Center Woods’s failure to maintain corpo-

rate status deprived it of standing, that the articles of

agreement were clearly discriminatory and, therefore,

invalid under state and federal law, and that Res-Care’s

use of the property was a valid residential use not in

violation of any restrictions, even assuming that they

were enforceable.

On November 9, 2009, the trial court held a hearing

on the request for a preliminary injunction. Res-Care

argued that, although it was a for-profit company, it was

providing the home through a contract with the county,

which rendered it essentially a not-for-profit entity. In

238 295 M

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232 [Jan

addition, counsel stated that the residents intending to

occupy the property “have no criminal record. They

have no history of violence. They have no history of

sexually predatory behavior, which is apparently

what’s, in part, driving this.” Counsel also indicated

that Res-Care had provided the Woodburys with an

opportunity to “sit down and meet and talk” and it had

provided some information about the residents without

violating their right to privacy. However, the Woodburys

elected to get counsel and file suit. Counsel also noted a

long history of cases that have held that group homes

were not considered a commercial use of residential

property.

Ultimately, the trial court granted the preliminary

injunction preventing Res-Care from occupying the

property. However, the trial court indicated that it

would grant an expedited trial. Res-Care then filed

counterclaims against plaintiffs, claiming tortious in-

terference with a contract, abuse of process, and viola-

tions of the federal Fair Housing Act

and Americans

with Disabilities Act.

Res-Care also objected to the

form of the preliminary injunction order.

At the hearing on Res-Care’s objections, the trial

court indicated that it would set trial for January 5 and

that summary disposition motions would be heard on

December 21 and had to be filed by December 14.

Although it is not entirely clear, it appears that the trial

date related solely to plaintiffs’ complaint, but there

was an indication that the trial court would also con-

sider Res-Care’s motion for summary disposition on its

counterclaims. An amended preliminary injunction or-

der was entered that also included a scheduling order

42 USC 3601 et seq.

42 USC 12101 et seq.

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setting forth these dates and reiterating that the trial

was to address plaintiffs’ complaint only.

Res-Care filed its first motion for summary disposi-

tion, alleging plaintiffs’ claims failed because the

“building and use restrictions” were extinguished un-

der the marketable record title act (MRTA),

and be-

cause Averill was not required to provide notice to

Center Woods because it was a nonexistent entity.

Averill then moved for summary disposition, reiterating

the MRTA and dissolution arguments from Res-Care,

but also arguing that she had complied with the notice

requirement. Res-Care filed a second motion for sum-

mary disposition, alleging that plaintiffs’ claim regard-

ing the right of first refusal failed because the only basis

for enforcement was discriminatory and, therefore,

unlawful, and that the count regarding commercial use

failed because a group home is not considered a com-

mercial use.

Plaintiffs also moved for summary disposition, argu-

ing that Averill and Res-Care both had constructive and

actual knowledge of the “building and use restrictions”

and that Center Woods had acted within 30 days of

when it received notice of the sale. They noted that

there were some factual disputes, but contended that

none of them prevented summary disposition. They

argued that the lack of 30 days’ notice and a failure to

include a selling price rendered Averill’s notice ineffec-

tive as a matter of law. They argued that the discrimi-

natory restriction was severable and, therefore, did not

automatically render the right of first refusal invalid.

Finally, they argued that Center Woods was statutorily

deemed to be in existence at the time of the sale and,

thus, was entitled to notice.

MCL 565.101 et seq.

240 295 M

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232 [Jan

Plaintiffs also filed a combined response to defen-

dants’ three motions for summary disposition, reiterat-

ing most of the same arguments. However, they pro-

vided no evidence or argument to refute Res-Care’s

allegations that discriminatory intent voided the right

to exercise the right of first refusal.

Res-Care filed a response to plaintiffs’ motion for

summary disposition and argued that the right of first

refusal expired for failure to contain a definite time

period and that plaintiffs had waived their right to

notice because of their failure to enforce that right.

Res-Care also noted that plaintiffs had failed to argue

anything regarding the commercial use of the property

and contended that plaintiffs had abandoned that argu-

ment. The hearing on the parties’ motions took place

December 22, 2009.

The trial court issued its opinion in February 2010. It

began by indicating that it was not addressing any

civil-rights claims, but was only addressing the enforce-

ability of the 30-day-notice provision, the propriety of

the notice given, and the related issue of Center

Woods’s corporate status. It concluded that the MRTA

did not extinguish the “building and use restrictions”

contained in the articles of agreement because they had

been sufficiently rerecorded by reference in the deeds

found in Averill’s chain of title. It concluded that the

right of first refusal had not expired and that any

determination of a time period for the duration of the

right would be arbitrary and capricious and that the

only unreasonable time period was that suggested by

defendants—the lifetime of the signatories.

The trial court acknowledged that the notice provi-

sion had not been enforced, but found that that was not

an abandonment of the right, but simply proof that

there were times plaintiffs elected not to exercise their

2012] W

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241

right of enforcement. The trial court concluded that the

notice provided by Averill was insufficient because it

was not for the sale to Res-Care, but for the proposed

sale to Zadeh, and that 30 days’ notice was not given.

The trial court concluded that Center Woods’s status as

a corporation did not excuse Averill’s failure to give

notice, if not to the individual homeowners, then to

someone involved with the day-to-day operations of

Center Woods.

Finally, the trial court concluded that any discussion

of defendants’ discrimination claims was premature

because the right of first refusal had not yet been

exercised and it was possible for plaintiffs to exercise

the right in a nondiscriminatory manner. The trial

court set aside the sale between Res-Care and Averill

and ordered that, if they renewed their agreement, they

had to provide 30-days’ notice to Center Woods, who

would have 30 days from receipt of the notice to exercise

its right of first refusal.

On March 8, 2010, the parties attended a hearing

regarding outstanding issues in order to obtain a final

judgment. One of the issues was whether there was an

agreement that the trial court had not decided Res-

Care’s discrimination counterclaims because they were

moot and that they could be “renewed.” The trial court

entered a judgment for plaintiffs pursuant to its opinion

and order the same day, but did not address the coun-

terclaims issue.

Res-Care then moved for rehearing, reconsideration,

or clarification of the judgment related to its unad-

dressed discrimination counterclaims. On April 12,

2010, the trial court entered an amended judgment that

expressly stated that the judgment rendered the coun-

terclaims moot and that the judgment was entered

242 295 M

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232 [Jan

without prejudice to Res-Care’s right to renew those

claims. Res-Care now appeals.

II. SUMMARY DISPOSITION

A. STANDARD OF REVIEW

Res-Care argues that the trial court erred by failing

to find that Center Woods’s failure to maintain its

corporate status prevents it from seeking to enforce the

articles of agreement. This Court reviews de novo a trial

court’s decision on a motion for summary disposition.

The facts are considered in the light most favorable to

the nonmoving party.

This Court reviews the record

and the documentary evidence but does not make

findings of fact or weigh credibility.

This Court also

reviews de novo the interpretation of statutes and the

proper interpretation of legal instruments, such as

deeds or contracts.

B. CORPORATE STATUS

The facts related to Center Woods’s corporate status

are not in dispute. It failed to file annual statements

and pay annual filing fees in 1992 and 1993, which

automatically dissolved the corporation pursuant to

MCL 450.2922. In October 2009, Center Woods rein-

stated itself under MCL 450.2925 before filing the

instant litigation. The trial court did not make any

determinations regarding the implications of Center

Woods’s reinstatement. Instead, it concluded:

Driver v Naini, 490 Mich 239, 246; 802 NW2d 311 (2011).

Dressel v Ameribank, 468 Mich 557, 561; 664 NW2d 151 (2003).

Taylor v Lenawee Co Bd of Co Rd Comm’rs, 216 Mich App 435, 437;

549 NW2d 80 (1996).

Driver, 490 Mich at 246; In re Rudell Estate, 286 Mich App 391,

402-403; 780 NW2d 884 (2009).

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243

Whether or not Center Woods was a corporation in good

standing with the State at the time does not, in the view of

the court, excuse Mrs. Averill’s failure to give notice, if not

to the individual residents, certainly to someone involved

with the day to day operations of Center Woods....Asa

practical matter, a right of first refusal is almost always

exercised on behalf of an interested homeowner and not

the association or corporation.

First, the trial court’s determination that Averill

ought to have notified someone other than Center

Woods is without merit. The articles of agreement is a

contract that must be interpreted according to its plain

language.

“In interpreting a contract, [this Court’s]

obligation is to determine the intent of the contracting

parties.”

“[A]n unambiguous contractual provision is

reflective of the parties’ intent as a matter of law.”

“[I]f the language of a contract is clear and unambigu-

ous, its construction is a question of law for the court.”

The articles of agreement provide, “No property in

Center Woods shall be sold without first giving Center

Woods, Inc. thirty (30) days notice thereof and first

opportunity to purchase said property at a price equal

to a bonafide offer.” The provision requires notice only

to “Center Woods, Inc.” There is no reference or re-

quirement for notice to homeowners or a generic refer-

ence to the homeowners association. Therefore, only

Center Woods, Inc., was entitled to notice, and the trial

court’s conclusion to the contrary was in error.

The next question, then, is whether Center Woods was

entitled to notice from Averill. Here, there is no question

In re Rudell Estate, 286 Mich App at 402-403.

Quality Prod & Concepts Co v Nagel Precision, Inc, 469 Mich 362,

375; 666 NW2d 251 (2003).

Id.

Mich Nat’l Bank v Laskowski, 228 Mich App 710, 714; 580 NW2d 8

(1998).

244 295 M

ICH

232 [Jan

that Center Woods did not exist at the time of the sale.

Center Woods does not dispute that it failed to file its

annual reports and pay the required fees, so that it was

automatically dissolved under MCL 450.2801(1)(f)

and

MCL 450.2922(1).

“At common law, upon dissolution of a

corporation, ‘there is no one to serve, because, in law, a

dissolved corporation is a dead person, so much so that, in

the absence of statute and revival, even pending actions by

or against it would abate.’ ”

Plaintiffs contend that the result of Center Woods’s

reinstatement pursuant to MCL 450.2925, hours before

filing the lawsuit in October 2009, was that the disso-

lution essentially never took place. Thus, they assert

that “Res-Care’s conclusion that Mrs. Averill was not

required to provide notice to Center-Woods, Inc. is

based on a false premise, i.e., that Center Woods, Inc.

‘did not exist.’ ”

Res-Care argues that plaintiffs did not argue the

implications of reinstatement before the trial court and

that this Court should not consider them here. How-

ever, it appears that plaintiffs did argue reinstatement.

MCL 450.2801(1)(f) provides:

A corporation may be dissolved in any of the following ways:

***

(f) Automatically, pursuant to [MCL 450.2922], for failure to

file an annual report or pay the annual filing fee or a penalty added

to the fee.

MCL 450.2922(1) provides, in part, “If a domestic corporation

neglects or refuses for 2 consecutive years to file the annual reports or

pay the annual filing fee required by law, the corporation shall be

automatically dissolved.”

Gilliam v Hi-Temp Prod, Inc, 260 Mich App 98, 112; 677 NW2d 856

(2003), quoting US Truck Co v Pennsylvania Surety Corp, 259 Mich 422,

426; 243 NW 311 (1932).

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245

But, even if they had not, because statutory interpreta-

tion is a question of law, and the effect of the reinstate-

ment statute could result in an affirmance of the trial

court’s decision on other grounds, this Court will con-

sider the issue.

MCL 450.2925 provides as follows:

(1) A domestic corporation which has been dissolved

pursuant to [MCL 450.2922(1)]...mayrenew its corpo-

rate existence...by filing the reports for the last 5

years or any lesser number of years in which the reports

were not filed and paying the annual filing fees for all the

years for which they were not paid....Upon filing the

reports and payment of the fees and penalties, the

corporate existence...isrenewed....

(2) Upon compliance with the provisions of this section,

the rights of the corporation shall be the same as through

the dissolution or revocation had not taken place, and all

contracts entered into and other rights acquired during the

interval shall be valid and enforceable.

[

]

There are no cases that have interpreted MCL

450.2925.

Plaintiffs rely on Bergy Bros, Inc v Zeeland Feeder

Pig, Inc,

which interpreted a previous version of this

statute. In Bergy Bros, the plaintiff brought suit against

the defendant corporation for money owed pursuant to

deliveries of feed made by the plaintiff to the defen-

dant’s pig farm between August 1971 and September

1972.

The defendant’s corporate charter was voided in

Middlebrooks v Wayne Co, 446 Mich 151, 166 n 41; 521 NW2d 774

(1994); D’Avanzo v Wise & Marsac, PC, 223 Mich App 314; 565 NW2d 915

(1997).

Emphasis added.

Bergy Bros, Inc v Zeeland Feeder Pig, Inc, 415 Mich 286; 327 NW2d

305 (1982).

Id. at 290.

246 295 M

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232 [Jan

May 1971 for failing to file reports and pay fees in 1969,

1970, and 1971.

Although the plaintiff “vigorously

maintained throughout trial that it dealt only with the

corporation,”

the plaintiff also asserted “that when

the corporation failed to file its annual report and pay

its franchise fee, pursuant to the statute its corporate

existence was extinguished” rendering the officers and

directors personally liable.

The Court noted that the

corporate charter had been revived by the time of trial.

The trial court and this Court had both held that the

defendant corporation had lost even de facto existence

when its charter was forfeited in 1971.

The Michigan

Supreme Court disagreed, concluding:

This theory is premised on the assumption that the

forfeiture makes the corporation nonexistent. In Michigan,

the statute providing for forfeiture of the charter must be

read in light of the statute providing for retroactive rein-

statement of the charter. Thus, because the charter is

subject to reinstatement, this Court has said: “The corpo-

ration does not cease to exist upon its charter becoming

absolutely void”. Stott v Stott Realty Co, 288 Mich 35, 42;

284 NW 635 (1939).... The effect of the reinstatement

statute is to make the voidance of the charter more in the

nature of a suspension of corporate privileges than an

absolute termination of corporate existence....

. . . Where, as here, the corporate charter has been

reinstated pursuant to the statute, the corporation should

be considered to have had at least de facto existence during

the period of forfeiture, which would preclude application

of the partnership theory of liability.

[

]

Id.

Id. at 291.

Id.

Id. at 294.

Id. at 295.

Id. at 295-296.

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Stott, the case cited by the Supreme Court, involved the

plaintiff shareholders filing suit alleging the corporate

charter was void for failure to pay fees for two consecu-

tive years and requesting a receiver be appointed to

wind up the affairs.

The defendants denied that the

corporation had ceased to exist, noting that the re-

quired fees had been paid since the plaintiffs had filed

their suit, placing the corporation in good standing.

quoted in Bergy Bros, the Stott Court noted that “[t]he

corporation does not cease to exist upon its charter

becoming absolutely void.”

However, it went on:

It still continues a body corporate and remains a legally

existing corporation for certain purposes....

From the foregoing, it may be said that a corporation

whose charter has become void may thereafter be reinstated.

The voiding of the corporate charter does not work a disso-

lution and put an end to corporate life. While a corporation

having had its charter declared void cannot carry on corpo-

rate business for the purposes for which it is authorized on

the granting of its charter, it still exists for certain other

purposes of winding up its business and closing its affairs.

The corporation not having been dissolved and still being in

existence, its corporate powers may be revived....

[

]

The Court continued, noting that the appellant stock-

holder, after the filing of the lawsuit, “attended a stock-

holders’ meeting, voted for directors, participated in a

directors’ meeting, took part in an election of officers, and

was himself elected vice-president” so that his own con-

duct recognized “the company as a functioning corpora-

tion....”

Stott, 288 Mich at 39.

Id.

Id. at 42.

Id. at 42-43 (citations omitted; emphasis added).

Id. at 48.

248 295 M

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232 [Jan

Neither Stott nor Bergy Bros is precisely on point. Stott

involved a stockholder suit attempting to force the corpo-

ration to wind up where the appellant stockholder’s own

actions belied his belief that the corporation had ceased to

exist.

Bergy Bros recognized the de facto existence of

the corporation in order to avoid imposing partnership

liability. This result is reasonable and logical given that

the plaintiff “vigorously maintained throughout trial

that it dealt only with the corporation....”

The

holding is also consistent with the language in MCL

450.2925(2) that, upon reinstatement, “all contracts en-

tered into and other rights acquired during the interval

shall be valid and enforceable.” Neither case, however,

provides guidance in answering the question whether a

party who is required to provide notice of some event to

the corporation, which has ceased to exist for 16 years,

could be deemed to have failed to properly give notice on

the grounds that, sometime in the future, the corporation

might seek reinstatement.

It is not reasonable to require persons to give notice to

a nonexistent corporation on the contingent basis that at

some unknown time in the future, some unknown person

might elect to reinstate the corporation. Simply because

someone can reinstate a corporation under MCL 450.2925

does not mean anyone will. And the law certainly should

not require people to assume otherwise. Indeed, some

corporations that dissolve automatically never seek rein-

statement, even when they continue to do business.

Others fail to seek reinstatement even when attempting

to file suit in their own name.

Id.

Bergy Bros, 415 Mich at 291.

See United Steelworkers v Forestply Indus, Inc, 702 F Supp 2d 798

(WD Mich, 2010); Mich Laborers’ Health Care Fund v Taddie Constr, Inc,

119 F Supp 2d 698 (ED Mich, 2000).

Flint Cold Storage v Dep’t of Treasury, 285 Mich App 483; 776 NW2d

387 (2009).

2012] W

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Further, plaintiffs incorrectly assert that the home-

owners’ association’s continued collection of monies

and exercise of obligations gave it a de facto existence

after dissolution. In Flint Cold Storage v Dep’t of

Treasury, this Court reiterated that corporations con-

tinue to exist beyond their date of dissolution in order

to wind up their affairs, but only for a reasonable

amount of time.

“Otherwise, a dissolved corporation

would languish in perpetuity, affording no true closure

or finality for the stakeholders of the dissolved entity.”

The determination of what constitutes a reasonable

time is a question of law for the courts.

This Court

then determined that a 32-year winding-up period was

unreasonable, so that the plaintiff corporation did not

exist and could not maintain its lawsuit.

“[O]nce a

dissolved corporation has finished winding up its af-

fairs, its existence is terminated and it ceases to exist

for all purposes” including to sue and be sued.

The type of legal, de facto existence created by MCL

450.2925 and Bergy Bros is based on the idea that

corporations that are reinstated pursuant to the statute

should be granted the benefits of corporate status—

such as no individual liability. It is reasonable to give

such corporations the benefits of the contracts they

entered into and whatever rights they acquired.

This

de facto legal existence, however, is just a legal creation.

It provides a retroactive legal existence to a corporation

even though, at that moment in the past, factually, the

corporation had no such existence. Thus, notwithstand-

Id. at 495-497.

Id. at 496.

Id. at 498.

Id. at 498-500.

Id. at 498.

MCL 450.2925(2).

250 295 M

ICH

232 [Jan

ing the fact that Center Woods’s reinstatement in

October 2009 created some type of legal existence for

those prior 16 years, the actuality is that Center Woods

did not exist when the sale between Averill and Res-

Care took place. Accordingly, we conclude that Averill

had no obligation to provide notice of the pending sale

to Center Woods because, although it obtained a retro-

active legal existence, it was, at the time of the pending

sale, a nonexistent corporation.

In sum, based on the plain language of the articles of

agreement, the trial court erred by holding that Averill

ought to have provided notice to anyone other than the

corporation. And the trial court further erred by hold-

ing that Center Woods was entitled to notice of the sale

between Averill and Res-Care because Center Woods

did not exist at that time. Because our resolution of this

issue is dispositive, we decline to address Res-Care’s

remaining arguments.

We reverse the order granting summary disposition

to plaintiffs and remand for entry of an order granting

summary disposition to defendants. We do not retain

jurisdiction.

AWYER

,P.J., and W

HITBECK

and M. J. K

ELLY

,JJ.,

concurred.

2012] W

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In re KABANUK

Docket No. 301536. Submitted January 11, 2012, at Detroit. Decided

January 19, 2012, at 9:05 a.m. Leave to appeal denied, 492 Mich 854.

Mary Nordstrom obtained a personal protection order (PPO) that

prohibited Dawn M. Kabanuk from approaching or confronting

her in a public place. Both Kabanuk and Nordstrom were at the

Oakland County courthouse for another matter when they got into

an altercation. The Oakland Circuit Court, Cheryl A. Matthews, J.,

found Kabanuk guilty of criminal contempt of court for violating

the PPO. Kabanuk appealed.

The Court of Appeals held:

1. The discussion in People v Freeman, 240 Mich App 235

(2000), concerning the possible misuse of a PPO as a sword rather

than a shield was dictum, but in any event, Freeman did not shift

the focus onto the behavior of the person holding the PPO. The

holder of a PPO is under no obligation to act in a certain way.

Rather, the court must look only at the behavior of the individual

against whom the PPO is held. Accordingly, Nordstrom’s conduct

was not relevant in evaluating whether Kabanuk violated the

PPO. The PPO prohibited Kabanuk from approaching or confront-

ing Nordstrom in a public place. There was competent evidence to

find that Kabanuk violated the PPO by lunging toward Nordstrom

with her finger pointed and verbally assaulting her. Thus, there

was sufficient evidence for the trial court to find beyond a

reasonable doubt that Kabanuk violated the PPO. And Kabanuk’s

trial counsel was not ineffective for failing to raise the Freeman

issue. Her counsel was not required to raise a meritless defense.

2. Under MRE 404(b)(1), evidence of other crimes, wrongs, or

acts is not admissible to prove the character of a person in order to

show action in conformity therewith. It may, however, be admis-

sible for other purposes. The rule applies to witnesses as well as

criminal defendants. In this case, the court found that because

Kabanuk’s husband had been disruptive during previous proceed-

ings, he was likely disruptive during the incident at issue, and thus

was lying about the circumstances of the incident. Although

violative of MRE 404(b)(1), the trial court’s use of the prior acts

evidence did not provide a basis for reversal because the use of the

252 295 M

ICH

252 [Jan

prior acts evidence was not outcome determinative given that

there was overwhelming evidence that Kabanuk violated the PPO

by lunging at Nordstrom with her finger pointed while yelling.

Affirmed.

1. C

ONTEMPT —

RIMINAL

ONTEMPT —

IOLATIONS OF

ERSONAL

ROTECTION

RDERS

The holder of a personal protection order is under no obligation to

act in a certain way; rather, when analyzing whether an individual

is guilty of criminal contempt for violating a personal protection

order, the court must look only at the behavior of that individual

against whom the personal protection order is held.

2. E

VIDENCE —

RIOR

CTS —

ITNESSES

Evidence of other crimes, wrongs, or acts is not admissible to prove

the character of a person in order to show action in conformity

therewith; it may, however, be admissible for other purposes; the

rule applies to witnesses as well as criminal defendants (MRE

404[b][1]).

Jessica R. Cooper, Prosecuting Attorney, and Thomas

R. Grden, Assistant Prosecuting Attorney, for the

people.

Charles P. Reisman for Dawn M. Kabanuk.

Before: J

ANSEN

,P.J., and W

ILDER

and K. F. K

ELLY

,JJ.

K. F. K

ELLY

, J. Respondent Dawn Marie Kabanuk

appeals as of right following her bench trial conviction

for criminal contempt after violating a personal protec-

tion order (PPO), MCL 600.2950a(23). She was sen-

tenced to 14 days in jail. Because the behavior of a PPO

respondent is the only relevant consideration in a

contempt proceeding, we affirm.

I. BASIC FACTS

The matter arises out of contentious family relations

regarding the custody of Dawn’s 14-year-old son. Dawn

2012] In re K

ABANUK

253

is married to Kenneth David Kabanuk who, along with

Dawn, was found in criminal contempt of court follow-

ing their joint bench trial.

The two were charged with

violating PPOs that had been issued on December 17,

2009, in favor of Mary Nordstrom. Mary is married to

Dawn’s brother, Ronald Nordstrom. Ronald was

granted guardianship over Dawn’s son as a result of

neglect and guardianship proceedings. Kenneth is not

the boy’s father, but is admittedly involved in all of the

proceedings affecting his wife. The trial court judge

acknowledged her familiarity with the parties and was

aware that PPOs had been “flying back and forth”

between the parties for quite some time.

On the day in question, Dawn and Kenneth were in

court for a show-cause hearing against Ronald. Dawn

and her ex-husband, Kurt Traskos, claimed that Ronald

was in violation of a visitation order and had wrongfully

denied visitation. Mary went to the courthouse that day

with a dual purpose: she wanted to be there to support

her husband and also wanted her sister, Jaya Wilson, to

serve Kenneth with additional court papers on behalf of

Patricia Nordstrom.

Both Mary and Jaya testified that

they saw Dawn and Kenneth on the main floor of the

court building, just after passing through security.

According to Jaya, she approached Kenneth with the

papers, but he refused service; she allowed the papers to

drop at his feet. Mary and Jaya were later in the hall

outside of the judge’s courtroom where a fair number of

other people had gathered for motion day. Mary and

Jaya testified that as they approached the judge’s

courtroom, they could hear and see Kenneth speaking

Kenneth has also appealed from his conviction (In re Kenneth David

Kabanuk, Docket No. 301537). The cases were submitted together for

resolution.

Patricia Nordstrom is the mother of Dawn and Ronald and is Mary’s

mother-in-law.

254 295 M

ICH

252 [Jan

very loudly with a woman. Dawn was beside him. Both

testified that when Kenneth caught sight of Mary, he

called her a “f***ing bitch” and screamed that he could

not believe she was doing this to them after they had

reached a settlement. Mary testified that he used pro-

fanity against her at least 10 times. According to Mary,

she began to look around the hall for a deputy, and the

woman to whom Kenneth was speaking cautioned him

to settle down or she would go into the courtroom and

summon a deputy. Kenneth persisted in his verbal

assault and the woman disappeared into the courtroom.

Mary testified that Dawn lunged forward, pointing her

finger at Mary and stated, “I have one thing to say to

you, you’re a f***ing bitch and I hate you.” The judge’s

law clerk, Laura McLane, testified that she heard the

commotion outside of the courtroom, and an attorney

reported that deputies were needed in the hallway.

According to McLane, she called for the deputies and

then went out into the hallway, hoping to defuse the

situation, where she saw Kenneth yelling at Mary.

McLane testified that she told everyone that deputies

had been summoned and she suggested that Kenneth

“take a walk” and pointed down the hallway.

The testimony of Dawn and Kenneth was in stark

contrast to that of Mary, Jaya, and McLane. Dawn and

Kenneth testified that at no time did they approach,

confront, or use profanity against Mary. Rather, accord-

ing to their testimony it was Mary who approached the

two of them in the hallway, told them they were in

violation of the PPO, and threatened to have them

arrested; Kenneth merely told Mary to stop talking to

them and to leave them alone. Kenneth further testified

that he reminded Mary that she was in violation of a

PPO they had against her and that when McLane came

out into the hall and suggested that Kenneth “take a

walk,” they took her advice and left.

2012] In re K

ABANUK

255

The trial court held both Dawn and Kenneth in

criminal contempt of court, finding that they violated

the PPOs to the extent that the PPOs prohibited them

from approaching or confronting Mary in a public place.

Dawn now appeals as of right.

II. SUFFICIENCY OF THE EVIDENCE

Dawn argues that there was insufficient evidence to

support the trial court’s finding that she violated the

PPO given that Mary used the PPO as a “sword rather

than a shield.” We disagree.

We review a trial court’s findings in a contempt

proceeding for clear error, and such findings must be

affirmed if there is competent evidence to support

them. In re Contempt of Henry, 282 Mich App 656, 668;

765 NW2d 44 (2009). We may not weigh the evidence or

the credibility of the witnesses in determining whether

there is competent evidence to support the findings. Id.

This Court reviews a trial court’s issuance of an order of

contempt for an abuse of discretion. Id. at 671.

Violation of a PPO may result in a finding of criminal

contempt and subject a respondent to up to 93 days in

jail and a fine of up to $500. MCL 600.2950a(23); MCR

3.708(H)(5)(a). The PPO at issue here prohibited Dawn

from approaching or confronting Mary in a public place.

There was competent evidence to find that Dawn vio-

lated the PPO by approaching or confronting Mary at

the courthouse, a public place. Dawn approached or

confronted Mary by lunging toward Mary and saying, “I

have one thing to say to you, you’re a f***ing bitch and

I hate you.” Although the testimony of Dawn and

Kenneth contradicted the testimony of Mary and Jaya,

we are not at liberty to weigh the evidence or the

credibility of the witnesses in determining whether

256 295 M

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252 [Jan

there is competent evidence to support the findings.

Henry, 282 Mich App at 668.

Respondent relies on People v Freeman, 240 Mich

App 235, 237 n 1; 612 NW2d 824 (2000), for the

proposition that a PPO may not be used as a “sword

instead of a shield.” In Freeman, the defendant was

convicted of resisting and obstructing a police officer

after officers attempted to handcuff defendant and

place him under arrest for violating a PPO. Id. at

235-236. On appeal, the defendant argued that the

evidence was insufficient to support his conviction

because the prosecution failed to prove that the arrest

was legal. The defendant further argued that remarks

the prosecutor made had impermissibly shifted the

burden of proof to him by requiring him to prove that

the PPO was invalid. Id. at 236-237. We affirmed

defendant’s conviction, concluding that the information

the officers obtained from the law enforcement infor-

mation network provided reasonable cause for them to

believe that the defendant had violated the PPO, sub-

jecting him to immediate arrest. Id. We further found

that the prosecutor’s remarks, when considered in

context, did not have the effect of impermissibly shift-

ing the burden of proof to the defendant. Id. at 237. In

a footnote, we added:

Although the personal protection order itself is not at

issue in this case, we express our concern raised by the

facts of this case. This case illustrates the need to draft

such orders carefully in order to avoid inconsistencies and

confusion. Here, for example, the complainant’s residence

is listed in the body of the order as 38 N. Riviera Drive. The

caption of the order, however, states that the complainant

can be reached at 1419 Capital Avenue, # 32. The com-

plainant was at defendant’s address at 1419 Capital Av-

enue, # 32, when defendant was arrested for violating the

order. Surely, a defendant must question the wisdom of an

2012] In re K

ABANUK

257

order that makes it a violation of a court order to be in his

own home, particularly when the complainant has a sepa-

rate residence and makes the complaint to the police while

at the defendant’s residence. This would appear to allow

personal protection orders to be used as a sword rather

than a shield, contrary to the intent of the legislation that

was quite properly designed and intended to protect

spouses and others from predators. When personal protec-

tion orders are allowed to be misused because of careless

wording or otherwise, then the law is correspondingly

undermined because it loses the respect of citizens that is

important to the effective operation of our justice system.

[Id. at 237 n 1.]

Our discussion in Freeman concerning the possible

misuse of PPOs was dictum and is not binding on this

Court. See People v Crockran, 292 Mich App 253, 258;

808 NW2d 499 (2011). Nevertheless, we take this op-

portunity to distinguish Freeman from the case at bar.

The sword/shield analysis in Freeman concerned a

poorly drafted PPO. Freeman does not, as Dawn argues,

shift the focus onto the behavior of the person who

holds the PPO. We clarify that one who holds a PPO is

under no obligation to act in a certain way. Instead, a

court must look only to the behavior of the individual

against whom the PPO is held. In this case, Dawn does

not argue that the PPO was carelessly worded or

incorrectly entered; rather, she argues that by placing

herself in the courthouse when Dawn and Kenneth

were bound to be there, Mary was inviting a confron-

tation. We do not find Mary’s conduct to be relevant in

evaluating whether Dawn was in violation of the PPO.

When evaluating whether there has been a violation of

a PPO, the proper focus is on the behavior of the

individual against whom the PPO is held, not the

behavior of the person who holds the PPO.

The trial court accepted Mary’s testimony that she

was in the courthouse to support her husband at his

258 295 M

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252 [Jan

show-cause hearing. It also accepted Mary’s testimony

that that she never approached Dawn or Kenneth.

Thus, the trial court’s findings suggest that it did not

believe Mary used the PPO as a sword. More impor-

tantly, the trial court indicated that it was “not neces-

sarily concerned” about whether Mary and Jaya ap-

proached Kenneth and Dawn. Instead, for purposes of

the contempt proceedings the relevant consideration

was whether Kenneth or Dawn or both violated the

PPOs. The focus was properly on their conduct outside

of the courtroom that morning. There was sufficient

evidence for the trial court to find beyond a reasonable

doubt that Dawn violated the PPO when she lunged at

Mary with her finger pointed and yelled, “I have one

thing to say to you, you’re a f***ing bitch and I hate

you.”

III. 404(b) EVIDENCE

Dawn argues that the trial court improperly relied on

the fact that Kenneth had been loud and disruptive in

the courtroom on prior occasions in unrelated proceed-

ings. She claims that the trial court impermissibly

relied on Kenneth’s prior bad behavior in concluding

that he acted in conformity therewith on the date in

question, a violation of MRE 404(b)(1). Dawn failed to

raise the issue in the trial court. We, therefore, review

the issue for plain error. Under that standard, Dawn

must show (1) that an error occurred, (2) that the error

was plain, and (3) that the error affected substantial

rights. People v Carines, 460 Mich 750, 763; 597 NW2d

130 (1999). The third requirement necessitates a show-

ing of prejudice—that the error affected the outcome of

the lower court proceedings. Id.

MRE 404(b)(1) provides:

2012] In re K

ABANUK

259

Evidence of other crimes, wrongs, or acts is not admis-

sible to prove the character of a person in order to show

action in conformity therewith. It may, however, be admis-

sible for other purposes, such as proof of motive, opportu-

nity, intent, preparation, scheme, plan, or system in doing

an act, knowledge, identity, or absence of mistake or

accident when the same is material, whether such other

crimes, wrongs, or acts are contemporaneous with, or prior

or subsequent to the conduct at issue in the case.

This Court has explained that “[t]o be admissible under

MRE 404(b), bad-acts evidence must satisfy three re-

quirements: (1) the evidence must be offered for a

proper purpose; (2) the evidence must be relevant; and

(3) the probative value of the evidence must not be

substantially outweighed by unfair prejudice.” People v

Kahley, 277 Mich App 182, 184-185; 744 NW2d 194

(2007). Although the rule is most often invoked in

connection with criminal defendants, it also applies to

witnesses. People v Rockwell, 188 Mich App 405, 409-

410; 470 NW2d 673 (1991).

In this case, no evidence of Kenneth’s past bad

behavior was introduced. Instead, the trial court took

judicial notice of Kenneth’s disruptive behavior at other

hearings. The trial court essentially found that because

Kenneth had been disruptive in the past, he was likely

disruptive in this case, and, therefore, he was lying

about the circumstances of the incident. Thus, it ap-

pears that the trial court relied on Kenneth’s prior acts

to conclude that he acted in conformity therewith, a

violation of MRE 404(b)(1).

However, we find no basis for reversal, as we do not

believe that such a consideration was outcome determi-

native in Dawn’s case. The trial court found Mary’s and

Jaya’s testimony to be credible, even though there were

some discrepancies. The trial court noted that Jaya had

never been to court on previous matters and seemed

260 295 M

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252 [Jan

reluctant to testify, suggesting that she was a disinter-

ested party worthy of belief. Their testimony was also

supported by the trial court’s law clerk, who heard the

commotion and sought to defuse the situation. Addi-

tionally, the trial court found that Kenneth was not

credible for reasons other than his past behavior. Ken-

neth’s testimony and explanations were inconsistent.

He went from denying any wrongdoing to admitting

that he stepped in to defend Dawn, to admitting that he

should have “kept my mouth shut.” Reversal is not

warranted because there is no indication that the error

resulted in the conviction of an innocent defendant or

substantially affected the fairness of the trial. Rather,

there was overwhelming evidence that Dawn violated

the PPO when she lunged at Mary with her finger

pointed and yelled, “I have one thing to say to you,

you’re a f***ing bitch and I hate you.”

IV. INEFFECTIVE ASSISTANCE OF COUNSEL

Dawn next argues that her trial counsel was ineffec-

tive because he failed to assert that under Freeman the

PPO was being improperly used as a sword rather than

a shield. We disagree. Because Dawn failed to move for

a Ginther

hearing, our review is limited to error

apparent on the record. People v Seals, 285 Mich App 1,

19-20; 776 NW2d 314 (2009).

As previously discussed, we conclude that the lan-

guage in Freeman regarding the use of a PPO as a

sword is dictum and, further, confined to extremely

narrow circumstances not applicable here. As such, trial

counsel was not required to raise a meritless defense.

People v Rodriguez, 212 Mich App 351, 356, 538 NW2d

People v Ginther, 390 Mich 436; 212 NW2d 922 (1973).

2012] In re K

ABANUK

261

42 (1995). Dawn fails to establish that she was denied

the effective assistance of counsel.

Affirmed.

ANSEN

,P.J., and W

ILDER

, J., concurred with K. F.

ELLY

,J.

262 295 M

ICH

252 [Jan

MALPASS v DEPARTMENT OF TREASURY

Docket Nos. 299057, 299058, and 299059. Submitted October 4, 2011, at

Lansing. Decided December 6, 2011. Approved for publication

January 19, 2012, at 9:10 a.m. Leave to appeal granted, 493 Mich

864.

Tad and Brenda L. Malpass (Docket No. 299057), Tracy and Brenda K.

Malpass (Docket No. 299058), and Fred and Barbara Malpass

(Docket No. 299059) brought separate actions in the Court of Claims,

seeking a reversal of the Department of Treasury’s decision to deny

plaintiffs’ amended individual income tax returns for the years 2001,

2002, and 2003. The actions were consolidated. Plaintiffs owned and

controlled East Jordan Iron Works, Inc. (EJIW), a Michigan corpora-

tion that operated a foundry in Michigan. Plaintiffs also owned the

stock of and operated Ardmore Foundry, Inc., a Michigan corporation

that owned and operated a foundry and distribution center in

Ardmore, Oklahoma. Both corporations were treated as subchapter S

corporations for federal tax purposes. In the specified years, plaintiffs

originally filed their Michigan individual income tax returns treating

the corporations’ respective incomes as if from separate businesses,

which resulted in income from EJIW being attributed to Michigan

and Ardmore’s losses being attributed to the state of Oklahoma and

then added back into the plaintiffs’ adjusted gross income for Michi-

gan. Plaintiffs later filed amended returns for those years. They

requested refunds totaling more than $1 million, claiming that

EJIW’s gains could be offset with Ardmore’s losses on the basis of the

their assertion that EJIW and Ardmore were a unitary business. The

department denied plaintiffs’ amended returns, contending that the

Income Tax Act, MCL 206.1 et seq., does not allow the unitary-

business principle to be applied to individual income tax returns

and that the act did not allow plaintiffs to use a combined-filing

method based on the unitary-business principle. The court, Paula

J. Manderfield, J., granted plaintiffs’ motion for summary dispo-

sition, finding that EJIW and Ardmore were a unitary business

and concluded that although the Legislature had not explicitly

referred to the unitary-business principle in the Income Tax Act, it

had adopted the principle because it required all business income

to be apportioned according to a statutory formula in MCL

206.115. The department appealed.

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The Court of Appeals held:

The unitary-business principle provides that a state is allowed

to tax a multistate business on the apportioned share of the

multistate business it conducted in the taxing state. Under MCL

206.110(1), all taxable income of a resident individual from any

source whatsoever, except that which is attributable to another

state, is allocated to the state of Michigan. Under Mich Admin

Code, R 206.12(4), business income attributed to Michigan and one

or more other states is apportioned according to the apportion-

ment formula in MCL 206.115. In order to apply the unitary

principle, there must be some sharing or exchange of value not

capable of precise identification or measurement that renders

formula apportionment a reasonable taxation method. In the

absence of an underlying unitary business, multistate apportion-

ment is precluded. To determine whether a multistate business is

unitary or discrete, a court must look at (1) economic realities, (2)

functional integration, (3) centralized management, (4) economies

of scale, and (5) substantial mutual interdependence. The Due

Process and Commerce Clauses of the United States Constitution

prohibit a state from imposing an income-based tax that taxes

value earned outside its borders. Because the corporations were

separate and legally distinct business entities, the Court of Claims

erred when it concluded that EJIW and Ardmore were a unitary

business and on that basis allowed them to combine the income

earned from both corporations under MCL 206.115. Plaintiffs’

business income came from two separate businesses and had to be

apportioned at the entity level to avoid raising due process

concerns and applying the Income Tax Act inconsistently. In

accordance with Mich Admin Code, R 206.12(3), plaintiffs’ income

from Ardmore (which included losses) should have been attributed

to the state in which the business was conducted: Oklahoma. As a

result, the Ardmore income and attendant losses may not be

allocated or apportioned to Michigan under the Income Tax Act

and should have been added back to plaintiffs’ adjusted gross

income when calculating plaintiffs’ Michigan taxes pursuant to

Mich Admin Code, R 206.12(20).

Reversed.

AXATION —

NCOME

AX —

ULTISTATE

USINESSES —

EPARATE AND

ISTINCT

USINESSES —

NITARY

USINESSES —

PPORTIONMENT

The unitary-business principle provides that a state is allowed to tax

a multistate business on the apportioned share of the multistate

business it conducted in the taxing state; all taxable income of a

resident individual from any source whatsoever, except that which

264 295 M

ICH

263 [Jan

is attributable to another state, is allocated to the state of

Michigan; business income attributed to Michigan and one or

more states is apportioned according to the apportionment for-

mula in the Income Tax Act; to apply the apportionment formula,

however, there must be some sharing or exchange of value not

capable of precise identification or measurement that renders

formula apportionment a reasonable taxation method; to deter-

mine whether a multistate business is unitary or discrete, a court

must look at (1) economic realities, (2) functional integration, (3)

centralized management, (4) economies of scale, and (5) substan-

tial mutual interdependence; in the absence of an underlying

unitary business, multistate apportionment is precluded and in-

come must be apportioned at the entity level. (MCL 206.110[1],

MCL 206.115; Mich Admin Code, R 206.12).

Warner Norcross & Judd LLP (by Jason L. Byrne,

Stephen R. Kretschman, and Jeffrey W. Bracken) for Tad

and Brenda L. Malpass, Tracy and Brenda K. Malpass,

and Fred and Barbara Malpass.

Bill Schuette, Attorney General, John J. Bursch,

Solicitor General, and Bradley K. Morton and Heidi L.

Johnson-Mehney, Assistant Attorneys General, for the

Department of Treasury.

Before: S

HAPIRO

,P.J., and S

AAD

and B

ECKERING

,JJ.

URIAM

. In this consolidated appeal, the Michi-

gan Department of Treasury (Treasury) appeals the

June 9, 2010, judgment of the Court of Claims that

reversed Treasury’s decision to deny plaintiffs’

amended individual income tax returns for the years

2001, 2002, and 2003. For the reasons set forth below,

we reverse.

I. FACTS AND PROCEEDINGS

Plaintiffs own and control East Jordan Iron Works,

Inc. (EJIW). EJIW is a Michigan corporation with its

corporate offices, resident agent, and principal place of

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business located at 301 Spring Street, East Jordan,

Michigan. During the years in question, EJIW operated

a foundry in East Jordan. In 1999, plaintiffs established

Ardmore Foundry, Inc. Ardmore is a Michigan corpora-

tion with its resident agent located at 301 Spring Street,

East Jordan. However, Ardmore’s sole business is the

ownership and operation of a foundry and distribution

center known as EJIW-Ardmore Foundry, located in

Ardmore, Oklahoma. All of Ardmore’s stock is owned

directly, or through trust, by members of the Malpass

family.

Both EJIW and Ardmore have elected to be treated as

S corporations for federal tax purposes. As the trial

court stated, “This means that the two corporations do

not pay federal income taxes. Instead the corporations

income and/or losses are passed through to their share-

holders and reported by those shareholders on their

individual federal and Michigan income tax returns.” In

the years 2001, 2002, and 2003, plaintiffs filed their

Michigan individual income tax returns “treating the

corporations’ business incomes as if from separate,

non-unitary businesses.” Accordingly, plaintiffs appor-

tioned their business income from EJIW attributable to

Michigan and included it as income on their Michigan

individual income tax returns. The losses incurred by

Ardmore were attributed to Oklahoma and added back

into plaintiffs’ adjusted gross income for Michigan

individual income tax purposes.

Plaintiffs later filed amended individual income tax

returns for the years 2001, 2002, and 2003. In their

amended returns, plaintiffs treated EJIW and Ardmore as

a unitary business and applied the Michigan apportion-

ment factors to both companies as a unitary business. In

so doing, plaintiffs sought to offset gains earned by EJIW

266 295 M

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263 [Jan

with losses incurred by Ardmore. Through their amended

returns, plaintiffs requested refunds totaling over $1

million.

Treasury denied plaintiffs’ amended returns, and

plaintiffs filed three actions in the Court of Claims

requesting reversal. The three cases were consolidated

by stipulation of the parties. After submitting a partial

stipulation of facts, Treasury moved for summary dis-

position and argued that Michigan’s Income Tax Act

(ITA), MCL 206.1 et seq., does not allow the unitary-

business principle to be applied to individual income tax

situations. Treasury also asserted that the ITA does not

allow plaintiffs to use a combined filing method based

on the unitary-business principle.

Plaintiffs opposed Treasury’s motion and asked the

court to grant summary disposition in their favor.

Plaintiffs argued that EJIW and Ardmore are a unitary

business and supported the motion with an affidavit

from William Lorne, treasurer of EJIW, who averred

that the two companies are functionally integrated.

After hearing arguments, the Court of Claims issued a

written opinion and order dated November 19, 2009,

granting summary disposition to plaintiffs. The Court

of Claims stated that although the Legislature had not

explicitly referred to the unitary-business principle in

the ITA, it nonetheless adopted the principle into the

act. The court based its conclusion on MCL 206.110(1),

which provides, “For a resident individual...all tax-

able income from any source whatsoever, except that

attributable to another state under [MCL 206.111 to

MCL 206.115] and subject to [MCL 206.255], is allo-

cated to this state.” The court noted that MCL 206.111

to MCL 206.114, and MCL 206.255 were not applicable,

but MCL 206.115 was. It provides, “All business income,

other than income from transportation services shall be

2012] M

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apportioned to this state by multiplying the income by

a fraction, the numerator of which is the property factor

plus the payroll factor plus the sales factor, and the

denominator of which is 3.”

Taking MCL 206.110 and MCL 206.115 together, the

court stated: “Clearly, based on the plain language set

forth in Sections 110 and 115, the Michigan Legislature

has adopted the unitary business principle, because it

has chosen to require the apportionment of all business

income according to a statutory formula.” The Court of

Claims further observed that the language of MCL

206.115 is so broad that it does not distinguish between

unitary and nonunitary businesses. However, the court

recognized that the ITA’s apportionment formula could

only be constitutionally applied to a unitary business.

Because it ruled that plaintiffs’ businesses are unitary,

the court allowed apportionment and ordered Treasury

to make the requested refunds.

II. DISCUSSION

This Court reviews de novo the grant or denial of a

motion for summary disposition. Int’l Business Ma-

chines v Dep’t of Treasury, 220 Mich App 83, 86; 558

NW2d 456 (1996). To the extent this appeal requires us

to interpret the ITA, our review is also de novo. Briggs

Tax Serv, LLC v Detroit Pub Sch, 485 Mich 69, 75; 780

NW2d 753 (2010).

We hold that the Court of Claims erred when it ruled

that the unitary-business principle allows plaintiffs to

apportion their business income from Ardmore to

Michigan.

Although the United States Constitution does not

impose a single tax formula on the states, apportion-

ment is often implemented because of the difficulties of

attempting to allocate taxable income on the basis of

268 295 M

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263 [Jan

geographic boundaries. Allied–Signal, Inc v Dir, Div of

Taxation, 504 US 768, 778; 112 S Ct 2251; 119 L Ed 2d

533 (1992); Container Corp of America v Franchise Tax

Bd, 463 US 159, 164-165; 103 S Ct 2933; 77 L Ed 2d 545

(1983). Because of these difficulties, states are permit-

ted to tax multistate businesses “on an apportionable

share of the multistate business carried on in part in

the taxing State.” Allied-Signal, 504 US at 778. This is

known as the “unitary business principle.” Id. Using

the unitary-business principle, Michigan has incorpo-

rated an apportionment formula into the ITA. MCL

206.110(1) provides: “For a resident individual,...all

taxable income from any source whatsoever, except that

attributable to another state under [MCL 206.111 to

MCL 206.115] and subject to [MCL 206.255], is allo-

cated to this state.” As noted, MCL 206.115 provides:

“All business income...shall be apportioned to this

state by multiplying the income by a fraction, the

numerator of which is the property factor plus the

payroll factor plus the sales factor, and the denominator

of which is 3.” “The property, payroll, and sales factors

represent the percentage of the total property, payroll,

or sales of the business used, paid, or made in this

state.” Grunewald v Dep’t of Treasury, 104 Mich App

601, 606; 305 NW2d 269 (1981), citing MCL 206.116,

MCL 206.119, and MCL 206.121.

For an individual or business to apply the unitary-

business principle, there must “be some sharing or

exchange of value not capable of precise identification

or measurement—beyond the mere flow of funds aris-

ing out of a passive investment or a distinct business

operation—which renders formula apportionment a

reasonable method of taxation.” Container Corp, 463

US at 166. In the absence of some underlying unitary

business, multistate apportionment is precluded. Hol-

loway Sand & Gravel Co, Inc, v Dep’t of Treasury, 152

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Mich App 823, 829-830; 393 NW2d 921 (1986). To

determine whether a multistate business is unitary or

discrete, this Court looks at (1) economic realities, (2)

functional integration, (3) centralized management, (4)

economies of scale, and (5) substantial mutual interde-

pendence. Id. at 831.

Plaintiffs argue in this case that they are allowed to

apportion their income from Ardmore and EJIW be-

cause the two corporations form a unitary business.

Given Lorne’s affidavit, there is no doubt that Ardmore

and EJIW have many characteristics of a unitary busi-

ness. See Holloway, 152 Mich App at 830-835. However,

they remain separate and legally distinct business en-

tities, and nothing in the ITA allows for combined-

entity reporting.

The Court of Claims focused on the word “all” in

MCL 206.115 and ruled that it meant that all business

income, no matter what the source, must be added

together and then apportioned by the apportionment

factors. The problem with this approach, which the

Court of Claims recognized, is that “[u]nder both the

Due Process and the Commerce Clauses of the Consti-

tution, a State may not, when imposing an income-

based tax, ‘tax value earned outside its borders.’ ”

Container Corp, 463 US at 164 (citation omitted).

Therefore, under the Court of Claims’ approach, in

order to comply with due process, business income may

only be combined if the separate entities operate in a

unitary fashion. If business income is earned from

entities that do not operate in a unitary fashion, then

the income must be apportioned at the entity level, with

each entity analyzed separately. While this approach

may be constitutionally permissible, it would cause

MCL 206.115 to be applied inconsistently with respect

270 295 M

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263 [Jan

to different taxpayers.

In contrast, a consistent ap-

proach would be to apportion all business income at the

entity level. That way, if the business conducts multi-

state activity, the income will be apportioned accord-

ingly. If the business has no nexus to Michigan, none of

that income will be attributed to Michigan because its

property factor, payroll factor, and sales factor will all be

zero. See Grunewald, 104 Mich App at 606.

Plaintiffs, however, argue that EJIW’s and Ard-

more’s separate-entity status does not matter because

they nonetheless form a unitary business. Plaintiffs

rely on Holloway and on Jaffe v Dep’t of Treasury, 172

Mich App 116; 431 NW2d 416 (1988), to support their

position. These cases, however, are distinguishable be-

cause they did not deal with multiple-entity apportion-

ment. Rather, they each involved a single entity trying

to use the unitary-business principle to apportion in-

come for business activities conducted in other states.

Holloway, 152 Mich App at 826; Jaffe, 172 Mich App at

117.

Plaintiffs also rely on rely on Glieberman v Dep’t of

Treasury, 14 MTTR 223 (Docket No. 288104, July 11,

2003), to support their argument that the separate-

entity status of EJIW and Ardmore is insignificant. In

Glieberman, the petitioner was the sole shareholder of

The difficulty appears to lie in the ability to consistently apply the

unitary-business principle to legally separate entities. For example, a

petitioner who holds interests in multiple separate entities could at-

tempt, on one hand, to exclude his or her out-of-state businesses that

turn a profit from inclusion and apportionment, while arguing on the

other hand that the petitioner’s other out-of-state businesses that post a

loss should be included and apportioned to his or her advantage. Given

the myriad of business organization and management options and the

somewhat broad factors used in Holloway to determine whether to apply

the unitary-business principle, it is difficult to see how the Court of

Claims’ approach would result in anything other than arbitrary decisions

and unnecessarily protracted litigation.

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Strathmore Finance Company, Inc., a qualified sub-

chapter S corporation. Id. at 3. Strathmore was the

parent company of Tralon Corporation, a qualified

subchapter S subsidiary. Id. at 1, 3. Tralon Corporation

earned income from two joint venture limited liability

corporations (LLCs) located in Arizona and California,

which was then passed up to the petitioner through

Strathmore. Id. at 3-4. Treasury argued that the peti-

tioner’s business income from the two LLCs was appor-

tionable to Michigan under the ITA, but the Tax Tribu-

nal held that the income passed up from the LLCs could

not be apportioned to Michigan because the LLCs did

not form part of a unitary business with Tralon. Id. at

9-10.

Plaintiffs argue that the Tax Tribunal did not allow

the separate-entity nature of the businesses in Glieber-

man to defeat the ITA’s mandate to apportion business

income as long the entities form part of a unitary

business. Plaintiffs assert that the tribunal indicated

apportionment would be required if the entities formed

a unitary business, despite the fact that they were

legally separate entities. Glieberman, however, is distin-

guishable because it involved a qualified subchapter S

subsidiary. Unlike the businesses in Glieberman, Ard-

more is not a qualified subchapter S subsidiary of EJIW

because Ardmore’s stock is not owned by EJIW, but

“directly or through trusts, by members of the Malpass

family.” 26 USCS 1361(b)(3)(B)(i). Therefore, plaintiffs’

reliance on Glieberman is misplaced. Despite the uni-

tary characteristic of EJIW and Ardmore, they are

separate legal entities. There is no provision in the ITA

that allows individuals to combine their business in-

come from separate businesses and then use a combined

apportionment formula on the total.

272 295 M

ICH

263 [Jan

This is further supported by Treasury rules. Mich

Admin Code, R 206.12 provides in relevant part:

(1) Salaries, wages, and other compensation received by

a Michigan resident are allocated to Michigan.

***

(3) Income from a trade or business as defined in [Mich

Admin Code] R 206.1 is allocated or apportioned to the

state in which the activity takes place.

(4) Business income that is attributable to Michigan and

1 or more other states shall be apportioned as provided in

[MCL 206.115 to MCL 206.195].

Starting with the premise that all compensation re-

ceived by a Michigan resident is allocated to Michigan,

which conforms with MCL 206.110(1), Rule 206.12(3)

then provides that business income is allocated or

apportioned to the state in which the activity took

place. Therefore, if a resident earns business income

that is derived from another state, it is allocated to that

state. However, if the business income is attributable to

Michigan and one or more other states, Rule 206.12(4)

requires that it be apportioned as calculated by the

formula in MCL 206.115.

As applied to this case, plaintiffs’ income from Ard-

more (which includes losses) is attributed to the state in

which the activity took place—Oklahoma. Mich Admin

Code, R 206.12(3). Because the losses sustained by

Ardmore are not attributable to Michigan, they are not

allocated or apportioned to Michigan and are added

back to plaintiffs’ adjusted gross income. Mich Admin

Code, R 206.12(20) (“Distributive income from a sub-

chapter S corporation not allocated or apportioned to

Michigan may be claimed as a subtraction from ad-

2012] M

ALPASS V

’

TOF

REASURY

273

justed gross income. Conversely, losses not allocated or

apportioned to Michigan shall be added to adjusted

gross income.”).

Plaintiffs rely on this Court’s decision in Preston v

Dep’t of Treasury, 292 Mich App 728; 815 NW2d 781

(2011), to support their argument that apportionment

is required. That case however, is distinguishable. In

Preston, the plaintiff owned Life Care Affiliates II (LCA

II), a Tennessee limited partnership. Id. at 730. LCA II

was a general partner in 22 lower level partnerships

that operated 27 nursing homes. Id. One of the lower

level partnerships was Riverview Medical Investors LP

(RMI), which owned two nursing homes in Michigan.

Id. 730-731. The remainder of the partnerships had no

business activity in Michigan. Id. at 731.

All 22 partnerships distributed gains and losses to

LCA II, which in turn distributed the combined income

to the plaintiff. When reporting his Michigan income,

the plaintiff took the gains received from RMI and

offset them with losses suffered by other partnerships.

Id. Treasury argued that the plaintiff could not offset

his Michigan income from RMI with losses incurred by

other partnerships because they had no activity in

Michigan. Id. at 732-733. This Court, however, ruled

that apportionment was proper because LCA II oper-

ated the partnerships as a unitary business. Id. at

734-737.

Plaintiffs assert that Preston supports apportion-

ment in this case. Preston, however, addressed partner-

ships, not corporations. And in Preston, the 22 lower

level partnerships were all operated together through

LCA II, which owned a 99 percent interest in the 22

partnerships. Although each of the 22 partnerships

were separate entities, they were all joined by LCA II.

Therefore, allowing multientity apportionment was not

274 295 M

ICH

263 [Jan

an issue. Here, again, Ardmore and EJIW are separate

business entities. Although they may operate in a

unitary fashion, they remain legally separate.

Further, the result in Preston was dictated by the ITA

and the Treasury regulations. Again, MCL 206.115

provides, “All business income...shall be apportioned

to this state by multiplying the income by a fraction, the

numerator of which is the property factor plus the

payroll factor plus the sales factor, and the denominator

of which is 3.” In Preston, the plaintiff’s business

income came from LCA II and was then apportioned in

accordance with the apportionment factors. Also, Rule

206.12(16) provides:

Distributive share items received by a partner are

allocated or apportioned as follows:

(a) Ordinary income is apportioned to Michigan by the

partnership apportionment factors provided in [MCL

206.115 to 206.195].”

In Preston, the plaintiff was the partner, and his dis-

tributed share of income was received from LCA II and

then apportioned in accordance with the partnership

apportionment factors.

Unlike the plaintiff in Preston, plaintiffs here receive

business income from two separate businesses. There-

fore, they must apportion that income at the entity

level. As previously discussed, allowing plaintiffs to

combine all their business income from separate enti-

ties and then apportion it using the apportionment

factors, or alternately requiring other similarly situated

taxpayers to do so whether or not the result would be

favorable to them, would raise due-process concerns

and cause the ITA to be applied inconsistently.

For these reasons, we hold that the court erred by

granting summary disposition to plaintiffs and incor-

2012] M

ALPASS V

’

TOF

REASURY

275

rectly allowed plaintiffs to combine their business in-

come from separate entities under MCL 206.115.

Reversed.

HAPIRO

,P.J., and S

AAD

and B

ECKERING

, JJ., concurred.

276 295 M

ICH

263 [Jan

PEOPLE v ALLEN

Docket No. 299267. Submitted November 8, 2011, at Detroit. Decided

November 22, 2011. Approved for publication January 24, 2012, at

9:00 a.m.

Regina M. Allen pleaded guilty in the Oakland Circuit Court of

attempting to commit prescription fraud, MCL 333.7407(1)(c) and

333.7407a(1). The court, Martha D. Anderson, J., sentenced her to

one year of probation and ordered her to pay restitution in the

amount of $5,753.88 to Blue Cross Blue Shield of Michigan. Allen

appealed by delayed leave granted the court’s order requiring her

to pay restitution.

The Court of Appeals held:

Under MCL 780.766(2), a trial court does not have discretion to

order a convicted defendant to pay restitution; rather, it must

order the defendant to pay restitution and the amount must fully

compensate any victim of the defendant’s course of conduct that

gave rise to the conviction. In this context, the term “victim”

includes a sole proprietorship, partnership, corporation, associa-

tion, governmental entity, or any other legal entity that suffers

direct physical or financial harm as a result of a crime. To

determine the amount of restitution, the trial court must consider

the amount of the loss sustained by any victim as a result of the

offense. The phrase “course of conduct” must be given a broad

construction to effectuate the intent of the Legislature and the

remedial purpose of the statute. In this case, Blue Cross lost the

time-value of the hours that its fraud investigator spent investi-

gating Allen’s actions. The loss to Blue Cross was not the money it

spent on the investigator’s salary, which the company would likely

have incurred anyway, but the loss of the investigator’s time,

which could have been spent on other matters. That loss could be

measured by assigning a value to the hours that Blue Cross spent

on the investigation. Accordingly, the trial court did not clearly err

when it found that Blue Cross suffered direct financial harm as a

result of Allen’s course of criminal conduct.

Affirmed.

2012] P

EOPLE V

LLEN

277

ENTENCES —

ESTITUTION —

RIME

ICTIMS —

MOUNT OF

ESTITUTION —

IRECT

INANCIAL

ARM —

IME

PENT

NVESTIGATING THE

RIME

A trial court does not have discretion to order a convicted defendant

to pay restitution; rather, it must order the defendant to pay

restitution and the amount must fully compensate any victim of

the defendant’s course of conduct that gave rise to the conviction;

in this context, the term “victim” includes a sole proprietorship,

partnership, corporation, association, governmental entity, or any

other legal entity that suffers direct physical or financial harm as

a result of a crime; to determine the amount of restitution, the

trial court must consider the amount of the loss sustained by any

victim as a result of the offense; the phrase “course of conduct”

must be given a broad construction to effectuate the intent of the

Legislature and the remedial purpose of the statute; the loss of

time incurred by a company when an employee of the company has

spent time investigating a crime committed against it instead of

working on other matters may be a direct financial harm; the

value of that harm can be measured by assigning a value to the

time spent on the investigation (MCL 780.766, MCL 780.767[1]).

Bill Schuette, Attorney General, John J. Bursch,

Solicitor General, Jessica R. Cooper, Prosecuting Attor-

ney, and Thomas R. Grden and Marilyn J. Day, Assis-

tant Prosecuting Attorneys, for the people.

Kevin A. Landau for defendant.

Before: M. J. K

ELLY

,P.J., and S

AAD

and O’C

ONNELL

,JJ.

URIAM

. Defendant Regina Marie Allen appeals

by delayed leave granted the trial court’s order requir-

ing her to pay restitution. After Allen pleaded guilty to

attempting to commit prescription fraud, see MCL

333.7407(1)(c); MCL 333.7407a(1), the trial court sen-

tenced Allen under a sentencing agreement to serve one

year of probation and ordered her to pay $5,753.88 in

restitution to Blue Cross Blue Shield of Michigan. The

sole question on appeal is whether the trial court erred

when it found that Blue Cross had suffered a loss as a

result of Allen’s course of criminal conduct. Because we

278 295 M

ICH

277 [Jan

conclude that the trial court did not clearly err when it

found that Blue Cross suffered such a loss, we affirm

the trial court’s order of restitution.

I. BASIC FACTS AND PROCEDURAL HISTORY

In November 2009, Allen attempted to purchase a

controlled substance from a pharmacy using a fraudu-

lent prescription. The prescription contained a legiti-

mate Blue Cross contract number. The pharmacy

alerted Blue Cross to the attempted purchase later that

same month.

At the time, Allen was a customer service represen-

tative with a Blue Cross vendor, Allegra Direct.

Through her employment, Allen had access to two

major databases. These databases contained private

information regarding Blue Cross subscribers; the in-

formation included the subscribers’ contract numbers,

Social Security numbers, dates of birth, home ad-

dresses, and physician records.

Nina Burnett testified at Allen’s restitution hearing

that she was a field investigator with Blue Cross and

that her department investigates fraud. Burnett inves-

tigated Allen’s attempt to purchase the controlled sub-

stance. Burnett determined that Allen used an actual

Blue Cross subscriber’s name on the fraudulent pre-

scription. As a result, Burnett feared that Allen might

have defrauded Blue Cross in prior incidents. Indeed,

after she learned that Allen had access to protected

Blue Cross information, Burnett extended the investi-

gation to determine whether Allen misused confidential

information. Burnett stated that Blue Cross had a legal

obligation to investigate whether its subscribers’ health

information had been compromised.

Burnett investigated whether Blue Cross had paid

for similar prescriptions written by the same physician

2012] P

EOPLE V

LLEN

279

that Allen had listed on the known fraudulent prescrip-

tion. As part of her investigation, Burnett met with the

physician’s staff, obtained video from various pharma-

cies, and examined signature logs. Additionally, Blue

Cross’s information technology department investi-

gated Allen’s use of the Blue Cross subscriber database.

Burnett was not able to definitively connect Allen to

any other fraudulent prescriptions.

Burnett testified that her investigation into Allen’s

fraudulent prescription was significantly more time-

consuming and detailed than other “ordinary” investi-

gations because Allen had access to patients’ confiden-

tial information. Burnett stated that Blue Cross spent

$5,738 to investigate Allen’s fraud and whether she

misused subscriber information. She said that she de-

termined this amount by multiplying an hourly rate of

$130.77, which was determined by dividing her depart-

ment’s annual budget by the number of hours the

department’s investigators spent investigating claims,

and multiplying that by the 44 hours that she spent

working on the investigation. She stated that this rate

did not include the cost of assistance by other depart-

ments; therefore, the research by the information tech-

nology staff was not included in the hourly rate.

Burnett testified that she is a salaried employee and

would have been paid the same amount of money without

regard to Allen’s attempted fraud. Burnett nevertheless

stated that Blue Cross suffered a loss because the money

that it spent investigating Allen’s fraud could have been

spent on claims or controlling premiums. Burnett ex-

plained that Blue Cross generally attempts to recoup

money from the perpetrators of fraud.

The trial court ultimately determined that Blue

Cross was entitled to the requested restitution and

ordered Allen to pay $5,753.88 to Blue Cross as part of

her sentence.

280 295 M

ICH

277 [Jan

II. RESTITUTION

A. STANDARD OF REVIEW

Allen argues on appeal that the trial court erred by

ordering her to pay Blue Cross for the costs associated

with investigating her fraud. A trial court does not have

discretion to order a convicted defendant to pay resti-

tution; it must order the defendant to pay restitution

and the amount must fully compensate the defendant’s

victims. See People v Gahan, 456 Mich 264, 270 n 6; 571

NW2d 503 (1997).

Whether and to what extent a loss

must be compensated is a matter of statutory interpre-

tation; and this Court reviews de novo the proper

interpretation of statutes. See People v Bemer, 286 Mich

App 26, 31; 777 NW2d 464 (2009). However, this Court

reviews the findings underlying a trial court’s restitu-

tion order for clear error. MCR 2.613(C). A finding is

clearly erroneous if this Court is left with the definite

and firm conviction that a mistake has been made.

People v Akins, 259 Mich App 545, 564; 675 NW2d 863

(2003).

B. ANALYSIS

Article 1, § 24 of the Michigan Constitution provides

that crime victims have the “right to restitution.” Const

1963, art 1, § 24. Additionally, with the Crime Victim’s

Rights Act, MCL 780.751 et seq., the Legislature re-

quired trial courts to order convicted defendants to pay

restitution:

[W]hen sentencing a defendant convicted of a crime, the

It is, for that reason, inaccurate to state that trial courts have

discretion to award restitution. Further, because the statute plainly

requires the trial court to order “full” restitution, see MCL 780.766(2), it

necessarily follows that a trial court abuses its discretion when it orders

restitution other than full restitution.

2012] P

EOPLE V

LLEN

281

court shall order, in addition to or in lieu of any other

penalty authorized by law or in addition to any other

penalty required by law, that the defendant make full

restitution to any victim of the defendant’s course of

conduct that gives rise to the conviction.... [MCL

780.766(2).]

For the purposes of MCL 780.766(2), the term “victim”

includes “a sole proprietorship, partnership, corpora-

tion, association, governmental entity, or any other

legal entity that suffers direct physical or financial

harm as a result of a crime.” MCL 780.766(1). To

determine the amount of restitution, “the court shall

consider the amount of the loss sustained by any victim

as a result of the offense.” MCL 780.767(1). The term

“course of conduct” must be given “a broad construc-

tion” to best effectuate the intent of the Legislature.

Gahan, 456 Mich at 271. Further, with the Crime

Victim’s Rights Act, the Legislature plainly intended to

shift the burden of losses arising from criminal

conduct—as much as practicable—from crime victims

to the perpetrators of the crimes; thus, it is “remedial in

character and should be liberally construed to effectu-

ate its intent.” See People v Gubachy, 272 Mich App 706,

710; 728 NW2d 891 (2006).

Allen argues that Blue Cross’s investigation did not

amount to a financial harm because the costs would

have been incurred regardless of her course of criminal

conduct. She asserts that Burnett would have received

the same salary and worked the same hours even in the

absence of Allen’s attempt to fraudulently purchase a

controlled substance. Thus, Blue Cross did not suffer a

loss within the meaning of the Crime Victim’s Rights

Act.

The evidence showed that Burnett was a salaried,

full-time employee in a department dedicated to inves-

tigating fraud. Nevertheless, Burnett’s department had

282 295 M

ICH

277 [Jan

numerous claims to investigate and she plainly could

have spent the 44 hours that she spent investigating

Allen’s fraud on other matters. Accordingly, Blue Cross

essentially lost the time-value of the 44 hours that

Burnett had to spend investigating Allen’s fraud, rather

than some other fraud. That is, the loss to Blue Cross

was not Burnett’s salary or the department’s budget;

Blue Cross would likely have incurred those costs

regardless of Allen’s criminal conduct. Rather, it was

the loss of time that amounted to a direct financial

harm, which can be measured by assigning a value to

the hours spent on the investigation. Accordingly, the

trial court did not clearly err when it found that Blue

Cross suffered a direct financial loss as a result of

Allen’s course of criminal conduct. And Allen has not

challenged the trial court’s finding that this loss should

be valued at $5,753.88.

On this record, we cannot conclude that the trial

court erred when it ordered Allen to pay Blue Cross

restitution in the amount of $5,753.88.

Affirmed.

M. J. K

ELLY

,P.J., and S

AAD

and O’C

ONNELL

,JJ.,

concurred.

2012] P

EOPLE V

LLEN

283

GAY v SELECT SPECIALTY HOSPITAL

Docket No. 301064. Submitted October 11, 2011, at Lansing. Decided

January 31, 2012, at 9:00 a.m.

Patricia Gay, personal representative of the estate of Dolores M.

Wright, deceased, brought an action in the Calhoun Circuit Court

against Select Specialty Hospital and Battle Creek Health System,

alleging malpractice by nurses on the hospital’s staff. The court,

Allen L. Garbrecht, J., entered an order dismissing the claims

against Battle Creek Health System. The hospital moved to strike

plaintiff’s proposed nursing expert, Kathleen Boggs, R.N., on the

basis that Boggs did not devote a majority of her professional time

to the active clinical practice of nursing or to the instruction of

nursing students in an accredited health professional school or

accredited residency or clinical research program in the year

immediately preceding the date of the decedent’s fall in the

hospital. The hospital alleged that Boggs was not qualified to sign

the affidavit of merit under MCL 600.2169(1)(b) and sought

dismissal of the action. The court determined that Boggs did not

meet the qualifications for an expert under the statute and

granted the motion to strike Boggs as an expert. The court also

determined that plaintiff did not timely propose an alternate

expert witness and granted the hospital’s motion to strike plain-

tiff’s supplemental witness list. The court then dismissed the

action on the basis that plaintiff did not have an expert to establish

the standard of care. Plaintiff appealed.

The Court of Appeals held:

1. Although trial courts have considerable discretion in deter-

mining whether a witness is qualified to testify as an expert, trial

courts must nevertheless accurately apply the law in exercising

their discretion. A trial court necessarily abuses its discretion

when it premises a ruling on an erroneous view of the law or on a

clearly erroneous assessment of the evidence.

2. The evidence concerning Boggs’s qualifications was undis-

puted; therefore, whether Boggs met the requirements stated in

MCL 600.2169(1)(b) was a matter of applying the undisputed facts

to the proper interpretation of the statute.

3. The trial court determined that Boggs did not spend any

284 295 M

ICH

284 [Jan

portion of her professional time in either the active clinical

practice of nursing or in the instruction of nurses at an accredited

health professional school or accredited residency or clinical re-

search program despite the fact that there was plain and unrebut-

ted evidence that Boggs engaged in both the active clinical practice

of nursing and the instruction of nurses at an accredited residency

or clinical research program.

4. The trial court’s determination that Boggs did not spend

any time in the active clinical practice of nursing was based on the

fact that Boggs supervised the orientation of nurses and was not

directly involved in the care of patients. In order to be engaged in

an active clinical practice, a medical professional’s practice must

involve practice in a clinical setting, which usually means a setting

where patients are treated. A professional can be involved in the

treatment of patients in a variety of ways in a clinical setting

without directly interacting with the patients. The fact that many

nurses will physically interact with patients does not mean that a

nurse who is indirectly involved in the care of patients is not

engaged in the active clinical practice of nursing. The word

“active” in the phrase “active clinical practice” cannot be con-

strued to require that the professional physically interact with

patients. The word “active” must be understood to mean that, as

part of his or her normal professional practice at the relevant time,

the professional was involved—directly or indirectly—in the care

of patients in a clinical setting. The undisputed evidence showed

that Boggs spent 25 percent of her professional time at the time of

the occurrence at issue engaged in the active clinical practice of

nursing. The trial court erred when it determined that Boggs did

not spend any amount of her professional time engaged in the

active clinical practice of nursing. Boggs’s work in orienting nurses

at the hospital amounted to the active clinical practice of nursing

within the meaning of MCL 600.2169(1)(b). Therefore, the trial

court’s determination to the contrary must have been premised on

an erroneous interpretation of the statute and was an abuse of

discretion.

5. The trial court erred by determining that Boggs did not

spend any of her professional time engaged in qualified instruc-

tion. Boggs testified that she spent 50 percent of her professional

time teaching at the hospital for an accredited residency program.

This time and the time engaged in the active clinical practice of

nursing clearly constitutes more than 50 percent of her profes-

sional time and met the professional-time requirement of the

statute.

2012] G

AY V

ELECT

PECIALTY

OSP

285

6. The Legislature’s statement that a professional may meet

the time requirement by devoting a majority of his or her time

to the instruction of students is not a requirement that the

professional must actually spend a majority of his or her time

instructing students. A teacher’s activities preparing for class,

maintaining familiarity with new and evolving professional

techniques, and participating in meetings designed to further

the educational process are activities devoted to the instruction

of students. The trial court abused its discretion by determining

that Boggs did not devote any of her time to the instruction of

students.

7. Boggs met the professional-time requirement of MCL

600.2169(1)(b) and was qualified to testify. The order striking

Boggs as a witness is vacated. The judgment and order dismiss-

ing the suit is reversed and the case is remanded for further

proceedings.

Reversed and remanded.

HITBECK

, J., dissenting, stated that the trial court properly

determined that Boggs did not meet the statutory qualifications

to testify regarding the appropriate standard of care, did not err

by refusing plaintiff’s request to substitute Jean Hurynowicz,

R.N., as plaintiff’s expert witness, and did not abuse its discre-

tion by ordering dismissal with prejudice because there was no

remaining time available under the wrongful death saving

period, MCL 600.5852. Working in a clinical setting merely

overseeing employees who actually treat the patients is too

removed from the type of experience contemplated by the

statutory requirement regarding “active clinical practice.” The

time spent by Boggs orienting new nurses to their units did not

qualify as “active clinical practice” because it did not involve the

active care of patients. The 45 percent of Boggs’s professional

time spent instructing students in some capacity is below the

requisite “majority,” or more than 50 percent, necessary to

satisfy the statute. The trial court’s refusal to allow the

substitution of Hurynowicz, an entirely new expert witness,

only 50 days before trial was not an abuse of discretion. The

trial court correctly recognized that plaintiff’s filing of the

complaint and affidavit of merit did not toll the wrongful death

saving period, MCL 600.5852, and that, because the wrongful

death saving period had expired, the proper remedy for plain-

tiff’s failure to submit a conforming affidavit of merit was

dismissal with prejudice. The judgment and order dismissing

the action should be affirmed.

286 295 M

ICH

284 [Jan

1. E

VIDENCE —

RRONEOUS

NTERPRETATIONS OR

PPLICATIONS OF

AW —

BUSE

ISCRETION

A trial court necessarily abuses its discretion when it admits or

excludes evidence on the basis of an erroneous interpretation or

application of law.

2. N

EGLIGENCE —

EDICAL

ALPRACTICE —

XPERT

ITNESSES —

ORDS AND

HRASES —

CTIVE

LINICAL

RACTICE

A medical professional’s practice must involve practice in a clinical

setting in order for the professional to be engaged in an “active

clinical practice” for purposes of MCL 600.2169(1)(b); a medical

professional can be involved in the treatment of patients in a

variety of ways in a clinical setting without directly interacting

with the patients; the word “active” means that, as part of the

professional’s normal professional practice at the relevant time,

the professional was involved, directly or indirectly, in the care of

patients in a clinical setting.

3. N

EGLIGENCE —

EDICAL

ALPRACTICE —

URSES —

CTIVE

LINICAL

RACTICE

URSING

A nurse who supervises other nurses in a hospital is practicing

nursing in a clinical setting for purposes of the professional-time

requirement of MCL 600.2169(1)(b) even though he or she does

not directly treat specific patients.

4. N

EGLIGENCE —

EDICAL

ALPRACTICE —

XPERT

ITNESSES —

NSTRUCTION OF

TUDENTS

A person may be qualified to testify as an expert on the standard

of care in a medical-malpractice action if during the year

immediately preceding the date of the occurrence that is the

basis for the claim or action the person devoted a majority of his

or her professional time to the instruction of students in an

accredited health professional school or accredited residency or

clinical research program in the same health profession in

which the party against whom or on whose behalf the testimony

is offered is licensed; time spent preparing for class, maintain-

ing familiarity with new and evolving professional techniques,

and participating in meetings designed to further the educa-

tional process is time devoted to the instruction of students

(MCL 600.2169[1][b][ii]).

Blaske & Blaske, P.L.C. (by Thomas H. Blaske), for

Patricia Gay.

2012] G

AY V

ELECT

PECIALTY

OSP

287

Magdich & Associates, PC (by Karen W. Magdich and

Jennifer R. Anstett), for Select Specialty Hospital.

Before: M. J. K

ELLY

,P.J., and F

ITZGERALD

and W

HITBECK

JJ.

M. J. K

ELLY

,P.J. In this nursing malpractice case,

Patricia Gay, as personal representative of the estate of

Dolores M. Wright, deceased, appeals by right the trial

court’s order dismissing Gay’s suit against defendant

Select Specialty Hospital.

On appeal, the primary issue

is whether the trial court erred when it determined that

Gay’s proposed nursing expert, Kathleen Boggs, R.N.,

did not meet the qualifications required of experts who

propose to testify concerning the applicable standard of

care. See MCL 600.2169(1). We conclude that the trial

court erred when it determined that Boggs did not meet

the qualifications stated under MCL 600.2169(1). Be-

cause Boggs was qualified to testify about the standard

of care, the trial court further erred when it dismissed

Gay’s claim on the ground that Gay did not have an

expert to establish the standard of care for her malprac-

tice claim. Accordingly, we reverse and remand for

further proceedings.

I. BASIC FACTS AND PROCEDURAL HISTORY

Dolores Wright was admitted to Select Specialty

Hospital to treat her rheumatoid arthritis—including

associated rheumatoid lung disease—in October 2003.

Wright responded well to the treatments and, on Thurs-

day, November 13, 2003, Wright learned that she would

be discharged from the hospital on the following Mon-

The trial court issued an order dismissing Gay’s claims against

defendant Battle Creek Health System in April 2009. That order is not at

issue on appeal.

288 295 M

ICH

284 [Jan

PINION OF THE

OURT

day. However, the next day a nurse assisted Wright to a

commode, but left her unattended. When her phone

rang, Wright reached for it and fell from the commode.

She injured her head, fractured her shoulder, and died

two days later.

In November 2008, Patricia Gay, acting as the per-

sonal representative of Dolores Wright’s estate, sued

the hospital. In the complaint, Gay alleged that, in

order to comply with the standard of care applicable to

Wright’s conditions, the hospital’s nursing staff had to

remain by Wright’s side and assist her whenever she

was out of bed. As such, the nurse should not have left

Wright unattended on the commode and had the nurse

not done so, she could have prevented Wright’s fall. Gay

alleged that the fall was a direct and proximate result of

the hospital’s nursing staff’s negligence and that the

fall ultimately led to Wright’s death. Gay submitted

Boggs’ affidavit of merit in support of the complaint. In

the affidavit, Boggs averred that the nursing staff

should have assessed Wright for fall-risk on each shift

and, given Wright’s frailty, should not have left her

unattended while she used the commode.

The hospital alleged that its nursing staff was not

negligent. Rather, Wright’s condition had improved

significantly and immediately before Wright reached for

the phone, a nurse had come in and instructed her to

wait for assistance.

Approximately two years later, in September 2010,

the hospital moved to strike Boggs as an expert and

dismiss Gay’s complaint with prejudice. The hospital

argued that the affidavit of merit was insufficient

because Boggs was not qualified to testify as an expert.

More specifically, the hospital argued that Boggs did not

devote a majority of her professional time to the active

clinical practice of nursing or to the instruction of

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nursing students in an accredited health professional

school or accredited residency or clinical research pro-

gram in the year immediately preceding the fall. As

such, the hospital argued that Boggs was not qualified

to sign the affidavit of merit under MCL 600.2169(1)(b)

and that the trial court had to dismiss the case.

After hearing oral arguments on the motions, the

trial court determined that Boggs did not meet the

expert qualifications stated under MCL 600.2169(1)(b).

Accordingly, the trial court granted the hospital’s mo-

tion to strike Boggs as an expert witness. The trial court

also determined that Gay did not timely propose an

alternate expert witness. Therefore, it granted the

hospital’s motion to strike Gay’s supplemental witness

list. The trial court then dismissed the case with preju-

dice. Gay now appeals.

II. STANDARDS OF REVIEW

“Ordinarily, the qualification of competency of expert

witnesses is a matter for the discretion of the trial

judge....” Siirila v Barrios, 398 Mich 576, 591; 248

NW2d 171 (1976). By reviewing a trial court’s decision

concerning the admission of expert testimony under this

highly deferential standard, appellate courts recognize

that the trial court’s assessment of the proposed expert

and his or her testimony typically involves a complex

balancing of various factors. See, e.g., Daubert v Merrell

Dow Pharm, Inc, 509 US 579, 592-595; 113 S Ct 2786; 125

L Ed 2d 469 (1993) (noting that, in reviewing the admis-

sion of expert testimony, trial courts must consider a

variety of factors—including being mindful of other appli-

cable rules—to determine the evidentiary relevance and

reliability of the proposed testimony). The same is true

when examining a witness’s qualifications; the court must

weigh the witness’s “knowledge, skill, experience, train-

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ing, [and] education” and determine whether—on the

basis of those factors—the witness is sufficiently qualified

to offer expert testimony on the area at issue. MRE 702.

There is always the concern that jurors will disregard

their own common sense and give inordinate or disposi-

tive weight to an expert’s testimony. See People v Peter-

son, 450 Mich 349, 374; 537 NW2d 857 (1995) (noting the

potential that a jury might defer to an expert’s seemingly

objective view of the evidence). For that reason, trial

courts must—at every stage of the litigation—serve as the

gatekeepers who ensure that the expert and his or her

proposed testimony meet the threshold requirements.

Gilbert v DaimlerChrysler Corp, 470 Mich 749, 782; 685

NW2d 391 (2004). This includes determining whether the

witness’s expertise fits the nature of the witness’s pro-

posed testimony. Id. at 789.

Although trial courts have considerable discretion in

determining whether a witness is qualified to testify as

an expert, see People v Whitfield, 425 Mich 116, 123;

388 NW2d 206 (1986), trial courts must nevertheless

accurately apply the law in exercising their discretion.

See Gilbert, 470 Mich at 780 (“While the exercise of this

gatekeeper role is within a court’s discretion, a trial

judge may neither ‘abandon’ this obligation nor ‘per-

form the function inadequately.’ ”), quoting Kumho

Tire Co Ltd v Carmichael, 526 US 137, 158-159; 119 S

Ct 1167; 143 L Ed 2d 238 (1999) (Scalia, J., concurring);

see also People v Lukity, 460 Mich 484, 488; 596 NW2d

607 (1999) (noting that a trial court necessarily abuses

its discretion when it premises its decision on a misap-

plication of law). They may not, for example, apply an

“overly narrow test of qualifications” in order to pre-

clude a witness from testifying as an expert. Whitfield,

425 Mich at 123. And this Court reviews de novo

whether the trial court correctly selected, interpreted,

and applied the law. See Adair v Michigan, 486 Mich

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468, 477; 785 NW2d 119 (2010). Moreover, when a trial

court admits or excludes evidence on the basis of an

erroneous interpretation or application of law, it neces-

sarily abuses its discretion. Kidder v Ptacin, 284 Mich

App 166, 170; 771 NW2d 806 (2009); Cooter & Gell v

Hartmarx Corp, 496 US 384, 405; 110 S Ct 2447; 110 L

Ed 2d 359 (1990) (stating that a trial court necessarily

abuses its discretion when it premises its ruling on an

erroneous view of the law or on a clearly erroneous

assessment of the evidence).

III. EXPERTS AND THE APPLICABLE STANDARD OF CARE

In order to establish the malpractice claim at trial, Gay

had to present evidence concerning the standard of care

applicable to the nursing staff involved in Wright’s care.

See Craig v Oakwood Hosp, 471 Mich 67, 86; 684 NW2d

296 (2004). And she could do so only through an expert’s

testimony. See Gonzalez v St John Hosp & Med Ctr (On

Reconsideration), 275 Mich App 290, 294; 739 NW2d 392

(2007). A witness must meet certain basic qualifications in

order to testify as an expert. See, e.g., MRE 702. In

addition, our Legislature has determined that a “person

shall not give expert testimony on the appropriate stan-

dard of practice or care” in an action alleging medical

malpractice unless that person meets certain require-

ments. One requirement is that the person must have

“during the year immediately preceding the date of the

occurrence that is the basis for the claim or action,

devoted a majority of his or her professional time” to

either “active clinical practice” or the instruction of “stu-

dents in an accredited health professional school or ac-

credited residency or clinical research program” or both,

where the active clinical practice or instruction is “in the

same health profession in which the party against whom

or on whose behalf the testimony is offered is

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licensed....”MCL600.2169(1)(b)(i) and (ii). Finally, the

party proposing to call an expert bears the burden to show

that his or her expert meets these qualifications. See Clerc

v Chippewa Co War Mem Hosp, 477 Mich 1067, 1067-

1068 (2007).

Here, Gay retained Boggs to offer an expert opinion

about the applicable standard of care. However, after

the hospital deposed Boggs, it moved to strike her as a

witness and dismiss Gay’s case. The hospital argued

that Boggs could not testify about the applicable stan-

dard of care because she did not meet the professional-

time requirement stated under MCL 600.2169(1)(b).

Specifically, the hospital presented Boggs’s deposition

testimony in which it claimed she admitted that she

spent the majority of her professional time serving as

an administrator. Moreover, because the time limit for

adding witnesses had passed, the hospital argued that

Gay should be precluded from adding an expert to

testify regarding the applicable standard. Finally, the

hospital maintained that the trial court had to dismiss

Gay’s suit because Gay would not be able to establish

this element of her claim.

The trial court heard arguments on the hospital’s

motion and determined that Gay had not met her

burden to show that Boggs met the professional-time

requirement:

Ah, here’s the thing: I’ve reviewed your briefs, and I am

not, ah, convinced that this witness meets the threshold

requirements...to offer standard of care testimony.

That’s based on what’s presented to me...including her

affidavit....Thestatute’s clear...andshesimply doesn’t

meet the requirements.

As indicated, I don’t think there’s any argument that

she [was] not actively in a clinical practice during the

relevant time period, the year prior to the occurrence, and

based on what’s presented to me here, she was not an

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instructor of students in an accredited professional school

during that period of time, either.

For that reason, the trial court granted the hospital’s

motion to strike Boggs as a witness. It also determined

that Gay should not be permitted to add an expert

witness and, because Gay would not be able to establish

the applicable standard of care at trial, it also concluded

that it must dismiss the case.

The evidence concerning Boggs’s qualifications was

undisputed. As such, whether Boggs met the require-

ments stated under MCL 600.2169(1)(b) was—and

remains—a matter of applying the undisputed facts to

the proper interpretation of that statute. Accordingly, if

Boggs met the qualifications stated under MCL

600.2169(1)(b) as a matter of law, then the trial court

necessarily abused its discretion when it struck her as a

witness on the ground that she did not meet those

requirements. Kidder, 284 Mich App at 170.

The trial court determined that Boggs did not spend

any portion of her professional time in either the active

clinical practice of nursing or in the instruction of

nurses at an accredited health professional school or

accredited residency or clinical research program. Fur-

ther, the trial court made this determination despite the

fact that there was plain—and unrebutted—evidence

that Boggs engaged in both the active clinical practice of

nursing and instructed nurses at an accredited resi-

dency or clinical research program.

A. ACTIVE CLINICAL PRACTICE

During the relevant period, Boggs served as the

director of education at a hospital. Boggs testified at her

deposition that she oversaw education for all support

staff, which included the nursing staff. She specifically

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denied that her job was a “desk job” even though there

“was a lot of desk [time].” She explained: “I did all the

orientation, I did all the CPR classes, I did continuing

education, sat on a lot of committees, oriented nurses,

new nurses to their units.” Further, when asked

whether she took an “active role in patient care” she

stated that she did, but only “as far as I was working

with the new nurses on their nursing unit.” She said

that her work in orienting the nurses involved 25

percent of her professional time.

Despite this testimony, the trial court determined

that Boggs did not spend any time in the active clinical

practice of nursing. The trial court apparently disre-

garded this aspect of Boggs’s professional work because

Boggs supervised the orientation of nurses and was not

directly involved in the care of patients. But the Legis-

lature did not impose any such requirement. Rather,

the Legislature provided that a witness might testify as

an expert if he or she spent the majority of his or her

time in an “active clinical practice....” Because the

Legislature did not choose to define the phrase “active

clinical practice,” this phrase must be given its ordinary

meaning. See Wolfe-Haddad Estate v Oakland Co, 272

Mich App 323, 325; 725 NW2d 80 (2006), citing MCL

8.3a.

The ordinary meaning of “clinical practice” is the

practice of one’s profession in a clinical setting. See

Random House Webster’s College Dictionary (2d ed,

1997) (defining “clinical” to mean “pertaining to a clinic”

or “concerned with or based on actual observation and

treatment of disease in patients rather than experimen-

tation or theory” and defining “practice” to mean “to

pursue a profession, [especially] law or medicine”). Thus,

in the case of a medical professional, in order to be

engaged in an active clinical practice, the profession-

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al’s practice must involve practice in a clinical setting,

which usually means a setting where patients are

treated. But this is not the equivalent of stating that the

professional must directly interact with patients, which

is what the trial court apparently understood when it

disregarded Boggs’s work overseeing the orientation of

new nurses for the hospital. A medical professional can

be involved in the treatment of patients in a variety of

ways in a clinical setting without directly interacting

with the patients. And the fact that many—if not

most—nurses will physically interact with patients in

the practice of their professions does not mean that a

nurse who is indirectly involved in the care of patients

is not engaged in the “active clinical practice” of nurs-

ing. Giving the phrase “active clinical practice” its

ordinary meaning, the key question is whether Boggs

was actively engaged in the profession of nursing in a

clinical setting.

We also cannot agree with the dissent’s conclusion

that the word “active”—as used in the phrase “active

clinical practice”—must be understood to impose a

requirement that a nurse directly treat patients in

order to be engaged in the “active clinical practice” of

nursing. Although it has the sense of being “marked by

or disposed to direct involvement or practical action,”

the adjective “active” can also mean “engaged in action

or activity,” or “characterized by current activity, par-

ticipation, or use.” Random House Webster’s College

Dictionary (2d ed, 1997). In imposing professional-time

requirements on expert witnesses, the Legislature in-

tended to address a perceived problem with full-time

professional witnesses who would ostensibly testify to

whatever someone paid them to testify about. See

McDougall v Schanz, 461 Mich 15, 25 n 9; 597 NW2d

148 (1999). And, in context, it is plain that the Legisla-

ture used the word “active” to ensure that the profes-

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sional’s practice involved actual, day-to-day perfor-

mance in a clinical setting. Accordingly, a professional

who is semiretired, but who retains privileges in a

clinical setting, might be said to no longer have an

“active” clinical practice. Similarly, a professional who

has a “clinical practice” but who leaves the day-to-day

operation of the practice to partners or is otherwise

uninvolved with the day-to-day practice is also not

involved in an “active clinical practice.” But the word

“active” cannot be construed in this context to require

that the professional physically interact with patients.

Rather, the word “active” must be understood to mean

that, as part of his or her normal professional practice

at the relevant time, the professional was involved—

directly or indirectly—in the care of patients in a

clinical setting.

Here, Boggs testified that she spent one-quarter of

her professional time orienting nurses to their units.

Although the hospital did not ask Boggs to elaborate on

what her orientation activities included, the act of

orienting nurses within a hospital involves some degree

of explaining, coordinating, and instructing nurses re-

garding the proper care of their patients. And explain-

ing, coordinating, and instructing nurses about the

proper care of patients in a clinical setting necessarily

involves—albeit indirectly—the treatment of patients.

Accordingly, it was undisputed that Boggs spent 25

percent of her professional time at the time of the

On this point we must disagree with the dissent: a nurse who

supervises other nurses in a hospital is practicing nursing in a clinical

setting even though he or she does not directly treat specific patients.

Indeed, if the supervising nurse were negligent in the supervision or

training of his or her staff and that negligence led to an injury, he or she

might be liable for malpractice even though he or she never physically

touched the patient. It therefore seems inapposite to state that the

supervision and training of nurses at a hospital does not amount to the

active clinical practice of nursing.

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occurrence at issue engaged in the “active clinical

practice” of nursing. See MCL 600.2169(1)(b).

Even if one were to disregard the ordinary under-

standing of the phrase “active clinical practice,” Boggs

unequivocally testified that she took an active role in

the care of patients while orienting nurses. Thus, even

under a narrow understanding of the phrase “active

clinical practice,” Boggs spent some portion of this 25

percent of her professional time in active clinical prac-

tice. Moreover, common sense dictates that some por-

tion of this percentage involved educating the nurses

about their duties and the appropriate care of patients.

Because Boggs averred that the hospital was accred-

ited,

these educational activities should also be counted

toward the professional-time requirements required

under MCL 600.2169(1)(b). It is, therefore, evident that

the trial court erred when it determined that Boggs did

not spend any amount of her professional time engaged

in the “active clinical practice” of nursing.

Boggs’s work in orienting nurses at the hospital

amounted to the active clinical practice of nursing

If only the time spent administering to patients counted towards the

professional-time requirements stated under MCL 600.2169(1)(b), one

would be forced to consider whether any nurse could meet the requirements.

Presumably, every nurse must take lunch and bathroom breaks, fill out

paperwork, attend staff meetings, and otherwise participate in a variety of

activities that do not involve directly administering to patients. Neverthe-

less, these activities are an integral part of working in a clinical setting.

The hospital claims on appeal that Boggs did not actually teach in an

accredited nursing residency or clinical program. However, Boggs averred

that she taught at an “accredited facility” and for an “accredited clinical

research program[].” When her averments are considered as a whole, she

plainly stated that her teaching qualified because she taught in an

accredited residency or clinical program. And, in the absence of evidence

to contradict her averments at the time of the motion, the trial court

clearly erred to the extent that it found that her institution was not

properly accredited.

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within the meaning of MCL 600.2169(1)(b). Hence, the

trial court’s determination that Boggs’ professional

work did not involve any amount of active clinical

practice must have been premised on an erroneous

interpretation of MCL 600.2169(1)(b). Therefore, it

abused its discretion when it struck Boggs under this

erroneous understanding. Kidder, 284 Mich App at 170.

B. THE INSTRUCTION OF STUDENTS

Similarly, the trial court erred when it determined that

Boggs did not spend any of her professional time engaged

in qualified instruction. A witness may be qualified to

testify as an expert on the standard of care if he or she

instructs “students in an accredited health professional

school or accredited residency or clinical research program

in the same health profession in which the party against

whom or on whose behalf the testimony is offered is

licensed....”MCL600.2169(1)(b)(ii). Here, Boggs testi-

fied that she spent 50 percent of her professional time

teaching at the hospital, which teaching—as already

noted—she averred was for an accredited residency pro-

gram. This, when coupled with her time engaged in the

active clinical practice of nursing, clearly constitutes more

than 50 percent of her professional time and, therefore,

meets the professional-time requirement stated under

MCL 600.2169(1)(b). See Kiefer v Markley, 283 Mich App

555, 558-559; 769 NW2d 271 (2009).

Further, although Boggs later averred that she spent

some portion of her time involved in administrative

activities, we do not agree with the trial court’s appar-

ent conclusion that the time spent on administrative

activities did not qualify as time devoted to the “in-

struction of students....” The Legislature provided

that the professional must have “devoted . . . his or her

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professional time” to the “instruction of students....”

MCL 600.2169(1)(b)(ii). The Legislature’s statement that

the professional may meet the time requirement by de-

voting the majority of his or her time to the instruction of

students is not the same as stating that the professional

must actually spend a majority of his or her time instruct-

ing students. We sincerely doubt that any instructor

spends the majority of his or her professional time in the

actual instruction of students. It is commonly understood

that a person who teaches—and especially with regard to

persons who teach a profession—must spend significant

time preparing for class, maintaining familiarity with new

and evolving professional techniques, and participating in

meetings designed to further the educational process.

Such activities are no less “devoted” to the “instruction of

students” than the time actually spent in front of the

students demonstrating a procedure or lecturing about

the proper standards of care. As such, when it found that

Boggs did not devote any portion of her professional time

to the instruction of students, the trial court plainly relied

on an erroneous understanding of MCL 600.2169(1)(b).

As such, it necessarily abused its discretion. Kidder, 284

Mich App at 170.

IV. CONCLUSION

On the basis of Boggs’s testimony and averments, we

conclude that Boggs spent significantly more than 50

percent of her professional time in the active clinical

practice of nursing or instructing nursing students.

Boggs testified that she spent 50 percent of her time teaching and

another 25 percent of her time in the active clinical practice of nursing.

Thus, she met the more than “majority” professional-time requirement.

See Kiefer, 283 Mich App at 558-559. We note that, even if one were to

assume that Boggs only spent 35 percent of her time engaged in qualified

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Because Boggs met the professional-time qualification

stated under MCL 600.2169(1)(b) as a matter of law, the

trial court necessarily abused its discretion when it

determined that she was not qualified under that stat-

ute. Kidder, 284 Mich App at 170. Moreover, because

Boggs can testify regarding the standard of care, the

trial court erred when it determined that it had to

dismiss Gay’s case because Gay would not be able to

establish an essential element of her claim.

For these reasons, we reverse the trial court’s judg-

ment and order dismissing the suit, vacate its October

2010 order striking Boggs as a witness in its entirety,

and remand for further proceedings.

Reversed and remanded for further proceedings con-

sistent with this opinion. We do not retain jurisdiction.

As the prevailing party, Gay may tax her costs. MCR

7.219(A).

ITZGERALD

, J., concurred with M. J. K

ELLY

,P.J.

HITBECK

,J.(dissenting). In this nursing malpractice

case against Select Specialty Hospital, the majority

decision reverses the trial court’s order dismissing the

action by Patricia Gay, personal representative of the

estate of Dolores M. Wright, deceased. I respectfully

dissent. Unlike the majority, I believe that the trial

court properly determined that plaintiff’s originally

proposed nursing expert, Kathleen Boggs, R.N., did not

meet the requisite MCL 600.2169(1) qualifications to

testify regarding the appropriate standard of care. I also

believe that the trial court did not err by refusing

teaching, when the 25 percent of her time that she testified that she spent

engaged in the active clinical practice of nursing is added to that time, she

still meets the professional-time requirement stated under MCL

600.2169(1)(b).

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plaintiff’s request to substitute Jean Hurynowicz, R.N.,

as plaintiff’s expert witness. And, further, I believe that

the trial court did not abuse its discretion by ordering

dismissal with prejudice because there is no remaining

time available under the wrongful death saving period.

Accordingly, I would affirm.

I. EXPERT’S PROFESSIONAL TIME UNDER MCL 600.2169

The salient question is whether Nurse Boggs devoted

sufficient time in the active clinical practice of nursing

or instruction in nursing to qualify as an expert witness

under MCL 600.2169. The majority concludes that

Nurse Boggs did meet the MCL 600.2169 qualifications

because she “spent significantly more than 50 percent

of her professional time in the active clinical practice of

nursing or instructing nursing students.” I disagree.

MCL 600.2169 provides, in pertinent part, as follows:

(1) In an action alleging medical malpractice, a person

shall not give expert testimony on the appropriate standard

of practice or care unless the person is licensed as a health

professional...andmeets the following criteria:

***

(b) ...[D]uring the year immediately preceding the date

of the occurrence that is the basis for the claim or action,

devoted a majority of his or her professional time to either or

both of the following:

(i) The active clinical practice of the same health profes-

sion in which the party against whom or on whose behalf

the testimony is offered is licensed....

(ii) The instruction of students in an accredited health

professional school or accredited residency or clinical re-

MCL 600.5852.

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search program in the same health profession in which the

party against whom or on whose behalf the testimony is

offered is licensed....

[

]

The term “majority” in subsection (1)(b) requires a

proposed medical expert to spend greater than 50

percent of his or her professional time practicing or

teaching in the same health profession as the party

against whom or on whose behalf the testimony is

offered during the year before the alleged malpractice.

Nurse Boggs testified in her deposition that from

about 2000 to December 2003, she was employed as the

director of education at Northlake Medical Center. In

this position, she “oversaw education for the whole

facility,” including orienting new nurses to their units.

More specifically, she testified as follows:

Q. [Counsel]: Were you taking an active role in patient

care as the director of education?

A. [Nurse Boggs]: Only as far as I was working with the

new nurses on their nursing unit.

Q. And what percentage of your job as director of

education was working with new nurses to orientate them

to their new floors?

A. Probably 25 percent.

***

Q. And that was 25 percent of your time. What was the

other 75 percent of your time spent doing?

A. Fifty percent teaching and 25 percent meetings and

setting up classes.

In sum, according to Nurse Boggs’s deposition testi-

mony, she spent 25 percent of her time orienting new

Emphasis added.

Kiefer v Markley, 283 Mich App 555, 559; 769 NW2d 271 (2009).

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nurses to their assigned units, 25 percent of her time in

meetings and setting up classes, and 50 percent of her

time teaching. On the basis of this testimony alone, I

would agree with the majority that Nurse Boggs would

meet the MCL 600.2169(1)(b)(ii) requirement by spend-

ing greater than 50 percent of her professional time in

the instruction of nursing students: she clearly testified

that she spent 50 percent of her time teaching and some

additional portion of her time setting up classes, which,

although more akin to an administrative task, does

arguably fall within the scope of “instruction of stu-

dents.” However, this deposition does not end the

inquiry into the calculation of Nurse Boggs’s time.

In her later-filed supporting affidavit, Nurse Boggs

clarified:

[I]n addition to the 25% of my professional time I spent

in the active clinical practice of nursing, most of the rest, I

believe 65%, of my total professional time was very much

focused on the education and training of nurses in that

accredited facility and in its accredited clinical research

programs.

She explained that the remaining 10 percent of her time

was spent performing “clerical tasks facilitating my

instructional role[.]”

Thus, while continuing to claim that 25 percent of

her time was spent in the active clinical practice of

nursing by virtue of her orientation of new nurses,

Nurse Boggs significantly amended her explanation of

the remaining 75 percent of her time. More specifically,

according to Nurse Boggs, of the 65 percent that she

claimed was spent “focused on the education and train-

ing of nurses,” she actually spent that time as follows:

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• 25 percent “teaching new issues and...procedures

and brushing up skills and knowledge bases on all policies,

practices and procedures to our nurses in an accredited

classroom setting”;

• 10 percent “chairing the nursing policy and procedure

committee, as a member of the education committee”;

• 10 percent “teaching nurses[,]...emergency medical

technicians[,] and others...basic life support classes, pro-

viding candidate advice for advanced life support certifica-

tion...andincontinuing my own training”; and

• 20 percent “as the co-chair of the policy and procedure

committee of the hospital, as a member of the patient care

and education committee and assisting in the preparation

of the Joint Commission surveys which were the basis of

our continuing accreditation.”

On the basis of this additional information, I conclude

that the trial court did not abuse its discretion by

finding that Nurse Boggs was not qualified to testify as

an expert under MCL 600.2169(1)(b).

With respect to active clinical practice, as stated,

Nurse Boggs testified in her deposition and averred in

her affidavit that 25 percent of her time was spent in

active nursing practice by virtue of her orientation of

new nurses. However, in my interpretation, I believe

that Nurse Boggs’s time spent orienting new nurses to

their units did not qualify as “active clinical practice”

because it did not involve the active care of patients.

That is, I believe that the key component of the phrase

“active clinical practice” is the word “active,” which is

See, e.g., Hatchett v Surapaneni, unpublished opinion per curiam of

the Court of Appeals, issued November 6, 2003 (Docket No. 238714)

(stating that the proposed expert witness devoted a majority of his time

to active clinical practice because “about 50 percent of his professional

time was spent performing research – but it was clinical research, i.e.,

had a significant clinical component, including patient care and treat-

ment,” and “about 30 percent of his time to seeing his own clients”)

(emphasis added).

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defined, in pertinent part, as “3. marked by or disposed

to direct involvement or practical action[;]...6.char-

acterized by current activity, participation, or use[.]”

Thus, in my opinion, working in a clinical setting

merely overseeing employees who actually treat the

patients is too removed from the type of experience

contemplated by the statutory requirement.

Thus, I turn to consideration of the remaining 75

percent of Nurse Boggs’s time. Again, Nurse Boggs

clarified in her affidavit that, of that 75 percent, she

actually spent 10 percent as chair of the nursing policy

and procedure committee and 20 percent as the cochair

of the policy and procedure committee of the hospital.

Thus, 30 percent of that 75 percent was clearly spent on

activities other than active clinical practice or teaching.

That leaves only 45 percent of Nurse Boggs’s time

remaining. And although this time was arguably spent

on the instruction of students in some capacity (10

percent on clerical tasks facilitating her instructional

role; 25 percent on teaching and “brushing up” nurses

on policies, practices, and procedures; and 10 percent

teaching basic life support classes), 45 percent is below

the requisite “majority” of time—that is, more than 50

percent—necessary to satisfy the statute. Accordingly, I

would conclude that the trial court did not abuse its

discretion by striking Nurse Boggs as an expert because

she was not qualified to offer expert testimony in this

nursing malpractice case.

II. PROPER REMEDY

A. STANDARD OF REVIEW

Plaintiff argues that even if the trial court properly

struck Nurse Boggs’s testimony, it erred by dismissing

Random House Webster’s College Dictionary (2d ed, 1997), pp 13-14.

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the lawsuit because other remedies—such as amend-

ment of the affidavit of merit and substitution of Jean

Hurynowicz, R.N., for Nurse Boggs, or dismissal with-

out prejudice—were available and appropriate rem-

edies. This Court reviews for an abuse of discretion a

trial court’s decision to deny amendment of witness

lists.

This Court also reviews for an abuse of discretion

a trial court’s decision to dismiss an action.

B. UNDERLYING FACTS

After receiving notice of the hospital’s September

2010 motion to strike Nurse Boggs as an expert and

dismiss plaintiff’s complaint with prejudice, plaintiff

retained Nurse Hurynowicz to review the pertinent

documentation to determine whether the hospital’s

nursing staff had committed malpractice in its treat-

ment of Wright. Nurse Hurynowicz concluded that

nursing malpractice had been committed, and in Octo-

ber 2010, plaintiff served a supplemental witness list on

the hospital.

The hospital moved to dismiss plaintiff’s supplemen-

tal witness list on the ground that it was untimely filed,

two years after the initial complaint had been filed and

only six weeks before trial. Plaintiff responded that

seeking to replace Nurse Boggs with Nurse Hurynowicz

was a prudent and necessary step to avoid adjournment

of the trial in the event that the trial court concluded

that Nurse Boggs did not qualify as an expert. And

plaintiff argued that even if the trial court refused to

allow substitution of Nurse Boggs with Nurse

Hurynowicz, the proper remedy would be dismissal

without prejudice.

Tisbury v Armstrong, 194 Mich App 19, 20; 486 NW2d 51 (1992).

Vicencio v Ramirez, 211 Mich App 501, 506; 536 NW2d 280 (1995).

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The hospital also filed a brief, arguing that dismissal

with prejudice was the proper remedy. According to the

hospital, plaintiff filed her complaint outside the appli-

cable period of limitations, and the deficient affidavit of

merit did not toll the wrongful death saving period,

which expired on November 14, 2008; thus, plaintiff’s

case would be timebarred, and dismissal with prejudice

was the only available remedy.

After hearing further oral arguments on the matter,

the trial court first stated that its understanding of the

pertinent caselaw led to a conclusion that whether or

not a plaintiff’s attorney had a reasonable belief regard-

ing its expert’s qualifications, the remedy was dismissal

without prejudice. However, the trial court questioned

whether the close temporal proximity to the trial nev-

ertheless warranted dismissal with prejudice. The trial

court also indicated that it was persuaded by caselaw

that stated that a defective affidavit of merit does not

toll the wrongful death saving period and results in

dismissal with prejudice.

C. AMENDMENT AND SUBSTITUTION OF NURSE HURYNOWICZ

FOR NURSE BOGGS

Plaintiff argues that the trial court erred by not

allowing her to substitute Nurse Hurynowicz as her

expert witness. I disagree.

I first note that plaintiff’s reliance on Dean v Tucker

is misplaced because that case involved discovery sanc-

tions rather than the failure to produce a witness

qualified to testify under MCL 600.2169. Thus, the

Dean factors are inapplicable.

With that said, I find it significant that the trial

court’s original scheduling order required that plaintiff

Dean v Tucker, 182 Mich App 27, 31-33; 451 NW2d 571 (1990).

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disclose all expert witnesses by August 18, 2009. That

date was later extended until January 17, 2010. And a

later scheduling order required that plaintiff depose all

expert witnesses by August 3, 2010. Here, the trial

court had discretion to decline to entertain requests

beyond the time frames agreed to and set forth in a

scheduling order.

“Were the rules not so construed,

scheduling orders would quickly become meaning-

less.”

This was not an extreme case warranting a

finding of an abuse of discretion.

Indeed, I conclude

that the trial court’s refusal to allow the substitution of

an entirely new expert witness only 50 days before trial

was well within the range of principled outcomes,

especially in light of its ruling that dismissal with

prejudice was the proper remedy for the defective

affidavit of merit.

D. DISMISSAL WITH PREJUDICE

Plaintiff argues that dismissal of the case should

have been ordered without prejudice so that plaintiff

could refile her cause of action within the remaining

time left in the period of limitations. The hospital

argues that it was proper for the trial court to dismiss

plaintiff’s lawsuit with prejudice because the trial court

struck plaintiff’s only nursing expert. Therefore, the

hospital argues, plaintiff was unable to establish her

prima facie case.

Plaintiff is correct that, pursuant to Kirkaldy v

Rim,

the filing of a complaint and accompanying

affidavit of merit tolls the applicable period of limita-

People v Grove, 455 Mich 439, 464-465; 566 NW2d 547 (1997).

Id. at 469.

Id.

Kirkaldy v Rim, 478 Mich 581, 586; 734 NW2d 201 (2007).

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tions until the validity of the affidavit is successfully

challenged. Thus, where an affidavit of merit is found

defective, dismissal without prejudice is the proper

remedy, allowing the plaintiff to refile the cause of

action within whatever time still remains in the period

of limitations.

However, as the trial court correctly recognized,

pursuant to Ligons v Crittenton Hosp,

the filing of a

complaint and accompanying affidavit of merit does not

toll the wrongful death saving period.

Thus, where the

wrongful death saving period has expired, the proper

remedy for a personal representative’s failure to submit

a conforming affidavit of merit is dismissal with preju-

dice.

Here, it is undisputed that the alleged malpractice

occurred on November 14, 2003, and therefore, the appli-

cable two-year period of limitation

expired on Novem-

ber 14, 2005. But plaintiff did not file her complaint and

affidavit of merit until November 5, 2008, almost three

years after the two-year period of limitations expired.

Thus, contrary to plaintiff’s contentions, Kirkaldy is

inapplicable because there is no time remaining in the

limitations period in which to refile the case.

The expiration of that period of limitations did not time

bar plaintiff’s action, however, because under the wrong-

ful death saving provision she had, at the latest, until

November 14, 2008, to file her claim.

Plaintiff filed her

Id.

Ligons v Crittenton Hosp, 285 Mich App 337, 354; 776 NW2d 361

(2009).

MCL 600.5852.

Ligons, 285 Mich App at 354.

MCL 600.5805(6).

Under the wrongful death saving provision, the personal represen-

tative of the estate of a deceased person may file an action at any time

310 295 M

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complaint and affidavit of merit on November 5, 2008.

But because under Ligons that filing had no tolling

effect on the wrongful death saving period, there is no

remaining time available under the wrongful death

saving period and the successful challenge to the affi-

davit of merit requires dismissal with prejudice.

Accordingly, I conclude that the trial court did not

abuse its discretion by ordering dismissal with preju-

dice.

I would affirm.

within two years after letters of authority are issued, but no later than

three years after the period of limitations has run. MCL 600.5852.

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In re MOROUN

Docket No. 308053. Submitted February 2, 2012, at Detroit. Decided

February 6, 2012, at 9:00 a.m. Leave to appeal denied, 491 Mich

855.

The Michigan Department of Transportation (MDOT) brought an

action in the Wayne Circuit Court against the Detroit International

Bridge Company (DIBC) and Safeco Insurance Company of America,

alleging that DIBC had failed to construct its portion of the Ambas-

sador Bridge Gateway Project in accordance with an agreement that

had been executed between MDOT and DIBC. Safeco, as surety, had

issued a performance bond supporting DIBC’s portion of the project.

MDOT filed two motions for partial summary disposition. MDOT

first moved for a partial judgment ordering DIBC to construct a

two-lane access road for the project. MDOT then moved for a partial

judgment ordering DIBC to complete construction of its portion of

the project in accordance with the plans attached to the performance

bond. DIBC countered that the parties had only committed to a

design concept and that there was no final, agreed-upon set of plans

for the project. On February 1, 2010, the court, Prentis Edwards, J.,

granted both motions and ordered DIBC to complete construction of

its portion of the project in accordance with the plans attached to the

performance bond. The Court of Appeals denied DIBC’s interlocutory

application for leave to appeal. The Supreme Court also denied

DIBC’s application for leave to appeal. 486 Mich 937 (2010). In the

trial court, DIBC moved for revision, clarification, and amendment of

the February 1, 2010, order for specific performance. The trial court

denied the motion and subsequently issued a show-cause order

compelling DIBC to appear and explain why it should not be held in

contempt for failing to comply with the February 1, 2010, order. After

several postponements, partially resulting from DIBC’s unsuccessful

attempts to remove the lawsuit to federal court, the show-cause

hearing was held in December 2010. On January 10, 2011, the trial

court ruled that DIBC was failing to comply with the court’s Febru-

ary 1, 2010, order and was in civil contempt. The court ordered that

Dan Stamper, president of DIBC, be incarcerated until DIBC began to

comply with the February 1, 2010, order. The court ordered Stamp-

er’s release later the same day after learning that DIBC had taken

steps to comply with the order. In June 2011, MDOT filed an ex parte

312 295 M

ICH

312 [Feb

motion for continuation of the contempt proceedings, alleging that

DIBC was continuing to violate the trial court’s February 1, 2010,

order. The trial court issued a show-cause order, directed at Stamper

and DIBC, to appear and explain why DIBC should not be held in civil

contempt. Following further hearings on the matter, on November 3,

2011, the trial court issued an opinion and order holding that DIBC

was, again, in civil contempt for failing to comply with the February

1, 2010, order. The court listed several options it was considering to

coerce compliance and directed that “the top company officer for

DIBC” and Manuel J. Moroun, a director of DIBC and its owner,

DIBC Holdings, Inc., appear before the court on January 12, 2012, to

address the sanctions issue. On that date, after discussing several

options for sanctions, the Court stated that DIBC was best equipped

to complete the project and that the key decision-makers, whom the

court identified as Stamper, Moroun, and Moroun’s son (the vice

president of DIBC), had the responsibility to ensure DIBC’s compli-

ance. The court ordered that Moroun and Stamper be incarcerated

until DIBC “fully complied” with the trial court’s February 1, 2010,

order or until they no longer had the power to comply with it. Moroun

and Stamper appealed and moved for release pending appeal. The

Court of Appeals denied the motion for release pending appeal.

Stamper and Moroun then moved for peremptory reversal and a stay.

The Court of Appeals denied the motion for peremptory reversal but

granted, in part, the motion for stay, releasing Stamper and Moroun

pending further order of the Court.

In a lead opinion by K. F. K

ELLY

, J., and separate opinions by

ILDER

,P.J., and F

ORT

OOD

, J., the Court of Appeals held:

1. An order finding a party in civil contempt of court is not a

final order for purposes of appellate review by right. However, the

right of a nonparty to appeal an adjudication of contempt cannot

be questioned even in the absence of a final order. The same

principle applies to individuals not personally held in contempt but

sanctioned as decision-makers to enforce a company’s compliance

with a court order. Accordingly, the Court of Appeals had jurisdic-

tion to hear Stamper and Moroun’s appeal as an appeal by right.

2. Individuals who are officially responsible for the conduct of

a corporation’s affairs are required to obey a court order directed

at the corporation, and they may be sanctioned if they fail to take

appropriate action within their power to ensure that the corpora-

tion complies with the court order. Accordingly, Stamper and

Moroun could be held accountable for failing to ensure DIBC’s

compliance with the trial court’s order.

3. A civil contempt proceeding requires only rudimentary due

process. In other words, it requires notice and an opportunity to be

2012] In re M

OROUN

313

heard. When contempt is committed outside the court’s view, MCL

600.1711(2) permits the court to punish the contemnor by fine or

imprisonment, or both, after proof of the facts charged has been made

by affidavit or other method and an opportunity has been given to

defend. The court must also comply with MCR 3.606(A), which, on a

proper showing on ex parte motion supported by affidavits, requires

that the trial court (1) order the accused person to show cause, at a

reasonable time specified in the order, why that person should not be

punished for the alleged misconduct or (2) issue a bench warrant for

the arrest of the person. With regard to Moroun, he was a director of

DIBC and his living trust held the majority of the voting shares in

DIBC Holdings, which owned DIBC. He admitted that he had been

informed about the project and the trial court’s order regarding the

project. The trial court’s November 3, 2011, opinion and order finding

DIBC in contempt discussed possible sanctions, including imprison-

ment, and directed Moroun to appear at the hearing on sanctions.

Accordingly, he was provided notice that he might be sanctioned for

DIBC’s contempt and an opportunity to be heard on the matter. With

regard to Stamper, he was listed on the show-cause order, was present

throughout the contempt proceedings, actively participated in

DIBC’s defense, and had previously been incarcerated for DIBC’s

contempt. There was no dispute regarding Stamper’s authority over

the company and the project. Accordingly, he had notice that he might

be incarcerated as a coercive sanction for DIBC’s contempt and was

provided an opportunity to be heard on the matter.

4. Confinement or imprisonment may be imposed whether the

contempt is civil or criminal in nature. In the context of civil

contempt, the term of imprisonment ceases when the contemnor

complies with the court’s order or no longer has the power to

comply. The contemnor must be able to purge the contempt and

obtain release by performing an affirmative act or duty. In other

words, the contemnor must carry the keys to the prison in his or

her own pocket. The commitment order must specify the act or

duty.

5. The trial court’s decision to use coercive measures that

included incarceration was not an abuse of discretion. In this case,

however, the trial court’s order of imprisonment could not be

upheld because the order failed to adequately identify the act or

duty Stamper and Moroun had to perform to purge the contempt.

6. Contrary to the assertions of Stamper and Moroun, the trial

court did not act as both an accuser and finder of fact by imposing

a sanction that was not requested by MDOT. The court provided

an adequate explanation of why the alternative sanctions were

inadequate.

314 295 M

ICH

312 [Feb

Affirmed in part, vacated in part, and remanded; judgment

given immediate effect in light of pending hearing by the trial

court on the status of the project.

ILDER

,P.J., concurring in part and dissenting in part, agreed

that the Court of Appeals had jurisdiction over the claim of appeal,

but reasoned that because they were nonparties, the order sanc-

tioning Stamper and Moroun was a final order appealable by right

under MCR 7.202(6)(a)(i). The lead opinion also correctly con-

cluded that the trial court’s commitment order failed to ad-

equately identify what actions Stamper and Moroun were required

to take that would allow them to immediately purge themselves of

the contempt finding made against DIBC. Stamper and Moroun,

however, did not receive sufficient notice that they could person-

ally be held in contempt and punished. The plain meaning of MCR

3.606(A)(1) requires that an individual be given direct notice to

appear and show cause why he or she should not be held in

contempt for specific contumacious conduct. Because such notice

was not given to Stamper and Moroun in this case, the contempt

sanctions imposed against them violated due process of law.

Because the issue had not been previously addressed in Michigan

and the panel issued three separate opinions, the judgment of the

Court of Appeals should not have been given immediate effect.

ORT

OOD

, J., concurring in part and dissenting in part, joined

in and concurred with the lead opinion in all respects except with

regard to the sanction of imprisonment and would have affirmed

the trial court’s decision in its entirety. Although civil contempt is

primarily coercive in nature, the sanction for civil contempt may

also have a punitive effect. Imprisonment for civil contempt might

be forever as long as it is within the contemnor’s power to comply

with the court order he or she has refused to carry out. The court

must use the least possible power necessary to achieve the pro-

posed end, but the propriety of the contempt sanction is contin-

gent on the facts and circumstances in each individual case. The

commitment order was justified in this case in light of DIBC’s

willful, continuous, and contemptuous failure to comply with the

trial court’s February 1, 2010, order. Promised future compliance

with prior judicial orders is a common and appropriate method of

purging contempt. Stamper and Moroun had the means and

knowledge to immediately purge the contempt by promises of

future compliance or good-faith efforts to comply with the court’s

order. Thus, the trial court did not abuse its discretion by imposing

an order of contempt and incarcerating them until the project was

completed.

2012] In re M

OROUN

315

1. C

ONTEMPT —

IVIL

ONTEMPT —

PPEAL BY

IGHT —

URISDICTION —

INAL

RDER —

ONPARTIES

An order finding a party in civil contempt of court is not a final order

for purposes of appellate review by right, but the right of a

nonparty to appeal an adjudication of contempt cannot be ques-

tioned even in the absence of a final order; the same principle

applies to individuals not personally held in contempt, but sanc-

tioned as decision-makers to enforce a company’s compliance with

a court order (MCL 600.308[2]; MCR 7.202[6][a]).

2. C

ONTEMPT —

IVIL

ONTEMPT —

ORPORATIONS —

FFICERS AND

GENTS

Individuals who are officially responsible for the conduct of a

corporation’s affairs are required to obey a court order directed at

the corporation, and they may be sanctioned if they fail to take

appropriate action within their power to ensure that the corpora-

tion complies with the court order.

3. C

ONTEMPT —

IVIL

ONTEMPT —

NDIRECT

ONTEMPT —

ROCESS

A civil contempt proceeding requires only rudimentary due process,

i.e., notice and an opportunity to be heard; when contempt is

committed outside the court’s view, the court may punish the

contemnor by fine or imprisonment, or both, after proof of the

facts charged has been made by affidavit or other method and an

opportunity has been given to defend; on a proper showing on ex

parte motion supported by affidavits, the trial court must (1) order

the accused person to show cause, at a reasonable time specified in

the order, why that person should not be punished for the alleged

misconduct or (2) issue a bench warrant for the arrest of the

person (MCL 600.1711[2]; MCR 3.606[A]).

4. C

ONTEMPT —

IVIL

ONTEMPT —

ANCTIONS —

ONDITIONAL

MPRISONMENT

Confinement or imprisonment may be imposed whether the con-

tempt is civil or criminal in nature; in the context of civil

contempt, the term of imprisonment ceases when the contemnor

complies with the court’s order or no longer has the power to

comply; the contemnor must be able to purge the contempt and

obtain release by committing an affirmative act or duty, and the

commitment order must specify the act or duty (MCL

600.1715[2]).

Bill Schuette, Attorney General, John J. Bursch,

Solicitor General, Richard A. Bandstra, Chief Legal

Counsel, and Robert L. Mol, LuAnn Cheyne Frost, and

316 295 M

ICH

312 [Feb

Michael Dittenber, Assistant Attorneys General, for the

Department of Transportation.

Kerr, Russell and Weber, PLC (by William A. Sankbeil

and Joanne Geha Swanson), Young & Susser, P.C. (by

Rodger D. Young), and Domina Law Group PC LLO (by

David A. Domina) for Manuel J. Moroun.

Mogill, Posner & Cohen (by Kenneth M. Mogill and

Jill M. Schinske) and Domina Law Group PC LLO (by

David A. Domina) for Dan Stamper.

Before: W

ILDER

,P.J., and K. F. K

ELLY

and F

ORT

OOD

JJ.

K. F. K

ELLY

, J. Appellants, Manuel J. Moroun and Dan

Stamper, appeal as of right the trial court’s January 12,

2012, order directing that they be imprisoned in the

Wayne County jail until defendant Detroit Interna-

tional Bridge Company (DIBC) fully complied with the

trial court’s opinion and order of February 1, 2010.

Moroun is a director of DIBC and Stamper is its

president. Previously, on November 3, 2011, the trial

court found DIBC in civil contempt for failing to comply

with the February 1, 2010, order, which had been

entered in the underlying lawsuit filed by plaintiff

Michigan Department of Transportation (MDOT)

against DIBC and Safeco Insurance Company of

America.

We conclude that appellants’ due-process

rights were not violated and that the trial court was

clearly acting within its inherent and statutory powers

to order DIBC’s key decision-makers incarcerated pend-

As explained in greater detail later in this opinion, the underlying

lawsuit concerns a large construction project undertaken by MDOT and

DIBC. Safeco, as surety, issued a performance bond supporting DIBC’s

portion of the project.

2012] In re M

OROUN

317

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,J.

ing DIBC’s compliance with the trial court’s February

1, 2010, order. However, the commitment order requir-

ing full compliance cannot stand because appellants do

not have the immediate ability to completely finish

construction and thus “purge” DIBC of the contempt.

Because the commitment order does not provide appel-

lants with the “keys to the jailhouse,” we vacate that

portion of the trial court’s commitment order that

continues incarceration until DIBC has “fully com-

plied” and remand the case to the trial court. On

remand, the trial court shall craft an order stating with

particularity what act or duty appellants must perform

both to ensure that DIBC will begin and continue

compliance with the court’s February 1, 2010, order as

well as to enable them to purge themselves of the

contempt finding against DIBC. Accordingly, we affirm

in part, vacate in part, and remand for further proceed-

ings consistent with this opinion.

I. BASIC FACTS AND PROCEDURAL HISTORY

The underlying lawsuit arises from the Ambassador

Bridge Gateway Project, which is intended to facilitate

the flow of traffic between the United States and

Canada over the Ambassador Bridge (the Bridge) by

constructing interstate freeway connections to the

Bridge. DIBC owns and operates the Bridge. Stamper is

the president of DIBC and is extensively involved in the

operation and construction activities at the Bridge and

in the defense of this lawsuit. Moroun has a living trust

that is a minority shareholder of DIBC Holdings, Inc.,

which, in turn, owns DIBC. Moroun is also a director on

the boards for DIBC and DIBC Holdings.

In April 2004, MDOT and DIBC executed an agree-

ment, which required DIBC to construct Part A of the

project in accordance with MDOT specifications and

318 295 M

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standards; plans and designs were attached to the

contract as exhibits. DIBC was responsible for 100

percent of the costs associated with Part A, including

construction and property acquisition costs. Because

DIBC was unable to acquire all the property interests

needed to complete Part A, the contract was amended in

February 2006, whereby MDOT assumed responsibility

to acquire, through the power of eminent domain if

necessary, the property interests encompassed by a

portion of Part A. On March 12, 2007, a performance

bond was executed, which provided that DIBC and

Safeco “are held and firmly bound unto” MDOT in the

penal sum of $34,664,650 and that “the condition of this

obligation” is that “the above named principal shall and

will, well and faithfully, and fully . . . execute and

perform all of the obligations contained in the attached

documents identified as Exhibits A through Exhibit E,

listed below.” Exhibit E was described in the bond as

“Plans for DIBC portion of the Ambassador

Bridge/Gateway Project (Part A, DIBC portion) per

MDOT/DIBC agreement as amended.” In November

2007, MDOT and DIBC also executed a maintenance

agreement, whereby DIBC agreed to maintain and

operate certain physical features or structures located

on a portion of M-85, including a truck road and related

infrastructure, and a gate system. The parties also

agreed that DIBC could use M-85, the I-75 exit ramp,

and an access easement road in emergency situations,

under certain conditions and limitations set forth in the

agreement.

On June 24, 2009, MDOT filed a lawsuit against

DIBC and Safeco alleging that DIBC had not performed

the construction in accordance with the agreements.

Among other claims, MDOT alleged that DIBC was

constructing Part A according to a “Conflicting De-

sign,” a plan not approved by MDOT, the Federal

2012] In re M

OROUN

319

PINION BY

K. F. K

ELLY

,J.

Highway Administration, or the city of Detroit, which

included (1) constructing permanent tollbooths in the

location where DIBC had agreed to construct an access

easement drive, (2) installing facilities including

automobile-fueling pumps in the location where it had

agreed to construct DIBC Ramp S04, the ramp over

23rd Street for traffic to Canada, (3) installing facilities

including underground fuel tanks in the location where

it had agreed to construct the two-lane truck road and

DIBC Ramp S05, the ramp over 23rd Street carrying

truck traffic to the interstate highways, and (4) con-

structing Pier 19 at a location that blocks construction

of the two-lane truck road from the truck plaza, as well

as a “special return route” for maintenance and emer-

gency vehicles. MDOT sought a cease-and-desist order

regarding ongoing construction activities by DIBC, re-

imbursement for costs associated with contractual

breaches of the parties’ agreements, an order of specific

performance to direct DIBC to engage in construction

consistent with the agreement, damages incurred as a

result of DIBC’s actions, and any other appropriate

equitable and monetary relief.

On October 29, 2009, MDOT filed a motion for

partial summary disposition pursuant to MCR

2.116(C)(10), seeking a partial judgment ordering DIBC

to construct the two-lane access road for the project.

Two weeks later, on November 13, 2009, MDOT filed a

second motion for partial summary disposition and an

order for specific performance pursuant to MCR

2.116(C)(10), seeking a partial judgment ordering DIBC

to construct the necessary roads, ramps, and bridges to

connect the I-75 and I-96 freeways directly to the

Ambassador Bridge in accordance with the agreed-upon

design for those structures. In response to these motions,

DIBC essentially argued that the parties had developed a

“flexible” plan, that they had merely committed to a

320 295 M

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312 [Feb

PINION BY

K. F. K

ELLY

,J.

“design concept,” and that they did not memorialize

any particular plan or agreement regarding the design

or construction of particular roads, structures, or im-

provements. DIBC submitted the affidavit of Stamper

to support its assertion that there was never “an

immutable, final, agreed set of plans.”

On February 1, 2010, the trial court issued an opin-

ion and order granting both motions and granting

MDOT’s request for specific performance. The trial

court found that MDOT and DIBC had “agreed on a

design for DIBC’s Part A of the project,” as reflected in

the agreements and incorporated into the performance

bond, and that DIBC had not constructed Part A

according to the agreed-upon design. In doing so, the

trial court rejected DIBC’s arguments that it was not

restricted by the contract to a particular design and

that it could unilaterally substitute different access

routes. The trial court further noted that “DIBC ha[d]

constructed permanent structures and facilities in con-

flict with the designs for the easement, road and

ramps.” Accordingly, the trial court directed DIBC,

among other things, to “remove structures that have

been constructed in the path of the access road and

recorded easement and complete construction of its

portion of the Gateway Project in accordance with the

plans attached to the Performance Bond and the Main-

tenance Agreement.”

On February 19, 2010, DIBC filed an emergency

application seeking leave to appeal the court’s opinion

and order granting partial summary disposition, along

with motions for immediate consideration and for a stay

of the order. This Court denied DIBC’s interlocutory

application for leave to appeal “for failure to persuade

the Court of the need for immediate appellate review”

and denied the motion for a stay. Dep’t of Transp v

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Detroit Int’l Bridge Co, unpublished order of the Court

of Appeals, entered March 17, 2010 (Docket No.

296567).

DIBC then filed a motion in the trial court seeking

revisions, clarification, and amendment of the order

because the order did not address the issue of material

and nonmaterial changes. DIBC claimed that MDOT’s

approval was not needed for nonmaterial changes. At a

hearing conducted on April 23, 2010, the trial court

ruled that its order was enforceable, that a timetable for

the completion of construction submitted by DIBC was

unsatisfactory, and that DIBC’s motion for revision,

clarification, and amendment was frivolous.

Four days later, the trial court issued an order to

show cause, directing DIBC and Stamper to appear in

court on May 10, 2010, to explain why DIBC should not

be held in civil contempt for failing to comply with the

terms of the February 1, 2010, opinion and order. On

the same day, DIBC filed an application with the

Supreme Court, as well as a motion for a stay and a

motion for immediate consideration, seeking leave to

appeal this Court’s denial of its application for leave to

appeal filed in Docket No. 296567. The Supreme Court

initially granted a stay, but subsequently denied DIBC’s

application for leave to appeal and vacated the stay.

Dep’t of Transp v Detroit Int’l Bridge Co, 486 Mich 937

(2010).

The trial court rescheduled the show-cause hearing

for June 10, 2010, and then for September 23, 2010, but

as a result of DIBC’s attempt to remove the lawsuit to

federal district court, each hearing was adjourned. The

trial court was finally able to conduct the show-cause

hearing in December 2010, over the course of three

days. Stamper appeared and testified at the hearing. On

January 10, 2011, the trial court ruled that it was

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finding by clear and unequivocal evidence that (1) DIBC

was not complying with the terms and provisions of the

February 1, 2010, order, (2) the failure to comply

impaired the authority and impeded the functioning of

the court, (3) DIBC’s acts and omissions occurred

outside of the presence of the court, and (4) DIBC was

in civil contempt. The trial court found that the time-

table submitted by DIBC, which provided a completion

date in June 2013, was completely unacceptable, espe-

cially given that at least 60 to 70 percent of the work

had been completed, and directed DIBC to submit a

detailed timetable that would ensure full compliance

with the February 1, 2010, order within one year. The

trial court also directed DIBC to submit biweekly re-

ports regarding all scheduled work and work in

progress. The trial court further ordered that Stamper

be imprisoned in the Wayne County jail until DIBC

began to comply with the February 1, 2010, order.

Stamper was released later in the day once it was

reported to the trial court that DIBC was beginning to

comply with the order to remove the structures.

DIBC again filed an application seeking leave to

appeal the February 1, 2010, opinion and order as well

as the January 10, 2011, contempt order. This Court

denied DIBC’s interlocutory application “for failure to

persuade the Court of the need for immediate appellate

review” and denied the motion for a stay. Dep’t of

Transp v Detroit Int’l Bridge Co, unpublished order of

the Court of Appeals, entered March 18, 2011 (Docket

No. 302330). DIBC did not seek leave to appeal in the

Supreme Court.

In June 2011, MDOT filed an ex parte motion for

continuation of contempt proceedings under MCR

3.606(A) because of DIBC’s continuing violation of the

court’s February 1, 2010, opinion and order. In its

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motion, MDOT claimed that DIBC had not removed any

conflicting structures and had not constructed any

public roads, as ordered by the court. MDOT submitted

an affidavit supporting the motion. On June 13, 2011,

the trial court issued a show-cause order directing

Stamper and DIBC to personally appear and show cause

why DIBC should not be held in civil contempt for

failure to comply with the terms and provisions of the

February 1, 2010, opinion and order. DIBC’s resident

agent was served with the order. Stamper was also

personally served with the order, appeared at the hear-

ing as directed, and provided testimony in defense of

the civil contempt charge against DIBC at subsequent

hearings conducted in September and October 2011.

The trial court issued an opinion and order on

November 3, 2011, in which it found by clear and

unequivocal evidence that DIBC was in violation of the

February 1, 2010, order, and therefore ruled that DIBC

was, again, in civil contempt of the court. The trial

court stated that the project site plan that was illus-

trated in the C-1 drawing “identifies the major compo-

nents” of the Gateway Agreement and that DIBC was

responsible for constructing “various components”

shown in the C-1 drawing, which included the S01

Bridge for outbound traffic to Canada and the “4/3

lane” road under the S01 Bridge. After describing the

factual background and previous proceedings in this

case, the court summarized the testimony from the

hearing and then set forth the following findings of fact:

DIBC has provided plans for construction and has

constructed parts of a design that is not in agreement with

the approved design. DIBC’s request for a variance for the

alternate design has been denied by MDOT. The proposed

substitute design materially changes the approved design.

The proposed construction plans leave out important parts

of the approved design including the two-lane access road

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and special return routes shown on the C-1 drawing and

the Maintenance Agreement. Additionally, DIBC has not

removed various conflicting structures that are in the path

of roads shown in the approved design.

The C-1 drawing in Exhibit E to the Performance Bond

required DIBC to construct a four lane road that proceeds

in a southerly direction under [the] S01 [ramp] and be-

tween its piers. The C-1 drawing shows the four lanes

making a turn to the west, paralleling Fort Street and then

narrowing to three lanes. The as-built plans submitted by

DIBC, show that piers of S01 (piers 11, 12, and 13) are in

conflict with the four lane road that passes under S01.

DIBC did not submit preliminary and final construction

plans to MDOT for approval, prior to the start of construc-

tion of S01 as required by the Gateway Agreement. DIBC

constructed a two lane road that proceeds in a southerly

direction under S01 between the piers conflicting with the

C-1 drawing. Cars using those two lanes may stop for

fueling, stop at the duty free store or proceed to S01. Truck

traffic is routed in a southwesterly direction at pier 11,

through newly constructed toll booths toward a truck

fueling area. The car fueling area is in the path of the 4/3

lane road shown in C-1. S01 as presently constructed, is not

in compliance with the February 1, 2010 Order of this

Court. Mr. [Thomas] LaCross[, an engineer serving as

project manager for the Ambassador Bridge Gateway

project on behalf of DIBC,] and Mr. [Michael] Anderson[,

an engineer employed by a security firm representing

Safeco,] acknowledged that S01 was not constructed in

conformity with C-1 of Exhibit E to the Performance Bond.

DIBC has sought approval for variances, including ap-

proval for nonconforming as-built plans for S01 from

MDOT; however, those requests have not been approved.

DIBC has not submitted construction plans that satisfy the

requirements of the plans attached to the Performance

Bond and the Maintenance Agreement for the access road

and the truck road. The truck road from Canada is a two

lane road that carries truck traffic in a westerly direction,

parallel to Fort Street. The truck road continues to the S02

Bridge to S32 to convey truck traffic onto the freeways.

2012] In re M

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Pier 19 conflicts with the proposed truck road. Plans have

not been submitted for the correction of piers 11, 12, 13

and the relocation of pier 19.

With respect to sanctions, the trial court listed options

it was considering to coerce compliance with the Feb-

ruary 1, 2010, order: (1) requiring DIBC’s surety,

Safeco, to take over responsibility for completing the

project, (2) having MDOT or another construction com-

pany complete DIBC’s portion of the project, (3) finan-

cial sanctions or imprisonment, or both, and (4) appoint-

ment of a receiver to stand in the place of the owner of

DIBC (Moroun, according to the court) and its officers

with authority to make decisions regarding the imple-

mentation of the February 1, 2010, order. The trial

court indicated that it would make this sanction deter-

mination at a hearing on January 12, 2012, and directed

DIBC in the interim to remove conflicting structures

and perform construction in accordance with the C-1

drawing. The trial court also directed Moroun and “the

top company officer for DIBC” to appear before the

court on January 12, 2012, on the sanctions issue.

DIBC filed an application seeking leave to appeal the

November 3, 2011, order and a motion for immediate

consideration. This Court denied the interlocutory ap-

plication “for failure to persuade the Court of the need

for immediate appellate review” and denied the motion

for a stay. Dep’t of Transp v Detroit Int’l Bridge Co,

unpublished order of the Court of Appeals, entered

January 10, 2012 (Docket No. 307306).

In the meantime, Moroun filed a motion to be ex-

cused from appearing at the January 12, 2012, hearing.

Moroun’s motion stated that it was intended to inform

the trial court that he was not the owner of DIBC and

that he was not the decision-maker with respect to the

Gateway Project, and further asserted:

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Mr. Moroun is not the owner of DIBC. DIBC is owned by

DIBC Holdings, Inc. (“DIBC Holdings”). The Manuel J.

Moroun Trust Dated March 24, 1977 As Amended and

Restated on August 28, 1996 is a minority owner of DIBC

Holdings. Mr. Moroun is a member of DIBC’s board of

directors, and he has not been a statutory officer of DIBC

during any pertinent time. While Mr. Moroun has been

informed about the Ambassador Bridge Gateway Project

(“Gateway Project”) and this Court’s order regarding the

Gateway Project, from the inception, authority over the

Gateway Project – and subsequently this litigation – has

been the responsibility of Dan Stamper, DIBC’s president

for over 20 years.

MDOT filed a response to the motion, asserting that

Moroun should not be excused from the hearing regard-

ing sanctions for the contempt order because he was a

director and owner of DIBC Holdings, Inc., which is the

sole owner of DIBC and DIBC was under the trial

court’s authority and jurisdiction. MDOT also asserted

that Moroun and Stamper were directors of DIBC and

that they constituted a majority in control of DIBC.

MDOT also pointed out that Stamper had testified at

the show-cause hearing that he reported to the board of

directors, which included Moroun.

The parties, and appellants, along with their attor-

neys, appeared at the hearing conducted on January 12,

2012. In denying Moroun’s motion to be excused, the

trial court stated:

In addition, the claim that Manuel Moroun has no

control or authority is not supported by the record of this

case. Mr. Moroun has the power, the authority to make sure

that there is compliance with the February 1st, 2010 Order

of this Court. The request to excuse Mr. Moroun from this

hearing is therefore denied.

After discussing several options for sanctions, the trial

court stated that DIBC “is best equipped to complete

2012] In re M

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the project at this time” because it has the power, the

resources, and the knowledge to comply with the court’s

order, and that the “key decision makers,” who were

Manuel Moroun, Stamper, and Matthew Moroun (Man-

uel Moroun’s son and the vice president of DIBC), had

the responsibility to ensure that DIBC fully complied

with the order. The trial court then directed DIBC to

pay the maximum fine of $7,500 and MDOT’s costs and

reasonable attorney fees and directed that appellants be

imprisoned in the Wayne County jail until DIBC com-

plied with the court’s February 1, 2010, order. The trial

court also entered an opinion and order incorporating

these rulings. In relevant part, the order provides:

IT IS ORDERED THAT Manuel “Matty” Moroun and

Dan Stamper shall be imprisoned in the Wayne County Jail

until the Detroit International Bridge Company complies

with the February 1, 2010 Order of this Court.

IT IS ORDERED THAT the imprisonment of Manuel

“Matty” Moroun and Dan Stamper shall cease when the

Detroit International Bridge Company has fully complied

with the February 1, 2010 Order of this Court or they no

longer have the power to comply with the February 1, 2010

Order of this Court.

Finally, the trial court continued the matter to February

9, 2012, “for further review of the status of the project

and the appearance of the Vice President of DIBC,

Matthew Moroun.”

Appellants filed a claim of appeal, along with a

motion for release pending appeal. This Court denied

the latter on January 12, 2012. The following day,

appellants filed motions for peremptory reversal, for a

stay, and for immediate consideration. This Court de-

nied the motion for peremptory reversal, but granted,

in part, the motion for a stay, releasing appellants until

further order of this Court. This Court also expedited

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the appeal by shortening the briefing schedule and

scheduling the matter for oral argument on February 2,

2012.

II. JURISDICTION

Appellants claim that their appeal is as of right, citing

MCR 7.203(A), MCR 7.204, and MCR 7.202(6)(a). MDOT

asserts “this Court does not have jurisdiction...as

claimed by both DIBC and its corporate officials, because

the January 12, 2012 order is not a final order appealable

by right.” MDOT makes no further argument, however,

believing that “[i]t appears this Court has treated the

corporate officials’ claim of appeal as an application for

leave to appeal under MCR 7.203(B) the January 12, 2012

Opinion and Order, and granted it.” We clarify that we

have not treated this appeal as on application for leave to

appeal; instead, we conclude that appellants may appeal

as of right.

In this case, DIBC, a party to the underlying lawsuit,

was held in civil contempt of court, which must be

distinguished from criminal contempt; whereas the

former is coercive, the latter is punitive. In re Contempt

of Dougherty, 429 Mich 81, 95; 413 NW2d 393 (1987).

Criminal contempt is a crime and, therefore, an order

finding a party in criminal contempt of court and

sanctioning the party is a final order from which the

contemnor may appeal as of right. See MCL 600.308(1);

MCR 7.203(A); MCR 7.202(6)(b); In re Contempt of

Dudzinski, 257 Mich App 96, 97; 667 NW2d 68 (2003);

In re Contempt of Robertson, 209 Mich App 433, 436;

531 NW2d 763 (1995). However, an order finding a

party in civil contempt of court is not a final order for

purposes of appellate review. See MCL 600.308(2); MCR

7.202(6)(a).

2012] In re M

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Civil contempt is clearly at issue in this case because

the trial court sought to compel DIBC’s compliance

with its February 1, 2010, order. Thus, an appeal by

DIBC of the civil contempt order entered on November

3, 2011, must be made by application, not as of right.

However, the same is not true for the individual appel-

lants, Moroun and Stamper, who are nonparties who

have not been held in contempt but instead have been

sanctioned for DIBC’s contempt. Even if a final order

against DIBC had been issued, appellants would not

have the ability to appeal as of right under MCR

7.203(A) because they do not have party status. Thus,

limiting appellants to only seeking leave to appeal by

application would be tantamount to denying them the

right to appellate review of the trial court’s imposition

of sanctions. We do not believe an individual’s right to

appellate review should be so constrained, especially in

this context, in which the most severe sanction—

incarceration—is used to coerce compliance with a trial

court’s order.

Under federal law, “[t]he right of a nonparty to

appeal an adjudication of contempt cannot be ques-

tioned” even absent a final order. United States Catholic

Conference v Abortion Rights Mobilization, Inc, 487 US

72, 76; 108 S Ct 2268; 101 L Ed 2d 69 (1988) (in the

context of finding a witness in contempt). We have also

previously treated an appeal from nonparties held in

civil contempt of court as an appeal by right, though the

issue was never specifically raised or discussed. See,

e.g., Droomers v Parnell, unpublished opinion per cu-

riam of the Court of Appeals, issued June 30, 2005

(Docket No. 253455) (nonparty officers of a corpora-

tion); In re Radulovich, unpublished opinion per curiam

of the Court of Appeals, issued April 10, 2001 (Docket

No. 210779) (attorney who represented a party in an

underlying matter). Although appellants have not been

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held in contempt, but sanctioned as decision-makers to

enforce DBIC’s compliance with the court’s order, we

conclude that the same principles apply. This matter is

properly before us by means of a claim of appeal.

III. DUE PROCESS

Appellants contend that they were not afforded due

process because they were never put on notice that they

were in jeopardy of being imprisoned as a result of

DIBC’s civil contempt. We disagree. Whether a person

has been afforded due process is a question of law that

is reviewed de novo. In re Contempt of Henry, 282 Mich

App 656, 668; 765 NW2d 44 (2009).

A trial court has inherent and statutory authority to

enforce its orders. MCL 600.611; MCL 600.1711; MCL

600.1715. In civil contempt proceedings, a trial court

employs its contempt power to coerce compliance with a

present or future obligation, including compliance with

a court order, to reimburse the complainant for costs

incurred as a result of contemptuous behavior, or both.

Porter v Porter, 285 Mich App 450, 455; 776 NW2d 377

(2009). “Civil contempt proceedings seek compliance

through the imposition of sanctions of indefinite dura-

tion, terminable upon the contemnor’s compliance or

inability to comply.” DeGeorge v Warheit, 276 Mich App

587, 592; 741 NW2d 384 (2007).

The trial court must carry out the proper procedures

before it can issue an order holding a party or individual

in contempt of court. In re Contempt of Auto Club Ins

Ass’n, 243 Mich App 697, 711; 624 NW2d 443 (2000). As

opposed to a criminal contempt proceeding, in which

some, but not all, of the due-process safeguards of an

ordinary criminal trial are used, a civil contempt pro-

ceeding only requires “rudimentary” due process, i.e.,

“notice and an opportunity to present a defense....”

2012] In re M

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Porter, 285 Mich App at 456-457; see also Int’l Union,

United Mine Workers of America v Bagwell, 512 US 821,

831; 114 S Ct 2552; 129 L Ed 2d 642 (1994) (“Because

civil contempt sanctions are viewed as nonpunitive and

avoidable, fewer procedural protections for such sanc-

tions have been required.”).

Appellants assert that they are not DIBC and that

“the fiction” underlying the trial court’s January 12,

2012, order is that they are “tantamount to DIBC” and

“stand in its place vis a vis the contempt proceedings.”

They also cite caselaw supporting the proposition that a

corporation is a separate entity from its individual

shareholders, officers, and directors. However, appel-

lants have overlooked that a corporation can only act

through its officers and agents. See In re Kennison

Sales & Engineering Co, Inc, 363 Mich 612, 617; 110

NW2d 579 (1961), quoting Stowe v Wolverine Metal

Specialties Co, 242 Mich 624, 628; 219 NW 714 (1928).

“ ‘When a court acquires jurisdiction over a corporation

as a party, it obtains jurisdiction over the official con-

duct of the corporate officers so far as the conduct may

be involved in the remedy against the corporation

which the court is called upon to enforce.’ ” Stowe, 242

Mich at 629, quoting Tolleson v People’s Savings Bank,

85 Ga 171; 11 SE 599 (1890). Courts will also disregard

the separate existence of corporate entities when it is

“used to defeat public convenience, justify wrong, pro-

tect fraud, or defend crime....” Paul v Univ Motor

Sales Co, 283 Mich 587, 602; 278 NW 714 (1938).

Because individuals who are officially responsible for

the conduct of a corporation’s affairs are required to

obey a court order directed at the corporation, these

same individuals may be sanctioned if they fail to take

appropriate action within their power to ensure that

the corporation complies with the court order. Wilson v

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United States, 221 US 361, 376; 31 S Ct 538; 55 L Ed

771 (1911). In Wilson, the United States Supreme Court

stated:

A command to [a] corporation is in effect a command to

those who are officially responsible for the conduct of its

affairs. If they, apprised of the writ directed to the corpora-

tion, prevent compliance or fail to take appropriate action

within their power for the performance of the corporate duty,

they, no less than the corporation itself, are guilty of disobe-

dience, and may be punished for contempt. [Id.]

See also Electrical Workers Pension Trust Fund of Local

Union 58, IBEW v Gary’s Electrical Serv Co, 340 F3d

373, 380 (CA 6, 2003), and Ex parte Chambers, 898

SW2d 257, 260 (Tex, 1995). Accordingly, we reject

appellants argument that they may not be held account-

able for failing to ensure DIBC’s compliance with the

trial court’s order.

Appellants further argue that they were not given

notice to show cause why they should not be personally

sanctioned, or given an opportunity to be heard, in

violation of the United States and Michigan Constitu-

tions and the notice requirements of MCL 600.l711(2)

and MCR 3.606(A). When the contempt is committed

outside the court’s direct view (i.e., “indirect con-

tempt”), as in this case, MCL 600.1711(2) allows a trial

court to punish the contemnor by fine or imprisonment,

or both, “after proof of the facts charged has been made

by affidavit or other method and opportunity has been

given to defend.” For indirect contempt, the trial court

must also comply with MCR 3.606(A), which, on a

proper showing on ex parte motion supported by affi-

davits, requires the trial court to (1) order the accused

person to show cause, at a reasonable time specified in

the order, why that person should not be punished for

the alleged misconduct or (2) issue a bench warrant for

the arrest of the person.

2012] In re M

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Appellants’ citation of Auto Club, 243 Mich App 697,

as support for their argument that the trial court was

required to name them in the show-cause order is not

persuasive. Auto Club is distinguishable because the

persons accused of contempt, the attorneys, were ca-

pable of committing the contemptuous acts on their

own, whereas a corporation cannot act on its own,

contemptuously or otherwise. Rather, as previously

noted, a corporation can only act through its officers

and agents. Appellants were responsible for ensuring

DIBC’s compliance with the February 1, 2010, opinion

and order, regardless of whether they were parties to

the underlying litigation or whether they were named

in the trial court’s opinion and order. The trial court

held DIBC in civil contempt. The trial court found that

appellants were the key decision-makers at DIBC, with

the responsibility to ensure that DIBC complied with

the court’s order. Contrary to their claim on appeal,

there is sufficient evidence in the record to support this

finding.

With respect to Moroun, he represented that he is a

director of DIBC and that his trust is a minority

shareholder in DIBC Holdings, which owns DIBC.

Moreover, Moroun does not dispute that his living trust

holds the majority of voting shares in DIBC Holdings.

Moroun also acknowledged that he had been informed

about the Gateway Project and the court’s order regard-

ing the Gateway Project, but claimed that authority

over the Gateway Project and the litigation “has been

the responsibility of Dan Stamper.” He did not other-

wise affirmatively assert that he had no authority or

responsibility over DIBC or its affairs, and any such

assertion would not have been credible.

Furthermore, the November 3, 2011, opinion and

order finding DIBC in contempt affirmatively discussed

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the possible civil contempt sanctions, including impris-

onment, and directed Moroun to appear at the sanction

hearing. Moroun filed a motion to be excused from the

hearing, which, from our perspective, was an attempt to

avoid the possibility that he might be sanctioned for

DIBC’s civil contempt. Accordingly, we conclude that

Moroun was provided notice that he might be sanc-

tioned for DIBC’s contempt and an opportunity to be

heard on the matter.

With respect to Stamper, he was listed on the show-

cause order, was present throughout the contempt

hearings, and actively participated in DIBC’s defense.

He had also previously been imprisoned for DIBC’s civil

contempt in January 2011. Because there is no dispute

regarding Stamper’s authority over the company and

the project, we conclude that he had notice that he

might be incarcerated as a coercive sanction for DIBC’s

civil contempt and was provided an opportunity to be

heard on the matter.

IV. IMPRISONMENT SANCTION

Appellants argue that their imprisonment was an

improper use of the civil contempt power and was

invalid as a matter of law because the trial court’s order

did not give them the “keys to their cell[s].” We disagree

with appellants to the extent that they argue that

incarceration was an improper use of the trial court’s

civil contempt power; however, we agree with appel-

lants that the trial court erred by requiring their

continued incarceration until DIBC “fully complied

with” the February 1, 2010, order. We review a trial

court’s issuance of a contempt order for an abuse of

discretion and the factual findings supporting the order

for clear error. Porter, 285 Mich App at 454-455. “[R]e-

versal is warranted only when the trial court’s decision

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is outside the range of principled outcomes.” Id. at 455.

To the extent that this Court must examine questions of

law related to the trial court’s contempt decision, our

review is de novo. See DeGeorge, 276 Mich App at 591.

The interpretation and application of the court rules

and statutes are also reviewed de novo. In re Mason, 486

Mich 142, 152; 782 NW2d 747 (2010).

Confinement or imprisonment may be imposed

whether the contempt is civil or criminal in nature.

Borden v Borden, 67 Mich App 45, 48; 239 NW2d 757

(1976). In the civil context, the confinement must be

conditional. See MCL 600.1715.

The critical feature that determines whether the rem-

edy is civil or criminal in nature is not when or whether the

contemnor is physically required to set foot in a jail but

whether the contemnor can avoid the sentence imposed on

him, or purge himself of it, by complying with the terms of

the original order. [Hicks ex rel Feiock v Feiock, 485 US 624,

635 n 7; 108 S Ct 1423; 99 L Ed 2d 721 (1988).]

Civil contempt imposes a term of imprisonment that

ceases when the contemnor complies with the court’s

order or when it is no longer within his or her power to

comply. Borden, 67 Mich App at 48. MCL 600.1715

provides:

(1) Except as otherwise provided by law, punishment for

contempt may be a fine of not more than $7,500.00, or

imprisonment which, except in those cases where the

commitment is for the omission to perform an act or duty

which is still within the power of the person to perform

shall not exceed 93 days, or both, in the discretion of the

court....

(2) If the contempt consists of the omission to perform

some act or duty that is still within the power of the person

to perform, the imprisonment shall be terminated when the

person performs the act or duty or no longer has the power

to perform the act or duty, which shall be specified in the

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order of commitment, and pays the fine, costs, and expenses

of the proceedings, which shall be specified in the order of

commitment. [Emphasis added.]

When the purpose of the sanction is to make a party

or person comply, the trial court, in exercising its

discretion, must “ ‘consider the character and magni-

tude of the harm threatened by continued contumacy,

and the probable effectiveness of any suggested sanc-

tion in bringing about the result desired.’ ” Dougherty,

429 Mich at 98, quoting United States v United Mine

Workers of America, 330 US 258, 304; 67 S Ct 677; 91 L

Ed 884 (1947). Clearly, the trial court considered the

effectiveness of other sanctions before choosing incar-

ceration to coerce compliance with its order, and pro-

vided the following reasons for rejecting other alterna-

tives that MDOT suggested:

One of the options considered was to require DIBC’s

surety Safeco to take over the responsibility for completing

the project. A default has been taken against Safeco.

However, even without the default, Safeco as surety is

liable for the responsibilities of its principle [sic] DIBC,

which includes completing the project and monetary dam-

ages. On July 8, 2011, Safeco was ordered to submit a

detailed plan that may be implemented to complete DIBC’s

portion of the Gateway Project. MDOT as well as DIBC

were given an opportunity to respond to Safeco’s plan. A

fair review of the information submitted by the parties in

response to Safeco’s plan makes it clear that this project

would be bogged down with further litigation in addition to

needless delays if Safeco was ordered to take on the

construction at this time. Requiring Safeco to take on the

construction obligations of DIBC is not the best option

available at this time.

The use of an independent contractor to complete

DIBC’s portion of the project would also be challenging.

There are funding considerations, oversight concerns,

probable litigation, as well the contractor’s need to assess

2012] In re M

OROUN

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ELLY

,J.

the construction requirements which could prove to be a

formidable task for a contractor new to the project. The

contractor would be required to arrange for the completion

of construction drawings for review and approval by

MDOT. The assessment and coordination of the construc-

tion needed would require interaction with other entities

resulting in further delays. The use of an independent

contractor would further delay the completion of the

project and would therefore not be the best option to use to

complete the project.

The use of a receiver would likely produce many of the

same problems as those anticipated by the use of an

independent contractor. At the Court’s direction, the par-

ties presented briefs discussing their positions regarding

the appointment of a receiver. In addition, a hearing was

conducted on December 1, 2011, at which time represen-

tatives from MDOT, DIBC, and Safeco were allowed to

make oral presentations. Based on the information that

has been presented, it appears that the appointment of a

receiver at this time would generate a number of issues

resulting in additional delays. There are funding issues

that would likely bring about additional litigation and

delays. There are also the concomitant problems of safe-

guarding the funds and coordinating construction activi-

ties. The receiver would be required to hire design consult-

ants, develop plans for approval by MDOT and obtain bids

for construction contracts. Appointing a receiver at this

time would likely greatly prolong the time required for the

completion of the project. The appointment of a receiver at

this time would not be the best option to complete this

project.

The trial court further found that DIBC had the power,

resources, and knowledge to complete its portion of the

project in accordance with the February 1, 2010, order

and that the decision-makers of DIBC did not intend to

carry out construction of its portion of the project in

conformity with the February 1, 2010, order unless the

court imposed “meaningful coercive measures.” We

cannot say that the trial court’s decision to use coercive

338 295 M

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,J.

measures, including incarceration, over other alterna-

tives fell outside the range of principled outcomes or

that the decision constituted an abuse of discretion.

As previously noted, the trial court’s January 12,

2012, order provides the following with respect to

appellants’ conditional imprisonment:

IT IS ORDERED THAT Manuel “Matty” Moroun and

Dan Stamper shall be imprisoned in the Wayne County Jail

until the Detroit International Bridge Company complies

with the February 1, 2010 Order of this Court.

IT IS ORDERED THAT the imprisonment of Manuel

“Matty” Moroun and Dan Stamper shall cease when the

Detroit International Bridge Company has fully complied

with the February 1, 2010 Order of this Court or they no

longer have the power to comply with the February 1, 2010

Order of this Court.

Because the purpose of civil contempt is to enforce

compliance with an order, rather than to punish for

disobedience, the contemnor may not be incarcerated

beyond the time that he or she is able to comply with

the court’s order. People v Kearns, 38 Mich App 561,

563; 196 NW2d 805 (1972), quoting Spalter v Wayne

Circuit Judge, 35 Mich App 156, 161; 192 NW2d 347

(1971). “Civil contempt seeks to coerce compliance, to

coerce [the contemnor] to do what he is able to do but

refuses to do.” Borden, 67 Mich App at 48. In other

words, the contemnor “carries the keys to his prison in

While it is clear that appellants take issue with the order, neverthe-

less, appellants are not at liberty to disregard the order on the basis of

their subjective belief that it was wrong. Porter, 285 Mich App 465. “A

party must obey an order entered by a court with proper jurisdiction,

even if the order is clearly incorrect, or the party must face the risk of

being held in contempt and possibly being ordered to comply with the

order at a later date.” Kirby v Mich High Sch Athletic Ass’n, 459 Mich 23,

40; 585 NW2d 290 (1998); see also Henry, 282 Mich App at 680.

2012] In re M

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his own pocket.” Id.InBagwell, 512 US at 828, the

Supreme Court further explained:

The paradigmatic coercive, civil contempt sanction...in-

volves confining a contemnor indefinitely until he complies

with an affirmative command such as an order to pay ali-

mony, or to surrender property ordered to be turned over to a

receiver, or to make a conveyance. Imprisonment for a fixed

term similarly is coercive when the contemnor is given the

option of earlier release if he complies. In these circum-

stances, the contemnor is able to purge the contempt and

obtain his release by committing an affirmative act, and thus,

carries the keys of his prison in his own pocket. [Quotation

marks and citations omitted.]

We cannot uphold the trial court’s commitment

order when the condition for release requires DIBC to

“fully” comply with the February 1, 2010, order

because it failed to identify “the act or duty” that

must be performed before the incarceration may be

terminated. MCL 600.1715(2). While appellants

might have the present ability to commence and

continue construction, they do not have the present

ability to actually finish the construction in accor-

dance with the directives set forth in the February 1,

2010, opinion and order for a period of 6 to 12

months. Therefore, the condition does not permit

appellants to use the keys to obtain their release until

the project is completed. In other words, appellants

may not immediately “avoid the sentence,” or purge

the contempt, by complying with the terms of the

original order. Hicks, 485 US at 635 n 7. Our decision

does not preclude further civil contempt sanctions,

including imprisonment under terms similar to those

imposed by the trial court in January 2011. However,

we leave this decision to the discretion of the trial court. If

the trial court orders further sanctions to coerce

340 295 M

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the initiation and continuation of compliance with its

February 1, 2010, order, it must do so within the

confines of the caselaw and MCL 600.1715 by identi-

fying the act or duty appellants will be required to

perform in order to purge the contempt.

V. JUDICIAL DISQUALIFICATION

Finally, appellants argue that further proceedings

should be held before a different judge because the

judge acted as both accuser and finder of fact and has

become personally embroiled in the litigation. There

has been no motion to disqualify the judge; therefore,

there is no ruling for us to review. See Henry, 282

Mich App at 679, citing MCR 2.003. We further

conclude that there is no merit to appellants’ position

that the judge acted as an accuser and finder of fact

by imposing a sanction that was not requested by

MDOT. The judge provided an adequate explanation

of why other alternatives would not bring about

compliance with the order.

VI. CONCLUSION

Accordingly, we conclude that appellants properly

appealed as of right because a nonparty individual

sanctioned to enforce compliance with a civil contempt

order directed at a party must be permitted to appeal

even in the absence of a final order. We further conclude

that appellants were afforded rudimentary due process,

but the conditional confinement did not allow appel-

lants to avoid the sentence by purging the contempt.

Therefore, we affirm in part, vacate in part, and remand

for further proceedings consistent with this opinion. We

do not retain jurisdiction. In light of the trial court’s

scheduled February 9, 2012, hearing, we give our judg-

ment immediate effect. MCR 7.215(F)(2).

2012] In re M

OROUN

341

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K. F. K

ELLY

,J.

ILDER

,P.J. (concurring in part and dissenting in

part).

I agree that this Court has jurisdiction of the claim of

appeal filed in this action by appellants Manuel J.

Moroun and Dan Stamper for the reason that, as they

are nonparties to the underlying action by the Michigan

Department of Transportation (MDOT) against the

Detroit International Bridge Company (DIBC), the or-

der that punished Moroun and Stamper for the civil

contempt of DIBC is a final order appealable by right.

MCR 7.202(6)(a)(i); US Catholic Conference v Abortion

Rights Mobilization, Inc, 487 US 72, 76; 108 S Ct 2268;

101 L Ed 2d 69 (1988).

Additionally, I agree that the trial court’s January 12,

2012, order did not specify with particularity what action

or actions Stamper and Moroun were required to take so

that they were able to immediately purge themselves of

the contempt finding made by the trial court against

DIBC. First, no contempt finding was made against

Moroun and Stamper. Only DIBC was found in contempt.

Thus, any act to be performed by Moroun and Stamper

was not to purge themselves of contempt for some un-

stated act in defiance of the trial court’s order, but instead

was to purge DIBC of contempt. Second, there is consid-

erable ambiguity with regard to what the trial court

intended by requiring Moroun and Stamper to remain

imprisoned until DIBC had “fully complied” with the trial

court’s February 1, 2010, order. In this regard, counsel for

MDOT acknowledged during oral argument before this

Court that it was unclear precisely what particular actions

by Moroun and Stamper would satisfy the trial court’s

342 295 M

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directive that DIBC fully comply with the February 1,

2010, order. Moreover, the trial court had appointed a

monitor to oversee and report on the project’s progress

and had also ordered DIBC to file biweekly progress

reports. But, as also acknowledged by counsel for MDOT,

it is unclear to what extent the trial court’s review of the

reports would affect its determination whether DIBC had

sufficiently complied with the February 1, 2010, order, so

that Moroun and Stamper could be determined to have

done enough to have purged DIBC of contempt.

For these

reasons, I agree that the commitment directive did not

enable appellants “to purge the contempt and obtain

[their] release by committing an affirmative act,” or in

other words, appellants did not carry “the keys of

[their] prison in [their] own pocket[s].”

Int’l Union,

United Mine Workers of America v Bagwell, 512 US 821,

828; 114 S Ct 2552; 129 L Ed 2d 642 (1994) (quotation

marks and citations omitted).

III

I disagree, however, with the conclusion in the lead

opinion that there was sufficient notice to Moroun and

Stamper.

Having seen no order that seals any part of the court record (there

might be valid reasons to seal aspects of the record, such as to protect

proprietary information, or for matters of public safety or national border

security, but no such finding has been made), I am unaware of the reason

why these reports, reviewed and presumably considered by the trial court

in its deliberations, should not be docketed in the register of actions and

available in the court record transmitted to this Court pursuant to MCR

7.210(G).

Pertinent to this point, during oral argument, counsel for Moroun and

Stamper represented to this Court that every day from January 13, 2012,

to February 1, 2012, Stamper had presented new engineering plans, from

a new engineering firm, to the court-appointed monitor in an effort to

comply with the trial court’s February 1, 2010, order, but the monitor had

refused to examine the plans.

2012] In re M

OROUN

343

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,P.J.

There is no question that officers and agents of a

corporation are bound to follow orders that are directed

toward the corporation, even if those officers and agents

are not named in the order itself. See In re Kennison

Sales & Engineering Co, 363 Mich 612, 618; 110 NW2d

579 (1961); Ex parte Chambers, 898 SW2d 257, 260

(Tex, 1995). Thus, Stamper as president of DIBC and

Moroun as a director of DIBC were bound by the orders

of the trial court directing certain action by DIBC, and

they were required to avoid conduct that contributed to

or caused DIBC to violate the trial court’s February 1,

2010, order. From the fact that the trial court ordered

them incarcerated, it is clear that the trial court con-

cluded that Moroun and Stamper did or failed to do

something that contributed to or caused the contuma-

cious conduct of DIBC.

However, the June 9, 2011, ex

parte motion filed by MDOT, the trial court’s June 13,

2011, order to show cause, and the show-cause proceed-

ings commenced on July 7, 2011, did not identify what

conduct of Moroun and Stamper contributed to or

caused DIBC to be in contempt of the trial court’s

February 1, 2010, order. In addition, the show-cause

order did not make Moroun and Stamper parties to the

contumacious conduct of DIBC. I would conclude that

these are due-process errors that require the trial

court’s sanctions against Moroun and Stamper to be

vacated.

I acknowledge Moroun and Stamper’s argument that if an appellate

court agrees with DIBC’s contention that it is not in violation of the

executory contract between it and MDOT, on the basis that it agreed to

a design concept for the project and never reached “an immutable, final,

agreed set of plans” with MDOT, the appellate court might also conclude

that DIBC’s conduct was not contumacious. However, because the

February 1, 2010, order was not a final order, MCR 7.202(6)(a)(i), that

issue is not before us.

344 295 M

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In a civil contempt proceeding, “rudimentary” due

process is required. Porter v Porter, 285 Mich App 450,

456-457; 776 NW2d 377 (2009). Specifically, this re-

quires “notice and an opportunity to present a defense,

and the party seeking enforcement of the court’s order

bears the burden of proving by a preponderance of the

evidence that the order was violated.” Id. at 457.

MCL 600.1711(2), addressing indirect contempt, pro-

vides that “[w]hen any contempt is committed other than

in the immediate view and presence of the court, the court

may punish it by fine or imprisonment, or both, after

proof of the facts charged has been made by affidavit or

other method and opportunity has been given to defend.”

MCR 3.606(A)(1), also governing contempt outside of

the immediate presence of the court, provides in part

that the court shall “order the accused person to show

cause, at a reasonable time specified in the order, why

that person should not be punished for the alleged

misconduct.” (Emphasis added.)

Accordingly,

[i]f the contemptuous behavior occurs in front of the court,

i.e., it is “direct” contempt, there is no need for a separate

hearing before the court imposes any proper sanctions be-

cause “all facts necessary to a finding of contempt are within

the personal knowledge of the judge.” If the contemptuous

conduct occurs outside the court’s direct view, i.e., it is

“indirect” contempt, the court must hold a hearing to deter-

mine whether the alleged contemnor actually committed

contempt. This hearing must follow the procedures estab-

lished in MCR 3.606 and afford some measure of due process

before the court can determine whether there is sufficient

evidence of contempt to warrant sanctions. [In re Contempt of

Auto Club Ins Ass’n, 243 Mich App 697, 712-713; 624 NW2d

443 (2000) (citations omitted).]

2012] In re M

OROUN

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,P.J.

This Court interprets court rules according to the

same principles that govern the interpretation of stat-

utes. Ligons v Crittenton Hosp, 490 Mich 61, 70; 803

NW2d 271 (2011). “Our goal when interpreting and

applying statutes or court rules is to give effect to the

plain meaning of the text. If the text is unambiguous,

we apply the language as written without construction

or interpretation.” Id. Moreover, if there is any conflict

between the requirements of MCL 600.1711(2) and

MCR 3.606, the court rule prevails. In re Contempt of

Henry, 282 Mich App 656, 667; 765 NW2d 44 (2009). A

trial court’s substantial compliance with MCR

3.606(A)(1) is sufficient. See People v Saffold, 465 Mich

268, 273; 631 NW2d 320 (2001).

The plain and unambiguous language of MCR

3.606(A)(1) requires that, on a proper showing on an ex

parte motion supported by affidavits, the accused per-

son should be ordered to show cause why that person

should not be punished for the alleged contempt. In this

case, the ex parte motion, without referring to anyone

in particular, asserted that “DIBC” did certain acts or

failed to perform certain acts. Also, the June 13, 2011,

order to show cause stated the following:

To: Dan Stamper, President

Detroit International Bridge Company

YOU ARE ORDERED to personally appear before this

Court...onThursday, July 7, 2011 at 9:00 a.m. and show

cause why the Detroit International Bridge Company

should not be held in civil contempt for failure to comply

with the terms and provisions of this Court’s February 1,

2010 Opinion and Order. [Emphasis added.]

346 295 M

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The show-cause order and the averments in the ex

parte affidavit were insufficient to comply or substan-

tially comply with the requirement that Moroun and

Stamper be given notice that they personally could be

punished because the documents pertained to DIBC’s

compliance with the trial court’s February 1, 2010,

order. Moroun’s and Stamper’s conduct was not men-

tioned in the ex parte affidavit or at the June 9, 2011,

hearing pertaining to the ex parte affidavit. In addi-

tion, Moroun was not mentioned whatsoever in the

show-cause order, and Stamper’s identification in the

order only directed him to show cause concerning

DIBC’s conduct. Moreover, when the show-cause pro-

ceedings commenced on July 7, 2011, the trial court

did not advise Stamper that his personal conduct

could be considered contumacious and was a subject

of the show-cause hearings, and no statement was

made on the record during the show-cause proceed-

ings that Moroun’s conduct was the subject of the

hearings.

See, for example, Michigan Judicial Institute (MJI), Contempt of

Court Benchbook (4th ed), Appendix C, p Appx-5, a procedural checklist

for conducting civil contempt proceedings, including a pretrial hearing at

which the trial court is recommended to, inter alia:

8 Inform the alleged contemnor of the charges.

8 Inform the alleged contemnor that the charge must be proven

by a preponderance of the evidence, or that evidence of the alleged

contempt must be “clear and unequivocal.”

8 Inform the alleged contemnor of the possible sanctions.

***

8 Ask the alleged contemnor how he or she wishes to plead.

8 Set date for trial if necessary. The alleged contemnor must be

given a reasonable opportunity to prepare a defense or explana-

tion. [Emphasis added; citations omitted.]

2012] In re M

OROUN

347

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ILDER

,P.J.

While these facts are not in dispute, the lead opinion

overlooks these procedural defects by appearing to

conclude that, because of Stamper’s and Moroun’s

status as “key decision-makers,” i.e., fiduciaries of

DIBC, notice that their personal conduct and personal

liberty were the subject of the show-cause hearing was

obviously implied. But MCR 3.606(A)(1) does not per-

mit constructive notice of the nature of the contempt

proceedings and the alleged contumacious conduct—it

requires actual notice. In my judgment, the lead opin-

ion’s interpretation of MCR 3.606(A)(1) as allowing

such constructive notice runs afoul of the plain mean-

ing of the court rule. See Robertson v DaimlerChrysler

Corp, 465 Mich 732, 758-759; 641 NW2d 567 (2002).

Although there is no precedent directly on point in

Michigan, the rationale for interpreting MCR

3.606(A)(1) as requiring all persons subject to a show-

cause order, including corporate officers and directors,

to be personally notified that they could be subject to

punishment for contemptuous conduct is supported by

caselaw from other jurisdictions that have addressed

this very question. The principle that these other juris-

dictions espouse can be summed up as follows: “ ‘An

officer of a corporation who participates in the disobe-

dience of a court mandate is punishable for contempt

provided he has been made a party to the contumacious

conduct and due notice has been given to him.’ ” In re

Snider Farms, Inc, 125 BR 993, 999 (Bankr ND Ind,

1991), quoting 17 Am Jur 2d, Contempt, § 61 (emphasis

added); see also Spuncraft, Inc v Lori Jay Mfg Co,47

Misc 2d 780, 781; 263 NYS2d 211 (NY Sup Ct, 1965).

In Dole Fresh Fruit Co v United Banana Co, Inc, 821

Although this MJI Benchbook and checklist are not authoritative, the

MJI is a training division of the State Court Administrative Office of the

Michigan Supreme Court.

348 295 M

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F2d 106 (CA 2, 1987), the district court found three

officers of the corporate defendant in civil contempt.

The United States Court of Appeals for the Second

Circuit reversed, holding that even though the individu-

als were within the scope of the underlying order, it was

improper to hold the individuals in contempt when it

appeared that only the corporate defendant was a party

to the contempt proceedings. Id. at 110. The court

stressed that the three individuals did not know that

they were “personally” going to be held in contempt. Id.

This factual situation is nearly identical with the situ-

ation in the present case, in which both Stamper and

Moroun were never notified that they could be individu-

ally punished.

Although the lead opinion does not agree, I would

find that Auto Club, 243 Mich App 697, does support

these principles. In that case, this Court reversed the

trial court’s finding of contempt against the defendant

corporation because the corporation was not afforded

notice. Id. at 718. The plaintiff instituted contempt

proceedings against defense counsel personally, not the

defendant corporation. Id. at 717. But at the conclusion

of the show-cause hearing, the trial court found both

the attorney and the corporation in contempt. Id. Thus,

this Court concluded that the corporation was “denied

The lead opinion suggests that Moroun was provided sufficient notice

by virtue of the trial court’s November 3, 2011, opinion and order.

However, this “notice” was no notice at all. This “notice” occurred after

the trial court had already conducted the show-cause hearing and found

that DIBC was in contempt. If any such notice was to be effective, it had

to occur before the show-cause hearing in order to allow Moroun “an

opportunity to present a defense.” Porter, 285 Mich App at 457. Indeed,

without specific advance notice that the show-cause hearing might result

in sanctions imposed against them, any alleged “opportunity to present a

defense” available to Moroun and Stamper at the various show-cause

hearings was illusory. Who would present a defense without knowing that

he or she was being accused?

2012] In re M

OROUN

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its right to know the substance of the charges against

it.” Id. This Court further noted:

The contempt hearing also failed to give [the defendant

corporation] notice that it was being charged with contempt

because the trial court’s order appeared to concern [the

defense] attorneys as individuals. The first time it became

clear that the trial court intended to hold [the corporation]

in contempt was in [its] order, after the trial court had

already done so. This completely denied [the corporation]

an opportunity to prepare or present a defense. [Id. (em-

phasis added).]

Just as the defendant in Auto Club was deprived of

notice because it was never notified that it could be

punished for contempt, the same can be said here of

Moroun and Stamper.

In summary, I would hold that the unambiguous

plain language and meaning of MCR 3.606(A)(1) re-

quire that regardless of a person’s status as a corporate

officer or director of a corporation subject to a show-

cause order, that officer or director is entitled to direct

rather than implied notice to appear to show cause why

he or she should not be held in contempt or punished for

specified contumacious conduct. Because such notice

was not provided in the instant case, I would conclude

that the contempt proceedings as they pertain to

Moroun and Stamper were fatally flawed as violative of

due process of law, and I would vacate the contempt

sanctions imposed against them.

Finally, I also dissent from the panel’s decision to

give this Court’s judgment immediate effect pursuant

to MCR 7.215(F)(2). The panel has issued three au-

350 295 M

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thored opinions concerning the necessary due process of

law to be accorded to corporate officials in a show-cause

proceeding against a corporation. This issue has not

been directly addressed by any Michigan precedent.

Under these circumstances, I believe that exceptional

issuance of our judgment is unwarranted.

ORT

OOD

,J.(concurring in part and dissenting in

part). I join in and concur with the lead opinion in all

respects except concerning the imprisonment sanction.

Because I conclude that the trial court did not abuse its

discretion with regard to the propriety of the penalty for

civil contempt, I would affirm the lower court’s decision

in its entirety.

Individuals who conspire with others to violate court

orders are equally liable and subject to contempt pro-

ceedings. ARA Chuckwagon of Detroit, Inc v Lobert,69

Mich App 151, 159; 244 NW2d 393 (1976). When an

order is entered by the court, it must be obeyed until it

is judicially vacated. Id. at 161. The validity of the order

is determined by the courts, not the parties. Id. “Our

jurisprudence has long recognized the inherent power

of a court of record to punish, by contempt citation, a

party for wilful, continuous, and contemptuous disobe-

dience of its orders.” Id. at 162-163.

The circuit court has the authority to punish by fine

or imprisonment, or both, any neglect, violation of duty,

or misconduct by “[p]arties to actions, attorneys, coun-

selors, and all other persons for disobeying any lawful

order, decree, or process of the court.” MCL

With regard to appellants’ contention that they were unaware that

they could be imprisoned for the contempt of DIBC, I would only add that

a party cannot claim lack of notice when the assertion is belied by the

pleadings it has filed in the case. See DeGeorge v Warheit, 276 Mich App

587, 592-593; 741 NW2d 384 (2007).

2012] In re M

OROUN

351

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OOD

,J.

600.1701(g). Contempt committed outside the immedi-

ate view and presence of the court may be punished by

fine or imprisonment, or both, after proof of the facts

charged has been made by affidavit or other means and

an opportunity to defend has been given. MCL

600.1711(2). MCL 600.1715

addresses the punishment

of contempt:

(1) Except as otherwise provided by law, punishment for

contempt may be a fine of not more than $7,500.00, or

imprisonment which, except in those cases where the

commitment is for the omission to perform an act or duty

which is still within the power of the person to perform

shall not exceed 93 days, or both, in the discretion of the

court....

(2) If the contempt consists of the omission to perform

some act or duty that is still within the power of the person

to perform, the imprisonment shall be terminated when

the person performs the act or duty or no longer has the

power to perform the act or duty, which shall be specified in

the order of commitment, and pays the fine, costs, and

expenses of the proceedings, which shall be specified in the

order of commitment.

“The issuance of an order of contempt rests in the

sound discretion of the trial court and is reviewed only

for an abuse of discretion.” In re Contempt of Henry, 282

Mich App 656, 671; 765 NW2d 44 (2009). “We review for

an abuse of discretion a trial court’s decision to hold a

party or individual in contempt.” In re Contempt of

Issues involving statutory interpretation present questions of law

reviewed de novo. Klooster v City of Charlevoix, 488 Mich 289, 295; 795

NW2d 578 (2011). “The primary goal of statutory interpretation is to give

effect to the intent of the Legislature.” Briggs Tax Serv, LLC v Detroit

Pub Sch, 485 Mich 69, 76; 780 NW2d 753 (2010). To determine the

legislative intent, a court must first examine the statute’s plain language.

Klooster, 488 Mich at 296. If the language of the statute is clear and

unambiguous, it is presumed that the Legislature intended the meaning

plainly expressed in the statute. Briggs, 485 Mich at 76.

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Dudzinski, 257 Mich App 96, 99; 667 NW2d 68 (2003).

The trial court’s factual findings are reviewed for clear

error, and questions of law are reviewed de novo. Porter

v Porter, 285 Mich App 450, 454-455; 776 NW2d 377

(2009). “Clear error exists when this Court is left with

the definite and firm conviction that a mistake was

made.” Henry, 282 Mich App at 669. “The abuse of

discretion standard recognizes that there will be cir-

cumstances where there is no single correct outcome

and which require us to defer to the trial court’s

judgment; reversal is warranted only when the trial

court’s decision is outside the range of principled out-

comes.” Porter, 285 Mich App at 455.

“The power to hold a party, attorney, or other person

in contempt is the ultimate sanction the trial court has

within its arsenal, allowing it to punish past transgres-

sions, compel future adherence to the rules of engage-

ment, i.e., the court rules and court orders, or compen-

sate the complainant.” In re Contempt of Auto Club Ins

Ass’n, 243 Mich App 697, 708; 624 NW2d 443 (2000).

[W]e define[] contempt of court as a willful act, omis-

sion, or statement that tends to...impede the functioning

of a court. . . . [T]he primary purpose of the contempt

power is to preserve the effectiveness and sustain the

power of the courts. Because the power to hold a party in

contempt is so great, it carries with it the equally great

responsibility to apply it judiciously and only when the

contempt is clearly and unequivocally shown. [Id. (quota-

tion marks and citations omitted).]

“Civil contempt proceedings seek compliance through

the imposition of sanctions of indefinite duration, ter-

minable upon the contemnor’s compliance or inability

to comply.” DeGeorge v Warheit, 276 Mich App 587, 592;

741 NW2d 384 (2007). Criminal contempt, however, is

designed to punish past disobedient conduct by impos-

ing an unconditional and definite sentence. Id. Al-

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though civil contempt is primarily coercive in nature to

compel compliance by the contemnor, the civil sanction

may also have a punitive effect. Id. Confinement or

imprisonment may be imposed whether the contempt is

civil or criminal in nature. Borden v Borden, 67 Mich

App 45, 48; 239 NW2d 757 (1976).

Civil contempt imposes a term of imprisonment which

ceases when defendant complies with the court’s order or

when it is no longer within his power to comply. Civil

contempt seeks to coerce compliance, to coerce the defen-

dant to do what he is able to do but refuses to do. The

defendant carries the keys to his prison in his own pocket.

Criminal contempt, on the other hand, imposes a definite

term of imprisonment as punishment for a past offense.

[Id.]

Contempts are not necessarily wholly civil or altogether

criminal because it is not always easy to classify a

particular act as belonging to either class. Gompers v

Buck’s Stove & Range Co, 221 US 418, 441; 31 S Ct 492;

55 L Ed 797 (1911). The Gompers Court offered the

following test to determine the character of the punish-

ment and held that any indirect overlapping conse-

quences did not alter the nature of the contempt:

It is not the fact of punishment but rather its character

and purpose that often serve to distinguish between the

two classes of cases. If it is for civil contempt the punish-

ment is remedial, and for the benefit of the complainant.

But if it is for criminal contempt the sentence is punitive,

to vindicate the authority of the court. It is true that

punishment by imprisonment may be remedial, as well as

punitive, and many civil contempt proceedings have re-

sulted not only in the imposition of a fine, payable to the

complainant, but also in committing the defendant to

prison. But imprisonment for civil contempt is ordered

where the defendant has refused to do an affirmative act

required by the provisions of an order which, either in form

or substance, was mandatory in its character. Imprison-

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ment in such cases is not inflicted as a punishment, but is

intended to be remedial by coercing the defendant to do

what he had refused to do. The decree in such cases is that

the defendant stand committed unless and until he per-

forms the affirmative act required by the court’s order.

***

It is true that either form of imprisonment has also an

incidental effect. For if the case is civil and the punishment

is purely remedial, there is also a vindication of the court’s

authority. On the other hand, if the proceeding is for

criminal contempt and the imprisonment is solely punitive,

to vindicate the authority of the law, the complainant may

also derive some incidental benefit from the fact that such

punishment tends to prevent a repetition of the disobedi-

ence. But such indirect consequences will not change

imprisonment which is merely coercive and remedial, into

that which is solely punitive in character, or vice versa.[Id.

at 441-443.]

Similarly, Michigan law provides that when conditional

and coercive confinement is imposed, the contempt

proceeding is civil. Borden, 67 Mich App at 49. Michigan

statutes also hold that a “commitment to coerce perfor-

mance may properly continue so long as it is within the

power of the contemnor to comply with the court

order.” Id.; see also MCL 600.1715.

Furthermore, Michigan law recognizes two types of

civil contempt sanctions, coercive and compensatory. In

re Contempt of Rochlin, 186 Mich App 639, 646; 465

NW2d 388 (1990). In United States v United Mine

Workers of America, 330 US 258, 304; 67 S Ct 677; 91 L

Ed 884 (1947), the United States Supreme Court ex-

plained the underlying rationale behind the two types

of civil contempt sanctions:

Where compensation is intended, a fine is imposed,

payable to the complainant. Such fine must of course be

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based upon evidence of complainant’s actual loss, and his

right, as a civil litigant, to the compensatory fine is

dependent on the outcome of the basic controversy.

But where the purpose is to make the defendant comply,

the court’s discretion is otherwise exercised. It must then

consider the character and magnitude of the harm threat-

ened by the continued contumacy, and the probable effec-

tiveness of any suggested sanction in bringing about the

result desired. [Citations omitted.]

The longstanding rule is that “a contempt proceeding

does not open to reconsideration the legal or factual

basis of the order alleged to have been disobeyed and

thus become a retrial of the original controversy.”

United States v Rylander, 460 US 752, 756; 103 S Ct

1548; 75 L Ed 2d 521 (1983) (quotation marks and

citation omitted). “Because civil contempt sanctions are

viewed as nonpunitive and avoidable, fewer procedural

protections for such sanctions have been required.”

Int’l Union, United Mine Workers of America v Bagwell,

512 US 821, 831; 114 S Ct 2552; 129 L Ed 2d 642 (1994).

Consequently, civil contempt “may be imposed in an

ordinary civil proceeding upon notice and an opportu-

nity to be heard. Neither a jury trial nor proof beyond a

reasonable doubt is required.” Id. at 827. Due process

does not require a full-blown evidentiary hearing, and

contempt sanctions may even be imposed on the basis of

uncontroverted affidavits. United States v Ayres, 166

F3d 991, 995 (CA 9, 1999); see also MCL 600.1711(2).

The paradigmatic coercive, civil contempt sanction...in-

volves confining a contemnor indefinitely until he complies

with an affirmative command such as an order to pay

alimony, or to surrender property ordered to be turned over

to a receiver, or to make a conveyance. Imprisonment for a

fixed term similarly is coercive when the contemnor is

given the option of earlier release if he complies. In these

circumstances, the contemnor is able to purge the con-

tempt and obtain his release by committing an affirmative

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act, and thus carries the keys of his prison in his own

pocket. [Bagwell, 512 US at 828 (quotation marks and

citations omitted).]

When civil contempt occurs, the trial court has inherent

and statutory authority to order conditional imprison-

ment. Harvey v Lewis, 10 Mich App 709, 717; 160 NW2d

391 (1968). “Theoretically, imprisonment for civil con-

tempt might be forever so long as it is within the

contemnor’s power to comply with the court order he

refuses to carry out[.]” Id. (emphasis added). The

determination regarding the propriety of contempt is

contingent on the facts and circumstances of the indi-

vidual case. See Spallone v United States, 493 US 265,

267, 279-280; 110 S Ct 625; 107 L Ed 2d 644 (1990); In

re Simmons, 248 Mich 297, 305-306; 226 NW 907

(1929); Stowe v Wolverine Metal Specialties Co, 242

Mich 624, 630; 219 NW 714 (1928); Wells v Wells, 144

Mich App 722, 732; 375 NW2d 800 (1985). When

selecting the appropriate contempt sanction, the court

must use the least possible power necessary to achieve

the proposed end. Spallone, 493 US at 276. However, if

the least possible contempt sanction approach fails to

produce compliance within a reasonable period of time,

additional sanctions may be imposed. Id. at 280.

Because the objective of civil contempt is to enforce

compliance with the court’s order rather than punish-

ment for a refusal to obey, one held in and incarcerated

for civil contempt may not be incarcerated beyond the

time that he or she is able to comply with the court’s

order. Spalter v Wayne Circuit Judge, 35 Mich App 156,

161; 192 NW2d 347 (1971). “The contemnor must have

the ability to comply with the court’s order and the

possibility of terminating his or her confinement and

purging himself of contempt by complying.” Borden,67

Mich App at 49. “Promised future compliance with

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prior judicial orders is a common and appropriate

method of purging contempt. Since future compliance is

the court’s objective in civil contempt proceedings, an

assurance of such compliance by one deemed worthy of

belief is a sensible basis for terminating coercive sanc-

tions.” Williams Int’l Corp v Smith, 144 Mich App 257,

266; 375 NW2d 408 (1985) (citations omitted), rev’d on

other grounds 429 Mich 81 (1987). The court is vested

with broad discretion to determine the appropriate

conditions through which the contemnor may purge the

contempt. Midlarsky v D’Urso, 133 AD2d 616; 519

NYS2d 724 (1987). The appellate court reviews the

denial of a motion to purge a contempt order for an

abuse of discretion. Consol Rail Corp v Yashinsky, 170

F3d 591, 594 (CA 6, 1999).

Appellants contend that because the completion of

the project will take approximately 9 to 12 months, they

do not have the ability to “immediately” purge the

contempt and, therefore, do not have the keys to their

jail cell. Appellants further contend that the trial court

was obligated to impose the least restrictive sanction to

compel compliance. Curiously, appellants fail to identify

the least restrictive sanction or impetus that would

prompt them into action on behalf of DIBC.

As indicated, the propriety of the contempt sanction

is contingent on the facts and circumstances in each

individual case, and although the least restrictive sanc-

tion should be imposed, a graduated penalty is appro-

Our order granting a stay of the lower court’s decision only applied to

appellants’ imprisonment, and there was no stay of the payment of fines

or the ordered completion of the Ambassador Bridge Gateway Project in

accordance with the February 1, 2010, order of the trial court. When

questioned at oral argument about the progress with regard to the

remainder of the trial court’s order, counsel for appellants answered that

there was the mere filing of the claim of appeal. During rebuttal,

cocounsel asserted that they had submitted plans, but they were refused.

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priate when necessary. See Spallone, 493 US at 276,

280; Wells, 144 Mich App at 732. The trial court is

granted the broad discretion to determine the appropri-

ate conditions through which the contemnor may purge

the contempt. Midlarsky, 133 AD2d at 617. Pursuant to

Michigan caselaw, full compliance with the contempt

order is not necessarily required; rather, a promise of

future compliance or a good-faith attempt may be

sufficient to purge the contempt. Williams Int’l Corp,

144 Mich App at 266.

In the present case, the facts and circumstances

justified the order of confinement pending completion

of the Ambassador Bridge Gateway Project. The exten-

sive and lengthy record demonstrates that the trial

court ordered completion of the project. Rather than

comply with the trial court’s order, DIBC filed multiple

claims of appeal, and the case was removed to federal

court on two occasions. DIBC did not obtain any relief

from the trial court’s order,

but nonetheless failed to

comply with that order. Unable to obtain compliance,

the trial court held a contempt hearing during which

Stamper testified. The trial court determined that civil

coercive sanctions were necessary to ensure compli-

ance, and Stamper, as president of DIBC, was ordered

imprisoned but was released within a short time when

DIBC restarted work on the project. However, since

then, DIBC has not complied with the trial court’s

order. This order has not been declared invalid, and,

consequently, the trial court has inherent contempt

power to punish the willful, continuous, and contemp-

tuous disobedience of the order. ARA Chuckwagon,69

The federal court concluded that DIBC had engaged in “the most

creative schemes and maneuvers to delay compliance with a court order.”

Mason and Dixon Lines, Inc v Steudle, 761 F Supp 2d 611, 628 (ED Mich,

2011) (quotation marks and citation omitted).

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Mich App at 162-163. Although the court has the

obligation to consider the least restrictive penalty, in

the present case, the court graduated its punishment in

light of the history of delay and noncompliance. Under

the circumstances, I cannot conclude that ordering the

contempt sanction until completion of the project con-

stituted an abuse of discretion.

Furthermore, the contention that appellants are

without the means or the knowledge to immediately

purge the contempt is without merit. The design of

coercive civil contempt sanctions is to achieve compli-

ance, to force the contemnor to do what he or she

refuses to do. Borden, 67 Mich App at 48. “Civil

contempt proceedings seek compliance through the

imposition of sanctions of indefinite duration, termi-

nable upon the contemnor’s compliance or inability to

comply.” DeGeorge, 276 Mich App at 592 (emphasis

added). “The power to hold a party, attorney, or other

person in contempt is the ultimate sanction the trial

court has within its arsenal, allowing it to punish past

transgressions, compel future adherence to the rules of

engagement, i.e., the court rules and court orders, or

compensate the complainant.” Auto Club, 243 Mich App

at 708. DIBC’s conduct rose to the height of contempt.

According to the factual findings of the trial court, it not

only failed to comply with the trial court’s order, but

engaged in a process designed to render the project

stagnant. This comes at a great cost to MDOT as well as

the local community where the construction com-

menced, and the trial court must be entitled to use the

ultimate sanction within its arsenal. Id. However, ap-

pellants have the right to move the trial court to purge

the contempt, Spalter, 35 Mich App at 166, and can be

released before the full completion by promises of

future compliance or good faith efforts, Williams Int’l

Corp, 144 Mich App at 266. In light of the fact that

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appellants can purge the contempt before the full

completion of the project, I cannot conclude that the

trial court’s decision regarding the imprisonment con-

stituted an abuse of discretion.

I would affirm the lower court’s order in its entirety.

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COALITION FOR A SAFER DETROIT v DETROIT CITY CLERK

Docket No. 300516. Submitted August 10, 2011, at Detroit. Decided

February 9, 2012, at 9:00 a.m. Leave to appeal denied, 491 Mich

932.

Coalition for a Safer Detroit brought an action in the Wayne Circuit

Court seeking a writ of mandamus directing the Detroit City Clerk

and the Detroit Election Commission to place a proposed amend-

ment to § 38 of the 1997 Detroit City Code on the city of Detroit’s

November 2, 2010, ballot. The coalition had filed signed initiative

petitions with the city clerk to place the proposed amendment on

the ballot. The proposed amendment would have provided that

none of the Detroit ordinances prohibiting the possession, sale,

and offer for sale or distribution of a controlled substance would

apply to the use or possession of less than 1 ounce of marijuana on

private property by a person who has attained the age of 21 years.

The city clerk verified that the petitions contained sufficient valid

signatures, but the Detroit City Council chose to not enact the

proposed amendment and forwarded it to the Detroit Election

Commission, which requested the city’s law department to deter-

mine whether the proposed amendment was a valid initiative

under Michigan law. On the basis of that department’s opinion, the

election commission voted to not place the initiative on the ballot,

and the coalition sought the writ of mandamus. Defendants moved

for summary disposition, which the court, Michael F. Sapala, J.,

denied, concluding that the clerk had discretion to determine

whether the proposed amendment was contrary to state law, that

it was in fact contrary to state law, and that the clerk therefore had

no legal duty to place it on the ballot. The coalition appealed.

The Court of Appeals held:

1. Under the Detroit Charter, state law applies to the conduct

and canvass of city elections. The city clerk must verify the

signatures of an initiative petition as required by MCL 117.25 of

the Home Rule Cities Act and then submit the proposed amend-

ment to the city electors at the next regular municipal or general

state election, MCL 117.25(3). Under the charter, the city clerk must

then report to the city council with regard to his or her canvass of the

signatures, after which the city council must either enact

362 295 M

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the proposed ordinance or submit it to the voters. Defendants did

not have authority under state law or city ordinance to request the

city’s legal department to assess whether the proposed amend-

ment, if passed, would conflict with Michigan’s controlled sub-

stance laws. They did not have discretion to review the substance

or effect of the proposal. Because the city clerk certified the

petitions as having the requisite number of qualified signatures,

the city clerk and the election commission had a clear legal duty to

perform the ministerial act of placing the initiative on the ballot,

and the coalition had a clear legal right to the performance of the

duty. There was no other legal remedy available to the coalition

when defendants improperly exercised their discretion and de-

clined to place the proposed amendment on the ballot. The trial

court abused its discretion by failing to grant the coalition’s

request for mandamus.

2. Although there are very rare cases in which there is a clear

and unmistakable conflict between an initiative and a state law

necessitating prior court intervention, a substantive challenge to a

proposed initiative is generally improper until after the law is

enacted. Courts should not render hypothetical opinions about

proposed amendments that may never become law because it

interferes with the legislative process.

Reversed and remanded for further proceedings.

ARKEY

,P.J., dissenting, would have affirmed the trial court’s

order granting summary disposition in favor of defendants, con-

cluding that the coalition had failed to demonstrate that defen-

dants had a clear legal duty to certify a ballot question to adopt a

city ordinance that was clearly contrary to state law. She reasoned

that under Const 1963, art 7, § 22, the city council was precluded

from enacting an ordinance that was in direct conflict with

Michigan’s controlled substance statutes. The city of Detroit did

not have the constitutional authority to adopt such an ordinance,

and it was not within the reserved right of initiative provided for

in Const 1963, art 2, § 9. Judge M

ARKEY

would have held that the

trial court did not abuse its discretion by denying the coalition’s

petition for a writ of mandamus.

1. M

ANDAMUS —

VIDENCE —

URDEN OF

ROOF

A writ of mandamus is an extraordinary remedy that will only be

issued if (1) the party seeking the writ has a clear legal right to the

performance of the specific duty sought, (2) the defendant has the

clear legal duty to perform the requested act, (3) the act is

ministerial, and (4) no other remedy exists that might achieve the

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same result; the party seeking mandamus has the burden of

establishing that the official in question has a clear duty to

perform the act.

2. C

OURTS —

YPOTHETICAL

PINIONS —

ROPOSED

NITIATIVES —

ONFLICT WITH

TATE

AWS —

LECTIONS

It is generally improper to challenge a proposed initiative until after

the law is enacted; although there are very rare cases in which

there is a clear and unmistakable conflict between an initiative

and a state law necessitating prior court intervention, courts

should generally not render hypothetical opinions about proposed

amendments.

Honigman Miller Schwartz and Cohn LLP (by Timo-

thy Sawyer Knowlton) for Coalition for a Safer Detroit.

Krystal A. Crittendon, Corporation Counsel, and

Sheri L. Whyte, Dennis A. Mazurek, and Tonja R. Long,

Assistant Corporation Counsel, for the Detroit City

Clerk and the Detroit Election Commission.

Before: M

ARKEY

,P.J., and S

AAD

and G

LEICHER

,JJ.

AAD

, J. Plaintiff appeals the trial court’s order that

denied its request for a writ of mandamus and granted

defendants’ motion for summary disposition. For the

reasons set forth below, we reverse and remand for

further proceedings consistent with this opinion.

I. FACTS AND PROCEEDINGS

On May 5, 2010, plaintiff filed signed initiative petitions

with the Detroit City Clerk to place on the November 2,

2010, ballot a proposed amendment to § 38 of the 1997

Detroit City Code.

Section 38 addresses controlled sub-

stances and contains the following relevant provisions:

While Detroit recently enacted a new city code, effective January 1,

2012, we note that the initiative petition in this case involved an

amendment of the 1997 Detroit City Code.

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38-11-2. Possession, sale, etc., prohibited generally.

It shall be unlawful for any person to possess, sell, offer

for sale, distribute, administer, dispense, prescribe or give

away any controlled substance for which the unlawful

possession, sale, offer for sale, distribution, administration,

dispensation, prescription, or giving away is punishable by

imprisonment for not more than one (1) year under any of

the provisions contained within Part 74 of the Michigan

Public Health Code, being MCL 333.7401 through MCL

333.7461; MSA 14.15(7401) through 14.15(7461), provided,

that this division shall not be construed to prohibit the

possession, sale, offer for sale, distribution, administration,

dispensation, or prescription of any controlled substance,

or its derivative, in accordance with this division.

***

Sec. 38-11-7. Penalties.

(a) Any person who shall be convicted of violating any

provision of this division shall be deemed guilty of a

misdemeanor and shall be punished by a fine not to exceed

five hundred dollars ($500.00), or by imprisonment not to

exceed ninety (90) days, or by both in the discretion of the

court.

(b) Each day a violation continues shall be considered a

separate offense and may be punished accordingly.

The proposed amendment set forth in the initiative

would have added § 38-11-50 to the code, which would

provide: “None of the provisions of this article shall

apply to the use or possession of less than 1 ounce of

marihuana, on private property, by a person who has

attained the age of 21 years.”

The city clerk reported that the petitions contained

sufficient valid signatures. When the signature require-

ment had been met and verified, the 1997 Detroit City

Charter permitted the city council to enact the ordi-

nance proposed by the petition or, if it failed to do so, to

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submit the proposed code amendment to the voters.

1997 Detroit Charter, art 12, § 12-107. The city council

did not vote on the proposed amendment, and the

matter was forwarded to the Detroit City Election

Commission. The election commission asked the De-

troit Law Department to provide an opinion about

whether the proposed amendment was a valid initiative

under Michigan law.

An attorney with the law department drafted a legal

memorandum in which she concluded that the initiative

conflicted with a state law that prohibits the use and

possession of marijuana and that a city may not enact

an ordinance that conflicts with state law. As a result

the initiative would have been advisory in nature and,

under Michigan law, an advisory or “symbolic” initia-

tive may not be placed on the ballot. On August 9, 2010,

the election commission voted to not place the initiative

on the ballot.

Plaintiff filed a complaint for mandamus requesting

the circuit court to order defendants to place the

proposed amendment on the ballot. The court denied

the writ of mandamus and granted defendants’ motion

for summary disposition under MCR 2.116(C)(8). The

court ruled that the clerk had the discretion to deter-

mine whether the proposed amendment was contrary to

state law. The court also agreed that the proposed

amendment was contrary to state law and that the clerk

therefore had no legal duty to place the initiative on the

ballot.

II. ANALYSIS

A. BURDEN OF PROOF AND STANDARD OF REVIEW

A writ of mandamus is an extraordinary remedy that

will only be issued if “(1) the party seeking the writ has

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a clear legal right to the performance of the specific

duty sought, (2) the defendant has the clear legal duty

to perform the act requested, (3) the act is ministerial,

and (4) no other remedy exists that might achieve the

same result.” Citizens Protecting Michigan’s Constitu-

tion v Secretary of State, 280 Mich App 273, 284; 761

NW2d 210 (2008). The party seeking mandamus has

the burden of establishing that the official in question

has a clear legal duty to perform. Burger King Corp v

Detroit, 33 Mich App 382, 384; 189 NW2d 797 (1971).

We review for an abuse of discretion a circuit court’s

decision on a request for mandamus. Carter v Ann Arbor

City Attorney, 271 Mich App 425, 438; 722 NW2d 243

(2006). However, we review de novo the first two elements

required for issuance of a writ of mandamus—that defen-

dants have a clear legal duty to perform, and plaintiffs

have a clear legal right to performance of the act

requested—as questions of law. Tuggle v Mich Dep’t of

State Police, 269 Mich App 657, 667; 712 NW2d 750

(2006). We also review de novo a trial court’s decision on a

motion for summary disposition. Ligon v Detroit, 276

Mich App 120, 124; 739 NW2d 900 (2007). MCR

2.116(C)(8) tests whether a claimant has failed to state a

cognizable claim. For purposes of a motion for summary

disposition under MCR 2.116(C)(8), this Court accepts all

well-pleaded factual allegations as true, and construes

them in a light most favorable to the nonmoving party.

Maiden v Rozwood, 461 Mich 109, 119; 597 NW2d 817

(1999).

B. DISCUSSION

Plaintiff argues that because its petitions had the

required number of qualified signatures, the statutory

requirements governing initiative proposals were satis-

fied and, therefore, that the trial court erred by uphold-

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ing defendants’ decision to not place the proposed

amendment on the ballot. Plaintiff also does not agree

that the proposed amendment is contrary to state law.

Article 3, § 3-104 of the 1997 Detroit Charter pro-

vides that, “[e]xcept as otherwise provided by this

Charter or ordinance, state law applies to...thecon-

duct and canvass of city elections.” With regard to

initiatives, the Home Rule Cities Act, MCL 117.1 et seq.,

provides:

Each city may provide in its charter for 1 or more of the

following:

***

(g) The initiative and referendum on all matters within

the scope of the powers of that city and the recall of city

officials. [MCL 117.4i(g).]

The act also sets forth the following with regard to the

handling of local elections in MCL 117.25:

(1) An initiatory petition authorized by this act shall be

addressed to and filed with the city clerk. The petition shall

state what body, organization, or person is primarily inter-

ested in and responsible for the circulation of the petition

and the securing of the amendment. Each sheet of the

petition shall be verified by the affidavit of the person who

obtained the signatures to the petition. The petition shall

be signed by at least 5% of the qualified and registered

electors of the municipality. Each signer of the petition

shall also write, immediately after his or her signature, the

date of signing and his or her street address. A signature

obtained more than 1 year before the filing of the petition

with the city clerk shall not be counted. The petition is

subject to the requirements of [MCL 117.25a].

(2) A person who willfully affixes another’s signature, or

subscribes and swears to a verification that is false in any

material particular, is guilty of perjury. A person who takes

the oath of another to the petition not knowing him or her

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to be the same person he or she represents himself or

herself to be or knowing that the petition or any part of it

is false or fraudulent in any material particular, or who

falsely represents that the proposed amendment is pro-

posed by persons other than the true sponsors, is guilty of

a felony and is liable for the same punishment as provided

for perjury.

(3) Upon receipt of the petition, the city clerk shall

canvass it to ascertain if it is signed by the requisite

number of registered electors. For the purpose of determin-

ing the validity of the petition, the city clerk may check any

doubtful signatures against the registration records of the

city. Within 45 days from the date of the filing of the

petition, the city clerk shall certify the sufficiency or

insufficiency of the petition. If the petition contains the

requisite number of signatures of registered electors, the

clerk shall submit the proposed amendment to the electors

of the city at the next regular municipal or general state

election held in the city which shall occur not less than 90

days following the filing of the petition.

Article 12 of the 1997 Detroit Charter governs initia-

tives and referendums in Detroit and provides, in

relevant part:

12-104. Duties of the City Clerk.

The petitions shall be filed with the city clerk. The clerk

shall, within ten (10) days, canvass the signatures thereon

to determine their sufficiency and make a report of the

result to the city council. Any signature on an initiative

petition obtained more than six (6) months before the filing

of the petition with the clerk shall not be counted.

***

12-107. Procedure.

Upon the report of the clerk that the initiative or

referendum petitions are sufficient, and filed within the

time limits provided by this Charter, the city may within

thirty (30) days:

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1. In the case of an initiative petition, enact the ordi-

nance proposed by the petition; or

2. In the case of a referendum petition, repeal the

ordinance to which the petition refers.

If the city fails to enact or repeal the measure, the

measure shall be submitted to the voters.

12-108. Submission to Voters.

If a measure must be submitted to the voters, it shall be

submitted:

1. In the case of initiative, at the next election in the

city, or, in the discretion of the city council, at a special

election; and

2. In the case of referendum, at the next election in the

city occurring not sooner than seventy (70) days after the

city council’s determination not to repeal the measure, or,

in the discretion of the city council, at a special election.

Except as otherwise required by law, the result of any

initiative or referendum election shall be determined

by...amajority of the voters voting on the question.

We agree with plaintiff that it was not within the

scope of defendants’ authority to assess the substance

of the petition or to determine whether, if passed, it

would conflict with state law. The duties of the city clerk

are clearly stated in both MCL 117.25 and the Detroit

City Charter. After the clerk canvasses the petitions to

determine if they contain the requisite number of

qualified signatures, MCL 117.25(3) provides that the

clerk “shall submit the proposed amendment to the

electors of the city at the next regular municipal or

general state election held in the city which shall occur

not less than 90 days following the filing of the peti-

tion.”

The charter then requires the clerk to report to

This Court has held that a clerk’s authority extends to a determina-

tion of whether the petition facially complies with MCL 117.25(1) and (2).

Herp v Lansing City Clerk, 164 Mich App 150, 159; 416 NW2d 367 (1987).

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the city council with regard to his or her canvass of the

signatures, and it gives the city council the opportunity

to pass the ordinance as proposed or to submit the

initiative to the voters in the next election. 1997 Detroit

Charter, art 12, § 12-107. Despite the additional oppor-

tunity for the city council to simply adopt the proposed

amendment, nothing in either the charter or the statute

indicates that defendants have the discretion to review

the substance or effect of the proposal itself.

On the basis of the clear language in the statute and

charter, it was a ministerial act for defendants to place

the initiative petition on the ballot once the clerk

determined that the petitions contained the required

number of qualified signatures. Because the clerk cer-

tified the petitions as having the requisite number of

qualified signatures, defendants had a clear legal duty

to place the initiative on the ballot and plaintiff had a

clear legal right to the performance of that duty. Fur-

ther, no other legal remedy was available when defen-

dants declined to place the proposed amendment on the

ballot through an exercise of discretion that is not

permitted by law. Accordingly, we hold that the trial

court abused its discretion by failing to enter an order of

mandamus because plaintiff satisfied the elements nec-

essary for mandamus relief. Citizens Protecting Michi-

gan’s Constitution, 280 Mich App at 284.

We further hold that the trial court erred when it

addressed the question of whether the proposed ordi-

nance conflicts with state law when it decided the

summary disposition motion. A preelection determina-

tion of the validity of a ballot initiative substantially

interferes with the legislative function, and our courts

have repeatedly held that a substantive challenge to a

However, unlike Herp, this case does not involve a challenge under either

subsection or a challenge to the form of the petition.

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proposed initiative is improper until after the law is

enacted. Citizens for Protection of Marriage v Bd of

State Canvassers, 263 Mich App 487, 493; 688 NW2d

538 (2004); Senior Accountants, Analysts & Appraisers

Ass’n v Detroit, 218 Mich App 263, 270 n 5; 553 NW2d

679 (1996); Hamilton v Secretary of State, 212 Mich 31,

34; 179 NW 553 (1920). We recognize that in the very

rare case in which there is a clear and unmistakable

conflict between an initiative and state law, the Consti-

tution, or the city charter itself, or when an “initiative

petition does not meet the constitutional prerequisites

for acceptance,” a court may find it necessary to inter-

vene in the initiative process. Citizens Protecting Michi-

gan’s Constitution, 280 Mich App at 276-277, 291;

Detroit v Detroit City Clerk, 98 Mich App 136, 139; 296

NW2d 207 (1980). But because the judicial branch

should rarely interfere with the legislative process, such

cases should be, and are, rare and this is not such a case.

To support their position, defendants cite People v

Llewellyn, 401 Mich 314, 322 n 4; 257 NW2d 902 (1977),

for the proposition that an ordinance conflicts with and

is preempted by state law if it permits what state law

forbids. We take no position on whether a court could

come to this conclusion if this proposed ordinance was

passed and then challenged. We also take no position on

the wisdom of the petition or speculate about any

actions that may or may not be taken if and when the

proposed amendment is enacted. Simply stated, before

it becomes law, any judgment on the merits of such a

claim would be an academic discussion about a hypo-

thetical set of facts. Our courts should not render

hypothetical opinions about matters that may never

become law.

Moreover, we note here that the question of a poten-

tial conflict between city and state law is complex,

372 295 M

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particularly when the language of the proposed ordi-

nance does not appear to invalidate or interfere with

the enforcement of state and federal laws prohibiting

the use or possession of marijuana. The proposed

amendment appears to only provide that the use or

possession of less than one ounce of marijuana on

private property by a person 21 or older will not also be

punished under the Detroit ordinances. And though

plaintiff’s objective in supporting this initiative may

well be to take yet another incremental step toward

legalizing marijuana in Michigan, and though the in-

tended effect of the ordinance may be to discourage

arrests for the possession or use of small amounts of

marijuana, this issue is not properly before us. We do

note, however, that under MCL 764.15 it remains the

case that local police officers may arrest a person for the

commission of a state felony or misdemeanor and,

under the Detroit City Charter, it is the obligation of the

Detroit Police Department to “enforce laws of the state

and the nation” as well as “the ordinances of the city.”

1997 Detroit Charter, art 7, § 7-1101. Thus, the pro-

posal, on its face, does not appear to change the fact

that all persons under Michigan’s jurisdiction remain

subject to the drug laws contained in the Public Health

Code that criminalize the use and possession of mari-

juana. MCL 333.7403(2)(d) and MCL 333.7404(2)(d).

Plaintiff established the requirements for a writ of

mandamus, and the trial court abused its discretion by

We also observe that defendants’ arguments with regard to an alleged

conflict with state law appear to apply equally to the initiative permitting

the use or possession of marijuana and paraphernalia by a person “under

the direction, prescription, supervision, or guidance of a physician or

other licensed medical professional.” Detroit City Code, §§ 38-11-9 and

38-11-32. Those amendments of the code were passed by initiative in

2004, despite the fact that Michigan’s medical marijuana act was not

passed on a statewide basis until 2008.

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failing to grant the writ. It was outside defendants’

authority to consider the substance and effect of the

initiative, and defendants had a clear legal duty to place

the matter on the ballot once the clerk verified that the

petition had the requisite number of qualified signa-

tures. Plaintiff had a clear legal right to the placement

of the initiative on the ballot, and plaintiff had no other

remedy that would achieve the same result. Again, we

emphasize that judicial preelection determinations re-

garding the legality of ballot proposals are disfavored as

an undue interference with the legislative process—

including the initiative process, the most direct form for

citizens to pass laws. And when, as here, the question of

whether the ballot proposal conflicts with state law is a

complex, close question of law, clearly the judiciary

should let the legislative process proceed.

Accordingly, we reverse and remand this case to the

trial court for further proceedings consistent with this

opinion. We do not retain jurisdiction.

LEICHER

, J., concurred with S

AAD

,J.

ARKEY

,P.J. (dissenting). I respectfully dissent. It is

plaintiff that seeks judicial interference with the politi-

cal legislative process. I agree with the trial court that

plaintiff failed to meet its burden of proof to establish

that defendants had a clear legal duty to certify a ballot

question to adopt a city ordinance that is clearly con-

trary to state law. For this reason, I would affirm.

The issuance of a writ of mandamus is an extraordi-

nary remedy, and whether it issues is within the discre-

tion of the court. Citizens Protecting Michigan’s Con-

stitution v Secretary of State, 280 Mich App 273, 284;

761 NW2d 210 (2008); Carter v Ann Arbor City Attorney,

271 Mich App 425, 438; 722 NW2d 243 (2006). “The

374 295 M

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plaintiff bears the burden of demonstrating entitlement

to the extraordinary remedy of a writ of mandamus.”

Citizens for Protection of Marriage v Bd of State Can-

vassers, 263 Mich App 487, 492; 688 NW2d 538 (2004).

The party seeking a writ of mandamus must establish

that it (1) “has a clear legal right to performance of the

specific duty sought, (2) the defendant has the clear

legal duty to perform the act requested, (3) the act is

ministerial, and (4) no other remedy exists that might

achieve the same result.” Citizens Protecting Michi-

gan’s Constitution, 280 Mich App at 284. The discre-

tionary writ of mandamus “cannot be invoked to accom-

plish [an] illegal purpose, even though the officer

against whom it is invoked is charged with an express

duty under [a] statute.” Cheboygan Co Bd of Supervi-

sors v Mentor Twp Supervisor, 94 Mich 386, 388; 54 NW

169 (1892).

The majority reasons that defendants may not review

the substance of the ballot initiative to ensure its

compliance with state law but must, instead, after

verifying the sufficiency of the requisite signatures and

the failure of the city council to adopt the initiative,

perform the ministerial act of placing the proposal on

the ballot. The majority also applies the doctrine of

ripeness, announced in Hamilton v Secretary of State,

212 Mich 31; 179 NW 553 (1920), and followed in

subsequent cases, to conclude “that a substantive chal-

lenge to a proposed initiative is improper until after the

law is enacted.” Ante at 371-372. I disagree.

Since Marbury v Madison, 5 US (1 Cranch) 137, 177;

2 L Ed 60 (1803), it has been the province of the

judiciary in the United States to “to say what the law

is.” Thus, under our system of government with three

coequal branches, “interpreting the law has been one of

the defining aspects of judicial power.” In re Complaint

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of Rovas Against SBC Mich, 482 Mich 90, 98; 754 NW2d

259 (2008). Yet all public officers in this state from each

branch of government must take the same oath. Const

1963, art 11, § 1 provides in part:

All officers, legislative, executive and judicial, before

entering upon the duties of their respective offices, shall

take and subscribe the following oath or affirmation: I do

solemnly swear (or affirm) that I will support the Consti-

tution of the United States and the constitution of this

state, and that I will faithfully discharge the duties of the

office of........according to the best of my ability.

The oath emphasizes that apart from the United States

Constitution, the Michigan Constitution is the supreme

law that must guide “legislative, executive and judicial”

officers to “faithfully discharge the duties of [their]

office.”

The supremacy of Michigan’s Constitution in mat-

ters relating to the right of initiative was recently

recognized by this Court in Citizens Protecting Michi-

gan’s Constitution, 280 Mich App 273. The issue pre-

sented in that case was whether an initiative petition

filed pursuant to Const 1963, art 12, § 2, to amend the

Michigan Constitution in a multitude of ways could be

placed on the ballot or whether the proposed amend-

ments were so multifarious as to constitute a “general

revision” and required compliance with the procedures

for a constitutional convention, Const 1963, art 12, § 3.

This Court held that the latter constitutional provision

applied and issued a writ of mandamus precluding

defendants from submitting the initiative petition to

the electors. Citizens Protecting Michigan’s Constitu-

tion, 280 Mich App at 277, 308. Relying on several

Michigan Supreme Court cases, including Michigan

United Conservation Clubs v Secretary of State (After

Remand), 464 Mich 359, 365-366; 630 NW2d 297

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(2001), Michigan United Conservation Clubs v Secre-

tary of State, 463 Mich 1009 (2001), City of Jackson v

Comm’r of Revenue, 316 Mich 694, 711; 26 NW2d 569

(1947), and Scott v Secretary of State, 202 Mich 629,

643; 168 NW 709 (1918), this Court concluded that

whether an initiative proposal meets Michigan’s consti-

tutional prerequisites for submission to the electors

presents a “threshold determination” that is ripe for

decision before the initiative proposal is submitted to

the voters. Citizens Protecting Michigan’s Constitution,

280 Mich App at 282-291. An initiative petition “will

not meet the constitutional prerequisites for acceptance

if the constitutional power of initiative does not extend

to the proposal at issue.” Id. at 291.

The rights of initiative and referendum are reserved

to the people by Const 1963, art 2, § 9, which states, in

pertinent part with respect to this case:

The people reserve to themselves the power to propose

laws and to enact and reject laws, called the initiative, and

the power to approve or reject laws enacted by the legisla-

ture, called the referendum. The power of initiative extends

only to laws which the legislature may enact under this

constitution. [Emphasis added.]

In my opinion, the emphasized sentence imposes a

substantive limit on the right of initiative.

Moreover,

For the reasons discussed in this opinion, I disagree with this Court’s

decision in Ferency v Bd of State Canvassers, 198 Mich App 271; 497

NW2d 233 (1993), which held that the substantive limitation of Const

1963, art 2, § 9 was not ripe for review before an election is held. Ferency,

198 Mich App at 274, held that whether an initiative petition was subject

to preelection review under Const 1963, art 2, § 9 was controlled by

Hamilton, 212 Mich 31. But Hamilton interpreted Const 1908, art 17,

§ 2, regarding amending the constitution, which did not contain the

substantive limit contained in Const 1963, art 2, § 9. See Hamilton, 212

Mich at 35-36; cf. Const 1908, art 5, § 1 and Auto Club of Mich Comm for

Lower Rates Now v Secretary of State (On Remand), 195 Mich App 613,

616-619; 491 NW2d 269 (1992). Ferency also held that the authority to

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consideration must be given to the fact that the initia-

tive petition at issue in this case proposes to amend a

Detroit ordinance. Cities and other municipalities of

this state are creatures of this state’s sovereignty and

possess only the power and authority granted by the

Michigan Constitution and state statutes. Sinas v City

of Lansing, 382 Mich 407, 411; 170 NW2d 23 (1969).

Consequently, another constitutional provision limits

the adoption of ordinances by Detroit’s legislative body.

Specifically, Const 1963, art 7, § 22 provides that a city

or village “shall have power to adopt resolutions and

ordinances relating to its municipal concerns, property

and government, subject to the constitution and law.”

In People v Llewellyn, 401 Mich 314, 322; 257 NW2d 902

(1977), our Supreme Court provided clear guidance on

the limits Const 1963, art 7, § 22 imposes on the au-

thority of a city legislature to adopt ordinances that

conflict with state law. “Under Const 1963, art 7, § 22,

a Michigan municipality’s power to adopt resolutions

and ordinances relating to municipal concerns is “ ‘sub-

ject to the constitution and law.’ ” Llewellyn, 401 Mich

at 321. Moreover,

[a] municipality is precluded from enacting an ordinance if

1) the ordinance is in direct conflict with the state statu-

tory scheme, or 2) if the state statutory scheme pre-empts

the ordinance by occupying the field of regulation which

the municipality seeks to enter, to the exclusion of the

ordinance, even where there is no direct conflict between

the two schemes of regulation. [Id. at 322.]

A direct conflict exists when an ordinance permits what

the statute prohibits or the ordinance prohibits what

the statute permits. Id. at 322 n 4.

engage in constitutional review “lies solely with the judiciary.” Ferency,

198 Mich App at 273-274. Even if this is so, judicial review in the grand

tradition of Marbury v Madison is occurring now. See Citizens Protecting

Michigan’s Constitution, 280 Mich App at 291.

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Except within the strict confines of the Michigan

Medical Marihuana Act (MMMA), MCL 333.26421 et

seq., the use and possession of marijuana is prohibited

by Michigan’s Public Health Code, MCL 333.1101 et

seq. See MCL 333.7404(2)(d) (prohibiting use of mari-

juana); MCL 333.7403(2)(d) (prohibiting possession of

marijuana); and MCL 333.7401(1) and (2)(d) (prohibit-

ing the manufacture, creation, delivery, or possession

with intent to manufacture, create, or deliver mari-

juana). Thus, because the proposed ordinance would

permit “the use or possession of less than 1 ounce of

marihuana, on private property, by a person who has

attained the age of 21 years,” without compliance with

the MMMA, there is a patent, direct conflict between

the proposed ordinance and state statute. Llewellyn,

401 Mich at 322 n 4. The proposed ordinance would be

preempted by state statute if passed by the voters, and

it is not within its constitutional authority under Const

1963, art 7, § 22 for the Detroit legislative body to adopt

this ordinance. Llewellyn, 401 Mich at 319-320. Conse-

quently, the initiative petition here does not satisfy the

constitutional prerequisite of coming within the right of

initiative under Const 1963, art 2, § 9. Citizens Protect-

ing Michigan’s Constitution, 280 Mich App at 291.

The majority opines that “the question of a potential

conflict between city and state law is complex, particu-

larly when the language of the proposed ordinance does

not appear to invalidate or interfere with the enforce-

ment of state and federal laws prohibiting the use or

possession of marijuana.” Ante at 372-373. While I

agree that a local ordinance cannot “invalidate or

interfere with the enforcement of state and federal

laws,” this is not the test announced in Llewellyn to

determine whether a city or village exceeds its authority

under Const 1963, art 7, § 22. Applying the correct test,

I conclude, as did the trial court, that the initiative

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proposal here sought the adoption of an ordinance that

directly conflicted with state law. Consequently, it was

not within the constitutional authority of the city of

Detroit to adopt such an ordinance. Id.; see also Llewel-

lyn, 401 Mich at 321-322, n 4. As such, the proposed

ordinance amendment was not within the reserved

right of initiative provided for in Const 1963, art 2, § 9.

See Citizens Protecting Michigan’s Constitution, 280

Mich App at 291.

Finally, as noted initially, it is the plaintiff’s burden

to establish not only that it has a clear legal right to

performance of the specific duty sought, but also that

the defendant has the clear legal duty to perform the act

requested. Id. at 284. Plaintiff in this case failed to meet

its burden of proof with respect to either of these

requirements. I would hold that the trial court did not

abuse its discretion by denying plaintiff’s complaint for

a writ of mandamus to compel the placing of this

initiative before the electors because its purpose—and

admittedly so—was to adopt an amendment to Detroit’s

ordinances that clearly conflicted with state law and,

thus, sought to accomplish an illegal purpose. Che-

boygan Co Bd of Supervisors, 94 Mich at 388.

I would affirm.

380 295 M

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THURMAN v CITY OF PONTIAC

Docket No. 300396. Submitted January 11, 2012, at Detroit. Decided

January 19, 2012. Approved for publication February 14, 2012, at

9:00 a.m.

Patrick Thurman brought a negligence action in the Oakland Circuit

Court against the city of Pontiac for injuries sustained when he

tripped and fell on an allegedly defective public sidewalk. Thur-

man notified the city of his injuries within 120 days as required by

MCL 691.1404(1) and identified the accident location as “35

Huron, Pontiac, Michigan.” The city moved for summary disposi-

tion pursuant to MCR 2.116(C)(7), arguing that because Thurman

did not sufficiently identify the exact location of his alleged injury,

as required by MCL 691.1404(1), it was entitled to judgment as a

matter of law on the basis of governmental immunity. The court,

Rudy J. Nichols, J., accepted additional photographic evidence of

the accident site from Thurman and denied the motion, concluding

that Thurman’s notice was more than adequate and had identified

the location sufficiently to enable the city to identify the location.

The city appealed.

The Court of Appeals held:

The circuit court erred by denying the city’s motion for

summary disposition on the basis of governmental immunity.

Under the highway exception to governmental immunity, MCL

691.1402(1), a governmental agency with jurisdiction over a par-

ticular highway has a duty to maintain the highway in reasonable

repair so that it is reasonably safe and convenient for public travel.

This includes the duty to maintain sidewalks. MCL 691.1401(e).

Under MCL 691.1404(1), a plaintiff must notify the governmental

defendant of his or her claim in a timely manner in order for the

highway exception to apply. While the notice need not be in any

particular form, it must be provided within 120 days of the

plaintiff’s injuries and specify the exact location and nature of the

defect, the injury sustained, and the names of witnesses known at

the time by the claimant. To qualify, the notice must specify details

such as the corner of the intersection at which the alleged defect is

located as well the side of the road on which it is located.

Thurman’s notice that the injury occurred at “35 Huron, Pontiac,

2012] T

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Michigan” did not provide adequate notice of the location of the

defect because it did not specify whether it was at 35 West Huron

or 35 East Huron Street, both of which were addresses in the city,

or whether it was located on the north or south side of the road.

The court also erred by considering the photographs submitted by

Thurman as part of his notice because they were submitted after

the city filed its motion for summary disposition, which was more

than 120 days after the injury and therefore should not have been

considered as part of the notice even though the untimely submis-

sion did not prejudice the city.

Reversed and remanded for entry of a judgment in favor of the

city.

OVERNMENTAL

MMUNITY —

IGHWAY

XCEPTION —

OTICE OF

LAIMS —

XACT

OCATION OF

CCIDENT

Under the highway exception to governmental immunity, a govern-

mental agency with jurisdiction over a particular highway has a

duty to maintain the highway in reasonable repair so that it is

reasonably safe and convenient for public travel; this includes the

duty to maintain sidewalks; a plaintiff alleging an injury from the

agency’s failure to do so must notify the governmental defendant

of his or her claim in a timely manner in order for the highway

exception to apply; while the notice need not be in any particular

form, it must be provided within 120 days of the plaintiff’s injuries

and specify the exact location and nature of the defect, the injury

sustained, and the names of witnesses known at the time; to

qualify, the notice must specify details such as the corner of the

intersection at which the alleged defect is located as well the side

of the road on which it is located (MCL 691.1401[e]; MCL

691.1402[1]; MCL 691.1404[1]).

Varjabedian Attorneys, P.C. (by Christopher S. Varja-

bedian and Anthony Vitucci, Jr.), for Patrick Thurman.

Johnston, Sztykiel, Hunt, Goldstein, Fitzgibbons &

Clifford, P.C. (by Eric S. Goldstein), for the city of

Pontiac.

Before: J

ANSEN

,P.J., and W

ILDER

and K. F. K

ELLY

,JJ.

URIAM

. Defendant, the city of Pontiac (the City),

appeals by right the circuit court’s denial of its motion

382 295 M

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for summary disposition brought pursuant to MCR

2.116(C)(7) on the basis of governmental immunity.

reverse and remand for entry of judgment in favor of

the City.

On March 3, 2010, plaintiff was walking in the City

when he fell on a public sidewalk, sustaining injuries to

his left leg. Plaintiff alleged that he had tripped on a

portion of the sidewalk that was cracked or uneven. On

April 15, 2010, plaintiff notified the City in writing that

he had tripped on an allegedly defective sidewalk while

“walking east on Huron Street” and that his injury had

occurred at “35 Huron, Pontiac, Michigan.”

On May 28, 2010, plaintiff commenced a negligence

action in the Oakland Circuit Court, claiming that the

City had failed to maintain the sidewalk in reasonable

repair and that the sidewalk was unsafe for public

travel. The City moved for summary disposition pursu-

ant to MCR 2.116(C)(7), arguing that plaintiff had

failed to comply with MCL 691.1404(1) because his

notice was not sufficiently detailed. In particular, the

City argued that the words “35 Huron, Pontiac, Michi-

gan” did not sufficiently identify the exact location of

plaintiff’s alleged injury. The City claimed that the

language of the notice was ambiguous because there

was both a 35 West Huron Street and a 35 East Huron

Street. Accordingly, the City argued, it was entitled to

judgment as a matter of law on the ground of govern-

mental immunity.

On August 30, 2010, plaintiff responded to the City’s

motion for summary disposition. Plaintiff maintained

that he had fully complied with MCL 691.1404(1) and

that his notice had been sufficiently specific. Plaintiff

The denial of a motion for summary disposition brought pursuant to

MCR 2.116(C)(7) on the basis of governmental immunity is appealable by

right. MCR 7.203(A)(1); MCR 7.202(6)(a)(v).

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also submitted several photographs of the sidewalk,

street, and buildings in the location of his fall. Plaintiff

argued that the photographs made clear that he had

fallen in the area of 35 West Huron Street.

In reply, the City reiterated its position that plain-

tiff’s description of the location of his fall was deficient.

The City further argued that the circuit court should

not consider the late-filed photographic evidence be-

cause it was not submitted with plaintiff’s original

notice.

At oral argument, the circuit court observed that

although there is both a 35 West Huron Street and a 35

East Huron Street in the city of Pontiac, “plaintiff’s

notice did still identify the location sufficiently so as to

enable [the City] to identify the location....” The

court determined that plaintiff’s notice provided the

City “more than adequate notice” and that “plaintiff

did identify the exact location of [his] injury.” On

September 22, 2010, the circuit court entered an order

denying the City’s motion for summary disposition for

the reasons stated on the record.

The grant or denial of a motion for summary dispo-

sition is reviewed de novo. McLean v McElhaney, 289

Mich App 592, 596; 798 NW2d 29 (2010). “Similarly, the

applicability of governmental immunity is a question of

law that this Court reviews de novo.” Id. A plaintiff who

asserts a claim against a governmental agency “ ‘must

plead in avoidance of governmental immunity’ ” by

“stat[ing] a claim that fits within a statutory excep-

tion....”Kendricks v Rehfield, 270 Mich App 679, 681;

716 NW2d 623 (2006) (citation omitted).

“[T]he immunity conferred upon governmental agen-

cies is broad, and the statutory exceptions thereto are to

be narrowly construed.” Nawrocki v Macomb Co Rd

Comm, 463 Mich 143, 158; 615 NW2d 702 (2000).

384 295 M

ICH

381 [Feb

Under the highway exception to governmental immunity,

a governmental agency with jurisdiction over a particular

highway has a duty to “maintain the highway in reason-

able repair so that it is reasonably safe and convenient for

public travel.” MCL 691.1402(1). This includes sidewalks.

MCL 691.1401(e). However, before the highway exception

can apply, the plaintiff must timely notify the governmen-

tal defendant of his or her claim in accordance with MCL

691.1404(1). Plunkett v Dep’t of Transp, 286 Mich App

168, 176; 779 NW2d 263 (2009). The notice provided

under MCL 691.1404(1) need not be in any particular

form, id., but must be provided within 120 days of the

plaintiff’s injury, MCL 691.1404(1); Burise v City of

Pontiac, 282 Mich App 646, 654; 766 NW2d 311 (2009).

The notice must also “specify the exact location and

nature of the defect, the injury sustained and the names

of the witnesses known at the time by the claimant.”

MCL 691.1404(1) (emphasis added).

In Smith v City of Warren, 11 Mich App 449, 452-453;

161 NW2d 412 (1968), the plaintiff notified the govern-

mental defendant that she had been injured as the

result of an alleged defect in the roadway at “ ‘Thirteen

Mile and Hoover, near the address of 11480 Thirteen

Mile Road.’ ” This Court held that the plaintiff’s notice

was not sufficiently detailed and did not specify the

exact location of the alleged defect because it did not

mention that the defect in question was actually on the

south side of Thirteen Mile Road and approximately

40 yards away from the stated address. Id. Similarly, in

Dempsey v Detroit, 4 Mich App 150, 151; 144 NW2d 684

(1966), an elderly plaintiff was injured after she fell

on an allegedly defective sidewalk. Before filing suit,

the plaintiff notified the governmental defendant

merely that the defect was located at “ ‘Adams and

Woodward.’ ” Id. Relying on Barribeau v Detroit, 147

2012] T

HURMAN V

ITY OF

ONTIAC

385

Mich 119, 124-126; 110 NW 512 (1907), the Dempsey

Court held that the plaintiff’s notice was insufficient as

a matter of law because it did not specify at which of the

four corners of the intersection the alleged defect was

located. Dempsey, 4 Mich App at 151-152.

Turning to the instant case, plaintiff’s notice merely

stated that the alleged defect in the City’s sidewalk was

located at “35 Huron, Pontiac, Michigan.” Plaintiff’s

notice did not specify whether the alleged defect was

located at 35 West Huron Street or 35 East Huron

Street, both of which are actual addresses in the city of

Pontiac. See Jakupovic v City of Hamtramck, 489 Mich

939 (2011). Nor did plaintiff’s notice specify whether

the alleged defect was located on the north side or south

side of Huron Street. Smith, 11 Mich App at 452-453.

We conclude that the circuit court erred by denying the

City’s motion for summary disposition because plain-

tiff’s notice to the City did not “specify the exact

location...ofthedefect” within the meaning of MCL

691.1404(1). See id.; Dempsey, 4 Mich App at 151-152.

Nor was the photographic evidence provided by plaintiff

in response to the City’s motion for summary disposi-

tion sufficient to cure the otherwise insufficient notice.

The photographs were submitted more than 120 days

after plaintiff’s injury, and it was therefore improper for

the circuit court to consider them as part of plaintiff’s

notice. MCL 691.1404(1); Burise, 282 Mich App at 654.

This is true even if the untimely submission of the

photographs did not prejudice the City in any way.

Rowland v Washtenaw Co Rd Comm, 477 Mich 197,

219; 731 NW2d 41 (2007).

Because plaintiff’s notice did not specify the exact

location of the alleged defect within the meaning of

MCL 691.1404(1), the notice was insufficient, plaintiff

was not entitled to proceed against the City under the

386 295 M

ICH

381 [Feb

highway exception, and the City was entitled to govern-

mental immunity as a matter of law. The circuit court

erred by denying the City’s motion for summary dispo-

sition brought pursuant to MCR 2.116(C)(7). We accord-

ingly reverse the circuit court’s denial of the City’s

motion for summary disposition and remand for entry

of judgment in favor of the City consistent with this

opinion.

Reversed and remanded for entry of judgment in

favor of the City. We do not retain jurisdiction. No

taxable costs pursuant to MCR 7.219, a public question

having been involved.

ANSEN

,P.J., and W

ILDER

and K. F. K

ELLY

, JJ., con-

curred.

2012] T

HURMAN V

ITY OF

ONTIAC

387

PEOPLE v RYAN

Docket No. 301787. Submitted January 4, 2012, at Lansing. Decided

February 14, 2012, at 9:05 a.m. Leave to appeal denied, 493 Mich

865.

Sean Michael Ryan was convicted by a jury in the Saginaw Circuit

Court of seven counts of first-degree criminal sexual conduct, MCL

750.520b(1)(a) (CSC-1), for committing various acts of sexual

penetration involving his daughter. The convictions were sup-

ported by both the victim’s testimony and defendant’s confession.

Defendant had moved to suppress his confession before trial,

arguing that it was involuntary and that his waiver of his rights

under Miranda v Arizona, 384 US 436 (1966), was not knowing,

intelligent, and voluntary. The court, Janet M. Boes, J., denied the

motion and following defendant’s convictions sentenced him to 25

to 50 years’ imprisonment for each of the seven CSC-1 convictions.

The sentences were to be served concurrently with the exception of

those for two of the counts, which were to be served consecutively.

Relying on MCL 750.520b(3), the court determined that it had

discretion to make the two sentences consecutive because the

distinct sexual penetrations associated with those counts arose out

of the same transaction. Defendant appealed, arguing that the

trial court erred by denying the motion to suppress his confession

and imposing consecutive sentences for the two CSC-1 convictions.

The Court of Appeals held:

1. The voluntariness of a confession is assessed by considering

the totality of the surrounding circumstances to determine

whether the confession was freely and voluntarily made. A confes-

sion is voluntary if it is the product of an essentially free and

unconstrained choice by its maker and the accused’s will has not

been overborne or his or her capacity for self-determination

criminally impaired. To determine whether a statement is volun-

tary a court should consider various factors, including the age of

the accused; his or her lack of education or intelligence level; his or

her prior experience with the police or lack thereof; the repeated

and prolonged nature of the questioning; the length of detention

before the accused gave the statement in question; the lack of any

advice to the accused of his or her constitutional rights; whether

there was an unnecessary delay in bringing the accused in front of

388 295 M

ICH

388 [Feb

a magistrate before he or she gave the confession; whether the

accused was injured, intoxicated, drugged, or in poor health;

whether the accused was deprived of food, sleep, or medical

attention; whether the accused was physically abused; and

whether he or she was threatened with abuse.

2. The same analysis applies to the voluntariness of a Miranda

waiver. A defendant’s waiver of his or her Miranda rights is

voluntary if there is an absence of police coercion. A waiver of

Miranda rights must be voluntary in the sense that it was the

product of a free and deliberate choice rather than intimidation,

coercion, or deception.

3. The trial court properly held that defendant’s confession

was voluntary. Defendant’s claim of involuntariness, which was

predicated on pain, lack of medications and medical care, threats

regarding his wife’s parental rights, and alleged promises of

leniency if he confessed, was supported solely by his own testimony

and expressly contradicted by police testimony. The trial court’s

determination that the police officers were more credible was

entitled to deference. Although defendant may have lacked access

to pain medications and complained of pain earlier in the day to a

polygraph examiner who declined to conduct a polygraph test,

defendant had never indicated during the recorded interview that

he was in pain or in need of medical attention. The confession was

not the result of intimidation, coercion or deception, and it was

freely and voluntarily made under the totality of the circum-

stances.

4. Concurrent sentencing is the norm in Michigan, and con-

secutive sentences may be imposed only if specifically authorized

by statute. A court has discretion under MCL 750.520b(3) to

impose a term of imprisonment for a first-degree criminal sexual

conduct conviction that is to be served consecutively to any term of

imprisonment imposed for any other criminal offense arising from

the same transaction. Sentences are imposed separately for each

count of a crime on which a defendant is convicted, including

counts arising from the same transaction and regardless of

whether the length of the sentences are identical. Thus, the

language “any other criminal offense” in MCL 750.520b(3) means

a different sentencing offense and can encompass additional

violations of the same CSC-1 statute. The court did not err by

imposing consecutive sentences for the two counts that involved

two acts of sexual penetration that were part of the same trans-

action. They were distinct offenses involving different acts of

penetration, and each could independently support a separate

prison term. The two counts, which involved an act of vaginal

2012] P

EOPLE V

YAN

389

intercourse immediately followed by the act of fellatio, arose out of

the same transaction because they grew out of a continuous time

sequence, sprang one from the other, and had a connective

relationship that was more than incidental.

5. The issues raised in propria persona by defendant are

rejected because his arguments had no support whatsoever in the

existing record, mischaracterized the record, were devoid of legal

merit, failed to establish prejudice, or provided no rational basis

for reversal.

Affirmed.

1. C

RIMINAL

AW —

ONFESSIONS —

VIDENCE —

OLUNTARINESS —

OTALITY OF

THE

IRCUMSTANCES

To determine whether a confession is voluntary, the court must

consider the totality of the surrounding circumstances to deter-

mine whether it was freely and voluntarily made; a confession is

voluntary if it is the product of an essentially free and uncon-

strained choice by its maker and the accused’s will has not been

overborne or his or her capacity for self-determination criminally

impaired; a court should consider various factors, including the

age of the accused; his or her lack of education or intelligence level;

his or her prior experience with the police or lack thereof; the

repeated and prolonged nature of the questioning; the length of

detention before the accused gave the statement in question; the

lack of any advice to the accused of his or her constitutional rights;

whether there was an unnecessary delay in bringing the accused in

front of a magistrate before he or she gave the confession; whether

the accused was injured, intoxicated, drugged, or in poor health;

whether the accused was deprived of food, sleep, or medical

attention; whether the accused was physically abused; and

whether he or she was threatened with abuse.

2. C

RIMINAL

AW —

NTERROGATIONS —

IRANDA

IGHTS —

AIVER —

OLUNTARI-

NESS

A defendant’s waiver of his or her rights under Miranda v Arizona,

384 US 436 (1966), is voluntary if there is an absence of police

coercion; the waiver of the Miranda rights must have been the

product of a free and deliberate choice rather than intimidation,

coercion, or deception.

3. S

ENTENCES —

ONSECUTIVE

ENTENCING —

IRST

-D

EGREE

RIMINAL

EXUAL

ONDUCT

A court may impose a term of imprisonment for a conviction of

first-degree criminal sexual conduct (CSC-1) that is to be served

390 295 M

ICH

388 [Feb

consecutively to any term of imprisonment imposed for any other

criminal offense arising from the same transaction; the language

“any other criminal offense” means a different offense and can

encompass additional violations of the same CSC-1 statute (MCL

750.520b[3]).

Bill Schuette, Attorney General, John J. Bursch,

Solicitor General, Michael D. Thomas, Prosecuting At-

torney, and Randy L. Price, Assistant Prosecuting At-

torney, for the people.

Patrick K. Ehlmann for defendant.

Before: M

URPHY

, C.J., and F

ITZGERALD

and M

ETER

,JJ.

URPHY

, C.J. Defendant was charged with nine

counts of first-degree criminal sexual conduct (CSC-1),

MCL 750.520b(1)(a) (victim under age 13), arising out

of various acts of sexual penetration involving his

daughter. Following a jury trial, defendant was con-

victed of seven counts of CSC-1, with the jury acquit-

ting defendant on the first count in the felony informa-

tion and the trial court granting a directed verdict on

the information’s second count. The victim’s testimony

and defendant’s confession fully supported the convic-

tions. Defendant was sentenced to 25 to 50 years’

imprisonment for each of the seven CSC-1 convictions.

MCL 750.520b(2)(b) mandated a 25-year minimum

sentence. The trial court ordered that the prison sen-

tences be served concurrently, except for the sentence

on count 9, which was to be served consecutively to the

sentence on count 3. The trial court found that the

sexual penetrations associated with counts 3 (fellatio)

and 9 (vaginal intercourse) arose out of the same

transaction and that imposition of consecutive sen-

tences was thus permissible under MCL 750.520b(3).

Defendant was therefore effectively sentenced to a

minimum prison term of 50 years. On appeal, defendant

2012] P

EOPLE V

YAN

391

challenges the consecutive sentences imposed by the

trial court, argues that the court erred by denying a

motion to suppress his confession, and sets forth a

litany of other arguments in support of reversal in a

Standard 4 brief.

We conclude that the trial court

correctly interpreted and applied MCL 750.520b(3)

with respect to consecutive sentencing, that the court

did not err by denying defendant’s motion to suppress

his confession, and that the remainder of defendant’s

appellate arguments lack merit. Accordingly, we affirm

the convictions and sentences.

I. FACTS

On March 1, 2010, the police were notified by local

school personnel that a student had made allegations

that her father, defendant, had sexually abused her on

various occasions. The police met with defendant at the

school, then transported him to the police department

for questioning. Meanwhile, a detective took the victim

to a local abuse and neglect center for purposes of a

forensic interview. At the police department, defendant

signed a form indicating that he understood and waived

his Miranda

rights. He provided the police with the

addresses of four properties that he owned, and defen-

dant consented to a search of those locations.

In an initial police interview on March 1, defendant

denied ever having sexual contact with his daughter.

The interview was recorded, but a computer failure or

human error resulted in the data or recording being

Administrative Order No. 2004-6 adopted the minimum standards for

indigent criminal appellate defense services proposed by the Appellate

Defender Commission. A Standard 4 brief refers to a brief filed by the

defendant in propria persona in which he or she raises issues on appeal

against the advice of counsel.

Miranda v Arizona, 384 US 436; 86 S Ct 1602; 16 L Ed 2d 694 (1966).

392 295 M

ICH

388 [Feb

lost. Defendant was then transported to the county jail.

The next day, March 2, detectives went to the county jail

with the intention of interviewing defendant once

again. However, the detectives decided not to interview

defendant because he complained of a lack of sleep.

Defendant was again interviewed by police on March 3,

2010, and the interview was recorded and played for the

jury. During the interview, defendant confessed to en-

gaging in numerous instances of sexual contact and

penetration with his daughter, including vaginal and

anal intercourse, as well as fellatio and cunnilingus.

The trial court denied defendant’s pretrial motion to

suppress the confession, which we shall address in more

detail later.

The victim testified that she was 12 years old at the

time of trial and that she had stopped living with her

mother and went to live with her father in 2009 at a

house in Saginaw that he shared with his wife (the

victim’s stepmother) and the victim’s two half-brothers.

The victim indicated that her stepmother went to

Mississippi for a wedding sometime in June 2009,

leaving defendant to care for her and her brothers.

Shortly after her stepmother left, defendant called the

victim into his bedroom and demanded that she remove

all of her clothing. She testified that defendant put his

penis in her vagina and thereafter placed his penis in

her mouth, leading to ejaculation. The victim was 11

years old at the time. The act of vaginal intercourse and

the act of fellatio in this first episode or transaction

We note that on March 3, 2010, there were actually two interviews of

defendant by police. A detective conducted an initial interview in which

defendant allegedly confessed to sexually abusing his daughter; however,

while this interview was successfully videotaped, the volume for the

audio was turned down, so the recording was silent. The detective

discovered the problem and then conducted a second interview, which

was successfully recorded and played for the jury.

2012] P

EOPLE V

YAN

393

gave rise to counts 3 and 9 of the information charging

CSC-1. Defendant’s daughter testified that he contin-

ued to engage in various acts of sexual contact and

penetration with her after the initial incident and that

the sexual abuse occurred numerous times at the vari-

ous properties owned by defendant.

The victim stated that on February 28, 2010, her

stepmother and brothers were gone from the house and

defendant wanted her to remove her clothing, but she

refused and climbed under her bed. She testified that

defendant took his belt off and started swinging it

under the bed, striking her once on the leg. The next

day at school the victim told the school counselor about

the sexual abuse.

Defendant took the stand and denied any sexual

contact with his daughter, suggesting that she had

made it all up in an effort to return to her mother out of

state. Defendant testified that his confession was false

and resulted from being deprived of medical attention

and his pain medications as well as threats that his sons

would be taken away from his wife and put in foster

care.

Defendant was convicted and sentenced on seven

counts of CSC-1 as indicated. He appeals as of right.

II. ANALYSIS

A. MOTION TO SUPPRESS CONFESSION

Defendant first argues that the trial court erred by

denying the motion to suppress his confession because

the confession was involuntary and the waiver of his

Miranda rights was not knowing, intelligent, and vol-

untary. Defendant claims that he had suffered a severe

injury in the past and was disabled, necessitating an

array of medications to manage his pain. Defendant

394 295 M

ICH

388 [Feb

asserts that the police deprived him of his pain medica-

tions and proper medical care and also suggested that

his wife could lose custody of their two sons because of

the allegations. Defendant contends that he confessed

because the police led him to believe that he would

receive his pain medications and appropriate medical

care and that his wife would be in a better position

regarding the children if defendant gave a confession.

Defendant notes that he was in extreme pain at the

time of the confession.

The trial court conducted a Walker

hearing on

defendant’s motion to suppress, taking testimony from

defendant and a number of police officers. The trial

court found that defendant’s testimony about pain or

concern for his wife’s parental rights was not credible.

The court, having viewed a DVD of the confession,

observed that defendant never complained of pain dur-

ing the interview, that he entered the interview room,

sat, and manipulated his bag of tobacco in an appar-

ently pain-free manner, that his hands were not shaking

as he drank from a cup, and that his speech was

coherent. The court noted that defendant gave direct

and specific answers to questions and provided details

about interactions with his daughter, including infor-

mation on times, places, and surrounding circum-

stances. The trial court also found that defendant’s

testimony concerning his mental state was contradicted

by the officers’ testimony about defendant’s appearance

and demeanor. The court found the officers’ testimony

to be credible.

We initially note that the nature and substance of

defendant’s argument is focused on the voluntariness of

the confession and perhaps the voluntariness of the

Miranda waiver, but not on whether the Miranda

People v Walker (On Rehearing), 374 Mich 331; 132 NW2d 87 (1965).

2012] P

EOPLE V

YAN

395

waiver was knowing and intelligent. Accordingly, our

attention will be fixated on the question of voluntari-

ness. “This Court reviews de novo the question of

voluntariness.” People v Tierney, 266 Mich App 687,

707; 703 NW2d 204 (2005). Deference is given, however,

to the trial court’s assessment of the credibility of the

witnesses and the weight accorded to the evidence. Id.

at 708. The trial court’s factual findings are subject to

reversal only if clearly erroneous, meaning that this

Court is left with a firm and definite conviction that a

mistake has been made. Id.

In People v Cipriano, 431 Mich 315, 333-334; 429

NW2d 781 (1988), our Supreme Court set forth the

applicable analysis that governs a determination

whether a confession was voluntary:

The test of voluntariness should be whether, considering

the totality of all the surrounding circumstances, the

confession is “the product of an essentially free and uncon-

strained choice by its maker,” or whether the accused’s

“will has been overborne and his capacity for self-

determination critically impaired...”Theline of demar-

cation “is that at which governing self-direction is lost and

compulsion, of whatever nature or however infused, pro-

pels or helps to propel the confession.”

In determining whether a statement is voluntary, the

trial court should consider, among other things, the follow-

ing factors: the age of the accused; his lack of education or

his intelligence level; the extent of his previous experience

with the police; the repeated and prolonged nature of the

questioning; the length of the detention of the accused

before he gave the statement in question; the lack of any

advice to the accused of his constitutional rights; whether

there was an unnecessary delay in bringing him before a

magistrate before he gave the confession; whether the

accused was injured, intoxicated or drugged, or in ill health

when he gave the statement; whether the accused was

deprived of food, sleep, or medical attention; whether the

396 295 M

ICH

388 [Feb

accused was physically abused; and whether the suspect

was threatened with abuse.

The absence or presence of any one of these factors is

not necessarily conclusive on the issue of voluntariness.

The ultimate test of admissibility is whether the totality of

the circumstances surrounding the making of the confes-

sion indicates that it was freely and voluntarily made.

[Citations omitted.]

The legal analysis is essentially the same with re-

spect to examining the “voluntary” prong of a Miranda

waiver. In People v Daoud, 462 Mich 621, 635; 614

NW2d 152 (2000), the Supreme Court explained:

Determining whether a waiver of Miranda rights was

voluntary involves the same inquiry as in the due process

context....[T]here is “no reason to require more in the

way of a voluntariness inquiry in the Miranda waiver

context than in the Fourteenth Amendment confession

context.” Thus, whether a waiver of Miranda rights is

voluntary depends on the absence of police coercion....

“ ‘[T]he relinquishment of the right must have been vol-

untary in the sense that it was the product of a free and

deliberate choice rather than intimidation, coercion, or

deception....’”[Citations omitted.]

Defendant was interviewed on March 1 and 3, 2010,

and the record reflects that the police declined to inter-

view him on March 2 because he complained of a lack of

sleep. Defendant indicated that the first interview lasted a

couple of hours. He was advised of and waived his

Miranda rights before the first interview. In regard to the

interviews on March 3, 2010, defendant admitted that he

received breaks in the interview process. Furthermore, on

March 3, the interviewing detective obtained confirmation

from defendant that he had previously been advised of

and waived his Miranda rights. The detective also ex-

plained to defendant that his Miranda rights still applied,

and defendant expressed, once again, that he understood

2012] P

EOPLE V

YAN

397

his Miranda rights before launching into his confession.

Defendant’s claim of involuntariness predicated on pain,

lack of medications and medical care, and threats regard-

ing his wife’s parental rights was supported solely by his

testimony. Police officers testified that they offered defen-

dant food, drink, cigarettes, and regular bathroom breaks.

Although defendant may have lacked access to pain medi-

cations for approximately two days and complained of

pain earlier in the day to a polygraph examiner who

declined to conduct a polygraph test, he never once

indicated or suggested during the recorded interview that

he was in pain or in need of medical attention. The trial

court observed that defendant appeared pain-free and at

ease during the interview.

Defendant’s testimony concerning alleged promises of

prosecutorial leniency, medical care, and continued paren-

tal rights with respect to defendant’s wife if he confessed

was flatly contradicted by police testimony. The trial

court’s assessment of the weight of the evidence and its

determination that the officers were credible witnesses

and that defendant lacked credibility fall within the trial

court’s purview and are entitled to deference, not second-

guessing by us when we did not hear and observe the

witnesses. We hold that defendant’s confession was freely

and voluntarily made under the totality of the circum-

stances; it was the product of an essentially free and

unconstrained choice by defendant. Defendant’s will was

not overborne, nor was his capacity for self-determination

critically impaired. The record reflects that the confession

was not the result of intimidation, coercion, or deception.

Reversal is unwarranted.

B. CONSECUTIVE SENTENCING

Defendant argues that the trial court erred by impos-

ing consecutive sentences on two of the CSC-1 convic-

398 295 M

ICH

388 [Feb

tions under MCL 750.520b(3), which provides that a

“court may order a term of imprisonment imposed

under this section [the CSC-1 statute] to be served

consecutively to any term of imprisonment imposed for

any other criminal offense arising from the same trans-

action.”

(Emphasis added.) Defendant argues that the

phrase “any other criminal offense” is ambiguous. He

asserts that it could be interpreted as encompassing all

criminal offenses other than the crime of CSC-1 or that

it could be interpreted, consistently with the trial

court’s construction, as encompassing all criminal of-

fenses except for the particular underlying count of

CSC-1, thereby allowing consideration of separate and

additional counts of CSC-1. Defendant points out that

the same phrase or similar language has been used by

the Legislature in various statutes in the Michigan

Penal Code, e.g., MCL 750.110a(8) (home invasion)

and

MCL 750.529a(3) (carjacking),

yet it is unlikely, defen-

dant posits, that multiple convictions of any one of

these offenses—for example, home invasion—could

ever arise from the same transaction. Therefore, ac-

cording to defendant, use of the phrase “any other

criminal offense” or similar language necessarily re-

flects the Legislature’s intent to encompass offenses

other than the offense covered by the statute that

provides for the consecutive sentencing. Accordingly,

MCL 750.520b(3) was intended to allow for consecutive

MCL 750.520b was amended in 2006, adding subsection (3). See 2006

PA 169.

MCL 750.110a(8) provides that a “court may order a term of impris-

onment imposed for home invasion in the first degree to be served

consecutively to any term of imprisonment imposed for any other

criminal offense arising from the same transaction.”

MCL 750.529a(3) provides that “[a] sentence imposed for a violation

of this section may be imposed to run consecutively to any other sentence

imposed for a conviction that arises out of the same transaction.”

2012] P

EOPLE V

YAN

399

sentences only when the “other criminal offense” was

not CSC-1 but was a different offense altogether. In

further support of this proposition, defendant notes

that the word “other,” as commonly understood and

defined, refers to something different or distinct in

kind. Finally, defendant maintains that CSC-1 is al-

ready punishable by life or any term of years and that

the fact of multiple sexual penetrations arising out of a

sentencing offense is a factor that is taken into account

by the sentencing guidelines under MCL 777.41—

offense variable 11 (OV-11)—so that resort to consecu-

tive sentencing is unnecessary to impose a lengthy

prison term under circumstances involving multiple

penetrations occurring within the same transaction.

This Court reviews de novo questions of statutory

construction. People v Flick, 487 Mich 1, 8-9; 790 NW2d

295 (2010). This appeal requires us to construe MCL

750.520b(3). In Flick, 487 Mich at 10-11, the Michigan

Supreme Court recited the well-established principles

that govern our interpretation of a statute:

The overriding goal of statutory interpretation is to

ascertain and give effect to the Legislature’s intent. The

touchstone of legislative intent is the statute’s language.

The words of a statute provide the most reliable indicator

of the Legislature’s intent and should be interpreted on the

basis of their ordinary meaning and the overall context in

which they are used. An undefined statutory word or

phrase must be accorded its plain and ordinary meaning,

unless the undefined word or phrase is a “term of art” with

a unique legal meaning. When we interpret the Michigan

Penal Code, we do so according to the fair import of the

terms, to promote justice and to effect the objects of the

law. [Citations, alterations, and quotation marks omitted.]

When an undefined statutory term has been the

subject of judicial interpretation, we presume that the

Legislature used the particular term in a manner con-

400 295 M

ICH

388 [Feb

sistent with the prior construction. McCormick v Car-

rier, 487 Mich 180, 192; 795 NW2d 517 (2010), quoting

People v Powell, 280 Mich 699, 703; 274 NW 372 (1937).

We must avoid an interpretation that renders any part

of a statute surplusage or nugatory. Zwiers v Growney,

286 Mich App 38, 44; 778 NW2d 81 (2009). “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.” Roberts v Mecosta Co

Gen Hosp, 466 Mich 57, 63; 642 NW2d 663 (2002).

In Michigan, “concurrent sentencing is the norm,”

and a “consecutive sentence may be imposed only if

specifically authorized by statute.” People v Brown, 220

Mich App 680, 682; 560 NW2d 80 (1996). MCL

750.520b(3) certainly authorizes a court to impose a

CSC-1 sentence that runs consecutively to a sentence

imposed for another criminal offense arising from the

same transaction, but the question is whether it does so

in the context of two CSC-1 convictions.

As recognized by the trial court and the parties, MCL 750.520b(3)

does not mandate consecutive sentencing. Rather, it provides that a court

“may” impose consecutive sentences, making the decision discretionary.

A sentencing court abuses its discretion when its decision falls outside

the range of reasonable and principled outcomes. People v Babcock, 469

Mich 247, 269; 666 NW2d 231 (2003). We ultimately hold in this case that

consecutive sentences may be imposed relative to the two CSC-1 convic-

tions at issue without offending MCL 750.520b(3), and we further hold

that the trial court did not abuse its discretion by actually imposing

consecutive sentences. The 50-year minimum term of imprisonment that

results from the consecutive sentencing is proportionate to the offenses

and the offender; the victim suffered horrific abuse at the hands of her

father. People v Milbourn, 435 Mich 630, 650; 461 NW2d 1 (1990). We also

note that “where a defendant receives consecutive sentences and neither

sentence exceeds the maximum punishment allowed, the aggregate of the

sentences will not be disproportionate under...Milbourn[.]” People v

Miles, 454 Mich 90, 95; 559 NW2d 299 (1997), citing and finding

persuasive People v Warner, 190 Mich App 734; 476 NW2d 660 (1991).

2012] P

EOPLE V

YAN

401

Initially, we address the issue of whether the CSC-1

convictions on counts 3 and 9 arose from the same

transaction, as found by the trial court. The jury

instructions and the jury verdict form itself expressly

provided that count 3 pertained to an alleged act of

fellatio that occurred during the first incident on Han-

cock Street in June 2009 and that count 9 concerned an

alleged act of vaginal intercourse that also occurred

during the first incident on Hancock Street in June

2009. The jury convicted defendant on both of these

counts. The victim’s testimony supported the verdicts

and indicated that defendant, on an evening in June

2009, first engaged in vaginal intercourse with the

victim and then proceeded to engage in fellatio with her

before ejaculating.

The term “same transaction” is not statutorily de-

fined; however, it has developed a unique legal meaning.

Accordingly, it is appropriate to examine judicial inter-

pretations of the terminology. Flick, 487 Mich at 11;

McCormick, 487 Mich at 192; Powell, 280 Mich at 703.

Two or more separate criminal offenses can occur

within the “same transaction.” People v Nutt, 469 Mich

565, 578 n 15; 677 NW2d 1 (2004) (“ ‘It is not of

unfrequent occurrence, that the same individual, at the

same time, and in the same transaction, commits two or

more distinct crimes....’”)(citation omitted). To find

otherwise would be nonsensical, as consecutive sentenc-

ing provisions such as MCL 750.520b(3), MCL

750.110a(8), and MCL 750.529a(3) would be rendered

meaningless. In the double-jeopardy context, our Su-

preme Court in People v Sturgis, 427 Mich 392, 401; 397

NW2 783 (1986), alluding to the same-transaction test,

stated that the test in part required the joining of

charges that “grew out of a continuous time sequence.”

Although Nutt, 469 Mich at 568, subsequently rejected

the same-transaction test in favor of the same-elements

402 295 M

ICH

388 [Feb

test for purposes of defining the term “same offense” in

our Constitution as part of a double-jeopardy analysis,

the Sturgis Court’s definition that touched on the

meaning of “same transaction” remains viable and

useful in the context of simply defining the term “same

offense.”

Additionally, in People v Johnson, 474 Mich 96; 712

NW2d 703 (2006), the Court construed analogous statu-

tory language that concerned acts “arising out of the

sentencing offense,” as that phrase is used in MCL

777.41(2)(a). MCL 777.41 governs the scoring of OV-11

under the legislative sentencing guidelines. The

Johnson Court held:

[W]e have previously defined “arising out of” to suggest

a causal connection between two events of a sort that is

more than incidental. We continue to believe that this sets

forth the most reasonable definition of “arising out of.”

Something that “aris[es] out of,” or springs from or results

from something else, has a connective relationship, a cause

and effect relationship, of more than an incidental sort

with the event out of which it has arisen. [Johnson, 474

Mich at 101.]

The evidence in this case reflected that the sexual

penetrations forming counts 3 and 9 grew out of a

continuous time sequence in which the act of vaginal

intercourse was immediately followed by the act of

fellatio. These two particular sexual penetrations

sprang one from the other and had a connective rela-

tionship that was more than incidental. Accordingly,

counts 3 and 9 arose from the same transaction. We find

further support for this conclusion in People v Ochotski,

115 Mich 601; 73 NW 889 (1898), in which there was

evidence that the defendant had committed an unpro-

voked assault on a neighbor and, after disabling the

neighbor, proceeded to assault the neighbor’s wife, who

had arrived on the scene. The defendant was acquitted

2012] P

EOPLE V

YAN

403

by a jury of assaulting his neighbor, but was later tried

and convicted of assaulting the neighbor’s wife. The

Court, rejecting a double-jeopardy argument, noted

that “[t]here is a difference between one volition and

one transaction.” Id. at 610. The Court stated that the

victims were struck and injured by different blows, that

“in one transaction a man may commit distinct of-

fenses,” and that the assaults were part of “the same

transaction.” Id. Similarly, in the case at bar, while the

two volitional acts of sexual penetration constituted

distinct offenses, they were part of the same transac-

tion. As in Ochotski, there was no relevant disruption in

time or in the flow of events between the two distinct

offenses.

Next, we examine the phrase “any other criminal

offense,” as used in MCL 750.520b(3). Again, MCL

750.520b(3) provides that a “court may order a term of

imprisonment imposed under this section [for CSC-1]

to be served consecutively to any term of imprisonment

imposed for any other criminal offense arising from the

same transaction.” Defendant maintains that the

“other” criminal offense cannot be the crime of CSC-1

in general, i.e., any and all other CSC-1 offenses are

barred from consideration, regardless of the fact that a

second CSC-1 offense constitutes a separate and dis-

tinct count. Therefore, according to defendant, a CSC-1

sentence can only be imposed consecutively to a non-

CSC-1 sentence if the associated offenses arose out of

the same transaction. We disagree, as this interpreta-

tion is inconsistent with the plain and unambiguous

language of the statute. The phrase “any other criminal

offense” necessarily invites a comparison between two

criminal offenses, which, given the use of the word

“other,” must be different offenses, not the same one.

The key to the proper interpretation of the statute, as

we view it, is determining how broadly or narrowly to

404 295 M

ICH

388 [Feb

construe the term “criminal offense.” Reference to a

“criminal offense” could pertain solely to a type of crime

as identified by its label or moniker, e.g., CSC-1, armed

robbery, and home invasion, or it could relate to a

particular count of any given type of crime. Thus, we

must discern whether the Legislature, in using the

phrase “any other criminal offense,” intended for sen-

tencing courts to focus on and make distinctions be-

tween types of crimes—CSC-1 and non-CSC-1

crimes—or between individual counts.

The language and sentence structure of MCL

750.520b(3) dictate that criminal offenses, when being

examined to determine whether they are the same or

different for purposes of consecutive sentencing, be

viewed in relationship to the “term[s] of imprisonment

imposed” thereon or, in other words, in relationship to

their sentences. The distinction between “a term of

imprisonment imposed under [MCL 750.520b]” and the

“term of imprisonment imposed for any other criminal

offense” necessarily embodies or includes a distinction

predicated on the sentences imposed. Therefore, the

phrase “any other criminal offense” means a different

sentencing offense, and offenses, for purposes of sen-

tencing, are always reduced or broken down into indi-

vidual counts. Sentences or terms of imprisonment are

imposed for each count of a crime on which a defendant

is convicted, including counts arising from the same

transaction. Each count in an information constitutes a

separate crime. People v Taurianen, 102 Mich App 17,

30; 300 NW2d 720 (1980); see also People v Vaughn, 409

Mich 463, 465; 295 NW2d 354 (1980) (“ ‘Each count in

an indictment is regarded as if it was a separate

indictment.’ ”) (citation omitted). A crime such as CSC-1

can be committed in myriad ways and give rise to multiple

counts arising from the same transaction, leading to

sentences on each count. While sentences on multiple

2012] P

EOPLE V

YAN

405

counts of any crime may be imposed to run concur-

rently, and although the length of those sentences may

be identical, they are still separately imposed sentences

for each and every count.

A fair import of the language in MCL 750.520b(3) is

that the trial court had the discretion to impose a term

of imprisonment for defendant’s act of engaging in

vaginal intercourse with the victim—CSC-1, count

9—to be served consecutively to the term of imprison-

ment imposed for defendant’s act of engaging in fellatio

with the victim—CSC-1, count 3—as count 3 was a

different or distinct criminal offense, given that it was

not the same act as the act of vaginal intercourse that

formed the basis of count 9. While the two counts are

both CSC-1 offenses, they are distinct in the sense that

they pertained to different acts of sexual penetration

and could independently support imposition of a term of

imprisonment; they stand on their own as criminal

offenses. Count 3 constitutes “any other criminal of-

fense” when viewed in relationship to, or in conjunction

with, count 9. The Legislature’s use of the word “any”

is all-encompassing and does not permit us to exclude

from consideration other CSC-1 offenses upon which a

term of imprisonment was imposed.

We find support for our holding in People v Morris,

450 Mich 316; 537 NW2d 842 (1995). The Court in

Morris interpreted the consecutive sentencing provi-

sion in MCL 333.7401(3), which provides that “[a] term

of imprisonment imposed under subsection (2)(a) [a

controlled-substance crime] may be imposed to run

Although the Legislature may have generally contemplated imposi-

tion of a consecutive sentence under MCL 750.520b(3), if a CSC-1 and a

non-CSC-1 offense were committed during the same transaction, the

statute as written does not so limit its scope. We must construe the

statute as written.

406 295 M

ICH

388 [Feb

consecutively with any term of imprisonment imposed

for the commission of another felony.” (Emphasis

added.) In Morris, our Supreme Court construed an

earlier version of this statutory provision that had

comparable language, except that consecutive sentenc-

ing was mandatory. Morris, 450 Mich at 319-320. The

Court held:

In light of the absence of words of limitation in the

statute, and because of the lack of evidence that there was

a legislative intent to limit the scope of the term “another

felony” in § 7401(3), we hold that the term includes any

felony for which the defendant has been sentenced either

before or simultaneously with the controlled substance

felony enumerated in § 7401(3) for which a defendant is

currently being sentenced. This represents the most sen-

sible and reasonable interpretation of “another felony” in

light of the intent of the law to deter the commission of

controlled substance offenses through the imposition of

consecutive sentences. The phrase applies to felonies that

violate any provision of the controlled substances act,

including additional violations of the same controlled sub-

stance provision as that for which the defendant is being

sentenced or any other felony. Sentences imposed in the

same sentencing proceeding are assumed, for the purposes

of § 7401(3), to be imposed simultaneously. Where any of

the felonies for which a defendant is being sentenced in the

same proceeding are covered by the mandatory consecutive

sentencing provision of § 7401(3), the sentence for that

felony must be imposed to run consecutively to the term of

imprisonment imposed for other, nonenumerated felonies.

[Id. at 337 (emphasis added).]

For purposes of our particular issue and analysis, we

view no discernible difference between the phrases “an-

other felony” and “any other criminal offense,” other than

the “felony” aspect of the former phrase. Consistently

with Morris, the phrase “any other criminal offense” can

encompass additional violations of the same CSC-1 stat-

ute. Again, the Morris Court emphasized that

2012] P

EOPLE V

YAN

407

[a]bsent a convincing indication that the Legislature meant

the term [“another felony”] to be interpreted in a limited

manner,...abroad definition of “another felony” provides

the most sensible and reasonable interpretation of the

legislative expression embodied in the statute, in view of

the subject matter of the law and the goal of consecutive

sentencing. [Id. at 327-328.]

We find that this logic applies equally to MCL

750.520b(3).

The purpose of consecutive-sentencing statutes is to

deter persons from committing multiple crimes by

removing the security of concurrent sentencing. People

v Phillips, 217 Mich App 489, 499; 552 NW2d 487

(1996); see also People v Denio, 454 Mich 691, 703; 564

NW2d 13 (1997) (noting that consecutive sentences

enhance punishment for the purpose of deterring cer-

tain criminal behavior). We find it undeniable that the

Legislature, by adding MCL 750.520b(3), intended to

empower sentencing courts by authorizing the imposi-

tion of lengthy prison terms by way of consecutive

sentencing when a defendant committed a non-CSC-1

criminal offense and chose to additionally commit a

CSC-1 offense during the same transaction. The Legis-

lature intended to remove the security of concurrent

sentencing and provide for real and substantial conse-

quences as part of an effort to deter the commission of

CSC-1 in transactions involving the commission of

non-CSC-1 offenses. We see no reason for concluding

that the Legislature did not intend to extend this goal to

cases in which multiple CSC-1 offenses are committed

during the same transaction. For example, if a defen-

dant sexually victimized two persons in the same trans-

action, the defendant would likely face a sentence

comparable to a sentence for sexually assaulting only

one victim absent the prospect of consecutive sentences.

Even when there is only one victim, a multiplicity of

408 295 M

ICH

388 [Feb

sexual penetrations in a single transaction would typi-

cally heighten the level of egregiousness associated with

the defendant’s conduct, but the additional conduct or

penetrations would effectively be protected by the secu-

rity of concurrent sentencing if consecutive sentencing

were prohibited. While it may be argued that a defen-

dant who commits a great number of CSC-1 offenses

against a single victim all in separate transactions over

time is more deserving of consecutive sentencing than,

for example, a defendant who commits two or more

penetrations against a victim in the same transaction,

MCL 750.520b(3) provides a sentencing court with the

discretion to not employ consecutive sentencing if not

appropriate under the circumstances. Moreover, it is

not for us to determine who is more deserving of a

consecutive sentence relative to the enactment of sen-

tencing statutes and general policy; that is the Legisla-

ture’s arena.

Because we have concluded that the plain and unam-

biguous language of the statute supported the imposi-

tion of consecutive sentences, it is unnecessary to

address the various arguments posed by defendant that

entail looking outside of the statutory language itself on

the basis of defendant’s mistaken proposition that the

statute is ambiguous. We hold that the trial court

correctly interpreted and applied MCL 750.520b(3) and

did not abuse its discretion when it imposed consecutive

sentences.

C. STANDARD 4 BRIEF

Defendant submitted a brief pursuant to Administra-

tive Order No. 2004-6, Standard 4, in which he presents

myriad issues, arguing that the prosecutor engaged in

misconduct, that the trial court erred by failing to

provide substitute counsel, that his arrest was unlaw-

2012] P

EOPLE V

YAN

409

ful, that the court made numerous evidentiary errors,

and that counsel was ineffective in several instances.

We have carefully scrutinized defendant’s arguments

and thoroughly reviewed the record. We find it unnec-

essary to address defendant’s arguments in any detail

because the arguments have no support whatsoever in

the existing record, grossly and nonsensically mischar-

acterize the record, are wholly devoid of legal merit, fail

to establish the existence of prejudice, or otherwise

provide no rational basis for reversal.

III. CONCLUSION

We hold that the trial court did not err by denying

defendant’s motion to suppress his confession. We ad-

ditionally conclude that the trial court had the author-

ity under MCL 750.520b(3) to impose consecutive sen-

tences with respect to the CSC-1 convictions on counts

3 and 9 and that the court did not abuse its discretion by

imposing the consecutive sentences. Finally, we hold

that the arguments in defendant’s Standard 4 brief do

not warrant reversal.

Affirmed.

ITZGERALD

and M

ETER

, JJ., concurred with M

URPHY

C.J.

410 295 M

ICH

388 [Feb

PEOPLE v GOMEZ

Docket No. 302485. Submitted February 8, 2012, at Grand Rapids.

Decided February 14, 2012, at 9:10 a.m. Leave to appeal sought.

Isaac A. Gomez, a Mexican citizen who had spent most of his life in

the United States as a permanent resident, pleaded no contest in

the Branch Circuit Court to possession with the intent to deliver

less than 5 kilograms of marijuana. Several years later, the

Department of Homeland Security notified Gomez that the con-

viction rendered him subject to automatic deportation. Gomez

subsequently moved for relief from the judgment, asserting that

his defense counsel had failed to advise him that the plea would

affect his immigration status. Gomez, citing Padilla v Kentucky,

559 US ___; 130 S Ct 1473 (2010), asserted that this failure

rendered his counsel ineffective and asked the court to set aside his

conviction. The court, Patrick W. O’Grady, J., denied the motion for

relief. Gomez appealed.

The Court of Appeals held:

1. A conviction becomes final after the time for direct appeal

has expired. Once a conviction is final, a defendant is entitled to

relief only if a retroactive change in the law altered the validity of

his or her conviction. A new rule of federal criminal procedure

generally cannot be applied retroactively to alter a final judgment.

A procedural rule is new unless it is dictated by precedent existing

at the time the defendant’s conviction became final. In Padilla, the

United States Supreme Court held that a criminal defense attor-

ney must advise a defendant of the effects of a plea on his or her

immigration status. Padilla established a new procedural rule. A

new rule is not retroactive unless one of two exceptions applies: (1)

the rule places certain kinds of primary, private individual conduct

beyond the power of the criminal lawmaking authority to pro-

scribe or (2) it requires the observance of procedures implicit in the

concept of ordered liberty. The new rule in Padilla does not

regulate private conduct, nor is the rule so implicit in the structure

of criminal proceedings that retroactivity is mandated. Thus, the

rule is not retroactive under federal law.

2. A state may accord broader effect to a new rule of criminal

procedure than federal retroactivity jurisprudence accords. Retro-

2011] P

EOPLE V

OMEZ

411

active application of the requirement that a defendant be advised

of the effects of a plea on his or her immigration status would

conflict with Michigan precedent regarding the necessity of that

advice, however. Further, in determining whether to apply a rule

retroactively under Michigan law, a court should consider the

purpose of the new rule, the general reliance on the old rule, and

the effect of retroactive application of the new rule on the

administration of justice. Consideration of these factors precludes

retroactive application of the Padilla rule. The trial court properly

denied relief from the judgment.

Affirmed.

RIMINAL

AW —

RIMINAL

ROCEDURE —

FFECTIVE

SSISTANCE OF

OUNSEL —

DVICE

EGARDING

FFECTS OF

LEA ON

MMIGRATION

TATUS —

ETRO-

ACTIVITY —

INALITY OF

ONVICTIONS

The United States Supreme Court’s decision in Padilla v Kentucky,

559 US ___; 130 S Ct 1473 (2010), holding that a criminal defense

attorney must advise a defendant of the effects of a plea on the

defendant’s immigration status, does not apply retroactively to

cases in which a defendant’s conviction became final before

Padilla was decided; a conviction becomes final when the time for

a direct appeal expires.

Bill Schuette, Attorney General, John J. Bursch,

Solicitor General, Richard A. Bandstra, Chief Legal

Counsel, Terri A. Norris, Prosecuting Attorney, and

John S. Pallas, Assistant Attorney General, for the

people.

Speaker Law Firm, PLLC (by Liisa R. Speaker), for

Isaac A. Gomez.

Before: S

AWYER

,P.J., and O’C

ONNELL

and R

ONAYNE

RAUSE

,JJ.

O’C

ONNELL

, J. Defendant appeals by leave granted

the trial court’s order denying his motion for relief from

the judgment. The issue on appeal is whether Padilla v

Kentucky, 559 US ___; 130 S Ct 1473; 176 L Ed 2d 284

(2010), applies retroactively to allow defendant to avoid

the potential immigration consequences of his plea-

412 295 M

ICH

411 [Feb

based conviction. We hold that the new rule of criminal

procedure announced in Padilla has prospective appli-

cation only. Accordingly, we affirm the trial court’s

order.

I. FACTS AND PROCEDURAL HISTORY

Defendant, a citizen of Mexico, has lived much of his

life in the United States as a permanent resident. In

2001, the Branch County prosecutor charged defendant

with two controlled substance offenses under MCL

333.7401 and with possession of a firearm during the

commission of a felony under MCL 750.227b. Defen-

dant ultimately entered a no-contest plea to the charge

of possession with intent to deliver less than 5 kilo-

grams of marijuana, MCL 333.7401(1) and (2)(d)(iii). At

sentencing, the trial court stated to defendant, “[H]av-

ing gone through the presentence report, you certainly

have demonstrated otherwise in your life that you are

an intelligent, hard working individual. And it’s unfor-

tunate that you are standing here under these circum-

stances. Hopefully this will be a single aberration in

your otherwise blemish-less life.” The court sentenced

defendant to 120 days’ imprisonment, with work re-

lease permitted. Defendant served a 24-month proba-

tion term and was discharged in 2005.

Four years later, the federal Department of Home-

land Security notified defendant that his conviction

rendered him subject to deportation. The following

year, the United States Supreme Court issued the

Padilla decision, which held that criminal defense coun-

sel must advise a defendant when a guilty plea will

render the defendant subject to automatic deportation.

Padilla, 559 US at ___; 130 S Ct at 1478. Shortly after

the Supreme Court issued Padilla, defendant moved for

relief from the judgment in the trial court. Defendant

2011] P

EOPLE V

OMEZ

413

asserted that neither defense counsel nor the trial court

ever asked him about his immigration or citizenship

status. He further asserted that if he had been told that

his plea would affect his immigration status, he would

not have entered the plea and would instead have gone

to trial on the charges. He argued that his counsel was

ineffective under Padilla and that the trial court should

set aside his conviction.

The trial court denied defendant’s motion for relief.

The court determined that nothing in the Padilla

decision required retroactive application of the new rule

regarding advice about immigration consequences. The

court further determined that “[t]o retroactively apply

the Padilla ruling and cause all cases to be later dis-

missed due to no longer having State’s evidence or to

have to recreate such investigation is not the intent of

the Padilla decision.”

II. ANALYSIS

A. STANDARD OF REVIEW

The issue whether a United States Supreme Court

decision applies retroactively presents a question of law

that we review de novo. People v Maxson, 482 Mich 385,

387; 759 NW2d 817 (2008). We review for an abuse of

discretion the trial court’s ultimate ruling on a motion

for relief from a judgment. People v Swain, 288 Mich

App 609, 628; 794 NW2d 92 (2010).

B. RETROACTIVITY UNDER FEDERAL LAW

Defendant’s conviction became final when the time

for a direct appeal expired, which was several years

before the Supreme Court issued Padilla. See Beard v

Banks, 542 US 406, 411; 124 S Ct 2504; 159 L Ed 2d 494

(2004) (stating that convictions are final when the

414 295 M

ICH

411 [Feb

availability of direct appeal has been exhausted and the

time for filing a petition for a writ of certiorari has

expired). Given that his conviction is final, defendant is

entitled to relief only if a retroactive change in the law

has altered the validity of his or her conviction. See

generally MCR 6.500 et seq. To determine whether a

retroactive change can alter a conviction, the federal

courts use the analysis described in Teague v Lane, 489

US 288; 109 S Ct 1060; 103 L Ed 2d 334 (1989). Under

Teague, a new rule of criminal procedure generally

cannot be applied retroactively to alter a final judg-

ment. Id. at 310. Accordingly, the first step in the

Teague analysis is to determine whether the rule at

issue constitutes a new rule. Maxson, 482 Mich at 388.

A procedural rule is new unless it is “dictated by

precedent existing at the time the defendant’s convic-

tion became final.” Teague, 489 US at 301 (emphasis

added).

The federal circuits are split regarding whether Pa-

dilla announced a new rule.

The United States Court

of Appeals for the Sixth Circuit has not ruled on the

issue, but has denied relief from a judgment in a Padilla

challenge on the ground that the defendant failed to

establish prejudice. Pilla v United States, 668 F3d 368,

373 (CA 6, 2012).

An examination of the Padilla

decision itself, however, indicates that neither the

bench nor the bar could have forecast that the pre-

Compare United States v Hong, 671 F3d 1147, 1148, 1156 (2011)

(Padilla announced a new rule), and Chaidez v United States, 655 F3d

684, 694 (CA 7, 2011) (same) (petition for certiorari filed December 23,

2011), with United States v Orocio, 645 F3d 630, 641 (CA 3, 2011)

(Padilla stated an old rule and is retroactive).

At least one district court in the Sixth Circuit has determined that

Padilla did not create a new rule and is retroactive. United States v Reid,

2011 WL 3417235, *4 (SD Ohio, August 4, 2011) (Docket No. 1:97-CR-

94).

2011] P

EOPLE V

OMEZ

415

Padilla precedent dictated an advisement of the immi-

gration consequences of a guilty plea. The two concur-

ring justices used pellucid phrasing to characterize the

new rule, terming the rule a “dramatic departure,” a

“major upheaval,” and a “dramatic expansion of the

scope of criminal defense counsel’s duties....”Padilla,

559 US at ___; 130 S Ct at 1488, 1491, 1492. The Tenth

Circuit aptly described the concurring and dissenting

justices’ views:

In a concurrence, Justice Alito (joined by Chief Justice

Roberts) stated “the Court’s decision marks a major

upheaval in Sixth Amendment law” and noted the major-

ity failed to cite any precedent for the premise that a

defense counsel’s failure to provide advice concerning

the immigration consequences of a criminal conviction

violated a defendant’s right to counsel. Padilla, 130

S. Ct. at 1491 (Alito, J., concurring in judgment); see also

id. at 1488 (noting the majority’s “dramatic departure

from precedent”); id. at 1491 (“[T]he Court’s view has

been rejected by every Federal Court of Appeals to have

considered the issue thus far.”); id. at 1492 (“The

majority seeks to downplay its dramatic expansion of the

scope of criminal defense counsel’s duties under the

Sixth Amendment.”).

Similarly, Justice Scalia in a dissent (joined by Justice

Thomas), argued the Sixth Amendment right to counsel

does not extend to “advice about the collateral conse-

quences of conviction” and that the Court, until Padilla,

had limited the Sixth Amendment to advice directly related

to defense against criminal prosecutions. Id. at 1494-95

(Scalia, J., dissenting); see also id. at 1495 (“There is no

basis in text or in principle to extend the constitutionally

required advice regarding guilty pleas beyond those mat-

ters germane to the criminal prosecution at hand.”).

[United States v Hong, 671 F3d 1147, 1154-1155 (2011).]

416 295 M

ICH

411 [Feb

The Seventh Circuit determined that the disagree-

ment among the justices demonstrated that Padilla

established a new rule (otherwise, the justices would

have reached some accord on the basic principle).

Chaidez v United States, 655 F3d 684, 689-690 (CA 7,

2011).

Given the narrow margin among our nation’s Su-

preme Court justices on this issue, the federal retroac-

tivity analysis indicates that Padilla established a new

procedural rule. This new rule is not retroactive unless

one of two exceptions to nonretroactivity applies: (1)

the rule “places certain kinds of primary, private indi-

vidual conduct beyond the power of the criminal law-

making authority to proscribe” or (2) the rule “requires

the observance of those procedures that...areimplicit

in the concept of ordered liberty.” Teague, 489 US at

307 (quotation marks and citations omitted); see also

Maxson, 482 Mich at 388.

Neither of the two exceptions applies here. The

requirement that criminal defense counsel advise de-

fendants of immigration consequences does not regu-

late private conduct, nor is the requirement so implicit

in the structure of criminal proceedings that retroactiv-

ity is mandated. Accord Hong, 671 F3d at 1158-1159.

Rather, the requirement applies to a subset of criminal

defendants who might wish to consider immigration

consequences as part of the many variables they will

assess when deciding whether to enter a plea. There-

The Padilla majority did not identify definitive precedent estab-

lishing that effective representation required immigration advice.

Rather, the Padilla majority stated, “For at least the past 15 years,

professional norms have generally imposed an obligation on counsel to

provide advice on the deportation consequences of a client’s plea.”

Padilla, 559 US at ___; 130 S Ct at 1485. In our view, professional

norms do not amount to precedent that dictates a result within the

meaning of Teague.

2011] P

EOPLE V

OMEZ

417

fore, we conclude that federal precedent does not re-

quire retroactive application of the new Padilla rule.

C. RETROACTIVITY UNDER MICHIGAN LAW

Despite the lack of retroactivity under the federal

analysis, this Court could nonetheless apply Padilla

retroactively in this case. “A state may accord broader

effect to a new rule of criminal procedure than federal

retroactivity jurisprudence accords.” Maxson, 482 Mich

at 392. We decline to broaden the applicability of

Padilla for two reasons. First, the pre-Padilla Michigan

precedent expressly stated that “a failure by counsel to

give immigration advice does not render [defense coun-

sel’s] representation constitutionally ineffective.”

People v Davidovich, 463 Mich 446, 453; 618 NW2d 579

(2000) (emphasis added). To apply Padilla retroactively

would be to allow any offender to negate an earlier

acknowledgement of guilt merely by asserting a poten-

tial immigration issue. Nothing in Michigan caselaw

allows withdrawal of guilty pleas on this basis.

Second, the Michigan retroactivity analysis man-

dates that Padilla be applied prospectively only. Three

factors govern the Michigan retroactivity analysis:

“ ‘(1) the purpose of the new rules; (2) the general

reliance on the old rule[;] and (3) the effect of retroac-

tive application of the new rule on the administration of

justice.’ ” Maxson, 482 Mich at 393, quoting People v

Sexton, 458 Mich 43, 60-61; 580 NW2d 404 (1998)

(alteration in original). In Maxson, our Supreme Court

held that these factors precluded retroactive application

of a new procedural rule that affected appeals from

guilty pleas. Id. at 393-399. Like the rule held to be

prospective in Maxson, the Padilla rule cannot reason-

ably be deemed to require retroactive application.

418 295 M

ICH

411 [Feb

III. CONCLUSION

In sum, we hold that both the federal analysis and

the Michigan analysis require that the new rule of

criminal procedure announced in Padilla be applied

prospectively only. Accordingly, the trial court was

within its discretion in denying defendant’s motion for

relief from the judgment.

Affirmed.

AWYER

,P.J., and R

ONAYNE

RAUSE

, J., concurred with

O’C

ONNELL

,J.

2011] P

EOPLE V

OMEZ

419

KALAJ v KHAN

Docket No. 298852. Submitted September 7, 2011, at Detroit. Decided

February 14, 2012, at 9:20 a.m. Leave to appeal denied, 491 Mich

946.

Sander and Alida Kalaj brought a medical malpractice action in the

Oakland Circuit Court against Syed Khan, M.D., and Basha Diagnos-

tics, P.C., alleging that when Khan reviewed x-rays taken of Sander at

Basha Diagnostics (the Basha x-rays), he negligently failed to observe

that Sander had suffered a cervical fracture. Plaintiffs’ complaint was

supported with an affidavit of merit by diagnostic radiologist Stuart

Mirvis, M.D., who averred that he had reviewed plaintiffs’ notice of

intent and Sander’s medical records, including the Basha x-rays, and

that it was his opinion that Khan was negligent. It was subsequently

discovered that the x-rays Mirvis had believed to be those taken at

Basha Diagnostics were not the Basha x-rays, but instead were x-rays

taken several days later by Sander’s chiropractor. The Basha x-rays

could not be located by any party. Defendants moved to strike

plaintiffs’ affidavit of merit, asserting that because Mirvis had not

reviewed the Basha x-rays, he could not opine that Khan had

misinterpreted them. Plaintiffs countered that the remaining records

Mirvis reviewed provided an adequate foundation for the affidavit of

merit. The court, John J. McDonald, J., granted the motion to strike

and dismissed plaintiffs’ complaint without prejudice, finding that

without the Basha x-rays, testimony by Mirvis that defendants were

professionally negligent would be speculative. Plaintiffs moved for

reconsideration, supporting the motion with a new affidavit from

Mirvis averring that he did not need the Basha x-rays to determine

that Khan had negligently failed to diagnose Sander’s cervical frac-

ture. The court denied the motion. Plaintiffs appealed.

The Court of Appeals held:

MCL 600.2912d(1) only requires that a health professional review

the notice of intent and all medical records supplied to him or her by

the plaintiff’s attorney concerning the allegations contained in the

notice. It is sufficient for the health professional to indicate that he or

she reviewed the records provided by the plaintiff’s counsel and that

in light of those records, the health professional is willing and able to

opine with respect to the defendant’s negligence consistently with the

elements set forth in the statute. Thus, Mirvis was not

420 295 M

ICH

420 [Feb

required to review the Basha x-rays. Accordingly, the affidavit of

merit Mirvis provided was not deficient unless the absence of the

Basha x-rays precluded him from opining that defendants breached

the applicable standard of care. Mirvis averred, to the contrary, that

even absent review of the x-rays, it was his opinion that defendants

had breached the applicable standard of care. Thus, the affidavit of

merit met the statutory requirements and should not have been

struck. Moreover, while the absence of the Basha x-rays might affect

the weight and credibility of the expert testimony concerning

whether defendants committed medical malpractice, the absence of

the x-rays did not render that expert testimony inadmissible. A

plaintiff may establish the elements of medical malpractice with

circumstantial proof that enables reasonable inferences. The trial

court abused its discretion when it misconstrued the requirements of

MCL 600.2912d.

Reversed and remanded.

EGLIGENCE —

EDICAL

ALPRACTICE —

FFIDAVITS OF

ERIT —

EQUIREMENTS —

EVIEW OF

EDICAL

ECORDS

A health professional providing an affidavit of merit in a medical

malpractice action must review the plaintiff’s notice of intent and

all medical records supplied to him or her by the plaintiff’s

attorney concerning the allegations contained in the notice; it is

sufficient for the health professional to indicate that he or she

reviewed the records provided by the plaintiff’s counsel and that in

light of those records, the health professional is willing and able to

opine with respect to the defendant’s negligence consistently with

the elements set forth in the statute governing affidavits of merit

(MCL 600.2912d).

McKeen & Associates, P.C. (by Brian J. McKeen, Jody

L. Aaron, and Ramona C. Howard), for plaintiffs.

Brian J. Doren, PLC (by Brian J. Doren), for defen-

dants.

Before: M. J. K

ELLY

,P.J., and O

WENS

and B

ORRELLO

JJ.

ORRELLO

, J. Plaintiffs appeal as of right the February

19, 2010, trial court order granting defendants’ motion

to strike plaintiffs’ affidavit of merit and dismissing

2012] K

ALAJ V

HAN

421

plaintiffs’ complaint without prejudice in this action

alleging medical malpractice. For the reasons set forth

in this opinion, we reverse and remand for further

proceedings consistent with this opinion.

I. FACTS AND PROCEEDINGS BELOW

Plaintiff Sander Kalaj

injured his head and neck in a

diving accident in July 2006. On July 31, 2006, plain-

tiff’s treating physician referred him to defendant

Basha Diagnostics, P.C., for cervical-spine x-rays. Defen-

dant Syed Mahmood Ali Khan, M.D., a diagnostic radi-

ologist, reviewed plaintiff’s x-rays, and concluded that

they were negative for a spinal fracture. Eight days

later, on August 8, 2006, plaintiff, complaining of wors-

ening symptoms, was treated by Dr. Gregory Cesul, a

chiropractor. Cesul also took a set of cervical-spine

x-rays, which he opined to be “consistent with a C5

fracture.” Cesul referred plaintiff to William Beaumont

Hospital for further evaluation and a neurosurgical

consultation. Additional x-rays and a CT scan per-

formed at Beaumont showed that plaintiff had suffered

a C5 fracture. The results of an MRI demonstrated “a

C5 tear drop fracture with foraminal narrowing and

mass effect on the spinal cord.”

Plaintiffs filed the instant medical malpractice

action against defendants in January 2009, premised

on the failure to properly diagnose the spinal fracture

on or about July 31, 2006. In support of their com-

plaint, plaintiffs provided an affidavit of merit from

diagnostic radiologist Stuart Mirvis, M.D., who

averred that he had reviewed plaintiffs’ notice of

intent and medical records from William Beaumont

From this point onward, Sander Kalaj will be referred to simply as

“plaintiff,” while both named plaintiffs will be referred to jointly as

“plaintiffs.”

422 295 M

ICH

420 [Feb

Hospital and “Basha Diagnostics — C-Spine Films

8.31.06”

and that in light of these records, it was his

opinion that Khan had been negligent in several ways,

including by failing to “[s]uspect, observe and diagnose

the existence of a tear drop fracture.” During the course of

discovery, however, it was revealed that the x-rays Mirvis

believed to be the cervical-spine films taken at Basha

Diagnostics and interpreted by Khan on July 31, 2006 (the

“Basha films”), were not the Basha films, but instead

were the films taken by Cesul on August 8, 2006.

The

Basha films were signed out from Basha Diagnostics by

plaintiff’s treating physician on August 9, 2006, and they

have not been located by any party to this dispute.

Defendants moved to strike plaintiffs’ affidavit of merit

on the basis that the x-rays Mirvis reviewed were not the

Basha films and that without having reviewed the Basha

films, it was impossible for Mirvis to opine that Khan

misinterpreted them. Therefore, defendants asserted,

Mirvis’s affidavit lacked the appropriate foundation for

any opinion that Khan was professionally negligent in

failing to diagnose plaintiff’s cervical spine fracture on

July 31, 2006. Plaintiffs asserted in response that there

were sufficient records available that Mirvis had reviewed.

Plaintiffs contended that these records provided adequate

foundation for Mirvis’s affidavit of merit even in the

absence of the Basha films. More specifically, plaintiffs

argued that considering the nature of the injury and the

progression of plaintiff’s symptoms, the subsequent films

Mirvis’s reference to “8.31.06,” appears to be a typographical error;

the date intended by Mirvis was July 31, 2006.

It appears from the record that the films Mirvis reviewed were

produced in response to plaintiffs’ request for a copy of plaintiff’s medical

records and that they were received in a Basha Diagnostics envelope.

Plaintiffs state in their brief to this Court that these films are the films

taken by plaintiff’s chiropractor on August 8, 2006. Defendants do not

suggest otherwise.

2012] K

ALAJ V

HAN

423

taken of plaintiff’s neck in close temporal proximity to the

Basha films—which clearly demonstrate a C5 fracture—

provide sufficient basis for Mirvis’s opinion that defen-

dants were professionally negligent by failing to diagnose

plaintiff’s fracture. After a brief hearing, the trial court

granted defendants’ motion to strike and dismissed plain-

tiffs’ complaint without prejudice, finding that without

the opportunity to review the Basha films, testimony by

Mirvis that defendants were professionally negligent by

failing to diagnose the fracture would be “pure specula-

tion” and “[w]e can’t have a jury guess.”

Plaintiffs moved for reconsideration, again asserting

that given their temporal proximity to the Basha films,

the subsequent x-rays, MRI, and CT scan of plaintiff’s

neck showed sufficient evidence of a fracture to provide

an adequate foundation for Mirvis’s affidavit, especially

in the context of the nature, and worsening, of plain-

tiff’s symptoms in the relevant time frame. In support

of their motion, plaintiffs provided the trial court with

an affidavit from Mirvis averring that he did not need to

review the Basha films to determine that Khan had

been negligent by failing to diagnose plaintiff’s cervical

fracture and that in light of plaintiff’s symptoms and

the medical records supplied to him, he could conclude

“within a reasonable degree of medical probability

there was evidence of the C5 fracture that would have

been discovered by a reasonable and prudent radiologist

under same or similar circumstances” as those pre-

sented to Khan at Basha Diagnostics on July 31, 2006.

The trial court denied plaintiffs’ motion.

II. ANALYSIS

Plaintiffs argue on appeal that the trial court erred

by striking the affidavit of merit and dismissing their

complaint because while Mirvis might not have re-

424 295 M

ICH

420 [Feb

viewed the Basha films as originally believed, his affi-

davit of merit meets the requirements of MCL

600.2912d. Plaintiffs assert that, under the circum-

stances presented in this case, Mirvis reviewed suffi-

cient records to provide an adequate foundation for the

opinions expressed in his affidavit. Plaintiffs note that

Mirvis explicitly stated in his revised affidavit that the

absence of the Basha films did not change his opinion

with regard to Khan’s deficient treatment of plaintiff.

Plaintiffs further assert that the fact that Mirvis did not

have the opportunity to review the missing Basha films

goes to the weight and credibility, and not the admissi-

bility, of his testimony.

This Court reviews for an abuse of discretion a trial

court’s decision to grant a motion to strike an affidavit.

Brown v Hayes, 270 Mich App 491, 494; 716 NW2d 13,

rev’d in part on other grounds 477 Mich 966 (2006);

Belle Isle Grille Corp v Detroit, 256 Mich App 463, 469;

666 NW2d 271 (2003). An abuse of discretion occurs

when the trial court’s decision is outside the range of

reasonable and principled outcomes. Maldonado v Ford

Motor Co, 476 Mich 372, 388; 719 NW2d 809 (2006).

Additionally, “ ‘[w]here the trial court misapprehends

the law to be applied, an abuse of discretion occurs.’ ”

Jackson v Detroit Med Ctr, 278 Mich App 532, 543; 753

NW2d 635 (2008), quoting Bynum v ESAB Group, Inc,

467 Mich 280, 283; 651 NW2d 383 (2002). However, to

the extent that resolution of this appeal depends on the

interpretation of MCL 600.2912d, our review is de novo.

Grossman v Brown, 470 Mich 593, 598; 685 NW2d 198

(2004). When interpreting a statute,

the paramount rule is that we must effect the intent of the

Legislature. Statutory language is read according to its

ordinary and generally accepted meaning. If the statute’s

language is plain and unambiguous, we assume the Legis-

2012] K

ALAJ V

HAN

425

lature intended its plain meaning; therefore, we enforce

the statute as written and follow the plain meaning of the

statutory language. [Id.]

As our Supreme Court explained in Ligons v Critten-

ton Hosp, 490 Mich 61, 70-71; 803 NW2d 271 (2011),

“MCL 600.2912d was enacted in 1986 and amended in

1993 as an element of broad tort reforms established by

the Legislature. In part, the legislation placed ‘en-

hanced responsibilities’ on medical malpractice plain-

tiffs.” MCL 600.2912d(1) requires that

the plaintiff in an action alleging medical malpractice or, if

the plaintiff is represented by an attorney, the plaintiff’s

attorney shall file with the complaint an affidavit of merit

signed by a health professional who the plaintiff’s attorney

reasonably believes meets the requirements for an expert

witness under [MCL 600.2169]. The affidavit of merit shall

certify that the health professional has reviewed the notice

and all medical records supplied to him or her by the

plaintiff’s attorney concerning the allegations contained in

the notice and shall contain a statement of each of the

following:

(a) The applicable standard of practice or care.

(b) The health professional’s opinion that the applicable

standard of practice or care was breached by the health

professional or health facility receiving the notice.

by the health professional or health facility in order to have

complied with the applicable standard of practice or care.

(d) The manner in which the breach of the standard of

practice or care was the proximate cause of the injury

alleged in the notice. [Emphasis added.]

“The failure to include any of the required information

renders the affidavit of merit insufficient.” Ligons, 490

Mich at 77.

The parties do not dispute that plaintiffs’ counsel

reasonably believed Mirvis to be qualified as an expert

426 295 M

ICH

420 [Feb

witness. Nor is there any dispute that Mirvis reviewed

the notice of intent and all medical records supplied to

him by plaintiff’s counsel. Furthermore, his affidavit of

merit includes all the statutorily required elements

listed in MCL 600.2912d(a) through (d). Indeed, defen-

dants do not assert, and the trial court did not find, that

Mirvis’s affidavit fails to meet any of the statutorily

required elements for a valid affidavit of merit. Rather,

defendants assert, and the trial court essentially con-

cluded, that the otherwise valid affidavit of merit must

be disregarded because Mirvis mistakenly believed he

had reviewed the Basha films. However, by its plain

language, MCL 600.2912d(1) requires only “that the

health professional has reviewed the notice and all

medical records supplied to him or her by the plaintiff’s

attorney concerning the allegations contained in the

notice.” There is no specific requirement concerning

which hospital or medical provider’s records must have

been reviewed in order for the expert to ascertain a

breach of the standard of care. Nor does the statute

require that the health professional even identify the

medical records he or she has reviewed. It is sufficient,

under the plain language of the statute, for the expert

to indicate that he or she has reviewed the records

provided by the plaintiff’s counsel and that in light of

those records, the expert is willing and able to opine

with respect to the defendant’s negligence consistently

with the elements set forth in the statute. Thus, Mirvis

was not required to review the Basha films at all; that

he mistakenly identified films provided to him as being

the Basha films likewise does not render the affidavit of

merit deficient under the statute unless the absence of

those films precludes him from opining that defendants

breached the applicable standard of care by failing to

diagnose plaintiff’s spinal fracture on July 31, 2006. In

that case, it would be up to Mirvis to indicate that his

2012] K

ALAJ V

HAN

427

opinion, as set forth in the affidavit of merit, was no

longer supported. He has not done so. Instead Mirvis

continues to aver that, even absent a review of the

missing Basha films, it is his professional opinion that

defendants breached the standard of care in their

treatment of plaintiff. Nothing more is required at this

initial stage of litigation. MCL 600.2912d.

The trial court dismissed plaintiffs’ action on the

basis that, absent the Basha films, any testimony of-

fered by Mirvis would be “pure speculation.” Such an

assertion by the trial court was itself speculation con-

cerning the evidence that would be disclosed during

discovery and presented by plaintiffs at trial. Under the

plain language of MCL 600.2912d, whether the asser-

tions in the affidavit of merit are ultimately proved to

be true is not at issue when evaluating whether the

affidavit complies with MCL 600.2912d. Rather, at issue

is whether, on its face, the affidavit of merit complies

with the requirements set forth in the statute. “To rule

otherwise would allow for battles to erupt or minitrials

to take place merely over the issue concerning the

validity of an affidavit or merit, necessitating produc-

tion of [documents] and the taking of testimony. We do

not believe that the Legislature intended that a trial

court conduct [such] proceedings to determine” the

validity of an affidavit of merit. Sturgis Bank & Trust

Co v Hillsdale Community Health Ctr, 268 Mich App

484, 493; 708 NW2d 453 (2005). The requirements set

forth in MCL 600.2912d are premised on a legislative

recognition that until the civil action has been com-

menced, no discovery is available to the plaintiff. Thus,

the plaintiff is left to the records and information

available to him or her in formulating the affidavit of

merit. Accordingly, the evaluation to be made at this

initial stage of the proceedings, as opposed to the

evaluation of expert testimony at trial, is simply

428 295 M

ICH

420 [Feb

whether the affidavit of merit contains each of the

elements set forth in MCL 600.2912d. See Sturgis Bank

& Trust, 268 Mich App at 493-494, citing Grossman,

470 Mich at 598-600.

Moreover, it is not true, as a matter of law, that

plaintiffs cannot establish that Khan was negligent in

his treatment of plaintiff without the Basha films. From

the presence and progression of plaintiff’s symptoms

and the allegedly plainly evident fracture on films taken

a mere eight days after Khan interpreted the Basha

films, Mirvis can opine that defendants breached the

standard of care by failing to diagnose plaintiff’s cervi-

cal fracture on July 31, 2006. To establish a cause of

action for medical malpractice, a plaintiff must estab-

lish four elements: (1) the appropriate standard of care

governing the defendant’s conduct at the time of the

purported negligence, (2) that the defendant breached

that standard of care, (3) that the plaintiff was injured,

and (4) that the plaintiff’s injuries were the proximate

result of the defendant’s breach of the applicable stan-

dard of care. Craig v Oakwood Hosp, 471 Mich 67, 86;

684 NW2d 296 (2004). Expert testimony is required to

establish the standard of care and a breach of that

standard, Decker v Rochowiak, 287 Mich App 666, 685;

791 NW2d 507 (2010), as well as causation, Teal v

Prasad, 283 Mich App 384, 394; 772 NW2d 57 (2009).

While there “must be facts in evidence to support the

opinion testimony of an expert,” id. at 395 (quotation

marks and citations omitted), circumstantial proof that

enables reasonable inferences is sufficient, Skinner v

Square D Co, 445 Mich 153, 164; 516 NW2d 475 (1994).

Applying these fundamental evidentiary principles

here, while the absence of the Basha films may affect

the weight and credibility afforded to expert testimony

concerning whether defendants committed malpractice

by failing to diagnose plaintiff’s cervical spine fracture

2012] K

ALAJ V

HAN

429

on July 31, 2006, the absence of those films does not

render that expert testimony inadmissible. Conse-

quently, dismissal of plaintiffs’ complaint constituted

legal error.

The trial court committed legal error when it mis-

construed the requirements set forth in MCL

600.2912d. Accordingly, an abuse of discretion occurred.

See Jackson, 278 Mich App at 543. Therefore, we

reverse and remand this matter for reinstatement of

plaintiffs’ complaint and further proceedings consistent

with this opinion. We do not retain jurisdiction. Plain-

tiffs, being the prevailing parties, may tax costs pursu-

ant to MCR 7.219.

M. J. K

ELLY

,P.J., and O

WENS

, J., concurred with

ORRELLO

,J.

430 295 M

ICH

420 [Feb

BRONSON METHODIST HOSPITAL v

AUTO-OWNERS INSURANCE COMPANY

BRONSON METHODIST HOSPITAL v

HOME-OWNERS INSURANCE COMPANY

Docket Nos. 300566 and 300567. Submitted December 14, 2011, at Grand

Rapids. Decided February 16, 2012, at 9:00 a.m. Leave to appeal

denied, 493 Mich 880.

Bronson Methodist Hospital brought separate actions in the

Kalamazoo Circuit Court against Home-Owners Insurance Com-

pany and Auto-Owners Insurance Company, respectively, after

each defendant had failed to pay plaintiff for surgical implant

products billed to the companies’ insureds following their treat-

ment at the hospital for injuries suffered in automobile accidents.

Defendants had requested invoices showing the cost to the hospital

of those surgical implant products, but the hospital had refused to

provide the information. The hospital sought to recover the unpaid

amounts, statutory interest, and attorney fees under the no-fault

motor vehicle insurance act, MCL 500.3101 et seq. The actions

were consolidated. The court, Alexander C. Lipsey, J., denied

defendants’ discovery request seeking, in part, information re-

garding the wholesale cost to the hospital of the surgical implant

products. The court granted summary disposition in favor of the

hospital and awarded it penalty interest, but denied the request

for attorney fees. Both defendants appealed separately the denial

of the discovery requests and the granting of summary disposition

in favor of the hospital. The hospital cross-appealed the denial of

its request for attorney fees. The appeals were consolidated.

The Court of Appeals held:

1. In accordance with defendants’ clear statutory right and

obligation to question the reasonableness of the charges, the

no-fault act permits defendants to discover the wholesale cost to

plaintiff of the surgical implant products for which the insureds

were charged when determining whether plaintiff’s charges for

the products are reasonable under the act.

2. Defendants’ ability to assess the reasonableness of provider

charges is not limited to a comparison of customary charges among

2012] B

RONSON

OSP V

UTO

-O

WNERS

431

similar providers. The no-fault act contemplates that, as occurred

in these cases, insurers will assess the reasonableness of a provid-

er’s charges, paying that portion deemed reasonable, with the

provider having the prerogative to then challenge the insurer’s

decision not to pay the entire charge submitted by filing suit. Once

an action is filed, the provider has the burden of proving the

reasonableness of its charges by a preponderance of the evidence.

Thus, defendants were permitted to consider the cost to plaintiff of

providing treatment to the insureds and not merely the cost of

treatment as billed by the provider when evaluating the reason-

ableness of the charges submitted for payment. This ruling was

limited, however, to the sort of durable medical-supply products at

issue in this case, which are billed separately and distinctly from

other treatment services and require little or no handling or

storage by a provider. The surgical implant products at issue in

this case were standalone items that could be easily quantified.

Therefore, plaintiff must come forward with evidence to convince

a jury that the charges for the durable medical equipment were

reasonable.

3. Plaintiff’s actual cost for the surgical implant products

would throw some light on the reasonableness of plaintiff’s

charges to the insureds. The trial court should have compelled

plaintiff to provide that information. Plaintiff’s actual cost for the

products would not be dispositive on the issue whether its charges

to the insureds were reasonable; however, the actual cost of the

products would be a piece of the overall collage of factors affecting

the reasonableness of plaintiff’s charges. The reasonableness of

the charges was a question of fact for the jury to determine, and

the jury can only make such a determination if it has been

provided all relevant and probative evidence. The trial court erred

when it denied defendants’ motion to compel discovery. Because of

the error, summary disposition in plaintiff’s favor was prematurely

and improvidently granted. Plaintiff wholly failed to provide the

trial court with some basis for concluding that its charges were

reasonable and that there was no factual issue for trial. A

provider’s customary charges are not necessarily reasonable and

the mere fact that a provider believes its charges to be reasonable

does not make it so.

4. MCL 500.3148(1) provides for an award of reasonable attor-

ney fees when an insurer unreasonably withholds benefits. A

refusal to pay or a delay in payment by an insurer is not

unreasonable if it is based on a legitimate question of statutory

construction, constitutional law, or factual uncertainty. The deter-

minative factor for an award of attorney fees when an insurer

432 295 M

ICH

431 [Feb

withholds benefits is not whether the insurer ultimately is held

responsible for the benefits, but whether its initial refusal to pay

was unreasonable. The trial court did not abuse its discretion by

declining to award plaintiff attorney fees on the basis that defen-

dants’ refusal to pay was based on a legitimate question of

statutory construction. Because insurers have a duty under the

no-fault act to audit and challenge the reasonableness of charges

submitted for payment, defendants were required to assess the

reasonableness of plaintiff’s charges for the surgical implant

products. Defendants’ actions in paying only the undisputed

portions of the bills were reasonable under the circumstances, and

the attorney-fee penalty provision of the act was thus not trig-

gered. The portion of the trial court’s order granting plaintiff

summary disposition was reversed and the portion of the order

denying plaintiff’s request for attorney fees was affirmed.

Affirmed in part, reversed in part, and remanded.

NSURANCE —

-F

AULT —

NSURER

’

UTY TO

UESTION

EASONABLENESS OF

ROVIDER

’

HARGES —

URABLE

EDICAL

UPPLY

RODUCTS

The no-fault act permits insurers to discover the wholesale cost to

the provider of durable medical-supply products, such as surgical

implant products, that are billed separately and distinctly from

other treatment services and that require little or no handling or

storage by a provider for purposes of determining whether the

provider’s charges for the products to insureds are reasonable

under the act; the provider’s actual cost of the products is not

dispositive on the issue whether the provider’s charges are rea-

sonable, but is a factor that affects the reasonableness of the

charges (MCL 500.3101 et seq.).

Miller Johnson (by Richard E. Hillary, II, and Joseph

J. Gavin) for plaintiff.

Kuiper Orlebeke PC (by Jack L. Hoffman) for defen-

dants.

Before: H

OEKSTRA

, P.J., and K. F. K

ELLY

and B

ECKERING

JJ.

URIAM

. Defendants, Home-Owners Insurance

Company and Auto-Owners Insurance Company, appeal

as of right a trial court order granting summary dispo-

2012] B

RONSON

OSP V

UTO

-O

WNERS

433

sition in favor of plaintiff, Bronson Methodist Hospital,

pursuant to MCR 2.116(C)(10) in these consolidated

cases concerning the reasonableness of charges for

surgical implant products billed by plaintiff to defen-

dants’ insureds under the no-fault insurance act, MCL

500.3101 et seq. Plaintiff cross-appeals that portion of

the trial court’s order denying its motion for attorney

fees under MCL 500.3148. We consolidated the appeals

and affirm in part, reverse in part, and remand. We

conclude that, in accordance with defendants’ clear

statutory right and obligation to question the reason-

ableness of the charges, the no-fault act permits defen-

dants to discover the wholesale cost to plaintiff of the

surgical implant products for which the insureds were

charged. Therefore, the trial court erred when it denied

defendants’ prior motion to compel discovery. Because

of the error denying discovery, summary disposition

was granted prematurely. We also stress that the ulti-

mate burden of proof regarding the reasonableness of

the charges rests with the provider. Finally, we conclude

that the attorney-fee penalty provision of the no-fault

act was not triggered.

I. BASIC FACTS AND PROCEDURAL HISTORY

These consolidated appeals arise from disputes over

the reasonableness of plaintiff’s charges for surgical

implant products provided to defendants’ insureds,

Gavin Powell and Hector Serrano-Ruiz, each of whom

were treated at plaintiff hospital after suffering serious

injuries in separate and unrelated automobile acci-

dents. At issue is whether defendants were entitled to

information pertaining to the cost of the surgical im-

plant products to plaintiff when defendants were deter-

mining whether the charges billed to defendants’ in-

sureds for those surgical implant products were

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“reasonable” under the no-fault act and, accordingly,

whether that information was discoverable during the

course of litigation over the charges.

Powell was injured on July 2, 2009, when the vehicle

he was driving struck a tree. Serrano-Ruiz was injured

on July 17, 2009, when the motorcycle he was driving

was struck by another vehicle. Both Powell and

Serrano-Ruiz suffered broken bones that were treated

with surgical implant products, including screws and

plates. Plaintiff’s charges for the medical treatment

afforded to Powell totaled $242,941.09, of which

$61,237.50 was for “supply/implant” products; plain-

tiff’s total charges for Serrano-Ruiz’s medical treat-

ment were $143,477.76, of which $28,800 was for

“supply/implant” products. Auto-Owners is responsible

for payment of the insurance benefits for Powell’s

medical treatment; Home-Owners is responsible for

payment of the insurance benefits for Serrano-Ruiz’s

medical treatment. Plaintiff provided defendants with

uniform billing forms, itemized statements, and medi-

cal records identifying the medical treatment provided

to Powell and Serrano-Ruiz, respectively. Defendants

timely paid the portion of plaintiff’s bills for all charges

other than for the surgical implant products used to

treat the two men. Defendants requested invoices show-

ing the cost to plaintiff of those surgical implant prod-

ucts. Plaintiff refused to provide this information. De-

fendants did not pay the charges within the allotted

statutory period, resulting in plaintiff’s filing the in-

stant actions to recover the unpaid amounts, together

with statutory interest and attorney fees.

Home-Owners admitted that it did not pay the

$28,800 charge for surgical implant products and de-

nied that such payment was due and owing on the basis

that plaintiff had failed to provide reasonable proof of

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the fact and amount of the loss and failed to comply

with MCL 500.3158(2) by refusing to provide copies of

the invoices showing the cost to plaintiff of the items

billed as “supply implants.” Home-Owners claimed

that, without such information, it was unable to make a

determination regarding the reasonableness of the

charges for the implants. Similarly, Auto-Owners ad-

mitted that it did not pay $61,237.50 for surgical

implants because Auto-Owners believed that plaintiff

had failed to provide sufficient documentation regard-

ing the cost of treatment as required by MCL

500.3158(2) and failed to provide reasonable proof of

the fact and amount of loss as required by MCL

500.3142 by refusing to provide copies of purchase

invoices showing the cost to plaintiff of the items billed

as “Supply/Implants in the amount of $61,237.50.”

Defendants submitted discovery requests seeking

information regarding the wholesale cost to plaintiff of

the surgical implant products at issue, plaintiff’s “total

revenue and operating expenses and the ‘cost-to-charge

ratio’ which is derived from these numbers,” the per-

centages of plaintiff’s patients that are uninsured or

covered by no-fault insurance, the average annual in-

crease in plaintiff’s charges over the last five years, and

any billing manuals or guidelines used to prepare

itemized charges or other billing documents. Plaintiff

objected to defendants’ discovery requests, arguing that

the information sought was irrelevant to the claims

asserted in plaintiff’s complaints and that defendants

were not entitled to the information sought because the

information regarding “costs of treatment” to which

defendants were entitled under MCL 500.3158(2) per-

tained to the cost to the “injured person” of the medical

care and treatment that person received, i.e., the

charges incurred by the patient at plaintiff’s hospital.

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Defendants later moved to compel discovery, assert-

ing that the information sought was relevant to their

determination whether the charges billed were reason-

able under the no-fault act. Pursuant to MCL

500.3158(2), plaintiff was required to provide insurers

with information relating to the cost of treatment of the

injured person, which, defendants argued, included the

wholesale cost to the provider of the surgical implant

products for which the insured was charged. Defen-

dants also asserted that MCR 2.302 required that

plaintiff produce the requested information because the

information was relevant to the factual question

whether plaintiff’s charges for the surgical implant

products were “reasonable” within the meaning of the

no-fault act. Defendants noted that they paid plaintiff a

substantial portion of the total charges billed in each

case and that the unpaid portions of plaintiff’s bills

related solely to charges for the surgical implant prod-

ucts for which defendants sought, and plaintiff refused

to provide, underlying cost information. Defendants

further asserted that whether plaintiff’s charges are

“reasonable” and whether plaintiff provided “reason-

able proof” of the fact and amount of loss as required by

the act are determinations to be made by the finder of

fact and were issues to which the requested materials

were relevant and discoverable.

Plaintiff opposed defendants’ motions, again assert-

ing that defendants were not entitled to the information

sought. Plaintiff also moved for summary disposition

under MCR 2.116(C)(9) on the basis that defendants

had abdicated their duty to process the balance of

plaintiff’s claims in accordance with the no-fault act

and were, instead, seeking to use the discovery process

to obtain information that they were not entitled to

obtain under the no-fault act: plaintiff’s underlying—

and often confidential—proprietary-cost data. Plaintiff

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asserted that defendants could not merely refuse to

process the claims; rather, defendants were required to

fully process plaintiff’s claims by adopting a method for

assessing the reasonableness of those claims. Further,

plaintiff argued that the information about the “costs of

treatment” that it was required to provide under MCL

500.3158(2) pertained to the cost of treatment to the

injured person, not the cost to the provider for provid-

ing the treatment.

At the hearing on the motions, defendants reiterated

their position that the no-fault act required them to

determine whether the charges assessed were reason-

able and that MCL 500.3158(2) entitled them to docu-

mentation regarding the cost to plaintiff of the surgical

implant products in order to make that determination.

Defendants argued that by failing to provide that infor-

mation, plaintiff had not met its burden of providing

reasonable proof of loss under the act so as to entitle it

to payment for the surgical implant products. In re-

sponse, plaintiff argued that by submitting a uniform

billing form, an itemized statement, and the patient’s

medical records, it had met its burden in each case to

provide defendants with reasonable proof of the amount

of the loss under MCL 500.3142 and that, thereafter,

defendants failed to evaluate the claims, pay what they

believed to be reasonable, and deny what they believed

to be excessive. Plaintiff argued that defendants were

required to conduct an investigation to determine

whether the charges were reasonable by comparing

costs among providers “similarly located geographi-

cally” for the products at issue. Plaintiff also asserted

that allowing insurers to obtain providers’ cost data

would undermine the goals and objectives of the no-

fault act and would cause that reparation system to

come to a grinding halt. Plaintiff reiterated that all it is

required to do is put the insurer on notice of the charges

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and the services provided to the insured and that, once

it does so, the insurer then has the obligation to go out

and use whatever resources it has at its disposal to

evaluate the reasonableness of the charges.

The trial court concluded that the no-fault statute

did not require plaintiff to provide its cost of surgical

implant products and denied the discovery request. The

trial court afforded defendants the opportunity to

amend their answers to include allegations that plain-

tiff’s charges were unreasonable. Following the court’s

ruling, defendants, through their audit consultant, Cor-

Vel Corporation, estimated a price at which the surgical

implant products had been purchased and, on the basis

of those estimates, paid plaintiff $34,701.02 of the

outstanding $61,237.50 charges related to Powell’s

treatment and $21,612.65 of the outstanding $28,800

charges related to Serrano-Ruiz’s treatment. The pay-

ments were “calculated on a basis of cost of the product

to the hospital plus 50%.” As a result of the additional

payments, the balances remaining in dispute were

$26,536.48 for Powell’s treatment and $7,187.35 for

Serrano-Ruiz’s treatment. Defendants amended their

answers to plaintiff’s complaints accordingly, to specifi-

cally deny the reasonableness of the outstanding

charges for surgical implant products.

Plaintiff again moved for summary disposition, this

time under MCR 2.116(C)(10), asserting that defen-

dants’ method for determining whether the charges for

the surgical implant products were reasonable was,

itself, unreasonable as a matter of law. Plaintiff argued

that calculating the reasonable rate of reimbursement

on the basis of 1

times the average wholesale implant

cost, provided to defendants by a third-party auditing

entity, was itself arbitrary and unreasonable as a matter

of law under this Court’s decision in Advocacy Org for

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Patients & Providers v Auto Club Ins Ass’n, 257 Mich

App 365, 370; 670 NW2d 569 (2003) (AOPP), aff’d 472

Mich 91 (2005). Plaintiff described defendants’ method

as mere guesswork. As it had previously, plaintiff ar-

gued that the only relevant consideration under the

no-fault act is the amount of the provider’s charges for

medical services, and not the provider’s cost of provid-

ing those services. The trial court granted plaintiff’s

motion for summary disposition, including penalty in-

terest, but denied plaintiff’s request for attorney fees

because defendants’ legal position was “based primarily

on testing the legal waters, as opposed to testing the

patience of this Court or the Plaintiff.” Defendants now

appeal as of right. Plaintiff cross-appeals that portion of

the order that denied its request for attorney fees.

II. STANDARDS OF REVIEW

This Court reviews for an abuse of discretion a trial

court’s ruling on a motion to compel discovery. Cabrera

v Ekema, 265 Mich App 402, 406; 695 NW2d 78 (2005).

We review de novo a trial court’s decision on a motion

for summary disposition, reviewing the record in the

same manner as must the trial court to determine

whether the movant was entitled to judgment as a

matter of law. Latham v Barton Malow Co, 480 Mich

105, 111; 746 NW2d 868 (2008). A motion for summary

disposition under MCR 2.116(C)(10) tests the factual

sufficiency of the complaint. Corley v Detroit Bd of Ed,

470 Mich 274, 278; 681 NW2d 342 (2004). The moving

party must specifically identify the matters that have

no disputed factual issues, and it has the initial burden

of supporting its position by affidavits, depositions,

admissions, or other documentary evidence. MCR

2.116(G)(3)(b); MCR 2.116(G)(4); Coblentz v City of

Novi, 475 Mich 558, 569; 719 NW2d 73 (2006). The

440 295 M

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party opposing the motion then has the burden of

showing by evidentiary materials that a genuine issue

of disputed material fact exists. MCR 2.116(G)(4);

Coblentz, 475 Mich at 569. The existence of a disputed

fact must be established by substantively admissible

evidence, although the evidence need not be in admis-

sible form. MCR 2.116(G)(6); Maiden v Rozwood, 461

Mich 109, 121; 597 NW2d 817 (1999). 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 could differ.

Allison v AEW Capital Mgt, LLP, 481 Mich 419, 425;

751 NW2d 8 (2008).

We review de novo questions of statutory construc-

tion. Feyz v Mercy Mem Hosp, 475 Mich 663, 672; 719

NW2d 1 (2006). This Court’s primary task in constru-

ing a statute is to discern and give effect to the intent of

the Legislature. Shinholster v Annapolis Hosp, 471

Mich 540, 548–549; 685 NW2d 275 (2004). In so doing,

the Court must begin with the language of the statute,

ascertaining the intent that may reasonably be inferred

from its language. Lash v Traverse City, 479 Mich 180,

187; 735 NW2d 628 (2007). It is axiomatic that the

words contained in the statute provide the most reliable

evidence of the Legislature’s intent. Kinder Morgan

Mich, LLC v City of Jackson, 277 Mich App 159, 163;

744 NW2d 184 (2007). The Legislature is presumed to

have intended the meaning it plainly expressed, and

clear statutory language must be enforced as written.

Rowland v Washtenaw Co Rd Comm, 477 Mich 197,

219; 731 NW2d 41 (2007); Fluor Enterprises, Inc v Dep’t

of Treasury, 477 Mich 170, 174; 730 NW2d 722 (2007).

If the statutory language is clear and unambiguous,

judicial construction is neither required nor permitted,

and courts must apply the statute as written. Lash, 479

Mich at 187; Rose Hill Ctr, Inc v Holly Twp, 224 Mich

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App 28, 32; 568 NW2d 332 (1997). Only if a statute is

ambiguous is judicial construction permitted. Detroit

City Council v Detroit Mayor, 283 Mich App 442, 449;

770 NW2d 117 (2009).

Finally, we review for an abuse of discretion a trial

court’s decision whether to award attorney fees under

the no-fault act. Moore v Secura Ins, 482 Mich 507, 516;

759 NW2d 833 (2008). An abuse of discretion occurs

when the trial court’s decision is outside the range of

reasonable and principled outcomes. Smith v Khouri,

481 Mich 519, 526; 751 NW2d 472 (2008). “The trial

court’s decision about whether the insurer acted rea-

sonably involves a mixed question of law and fact. What

constitutes reasonableness is a question of law, but

whether [a] defendant’s denial of benefits is reasonable

under the particular facts of the case is a question of

fact.” Ross v Auto Club Group, 481 Mich 1, 7; 748 NW2d

552 (2008). This Court reviews a trial court’s factual

findings for clear error. Id. A decision is clearly errone-

ous when the reviewing court is left with a definite and

firm conviction that a mistake has been made. Id.

III. ANALYSIS

A. IS THE COST OF PROVIDING MEDICAL SERVICES AND

PRODUCTS DISCOVERABLE UNDER MCL

500.3158(2),

MCL

500.3159, AND MCR 2.302?

The primary issue on appeal is whether defendants

are permitted by the no-fault act to discover the whole-

sale cost to plaintiff of surgical implant products used in

treating defendants’ insureds when determining

whether plaintiff’s charges for those surgical implant

products are reasonable under the act. We conclude

that, in accordance with defendants’ clear statutory

right and obligation to question the reasonableness of

the charges, the no-fault act permits defendants to

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discover the wholesale cost to plaintiff of the surgical

implant products for which the insureds were charged.

We also stress that the ultimate burden of proof regard-

ing the reasonableness of the charges rests with the

provider.

The Michigan court rules establish “ ‘an open, broad

discovery policy....’”Cabrera, 265 Mich App at 407

(citation omitted); MCR 2.302. Discovery is permitted

for any relevant matter, unless privileged. Cabrera, 265

Mich App at 407. However, “a trial court should also

protect the interests of the party opposing discovery so

as not to subject that party to excessive, abusive, or

irrelevant discovery requests.” Id.

The no-fault act provides for a system of mandatory

no-fault automobile insurance, which requires Michi-

gan drivers to purchase personal protection insurance.

MCL 500.3101 et seq. “Under personal protection insur-

ance[,] an insurer is liable to pay benefits for accidental

bodily injury arising out of the ownership, operation,

maintenance or use of a motor vehicle as a motor

vehicle, subject to the provisions of [chapter 31 of the

Insurance Code].” MCL 500.3105(1). MCL

500.3107(1)(a) provides that personal protection insur-

ance benefits are payable for “[a]llowable expenses

consisting of all reasonable charges incurred for reason-

ably necessary products, services and accommodations

for an injured person’s care, recovery, or rehabilita-

tion.” (Emphasis added.) Though “reasonable” is not

defined, MCL 500.3157 instructs:

A physician, hospital, clinic or other person or institu-

tion lawfully rendering treatment to an injured person for

an accidental bodily injury covered by personal protection

insurance, and a person or institution providing rehabili-

tative occupational training following the injury, may

charge a reasonable amount for the products, services and

accommodations rendered. The charge shall not exceed the

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amount the person or institution customarily charges for

like products, services and accommodations in cases not

involving insurance. [Emphasis added.]

MCL 500.3158(2) further requires that

[a] physician, hospital, clinic or other medical institution

providing, before or after an accidental bodily injury upon

which a claim for personal protection insurance benefits is

based, any product, service or accommodation in relation to

that or any other injury, or in relation to a condition

claimed to be connected with that or any other injury, if

requested to do so by the insurer against whom the claim

has been made, (a) shall furnish forthwith a written report

of the history, condition, treatment and dates and costs of

treatment of the injured person and (b) shall produce

forthwith and permit inspection and copying of its records

regarding the history, condition, treatment and dates and

costs of treatment. [Emphasis added.]

Finally, MCL 500.3159 provides:

In a dispute regarding an insurer’s right to discovery of

facts about an injured person’s earnings or about his

history, condition, treatment and dates and costs of treat-

ment, a court may enter an order for the discovery. The

order may be made only on motion for good cause shown

and upon notice to all persons having an interest, and shall

specify the time, place, manner, conditions and scope of the

discovery. A court, in order to protect against annoyance,

embarrassment or oppression, as justice requires, may

enter an order refusing discovery or specifying conditions

of discovery and may order payments of costs and expenses

of the proceeding, including reasonable fees for the appear-

ance of attorneys at the proceedings, as justice requires.

[Emphasis added.]

Because benefits are payable as losses accrue, benefits

are considered overdue “if not paid within 30 days after

an insurer receives reasonable proof of the fact and of the

amount of loss sustained.” MCL 500.3142(2) (emphasis

added). Similarly, “if the court finds that the insurer

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unreasonably refused to pay the claim or unreasonably

delayed in making proper payment,” attorney fees shall

be a charged against the insurer in addition to the

benefits recovered. MCL 500.3148(1).

Defendants argue that the cost to the providers of the

products used in treating an insured is an appropriate

consideration in determining whether the charge for

those products is reasonable and that the trial court

erred by construing the phrase “costs of treatment” in

MCL 500.3158(2) as referring only to the charges of the

health-care providers in their own billing to the pa-

tients and not to documentation of the cost to the

providers of the products and materials used in that

treatment.

In contrast, plaintiff argues that the cost of the

surgical implant products, whether actual or estimated,

was not a permissible consideration in determining

whether plaintiff’s charges were reasonable and that

defendants’ method is equivalent to a fee schedule,

which is not authorized under the act; rather, the act

contemplates only a “charge-to-charge” comparison.

Plaintiff believes that defendants were limited to com-

paring plaintiff’s charges to those of other similar

providers of the same services.

The trial court concluded that defendants were not

permitted to consider either plaintiff’s cost for the

surgical implant products or the average cost of those

products to providers generally, as calculated by a

third-party auditor. Instead, defendants were restricted

to comparing plaintiff’s charges with the charges of

other similar providers of these products. We believe the

trial court erred by so concluding.

Both parties rely on our holding in AOPP, 257 Mich

App 365. At issue in that case was

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whether, under the language of the [no-fault] act, defen-

dant insurance companies are required to pay the full

amount charged as long as the charge constitutes a “cus-

tomary” one, or if defendants are entitled to independently

review and audit the medical costs charged to their in-

sureds to determine whether a particular charge is “rea-

sonable.” [AOPP, 257 Mich App at 372.]

Citing both MCL 500.3157 and MCL 500.3107, we

noted that the amount an insurer is obligated to pay to

a health-care provider is limited to “a reasonable

amount.” AOPP, 257 Mich App at 374. We held:

Under this statutory scheme, an insurer is not liable for

any medical expense that is not both reasonable and

necessary. Hofmann v Auto Club Ins Ass’n, 211 Mich App

55, 93-94; 535 NW2d 529 (1995), quoting Nasser v Auto

Club Ins Ass’n, 435 Mich 33, 49-50; 457 NW2d 637 (1990).

The reasonableness of the charge is an explicit and neces-

sary element of a claimant’s recovery against an insurer,

and, accordingly, the burden of proof on this issue lies with

the plaintiff. Id. “Where a plaintiff is unable to show that a

particular, reasonable expense has been incurred for a

reasonably necessary product and service, there can be no

finding of a breach of the insurer’s duty to pay that

expense, and thus no finding of liability with regard to that

expense.” Nasser, [435 Mich] at 50.

As the United States Court of Appeals for the Sixth

Circuit recognized, these statutory provisions leave open

the questions of (1) what constitutes a reasonable charge,

(2) who decides what is a reasonable charge, and (3) what

criteria may be used to determine what is reasonable. See

Advocacy Organization for Patients & Providers (AOPP) v

Auto Club Ins Ass’n, 176 F3d 315, 320 (CA 6, 1999). [Id. at

374-375.]

We rejected the provider’s claim that insurers must pay

all reasonable necessary medical expenses incurred for

accidental bodily injuries as long as the charges did not

exceed the amount the provider customarily charged for

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comparable services to patients without insurance. Id.

at 375. While MCL 500.3157 specifically sets forth that

a provider’s charge “shall not exceed the amount the

person or institution customarily charges for like prod-

ucts, services and accommodations in cases not involv-

ing insurance,” the language of the statute did not

define what was “reasonable”; rather, the language

simply placed a maximum on what a provider could

charge in no-fault cases. “Thus, although § 3157 limits

what can be charged, nowhere in that section does the

Legislature indicate that a ‘customary’ charge is neces-

sarily a ‘reasonable’ charge that must be reimbursed in

full by the insurer.” AOPP, 257 Mich App at 376

(emphasis omitted). Such a finding would be contrary to

the purpose of the no-fault act. We noted:

In fact, this Court in McGill [v Auto Ass’n of Mich, 207

Mich App 402; 526 NW2d 12 (1994)] discussed at length the

policy considerations underlying the act in rejecting the

plaintiffs’ argument that the defendant insurers were

required to pay the full amount of medical expenses billed

by health-care providers:

“It is to be recalled that the public policy of this state is

that ‘the existence of no-fault insurance shall not increase

the cost of health care.’ Indeed, ‘[t]he no-fault act was as

concerned with the rising cost of health care as it was with

providing an efficient system of automobile insurance.’ To

that end, the plain and ordinary language of § 3107 requir-

ing no-fault insurance carriers to pay no more than rea-

sonable medical expenses, clearly evinces the Legislature’s

intent to ‘place a check on health care providers who have

“no incentive to keep the doctor bill at a minimum.” ’

“For the above reasons, we reject plaintiffs’ argument

that, pursuant to the no-fault act, defendants are obligated

to pay the entire amount of plaintiffs’ medical bills. Such

an interpretation would require insurance companies to

accept health care providers’ unilateral decisions regarding

what constitutes reasonable medical expenses, effectively

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eliminating insurance companies’ cost-policing function as

contemplated by the no-fault act. This result would directly

conflict with the Legislature’s purpose in enacting the

no-fault system in general and § 3107 in particular. ‘[I]tis

clear that the Legislature did not intend for no-fault insur-

ers to pay all claims submitted without reviewing the claims

for lack of coverage, excessiveness, or fraud.’” [Id.at

407-408 (citations omitted; emphasis added).] [AOPP, 257

Mich App at 377-378.]

Thus, insurers are required to challenge the reasonable-

ness of charges, and providers should expect no less. Id.

at 378-379.

In concluding that insurers were only obligated to

pay benefits for reasonable charges, we acknowledged

that what was “reasonable” had yet to be defined.

“[C]onsequently, insurers must determine in each in-

stance whether a charge is reasonable in light of the

service or product provided.” Id. at 379. Ultimately, the

determination of what is a reasonable charge is for the

trier of fact. Id. In a footnote, we acknowledged that the

case had policy ramifications, but that those should not

be overstated:

We believe both sides overstate the effects of either side

prevailing. Under the statute, plaintiffs necessarily make

the initial determination of reasonableness by charging the

insured for the services. Once plaintiffs charge the insured,

the insurer then makes its own determination regarding

what is reasonable and pays that amount to plaintiffs.

Although, as plaintiffs argue, the cost-benefit analysis may

cause fewer legal actions over the disputed amount, the

fact-finder will ultimately decide what is reasonable.

Whether this procedure is the best is a matter for the

Legislature. [Id. at 379 n 4 (citations omitted).]

Naturally, “[p]laintiffs may challenge defendants’ fail-

ure to fully reimburse them for medical bills as a

violation of the act, but they have the burden of

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establishing the reasonableness of the charges in order

to impose liability on the insurer,” and “[t]he question

whether expenses are reasonable and reasonably neces-

sary is generally one of fact for the jury....”Id. at 380.

Thus, “[i]f plaintiffs disagree with a defendant’s assess-

ment of reasonableness, they have the right to contest

the amount of such payment and must prove by a

preponderance of the evidence that the expenses were

both reasonable and necessary.” Id.

While AOPP supports an insurer’s practice of deter-

mining the reasonableness of a provider’s charges for

surgical implant products by comparing those charges

to the amounts charged for those products by other,

similar providers, AOPP does not suggest that this is

the only permissible approach under the act. In AOPP,

we specifically declined to “delineate the permissible

factors” that defendants may consider when determin-

ing whether a charge is reasonable, while specifically

rejecting the notion that providers are permitted to

“unilaterally determine the ‘reasonable’ charge to be

paid by the insurer” by way of their customary charges

or that the act should be interpreted in a manner that

effectively eliminates the cost-policing function of in-

surance companies as contemplated by the no-fault act.

Id. at 377, 379. To limit assessing the reasonableness of

provider charges solely to a comparison of such charges

among similar providers would be to leave the determi-

Following our decision in AOPP, our Supreme Court granted the

providers’ application for leave to appeal, directing that “defendants are

to explain in detail the computations they use in determining whether a

particular charge meets the ‘80th percentile test.’ ” Advocacy Org for

Patients & Providers v Auto Club Ins Ass’n, 470 Mich 881 (2004).

Thereafter, the Supreme Court affirmed the case in a memorandum

opinion and concurring opinions for the reason that “we agree with the

Court of Appeals resolution of this issue....”Advocacy Org for Patients

& Providers v Auto Club Ins Ass’n, 472 Mich 91, 95; 693 NW2d 358

(2005).

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nation of reasonableness solely in the hands of provid-

ers, as a collective group, and would abrogate the

cost-policing function of no-fault insurers, contrary to

the intention of the Legislature. Accordingly, defen-

dants’ ability to assess the reasonableness of provider

charges is not limited to a comparison of customary

charges among similar providers. Rather, the act con-

templates that, as happened here, insurers will assess

the reasonableness of a provider’s charges, paying that

portion deemed reasonable, with the provider having

the prerogative to then challenge the insurer’s decision

not to pay the entire charge submitted by filing suit.

Once an action is filed, the provider has the burden of

proving by a preponderance of the evidence the reason-

ableness of its charges. Id. at 379-380. The parties are

free to introduce evidence to the fact-finder regarding

the reasonableness of plaintiff’s charges. Plaintiff is

free to argue that its charges are in line with those of

other similar providers for the surgical implant prod-

ucts at issue here, and defendants may respond by

asserting that plaintiff’s markup over the average

wholesale cost of those products renders the charges

excessive. But ultimately, the burden of proof is on the

provider to show how and why the charges are reason-

able.

In keeping with the insurer’s obligation to determine

the reasonableness of a provider’s charges, we believe

that defendants were entitled to discover the wholesale

cost of the surgical implant products for which the

insureds were charged. The no-fault act, MCL

500.3158(2), permits defendants to discover plaintiff’s

“costs of treatment of the injured person,” not the

“costs of treatment to the injured person,” which pre-

sumably are plaintiff’s customary charges. (Emphasis

added.) Accordingly, defendants are permitted to con-

sider the cost to plaintiff of providing that treatment

450 295 M

ICH

431 [Feb

and not merely the cost of treatment as billed by the

provider to the injured person when evaluating the

reasonableness of the charges submitted for payment.

We recognize that permitting insurers access to a pro-

vider’s cost information could open the door to nearly

unlimited inquiry into the business operations of a

provider, including into such concerns as employee

wages and benefits. However, we explicitly limit our

ruling to the sort of durable medical-supply products at

issue here, which are billed separately and distinctly

from other treatment services and which defendants

represent (and plaintiff has not disputed) require little

or no handling or storage by a provider. The surgical

implant products here are standalone items that can be

easily quantified. Plaintiff must come forward with

evidence to convince a jury that the charges for the

durable medical equipment were reasonable.

We find further support in our recent opinion in

Hardrick v Auto Club Ins Ass’n, 294 Mich App 651; 819

NW2d 28 (2011). At issue in that case was the reason-

able rate for family-provided attendant-care services

under MCL 500.3107(1)(a). The plaintiff believed that

agency rates constituted a material and probative mea-

sure of the general value of attendant-care services,

whereas the insurance company claimed that agency

rates were irrelevant to establish the reasonable rate

for care provided by an unlicensed family member.

Instead, the insurance company argued, the reasonable

rate should have been based on a similar worker’s wage,

which would not include an agency’s overhead and

additional expenses not related to the worker’s wages.

Hardrick, 294 Mich App at 664-665. We held that, while

rates charged by an agency to provide attendant-care

services were not dispositive of the reasonable rate

chargeable by a relative caregiver, they were certainly a

relevant consideration for the jury in deciding what was

2012] B

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a “reasonable rate.” Id. at 666. Concluding that the trial

court properly rejected the insurance company’s at-

tempt to exclude the evidence, we explained:

Here, the question presented is not whether an agency

rate is reasonable per se under the circumstances, but

whether evidence of an agency rate may assist a jury in

determining a reasonable charge for family-provided

attendant-care services. The fact that an agency charges a

certain rate for precisely the same services that [the]

parents provide does not prove that the rate should apply to

the parents’ services. However, an agency rate for

attendant-care services, routinely paid by a no-fault car-

rier, is a piece of evidence that throws some light, however

faint, on the reasonableness of a charge for attendant-care

services. In other words, an agency rate supplies one

measure of the value of attendant care and is worthy of a

jury’s consideration. A jury may ultimately decide that an

agency rate carries less weight than the rate charged by an

independent contractor, or no weight at all. But the fact

that different charges for the same service exist in the

marketplace hardly renders one charge irrelevant as a

matter of law. [Id. at 669 (citation omitted).]

Similarly, in this case, plaintiff’s actual cost for surgical

implant products is but one piece of information that a

jury might find relevant in determining whether plain-

tiff’s charges were reasonable. Hardrick stresses what

we have already discussed at length—the jury is

charged with the responsibility of determining the

reasonableness of plaintiff’s charges. Because actual

costs to plaintiff would most certainly “throw some

light on” the reasonableness of the charges, the trial

court should have compelled plaintiff to provide the

information.

Hardrick also confirms the notion that a hospital’s

itemized bills and records do not, standing alone, satisfy

the “reasonableness” requirement. We analogized a

“charge” to an attorney’s bill for services. When an

452 295 M

ICH

431 [Feb

attorney seeks a court order for payment of a “reason-

able attorney fee,” he or she may not simply provide a

bill, but must also demonstrate that the bill is reason-

able by showing more than his or her actual “wage.” Id.

at 673-674. We explained:

Given that many factors influence the determination of

a “reasonable charge” for attendant-care services, a jury

may consider a provider’s wage as one piece of evidence

relevant to this calculation. We view the reasonableness

inquiry as encompassing any evidence bearing on fair

compensation for the particular services rendered. The

principles supporting the relevancy of agency rates equally

support the relevancy of other evidence. For example, [the

expert witness] testified that an agency would pay its

employees less than the $25 to $45 hourly rate charged to

the patient. Evidence of the employee’s hourly wage throws

some light, however faint [,] on the reasonableness of a

charge for attendant-care services. [The insurance com-

pany] correctly notes that the jury should hear such

evidence to more fully and accurately calculate a reason-

able rate for the services rendered.

***

. . . Limiting a family member’s “reasonable charge” to

a wage ignores...other costs. In the end, the Legislature

commanded that no-fault insurers pay a “reasonable

charge” for attendant-care services, thereby consigning to

a jury the necessary economic-value choices.

***

None of the evidence proffered by [either party], or even

mentioned by this Court, is dispositive of the reasonable-

charge issue. Rather, the evidence provides a collage of

factors affecting the reasonable rate that may be charged

by [the] parents for the services they provide. [Id. at

675-678 (citation omitted).]

2012] B

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Similarly, plaintiff’s actual cost for the surgical implant

products is not dispositive on the issue whether its

charges were reasonable; however, the actual cost of the

durable medical equipment is certainly a piece of the

overall “collage of factors affecting the reasonable rate”

of plaintiff’s charges. Again, it cannot be overstated

that, when factually disputed, the reasonableness of the

charges is a question of fact for the jury to determine.

The jury can only make such a determination if it has

been provided with all relevant and probative evidence.

Accordingly, given our conclusion that defendants

were entitled to discover the actual cost of the surgical

implant products to plaintiff under MCL 500.3158 and

MCL 500.3159, the trial court erred when it denied

defendants’ motion to compel discovery. Because of the

error, it follows that summary disposition in plaintiff’s

favor was prematurely and improvidently granted, as

discussed hereinafter.

B. DID THE TRIAL COURT ERR BY GRANTING PLAINTIFF

SUMMARY DISPOSITION?

Defendants argue that, considering the cost data

presented by defendants, which is a permissible consid-

eration under the no-fault act in determining reason-

ableness, and considering plaintiff’s lack of admissible

evidence supporting the reasonableness of its charges, a

rational fact-finder could conclude that plaintiff’s

charges for surgical implant products were not reason-

able and, therefore, summary disposition in plaintiff’s

favor was not warranted. We agree.

Plaintiff sought summary disposition on the basis

that defendants’ method of determining that plaintiff’s

charges for the surgical implant products were exces-

sive was arbitrary and unreasonable. Plaintiff did not

proffer anything to support its assertion that its

454 295 M

ICH

431 [Feb

charges were reasonable, nor did it offer any evidence

regarding how its charges compared with those of

similar providers of the same products. Instead, plain-

tiff claimed that when it established and submitted its

charges to defendants it necessarily made the determi-

nation regarding the reasonableness of those charges,

thus shifting the burden to defendants to employ a

reasonable method to challenge the validity of plain-

tiff’s charges. Thus, plaintiff argued, defendants had

the burden of legitimately auditing plaintiff’s charges

under the no-fault act and, when they failed to do so,

they failed to create a triable issue for the jury. We

disagree.

Plaintiff’s position is at odds with established case-

law. The burden of proof on the reasonableness of its

fees lies with plaintiff. Hofmann, 211 Mich App at

93-94, quoting Nasser, 435 Mich at 49-50. “[I]t is the

insurance company that has the right to deny a claim

(or part of a claim) for unreasonableness under § 3107.

The insured then has the burden to prove that the

charges are in fact reasonable.” United States Fidelity

& Guaranty Co v Mich Catastrophic Claims Ass’n (On

Rehearing), 484 Mich 1, 18; 795 NW2d 101 (2009).

Moreover, as the moving party, plaintiff bore the burden

of establishing the absence of any genuine issue of

material fact in the first instance. MCR 2.116(G)(4);

Coblentz, 475 Mich at 569. Plaintiff had to provide the

trial court with some basis for concluding that its

charges were reasonable and that there was no factual

issue for trial, despite defendants’ arguments other-

wise. Plaintiff wholly failed to do this. Considering that

this Court has explicitly held that a provider’s custom-

ary charges are not necessarily reasonable, AOPP, 257

Mich App at 377, the mere fact that plaintiff believed its

charges to be reasonable does not make it so. Accord-

ingly, there was no basis for the trial court to conclude

2012] B

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that plaintiff’s charges were necessarily reasonable

under the no-fault act. Hence, summary disposition was

improvidently granted.

C. DID THE TRIAL COURT ERR BY REFUSING TO AWARD ATTORNEY

FEES UNDER MCL

500.3148?

In its cross-appeal, plaintiff argues that the trial

court clearly erred by failing to award plaintiff its

attorney fees after defendants refused to pay for the

surgical implant products. We disagree.

The no-fault act provides for an award of reasonable

attorney fees when an insurer unreasonably withholds

benefits. MCL 500.3148(1). Our Supreme Court has

held:

MCL 500.3148(1) establishes two prerequisites for the

award of attorney fees. First, the benefits must be overdue,

meaning “not paid within 30 days after [the] insurer

receives reasonable proof of the fact and of the amount of

loss sustained.” MCL 500.3142(2). Second, in postjudg-

ment proceedings, the trial court must find that the

insurer “unreasonably refused to pay the claim or unrea-

sonably delayed in making proper payment.” MCL

500.3148(1). Therefore, assigning the words in MCL

500.3142 and MCL 500.3148 their common and ordinary

meaning, “attorney fees are payable only on overdue ben-

efits for which the insurer has unreasonably refused to pay

or unreasonably delayed in paying.” Proudfoot v State

Farm Mut Ins Co, 469 Mich 476, 485; 673 NW2d 739 (2003)

(emphasis omitted). [Moore, 482 Mich at 517.]

“The purpose of the no-fault act’s attorney-fee pen-

alty provision is to ensure prompt payment to the

insured.” Ross v Auto Club Group, 481 Mich 1, 11; 748

NW2d 552 (2008). Therefore, when an insurer refuses

or delays payment of personal protection insurance

benefits, it has the burden of justifying its refusal or

delay under MCL 500.3148(1). Ross, 481 Mich at 11.

456 295 M

ICH

431 [Feb

When benefits initially denied or delayed are later

determined to be payable, “a rebuttable presumption

arises that places the burden on the insurer to justify

the refusal or delay.” Attard v Citizens Ins Co of

America, 237 Mich App 311, 317; 602 NW2d 633 (1999).

However, a refusal to pay or a delay in payment “is not

unreasonable if it is based on a legitimate question of

statutory construction, constitutional law, or factual

uncertainty.” Id. The determinative factor “is not

whether the insurer ultimately is held responsible for

benefits, but whether its initial refusal to pay was

unreasonable.” Ross, 481 Mich at 11.

Defendants asserted in the trial court, as they do

here, that the refusal to pay the full amount of plain-

tiff’s charges for surgical implant products was based

on both a legitimate question of statutory construction

and factual uncertainty regarding the reasonableness of

those charges. The trial court determined that defen-

dants’ conduct was based on a legitimate question of

statutory construction. We agree and conclude that the

trial court did not abuse its discretion by declining to

award plaintiff attorney fees.

As discussed earlier in this opinion, an insurer is not

foreclosed from assessing the reasonableness of a pro-

vider’s charges merely because those charges are the

provider’s customary charges; rather, insurers have a

duty under the act to “ ‘audit and challenge the reason-

ableness’ ” of charges submitted for payment. AOPP,

257 Mich App at 378, quoting LaMothe v Auto Club Ins

Ass’n, 214 Mich App 577, 582 n 3; 543 NW2d 42 (1995).

Thus, defendants were required to assess the reason-

ableness of plaintiff’s charges for surgical implant prod-

ucts. In AOPP, this Court found it unnecessary to

“delineate the permissible factors for determining what

is ‘reasonable’....” AOPP, 257 Mich App at 379.

2012] B

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Consequently, at the time defendants received plain-

tiff’s billings, the permissible factors available for de-

fendants’ consideration in evaluating the reasonable-

ness of the charges for surgical implant products

submitted by plaintiff remained undefined by either the

no-fault act or the caselaw interpreting and construing

it. Defendants requested that plaintiff provide informa-

tion regarding the wholesale cost of these durable

medical products for consideration in determining

whether plaintiff’s charges to defendants’ insureds for

those products were reasonable. Considering that MCL

500.3158(2) requires that, upon defendants’ request,

plaintiff provide defendants with “a written report of

the...costs of treatment of the injured person” and

that plaintiffs “produce forthwith and permit inspec-

tion and copying of its records regarding...costs of

treatment,” and considering further a complete absence

of caselaw construing this phrase, the trial court did not

clearly err by concluding that defendants’ denial of full

payment was premised on a legitimate question of

statutory construction. “[A]n insurer’s initial refusal to

pay benefits under Michigan’s no-fault insurance stat-

utes can be deemed reasonable even though it is later

determined that the insurer was required to pay those

benefits.” Moore, 482 Mich at 525. Even if it is later

established that defendants are obligated to pay the full

amount of plaintiff’s charges, we believe that defen-

dants’ actions thus far in paying only the undisputed

portions of the bills were reasonable under the circum-

stances and that the attorney-fee penalty provision of

the no-fault act was not triggered.

Because we conclude that the no-fault act permits

defendants to discover the wholesale cost to plaintiff of

the surgical implant products for which the insureds

were charged, we reverse that portion of the trial court’s

order that granted plaintiff summary disposition, af-

458 295 M

ICH

431 [Feb

firm that portion of the trial court’s order that denied

plaintiff’s request for attorneys fees, and remand for

further proceedings. We do not retain jurisdiction.

OEKSTRA

, P.J., and K. F. K

ELLY

and B

ECKERING

,JJ.,

concurred.

2012] B

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459

NEVILLE v NEVILLE

Docket Nos. 294461 and 302946. Submitted February 7, 2012, at Detroit.

Decided February 16, 2012, at 9:05 a.m.

Defendant, Mark T. Neville, moved in the Wayne Circuit Court to

clarify and amend the 1995 qualified domestic relations order

(QDRO) entered in accordance with the terms of his and plaintiff

Kathy Kay Neville’s 1994 divorce judgment, arguing that the

administrator of his employer’s retirement plan had construed the

QDRO in a manner that would give more benefits to plaintiff than

provided for in the divorce judgment and that the QDRO itself did

not conform to the terms of the judgment. In August 2009, the

court, Connie Marie Kelley, J., determined that defendant’s motion

had been improperly brought under MCR 2.612(C)(1)(a) and (f)

because the QDRO was not an appealable judgment, treated his

motion as a request to amend the QDRO to be consistent with the

divorce judgment, and granted the motion. The court thereafter

amended the QDRO in March 2010. Plaintiff applied for leave to

appeal the August 2009 decision (Docket No. 294461), which the

Court of Appeals denied. In lieu of granting plaintiff’s application

for leave to appeal, the Supreme Court remanded the case to the

Court of Appeals for consideration as on leave granted. 488 Mich

899 (2010). Plaintiff also appealed by delayed leave granted the

March 2010 order amending the QDRO (Docket No. 302946), and

the cases were consolidated.

The Court of Appeals held:

1. Under the language of MCL 552.101(4) that was in effect at

the time of the parties’ 1994 divorce, a divorce judgment was

required to conclusively determine all the rights of the husband

and wife in any pension, annuity, or retirement benefits. A QDRO

entered in accordance with the terms of a divorce judgment is part

of the property settlement. The trial court erred by treating the

QDRO as a separate order and regarding defendant’s motion as

one to amend that QDRO rather than as a motion for relief from

the judgment under MCR 2.612(C)(1)(a) and (f) because the final

divorce judgment encompassed both the 1994 divorce judgment

and the 1995 QDRO as a whole. The terms of the parties’ property

460 295 M

ICH

460 [Feb

settlement were not conclusively established by the divorce judg-

ment because it mandated entry of a QDRO.

2. A court may relieve a party from a final judgment, order, or

proceeding on the basis of mistake, inadvertence, surprise, or excus-

able neglect or any other reason justifying relief from operation of the

judgment under MCR 2.612(C)(1)(a) and (f). However, under MCR

2.612(C)(2), the motion must be made within a reasonable time, and

for the grounds stated in MCR 2.612 (C)(1)(a), within one year after

the judgment, order, or proceeding was entered or taken. Defendant’s

motion, which he filed more than 14 years after entry of the final

divorce judgment, was time-barred under MCR 2.612(C)(2) to the

extent he sought substantive changes through entry of an amended

QDRO.

3. The treatment and distribution of pension benefits may vary.

When the division of pension benefits is established by the terms of

parties’ property settlement, the trial court must determine the

parties’ intent as manifested in their agreement through application

of principles of contract construction. However, when the contract

language in a divorce judgment is unambiguous, it must be applied as

written. The trial court erred by finding that the property-settlement

provisions in the 1994 divorce judgment controlled distribution of the

pension benefits in issue and by concluding that it limited plaintiff’s

survivorship benefits to a proportionate interest based on years of the

marriage. Because the divorce judgment encompassed both the

divorce judgment and the QDRO, the trial court erred by assuming

that there was a conflict between the two documents rather than

recognizing that the parties were free to modify the terms of their

property settlement in the divorce judgment through mutual assent

and that any changes to those provisions as reflected in the 1995

QDRO were controlling.

4. A single method for valuing a pension plan is not required,

even when the division of the pension plan is to be determined by

the trial court rather than by agreement of the parties. If the

parties agree in the divorce judgment on how the pension plan is

to be divided, the court must determine the parties’ intent through

application of the principles of contract construction. Because the

parties were free to modify the terms of their property settlement

when approving the QDRO, the trial court erred by developing a

formula for plaintiff’s share of defendant’s retirement benefits

that differed from the formula set forth in the QDRO.

Decision granting defendant’s motion to amend in Docket No.

294461 reversed; amended QDRO in Docket No. 302946 vacated

and original QDRO reinstated.

2012] N

EVILLE V

EVILLE

461

1. M

OTIONS AND

RDERS —

ELIEF

ROM

INAL

UDGMENT —

ISTAKE

NAD-

VERTENCE

URPRISE

XCUSABLE

EGLECT

A court may relieve a party from a final judgment, order, or

proceeding on the basis of mistake, inadvertence, surprise, or

excusable neglect or any other reason justifying relief from opera-

tion of the judgment; the motion must be made within a reason-

able time, and for the grounds stated in MCR 2.612(C)(1)(a),

within one year after the judgment, order, or proceeding was

entered or taken (MCR 2.612[C][1][a] and [f], [C][2]).

2. D

IVORCE —

ROPERTY

ETTLEMENT —

UALIFIED

OMESTIC

ELATIONS

R-

DERS

A qualified domestic relations order executed in accordance with the

terms of a divorce judgment is part of the property settlement and

must be treated as part of the final divorce judgment.

Judith A. Curtis for Kathy Kay Neville.

Daniel P. Marsh for Mark T. Neville.

Before: S

ERVITTO

,P.J., and T

ALBOT

and K. F. K

ELLY

,JJ.

URIAM

. In Docket No. 294461, plaintiff appeals

the trial court’s August 12, 2009, opinion and order

granting defendant’s motion to clarify and amend a quali-

fied domestic relations order (QDRO) that was previously

entered on March 14, 1995. This Court originally denied

plaintiff’s application for leave to appeal, Neville v Neville,

unpublished order of the Court of Appeals, entered Feb-

ruary 16, 2010 (Docket No. 294461), but our Supreme

Court subsequently remanded the case to this Court for

consideration as on leave granted, Neville v Neville, 488

Mich 899 (2010). In Docket No. 302946, plaintiff appeals

by delayed leave granted the trial court’s March 11, 2010,

amended QDRO. This Court consolidated the two appeals.

In Docket No. 294461, we reverse the trial court’s August

12, 2009, decision granting defendant’s motion to amend

the March 14, 1995, QDRO. In Docket No. 302946, we

vacate the March 11, 2010, amended QDRO and reinstate

462 295 M

ICH

460 [Feb

the March 14, 1995, QDRO without prejudice to the trial

court’s authority to amend the latter order to carry out

the parties’ intent as expressed in their agreement.

The parties were married in March 1978. On Novem-

ber 14, 1994, the trial court entered a default divorce

judgment, which provided in pertinent part:

IT IS FURTHER ORDERED AND ADJUDGED that

Plaintiff is awarded one half of the present value of the

general retirement pension through Defendant’s employer. A

Qualified Domestic Relations Order shall enter. Plaintiff shall

be entitled to a percentage based upon years worked during

the marriage over (16.5 years) total years worked. Value shall

be based upon contributory, noncontributory and supplemen-

tal, if applicable. The Plaintiff shall be deemed “surviving

spouse” for pre and post benefit purposes.

A QDRO was later entered on March 14, 1995, which

provided in pertinent part:

IT IS HEREBY ORDERED AND ADJUDGED that

pension benefits, contributory, non-contributory, and

supplemental, otherwise payable to the Participant, MARK

T. NEVILLE, under his pension plan(s) with Ford Motor

Company, specifically including the Ford Motor Company

General Retirement Plan shall be apportioned as follows:

A. The amount payable to the Alternate Payee with

respect to all pension benefits, contributory, non-contributory,

and supplemental, shall be the amount otherwise payable to

such Participant pursuant to the Plan(s) multiplied by 50%

and multiplied by a fraction the numerator of which is the

number of years of service of such Participant under such

Plan(s) during the marriage, namely, 16 years, 6 months, and

the denominator of which is the total number of years of

service of such Participant under the Plan(s). Years of service

shall mean years and any fractional year used in computing

the particular benefit.

***

2012] N

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463

C. The Alternate Payee shall be entitled to pre and post

retirement survivorship retirement benefits and shall be

treated as the surviving spouse under the Plan(s), accord-

ingly, in the event of the death of the Participant either

before or after commencement of retirement benefits,

payment shall be made to the Alternate Payee as provide in

the Plan for the surviving spouse.

The March 14, 1995, QDRO also provided that “modi-

fications of this Order shall be allowable for purposes of

carrying out the intent of the parties.”

In April 2009, defendant moved for clarification and

amendment of the QDRO, relying in part on MCR

2.612(C)(1)(a) and (f). The motion alleged that an

administrator of his employer’s retirement plan had

construed the QDRO in a manner that would provide

more benefits to plaintiff than provided for in the

divorce judgment (specifically a portion of defendant’s

early-retirement incentives and surviving-spouse ben-

efits earned by defendant after the divorce). On August

12, 2009, the trial court treated defendant’s motion as a

request to amend the March 14, 1995, QDRO to be

consistent with the divorce judgment and granted the

motion. The court thereafter entered an amended

QDRO on March 11, 2010, to correct what it deter-

mined to be inconsistencies between the original di-

vorce judgment and the March 14, 1995, QDRO with

respect to plaintiff’s right to share in defendant’s re-

tirement benefits. The amended QDRO treated the

original March 14, 1995, QDRO as a nunc pro tunc

order entered as part of the November 14, 1994, divorce

judgment.

When entering the order, the trial court determined

that the March 14, 1995, QDRO improperly expanded

benefits provided for in the divorce judgment by refer-

ring to more than one plan, and not just the general

retirement plan. The trial court also expressed concern

464 295 M

ICH

460 [Feb

that the phrase “all pension benefits” in the March 14,

1995, QDRO suggested that it included benefits not

contemplated by the divorce judgment, such as early-

retirement benefits. In addition, the trial court was

concerned that defendant’s exercise of early-retirement

incentives might reduce the pension benefit that plain-

tiff would be entitled to under the terms of the divorce

judgment if pension funds were used for the payment.

On March 11, 2010, the trial court fashioned an

amended QDRO to account for this possibility and

adopted a formula for determining plaintiff’s share of

pension benefits that did not consider retirement ben-

efits accrued by defendant after the date of the divorce.

The trial court also limited plaintiff’s survivorship

rights to “a fraction of all pre-retirement survivor

benefits....”

Our Supreme Court’s remand order concerning the

trial court’s August 12, 2009, opinion and order grant-

ing defendant’s motion to amend the March 14, 1995,

QDRO directs this Court to consider the following

questions:

[W]hether the trial court correctly held that the parties’

November 14, 1994, divorce judgment limited the plain-

tiff’s survivorship benefit to a proportionate interest based

on years of marriage, that the divorce judgment conflicted

with the 1995 qualified domestic relations order (QDRO)

agreed upon by the parties, that the terms of the divorce

judgment should control over the terms of the QDRO, and

that the defendant’s motion to have the QDRO amended

was not time-barred. [Neville, 488 Mich at 899.]

Although plaintiff asserts that the Supreme Court’s

questions in Docket No. 294461 only involve the survi-

vorship benefit, we conclude that with the exception of

the first question, which is directed specifically at the

methodology for determining the survivorship benefit,

the remaining questions are also pertinent to plaintiff’s

2012] N

EVILLE V

EVILLE

465

appeal in Docket No. 302946 regarding the formula

adopted by the trial court to determine other benefits.

Therefore, we shall consider these questions as they

relate to both appeals.

We review de novo the trial court’s decision interpret-

ing the November 14, 1994, divorce judgment and the

March 14, 1995, QDRO. Silberstein v Pro-Golf of

America, Inc, 278 Mich App 446, 460; 750 NW2d 615

(2008). To the extent that the judgment and the QDRO

were entered pursuant to the parties’ agreement, ques-

tions involving the interpretation of the agreement,

including whether any language is ambiguous, are also

reviewed de novo because judgments entered pursuant

to the agreement of parties are in the nature of a

contract. Reed v Reed, 265 Mich App 131, 141; 693

NW2d 825 (2005); Gramer v Gramer, 207 Mich App

123, 125; 523 NW2d 861 (1994). In addition, we review

de novo as a question of law issues involving a trial

court’s interpretation and application of court rules or

statutes. Henry v Dow Chem Co, 484 Mich 483, 495; 772

NW2d 301 (2009); Estes v Titus, 481 Mich 573, 578-579;

751 NW2d 493 (2008).

We first address plaintiff’s challenge to the timeliness

of defendant’s motion for clarification and amendment

of the March 14, 1995, QDRO (and the Supreme Court’s

directive that we consider whether defendant’s motion

to have the QDRO amended was not time-barred.) As

authority for the motion, defendant cited MCR

2.612(C)(1)(a) and (f), which provide that a court may

relieve a party from a “final judgment, order, or pro-

ceeding” on the basis of “[m]istake, inadvertence, sur-

prise, or excusable neglect” or “[a]ny other reason

justifying relief from the operation of the judgment.”

MCR 2.612(C)(2) provides that “[t]he motion must be

made within a reasonable time, and, for the grounds

466 295 M

ICH

460 [Feb

stated in subrules (C)(1)(a), (b), and (c), within one year

after the judgment, order, or proceeding was entered or

taken.”

The trial court determined that MCR 2.612(C) was

inapplicable to defendant’s motion in its entirety be-

cause he was “not seeking relief from the [divorce

judgment]. On the contrary, Defendant is requesting

that the QDRO be amended to be consistent with the

[divorce judgment].” Citing LeevLee, unpublished

opinion per curiam of the Court of Appeals, issued April

8, 2004 (Docket No. 246183), the trial court also held

that because the QDRO did not conform to the judg-

ment of divorce, the QDRO was invalid. However, at the

time the divorce judgment was entered, MCL

552.101(4) required that a divorce judgment determine

all rights of the husband and wife in “[a]ny pension,

annuity, or retirement benefits.” In Mixon v Mixon, 237

Mich App 159, 166; 602 NW2d 406 (1999), this Court

construed the statute as requiring that pension rights

be decided conclusively. Consistently with this obliga-

tion, entry of a QDRO was explicitly required by the

terms of the November 14, 1994, divorce judgment. As

such, the trial court should have treated the March 14,

1995, QDRO as part of the divorce judgment when

ruling on defendant’s motion. Id. at 166-167. Instead,

the trial court erroneously treated the QDRO as a

completely separate order, thus dismissing the applica-

tion of MCR 2.612 to defendant’s motion as a whole.

The trial court further erred by giving the March 14, 1995, QDRO

nunc pro tunc effect when entering the amended QDRO on March 11,

2010. “An entry nunc pro tunc is proper to supply an omission in the

record of action really had, but omitted through inadvertence or mis-

take.” Shifferd v Gholston, 184 Mich App 240, 243; 457 NW2d 58 (1990).

Its purpose is not to supply omitted action of a trial court. Freeman v

Wayne Probate Judge, 230 Mich 455, 460; 203 NW 158 (1925). There is

nothing in the record to indicate that the March 14, 1995, QDRO was

2012] N

EVILLE V

EVILLE

467

The trial court’s reliance on Lee was misplaced

because unpublished decisions are not precedentially

binding under the rules of stare decisis. MCR

7.215(C)(1). While an unpublished decision may be

considered for its persuasive reasoning, Beyer v Verizon

North, Inc, 270 Mich App 424, 430-431; 715 NW2d 328

(2006), the decision in Lee is not persuasive as applied

to this case because it did not substantively treat a

QDRO as part of the divorce judgment. Rather, relying

on Quade v Quade, 238 Mich App 222, 224, 226; 604

NW2d 778 (1999), and Roth v Roth, 201 Mich App 563;

506 NW2d 900 (1993), the Lee Court concluded that

separate and distinct components of a pension plan

must be specifically included in a divorce judgment in

order to be included in a QDRO. And the two cases

relied on by the Lee Court are also factually distinguish-

able.

This case is factually distinguishable from Roth, 201

Mich App at 564-565, because the 1983 divorce judg-

ment in that case did not contain any provision requir-

ing entry of a QDRO. Rather, the plaintiff moved in

1990 for entry of a separate QDRO and to add certain

pension rights because of a change in the law. Id. at 565.

The facts in Quade were similar to those in this case to

the extent that the divorce judgment in Quade provided

for a transfer of pension rights by way of a QDRO. But

unlike this case, there was no indication in Quade that

the parties reached an agreement regarding the terms

of a QDRO. Rather, the trial court refused to enter a

QDRO that contained language that differed from the

divorce judgment. Quade, 238 Mich App at 223-224.

This Court further determined that the divorce judg-

entered as a nunc pro tunc order, effective as of the date of the divorce

judgment, and the purpose of the QDRO was not to supply an omitted

action. Rather, the QDRO was a subsequent consensual order expressly

required by the divorce judgment.

468 295 M

ICH

460 [Feb

ment contained a waiver provision whereby each party

waived any interest in any individual retirement ac-

count, pension, or profit-sharing plan except as specifi-

cally provided therein. Id. at 226.

The divorce judgment in this case does not contain

the type of waiver language used in Quade. There is also

no evidence that the March 14, 1995, QDRO was a

contested order as opposed to a consensual one. Keep-

ing in mind the requirement that a divorce judgment

conclusively determine the parties’ rights, Mixon, 237

Mich App at 166, we conclude that the March 14, 1995,

QDRO must be treated as part of the property settle-

ment in the divorce judgment. Cf. Thornton v Thornton,

277 Mich App 453, 457-458; 746 NW2d 627 (2007)

(holding that a QDRO executed contemporaneously

with a divorce judgment and required by the terms of

the judgment must be considered part of the property

settlement). The QDRO and the divorce judgment are

thus two parts of a whole. Because MCR 2.612 applies to

relief from final judgment or orders and the March 14,

1995, QDRO is properly treated as part of the final

divorce judgment, we conclude that the trial court erred

by determining that MCR 2.612(C) did not apply to

defendant’s request for substantive changes to the

March 14, 1995, QDRO to make it consistent with the

property-settlement provisions contained in the No-

vember 14, 1994, divorce judgment.

This is not to say that the trial court could not

interpret and clarify the parties’ agreement without

considering MCR 2.612. It may do so provided it does

not change the parties’ substantive rights as reflected

in the parties’ agreement. See Bers v Bers, 161 Mich

App 457, 464; 411 NW2d 732 (1987). In order to

determine the parties’ agreement, a court must con-

sider all of its terms, including any modifications agreed

2012] N

EVILLE V

EVILLE

469

to by the parties. See Forge v Smith, 458 Mich 198, 207;

580 NW2d 876 (1998) (noting that when one writing

refers to another instrument for additional terms, the

two writings should be read together), and Adell Broad-

casting Corp v Apex Media Sales, Inc, 269 Mich App 6,

11; 708 NW2d 778 (2005) (stating that contracting

parties may modify their contract through mutual

assent). Because the trial court failed to construe as a

whole the terms of the parties’ agreement, which con-

sisted of the property settlement terms in the divorce

judgment and the March 14, 1995, QDRO that was

made part of the judgment, its conclusion that MCR

2.612 did not apply to defendant’s motion was affected

by an error of law.

As a matter of law, we conclude that MCR 2.612 was

applicable to defendant’s motion to the extent that

defendant sought, and the trial court granted, relief in

the form of substantive modifications to the provisions

of the parties’ agreement. Because defendant has nei-

ther argued nor otherwise established on appeal that

his motion—brought more than 14 years after entry of

both the November 14, 1994, divorce judgment and the

March 14, 1995, QDRO—could be considered timely

under MCR 2.612(C)(2), we hold that the motion was

time-barred to the extent that it sought substantive

changes through entry of an amended QDRO. See

Thornton, 277 Mich App at 454-455, 458 (holding that

the defendant’s 2005 motion to amend a QDRO entered

in 1993 was untimely and unreasonable to the extent

that it could be interpreted as a motion for relief from

the judgment under MCR 2.612). This Court, however,

will not reverse when a trial court reaches the right

result for a wrong reason. Coates v Bastian Bros, Inc,

276 Mich App 498, 508-509; 741 NW2d 539 (2007).

Therefore, we turn to the remaining questions before us

regarding survivorship and other retirement benefits to

470 295 M

ICH

460 [Feb

determine if plaintiff has demonstrated that her sub-

stantive rights have been affected.

With regard to the trial court’s decision that the divorce

judgment limited plaintiff’s survivorship benefit to a pro-

portionate interest based on years of marriage, we agree

with plaintiff that the judgment contains no such limita-

tion. The treatment and distribution of pension benefits

may vary. Pickering v Pickering, 268 Mich App 1, 8; 706

NW2d 835 (2005). The property settlement in this case

provides only that “[t]he plaintiff shall be deemed ‘surviv-

ing spouse’ for pre and post benefit purposes.” Because

the contract language is unambiguous, we must apply it as

written. Coates, 276 Mich App at 503; Reed, 265 Mich App

at 141, 147-148.

This construction of the divorce judgment is consistent

with the March 14, 1995, QDRO agreed upon by the

parties, except that the QDRO specifies that plaintiff is to

be treated as “the surviving spouse under the Plan(s).”

Improperly assuming the existence of some substantive

conflict between the November 14, 1994, divorce judg-

ment and the March 14, 1995, QDRO with respect to

survivorship benefits, the trial court erred by finding that

the terms of the November 14, 1994, divorce judgment

were controlling. As discussed previously, the March 14,

1995, QDRO is properly treated as part of the final divorce

judgment. Given that the parties were free to modify the

terms of their November 1994 property settlement

through mutual assent, any changes to those property-

settlement provisions as reflected in the March 1995

QDRO are controlling. Adell Broadcasting, 269 Mich App

at 11. Because the trial court’s August 12, 2009, decision

modifying plaintiff’s survivorship benefits under the

March 14, 1995, QDRO affected plaintiff’s substantive

rights and defendant’s motion was untimely under MCR

2.612(C), we reverse the trial court’s decision.

2012] N

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471

With respect to plaintiff’s challenge in Docket No.

302946 to the formula crafted by the trial court to

determine her share of defendant’s other retirement

benefits, we note that no one method for valuing a

pension plan is required in a divorce action, even when

the division of the pension plan is to be determined by

the trial court rather than by agreement of the parties.

Heike v Heike, 198 Mich App 289, 292; 497 NW2d 220

(1993). When, as in this case, the division is established

by agreement of the parties, a court’s task is to deter-

mine the parties’ intent as manifested in their agree-

ment through application of principles of contact con-

struction. Coates, 276 Mich App at 503; Gramer, 207

Mich App at 125.

The November 14, 1994, divorce judgment purports

to use a “present value” method of valuation for defen-

dant’s “general retirement pension” and awards plain-

tiff

of the present value of that pension. This

language suggests a methodology that would reduce

potential pension benefits to their present value and

distribute them immediately. See Boyd v Boyd, 116

Mich App 774, 782; 323 NW2d 553 (1982); see also

Burkey v Burkey (On Rehearing), 189 Mich App 72, 77;

471 NW2d 631 (1991) (defining “present value” as

“essentially the amount of money a person must receive

today in order to provide the same benefit which he is

scheduled to receive later”).

At the same time, the November 14, 1994, divorce

judgment provides little direction on how to determine

present value or the distribution. It specifies that

“value” is to be based on “contributory, noncontribu-

tory and supplemental, if applicable,” but fails to

specify the applicable period for accumulating these

value factors or whether they could be based on future

accumulations. The judgment entitles plaintiff to a

472 295 M

ICH

460 [Feb

“percentage based upon years worked during the mar-

riage (16.5 years) over total years worked,” but fails to

specify what factor the percentage is applied to for

purposes of determining her payment.

In addition, the parties’ agreement that a QDRO

would be entered at a subsequent date was inconsistent

with any intent for immediate distribution because it

would allow plaintiff to receive defendant’s pension

benefits as an alternate payee under the Employee

Retirement Income Security Act. 29 USC 1056(d). As

discussed previously, the requirement that a QDRO be

subsequently entered also establishes that the Novem-

ber 14, 1994, divorce judgment did not conclusively

establish the terms of the property division.

Mixon, 237

Mich App at 166. Because the parties were free to

modify the terms of their property settlement when

approving the March 14, 1995, QDRO, Adell Broadcast-

ing, 269 Mich App at 11, we conclude that the trial

court erred by crafting a formula for plaintiff’s share of

defendant’s retirement benefits that differed from that

QDRO. Because the trial court’s error changed the

parties’ substantive rights and defendant’s motion was

untimely under MCR 2.612(C), we vacate the trial

court’s March 11, 2010, amended QDRO and reinstate

the March 14, 1995, QDRO, without prejudice to the

trial court’s authority to make nonsubstantive amend-

ments to the March 14, 1995, QDRO for the purpose of

carrying out the parties’ intent.

In Docket No. 294461, we reverse the trial court’s

decision granting defendant’s motion to amend, and in

Under 29 USC 1056, the plan administrator must also approve the

QDRO. Once the plan administrator determines that a domestic relations

order meets the qualifications set forth in 29 USC 1056(d)(3)(C) and (D),

benefits must be paid in accordance with the QDRO. See Brown v

Continental Airlines, Inc, 647 F3d 221, 224 (CA 5, 2011), and 29 USC

1056(d)(3)(A).

2012] N

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473

Docket No. 302946 we vacate the trial court’s March 11,

2010, amended QDRO and reinstate the March 14,

1995, QDRO.

ERVITTO

,P.J., and T

ALBOT

and K. F. K

ELLY

,JJ.,

concurred.

474 295 M

ICH

460 [Feb

FERRERO v WALTON TOWNSHIP

Docket No. 302221. Submitted January 12, 2012, at Lansing. Decided

February 23, 2012, at 9:00 a.m.

Rhonda Ferrero paid property taxes on her home in 2008 and, when

filing her 2008 state income tax return in 2009, claimed a

homestead property tax credit pursuant to MCL 206.520. Because

Ferrero had no state income tax liability, the amount of the credit

against her property taxes paid could not be returned to her as a

reduction in her income tax. Therefore, pursuant to the mandates

of MCL 206.520(1), the sum was paid to her, without interest, after

she filed her 2008 income tax return in 2009. In 2009, Ferrero filed

an application with the Walton Township Board of Review, re-

questing an exemption from property taxes under MCL 211.7u on

the basis of poverty. The board of review denied the request. The

board of review considered Ferrero’s 2008 homestead property tax

credit to be income, and when that income was added to the social

security disability income Ferrero received, Ferrero’s total income

exceeded the maximum amount for her to be eligible for the

exemption. Ferrero filed a petition for review in the Michigan Tax

Tribunal, Small Claims Division, seeking a determination that

Walton Township had improperly treated the money petitioner

received in 2009 pursuant to MCL 206.520(1) as income for

purposes of her qualification for the property tax exemption under

MCL 211.7u. The Tax Tribunal affirmed the decision of the Walton

Township Board of Review. Ferrero appealed.

The Court of Appeals held:

A tax refund is not income because a refund returns money to

the taxpayer that need not have been paid. It is not an independent

payment to the taxpayer. The tax credit involved in this case

plainly functioned as a refund. The homestead property tax credit

does not confer income, nor is it a program to transfer new money

to individuals. The credit’s function is to rebate a portion of the

property taxes a person has already paid. Because the money

received by plaintiff through the property tax credit was a tax

refund and refunds are not considered income, the Tax Tribunal

should not have counted this money toward petitioner’s income.

2012] F

ERRERO V

ALTON

475

When properly calculated, petitioner’s income fell below the

amount that would make her ineligible for the tax exemption.

Reversed and remanded.

WENS

, J., dissenting, stated that the homestead property tax

credit is not a tax refund; rather, it is a refundable tax credit.

Unlike a tax refund, for which the taxpayer has already overpaid

or incorrectly paid the tax with his or her own money and is simply

reclaiming the money that was erroneously paid out, a refundable

tax credit pays a taxpayer from state funds a sum equal to a

portion of, in this case, property taxes that were properly paid. As

such, the homestead property tax credit is an age- and means-

tested program to distribute money to recipients on the basis of

their need and is not a refund of taxes incorrectly paid. Thus, the

homestead property tax credit is income for purposes of calculat-

ing eligibility for the poverty exemption under MCL 211.7u. The

judgment and order of the Tax Tribunal should have been af-

firmed.

1. T

AXATION —

EFUNDS —

REDITS —

NCOME

A tax refund is not income because a refund returns money to a

taxpayer that need not have been paid; a tax refund is not an

independent payment to a taxpayer; although there is a distinction

between a tax refund and a tax credit, a tax credit can function like

a tax refund in some cases; the homestead property tax credit does

not confer income and is not a program that transfers new money

to individuals; rather, it is intended to rebate a portion of the

property taxes a person has already paid (MCL 206.520[3]).

2. T

AXATION —

OMESTEAD

ROPERTY

REDIT —

ROPERTY

XEMPTIONS —

OVERTY —

NCOME

When a person’s homestead property tax credit exceeds the person’s

tax liability for the tax year or if there is no tax liability for the tax

year, the amount of the credit not used as an offset against the tax

liability must, after examination and review, be approved for

payment, without interest, to the person; that payment is not

counted as income for purposes of determining the person’s

qualification for an exemption from property taxes on the basis of

poverty (MCL 205.520[3]; MCL 211.7u[1]).

Michigan State University College of Law Tax Clinic

(by Michele L. Halloran and Bridgette M. Austin) for

petitioner.

476 295 M

ICH

475 [Feb

Fahey Schultz Burzych Rhodes PLC (by William K.

Fahey) for respondent.

Before: B

ECKERING

,P.J., and O

WENS

and S

HAPIRO

,JJ.

HAPIRO

, J. The single issue presented in this case is

whether monies petitioner received in 2009 pursuant to

MCL 206.520 should be counted as income for the

purposes of her qualification for an exemption under

MCL 211.7u for property taxes in 2009. Petitioner

appeals as of right the decision of the Michigan Tax

Tribunal (MTT) that the monies received should be

treated as income for purposes of MCL 211.7u. We

reverse and remand because monies received pursuant

to MCL 206.520 are a rebate of property taxes paid and

not income for purposes of MCL 211.7u.

I. BACKGROUND

Petitioner, 63 years old, has been permanently dis-

abled since 1998. She owns a home and in 2008 paid

property taxes. When filing her 2008 state income tax

return in early 2009, petitioner claimed a homestead

property tax credit pursuant to MCL 206.520. It is not

disputed that her 2008 property taxes were paid and

that she qualified to receive the homestead tax credit

for 2008 pursuant to MCL 206.520. Because petitioner

had no state income tax liability, the amount of the

credit against her property taxes paid could not be

returned to her as a reduction in her income tax.

Pursuant to the mandates of subsection (3) of MCL

206.520, therefore, the sum, after examination and

review, was paid to her, without interest, after she filed

her 2008 income tax return in 2009.

MCL 206.520(3) provides that

2012] F

ERRERO V

ALTON

477

PINION OF THE

OURT

In 2009, petitioner requested an exemption from prop-

erty taxes under MCL 211.7u, which provides that per-

sons with income below a defined poverty level during the

relevant year are exempt from having to pay that year’s

property taxes. In order to qualify for the exemption for

respondent Walton Township, the property owner’s in-

come must have been no more than $10,400.

For the 2009 tax year, petitioner received $9,732 in

social security disability income. Thus, if her other

income exceeded $668, she would be ineligible for the

exemption. If it did not exceed $668, she would qualify

for the exemption.

The Walton Township Board of

Review (the Board) denied her application for the

exemption because it considered her 2008 homestead

property tax credit as income that, when added to her

social security disability income, placed her above the

$10,400 limit. Petitioner appealed the denial in the

Michigan Tax Tribunal, Small Claims Division, which

affirmed the Board’s denial.

II. STANDARD OF REVIEW

“In the absence of fraud, review of a decision by the Tax

Tribunal is limited to determining whether the tribunal

erred in applying the law or adopted a wrong principle; its

factual findings are conclusive if supported by competent,

[i]f the credit claimed under this section...exceeds the tax

liability for the tax year or if there is no tax liability for the tax

year, the amount of the claim not used as an offset against the tax

liability shall, after examination and review, be approved for

payment, without interest, to the claimant. In determining the

amount of the payment under this subsection, withholdings and

other credits shall be used first to offset any tax liabilities.

Plaintiff also received $564 in food-stamp assistance. However, it is

not disputed that food-stamp assistance does not qualify as income for

purposes of the exemption.

478 295 M

ICH

475 [Feb

PINION OF THE

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material, and substantial evidence on the whole record.”

Mich Bell Tel Co v Dep’t of Treasury, 445 Mich 470, 476;

518 NW2d 808 (1994).

Issues of statutory interpretation are questions of law

that are reviewed de novo. Brown v Detroit Mayor, 478

Mich 589, 593; 734 NW2d 514 (2007). The primary goal of

statutory interpretation is to give effect to the Legisla-

ture’s intent, focusing first on the statute’s plain language.

Sun Valley Foods Co v Ward, 460 Mich 230, 236; 596 NW2d

119 (1999). “The words of a statute provide ‘the most

reliable evidence of its intent....’” Id., quoting United

States v Turkette, 452 US 576, 593; 101 S Ct 2524; 69 L Ed

2d 246 (1981). When construing a statute, a court must

read it as a whole. People v Jackson, 487 Mich 783, 791; 790

NW2d 340 (2010). [Klooster v City of Charlevoix, 488 Mich

289, 295-296; 795 NW2d 578 (2011).]

III. ANALYSIS

The homestead property tax exemption for persons

unable to pay because of poverty is governed by MCL

211.7u, which provides, in pertinent part:

(1) The principal residence of persons who, in the

judgment of the supervisor and board of review, by reason

of poverty, are unable to contribute toward the public

charges is eligible for exemption in whole or in part from

taxation under this act. This section does not apply to the

property of a corporation.

While State Tax Commission (STC) bulletins are not

binding,

the STC has defined income as including

wages and salaries, net receipts from self-employment,

regular payments from social security or public assis-

tance, alimony, pensions, scholarships, and dividends

and interest. STC Bulletin No. 5 of 1995, Poverty

Moshier v Whitewater Twp, 277 Mich App 403, 408 n 2; 745 NW2d 523

(2007).

2012] F

ERRERO V

ALTON

479

PINION OF THE

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Exemptions Under MCL 211.7[u], New Requirements,

January 23, 1995.

A tax refund is not income because a refund returns

money to the taxpayer that need not have been paid; it

is not an independent payment to the taxpayer. Al-

though there is a distinction between a tax refund and

a tax credit, a tax credit can function like a tax refund

in some cases. Universal Oil Prod Co v Campbell, 181

F2d 451, 478 (CA 7, 1950) (concluding that “tax cred-

its...doamount to refunds of the taxes...paid”).

The tax credit involved here plainly functions as a

refund. As held in Butcher v Dep’t of Treasury, 425 Mich

262, 275; 389 NW2d 412 (1986), “[u]nlike the federal

government, the state is not exempting certain property

taxes from the base of the tax; rather, it is refunding

them.” The Butcher Court further explained that “[t]he

property tax ‘credit’...is ineffect a property tax rebate

that employs the income tax as a vehicle for its reconcili-

ation. Therefore, Const 1963, art 9, § 7, which is con-

cerned only with income taxes, is inapplicable to what is

clearly a property tax rebate.” Id. at 276 (emphasis added);

see also In re Request for Advisory Opinion Regarding

Constitutionality of 2011 PA 38, 490 Mich 295, 344; 806

NW2d 683 (2011).

The homestead property tax credit does not confer

income, nor is it a program to transfer new monies to

individuals; rather, as Butcher makes clear, it functions

A new bulletin on this topic was released in 2010. STC Bulletin No. 7

of 2010, Poverty Exemption, May 24, 2010. Its definition of income is

consistent with the 1995 bulletin.

The hearing referee’s proposed opinion cites page 5 of Bulletin No. 5

of 1995 as the sole authority for its holding that “Petitioner’s homestead

property tax refund credit shall be counted as available income.” (Em-

phasis added.) Page 5 of the bulletin contains no such statement,

however. Indeed, the bulletin actually states, on page 6, that “[i]ncome

does not include...[t]ax refunds....”

480 295 M

ICH

475 [Feb

PINION OF THE

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to rebate a portion of the property taxes a person has

already paid. This is easily seen in the context of a

taxpayer whose income tax liability exceeds the amount

of the homestead credit for which the taxpayer quali-

fies. In such a case, the taxpayer does not receive a

refund check; rather, the taxpayer receives a rebate in

the form of an equivalent reduction in the amount of

income tax due. The amount of money received and the

basis on which it is received is identical whether it is

received as a reduction in the income taxes due or a

payment of the amount of the rebate that exceeds the

individual’s income tax liability.

Because the $1,093 received by petitioner through

the property tax credit was in fact a tax refund and

refunds are not considered income, the MTT should not

have counted this money toward petitioner’s income.

When petitioner’s income is properly calculated, it falls

below the threshold amount that would make her

ineligible for the poverty exemption.

Reversed and remanded for further proceedings con-

sistent with this opinion. We do not retain jurisdiction.

ECKERING

,P.J., concurred with S

HAPIRO

,J.

WENS

,J.(dissenting). I respectfully dissent from the

majority’s opinion stating that the Michigan Tax Tri-

The hearing referee’s proposed opinion and judgment (which the

MTT adopted) noted that there was evidence that petitioner had other

unreported income. However, that evidence was disputed, and the

findings of fact set forth by the referee plainly do not include any finding

that petitioner actually received unreported income or, if so, how much.

The MTT’s final opinion bases its ruling solely on its conclusion that

“when adding Petitioner’s 2008 property tax credit to Petitioner’s 2009

Social Security income, Petitioner’s annual household income exceeds the

$10,400 threshold established by Respondent.” MTT Final Opinion and

Judgment, ¶ 4, p 3. We decline to uphold the MTT’s ruling on the basis of

disputed allegations, the evidence of which the MTT itself did not find

convincing enough to include in its official findings of fact.

2012] F

ERRERO V

ALTON

481

ISSENTING

PINION BY

WENS

,J.

bunal (MTT) erred when it concluded that the money

received from a property tax credit under Michigan’s

homestead property tax credit, MCL 206.520(1), should

be treated as income for purposes of petitioner’s quali-

fication for a poverty exemption from property taxes. I

agree with the decision of the MTT and would affirm

the denial of petitioner’s poverty exemption.

In reviewing a decision of the MTT, we consider

“ ‘whether the tribunal erred in applying the law or

adopted a wrong principle.’ ” Klooster v City of Char-

levoix, 488 Mich 289, 295; 795 NW2d 578 (2011) (cita-

tion omitted). Findings of fact are taken as final as long

as they are supported by more than a scintilla of

evidence. Fairplains Twp v Montcalm Co Bd of

Comm’rs, 214 Mich App 365, 372; 542 NW2d 897

(1995). Resolution of this appeal involves a question of

statutory interpretation, which we review de novo.

Klooster, 488 Mich at 295.

“In general, tax [exemption] statutes must be strictly

construed in favor of the taxing authority.” Mich United

Conservation Clubs v Lansing Twp, 423 Mich 661, 664;

378 NW2d 737 (1985). With regard to interpreting

statutory exemptions:

“ ‘An intention on the part of the legislature to grant an

exemption from the taxing power of the State will never be

implied from language which will admit of any other

reasonable construction. Such an intention must be ex-

pressed in clear and unmistakable terms, or must appear

by necessary implication from the language used, for it is a

well-settled principle that, when a specific privilege or

exemption is claimed under a statute,...it is tobecon-

strued strictly against the property owner and in favor of

the public. This principle applies with peculiar force to a

claim of exemption from taxation. Exemptions are never

presumed, the burden is on a claimant to establish clearly

his right to exemption[.]...Inother words,...taxation is

482 295 M

ICH

475 [Feb

ISSENTING

PINION BY

WENS

,J.

the rule, and exemption the exception....Moreover, if an

exemption is found to exist, it must not be enlarged by

construction, since the reasonable presumption is that the

State has granted in express terms all it intended to grant

atall....’”[Stege v Dep’t of Treasury, 252 Mich App 183,

189; 651 NW2d 164 (2002), quoting Guardian Indus Corp

v Dep’t of Treasury, 243 Mich App 244, 249-250; 621 NW2d

450 (2000), quoting Detroit v Detroit Commercial College,

322 Mich 142, 148-149; 33 NW2d 737 (1948), quoting 2

Cooley, Taxation (4th ed), § 672, p 1403.]

The property tax exemption for persons unable to pay

because of poverty is governed by MCL 211.7u, which

provides, in relevant part:

(1) The principal residence of persons who, in the

judgment of the supervisor and board of review, by reason

of poverty, are unable to contribute toward the public

charges is eligible for exemption in whole or in part from

taxation under this act....

(2) To be eligible for exemption under this section, a

person shall do all of the following on an annual basis:

***

(e) Meet the federal poverty guidelines updated annu-

ally in the federal register...or alternative guidelines

adopted by the governing body of the local assessing unit

provided the alternative guidelines do not provide income

eligibility requirements less than the federal guidelines.

***

(4) The governing body of the local assessing unit shall

determine and make available to the public the policy and

guidelines the local assessing unit uses for the granting of

exemptions under this section. The guidelines shall include

but not be limited to the specific income and asset levels of

the claimant and total household income and assets.

2012] F

ERRERO V

ALTON

483

ISSENTING

PINION BY

WENS

,J.

Under the homestead property tax credit, MCL

206.520(1), “[s]ubject to the limitations and the defini-

tions in this chapter, a claimant may claim against the

tax due under this act for the tax year a credit for the

property taxes on the taxpayer’s homestead deductible

for federal income tax purposes....”MCL206.520(3)

allows the credit to be paid directly to the taxpayer if

the credit exceeds the taxpayer’s tax liability. Butcher v

Dep’t of Treasury, 141 Mich App 116, 122; 366 NW2d 15

(1984).

The homestead property tax credit is not a “tax

refund” under MCL 205.30, which states, in part:

(1) The department shall credit or refund an overpay-

ment of taxes; taxes, penalties, and interest erroneously

assessed and collected; and taxes, penalties, and interest

that are found unjustly assessed, excessive in amount, or

wrongfully collected with interest at the rate calculated

under [MCL 205.23] for deficiencies in tax payment.

Respondent characterizes the homestead property tax

credit as a “tax refund.” Were this an actual tax refund,

this money would not be used to calculate petitioner’s

income because it would merely be a return of petition-

er’s own money that had been improperly paid to the

state.

However, the homestead property tax credit is not a

“tax refund”; rather, it is a “refundable tax credit.”

Unlike a tax refund, for which the taxpayer has already

overpaid or incorrectly paid the tax with his or her own

money and is simply reclaiming the money that was

erroneously paid out, a refundable tax credit pays a

taxpayer from state funds a sum equal to a portion of, in

this case, property taxes that were properly paid to a

local government. As such, the homestead property tax

credit is an age- and means-tested program to distribute

money to recipients on the basis of their need, as

484 295 M

ICH

475 [Feb

ISSENTING

PINION BY

WENS

,J.

determined by the formulas in MCL 206.522, in order to

ameliorate the burden of their homestead property

taxes and is not a refund of taxes incorrectly paid. Thus,

the homestead property tax credit is income for pur-

poses of calculating eligibility for the poverty exemption

under MCL 211.7u.

In sum, I would conclude that the MTT did not err by

upholding respondent’s denial of petitioner’s request

for a poverty exemption. Petitioner’s income was prop-

erly calculated by including money she received from

the Michigan homestead property tax credit.

I would affirm.

2012] F

ERRERO V

ALTON

485

ISSENTING

PINION BY

WENS

,J.

INTERNATIONAL UNION, UNITED AUTOMOBILE, AEROSPACE &

AGRICULTURAL IMPLEMENT WORKERS OF AMERICA v

CENTRAL MICHIGAN UNIVERSITY TRUSTEES

Docket No. 299785. Submitted November 2, 2011, at Lansing. Decided

February 28, 2012, at 9:00 a.m.

The International Union, United Automobile, Aerospace & Agri-

cultural Implement Workers of America and UAW Local 6888

filed an action in the Isabella Circuit Court against the Central

Michigan University (CMU) Trustees and the Central Michigan

University President, challenging policies and procedures re-

garding university employees’ candidacy for public office. The

trustees had adopted a policy regarding the political candidacy

of employees in December 2008, and the president had issued a

draft of proposed procedures implementing the candidacy policy

in March 2009. As the collective-bargaining representative for

office professional employees at CMU, plaintiffs filed the com-

plaint on behalf of their members employed by the university,

arguing that the candidacy policy and proposed procedures

violated the Political Activities by Public Employees Act, MCL

15.401 through MCL 15.407. The court, Paul H. Chamberlain,

J., denied plaintiffs’ motion for summary disposition and their

request for declaratory and injunctive relief. It granted sum-

mary disposition in favor of defendants pursuant to MCR

2.116(C)(5) (lack of standing), concluding that the union mem-

bers lacked standing to sue because no employee had suffered a

particular injury because no employee had attempted to become

a candidate since the candidacy policy was implemented. The

court also granted summary disposition in favor of defendants

pursuant to MCR 2.116(C)(10) (no genuine issue of material

fact), concluding that the candidacy policy and draft procedures

did not violate the act because they only regulated political

activities that interfered with work responsibilities and did not

regulate political content, activity, or the views of employees.

Plaintiffs appealed and defendants cross-appealed, but the

cross-appeal was dismissed by stipulation of the parties after

oral argument.

The Court of Appeals held:

486 295 M

ICH

486 [Feb

1. The purpose of a declaratory judgment is to enable the

parties to obtain adjudication of rights before an actual injury

occurs, to settle a matter before it ripens into a violation of the

law or a breach of contract, or to avoid multiplicity of actions by

affording a remedy for declaring in expedient action the rights

and obligations of all litigants. Standing to seek a declaratory

judgment exists whenever a litigant meets the requirements of

MCR 2.605. When a declaratory judgment is necessary to guide

a plaintiff’s future conduct in order to preserve legal rights,

there is an actual controversy and a declaratory judgment may

be issued under MCR 2.605(A)(1), and in those cases courts are

not precluded from reaching issues before actual injuries or

losses have occurred. To establish an “actual controversy”

under the rule, a plaintiff must plead and prove facts that

demonstrate an adverse interest necessitating the sharpening of

the issues raised.

2. The trial court correctly determined that plaintiffs did not

have standing to challenge the draft procedures relating to the

candidacy policy because they were in draft form and had not been

implemented. Any challenge would therefore have been specula-

tive and hypothetical. However, the trial court erred by concluding

that plaintiffs lacked standing to challenge the candidacy policy

even though no university employee had attempted to become a

candidate since its adoption. Plaintiffs presented an actual contro-

versy regarding the scope of the university employee’s rights

under the act and the legitimacy of the candidacy policy. The

university employees had a special and substantial interest that

was different from that of the public at large in ensuring that

defendants’ policies did not violate their statutory rights under the

act.

3. MCL 15.403 and MCL 15.404 permit a public employee to

engage in partisan political activity except during those hours

when that person is being compensated for the performance of

that person’s duties as a public employee. A public employer

may regulate and even prohibit off-duty activity that adversely

interferes with job performance, but the public employer may

not completely curtail an employee’s off-hours activity as a

matter of policy simply because that activity may conceivably

interfere with job performance; rather, it may only deal with the

adequacy of job performance on a case-by-case basis. The trial

court properly determined that the candidacy policy did not

violate the act. It regulated only an employee’s work and not his

or her activities outside work. Under the policy, an employee

must consult with university officials regarding any candidacy,

2012] UAW

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RUSTEES

487

but only to ensure that the employee’s work responsibilities will

not be affected. Defendants had the authority to regulate

on-duty political activity or deal with unsatisfactory job perfor-

mance attributable to off-duty political activity. The trial court

properly denied the declaratory and injunctive relief plaintiffs

sought.

Affirmed in part and reversed in part.

1. A

CTIONS —

TANDING —

ECLARATORY

UDGMENTS

The purpose of a declaratory judgment is to enable the parties to

obtain adjudication of rights before an actual injury occurs, to

settle a matter before it ripens into a violation of the law or a

breach of contract, or to avoid multiplicity of actions by afford-

ing a remedy for declaring in expedient action the rights and

obligations of all litigants; standing to seek a declaratory

judgment exists whenever a litigant meets the requirements of

MCR 2.605; when a declaratory judgment is necessary to guide

a plaintiff’s future conduct in order to preserve legal rights,

there is an actual controversy and a declaratory judgment may

be issued under MCR 2.605(A)(1), and in those cases courts are

not precluded from reaching issues before actual injuries or

losses have occurred; to establish an “actual controversy” under

the rule, a plaintiff must plead and prove facts that demonstrate

an adverse interest necessitating the sharpening of the issues

raised.

2. P

UBLIC

MPLOYEES —

OLITICAL

CTIVITY —

ESTRICTIONS

URING

ORK

A public employee may engage in partisan political activity except

during those hours when that person is being compensated for

the performance of that person’s duties as a public employee; a

public employer may regulate and even prohibit off-duty activ-

ity that adversely interferes with job performance, but a public

employer may not completely curtail an employee’s off-hours

activity as a matter of policy simply because the activity may

conceivably interfere with job performance; rather it may only

deal with the adequacy of job performance on a case-by-case

basis.

Ava R. Barbour for plaintiffs.

Vercruysse Murray & Calzone, PC (by Robert M.

Vercruysse and Gary S. Fealk), for defendants.

488 295 M

ICH

486 [Feb

Before: W

HITBECK

,P.J., and M

URRAY

and D

ONOFRIO

,JJ.

URIAM

. Plaintiffs, the International Union,

United Automobile, Aerospace & Agricultural Imple-

ment Workers of America and UAW Local 6888 (collec-

tively, the Union), appeal the circuit court order grant-

ing summary disposition in favor of defendants, Central

Michigan University Trustees and Central Michigan

University President (collectively, the CMU officials),

under MCR 2.116(C)(10) and MCR 2.116(C)(5).

The

Union is the collective-bargaining representative for

office professional employees of Central Michigan Uni-

versity (the University or CMU), and it filed a com-

plaint on behalf of its members who are employed by

the University. The trial court found that the CMU

officials’ policy and procedures regarding university

employees’ candidacies for public office did not violate

the Political Activities by Public Employees Act (the

Act)

and that the Union’s members suffered no par-

ticularized injury as a result of the policy and proce-

dures. We reverse in part and affirm in part.

I. FACTS

On December 4, 2008, the CMU Board of Trustees

adopted the political candidacy of employees policy

(candidacy policy), which provides, in part:

Employees who seek public office of any kind must do so

on their own time. They must be clear in their statements of

candidacy that they are not speaking on behalf of Central

Michigan University, and they must do everything reasonably

within their control to assure that there is no public misper-

ception on this point. They may not use any university

The CMU officials also filed a cross-appeal. However, the parties

agreed to dismiss those claims after oral argument.

MCL 15.401 through MCL 15.407.

2012] UAW

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ICH

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RUSTEES

489

resources of whatever kind in furtherance of campaign activ-

ity; nor may the university or its employees use any univer-

sity resources to assist, oppose or influence their campaign.

Any employee of the university who becomes a candi-

date for nomination and/or election to any federal, state,

county, or local office, whether it be part-time or full-time,

paid or unpaid, is required, upon filing for candidacy, to

present to the applicable personnel office (either Human

Resources or Faculty Personnel Services) a statement from

her/his supervisor and the applicable vice president or the

provost (or president with respect to members of the

president’s division) of CMU attesting that appropriate

arrangements have been made to ensure that their candi-

dacy in no way will interfere with the full performance of

their university work and that their candidacy will pose no

conflict with professional standards or ethics.

Further, any employee of the university, who is elected

or appointed to any public office, shall present to the

appropriate CMU personnel office, within twenty (20) work

days after having been elected or appointed, a statement

from her/his supervisor and the applicable vice president or

the provost (or president with respect to members of the

president’s division) of CMU attesting that appropriate

arrangements have been made to ensure that the duties

associated with the public office in no way will interfere

with the full performance of their university work and that

those duties pose no conflict of interest with respect to

CMU employment. If the duties associated with the public

office will interfere with the full performance of the em-

ployee’s university work, or do pose a conflict of interest,

then an alternate relationship with the university must be

arranged, which may include a change from full-time

university status to that of part-time, an unpaid leave of

absence, or termination of employment. Reasonable alter-

natives short of termination must be explored. Leaves of

absence for long periods of time, or requests for subsequent

or sequential leaves, will be considered and approved upon

presentation of a compelling advantage to the university.

490 295 M

ICH

486 [Feb

The candidacy policy also includes an introductory

paragraph encouraging employees’ public service and

emphasizing the importance of separating any public

service from their university work.

On March 15, 2009, the president of CMU issued a

draft of procedures and guidelines (draft procedures)

pertaining to the candidacy policy. The draft proce-

dures required employees to discuss their desire to be

a candidate for office with their supervisor and appli-

cable vice president at least 60 days before filing for

candidacy. The draft procedures further provided

that the vice president or provost must be convinced

that no substantial conflict of interest or conflict of

commitment would be involved in becoming a candi-

date. The vice president or provost also had to gain

the president’s support before issuing a statement to

the relevant personnel office. The draft procedures

similarly required an elected or appointed employee

to discuss with his or her supervisor and applicable

vice president or provost, within 20 days of election or

appointment, how the employee’s election or appoint-

ment would not interfere with normal work respon-

sibilities. The vice president or provost had to be

convinced that there was no substantial conflict of

commitment or conflict of interest and also gain the

president’s support before issuing a statement to the

relevant personnel office. The draft procedures fur-

ther provided that if the vice president or provost was

not convinced that there was no conflict of interest or

conflict of commitment, the employee could suggest

an alternative or reduced work assignment or take an

unpaid leave of absence to eliminate any conflict. The

draft procedures stated that any employee who did

not follow the procedures was subject to discipline,

including discharge.

2012] UAW

ENTRAL

ICH

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RUSTEES

491

The Union filed suit, seeking declaratory and injunc-

tive relief preventing the CMU officials from applying

the candidacy policy and the draft procedures. The

Union alleged that the candidacy policy and draft

procedures placed requirements and conditions on em-

ployees that violated their rights to run for office under

the Act. Both parties moved for summary disposition.

The Union argued that the Act barred the CMU

officials from interfering with university employees’

off-duty political conduct and that the candidacy policy

placed conditions on employees’ ability to run for office

when there was no conflict with work. The CMU

officials responded that the candidacy policy properly

regulated employees’ work conduct and was consistent

with the Act.

The CMU officials argued that there was no case for

the trial court to decide because the University had not

applied the candidacy policy to any employees. The

Union responded that they did not lack standing be-

cause there was an actual controversy given that the

candidacy policy threatened to harm employees repre-

sented by the Union.

The trial court granted the CMU officials’ motion for

summary disposition according to MCR 2.116(C)(10)

(no genuine issue of material fact) and MCR 2.116(C)(5)

(lack of standing to sue). With respect to MCR

2.116(C)(10), the trial court concluded that the candi-

dacy policy and draft procedures did not violate the Act

because they were a permissible mechanism to ensure

that university employees adhered to the Act by regu-

lating only political activities that interfered with work.

The trial court also found that the CMU officials did not

regulate political content, activity, or views of employ-

ees and provided discipline only for violating the candi-

dacy policy and the procedures. With respect to MCR

492 295 M

ICH

486 [Feb

2.116(C)(5), the trial court concluded that the Union’s

members had suffered no particular injury because the

candidacy policy adhered to the Act and because no one

had attempted to become a candidate since the Univer-

sity implemented the candidacy policy. The trial court

also denied the Union’s motion for summary disposition

and denied its request for declaratory and injunctive

relief.

The Union now appeals.

II. MCR 2.116(C)(5)

A. STANDARD OF REVIEW

The Union argues that the trial court erred by

granting summary disposition in favor of the CMU

officials under MCR 2.116(C)(5) on the basis of lack of

standing to sue. “ ‘In reviewing a motion for summary

disposition pursuant to MCR 2.116(C)(5), this Court

must consider the pleadings, depositions, admissions,

affidavits, and other documentary evidence submitted

by the parties.’ ”

This Court reviews de novo a trial

court’s determination on a motion for summary dispo-

sition

as well as the legal question of whether a party

has standing to sue.

B. LEGAL STANDARDS

The trial court found that the Union’s members

suffered no injury because none of the Union’s mem-

bers had attempted to become a candidate for public

office since the University implemented the candidacy

Aichele v Hodge, 259 Mich App 146, 152; 673 NW2d 452 (2003)

(citation omitted).

Ormsby v Capital Welding, Inc, 471 Mich 45, 52; 684 NW2d 320

(2004).

Manuel v Gill, 481 Mich 637, 642-643; 753 NW2d 48 (2008).

2012] UAW

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493

policy and because the University had not implemented

the draft procedures. The trial court concluded that it

was unlikely to redress any speculative injury because it

found that the policy was legal. In so holding, the trial

court relied on the principles set forth in Nat’l Wildlife

Federation v Cleveland Cliffs Iron Co

and Mich Citi-

zens for Water Conservation v Nestlé Waters North

America Inc.

However, two days before the trial court’s

opinion, the Michigan Supreme Court held in Lansing

Sch Ed Ass’n v Lansing Bd of Ed

that the doctrine

relied on in those cases “lacks a basis in the Michigan

Constitution and is inconsistent with Michigan’s his-

torical approach to standing.”

The Supreme Court held:

Michigan standing jurisprudence should be restored to a

limited, prudential doctrine that is consistent with Michi-

gan’s longstanding historical approach to standing. Under

this approach, a litigant has standing whenever there is a

legal cause of action. Further, whenever a litigant meets

the requirements of MCR 2.605, it is sufficient to establish

standing to seek a declaratory judgment. Where a cause of

action is not provided at law, then a court should, in its

discretion, determine whether a litigant has standing. A

litigant may have standing in this context if the litigant has

a special injury or right, or substantial interest, that will be

detrimentally affected in a manner different from the

citizenry at large or if the statutory scheme implies that

the Legislature intended to confer standing on the liti-

gant.

[

]

Nat’l Wildlife Federation v Cleveland Cliffs Iron Co, 471 Mich 608,

628-629; 684 NW2d 800 (2004).

Mich Citizens for Water Conservation v Nestlé Waters North America

Inc, 479 Mich 280, 294-295; 737 NW2d 447 (2007).

Lansing Sch Ed Ass’n v Lansing Bd of Ed, 487 Mich 349, 352-353;

792 NW2d 686 (2010).

Id. at 372.

494 295 M

ICH

486 [Feb

In so stating, the Supreme Court overruled Nat’l

Wildlife Federation and its progeny. Therefore, under

the current approach, it is sufficient to establish stand-

ing to seek a declaratory judgment when a litigant

meets the requirements of MCR 2.605.

MCR 2.605(A)(1) provides:

In a case of actual controversy within its jurisdiction, a

Michigan court of record may declare the rights and other

legal relations of an interested party seeking a declaratory

judgment, whether or not other relief is or could be sought

or granted.

MCR 2.605 does not limit or expand the subject-matter

jurisdiction of the courts, but instead incorporates the

doctrines of standing, ripeness, and mootness.

An “ac-

tual controversy” under MCR 2.605(A)(1) exists when a

declaratory judgment is necessary to guide a plaintiff’s

future conduct in order to preserve legal rights. The

requirement prevents a court from deciding hypothetical

issues.

However, by granting declaratory relief in order

to guide or direct future conduct, courts are not precluded

from reaching issues before actual injuries or losses have

occurred.

The essential requirement of an “actual con-

troversy” under the rule is that the plaintiff pleads and

proves facts that demonstrate an “ ‘adverse interest ne-

cessitating the sharpening of the issues raised.’ ”

Id.

MOSES, Inc v SEMCOG, 270 Mich App 401, 416; 716 NW2d 278

(2006).

Associated Builders & Contractors v Dir of Consumer & Indus Servs,

472 Mich 117, 126; 693 NW2d 374 (2005), overruled on other grounds in

Lansing Sch Ed Ass’n, 487 Mich 349.

Huntington Woods v Detroit, 279 Mich App 603, 616; 761 NW2d 127

(2008); Lake Angelus v Aeronautics Comm, 260 Mich App 371, 376-377;

676 NW2d 642 (2004).

Associated Builders & Contractors, 472 Mich at 126.

2012] UAW

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495

C. APPLYING THE LEGAL STANDARDS

At the outset, we conclude that the trial court was

correct by determining that the Union did not have

standing to the extent that it challenged the draft

procedures. Guidance on the future implications of the

draft procedures would be speculative and hypothetical

because those procedures were still in draft form and

the University had not yet implemented them.

Turning to the candidacy policy, it is true that the

Union’s members had suffered no injury because no

university employee had attempted to become a candi-

date since the University adopted the policy in Decem-

ber 2008.

However, applying MCR 2.605, we conclude

that the Union has standing to pursue its claims for

declaratory and injunctive relief because it presented an

actual controversy regarding the scope of the university

employees’ rights under the Act and the legitimacy of

the candidacy policy. To hold otherwise would be incon-

sistent with the purpose of a declaratory judgment,

which is

to enable the parties to obtain adjudication of rights before

an actual injury occurs, to settle a matter before it ripens

into a violation of the law or a breach of contract, or to

avoid multiplicity of actions by affording a remedy for

declaring in expedient action the rights and obligations of

all litigants.

[

]

There is an actual controversy between the parties

because the CMU officials promulgated a policy that is

allegedly at odds with a state statute. And although no

MOSES, 270 Mich App at 414 (providing that organizations have

standing to bring suit in the interest of their members when those

members would have standing as individual plaintiffs).

Rose v State Farm Mut Auto Ins Co, 274 Mich App 291, 294; 732

NW2d 160 (2006) (emphasis added).

496 295 M

ICH

486 [Feb

university employee has yet sought to run for office, it

is appropriate for the Union to seek an adjudication of

its members’ rights and responsibilities before the

candidacy policy causes actual injury or ripens into a

violation of the law by interfering with the employees’

ability to engage in off-duty political activity.

Moreover, applying the principles announced in Lan-

sing Sch Ed Ass’n, the Union has standing because the

university employees have a special and substantial

interest in ensuring that the CMU officials’ policies do

not violate their statutory rights under the Act, and

that interest is different from any rights or interests of

the public at large.

Thus, we conclude that the trial court erred by

finding that the Union had not presented an actual

controversy and by determining that the Union did not

have standing to seek declaratory and injunctive relief

regarding the university employees’ rights under the

candidacy policy.

III. MCR 2.116(C)(10)

A. STANDARD OF REVIEW

The Union argues that the trial court erred by

granting the CMU officials’ motion for summary dispo-

sition pursuant to MCR 2.116(C)(10). When reviewing a

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.

Summary disposition is appropriate if there is no genu-

ine issue regarding any material fact and the moving

Lansing Schools Ed Ass’n, 487 Mich at 372.

Rose v Nat’l Auction Group, Inc, 466 Mich 453, 461; 646 NW2d 455

(2002).

2012] UAW

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497

party is entitled to judgment as a matter of law.

This

Court reviews de novo a trial court’s determination on

a motion for summary disposition.

B. LEGAL STANDARDS

MCL 15.403 of the Act provides, in relevant part:

(1) An employee of a political subdivision of the state may:

***

state elective office, or any district, county, city, village,

township, school district, or other local elective office without

first obtaining a leave of absence from his employment. If the

person becomes a candidate for elective office within the unit

of government or school district in which he is employed,

unless contrary to a collective bargaining agreement the

employer may require the person to request and take a leave

of absence without pay when he complies with the candidacy

filing requirements, or 60 days before any election relating to

that position, whichever date is closer to the election.

(d) Engage in other political activities on behalf of a

candidate or issue in connection with partisan or nonpar-

tisan elections.

The activities permitted in MCL 15.403 “shall not be

actively engaged in by a public employee during those

hours when that person is being compensated for the

performance of that person’s duties as a public em-

ployee.”

The language of the Act is unambiguous.

A public

employee may engage in partisan political activity ex-

Id.

Ormsby, 471 Mich at 52.

MCL 15.404.

Mich State AFL-CIO v Civil Serv Comm, 455 Mich 720, 734; 566

NW2d 258 (1997).

498 295 M

ICH

486 [Feb

cept “during those hours when that person is being

compensated for the performance of that person’s du-

ties as a public employee.”

C. APPLYING THE LEGAL STANDARDS

Given our conclusion that the Union did not have

standing to challenge the draft procedures, we need not

address the Union’s claims regarding the implications

of those procedures. Thus, we focus our analysis on the

legitimacy of the candidacy policy.

The Union argues that the candidacy policy violated

the Act because it interferes with its members’ ability to

engage in political activities during nonwork hours.

More specifically, the Union asserts that the candidacy

policy violates the Act because it requires an employee

to provide advance notice and engage in advance dis-

cussion with two levels of superiors when seeking to

participate in political office. Those superiors must then

attest that the political activity will not present a

conflict of interest or interfere with employment. The

candidacy policy further provides that failure to dem-

onstrate that political candidacy activities will not in-

terfere with university activities could affect the em-

ployee’s job status.

The Michigan Supreme Court has recognized a public

employer’s

power to regulate and even prohibit off-duty activity which

is found to interfere with job performance.

That power does not extend, however, to the blanket

prohibition of off-duty activities, political or otherwise, as a

matter of policy simply because such activities may con-

ceivably interfere with satisfactory job performance. What

an employee does during his off-duty hours is not of proper

MCL 15.404; see also Mich State AFL-CIO, 455 Mich at 734.

2012] UAW

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499

concern to the [public employer] unless and until it is

shown to adversely affect job performance. Even then the

[public employer’s] authority is not to curtail the off-hours

activity, it is to deal with the adequacy of job performance.

Certainly, it is within contemplation that off-duty political

involvement may adversely affect a [public] employee’s

performance at work. If and when it does, the [public

employer] is empowered to deal with such circumstances

on a case-by-case basis.

[

]

But public employers may not regulate the off-duty

political activity of their employees in any way that

preemptively conflicts with the Act.

The trial court found that the candidacy policy did

not violate the Act because it does “not restrict an

employee’s rights to engage in political activity and

do[es] not hinge in any way on the political content or

position an employee purports, nor do[es] [it] provide a

blanket ban on an employee’s off-duty political activ-

ity.” We agree. The candidacy policy only regulates an

employee’s work and not an employee’s activities out-

side of work. It does require consultation with the CMU

officials regarding an employee’s political candidacy,

but this is to ensure that an employee’s work responsi-

bilities will not be affected. The CMU officials are

empowered to deal with circumstances in which off-

work political involvement may adversely affect an

employee’s performance at work.

The CMU officials

have the authority to regulate “on-duty political activ-

ity or deal with unsatisfactory job performance attrib-

utable to off-duty political activity or any other cause on

a case-by-case basis.”

The state may regulate the

Council No 11 AFSCME v Civil Serv Comm, 408 Mich 385, 407; 292

NW2d 442 (1980) (citations omitted).

Id. at 408.

Id. at 407.

Id. at 409.

500 295 M

ICH

486 [Feb

off-duty political activities of public employees when

those activities interfere with job performance.

The candidacy policy specifically requires that “appro-

priate arrangements have been made to ensure that their

candidacy in no way will interfere with the full perfor-

mance of their university work and that their candidacy

will pose no conflict with professional standards or eth-

ics.” The candidacy policy does not curtail activities out-

side work and does not potentially curtail any work

responsibility that was affected by activity outside work.

The assurances that the policy requires are not whether

or how an employee will seek political office. Rather, the

assurances are that this activity will not interfere with

work. Additionally, any discipline or leave of absence that

a candidate/employee could be assessed would be in re-

sponse to political activities at work, rather than off-duty

political pursuits. An employer may prohibit political

activity during work hours when the employer compen-

sates the employee and that compensation is for the

performance of the employee’s duties as a public em-

ployee.

It was therefore permissible for the CMU

officials to regulate the Union members’ work environ-

ment, and the trial court did not err in its findings.

Because the trial courts’ properly determined that

the CMU officials’ candidacy policy did not violate the

Act, it correctly denied declaratory and injunctive relief.

We reverse in part and affirm in part. We do not

retain jurisdiction.

HITBECK

,P.J., and M

URRAY

and D

ONOFRIO

, JJ., con-

curred.

Mich State AFL-CIO, 455 Mich at 733.

Id. at 734.

2012] UAW

ENTRAL

ICH

NIV

RUSTEES

501

36th DISTRICT COURT v MICHIGAN AMERICAN FEDERATION OF

STATE, COUNTY & MUNICIPAL EMPLOYEES COUNCIL 25,

LOCAL 917

Docket No. 298271. Submitted January 4, 2012, at Detroit. Decided

February 28, 2012, at 9:05 a.m. Reversed in part, 493 Mich 879.

The 36th District Court brought an action in the Wayne Circuit Court

against the Michigan American Federation of State, County &

Municipal Employees Council 25, Local 917 (AFSCME Local 917),

seeking to vacate an arbitrator’s award that determined that certain

grievances were arbitrable under the terms of a collective-bargaining

agreement (CBA) and challenging the arbitrator’s decision that the

district court did not have just cause for not reappointing four court

officers and that those officers were to be reinstated to their former

positions. The district court and AFSCME Local 917 were parties to

a CBA that was in effect from June 30, 2003, through June 30, 2006.

The CBA was to remain in effect for consecutive yearly periods after

that date unless either party gave written notice of its desire to

modify, amend, or terminate the contract 90 days before the end date,

which the district court did. Two court officers, Bobby Jones and

Carlton Carter, were not reappointed to their positions by the chief

judge in 2004, while two other court officers, Richard Weatherly and

Roderick Holley, were not reappointed to their positions in 2007. In

an earlier action in this matter, AFSCME Local 917 had moved to

compel the district court to arbitrate the termination of employment

of the four individuals in accordance with the CBA. The circuit court,

Jeanne Stempien, J., entered an order requiring that an arbitration

hearing be held. The arbitrator ultimately rendered two decisions.

The arbitrator first determined that the grievances were arbi-

trable and then, after concluding the district court did not have

just cause for not reappointing the four court officers, ordered

that each grievant be reinstated to his former position with

back pay from the date he was not reappointed. Following those

decisions by the arbitrator, the district court filed this action to

vacate the arbitrator’s decisions and awards, arguing that they

violated MCR 3.106(C) and that the awards exceeded the

arbitrator’s contractual authority under the CBA. It further

argued that the CBA did not apply to the grievances of Weath-

erly and Holley because their claims accrued in 2007, after the

502 295 M

ICH

502 [Feb

CBA had expired. The circuit court determined that the claims

raised by AFSCME Local 917 were arbitrable and granted its

motion for summary disposition. The district court appealed.

The Court of Appeals held:

1. Whether a contract to arbitrate exists and the enforceability

of its terms is a judicial question that cannot be decided by an

arbitrator. The parties must provide clear and unmistakable

evidence in a contract that they agreed to remove the arbitrability

issue from the court’s jurisdiction. The trial court erred by ruling

that the arbitrator had the authority to decide whether the CBA

had terminated. A court, not an arbitrator, must decide whether a

contract that contains a contractual duty to arbitrate has been

terminated or is still in effect and thus mandates arbitration. The

CBA did not contain clear and unmistakable language granting the

arbitrator authority to determine the issue of arbitrability. Al-

though the court erred by not deciding this issue, it could none-

theless be decided on appeal.

2. A notice to terminate a contract must be clear and explicit.

A notice of modification is not a notice of termination and does not

operate to terminate the CBA. A notice that refers to an intent to

both modify and terminate a contract, without specifying which, is

ambiguous and does not operate to terminate or modify the

contract. The district court’s letter indicating an intent to modify,

amend, or terminate the agreement was ambiguous and did not

terminate the agreement. Accordingly, the contract automatically

extended for one more year on June 30, 2006, and the issues raised

by all four grievants were subject to arbitration under the terms of

the CBA.

3. Review of an arbitrator’s decision is limited. A court may not

review an arbitrator’s factual findings but may review whether the

arbitrator acted within the scope of his or her contractual author-

ity or made an error of law that clearly appears on the face of the

award. The trial court did not err by determining that the disputed

issue of what constituted disciplinary action was within the terms

of the CBA. The arbitrator had the authority to determine

whether disciplinary action taken under the CBA included reap-

pointment decisions because it involved an issue of contract

interpretation and the CBA had not expressly excluded reappoint-

ment decisions from arbitration.

4. The judicial branch is constitutionally accountable for

individuals who provide court services. The chief judge of a

district court retains a measure of supervision over the duties

2012] 36

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AFSCME L

OCAL

917 503

performed by court officers to ensure the sound administration of

justice within the judicial district. Under MCR 3.106(C), court officers

are appointed by the chief judge for a term of not more than two

years. The rule does not preclude a chief judge from agreeing to use

a just-cause standard for making reappointment decisions. The CBA

required that all employment decisions would be subject to a just-

cause standard. The arbitrator’s decision that required the chief

judge to use a just-cause standard of review when making reappoint-

ment decisions did not contravene a controlling principle of law

because the court rule does not state what standard, if any, should

apply to the reappointment decision. The arbitrator’s decision was

not contrary to law because he construed the CBA in harmony with

MCR 3.106. However, the arbitrator exceeded his contractual author-

ity by requiring that each of the four grievants be reinstated and

reappointed to their former positions of court officer because under

MCR 3.106(C), only the chief judge has authority to make appoint-

ment or reappointment decisions.

Affirmed in part, vacated in part, and remanded to the circuit

court with directions to remand the matter to the arbitrator for a

determination of an appropriate remedy.

1. A

RBITRATION —

OLLECTIVE

ARGAINING —

XISTENCE AND

ERMINATION OF

GREEMENT —

UDICIAL

EVIEW

Whether a contract to arbitrate exists or has terminated, and the

enforceability of its terms, are judicial questions that cannot be

decided by an arbitrator; the parties must provide clear and

unmistakable evidence in a contract that they agreed to remove

the arbitrability issue from the court’s jurisdiction.

2. L

ABOR

ELATIONS —

OLLECTIVE

ARGAINING —

ERMINATION OF

GREEMENT

—

OTICE

A notice to terminate a collective-bargaining agreement must be

clear and explicit; a notice of a desire to modify the collective-

bargaining agreement is not a notice of termination and does not

operate to terminate the contract; a notice that refers to an intent

to both modify and terminate a contract, without specifying which,

is ambiguous and does not operate to terminate or modify the

contract; an ambiguous notice of an intent to modify, amend, or

terminate a collective-bargaining agreement does not terminate

the agreement.

3. A

RBITRATION —

OLLECTIVE

ARGAINING —

UDICIAL

EVIEW OF

RBITRATION

WARDS

An individual’s right to arbitrate must be based on a viable contrac-

tual right to arbitration, and review of an arbitrator’s decision is

504 295 M

ICH

502 [Feb

limited; a court may not review an arbitrator’s factual findings but

may review whether the arbitrator acted within the scope of his or

her contractual authority or made an error of law that clearly

appears on the face of the award.

Kotz, Sangster, Wysocki & Berg, P.C. (by Matthew S.

Derby and Heather Gelfand Ptasznik), for plaintiff.

Miller Cohen, P.L.C. (by Robert D. Fetter and Austin

W. Garrett), for defendant.

Before: M

URRAY

,P.J., and T

ALBOT

and S

ERVITTO

,JJ.

URRAY

,P.J. Plaintiff, the 36th District Court, ap-

peals as of right from an order granting a motion for

summary disposition filed by defendant, Michigan

American Federation of State, County and Municipal

Employees (AFSCME) Council 25, Local 917, with

respect to the 36th District Court’s request to vacate an

arbitration award. We affirm in part, vacate in part, and

remand.

I. FACTUAL AND PROCEDURAL BACKGROUND

The 36th District Court and AFSCME Local 917

were parties to a collective-bargaining agreement

(CBA) that applied to court officers and had a term of

June 30, 2003-June 30, 2006. This case arises from the

decision of the 36th District Court chief judge to not

reappoint four individuals as court officers. Two of the

individuals, Bobby Jones and Carlton Carter, were not

reappointed in 2004. The other two individuals, Richard

Weatherly and Roderick Holley, were not reappointed in

2007.

Each of the four individuals challenged the termina-

tion of his employment by filing (at different times)

grievances and demands for arbitration. With respect to

2012] 36

IST

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AFSCME L

OCAL

917 505

the expiration of the CBA, Article 27 provided that it

would be effective until June 30, 2006, but also stated:

This Agreement shall continue in effect for consecutive

yearly periods after June 30, 2006, unless notice is given, in

writing, by either the Union or the Employer, to the other

party at least ninety (90) days prior to June 30, 2006, or

any anniversary date thereafter, of its desire to modify,

amend or terminate this Agreement.

If such notice is given, this Agreement shall be open to

modification, amendment or termination, as such notice

may indicate on June 30, 2006, or the subsequent anniver-

sary date, as the case may be.

The 36th District Court had given notice 90 days before

June 30, 2006, indicating a desire to modify, amend or

terminate the agreement, and so took the position that

the grievances were not subject to any arbitration

agreement since the CBA had expired under Article 27.

Additionally, it was and is the position of the 36th

District Court that the appointment of court officers is

governed by MCR 3.106, which provides that court

officers are to be appointed by the chief judge of a court

for terms not to exceed two years.

A. BACKGROUND FACTS FROM THE 2007

WAYNE CIRCUIT COURT CASE

In 2007, AFSCME Local 917 filed an action against

the 36th District Court in the Wayne Circuit Court,

seeking to compel the 36th District Court to arbitrate

the termination of the employment of the four individu-

als in accordance with the CBA. On June 12, 2008, the

circuit court entered an order requiring that an arbi-

tration hearing be held within 60 days. The 36th

District Court appealed that order, which was assigned

Docket No. 286432 in this Court.

506 295 M

ICH

502 [Feb

While the appeal in Docket No. 286432 was still

pending, the arbitrator rendered two decisions. In his

first decision the arbitrator determined that the griev-

ances were arbitrable, while in the second decision

issued six months later, the arbitrator determined that

the 36th District Court did not have just cause for

terminating, or more precisely for not reappointing, the

four grievants. Each grievant was to be reinstated to his

former position and receive back pay effective from the

date of termination or nonreappointment.

In August 2009, the 36th District Court filed a

motion to remand in Docket No. 286432, requesting

that the case be remanded to the trial court for a

judicial decision on the issue of arbitrability. This Court

granted the motion and ordered that the two lower

court cases (the second case is discussed immediately

below) be consolidated. AFSCME v 36th Dist Court,

unpublished order of the Court of Appeals, entered

September 2, 2009 (Docket No. 286432).

B. THE INSTANT CASE

Before the motion to remand was filed in the prior

case, the 36th District Court filed this action to vacate

the arbitration decisions and awards on the ground that

they violated the law and public policy as set forth in

MCR 3.106, that the awards exceeded the arbitrator’s

contractual authority, and that the awards did not draw

their essence from the CBA. The 36th District Court

also alleged that the CBA did not apply to the griev-

ances of Weatherly and Holley because their claims

accrued after the CBA expired.

AFSCME Local 917 eventually moved for summary

disposition on the ground that the disputed grievances

were arbitrable, and also sought to enforce the arbitra-

tion awards. Less than a month later, the 36th District

2012] 36

IST

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AFSCME L

OCAL

917 507

Court moved to vacate the arbitration decisions and

awards or, alternatively, for an evidentiary hearing to

determine the issue of arbitrability. After a hearing and

the filing of supplemental briefs the trial court deter-

mined in a written opinion and order that the claims

raised by AFSCME Local 917 were arbitrable and

granted its motion for summary disposition. This case is

now before us on an appeal of right.

II. STANDARD OF REVIEW

We review de novo a trial court’s ruling on a motion

for summary disposition. Coblentz v City of Novi, 475

Mich 558, 567; 719 NW2d 73 (2006). Although the trial

court did not specify the particular subrule of MCR

2.116(C) under which it granted the motion for sum-

mary disposition, review is appropriate under MCR

2.116(C)(10) because the parties relied on evidence

outside the pleadings. Spiek v Dep’t of Transp, 456 Mich

331, 338; 572 NW2d 201 (1998). A motion under MCR

2.116(C)(10) should be granted only if the submitted

evidence fails to establish a genuine issue of material

fact and the moving party is entitled to judgment as a

matter of law. Allison v AEW Capital Mgt, LLP, 481

Mich 419, 424-425; 751 NW2d 8 (2008).

We also review de novo a trial court’s decision to

enforce, vacate, or modify an arbitration award. Ann

Arbor v AFSCME Local 369, 284 Mich App 126, 144;

771 NW2d 843 (2009). Labor arbitration falls within the

realm of the common law, id., where judicial review of

an arbitration decision is limited, City of Ferndale v

Florence Cement Co, 269 Mich App 452, 460; 712 NW2d

522 (2006). A court may not review an arbitrator’s

factual findings, Ann Arbor, 284 Mich App at 144;

Lenawee Co Sheriff v Police Officers Labor Council, 239

Mich App 111, 118; 607 NW2d 742 (1999), but may

508 295 M

ICH

502 [Feb

review whether the arbitrator acted within the scope of

his or her contractual authority, Lenawee Co Sheriff,

239 Mich App 118. A court may also review an arbitra-

tor’s award for an error of law that clearly appears on

the face of the award or in the reasons stated by the

arbitrator for the decision. DAIIE v Gavin, 416 Mich

407, 441-443; 331 NW2d 418 (1982). The error must be

“so material or so substantial as to have governed the

award, and but for which the award would have been

substantially otherwise.” Id. at 443. “[A]rbitrators can

fairly be said to exceed their power whenever they act

beyond the material terms of the contract from which

they primarily draw their authority, or in contravention

of controlling principles of law.” Id. at 434.

III. CONTRACT PERIOD OF THE CBA

Although the 36th District Court argues that the

trial court failed to decide on remand whether the

grievances were arbitrable, i.e., whether the CBA ex-

pired before the chief judge declined to reappoint

Weatherly and Holley in 2007, the record belies this

assertion.

The trial court unquestionably complied

with the remand order, and clearly decided the arbitra-

bility issue. The 36th District Court’s real beef is the

rationale utilized by the trial court, which we shall now

examine.

There is an exception to the substantial judicial deference given to

arbitration awards. As we stated in Gogebic Med Care Facility v AFSCME

Local 992, 209 Mich App 693, 697; 531 NW2d 728 (1995), “[a]s an

exception to the general rule of judicial deference, we have recognized

that a court may refuse to enforce an arbitrator’s decision when it is

contrary to public policy.” However, the 36th District Court does not

argue that the arbitration award reinstating the grievants violates the

public policy of MCR 3.106.

We state the obvious in noting that this issue only pertains to

Weatherly and Holley, as Jones and Carter were not reappointed during

the term of the CBA and filed their demands for arbitration in 2005.

2012] 36

IST

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AFSCME L

OCAL

917 509

An individual’s right to arbitrate must be based on a

viable contractual right to arbitration. Ottawa Co v

Jaklinski, 423 Mich 1, 13; 377 NW2d 668 (1985). “The

existence of a contract to arbitrate and the enforceabil-

ity of its terms is a judicial question which cannot be

decided by an arbitrator.” Arrow Overall Supply Co v

Peloquin Enterprises, 414 Mich 95, 99; 323 NW2d 1

(1982). Absent a binding contract, the parties cannot be

required to arbitrate issues that arise between them.

Florence Cement, 269 Mich App at 460; AFSCME Coun-

cil 25 v Wayne Co, 290 Mich App 348, 350; 810 NW2d 53

(2010).

The parties never disputed that the CBA contained

an arbitration provision for grievances. Indeed, Article

8, § 1 of the CBA specifies:

In the event differences should arise between the Em-

ployer and the Union during the term of this Agreement as

to the interpretation and application of any of its provisions,

the parties shall act in good faith to promptly resolve such

differences in accordance with the following procedure.

[Emphasis added.]

Article 8, § 10 provides for arbitration to resolve

unresolved grievances which relate to the interpretation,

application, or enforcement of any specific Article and

Section of this Agreement, or any written Supplementary

Agreement, which have been fully processed through the

last step of the Grievance Procedure as herein provided

may be submitted to arbitration....[Emphasis added.]

The material question instead is whether the term of

the CBA had ended, and therefore no contract to

arbitrate existed, when court officers Weatherly and

Although some issues do survive expiration of a collective-bargaining

agreement, the right to only be terminated for just cause does not extend

beyond the life of the contract. Jaklinski, 423 Mich at 27.

510 295 M

ICH

502 [Feb

Holley were not reappointed in 2007. As noted earlier,

Article 27 of the CBA provides:

This Agreement shall become effective and binding on

date of signing and remain in full force and effect until

June 30, 2006.

This Agreement shall continue in effect for consecutive

yearly periods after June 30, 2006, unless notice is given, in

writing, by either the Union or the Employer, to the other

party at least ninety (90) days prior to June 30, 2006, or

any anniversary date thereafter, of its desire to modify,

amend or terminate this Agreement.

If such notice is given, this Agreement shall be open to

modification, amendment or termination, as such notice

may indicate on June 30, 2006, or the subsequent anniver-

sary date, as the case may be.

In concluding that whether the CBA was terminated

by the 36th District Court’s March 1, 2006, letter was

arbitratable, the trial court relied on the unpublished

decision in Int’l Ass’n of Bridge Workers Local No 44 v

J & N Steel & Erection Co, Inc, 8 Fed Appx 381 (CA 6,

2001), which held that it is for the arbitrator, not the

court, to decide whether a contract has been termi-

nated. We are by no means bound to follow federal

caselaw interpreting a federal law similar in language to

our state law, but we can look to it for guidance. Murad

v Prof & Admin Union Local 1979, 239 Mich App 538,

542; 609 NW2d 588 (2000). Although the Sixth Circuit

case relied on by the trial court and AFSCME Local 917

is an unpublished decision, there are many published

decisions from the federal circuit courts of appeal that

hold the same as did the J & N Steel court, including

Provisions like Article 27, that contain an automatic renewal of the

contract period if certain notice is not given with a prescribed time, are

generally referred to as an “evergreen clause.” Vulcan Materials Co v

Atofina Chems Inc, 355 F Supp 2d 1214, 1240 (D Kan, 2005).

2012] 36

IST

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AFSCME L

OCAL

917 511

the Sixth Circuit in Teamsters Local Union No 89 v

Kroger Co, 617 F3d 899, 906-907 (CA 6, 2010).

Indeed, numerous federal courts have concluded that

when the contract contains a broad arbitration clause it

is for the arbitrator, not the court, to decide whether a

termination provision in a contract applies or has been

properly invoked. See, e.g., Brotherhood of Teamsters &

Auto Truck Drivers Local 70 v Interstate Distrib Co, 832

F2d 507, 511 (CA 9, 1987) (“When the collective bar-

gaining agreement contains a broad arbitration clause,

the question whether a particular act or failure to act

effectively serves to terminate the agreement is to be

resolved by an arbitrator.”); Acequip Ltd v American

Engineering Corp, 315 F3d 151, 155-156 (CA 2, 2003);

Unite Here Local 217 v Sage Hospitality Resources, 642

F3d 255, 259-260 (CA 1, 2011). And, more specific to

this case, at least one court has held that it is for the

arbitrator to decide whether the employer’s notice to

terminate the contract complied with the notice of

termination provision within the contract. Rochdale

Village, Inc v Pub Serv Employees Union, Local No 80,

605 F2d 1290, 1295-1296 (CA 2, 1979); see, also, Mont-

gomery Mailers’ Union No 127 v Advertiser Co, 827 F2d

709, 713 (CA 11, 1987).

The rationale of these cases seems to be that because

how a particular clause (like a termination clause) is to

be interpreted and applied typically falls within the

broad language of an arbitration clause, arbitrators

must decide these issues. For example, in Interstate

Distrib, 832 F2d at 512, the court held that the effect

the parties’ letters had under the termination clause

was an issue of contract interpretation to be decided by

the arbitrator:

In the present case, Interstate sent a letter to the union

requesting modification of the agreement. It contends that

512 295 M

ICH

502 [Feb

under the agreement this request served to terminate the

contract between the parties as of the end of March. A week

later, the Union stated that it, too, was willing to “open”

the contract, apparently for negotiations. In June, the

company again wrote the union, this time saying that it

was withdrawing recognition. The parties are in agreement

as to the facts. They disagree only as to the meaning and

effect of the exchange of letters—as to whether it served to

terminate the contract or merely provided an opportunity

for renewed bargaining. It is not our role to pass on the

merits of the parties’ respective positions regarding the

meaning and effect of the letters under their collective

bargaining agreement.

Likewise, in Sage Hospitality Resources, 642 F3d at

259-261, the First Circuit held that the meaning of a

duration clause in the contract is manifestly a matter of

interpretation for the arbitrator, particularly when the

arbitration clause is broad. In general, an arbitration

provision that covers all disputes pertaining to the

application and interpretation of a contract is consid-

ered broad in scope, while an arbitration clause limited

to the issues it covers, like one that is limited to only

resolving employee grievances, is considered narrow in

scope. New England Cleaning Servs, Inc v Servs Em-

ployees Int’l Union Local 254, AFL-CIO, 199 F3d 537,

541 (CA 1, 1999).

However, as the United States Court of Appeals for

the Eleventh Circuit recognized in discussing this gen-

erally supported rule, not all federal courts are in

harmony on this issue. In Advertiser Co, 827 F2d at 713,

the court cited many of the cases noted above, but also

cited the Sixth Circuit decision in Office & Prof Em-

ployees Int’l Union, Local 42 v United Auto, Aerospace

& Agricultural Implement Workers of America, 524 F2d

1316 (CA 6, 1975), as taking a contrary position. One of

the issues in that case was “whether the district judge

should have submitted to the arbitrator the determina-

2012] 36

IST

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AFSCME L

OCAL

917 513

tion whether the collective bargaining agreement had

been terminated by the notice.” Office & Prof Employ-

ees, 524 F2d at 1316. Though there are no facts telling

us the details of the dispute, the court held that

“[c]learly, it was for the district judge, not the arbitra-

tor, to decide whether the contract had terminated.” Id.

Similarly, in an earlier decision, Local Union No 998

Int’l Union, United Auto, Aircraft & Agricultural

Implement Workers of AmericavB&TMetals Co, 315

F2d 432 (CA 6, 1963),

the Sixth Circuit reversed a

district court’s order compelling arbitration. In that

case the employer sent a termination letter pursuant to

a termination clause like the one involved in this case,

and the contract end date came and went without a new

contract. Id. at 434-435. Eventually a new contract was

agreed to, but several grievances were filed regarding

issues that arose during the intervening time between

the two contracts. Id. at 435. The employer refused to

arbitrate on the ground that no contract existed at the

time, and the union argued that whether the contract

actually expired was a matter for arbitration. Id. The

district court agreed with the union, but the Sixth

Circuit reversed. In doing so, the court recognized that

if the agreement terminated according to its terms, and

was not kept alive by the actions of the parties, then

neither party had an obligation to arbitrate any matter

arising after the contract ended. Id. at 435-436. Impor-

tantly, the court also opined that in principle there was

no difference between a court deciding if a contract

existed based on facts existing at its execution or

subsequent thereto, as the question under either sce-

B & T Metals was decided after the United States Supreme Court’s

“Steelworker’s trilogy” that articulated the strong presumption in favor

of arbitration and a deferential review of arbitration decisions. B&T

Metals, 315 F2d at 436.

514 295 M

ICH

502 [Feb

nario remains whether a contract exists between the

parties requiring arbitration:

In accordance with the foregoing rule, appellee’s right to

arbitrate the claimed grievances in the present case de-

pends upon the existence of a contract so providing.

Whether such a contract exists is a question, which, in our

opinion under the authorities above cited, must be decided

by the Court before any authority is conferred upon the

arbitrator. Clearly, this is the rule in a case where the

challenge is directed to the validity of the contract in its

inception, and no question of the renewal or extension of

the contract is involved.

We are of the opinion that the basic question is not

changed by the fact that the question of the existence of the

contract at the time when the grievances occurred depends

upon facts occurring subsequent to the original execution of

the contract instead of upon facts existing at the time of the

execution of the contract. In either case the same legal

question is presented, namely, whether at the time of the

claimed grievances there was a valid bargaining agreement

in existence, which existence is necessary in order for an

employee or the Union to compel arbitration. [Id.at436

(emphasis added).]

Accord Moldovan v Great Atlantic & Pacific Tea Co, Inc,

790 F2d 894, 896-897 (CA 3, 1986) (noting that it is

always a judicial question whether a collective-

bargaining contract exists).

This brings us to Michigan law. Although there are

no cases right on point, for several reasons we hold that

whether a contract has been terminated—and therefore

no longer exists, eliminating the contractual duty to

arbitrate—is a question for the court, not the arbitrator.

The first reason supporting this conclusion is the broad

proposition under Michigan law that it is for the court,

not an arbitrator, to decide if a contract to arbitrate

exists. Arrow Overall Supply, 414 Mich at 99 (“The

existence of a contract to arbitrate and the enforceabil-

2012] 36

IST

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AFSCME L

OCAL

917 515

ity of its terms is a judicial question which cannot be

decided by an arbitrator.”); Jaklinski, 423 Mich at 25;

Florence Cement, 269 Mich App at 458 (“The existence

of an arbitration agreement and the enforceability of its

terms are judicial questions for the court, not the

arbitrators.”). This case raises that same fundamental

issue; namely, is there still a contract that exists be-

tween the parties that requires arbitration of their

disputes. This is a threshold question that our courts

have always considered to be within the sole province of

the judiciary, and no exceptions to this rule have been

recognized by our courts.

Second, like the Sixth Circuit in B & T Metals, 315

F2d at 435, we reject a rationale that allows the

judiciary to decide whether a contract came into exist-

ence because of some fundamental deficiency on the

front end (i.e., during contract formation), but pre-

cludes a court from deciding whether by its terms the

contract expired. The only difference between the two

scenarios is that in determining whether a contract has

terminated the court will have to construe a provision

of a contract that had been agreed to by the parties. But

this is also true when deciding if a matter falls within

the provisions of an arbitration clause, and in that

instance a court has to review the words agreed to by

the parties and determine their meaning. Yet our courts

have always held that whether a particular grievance

falls within an arbitration clause is a question for the

court. Port Huron Area Sch Dist v Port Huron Ed Ass’n,

426 Mich 143, 162-163; 393 NW2d 811 (1986); see also

AFSCME Council 25, 290 Mich App at 352-354.

Our decision in Highland Park v Mich Law Enforce-

ment Union, Teamsters Local No 129, 148 Mich App

821; 385 NW2d 701 (1986), supports the notion that

courts must to a limited extent review provisions of a

516 295 M

ICH

502 [Feb

contract in deciding the initial arbitrability issue. In

Highland Park a collective-bargaining agreement be-

tween the parties expired on June 30, 1982. In August

of that year the union filed a grievance over the

appointments made after expiration of the contract. Id.

at 823. The employer argued that the grievances were

not arbitrable, but the union contended that the terms

of the expired contract still governed the parties’ con-

duct. An arbitrator ruled in favor of the union on the

merits of the grievances, but the circuit court vacated

the award. Id. On appeal the union argued that the trial

court had gone beyond its limited scope of review in

ruling that the arbitration provision did not extend

beyond the expiration of the contract. This Court dis-

agreed, holding that the court must consider to some

extent the contract terms in deciding whether a con-

tract to arbitrate still exists:

The instant grievances were clearly based upon events

which occurred after the collective bargaining agreement

was terminated on June 30, 1982 (i.e., the reorganization of

the police department on July 1, 1982, and the appoint-

ment of six officers on August 5, 1982). Although the

grievances would have been arbitrable had they arisen

during the life of the agreement, under the terms of the

agreement they are not arbitrable after expiration. See,

e.g., General Warehousemen & Employees Union Local No

636vJCPenney Co, 484 F Supp 130 (WD Pa, 1980).

Because the grievances were not arbitrable, the circuit

court properly vacated the arbitration award.

We recognize that the circuit court construed the arbi-

tration provision contained in the collective bargaining

agreement. This was necessary, however, to determine the

initial question of arbitrability.

In Ottawa County v Jaklinski, supra, the Supreme

Court reaffirmed that the question of arbitrability is for the

courts. The court additionally recognized that the parties

may agree to extend beyond contract expiration certain

2012] 36

IST

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OCAL

917 517

substantive or procedural rights and “may explicitly agree

that accrued and vested rights and the right to arbitrate

concerning them also extinguish at contract termination”.

423 Mich 24. Thus, the Supreme Court recognized that, as

a prerequisite to deciding the question of arbitrability, a

court must, on occasion, determine whether the parties have

agreed to terminate arbitration rights upon the expiration of

the collective bargaining agreement. As the circuit court in

the instant case was confronted with this question, we

cannot say that it exceeded the permissible scope of review.

[Id. at 825-826 (emphasis added).]

Third, in order to remove a nonprocedural arbitra-

bility

issue from the court’s jurisdiction, parties must

provide “clear and unmistakable evidence” that they

agreed to do so. First Options of Chicago, Inc v Kaplan,

514 US 938, 944; 115 S Ct 1920; 131 L Ed 2d 985 (1995).

This holding from First Options was premised upon the

principle, deeply embedded in Michigan law, that arbi-

tration is a matter of contract and that no party can be

forced to arbitrate when they did not agree to do so. Id.

at 944-945. In explaining why there must be clear and

unmistakable evidence of the party’s agreement to

allow an arbitrator to rule on arbitrability, the Court

stated:

Courts should not assume that the parties agreed to

arbitrate arbitrability unless there is “clea[r] and unmis-

takabl[e]” evidence that they did so. AT&T Technologies,

[Inc v Communications Workers of America, 475 US 643,

649; 106 S Ct 1415; 89 L Ed 2d 648 (1986)]; see [United

States Steelworkers v] Warrior & Gulf [Navigation Co, 363

Procedural arbitrability refers to defenses to arbitration such as

timeliness, waiver, etc., and, on those issues (which are not present in this

case), “Michigan law...provides that arbitrators, rather than courts,

should decide the application of such potential defenses to arbitration as

contractual limitation periods, statutes of limitation, and the doctrine of

laches.” Amtower v William C Roney & Co (On Remand), 232 Mich App

226, 233; 590 NW2d 580 (1998).

518 295 M

ICH

502 [Feb

US 574, 583 n 7; 80 S Ct 1347;4LEd2d1409 (1960)]. In

this manner the law treats silence or ambiguity about the

question “who (primarily) should decide arbitrability” dif-

ferently from the way it treats silence or ambiguity about

the question “whether a particular merits-related dispute is

arbitrable because it is within the scope of a valid arbitra-

tion agreement”—for in respect to this latter question the

law reverses the presumption. See Mitsubishi Motors [Corp

v Soler Chrysler-Plymouth, Inc, 473 US 614, 626; 105 S Ct

3346; 87 L Ed 2d 444 (1985)] (‘ “[A]ny doubts concerning

the scope of arbitrable issues should be resolved in favor of

arbitration” ’) (quoting Moses H. Cone Memorial Hospital

v. Mercury Constr. Corp., 460 U.S. 1, 24-25 [103 S Ct 927; 74

L Ed 2d 765] (1983)); Warrior & Gulf [363 US at 582-583].

But, this difference in treatment is understandable. The

latter question arises when the parties have a contract that

provides for arbitration of some issues. In such circum-

stances, the parties likely gave at least some thought to the

scope of arbitration. And, given the law’s permissive poli-

cies in respect to arbitration, see, e.g., Mitsubishi Motors,

[473 US at 626], one can understand why the law would

insist upon clarity before concluding that the parties did not

want to arbitrate a related matter. See [1] Domke [, Commer-

cial Arbitration] § 12.02, p. 156 [(rev ed, supp 1993)] (issues

will be deemed arbitrable unless “it is clear that the

arbitration clause has not included” them). On the other

hand, the former question—the “who (primarily) should

decide arbitrability” question—is rather arcane. A party

often might not focus upon that question or upon the

significance of having arbitrators decide the scope of their

own powers. Cf. Cox, Reflections Upon Labor Arbitration,

72 Harv.L.Rev. 1482, 1508-1509 (1959), cited in Warrior &

Gulf, 363 US, at 583, n. 7, 80 S.Ct., at 1353, n. 7. And,

given the principle that a party can be forced to arbitrate

only those issues it specifically has agreed to submit to

arbitration, one can understand why courts might hesitate

to interpret silence or ambiguity on the “who should decide

arbitrability” point as giving the arbitrators that power, for

doing so might too often force unwilling parties to arbitrate

a matter they reasonably would have thought a judge, not

2012] 36

IST

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917 519

an arbitrator, would decide. Ibid. See generally Dean Witter

Reynolds Inc. v. Byrd, 470 U.S. 213, 219-220 [105 S Ct

1238; 84 L Ed 2d 158] (1985) (Arbitration Act’s basic

purpose is to “ensure judicial enforcement of privately

made agreements to arbitrate”). [Id. at 944-945 (emphasis

added).]

The rationale of First Options should apply with equal

force in Michigan, for as we have noted, Michigan law

has long provided that arbitration is purely a matter of

contract between the parties, and because of that no

one can be compelled to arbitrate an issue unless it was

agreed upon. Florence Cement, 269 Mich App at 460;

AFSCME Council 25, 290 Mich App at 350. And, since

Michigan law requires a court to decide this initial

question of arbitrability, Arrow Overall Supply, 414

Mich at 99, if the parties desire the opposite result, i.e.

the arbitrator deciding the issue, the parties must

explicitly so provide in the contract.

In light of the foregoing, we hold that the trial court

erred in ruling that the arbitrator should decide

whether the contract had terminated, for that question

is no more than whether a contract to arbitrate exists,

which is a question to be decided by the courts. Micro-

chip Technology Inc v US Philips Corp, 367 F3d 1350,

At least two federal circuit courts of appeal have limited First Options

to the commercial arbitration setting, see Abram Landau Real Estate v

Benova, 123 F3d 69, 73-74 (CA 2, 1997), and United Brotherhood of

Carpenters & Joiners of America, Local No 1780 v Desert Palace, Inc,94

F3d 1308, 1311 (CA 9, 1996). However, several other courts have applied

First Options to labor arbitration issues, see Aircraft Braking Sys Corp v

Local 856, UAW, 97 F3d 155, 160-161 (CA 6, 1996); Peabody Holding Co,

LLC v United Mine Workers of America Int’l Union, 665 F3d 96, 104-105

(CA 4, 2012), and for good reason. The First Options court relied heavily

on both traditional labor law cases (like Steelworkers), see PaineWebber

Inc v Elahi, 87 F3d 589, 594n6(CA1,1996) (noting that fact), and

traditional contract principles that have always applied to traditional

labor law arbitration issues, see First Options, 514 US at 942-945.

520 295 M

ICH

502 [Feb

1357-1358 (CA Fed, 2004). And, in order to have the

arbitrator decide this initial question of arbitrability,

the parties must have expressed an agreement to do so

through “clear and unmistakable” language, and a

generally broad arbitration provision like the one in

this case does not suffice. Lebanon Chem Corp v United

Farmers Plant Food Inc, 179 F3d 1095, 1100 (CA 8,

1999).

This error, however, has no real impact on this case.

Although the trial court should have decided the issue

of arbitrability, we can do so now. In doing so we

conclude, as did a prior panel of this Court in an appeal

involving an identical letter of termination issued by

the same employer under an identical termination

clause, that the notice was insufficient to prevent the

automatic continuation of the agreement. As stated in

36th Dist Court v AFSCME Local 3308, unpublished

opinion per curiam of the Court of Appeals, issued June

24, 2010 (Docket No. 291643), pp 2-3:

The first paragraph of article 50 must be understood in

light of the second paragraph that explicitly states the

effect of providing notice. “If such notice is given, this

Agreement shall be open to....” The second paragraph

indicates that the 90-day notice is required to preserve the

right to modify, amend, or terminate the agreement on

June 30, 2006, or a subsequent anniversary date. The

90-day notice of the “desire to modify, amend or terminate”

the agreement is not itself effective as a modification,

amendment, or termination of the CBA. Rather, the CBA in

this case contemplates some additional action. Plaintiff

does not point to any further action it took to terminate the

agreement. An affidavit from defendant’s staff representa-

tive states that plaintiff “has never communicated in

We may affirm a trial court’s decision even if we do not fully agree

with its reasoning. Taylor v Laban, 241 Mich App 449, 458; 616 NW2d

229 (2000).

2012] 36

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writing that it has terminated the collective bargaining

agreement.” Therefore, the March 1, 2006, letter did not

terminate the CBA because it only referenced an intent to

modify, amend, or terminate.

Furthermore, plaintiff’s contention that the March 1

letter resulted in termination of the CBA ignores the

ambiguity of the language in the letter. The letter refer-

enced plaintiff’s intent to “modify, amend or terminate all

or parts of the Labor Agreement....”“Anotice to termi-

nate must be clear and explicit. . . . A notice of modification

is not a notice of termination and does not affect termina-

tion of the contract.” Chattanooga Mailers Union Local No

92 v Chattanooga News-Free Press Co, 524 F2d 1305, 1312

(CA 6, 1975) (internal citations and quotation marks omit-

ted), overruled on other grounds in Bacashihua v United

States Postal Service, 859 F2d 402, 404 (CA 6, 1988); see

also Office & Professional Employers Int’l Union, Local 42,

AFL-CIO v United Automobile, Aerospace & Agricultural

Implement Workers of America, Westside Local No 174,

UAW, 524 F2d 1316, 1317 (CA 6, 1975), and Laborers

Pension Trust Fund Detroit and Vicinity v Interior Exterior

Specialists Constr Group, Inc, 479 F Supp 2d 674, 684 (ED

Mich, 2007). When a party provides a notice that refers to

an intent to both modify and terminate without specifying

which one, “the ambiguity of the notice destroys its effec-

tiveness for any purpose....”SeeGen Electric Co v Int’l

Union United Automobile, Aircraft & Agricultural Imple-

ment Workers of America (UAW-CIO), 93 Ohio App 139,

147; 108 NE2d 211 (1952). In Gen Electric, a pre-printed

notice form stated, “This is a 60-day notice to you that we

propose to (modify) (terminate) our collective bargaining

contract,” with an unfulfilled directive to “(Strike out

one)” (quotation marks omitted). Id. at 144. The Ohio

Court of Appeals explained:

“They could not terminate and modify the same con-

tract at the same time by the same notice. However, it

seems, according to the defendants’ testimony and conten-

tion, they attempted by the notice served upon the plaintiff

to do just that, but in attempting to do both, they did

neither.” [Id. at 147.]

522 295 M

ICH

502 [Feb

In the present case, plaintiff’s notice indicated an intent

to “modify, amend or terminate all or parts of the Labor

Agreement....”Theexpression of an intent to modify the

CBA is just as strong as the expression of an intent to

terminate the agreement. Even disregarding the second

paragraph of article 50, the notice is too ambiguous to be

effective as a notice of intent to terminate the agreement.

For these same reasons, we hold that the March 1, 2006

letter did not terminate the contract, and therefore the

contract automatically extended for one more year. As

such, the issues raised in the Weatherly and Holley

grievances, as well as those in the Jones and Carter

grievances, were properly subject to arbitration.

Because of this holding, our review of the arbitrator’s

decision is limited. Because fact-finding is quintessen-

tially an arbitrator function, review of these facts falls

outside our judicial review. Ann Arbor, 284 Mich App at

144. To the extent that the 36th District Court argues

that the arbitrator exceeded his authority in resolving

this issue, as was explained in Gordon Sel-Way, Inc v

Spence Bros, Inc, 438 Mich 488, 497; 475 NW2d 704

(1991), “an allegation that the arbitrators have ex-

ceeded their powers must be carefully evaluated in

order to assure that this claim is not used as a ruse to

induce the court to review the merits of the arbitrators’

decision.”

IV. REAPPOINTMENT DECISIONS

The 36th District Court raises various additional

arguments concerning the arbitrability of the chief

judge’s decision to not reappoint each of the four

grievants. In particular, the 36th District Court argues

that reappointment decisions are not subject to the

disciplinary procedures in Article 12, § 1(A), which

specifies that “[d]isciplinary action including discharge

2012] 36

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shall be imposed only for just cause,” and that even if

they are subject to that provision, it could not be

enforced because it would violate MCR 3.106.

Addressing first the argument concerning the arbitra-

bility of the reappointment decisions, we find no error in

the trial court’s determination that the question whether

disciplinary action under Article 12 would include reap-

pointment decisions was arbitrable because it involved an

issue of contract interpretation. Here, the CBA does not

exclude reappointment decisions from arbitration, and

Article 8 of the CBA provides that differences between the

parties “as to the interpretation and application of any of

[the CBA] provisions” be submitted to arbitration. Be-

cause the disputed issue concerning what constitutes

disciplinary action was arguably within the arbitration

agreement, and the dispute was not expressly exempted

from arbitration by the terms of the CBA, the trial court

did not err in determining that it was arbitrable. In re

Nestorovski Estate, 283 Mich App 177, 202; 769 NW2d

720 (2009).

Consequently, whether a nonrenewal of an

appointment constitutes loss of employment, or a dis-

charge for purposes of a discharge-for-cause provision, is

an arbitrable issue because it is a matter of contract

interpretation that the parties authorized the arbitrator

to decide. Monroe Co Sheriff v Fraternal Order of Police,

Lodge 113, 136 Mich App 709, 717; 357 NW2d 744 (1984).

The 36th District Court’s reliance on Lanting v

Jenison Pub Sch, 103 Mich App 165, 175; 302 NW2d

631 (1981), is misplaced because the contract language

in this case is distinguishable from the contract lan-

guage at issue in Lanting, which contained an explicit

Appendix B to the CBA does not alter this conclusion. Although that

document shows an intent to bargain over what to do with court officers

who are not reappointed, it says nothing about what standard applies to

the reappointment decision.

524 295 M

ICH

502 [Feb

agreement to “exclude from arbitration matters cov-

ered under the teachers’ tenure act, i.e., the nonrenewal

of the contracts of probationary teachers.”

Turning now to the 36th District Court’s argument

that application of the CBA to reappointment decisions

violates MCR 3.106, we limit our review to whether the

arbitrator’s decision contravenes controlling principles

of law. DAIIE, 416 Mich at 434, 443. We apply rules of

statutory construction when construing a court rule.

Lawrence M Clarke, Inc v Richco Constr, Inc, 489 Mich

265, 272; 803 NW2d 151 (2011). Therefore, in constru-

ing a court rule, a court may not read into the rule what

is not within the Supreme Court’s intent as derived

from the language of the rule. AFSCME v Detroit, 468

Mich 388, 400; 662 NW2d 695 (2003). In conducting

this review, we find no basis for concluding that the

arbitrator’s interpretation of the CBA to require that

the chief judge use a just-cause standard when making

reappointment decisions contravenes MCR 3.106(C).

That rule provides:

Court officers may be appointed by a court for a term

not to exceed 2 years.

(1) The appointment shall be made by the chief judge.

Two or more chief judges may jointly appoint court officers

for their respective courts.

(2) The appointing court must specify the nature of the

court officer’s employment relationship at the time of

appointment.

(3) The appointing court must maintain a copy of each

court officer’s application, as required by the State Court

Administrative Office.

(4) The State Court Administrative Office shall develop

a procedure for the appointment and supervision of court

officers, including a model application form. Consider-

ations shall include, but are not limited to, an applicant’s

character, experience, and references. [MCR 3.106(C).]

2012] 36

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While MCR 3.106(C) provides that a chief judge may

appoint a court officer for “a term not to exceed 2

years,” nothing in MCR 3.106 precludes a chief judge

from agreeing to use just cause as a criterion for making

reappointment decisions. And, that is precisely what

occurred here. That is, in negotiating and signing the

CBA, the chief judge agreed that all employment deci-

sions would be subject to a just-cause standard. Because

the court rule does not state what, if any, standard

should apply in the reappointment decision, the arbi-

trator’s decision was not contrary to the court rule.

Because the CBA can be construed in harmony with

MCR 3.106, and the arbitrator did so in this case, the

trial court correctly concluded that the arbitrator’s

decision is not contrary to law.

As recognized in

AFSCME Council 25 v Wayne Co, 292 Mich App 68, 88

n 6; 811 NW2d 4 (2011), the judicial branch’s constitu-

tional accountability for court operations does not mean

that a court can refuse to honor a collective-bargaining

agreement that it has voluntarily entered into under

the public employment relations act (PERA), MCL

423.201 et seq.

We do, however, find merit to the 36th District

Court’s argument that the remedy ordered by the

arbitrator should be modified.

When parties agree to submit a matter to arbitration,

they invest the arbitrator with sufficient discretion to

resolve their dispute in a manner which is appropriate

under the circumstances. Where the collective bargaining

We note that the record does not indicate that the chief judge’s

reappointment decisions involved any plan to eliminate court officer posi-

tions. It is apparent that the just-cause standard for a disciplinary action

under the CBA would not apply to a reduction in the number of court officer

positions. Therefore, we limit our holding to circumstances that do not

involve the elimination of a court officer position, but rather only whether a

particular individual should be reappointed to fill the position.

526 295 M

ICH

502 [Feb

agreement is silent as to permissible remedies, an arbitra-

tor does not add to the obligations contractually assumed

by the parties by fashioning a remedy which is appropriate

under the circumstances. Wayne Co Bd of Comm’rs v

National Union of Police Officers, 75 Mich App 375, 381;

254 NW2d 896 (1977), lv den 401 Mich 817 (1977). [Mich

Ass’n of Police v City of Pontiac, 177 Mich App 752, 760; 442

NW2d 773 (1989).]

The CBA does address possible remedies, and pro-

vides in pertinent part:

Arbitrators shall be without authority to require the

Employer to delegate, alienate, or relinquish any powers,

duties, responsibilities, obligations, or discretions which by

State Law or State Constitution the Employer cannot

delegate, alienate, or relinquish or pay any funds other

than back wages. [Emphasis added.]

The arbitrator’s award requiring that each of the

four grievants be “reinstated to their former position of

court officer” requires the chief judge to “re-appoint”

the grievants to perform all duties in their former

positions, and in issuing that award the arbitrator

exceeded his contractual authority. By court rule, only

the chief judge has the authority to make appointment

or reappointment decisions under MCR 3.106(C). Thus,

although the court rule is silent about what (if any)

standard is to apply to a reappointment decision, it

affirmatively states that only the chief judge shall make

the appointment decisions. In addition, as indicated

previously, the judicial branch is constitutionally ac-

countable for individuals who provide court services.

AFSCME Council 25, 292 Mich App at 97. The presid-

ing or chief judge of a district court retains a measure of

supervision over the duties performed by court officers

to ensure the sound administration of justice within the

judicial district. Menken v 31st Dist Court, 179 Mich

App 379, 381-382; 445 NW2d 527 (1989).

2012] 36

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Because the CBA in this case does not abrogate the

chief judge’s authority to appoint or reappoint court

officers in the first instance—and in fact affirmatively

provides that the arbitrator cannot, through his award,

require the employer to relinquish any responsibility that

by state law or the constitution cannot be relinquished—

the arbitrator exceeded his jurisdiction by requiring the

chief judge to reappoint the grievants to their former

positions. Cf. Monroe Co Sheriff, 136 Mich App at 720

(collective-bargaining agreement did not abrogate sher-

iff’s statutory authority to determine which deputies

should have law enforcement duties). Therefore, we va-

cate the trial court’s order in part and remand for the trial

court to modify its summary disposition order to provide

that the arbitration award cannot be enforced as it in-

fringes on the chief judge’s authority to appoint or reap-

point court officers under MCR 3.106.

Finally, our conclusion does not require us to deter-

mine whether the PERA controls over the court rule.

Instead, the terms of the CBA itself limit the remedial

authority of the arbitrator, and those limitations bring

into play the commands of MCR 3.106. Consequently,

both the PERA and the court rule are being enforced by

our decision today.

Affirmed in part, vacated in part, and remanded to

the circuit court, which shall remand the matter to the

arbitrator for a determination of the appropriate rem-

edy consistent with the holding of this Court. No costs,

a question of public importance being involved. MCR

7.219(A). We do not retain jurisdiction.

ALBOT

and S

ERVITTO

, JJ., concurred with M

URRAY

P.J.

528 295 M

ICH

502 [Feb

PEOPLE v GLENN

Docket No. 302293. Submitted January 12, 2012, at Lansing. Decided

February 28, 2012, at 9:10 a.m. Leave to appeal granted, 491 Mich

934.

Devon D. Glenn, Jr., was convicted in the Jackson Circuit Court

following his pleas of guilty of armed robbery and felonious assault

and was sentenced by the court, John G. McBain, J., to 18 to 30

years’ and 18 to 48 months’ imprisonment for the respective

convictions. The Court of Appeals granted defendant’s delayed

application for leave to appeal that alleged that the trial court

erred by assessing 50 points for offense variable (OV) 7, MCL

777.37 (aggravated physical abuse).

The Court of Appeals held:

1. Fifty points must be assessed for OV 7 if a victim was treated

with sadism, torture, or excessive brutality or conduct designed to

substantially increase the fear and anxiety a victim suffered

during the offense. Defendant’s conduct did not meet the defini-

tion of “sadism” because no evidence showed that the victims were

subjected to extreme or prolonged pain or humiliation. No evi-

dence showed that the victims were subjected to torture or

excessive brutality by defendant.

2. A defendant’s conduct may be found to have been designed

to substantially increase the fear and anxiety a victim suffered

during the offense only if the conduct was designed to cause

copious or plentiful amounts of additional fear. Circumstances

inherently present in the crime must be discounted for purposes of

scoring OV 7. Because the use of a weapon is inherent in a

felonious assault, the presence of a weapon and the use of a certain

amount of force or intimidation during a felonious assault must be

discounted for purposes of OV 7. All such crimes against a person

involve the infliction of a certain amount of fear and anxiety. OV 7

is designed to respond to particularly heinous instances in which

the defendant acted to increase that fear by a substantial or

considerable amount. Although defendant may have used more

violence than would be strictly necessary to complete an armed

robbery, it cannot be said that defendant’s conduct was designed to

substantially increase the victims’ fear and anxiety beyond the

2012] P

EOPLE V

LENN

529

fear and anxiety that occurs in most armed robberies. The trial

court erred by assessing 50 points for OV 7.

Sentences vacated and case remanded for resentencing.

1. S

ENTENCES —

FFENSE

ARIABLE

7—W

ORDS AND

HRASES —

ADISM —

ORTURE —

XCESSIVE

RUTALITY

“Sadism” for purposes of scoring offense variable 7 (aggravated

physical abuse) is conduct that subjects a victim to extreme or

prolonged pain or humiliation and is inflicted to produce suffering

or for the offender’s gratification; “torture” is the act of inflicting

excruciating pain, as punishment or revenge, as a means of getting

a confession or information, or for sheer cruelty; “excessive

brutality” is savagery or cruelty beyond even the usual brutality of

a crime (MCL 777.37).

2. S

ENTENCES —

FFENSE

ARIABLE

7—C

ONDUCT

UBSTANTIALLY

NCREASING

ICTIM

’

EAR AND

NXIETY

A defendant’s conduct may be found to have substantially increased

the victim’s fear and anxiety for purposes of scoring offense

variable 7 (aggravated physical abuse) only if the conduct was

designed to cause copious or plentiful amounts of additional fear

beyond the fear and anxiety that are an inherent part of the crime;

circumstances inherently present in the crime must be discounted

for purposes of scoring the offense variable (MCL 777.37).

Bill Schuette, Attorney General, John J. Bursch,

Solicitor General, Henry C. Zavislak, Prosecuting At-

torney, and Jerrold Schrotenboer, Chief Appellate Attor-

ney, for the people.

Linda D. Ashford, P. C . (by Linda D. Ashford), for

defendant.

Before: B

ECKERING

,P.J., and O

WENS

and S

HAPIRO

,JJ.

URIAM

. We granted defendant’s delayed applica-

tion for leave to appeal the sentences of imprisonment for

18 to 30 years and 18 to 48 months imposed following his

plea-based convictions of armed robbery, MCL 750.529,

and felonious assault, MCL 750.82, respectively. The only

question is whether the trial court properly assessed 50

530 295 M

ICH

529 [Feb

points for offense variable (OV) 7, MCL 777.37 (aggra-

vated physical abuse). Fifty points can be assessed

under OV 7 for “sadism, torture, or excessive brutality

or conduct designed to substantially increase the fear

and anxiety a victim suffered....”MCL777.37(1)(a).

The prosecution does not contend that defendant’s

actions amounted to sadism, torture, or excessive bru-

tality and instead contends that defendant’s conduct

was designed to substantially increase the fear and

anxiety a victim suffered.

Defendant’s conduct was reprehensible, and his ac-

tions were undoubtedly designed to cause fear and

anxiety in his victims, as is the conduct in all armed

robberies. However, because OV 7, by its own terms, is

to be scored at 50 points only for conduct “designed to

substantially increase the fear and anxiety” of a victim,

we conclude that zero points should have been assessed

for OV 7. We therefore vacate defendant’s sentences

and remand for resentencing.

I. FACTS

Defendant robbed a gas station/party store. He en-

tered the gas station carrying an airsoft

shotgun that

appeared to be an actual sawed-off shotgun. When

defendant entered the store, he struck a clerk on the

left side of the head with the butt of the gun, knocking

him to the ground. Defendant directed the clerks to

move behind the counter and open the store’s cash

other clerk on the head with the butt of the airsoft gun,

and fled the premises. Neither victim suffered serious

physical injuries, and neither required medical care.

An airsoft gun fires small plastic BBs using compressed air as the

propellant and is used as a weapon in recreational mock-combat games.

See Yao v State, 953 NE2d 1236, 1238-1239 (Ind App, 2011).

2012] P

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LENN

531

Defendant pleaded guilty to charges of armed rob-

bery and felonious assault.

At sentencing, the trial

court, over defendant’s objection, assessed 50 points for

OV 7, MCL 777.37. The sentencing guidelines recom-

mended a minimum sentence in the range of 126 to 210

months for armed robbery. If OV 7 had been scored at

zero points, the guidelines would have recommended a

minimum sentence in the range of 81 to 135 months.

II. ANALYSIS

This Court reviews a trial court’s scoring of 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 Lechleitner, 291 Mich App 56, 62; 804 NW2d

345 (2010). To the extent that a scoring issue calls for

statutory interpretation, review is de novo. Id.

MCL 777.37(1)(a) provides that 50 points must be

assessed for OV 7 if “[a] victim was treated with sadism,

torture, or excessive brutality or conduct designed to

substantially increase the fear and anxiety a victim

suffered during the offense.” Defendant argues that the

trial court erred by assessing 50 points for OV 7 because

his conduct did not fall within the statute.

“Sadism” is defined by the statute as “conduct that

subjects a victim to extreme or prolonged pain or

humiliation and is inflicted to produce suffering or for

the offender’s gratification.” MCL 777.37(3). Defen-

dant’s conduct does not meet the definition of “sadism”

The charge of felonious assault resulted from an incident that

occurred while defendant and a codefendant fled from the gas station and

the codefendant pointed the shotgun at the occupant of a vehicle.

On the count of felonious assault, a score of zero points for OV 7

would result in a recommended minimum-sentence range of 2 to 17

months instead of 5 to 23 months.

532 295 M

ICH

529 [Feb

because no evidence showed that the victims were

subjected to extreme or prolonged pain or humiliation.

No evidence showed that the victims were subjected to

torture. “Torture” is not defined by statute; therefore,

this Court may consult a dictionary to determine its

ordinary meaning. People v Peals, 476 Mich 636, 641;

720 NW2d 196 (2006). Random House Webster’s College

Dictionary (2d ed, 1997) defines “torture” as “the act of

inflicting excruciating pain, as punishment or revenge,

as a means of getting a confession or information, or for

sheer cruelty.” No evidence showed that defendant

inflicted excruciating pain on the victims.

Similarly, there is no evidence that defendant used

excessive brutality. “Excessive” and “brutality” are not

defined in MCL 777.37. Random House Webster’s Col-

lege Dictionary (2d ed, 1997) defines “excessive” as

“going beyond the usual, necessary, or proper limit or

degree[.]” “Brutality” is defined as “the quality of being

brutal[.]” Id. “Brutal,” in turn, is defined as “savage;

cruel; inhuman” or “harsh; severe[.]” Id. Thus, exces-

sive brutality means savagery or cruelty beyond even

the “usual” brutality of a crime. Defendant struck each

victim once in the head, but there is no evidence that

either clerk was injured. This behavior, while certainly

illegal and reprehensible, was not savage or inhuman in

comparison with behavior that has occurred during

other armed robberies or felonious assaults.

The prosecution argues, however, that defendant’s

conduct was “designed to substantially increase the fear

and anxiety a victim suffered during the offense.”

“Substantial” means “of ample or considerable amount,

quantity, size, etc.” Id. “Ample,” in turn, is defined as

“plentiful[;]...liberal; copious[.]” Id. Therefore, de-

fendant’s conduct would have substantially increased

the victims’ fear only if the conduct was designed to

2012] P

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533

cause copious or plentiful amounts of additional fear.

Further, “[w]hen construing a series of terms...weare

guided by the principle ‘that words grouped in a list

should be given related meaning.’ ” Griffith v State

Farm Mut Auto Ins Co, 472 Mich 521, 533; 697 NW2d

895 (2005) (citation omitted).

That is, while the term at

issue must have a meaning independent of “sadism,”

“torture,” and “excessive brutality,” it should nonethe-

less be construed to cover similarly egregious conduct.

The conclusion that the Legislature intended OV 7 to

apply only in egregious cases is also supported by the

fact that assessing 50 points under OV 7, on its own, is

enough to raise an offender’s OV level to III, consider-

ably increasing a criminal’s minimum-sentence range.

Moreover, an overly broad reading of the term at issue

would obviate the need for the other terms in the list.

We must “ ‘avoid an interpretation that would render

any part of the statute surplusage or nugatory.’ ” Grif-

fith, 472 Mich at 533-534, quoting State Farm Fire &

Cas Co v Old Republic Ins Co, 466 Mich 142, 146; 644

NW2d 715 (2002). In People v Hunt, 290 Mich App 317,

324-325; 810 NW2d 588 (2010), this Court undertook a

survey of the OV 7 caselaw, which demonstrates the

types of conduct “designed to substantially increase”

victims’ fear and anxiety:

Cases upholding scores of 50 points for OV 7 are

distinguishable because they involve specific acts of sa-

dism, torture, or excessively brutal acts by the defendant.

In People v Wilson, 265 Mich App 386, 396–398; 695 NW2d

351 (2005), the defendant was convicted of assault with

intent to commit great bodily harm less than murder after

inflicting a prolonged and severe beating that left lasting

This rule is derived from the principle of noscitur a sociis, which holds

that “ ‘the meaning of statutory language, plain or not, depends on

context.’ ” Griffith, 472 Mich at 533, quoting King v St Vincent’s Hosp,

502 US 215, 221; 112 S Ct 570; 116 L Ed 2d 578 (1991).

534 295 M

ICH

529 [Feb

and serious effects. The defendant in that case choked the

victim a number of times, cut her, dragged her, and kicked

her in the head. After her hospital stay, the victim was in a

wheelchair for three weeks and used a cane for another

three weeks. In another case in which 50 points were

assessed for OV 7, the defendant was convicted of kidnap-

ping, felonious assault, and felony-firearm after he held the

victim at gunpoint for nine hours, made her look down the

barrel of a gun, repeatedly threatened to kill her and

himself, and asked her what her son would feel like when

he saw yellow crime tape around his mother’s house. People

v Mattoon, 271 Mich App 275, 276; 721 NW2d 269 (2006),

and People v Mattoon, unpublished opinion per curiam of

the Court of Appeals, issued October 18, 2007 (Docket No.

272549) (after remand). Similarly, in People v Hornsby, 251

Mich App 462, 468-469; 650 NW2d 700 (2002), the defen-

dant pointed a gun at the victim, cocked it, and repeatedly

threatened the victim and others in a store. In People v

Kegler, 268 Mich App 187, 189-190; 706 NW2d 744 (2005),

the defendant removed the victim’s clothes, assisted with

carrying him naked outside, and admitted that she wanted

to humiliate him by leaving him outside naked. In People v

James, 267 Mich App 675, 680; 705 NW2d 724 (2005), the

defendant repeatedly stomped on the victim’s face and

chest and deprived the victim of oxygen for several min-

utes, causing him to sustain brain damage and become

comatose. And in People v Horn, 279 Mich App 31, 46-48;

755 NW2d 212 (2008), the defendant terrorized and abused

his wife with recurring and escalating acts of violence,

including threatening to kill her. [Emphasis omitted.]

Further, circumstances inherently present in the

crime must be discounted for purposes of scoring an OV.

Id. at 326. For example, “[t]ransportation to a place of

greater danger is appropriately scored under OV 8

[MCL 777.38], but must be given a score of zero points

when...the sentencing offense is kidnapping.” Id.

Armed robbery requires the use of a dangerous weapon

during a robbery. MCL 750.529. A robbery occurs when,

in the course of a larceny, the defendant “uses force or

2012] P

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535

violence against any person who is present, or...as-

saults or puts the person in fear....”MCL750.530(1).

As noted by the Hunt Court, the use of a weapon is

inherent in a felonious assault. See Hunt, 290 Mich App

at 326; MCL 750.82(1). Therefore, the presence of a

weapon and the use of a certain amount of force or

intimidation must be discounted for purposes of OV 7.

All such crimes against a person involve the infliction of

a certain amount of fear and anxiety. OV 7 is designed to

respond to particularly heinous instances in which the

criminal acted to increase that fear by a substantial or

considerable amount.

While defendant may have used more violence than

would be strictly necessary to complete an armed rob-

bery, it cannot be said that his conduct was “designed to

substantially increase the fear and anxiety” beyond the

fear and anxiety that occurs in most armed robberies.

The plain language of OV 7 reveals that it was meant to

be scored in particularly egregious cases involving tor-

ture, brutality, or similar conduct designed to substan-

tially increase the victim’s fear, not in every case in

which some fear-producing action beyond the bare

minimum necessary to commit the crime was under-

taken.

The trial court erred by assessing 50 points for OV 7.

Defendant is entitled to resentencing because the

proper guidelines score results in a different recom-

mended minimum-sentence range. People v Francisco,

474 Mich 82, 89-90; 711 NW2d 44 (2006).

Vacated and remanded for resentencing. We do not

retain jurisdiction.

ECKERING

,P.J., and O

WENS

and S

HAPIRO

, JJ., con-

curred.

536 295 M

ICH

529

PEOPLE v MUNGO (ON SECOND REMAND)

Docket No. 269250. Submitted October 21, 2011, at Lansing. Decided

March 6, 2012, at 9:00 a.m. Leave to appeal denied, 492 Mich 867.

Michael W. Mungo was charged in the Washtenaw Circuit Court with

unlawfully carrying a concealed weapon. In 2005, a police officer had

found a gun under the driver’s seat of defendant’s automobile during

a search conducted after the officer made a routine traffic stop and

had arrested defendant’s passenger on outstanding warrants for

traffic offenses. The court, David S. Swartz, J., granted defendant’s

motion to suppress evidence of the gun and quashed the information.

The prosecution appealed, and the Court of Appeals, W

HITBECK

, C.J.,

and T

ALBOT

and Z

AHRA

, JJ., reversed and remanded, applying New

York v Belton, 453 US 454 (1981), which held that when a police

officer has made a lawful custodial arrest of the occupant of an

automobile, the officer may, as a contemporaneous incident of that

arrest, search the passenger compartment of the automobile. The

Court of Appeals held that a police officer may search an automobile

incident to a passenger’s arrest even when before the search there

was no probable cause to believe that the automobile contained

contraband or that the driver and owner of the automobile had

engaged in unlawful activity and that the search was therefore

constitutionally permissible. People v Mungo, 277 Mich App 577

(2008) (Mungo I). Defendant’s application for leave to appeal was

held in abeyance by the Michigan Supreme Court pending the

decision of the United States Supreme Court in Arizona v Gant, 556

US 332 (2009). Following the decision in Gant, which significantly

limited the application of Belton by holding that the police may not

search a vehicle incident to a recent occupant’s arrest after the

arrestee has been secured and cannot access the interior of the

vehicle, the Michigan Supreme Court, in lieu of granting leave to

appeal, vacated the judgment in Mungo I and remanded the case to

the Court of Appeals for reconsideration in light of Gant. People v

Mungo, 483 Mich 1091 (2009). On remand, the Court of Appeals,

HITBECK

,P.J., and T

ALBOT

and Z

AHRA

, JJ., determined that Gant had

retroactive effect and applied it to the case. The Court of Appeals

affirmed the circuit court’s suppression of the evidence on the basis of

Gant, concluding that the search of the automobile without a warrant

was unreasonable and in violation of the Fourth Amendment. People

EOPLE V

UNGO

ECOND

) 537

v Mungo (On Remand), 288 Mich App 167 (2010) (Mungo II). The

Michigan Supreme Court granted the prosecution’s application for

leave to appeal. People v Mungo, 488 Mich 920 (2010). The Michigan

Supreme Court then held the appeal in abeyance pending the

decision of the United States Supreme Court in Davis v United

States, 564 US ___; 131 S Ct 2419; 180 L Ed 2d 285 (2011). People v

Mungo, 795 NW2d 156 (Mich, 2011). After the United States Su-

preme Court decided Davis, holding that searches conducted in

objectively reasonable reliance on binding appellate precedent are not

subject to the exclusionary rule and therefore the fruit of such

searches is not to be suppressed, the Michigan Supreme Court

vacated its previous order that granted leave to appeal, vacated the

judgment in Mungo II, and remanded the case to the Court of

Appeals for reconsideration in light of Davis. People v Mungo, 490

Mich 870 (2011).

On second remand, the Court of Appeals held:

1. It cannot be disputed that the search of defendant’s auto-

mobile was unconstitutional under Gant because the officer had

arrested defendant’s passenger and secured him in the back seat of

a police vehicle before the officer searched defendant’s automobile.

2. At the time of the search, Belton was binding precedent. It

was objectively reasonable for the police to rely on Belton to

authorize the search.

3. There is no basis for defendant’s implicit suggestion that

Belton was limited to vehicle searches incident to an arrest of the

driver of a vehicle. Belton stated that its holding was to apply to

the arrest of any occupant of the vehicle, making no distinction

between the driver and the passengers.

4. At the time of the search, the arrest of defendant’s passen-

ger allowed the police to search the vehicle under the binding

precedent of Belton and the police officer had a good-faith basis to

rely on Belton. Because the search was constitutional under

existing law at the time of the search, Davis provides that the

exclusionary rule need not apply. The good-faith exception to the

exclusionary rule applies. The circuit court should not have

suppressed the evidence and quashed the information.

Reversed and remanded.

EARCHES AND

EIZURES —

VIDENCE —

XCLUSIONARY

ULE —

OOD

-F

AITH

XCEPTION TO

XCLUSIONARY

ULE —

ELIANCE ON

INDING

RECEDENT

The good-faith exception to the exclusionary rule applies when the

police conduct a search in compliance with binding appellate

precedent that is later overruled; searches conducted in objectively

538 295 M

ICH

537 [Mar

reasonable reliance on binding appellate precedent are not subject

to the exclusionary rule and the fruit of the searches need not be

suppressed.

Bill Schuette, Attorney General, John J. Bursch,

Solicitor General, Brian L. Mackie, Prosecuting Attor-

ney, and Mark Kneisel, Assistant Prosecuting Attorney,

for the people.

State Appellate Defender (by Brandy Y. Robinson) for

defendant.

ON SECOND REMAND

Before: W

HITBECK

,P.J., and T

ALBOT

and O

WENS

,JJ.

URIAM

I. OVERVIEW

This case is before this Court for the third time for

reconsideration in light of Davis v United States.

This

case has a tortuous and monstrously complex proce-

dural history stretching out behind it. We believe that it

helps, in framing the issue, to summarize that history

in something approaching plain English. For ease of

reference, we have delineated each of the three stages of

this case sequentially and numerically; that is, Mungo

Mungo II,

and Mungo III.

Initially, the circuit court suppressed the evidence: a

gun for which defendant Michael Mungo did not hold a

Davis v United States, 564 US ___; 131 S Ct 2419; 180 L Ed 2d 285

(2011).

People v Mungo, 277 Mich App 577; 747 NW2d 875 (2008) (Mungo I),

vacated and remanded 483 Mich 1091 (2009).

People v Mungo (On Remand), 288 Mich App 167; 792 NW2d 763

(2010) (Mungo II), vacated and remanded 490 Mich 870 (2011).

People v Mungo, 490 Mich 870 (2011) (Mungo III).

2012] P

EOPLE V

UNGO

ECOND

) 539

concealed weapons permit, which the police found when

they searched Mungo’s car, incident to the arrest of

Mungo’s passenger in that car.

The prosecution appealed

that decision, and in Mungo I, we applied New York v

Belton,

a United States Supreme Court case, and held

that the search was constitutionally permissible. We

reached this conclusion even though the search was inci-

dent to the passenger’s arrest and even “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.”

But in Mungo II, we were required by the Michigan

Supreme Court

to reconsider our decision in light of

Arizona v Gant.

Gant was a United States Supreme

Court case that postdated and significantly limited the

application of Belton. We determined that Gant had

retroactive effect and then applied it to the facts of this

case.

We affirmed the circuit court’s suppression of the

evidence. We concluded that, on the basis of Gant, the

search of Mungo’s car without a warrant was unreason-

able and in violation of the Fourth Amendment.

Quite

obviously, absent the United States Supreme Court’s

holding in Gant, we would have reached the opposite

conclusion and reversed the circuit court’s suppression

of the evidence.

Mungo II, however, was not to be the end of the story.

The Michigan Supreme Court granted

the prosecu-

See Mungo I, 277 Mich App at 578.

New York v Belton, 453 US 454; 101 S Ct 2860; 69 L Ed 2d 768 (1981).

Mungo I, 277 Mich App at 578.

People v Mungo, 483 Mich 1091 (2009).

Arizona v Gant, 556 US 332; 129 S Ct 1710; 173 L Ed 2d 485 (2009).

Mungo II, 288 Mich App at 182-183.

Id.

People v Mungo, 488 Mich 920 (2010).

540 295 M

ICH

537 [Mar

tion’s application for leave to appeal our ruling in

Mungo II. The Michigan Supreme Court then held that

appeal in abeyance pending a decision in Davis.

Davis

postdated Gant, and held that searches conducted in

objectively reasonable reliance on binding appellate

precedent are not subject to the exclusionary rule and

therefore the fruit of such searches is not to be sup-

pressed.

After the United States Supreme Court de-

cided Davis, the Michigan Supreme Court vacated its

previous order that granted leave to appeal, vacated our

judgment in Mungo II, and again remanded this case to

us for reconsideration “in light of Davis.”

So, the question before us, in the simplest possible

terms, is this: in light of Davis, did the police search

Mungo’s car in objectively reasonable reliance on bind-

ing appellate precedent, namely the precedent that

Belton established? We hold that the police did conduct

the search in objectively reasonable reliance on binding

appellate precedent. We therefore reverse the circuit

court’s exclusion of the gun evidence and remand for

further proceedings.

II. FACTS

A. MUNGO I

This Court set forth the facts of Mungo’s June 23,

2005 arrest in our first opinion, Mungo I, as follows:

Washtenaw County Sheriff’s Deputy Ryan Stuck lawfully

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 occupants’ driv-

People v Mungo, 795 NW2d 156 (Mich, 2011).

Davis, 564 US at ___; 131 S Ct at 2423-2424.

Mungo III, 490 Mich 870.

2012] P

EOPLE V

UNGO

ECOND

) 541

er’s licenses and ran Law Enforcement Information 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 conducted a pat-down search. There-

after, 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 ar-

rested defendant for unlawfully carrying a concealed weapon.

In the circuit court, defendant moved to quash the infor-

mation and suppress evidence of the gun. The prosecutor

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 compartment of that

car. The prosecutors 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 Bradshaw, 99 SW3d 73 (Mo App,

2003), a case in which a divided panel of the Missouri Court of

Appeals distinguished 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 Brad-

shaw. 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 pro-

tected privacy interest in his car. The circuit court held that

there was no probable cause to arrest defendant and, there-

fore, the search of his car was not constitutionally permis-

sible.

[

]

Mungo I, 277 Mich App at 578-580.

542 295 M

ICH

537 [Mar

The prosecution appealed the circuit court’s decision.

In an opinion authored by then Judge Z

AHRA

, this Court

reversed and remanded. We applied Belton, in which the

United States Supreme Court held “that when a police-

man has made a lawful custodial arrest of the occupant

of an automobile, he may, as a contemporaneous inci-

dent of that arrest, search the passenger compartment

of that automobile.”

We concluded that the facts fit

within Belton and 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.”

B. MUNGO II

Mungo then sought leave to appeal in the Michigan

Supreme Court. After holding the application in abey-

ance, the Michigan Supreme Court, in lieu of granting

leave to appeal, vacated this Court’s decision in Mungo

I and remanded for this Court’s reconsideration in light

of Gant.InGant, the vehicle’s occupant was handcuffed

and locked in a patrol car when the police searched the

vehicle.

The United States Supreme Court distin-

guished Belton, in which four unsecured occupants

were arrested and posed both a risk to the officer’s

safety and a risk of loss of evidence.

Gant held that the

police may not search a vehicle “incident to a recent

occupant’s arrest after the arrestee has been secured

and cannot access the interior of the vehicle.”

Belton, 453 US at 460.

Mungo I, 277 Mich App at 578.

Gant, 556 US at 336.

Id. at 344; see Belton, 453 US at 456.

Gant, 556 US at 335.

2012] P

EOPLE V

UNGO

ECOND

) 543

On remand, in light of Gant, this Court affirmed the

trial court’s suppression of the gun evidence.

In Mungo

II, we held that Gant applies retroactively and required

the suppression of the evidence obtained from the uncon-

stitutional search of defendant’s vehicle.

In applying

Gant to the facts of this case, we stated:

Deputy Stuck placed Dixon under arrest after discovering

that Dixon had two outstanding warrants for traffic viola-

tions. The officer secured Dixon in the backseat of the police

vehicle. The officer searched the vehicle only after an addi-

tional police unit had arrived and defendant had been secured

in the backseat of that police vehicle. Defendant 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 [337-338]; 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 [343-344];

129 S Ct at 1719; Thornton [v United States, 541 US 615, 632;

124 S Ct 2127; 158 L Ed 2d 905 (2004)] (Scalia, J., concurring

in the judgment). Thus, we conclude that Deputy Stuck’s

warrantless search of defendant’s car was unreasonable and

in violation of the Fourth Amendment. See Gant, 556 US at

[350-351]; 129 S Ct at 1723-1724.

[

]

C. MUNGO III

The prosecution sought leave to appeal in the Michi-

gan Supreme Court. After granting leave and then

holding the case in abeyance, the Court vacated its

previous order that granted leave to appeal, vacated

Mungo II, 288 Mich App at 170, 184.

Id. at 182-183.

Id. at 175.

544 295 M

ICH

537 [Mar

this Court’s opinion in Mungo II, and remanded the

case to this Court for reconsideration,

this time in

light of Davis. Davis considered the application of the

exclusionary rule and its good-faith exception to vehicle

searches incident to arrests of recent occupants that

were conducted before the new rule was announced in

Gant.

The United States Supreme Court held in Davis

“that searches conducted in objectively reasonable reli-

ance on binding appellate precedent are not subject to

the exclusionary rule.”

III. STANDARD OF REVIEW

This Court “review[s] de novo whether the Fourth

Amendment was violated and whether an exclusionary

rule applies.”

If a ruling on a motion to suppress

evidence “involves an interpretation of the law or the

application of a constitutional standard to uncontested

facts,” appellate review is de novo.

IV. THE PARTIES’ POSITIONS

A. THE PROSECUTION’S POSITION

The prosecution argues that Deputy Stuck’s search

of Mungo’s vehicle was permissible under Belton and

that Davis held that the exclusionary rule need not

apply to evidence obtained by the police who in good

faith relied on existing caselaw. The prosecution

notes that the Michigan Supreme Court initially

granted leave to appeal in Mungo II only on the issue

Mungo III, 490 Mich 870.

Davis, 564 US at ___; 131 S Ct at 2428-2429.

Id. at ___; 131 S Ct at 2423-2424.

People v Hyde, 285 Mich App 428, 436; 775 NW2d 833 (2009).

People v Attebury, 463 Mich 662, 668; 624 NW2d 912 (2001).

2012] P

EOPLE V

UNGO

ECOND

) 545

whether a good-faith exception to the exclusionary

rule should apply to evidence seized pursuant to a

pre-Gant search that was permissible under Belton.

The prosecution asserts that the Michigan Supreme

Court did not grant leave to appeal on any other

issue, including whether the search was valid under

Belton. The prosecution maintains that by granting

leave to appeal on the first issue only, the Michigan

Supreme Court implicitly determined that the search

was valid under Belton.

The prosecution also argues that Mungo I did not

announce a new rule or create an exception to Belton;it

merely interpreted and applied Belton to the facts of the

case and recognized that the bright-line rule of Belton was

not limited to an arrest of the driver. The prosecution

further argues that Mungo II assumed, without deciding,

that a good-faith exception to the exclusionary rule can be

based on Michigan caselaw, which Davis expressly per-

mits. The prosecution disagrees with Mungo II’s charac-

terization of Mungo I as announcing a new rule of law by

extending Belton or applying it in a new context of a

vehicle search incident to a passenger’s arrest.

According to the prosecution, therefore, this Court

concluded in Mungo I that the facts of this case fit

“precisely” within Belton and that the application of

Belton was not limited only to searches incident to an

arrest of the driver. The prosecution maintains that, as

in Davis, the exclusionary rule should not apply to

evidence seized in an unconstitutional search before

Gant was decided because suppression would not fur-

ther the purpose of the exclusionary rule to deter police

misconduct. The prosecution argues that the police

searched Mungo’s car in objectively reasonable reliance

on Belton, which allowed a search incident to an arrest

of an occupant of the vehicle.

546 295 M

ICH

537 [Mar

B. MUNGO’S POSITION

Mungo argues that Davis does not undermine this

Court’s analysis in Mungo II because, unlike the situa-

tion in Davis, Deputy Stuck did not reasonably rely on

binding, settled precedent in conducting the search of

Mungo’s car. Mungo relies on then Judge Z

AHRA

’s

statement in Mungo II that the facts of this case

present an issue of first impression and therefore the

good-faith exception does not apply.

In making this argument, Mungo acknowledges

Davis’s holding that the good-faith exception to the

exclusionary rule applies when the police act in reason-

able reliance on settled precedent that the United

States Supreme Court later overrules. But Mungo

maintains that Davis did not address whether the

exclusionary rule applies when the police act in reliance

on precedent that is not clear or settled at the time of

the challenged search, circumstances that Mungo ar-

gues existed in this case.

Mungo contends that Belton was not settled law

because no Michigan decision had applied Belton to a

vehicle search incident to a passenger’s arrest. Mungo

argues that Mungo II correctly held that the good-faith

exception to the exclusionary rule does not apply in this

case and that Davis does not compel a different result.

V. ANALYSIS

A. DAVIS

This case turns on Davis, and so we consider it first.

Davis arose in the context of the new rule announced in

Gant regarding the constitutionality of vehicle searches

incident to arrests of recent occupants. The issue in

Davis was whether the good-faith exception to the

exclusionary rule applies “when the police conduct a

2012] P

EOPLE V

UNGO

ECOND

) 547

search in compliance with binding precedent that is

later overruled.”

The United States Supreme Court

held: “Because suppression would do nothing to deter

police misconduct in these circumstances, and because

it would come at a high cost to both the truth and the

public safety, we hold that searches conducted in objec-

tively reasonable reliance on binding appellate prece-

dent are not subject to the exclusionary rule.”

The vehicle search at issue in Davis occurred two

years before the United States Supreme Court decided

Gant.

In Davis, police officers stopped the vehicle in

which the defendant was a passenger.

The driver was

intoxicated, and the defendant gave a false name to the

police.

The police arrested both the driver and the

defendant, handcuffed them, and secured them in sepa-

rate patrol cars.

The police then searched the vehicle

and found a revolver in the defendant’s jacket pocket.

The defendant was a convicted felon and was prohibited

from possessing a firearm.

The defendant moved to

suppress evidence of the gun.

The district court denied

the motion, and the defendant was convicted of one

count of possession of a firearm by a convicted felon.

While the defendant’s appeal was pending in the

United States Court of Appeals for the Eleventh Cir-

Davis, 564 US at ___; 131 S Ct at 2423.

Id. at ___; 131 S Ct at 2423-2424.

Id. at ___; 131 S Ct at 2425.

Id.

Id. at ___; 131 S Ct at 2425-2426, citing 18 USC 922(g)(1).

Davis, 564 US at ___; 131 S Ct at 2426.

Id.

548 295 M

ICH

537 [Mar

cuit, the United States Supreme Court decided Gant.

Thus, on appeal, the Eleventh Circuit applied Gant and

held that the vehicle search incident to the defendant’s

arrest violated his Fourth Amendment rights. However,

it declined to apply the exclusionary rule, reasoning

that penalizing the arresting officer for following bind-

ing appellate precedent would not deter Fourth Amend-

ment violations.

Therefore, the Eleventh Circuit af-

firmed the defendant’s conviction.

On appeal, the United States Supreme Court clari-

fied that Gant applied retroactively to Davis’s case

because the direct appeal of his conviction was still

pending when Gant was decided.

However, the issue

was not the retroactivity of Gant, but the appropriate

remedy for a Fourth Amendment violation that pre-

dated Gant:

When this Court announced its decision in Gant, Davis’s

conviction had not yet become final on direct review. Gant

therefore applies retroactively to this case. Davis may

invoke its newly announced rule of substantive Fourth

Amendment law as a basis for seeking relief. The question,

then, becomes one of remedy, and on that issue Davis seeks

application of the exclusionary rule. But exclusion of evi-

dence does not automatically follow from the fact that a

Fourth Amendment violation occurred. The remedy is

subject to exceptions and applies only where its “purpose is

effectively advanced.”

[

]

The United States Supreme Court noted that it was

not disputed that the police search in Davis was valid

under the Eleventh Circuit’s accepted interpretation

Id.

Id. at ___; 131 S Ct at 2431.

Id. (citations omitted).

2012] P

EOPLE V

UNGO

ECOND

) 549

and application of Belton, which many courts viewed as

“authoriz[ing] automobile searches incident to arrests

of recent occupants, regardless of whether the arrestee

in any particular case was within reaching distance of

the vehicle at the time of the search.”

“Like most

courts, the Eleventh Circuit had long read Belton to

establish a bright-line rule authorizing substantially

contemporaneous vehicle searches incident to arrests of

recent occupants.”

The United States Supreme Court then proceeded to

consider application of the exclusionary rule in light of

the officers’ compliance with then existing caselaw:

The question in this case is whether to apply the

exclusionary rule when the police conduct a search in

objectively reasonable reliance on binding judicial prece-

dent. At the time of the search at issue here, we had not yet

decided [Gant]....Although the search turned out to be

unconstitutional under Gant, all agree that the officers’

conduct was in strict compliance with then-binding Circuit

law and was not culpable in any way.

[

]

The Court determined that the exclusionary rule does

not apply in situations in which the police followed

established precedent:

Under our exclusionary-rule precedents, this acknowl-

edged absence of police culpability dooms Davis’s claim.

Police practices trigger the harsh sanction of exclusion only

when they are deliberate enough to yield “meaningfu[l]”

deterrence, and culpable enough to be “worth the price

paid by the justice system.” The conduct of the officers here

was neither of these things. The officers who conducted the

search did not violate Davis’s Fourth Amendment rights

Id. at ___; 131 S Ct at 2424.

Id. at ___; 131 S Ct at 2426, citing United States v Gonzalez,71F3d

819, 822, 824-827 (CA 11, 1996).

Davis, 564 US at ___; 131 S Ct at 2428.

550 295 M

ICH

537 [Mar

deliberately, recklessly, or with gross negligence. Nor does

this case involve any “recurring or systemic negligence” on

the part of law enforcement. The police acted in strict

compliance with binding precedent, and their behavior was

not wrongful. Unless the exclusionary rule is to become a

strict-liability regime, it can have no application in this

case.

[

]

The Court reasoned that excluding the evidence in the

case before it would yield no “meaningful” deterrence:

About all that exclusion would deter in this case is

conscientious police work. Responsible law-enforcement

officers will take care to learn “what is required of them”

under Fourth Amendment precedent and will conform

their conduct to these rules. But by the same token, when

binding appellate precedent specifically authorizes a par-

ticular police practice, well-trained officers will and should

use that tool to fulfill their crime-detection and public-

safety responsibilities. An officer who conducts a search in

reliance on binding appellate precedent does no more than

“ ‘ac[t] as a reasonable officer would and should act’ ”

under the circumstances. The deterrent effect of exclusion

in such a case can only be to discourage the officer from

“ ‘do[ing] his duty.’ ”

[49]

The Davis Court concluded:

That is not the kind of deterrence the exclusionary rule

seeks to foster. We have stated before, and we reaffirm

today, that the harsh sanction of exclusion “should not be

applied to deter objectively reasonable law enforcement

activity.” Evidence obtained during a search conducted in

reasonable reliance on binding precedent is not subject to

the exclusionary rule.

[

]

The United States Supreme Court reviewed the

history of the exclusionary rule and its parameters and

Id. at ___; 131 S Ct at 2428-2429 (citations omitted).

Id. at ___; 131 S Ct at 2429 (citations omitted).

Id. (citation omitted).

2012] P

EOPLE V

UNGO

ECOND

) 551

the good-faith exception that was first recognized in

United States v Leon.

The Court concluded that the

evidence found during the unconstitutional search was

not subject to the exclusionary rule because the police

officers reasonably relied on existing caselaw precedent

when conducting their search:

Davis did not secure a decision overturning a Supreme

Court precedent; the police in his case reasonably relied on

binding Circuit precedent. See United States v. Gonzalez,

71 F.3d 819 [(CA 11, 1996)]. That sort of blameless police

conduct, we hold, comes within the good-faith exception

and is not properly subject to the exclusionary rule.

***

It is one thing for the criminal “to go free because the

constable has blundered.” People v. Defore, 242 N.Y. 13, 21,

150 N.E. 585, 587 (1926) (Cardozo, J.). It is quite another to

set the criminal free because the constable has scrupu-

lously adhered to governing law. Excluding evidence in

such cases deters no police misconduct and imposes sub-

stantial social costs. We therefore hold that when the police

conduct a search in objectively reasonable reliance on

binding appellate precedent, the exclusionary rule does not

apply.

[

]

B. APPLYING DAVIS

In Michigan, even before the United States Supreme

Court decided Davis, this Court recognized that the

good-faith exception to the exclusionary rule applies to

pre-Gant searches that were conducted in reasonable

reliance on Belton.InPeople v Short,

this Court held

Id. at ___; 131 S Ct at 2426-2428; see United States v Leon, 468 US

897; 104 S Ct 3405; 82 L Ed 2d 677 (1984).

Davis, 564 US at ___; 131 S Ct at 2434.

People v Short, 289 Mich App 538, 551-552; 797 NW2d 665 (2010)

(citation omitted).

552 295 M

ICH

537 [Mar

that the good-faith exception to the exclusionary rule

applies to a permissible Belton search conducted before

the Gant decision:

[A]t the time [the officer] conducted the search, our

courts adhered to the nearly universally accepted reading

of Belton that an officer may search a vehicle incident to a

lawful arrest. Law enforcement officers are entitled to, and

indeed must, rely on court decisions that define appropri-

ate police conduct, and it is illogical to impose “the extreme

sanction of exclusion” when a clear rule of conduct is later

abrogated by the Supreme Court. Accordingly, though the

well-settled interpretation of Belton was changed by Gant,

because it was objectively reasonable for [the officer] to

have relied on that precedent, the good-faith exception to

the exclusionary rule applies and the trial court correctly

denied [the] defendant’s motion to suppress.

Here, it cannot be disputed that the search of Mun-

go’s car was unconstitutional under Gant. The police

had arrested Mungo’s passenger, Dixon, and secured

him in the back of a squad car before Deputy Stuck

searched Mungo’s vehicle. Again, the question is

whether Deputy Stuck reasonably relied on the estab-

lished rule in Belton, so that the good-faith exception to

the exclusionary rule applies, as in Davis.

Mungo argues that the search of his vehicle was not

permissible under Belton because Michigan courts had

never before applied Belton to permit a vehicle search

incident to an arrest when the arrestee was a passenger,

rather than the driver. He relies on statements in

Mungo II that this is an issue of first impression

because Mungo I was “the first published case in

Michigan to address the applicability and extension of

Belton to a vehicle search solely incident to a passen-

ger’s arrest.”

Mungo II, 288 Mich App at 184.

2012] P

EOPLE V

UNGO

ECOND

) 553

First, we note that Mungo I and Mungo II are not

controlling authorities. “ ‘[A] Court of Appeals opin-

ion that has been vacated by the majority of the

Supreme Court without an expression of approval or

disapproval of this Court’s reasoning is not preceden-

tially binding.’ ”

Because the Michigan Supreme

Court vacated Mungo I and Mungo II, they have no

precedential value.

Second, at the time of the search in this case, Belton

was binding precedent, and, therefore, reliance on Bel-

ton by the police to authorize the search of defendant’s

car was objectively reasonable. Michigan had followed

the Belton rule since 1983, when this Court first applied

Belton in People v Miller (On Remand).

And even if no

Michigan decision had applied Belton in the context of a

search incident to a passenger’s arrest, the broad hold-

ing of Belton itself permitted the search.

Third, there is no basis for Mungo’s implicit sugges-

tion that Belton was limited to vehicle searches incident

to an arrest of the driver of a vehicle. To the contrary,

the defendant in Belton was a passenger in the car that

the police searched.

The four occupants of the car were

arrested, and no distinction was made between the

driver and the passengers. Belton articulated that its

holding was to apply to the arrest of any occupant of the

vehicle: “[W]e hold that when a policeman has made a

lawful custodial arrest of the occupant of an automobile,

People v Giovannini, 271 Mich App 409, 414; 722 NW2d 237

(2006), quoting People v Akins, 259 Mich App 545, 550 n 8; 675 NW2d

863 (2003).

People v Miller (On Remand), 128 Mich App 298, 302; 340 NW2d 858

(1983).

See Belton, 453 US at 462 (“The jacket was located inside the

passenger compartment of the car in which the respondent had been a

passenger just before he was arrested.”).

554 295 M

ICH

537 [Mar

he may, as a contemporaneous incident of that arrest,

search the passenger compartment of that automo-

bile.”

Notably, in Mungo I, this Court considered the scope

of Belton. We rejected Mungo’s attempt to distinguish

Belton from this case on the basis that it was the

passenger, not the driver, who was arrested and incident

to whose arrest the search was conducted:

We find no merit in defendant’s argument that Belton is

distinguishable from the present case and ought not be

applied under these circumstances....[A]s noted by Jus-

tice Rehnquist in Belton, supra at 463 (Rehnquist, J.,

concurring), the majority did not rest its decision on the

automobile exception [to the warrant requirement]. In-

stead, the Supreme Court elected to premise its decision in

Belton on the search-incident-to-an-arrest exception. In

doing so, the Supreme Court carefully crafted its opinion.

In its statement of facts, the Supreme Court indicated that

“[t]here were four men in the car, one of whom was Roger

Belton, the respondent in this case.” Belton, supra at 455.

Significantly, the Supreme Court did not premise its hold-

ing in Belton on the arrest of the driver of the car, Belton,

or any other passenger. Rather, the Supreme Court set

forth the concisely worded rule: “[W]hen a policeman has

made a lawful custodial arrest of the occupant of an

automobile, he may, as a contemporaneous incident of that

arrest, search the passenger compartment of that automo-

bile.” Belton, supra at 460.

This is precisely what occurred in this case. Deputy

Stuck made an arrest of Dixon, an occupant of the

vehicle owned and operated by defendant. Conse-

Id. at 460 (emphasis added). See also Short, 289 Mich App at 542-543,

quoting Gant, 556 US at 341 (“Under Belton and its progeny, it was

lawful for an officer to search a vehicle ‘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.’ ”) (emphasis added).

Mungo I, 277 Mich App at 587-588.

2012] P

EOPLE V

UNGO

ECOND

) 555

quently, Deputy Stuck was constitutionally permitted

to conduct a search of the passenger compartment of

defendant’s car.

VI. CONCLUSION

There is no dispute that Dixon was a recent occupant

of Mungo’s vehicle. Therefore, at the time of the search,

his arrest allowed the police to search the car under

Belton, and Deputy Stuck had a good-faith basis to rely

on Belton. There is no evidence of police misconduct or

an intentional violation of Mungo’s Fourth Amendment

rights. Because the well-established bright-line rule in

Belton authorized a search incident to an arrest of a

recent occupant of a vehicle, without regard to whether

the occupant was the driver or a passenger, Deputy

Stuck’s search of Mungo’s car after Dixon’s arrest was

permissible under Belton. Davis holds that under such

circumstances, the exclusionary rule need not apply.

Because the search was constitutional under existing

law at the time of the search, Davis compels the same

result here. We therefore conclude that the good-faith

exception to the exclusionary rule applies and that the

circuit court should not have suppressed the evidence

pertaining to the gun that Deputy Stuck discovered in

his search of Mungo’s car and quashed the information.

We reverse and remand. We do not retain jurisdic-

tion.

HITBECK

,P.J., and T

ALBOT

and O

WENS

, JJ., con-

curred.

Id.

556 295 M

ICH

537 [Mar

GAGNON v GLOWACKI

Docket No. 303449. Submitted January 11, 2012, at Detroit. Decided

March 6, 2012, at 9:05 a.m. Leave to appeal denied, 491 Mich 949.

Randi Gagnon filed a motion in the Wayne Circuit Court seeking

to change the domicile of her and Gary Glowacki’s minor child

from Plymouth, Michigan to Windsor, Ontario. The parties, who

were never married, were awarded joint legal and joint physical

custody of the minor child following his birth in 2005. The child

primarily resided with Gagnon, with Glowacki having signifi-

cant parenting time that he exercised on a consistent basis.

Glowacki also exercised additional parenting time as much as

possible, brought the child lunch, and took him out to eat and on

vacations. Gagnon had been unemployed since the end of 2009,

but had attempted to attend classes at different times. Because

she lacked access to transportation, Gagnon had limited her job

search to areas within walking distance of her deceased grand-

mother’s home where she resided, but had received no offers or

call-backs. Gagnon’s mother, who owned the house in which

Gagnon lived, expressed an intent to sell the house because she

could not afford to continue paying the mortgage. Gagnon relied

on child support and public assistance to provide for herself and

the minor child. Gagnon filed a motion to move to Windsor

because she had a job offer there, her family still lived there,

and she would have access to family cars and available daycare

by her mother. The circuit court, Eric William Cholack, J.,

granted the motion, finding that while an established custodial

environment existed with both parents, it would not be affected

by the move if Glowacki was given an additional weekend of

parenting time each month and allowed to maintain his Tues-

day and Thursday parenting time and if Gagnon was respon-

sible for driving the child across the Canadian-American border.

Glowacki appealed.

The Court of Appeals held:

1. A party to a custody order who requests a change of

domicile has the burden of establishing by a preponderance of

the evidence that the change is warranted. When a custody

order prohibits a parent from changing the minor child’s legal

2012] G

AGNON V

LOWACKI

557

residence to a different state without the court’s permission (for

changes in domicile analysis, Canada is considered another

state), the court must consider the factors in MCL 722.31(4)

when making a decision. The court must consider whether the

change in legal residence has the capacity to improve the quality

of life for both the child and the relocating parent, the degree to

which each parent has complied with the parenting-time aspect

of the custody order and the extent to which the planned

domicile change was inspired by that parent’s desire to defeat or

frustrate the parenting-time schedule, the degree to which the

parenting-time schedule could be modified if the domicile

change request was granted to preserve and foster the parental

relationship between the child and each parent, the degree to

which the parent opposing the legal residence change is moti-

vated by a desire to secure a financial advantage with respect to

a support obligation, and whether any domestic violence is

involved. An increase in a relocating parent’s earning potential

may improve a child’s quality of life. Gagnon proved by a

preponderance of the evidence that moving the child to Windsor

was warranted, and the trial court’s findings were not against

the great weight of the evidence. The move had the capacity to

improve the minor child’s quality of life because Gagnon would

have immediate employment, a support system, access to trans-

portation, and free daycare by her family. Although weekday

parenting may be more difficult for Glowacki after the move,

increasing his weekend parenting time would provide a realistic

opportunity to preserve and foster the parental relationship

because the number of hours of parenting time remained

essentially the same.

2. If a trial court grants a change of domicile it must

determine whether there will be a change in the established

custodial environment. If it results in a change in the custodial

environment, the relocating parent must prove by clear and

convincing evidence that the change is in the minor child’s best

interest. It is possible to have a change of domicile without a

corresponding change in the established custodial environment.

However, a change in established custodial environment will

occur if it would turn a party into a weekend-only parent. The

trial court’s conclusion that the move would not change the

established custodial environment was not against the great

weight of the evidence. Glowacki was given an additional

weekend each month and was allowed to maintain his current

parenting time if desired, with Gagnon ordered to transport the

child across the border for weekday visits. The potential loss of

a weekday overnight and school-time lunches would not destroy

558 295 M

ICH

557 [Mar

the established custodial environment. The trial court’s finding

that the extra weekend of parenting time each month would

offset the lack of any weekday parenting if weekday visits

became too difficult to continue was erroneous because such a

change would alter the established custodial environment by

making him a weekend-only parent. However, because the trial

court made it clear that it expected the weekday parenting to

continue, its conclusion that the move would not alter the

established custodial environment was not against the great

weight of the evidence.

3. The trial court was not required to determine whether

the moving party proved by a preponderance of the evidence

that the move was in the best interest of the minor child. A

best-interest analysis under MCL 722.23 is not required when a

movant has proven by a preponderance of the evidence that a

change of domicile is warranted under MCL 722.31 and the

relocation would not alter any established custodial environ-

ment. MCL 722.31(4) is a specific statute that applies to

requests for a change of domicile of the minor child, and if the

Legislature had wanted the best-interest factors of MCL 722.23

to be applied to the analysis of this issue they would have been

referred to specifically.

Affirmed.

ANSEN

,P.J., concurring in part and dissenting in part, con-

curred with the majority’s conclusion that the circuit court did not

err with regard to its evaluation of the change-of-residence factors

of MCL 722.31(4) and its determination that plaintiff had met her

burden of establishing by a preponderance of the evidence that the

move to Windsor, Ontario was warranted. Judge J

ANSEN

would

have held, however, that the circuit court’s determination that the

move to Windsor would not alter the child’s established custodial

environment was against the great weight of the evidence because

the reality of the time involved with crossing the Canadian-

American border would most likely render Glowacki a weekend-

only parent.

1. P

ARENT AND

HILD —

HILD

USTODY —

HANGES OF

HILD

’

OMICILE OR

ESIDENCE

A party to a custody order who requests a change of domicile has

the burden of establishing by a preponderance of the evidence

that the change is warranted; when a custody order prohibits a

parent from changing the minor child’s legal residence to a

different state without the court’s permission, the court must

consider the factors in MCL 722.31(4) when making a decision;

2012] G

AGNON V

LOWACKI

559

Canada is considered another state for changes in domicile

analysis; under MCL 722.31(4) the court must consider whether

the change in legal residence has the capacity to improve the

quality of life for both the child and the relocating parent, the

degree to which each parent has complied with the parenting-

time aspect of the custody order and the extent to which the

planned domicile change was inspired by that parent’s desire to

defeat or frustrate the parenting-time schedule, the degree to

which the parenting-time schedule could be modified if the

domicile change request was granted to preserve and foster the

parental relationship between the child and each parent, the

degree to which the parent opposing the legal residence change

is motivated by a desire to secure a financial advantage with

respect to a support obligation, and whether any domestic

violence is involved; an increase in a relocating parent’s earning

potential may improve a child’s quality of life.

2. P

ARENT AND

HILD —

HILD

USTODY —

HANGES OF

HILD

’

OMICILE OR

ESIDENCE —

HANGE IN

STABLISHED

USTODIAL

NVIRONMENT

ETER-

MINATION

If a trial court grants a change of domicile it must determine

whether there will be a change in the established custodial

environment; if the change of domicile results in a change in the

custodial environment, the relocating parent must prove by

clear and convincing evidence that the change is in the minor

child’s best interest; it is possible to have a change of domicile

without a corresponding change in the established custodial

environment; however, a change in established custodial envi-

ronment will occur if it would turn a party into a weekend-only

parent.

3. C

HILD

USTODY —

HANGES OF

HILD

’

OMICILE OR

ESIDENCE —

EST

NTEREST

ACTORS

PPLICABLE.

A best-interest analysis under MCL 722.23 is not required when

a movant has proven by a preponderance of the evidence that a

change of domicile is warranted under MCL 722.31 and the

relocation would not alter any established custodial environ-

ment; MCL 722.31(4) is a specific statute that applies to

requests for a change of domicile of the minor child, and if the

Legislature had wanted the best-interest factors of MCL 722.23

to be applied to the analysis of this issue they would have been

referred to specifically.

560 295 M

ICH

557 [Mar

Plunkett Cooney (by Robert G. Kamenec) for Randi

Gagnon.

Gentry Law Offices, P.C. (by Kevin S. Gentry), for

Gary Glowacki.

Before: J

ANSEN

,P.J., and W

ILDER

and K. F. K

ELLY

,JJ.

ILDER

, J. Defendant appeals as of right the trial

court’s order granting plaintiff’s request to change the

domicile of their minor child from Michigan to Windsor,

Ontario. We affirm.

I. BASIC FACTS

Plaintiff and defendant never married and had a son

together, who was born on September 19, 2005. Around

the time that the child was born, plaintiff and defen-

dant stopped dating. Since birth, the child has lived

with plaintiff in her grandmother’s home in Plymouth.

Defendant lives approximately 11

miles away in

Farmington Hills and is married. He and his wife have

a child of their own, who was born in June 2010.

A court order awarded plaintiff and defendant joint

legal and joint physical custody of their child. The order

provided that the child would primarily reside with

plaintiff, with defendant having parenting time every

Tuesday and Thursday evening and alternate week-

ends. Additionally, defendant received an overnight

with the child every other Thursday night.

Plaintiff worked as an assistant in a latch-key pro-

gram in the Plymouth-Canton School district from 2003

until 2006, when she decided to quit because she

determined that the cost of providing child care for her

son was almost as much as her income. Plaintiff then

became a nanny for her friend’s children until the end

2012] G

AGNON V

LOWACKI

561

PINION OF THE

OURT

of 2009, which allowed her to take care of her son at the

same time. During this time, plaintiff attempted to

further her education by attending a paramedic class on

Saturdays. Defendant would watch and care for their

son while plaintiff was in class. Eventually, plaintiff quit

to take care of her grandmother, who was in failing

health.

In August 2007, plaintiff’s car was repossessed

because she could not afford to keep current with the

payments. In 2009, she began to attend classes at a

community college to study criminal justice. However,

just a few months later, plaintiff lacked the means to get

to the school because her friend would no longer allow

her use of the friend’s car. Consequently, plaintiff

stopped attending the classes.

Plaintiff has tried to find other jobs in Michigan

within walking distance of her home. Because of her

desire to be home when the child was home, she limited

her work availability to every other weekend and 12:30

p.m. to 3:30 p.m. Monday through Friday, when the

child would either be with defendant or at preschool.

Plaintiff did not receive any offers or call-backs.

Because of her lack of employment, plaintiff was rely-

ing on child support and public assistance from the state

in the form of a bridge card. Because the monthly mort-

gage payment was $918 she could not continue to afford to

live in her grandmother’s home. After plaintiff’s grand-

mother passed away, title in the home went to plaintiff’s

mother, who assumed the existing mortgage. Plaintiff was

paying a portion of the mortgage ($500) each month to her

mother. More recently, plaintiff has not been able to afford

the $500, so her mother has been paying the full mortgage

amount. Plaintiff’s mother testified that she is unable to

At some point later, not specified in the record, plaintiff’s grand-

mother passed away.

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continue paying the mortgage each month and that her

intention is to sell the house.

Defendant is employed as a supervisor of the service

department for an armored transport company and

exercises additional parenting time as much as possible,

bringing the child lunch, taking the child to Mc-

Donald’s, and going on vacations. Defendant and the

child talk on the phone two or three times per day, with

the child initiating many of the calls. Defendant did the

majority of transporting the child to preschool with his

wife helping occasionally. Defendant also has been tak-

ing the child to ice skating classes on Tuesday evenings,

during his parenting time. And defendant testified that

he and the child have an “extremely strong” relation-

ship and that their bond is “unbreakable.” Even plain-

tiff testified that the child “idolizes his father like a

superhero. He loves his father.” Plaintiff added that the

child looks to defendant for guidance and discipline in

his day-to-day life when the child is with him.

Because of plaintiff’s lack of access to transportation,

defendant has always done all of the driving to and from

Plymouth for his parenting time. It takes approxi-

mately 15 minutes to drive from his home in Farming-

ton Hills to plaintiff’s home in Plymouth. Defendant

also has taken the child to all of his doctor appoint-

ments and dentist appointments.

Plaintiff desires to move to Windsor, where she grew

up and her entire family still resides. Plaintiff also

testified that she would gain access to a car because her

mother and her mother’s husband

have four cars

between them.

Furthermore, plaintiff has a job offer to

work as a waitress at The Penalty Box, which is a

Plaintiff’s parents are divorced but still both reside in Windsor.

Plaintiff’s mother testified that she would only allow plaintiff to have

access to a vehicle if she lived in Windsor.

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restaurant in Windsor where her mother also works.

The job would be for 25 to 30 hours per week making

approximately $18 per hour, including tips. Plaintiff’s

mother would be available to care for the child while

plaintiff was at work or school because she would quit

her job if necessary. Plaintiff plans to live with her

father in his three-bedroom house for a few weeks until

she is able to rent an apartment on her own. Addition-

ally, plaintiff plans for the child to attend St. Maria

Goretti Catholic Elementary School, which is located

near the home of her father.

On August 30, 2010, plaintiff filed a motion to change

the domicile of the child from Plymouth to Windsor.

After conducting a hearing, the trial court granted the

motion. In its order dated February 8, 2011, it found

that plaintiff successfully established by a preponder-

ance of the evidence that the move was warranted. It

also found that an established custodial environment

existed with both parents and that the established

custodial environment would not be affected with the

move “if Defendant were given an additional weekend

each month and were allowed to maintain his Tuesday

and Thursday parenting time sessions if desired.” Be-

cause it found no change in the established custodial

environment, the trial court found it unnecessary to

consider any best-interest factors. The trial court also

ordered plaintiff to drop off and pick up the child in

Detroit for parenting time with defendant.

II. CHANGE OF DOMICILE: MCL 722.31

Defendant first contends that the trial court erred by

addressing the change in legal residence factors set

forth in MCL 722.31(4) from the perspective of plaintiff,

rather than the child, and by improperly crediting some

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of plaintiff’s factual claims. Defendant also suggests

that other factual findings of the trial court were

erroneous. We disagree.

We review a decision on a petition to change the

domicile of a minor child for an abuse of discretion.

Brown v Loveman, 260 Mich App 576, 600; 680 NW2d

432 (2004). We review the trial court’s findings in

applying the MCL 722.31 factors under the great weight

of the evidence standard. Id. “Under this standard, we

may not substitute our judgment on questions of fact

unless the facts clearly preponderate in the opposite

direction.” McKimmy v Melling, 291 Mich App 577,

581; 805 NW2d 615 (2011).

Under MCL 722.31(1) “a parent of a child whose

custody is governed by court order shall not change a

legal residence of the child to a location that is more

than 100 miles from the child’s legal residence at the

time of the commencement of the action in which the

order is issued” without court approval. Before allowing

a change of legal residence, a court must consider the

following factors in MCL 722.31(4):

(a) Whether the legal residence change has the capacity

to improve the quality of life for both the child and the

relocating parent.

(b) The degree to which each parent has complied with,

and utilized his or her time under, a court order governing

parenting time with the child, and whether the parent’s

plan to change the child’s legal residence is inspired by that

parent’s desire to defeat or frustrate the parenting time

schedule.

court permits the legal residence change, it is possible to

order a modification of the parenting time schedule and

other arrangements governing the child’s schedule in a

manner that can provide an adequate basis for preserving

and fostering the parental relationship between the child

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and each parent; and whether each parent is likely to

comply with the modification.

(d) The extent to which the parent opposing the legal

residence change is motivated by a desire to secure a

financial advantage with respect to a support obligation.

(e) Domestic violence, regardless of whether the vio-

lence was directed against or witnessed by the child.

“The party requesting the change of domicile has the

burden of establishing by a preponderance of the evi-

dence that the change is warranted.” McKimmy, 291

Mich App at 582. In addition, MCL 722.31(4) requires

that the trial court consider the factors “with the child

as the primary focus in the court’s deliberations.”

On its face, MCL 722.31 is only applicable when a

parent attempts to change the domicile of a child to a

location that is over 100 miles away. However, when a

child’s custody is governed by a court order that pro-

hibits the child from moving to another state without

the permission of the court, as is the case here, regard-

less of the distance involved if the proposed residence

change involves leaving the state, then the factors

under MCL 722.31(4) are the proper criteria for the

court to consider.

See Mogle v Scriver, 241 Mich App

192, 202-203; 614 NW2d 696 (2000).

With regard to MCL 722.31(4)(a), capacity to im-

prove the quality of life for both the child and the

relocating parent, the trial court found that the move

would provide plaintiff with immediate employment, a

support system, access to transportation, and free day-

care by her family. The move would also make it more

likely that plaintiff would “secure a steady income,

return to school and pursue a brighter future. This

could have a positive spillover effect on [the child].” The

The parties do not dispute the application of MCL 722.31(4).

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trial court also found insufficient evidence that the

child would be harmed educationally by the move.

This Court has stated that “[i]t is well established

that the relocating parent’s increased earning potential

may improve a child’s quality of life.” Rittershaus v

Rittershaus, 273 Mich App 462, 466; 730 NW2d 262

(2007). Thus, the trial court’s finding in this case that

improvement in plaintiff’s income would have a spill-

over effect on the child is not an improper application of

the law. In addition, the finding is not against the great

weight of the evidence. There was evidence that plain-

tiff was unemployed, did not have a vehicle, and relied

on defendant’s child support payments and assistance

from the state of Michigan for her income. In Windsor,

however, she had a job offer, access to a vehicle, and free

childcare available. While, as defendant contends, the

child may not have suffered from a lack of transporta-

tion or basic necessities while in Michigan, the trial

court’s finding that the move had the capacity to

improve his quality of life was not against the great

weight of the evidence.

The trial court’s finding that the move would not

detrimentally affect the child’s education was also not

against the great weight of evidence. First and fore-

most, the evidence comparing the Plymouth-Canton

schools with the Windsor schools was not entirely

relevant because even if the motion to change domicile

was denied, plaintiff stated she would be moving out of

the Plymouth home and there was no guarantee that

she would remain in the Plymouth-Canton School Dis-

trict. Additionally, because Michigan and Ontario use

different “proficiency standards” when evaluating their

schools, the statistics presented were of “limited use.”

Defendant is correct when he states that the standard is

whether the move has the capacity to improve the

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plaintiff’s and the child’s life. However, the fact that the

trial court found this particular fact neutral does not

preclude a finding that the move overall had the capac-

ity to improve their lives.

Finally, defendant’s argument that plaintiff and her

mother created the alleged crisis so that plaintiff could

move to Windsor and make defendant a weekend parent

ultimately involves credibility determinations, and this

Court must defer to the trial court on issues of credibil-

ity. Mogle, 241 Mich App at 201. The trial court was free

to believe the testimony of plaintiff and her mother

regarding plaintiff’s employment opportunities, the

availability for plaintiff to use her mother’s extra ve-

hicle, her mother’s inability to provide childcare in

Michigan, and the need to sell the Plymouth residence.

Therefore, when evaluating all of the above facts, we

conclude that the trial court’s finding that the move did

have the capacity to improve the quality of life of both

plaintiff and the child was not against the great weight

of evidence.

With regard to MCL 722.31(4)(b), the trial court

found that plaintiff’s move was not inspired by a desire

to deny defendant parenting time. The trial court found

that plaintiff has frequently given defendant more

parenting time than required by the court order, con-

sented to additional parenting time in the summer, is

willing to give defendant an extra weekend or overnight

per month, and is willing to transport the child across

the border for parenting time.

Although weekday parenting time may be more dif-

ficult after the move, the trial court’s finding that

plaintiff did not intend to frustrate defendant’s parent-

ing time is also not against the great weight of the

evidence. Plaintiff offered defendant an additional

weekend per month and offered to transport the child

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across the border for parenting time. Moreover, as

previously noted, there was testimony in the record

that the plaintiff’s family and friends were in Windsor,

plaintiff would have access to transportation in Wind-

sor, plaintiff would have employment in Windsor, and

plaintiff would have access to free childcare in Windsor.

This factor also involves a credibility determination, on

which we must defer to the trial court. Id.

With regard to MCL 722.31(4)(c), the trial court

found that providing defendant with an additional

weekend of parenting time per month, even if weekday

parenting time was negatively affected, could provide

an adequate basis for preserving and fostering the

parental relationship between defendant and the child.

The trial court concluded that this could give defendant

additional extended time, which could foster an even

closer parent-child relationship. In addition, the trial

court found that the parties’ history of cooperation

regarding parenting time suggested that they would

comply with the modified order. Moreover, the trial

court found that plaintiff agreed to subject herself to

the jurisdiction of the court while in Canada, and as

such the trial court would be able to ensure compliance

with its orders. See Brausch v Brausch, 283 Mich App

339, 354; 770 NW2d 72 (2009).

For this factor, our inquiry is “whether the proposed

parenting-time schedule provides ‘a realistic opportu-

nity to preserve and foster the parental relationship

previously enjoyed’ by the nonrelocating parent.”

McKimmy, 291 Mich App at 584, quoting Mogle, 241

Mich App at 204. Furthermore, “the visitation plan

need not be equal to the prior visitation plan in all

respects.” Brown, 260 Mich App at 603.

The trial court’s finding that the new parenting time

schedule would provide an adequate basis for preserv-

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ing and fostering the parent-child relationship is not

against the great weight of the evidence. The parenting

time schedule after the move is essentially the same as

the parenting time schedule before the move, with

defendant given an extra weekend per month.

The trial court found that factors (d) and (e) were not

applicable. Neither plaintiff nor defendant disputes

these findings on appeal, and we do not find that the

findings were against the great weight of evidence.

After evaluating all the above factors, the trial court

determined that plaintiff met her burden of establish-

ing by a preponderance of the evidence that moving the

child to Windsor was warranted. This ultimate finding

is not against the great weight of evidence. In short, the

capacity of the move to improve both plaintiff’s and the

child’s lives was not outweighed by any possible nega-

tive ramifications associated with the move.

III. ESTABLISHED CUSTODIAL ENVIRONMENT

Defendant next contends that the trial court erred by

finding that the move would not change the established

custodial environment with defendant and, therefore,

failed to determine whether plaintiff proved by clear

and convincing evidence that the move was in the best

interest of the child. We disagree.

After granting a change of domicile, the trial court

must determine whether there will be a change in the

established custodial environment and, if so, determine

whether the relocating parent can prove, by clear and

convincing evidence, that the change is in the child’s

best interest.

Id. at 591.

According to MCL 722.27(1)(c),

MCL 722.23 provides:

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[t]he custodial environment of a child is established if over

an appreciable time the child naturally looks to the custo-

dian in that environment for guidance, discipline, the

necessities of life, and parental comfort. The age of the

child, the physical environment, and the inclination of the

custodian and the child as to permanency of the relation-

ship should also be considered.

As used in this act, “best interests of the child” means the sum

total of the following factors to be considered, evaluated, and

determined by the court:

(a) The love, affection, and other emotional ties existing

between the parties involved and the child.

(b) The capacity and disposition of the parties involved to give

the child love, affection, and guidance and to continue the educa-

tion and raising of the child in his or her religion or creed, if any.

provide the child with food, clothing, medical care or other

remedial care recognized and permitted under the laws of this

state in place of medical care, and other material needs.

(d) The length of time the child has lived in a stable, satisfac-

tory environment, and the desirability of maintaining continuity.

(e) The permanence, as a family unit, of the existing or

proposed custodial home or homes.

(f) The moral fitness of the parties involved.

(g) The mental and physical health of the parties involved.

(h) The home, school, and community record of the child.

(i) The reasonable preference of the child, if the court considers

the child to be of sufficient age to express preference.

(j) The willingness and ability of each of the parties to facilitate

and encourage a close and continuing parent-child relationship

between the child and the other parent or the child and the

parents.

(k) Domestic violence, regardless of whether the violence was

directed against or witnessed by the child.

(l) Any other factor considered by the court to be relevant to a

particular child custody dispute.

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In Brown, this Court noted that it is possible to have a

change of domicile without changing the established

custodial environment. Id. at 596.

The parties do not dispute that an established custo-

dial environment existed with both plaintiff and defen-

dant. The trial court’s finding that the move would not

change the established custodial environment was not

against the great weight of the evidence.

The trial court found that the established custodial

environment with both parents would not change if

defendant was given an additional weekend per month

and was allowed to maintain his current parenting time

if desired. The trial court further found that, even if

defendant decided to no longer exercise Thursday over-

nights, defendant would have the same number of

overnights per month as he does now (six). In addition,

if defendant stopped weekday parenting time, the extra

time that defendant would receive for the additional

weekend (48 hours) is almost equivalent to the maxi-

mum number of weekday hours that defendant cur-

rently exercises (58 hours). Finally, the court found that

with advance planning, defendant would also be able to

continue to attend school-related events.

In this case, the new parenting-time schedule was

essentially the same, with defendant being given an

additional weekend per month. Defendant’s argument

stresses that plaintiff’s move is more than a mere

17-mile move because it crosses international borders.

Specifically, defendant argues that because of the inher-

ent extra time needed for him to make such border

crossings, his weekday parenting time will be so ad-

versely affected that he may have to opt out of them for

the benefit of the child. Defendant notes that if the

move results in him becoming a weekend-only dad, then

the established custodial environment the child has

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with him would necessarily be affected. This argument

has some merit; however, the trial court ordered plain-

tiff to transport the child across the border to facilitate

the weekday parenting time. Thus, on the face of it, the

bulk of defendant’s concerns about diminished weekday

parenting time are not warranted. While the move to

Windsor likely means the end of spontaneous lunches

during the week and Thursday overnights with defen-

dant,

defendant still can have the Tuesday/Thursday

evening parenting time. The loss of the weekday over-

night and the lunches is insufficient to destroy the

established custodial environment between the child

and defendant. Therefore, the trial court finding that

the established custodial environment would not

change if defendant was given an extra weekend per

month and continued to maintain his current parenting

time was not against the great weight of the evidence. If

the child continued to see his father on weekdays and

an extra weekend per month, he would continue to look

to his father for guidance, discipline, necessities, and

comfort. See MCL 722.27(1)(c).

However, the trial court’s finding that the extra

weekend per month of parenting time would offset the

lack of any weekday parenting time if weekday visits

became too difficult to continue, is erroneous. On the

contrary, if the move were to render defendant a

weekend-only parent, a change in the established cus-

todial environment would result. Powery v Wells, 278

Mich App 526, 528; 752 NW2d 47 (2008). But this

particular finding was not central to the trial court’s

ultimate conclusion. The trial court’s order made it

We acknowledge that the extra time involved with morning rush hour

and crossing the international border would likely require the child to

wake up unreasonably early to timely arrive at school on Friday, thereby

making weekday overnights difficult.

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clear that defendant would maintain his weekday

parenting time. At another part of the opinion, the trial

court found that plaintiff and defendant were likely to

comply with a modified order. Thus, defendant is not

made a weekend parent by the terms of the order, and

the trial court’s finding that the move would not change

the established custodial environment was not against

the great weight of the evidence.

IV. CHILD’S BEST INTERESTS

Because there would be no change in the established

custodial environment, the trial court was not required

to determine whether plaintiff proved by clear and

convincing evidence that the move was in the best

interest of the child. See Brown, 260 Mich App at

590-591. However, defendant contends that, even if

there was no change in the established custodial envi-

ronment, the trial court was required to consider

whether the move was in the best interest of the child,

but at the lower preponderance of the evidence stan-

dard. We disagree.

Defendant’s reliance on Pierron v Pierron, 486 Mich

81; 782 NW2d 480 (2010), is misplaced. Pierron did not

specifically address a change of domicile under MCL

722.31. Instead, the Pierron Court was confronted with

a situation where the parents, who had joint legal

custody, could not agree regarding an important deci-

sion that affected the welfare of the child, specifically a

change in the children’s school.

In such instances, the

court is responsible for resolving the issue in the child’s

best interests. MCL 722.25; Pierron, 486 Mich at 85. In

Pierron, the plaintiff-father, the defendant-mother, and

MCL 722.26a(7)(b) provides that the parents in a joint-custody

setting “shall share decision-making authority as to the important

decisions affecting the welfare of the child.”

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the children lived in Grosse Pointe Woods, with the

children residing with the mother. The defendant later

moved to Howell, which was 60 miles away,

and tried to

enroll their children in Howell schools. The plaintiff

objected to the children changing school districts and

moved to have the courts decide the issue. The Supreme

Court concluded that because the change would not

modify the established custodial environment, the de-

fendant did not have to prove by clear and convincing

evidence that the change was in the best interests of the

children. Rather, the Court stated that the “defendant

is required to prove by a preponderance of the evidence

that the proposed change of schools would be in the best

interests of the children, using the best-interest factors

identified in MCL 722.23.” Pierron, 486 Mich at 89-90.

In the present case, defendant invites us to extend this

requirement to all change of domicile cases under MCL

722.31, when there also is no change to the established

custodial environment. We decline the invitation.

This Court has repeatedly held that if a movant can

establish that a relocation of domicile under MCL

722.31 is warranted by a preponderance of the evidence

and the relocation would not alter any established

custodial environment, then no best-interest analysis is

necessary. Spires v Bergman, 276 Mich App 432, 437 n 1;

741 NW2d 523 (2007) (“Only when the parents share

joint physical custody and the proposed change of

domicile would also constitute a change in the child’s

established custodial environment is it also necessary to

evaluate whether the change of domicile would be in the

child’s best interest.”); Rittershaus, 273 Mich App at

470-471 (“We reiterate that the trial court is not re-

quired to consider the best-interest factors until it first

determines that the modification actually changes the

Thus, MCL 722.31 was not applicable.

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children’s established custodial environment.”); Brown,

260 Mich App at 598 n 7 (stating that only when “the

relocation would result in a change in parenting time so

great as to necessarily change the established custodial

environment that an inquiry into the best interest

factors is necessary.”). Nowhere in Pierron did the

Court explicitly overrule or modify any of this Court’s

prior published opinions.

Thus, Pierron differed from the present case in that

it did not involve a change of domicile analysis under

MCL 722.31(4) but, rather, focused on the general

procedure put in place to resolve an impasse when

parents cannot decide on important decisions affecting

the welfare of the child. Pierron, 486 Mich at 85, citing

MCL 722.25(1) and Lombardo v Lombardo, 202 Mich

App 151, 159; 507 NW2d 788 (1993).

We find that the

situation presented in a change of domicile case under

MCL 722.31 is distinguishable from the situation where

two parents cannot agree on an important decision

affecting a child’s welfare. In the former, the decision

involves more than the child—it also necessarily affects

the relocating parent directly. Furthermore, MCL

722.31 is a specific statute that outlines the require-

ments necessary to grant a change of domicile. Con-

versely, the general provision of MCL 722.25 explicitly

refers to the “best interests of the child.” But as our

Supreme Court has stated, “ ‘[W]here a statute con-

tains a general provision and a specific provision, the

specific provision controls.’ ” Duffy v Mich Dep’t of

It is important to note that Spires, Rittershaus, and Brown all held

that no best-interest analysis was necessary if the established custodial

environment was not being altered even though they all had the benefit

of this Court’s earlier opinion in Lombardo, which stated that “a trial

court must determine the best interests of the child in resolving disputes

concerning ‘important decisions affecting the welfare of the child’ that

arise between joint custodial parents.” Lombardo, 202 Mich App at 160.

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Natural Resources, 490 Mich 198, 215; 805 NW2d 399

(2011) (citation omitted). If the Legislature intended for

the best-interest factors of MCL 722.21 to be evaluated

in a change of domicile case, it easily could have done so.

Instead, it limited the analysis to the factors enumer-

ated in MCL 722.31(4).

V. CONCLUSION

We conclude that the trial court did not abuse its

discretion when it granted plaintiff’s motion to change

the child’s domicile to Windsor. Furthermore, the court

did not err when it concluded that the established

custodial environment would not be affected. As a

result, the trial court was not required to determine if

defendant proved by a preponderance of the evidence

that the move was in the best interests of the child.

Affirmed.

K. F. K

ELLY

, J., concurred with W

ILDER

,J.

ANSEN

,P.J. (concurring in part and dissenting in

part). I concur with the majority’s conclusion that the

circuit court did not err with regard to its evaluation of

the change-of-residence factors of MCL 722.31(4), or its

determination that plaintiff met her burden of estab-

lishing by a preponderance of the evidence that the

move to Windsor, Ontario was warranted. I respectfully

dissent, however, from the majority’s conclusion that

the circuit court properly determined that the move to

Windsor would not alter the child’s established custo-

dial environment.

The circuit court correctly determined that an estab-

lished custodial environment existed with both parents

in this case. See Berger v Berger, 277 Mich App 700,

707; 747 NW2d 336 (2008) (noting that “[a]n estab-

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lished custodial environment may exist with both par-

ents where a child looks to both the mother and the

father for guidance, discipline, the necessities of life,

and parental comfort”). I fully acknowledge that “[i]t is

possible to have a change of domicile...without dis-

turbing the established custodial environment.” Brown

v Loveman, 260 Mich App 576, 596; 680 NW2d 432

(2004); see also Pierron v Pierron, 282 Mich App 222,

249-250; 765 NW2d 345 (2009), aff’d 486 Mich 81

(2010); DeGrow v DeGrow, 112 Mich App 260, 267; 315

NW2d 915 (1982). However, on the facts of this case, I

conclude that the move to Windsor, Ontario would

change the child’s established custodial environment

and that the circuit court erred by determining that it

would not.

Defendant has been closely involved in the child’s

upbringing since the child was born in 2005. Along with

plaintiff, defendant has joint legal and physical custody

of the child. The record evidence establishes that defen-

dant consistently exercises his full complement of

parenting time and spends additional time with the

child whenever possible. Defendant spends time with

the child both during the week and on weekends. In

addition to defendant’s regularly scheduled parenting

time, he frequently brings the child lunch, has taken

the child on vacations, and talks to the child on the

telephone two or three times per day. Further, defen-

dant is responsible for the vast majority of the child’s

transportation needs, and takes the child to all of his

medical and dental appointments. Even plaintiff admits

that defendant has an extremely close relationship with

the child and that the child looks to defendant for

guidance and discipline in his day-to-day life.

The majority concludes that plaintiff’s move to Wind-

sor with the child would not destroy defendant’s strong

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relationship with the child and would not render defen-

dant a “weekend” parent. Consequently, according to

the majority, the circuit court correctly determined that

the move to Windsor would not affect the child’s estab-

lished custodial environment with defendant. I must

respectfully disagree.

I realize that Canada is to be treated as a “state” for

purposes of the Uniform Child-Custody Jurisdiction

and Enforcement Act (UCCJEA), MCL 722.1101 et seq.,

that Canada is a signatory to the Hague Convention on

Child Abduction, and that Canada “has adopted specific

and far-reaching legislation protecting the rights of

noncustodial parents, including those who are not Ca-

nadian citizens.” Brausch v Brausch, 283 Mich App 339,

354; 770 NW2d 77 (2009); see also MCL 722.1105;

Atchison v Atchison, 256 Mich App 531, 536-537; 664

NW2d 249 (2003). But I nevertheless believe that one

parent’s act of moving to a foreign country with a minor

child is both quantitatively and qualitatively different

than the scenario presented by a mere interstate move

with a minor child within the United States. Traveling

from one state to another is relatively simple; it does not

require a passport or any special papers, and does not

subject the traveler to potentially lengthy stops or

searches at the border between the states. Indeed, the

United States Constitution implicitly guarantees the right

to interstate travel, “a right that has been firmly estab-

lished and repeatedly recognized.” United States v Guest,

383 US 745, 757; 86 S Ct 1170; 16 L Ed 2d 239 (1966); see

also Griffin v Breckenridge, 403 US 88, 105-106; 91 S Ct

1790; 29 L Ed 2d 338 (1971). By contrast, the freedom to

travel outside the United States, including to and from

Canada, is clearly accorded less stature than the right to

interstate travel. Califano v Aznavorian, 439 US 170,

176-177; 99 S Ct 471; 58 L Ed 2d 435 (1978); Haig v

Agee, 453 US 280, 306-307; 101 S Ct 2766; 69 L

2012] G

AGNON V

LOWACKI

579

PINION BY

ANSEN

,P.J.

Ed 2d 640 (1981). Particularly in today’s post-9/11

world, the act of traveling to or from a foreign country,

even if only Canada, has become a much more compli-

cated, burdensome, and time-consuming prospect.

I realize that plaintiff has agreed to bring the child

into the United States for defendant’s parenting time so

that defendant, himself, does not have to face the

burdens of traveling to Canada to see the child. How-

ever, I still believe that plaintiff’s international move

with the child poses substantial difficulties for defen-

dant. The circuit court determined that despite plain-

tiff’s move to Windsor with the child, defendant would

still be able to spend time and interact with the child on

a regular basis. The circuit court further observed that,

even though defendant might lose his overnight visits

with the child during the week, this could be remedied

by granting defendant an additional weekend of parent-

ing time each month. But unlike a move to Ohio or

Indiana, it strikes me that plaintiff’s move to Canada

will have the potential of significantly obstructing de-

fendant’s weekday visitation schedule. Neither the par-

ties nor the circuit court can know for certain whether

plaintiff will be able to bring the child to Michigan for

all scheduled parenting time with defendant. For in-

stance, what will happen if plaintiff must wait to cross

the international border with the child or, worse yet, if

the border is closed completely? While such questions

are not germane in the context of interstate moves, they

are certainly relevant in the context of international

moves. In short, I agree with defendant that the unpre-

dictable and time-consuming nature of crossing the

international border may ultimately affect his weekday

parenting-time schedule so greatly that he will have to

opt out of weekday visitation altogether on certain

occasions. Unlike the majority, I conclude that such a

scenario would effectively relegate defendant to the role

580 295 M

ICH

557 [Mar

PINION BY

ANSEN

,P.J.

of a weekend-only parent, thereby altering the child’s

established custodial environment with defendant.

Powery v Wells, 278 Mich App 526, 528; 752 NW2d 47

(2008).

On the facts before us, I conclude that plaintiff’s

move to Windsor with the child would alter the estab-

lished custodial environment that currently exists with

defendant. I believe that the circuit court’s finding to

the contrary was clearly against the great weight of the

evidence. MCL 722.28; Berger, 277 Mich App at 705.

Once a circuit court has granted a party permission

to remove a minor child from the state, and assuming

that the party’s move would effectively alter the child’s

established custodial environment, the court must un-

dertake an analysis of the best-interest factors set forth

in MCL 722.23 to determine whether the party can

prove by clear and convincing evidence that the removal

and consequent change in the established custodial

environment will be in the child’s best interests. Brown,

260 Mich App at 583. In the instant case, the circuit

court granted plaintiff’s request for permission to re-

move the child to Windsor. Moreover, as I have already

explained, I believe that such a move would alter the

child’s established custodial environment with defen-

dant. Accordingly, in my opinion, the circuit court

should have undertaken an analysis of the best-interest

factors to determine whether the move to Windsor and

consequent change in the established custodial environ-

ment was in the child’s best interests. Id. I would

reverse the circuit court’s determination that the move

to Windsor will not affect the child’s established custo-

dial environment and remand this matter to the circuit

court for a best-interests determination in accordance

with Brown and MCL 722.23.

2012] G

AGNON V

LOWACKI

581

PINION BY

ANSEN

,P.J.

PEOPLE v TAVERNIER

Docket No. 302678. Submitted January 5, 2012, at Detroit. Decided

January 26, 2012. Approved for publication March 6, 2012, at

9:10 a.m. Application for leave to appeal dismissed, 492 Mich

859.

William S. Tavernier was convicted following a bench trial in the

Wayne Circuit Court, Daniel A. Hathaway, J., of carrying a

concealed weapon, possession of a firearm by a felon, possession of

a firearm during the commission of a felony, operating a motor

vehicle while intoxicated and with an occupant under 16 years old,

and possession of marijuana. Defendant appealed, alleging that

the court had erred when it denied his motion to suppress evidence

that was discovered after the police officer stopped defendant’s

vehicle because he thought defendant might be driving while

intoxicated, placed defendant in the back seat of a police vehicle,

determined that defendant was under arrest, and searched the

vehicle. The motion was based on Arizona v Gant, 556 US 332

(2009), which held that the police may search a vehicle incident to

a recent occupant’s arrest only if the arrestee is within reaching

distance of the passenger compartment at the time of the search or

it is reasonable to believe that the vehicle contains evidence of the

offense of arrest. Defendant alleged that the court erred by

determining that the officer had a reasonable belief that the

vehicle might contain evidence that defendant had been driving

while under the influence of drugs, “the offense of arrest.”

The Court of Appeals held:

The facts known to the police officer at the time of the search,

coupled with the officer’s common sense, based on his experience,

training, and the totality of the circumstances, were sufficient for

the trial court to conclude that it was reasonable for the officer to

believe that the vehicle might contain evidence of driving under

the influence of drugs, “the offense of arrest.” The search of the

vehicle did not violate the Gant exception to the Fourth Amend-

ment’s warrant requirement. The trial court did not clearly err as

a result of its factual findings and did not err by denying

defendant’s motion to suppress the evidence.

Affirmed.

582 295 M

ICH

582 [Mar

EARCHES AND

EIZURES —

OTOR

EHICLES —

EARCH

OLLOWING

ECENT

CCUPANT

’

RREST

The police may search a vehicle without a warrant incident to a

recent occupant’s arrest only if the arrestee is within reaching

distance of the passenger compartment at the time of the search or

it is reasonable to believe that the vehicle contains evidence of the

offense of arrest; a trial court, in determining reasonableness,

must consider whether the facts known to the officer at the time of

the stop would warrant an officer of reasonable caution to suspect

criminal activity; the officer’s conclusion must be drawn from

reasonable inferences based on the facts in light of the officer’s

training and experience; the reasonableness of an officer’s suspi-

cion is determined case by case on the basis of the totality of all the

facts and circumstances; those circumstances must be viewed as

understood and interpreted by law enforcement officers, not legal

scholars, and deference should be given to the experience of the

law enforcement officers and their assessments of criminal modes

and patterns.

Bill Schuette, Attorney General, John J. Bursch,

Solicitor General, Kym L. Worthy, Prosecuting Attor-

ney, and Timothy A. Baughman, Chief of Research,

Training, and Appeals, for the people.

William W. Swor for defendant.

Before: D

ONOFRIO

,P.J., and S

TEPHENS

and R

ONAYNE

RAUSE

,JJ.

URIAM

. Defendant appeals as of right his con-

victions following a bench trial of carrying a concealed

weapon, MCL 750.227, possession of a firearm by a

felon, MCL 750.224f, possession of a firearm during the

commission of a felony (felony-firearm), MCL 750.227b,

operating a motor vehicle while intoxicated and with an

occupant under the age of 16, MCL 257.625(7)(a)(i), and

possession of marijuana, MCL 333.7403(2)(d). He was

sentenced to two years’ incarceration for the felony-

firearm conviction to be served consecutively to three

years’ probation for the other convictions. We affirm.

2012] P

EOPLE V

AVERNIER

583

On appeal, defendant contends that the trial court

erred when it denied his motion to suppress evidence

based on Arizona v Gant, 556 US 332, 343-344; 129 S Ct

1710; 173 L Ed 2d 485 (2009). We disagree. This Court

reviews a trial court’s findings of fact at a suppression

hearing for clear error and reviews de novo its ultimate

decision on a motion to suppress the evidence. People v

Hyde, 285 Mich App 428, 438; 775 NW2d 833 (2009);

People v Mullen, 282 Mich App 14, 21; 762 NW2d 170

(2008). Whether the exclusionary rule should be applied

to a violation of the Fourth Amendment is a question of

law reviewed de novo. People v Custer, 465 Mich 319,

326; 630 NW2d 870 (2001).

In New York v Belton, 453 US 454, 460; 101 S Ct

2860; 69 L Ed 2d 768 (1981), the United States Supreme

Court held that when an officer lawfully arrests “the

occupant of an automobile, he may, as a contemporane-

ous incident of that arrest, search the passenger com-

partment of that automobile” as well as the “contents of

any containers found within the passenger compart-

ment.... However, in Gant, 556 US at 343, quoting

Thornton v United States, 541 US 615, 632; 124 S Ct

2127; 158 L Ed 2d 905 (2004) (Scalia, J., concurring in

the judgment), the Court held: “[W]e 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.’ ” The Gant Court further

explained:

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-

584 295 M

ICH

582 [Mar

sonable unless police obtain a warrant or show that an-

other exception to the warrant requirement applies. [Gant,

556 US at 351.]

Several cases, including Gant, provide guidance in

determining reasonableness. In Terry v Ohio, 392 US 1,

21-22; 88 S Ct 1868; 20 L Ed 2d 889 (1968), the Court

stated that in determining reasonableness, the trial

court must consider whether the facts known to the

officer at the time of the stop would warrant a reason-

ably prudent person to suspect criminal activity. An

officer’s conclusion must be drawn from reasonable

inferences based on the facts in light of his training and

experience. Id. at 27. “The reasonableness of an offic-

er’s suspicion is determined case by case on the basis of

the totality of all the facts and circumstances.” People v

LoCicero (After Remand), 453 Mich 496, 501-502; 556

NW2d 498 (1996). “[T]hose circumstances must be

viewed ‘as understood and interpreted by law enforce-

ment officers, not legal scholars....’”People v Oliver,

464 Mich 184, 192; 627 NW2d 297 (2001), quoting

People v Nelson, 443 Mich 626, 632; 505 NW2d 266

(1993). The United States Supreme Court has said that

deference should be given to the experience of law

enforcement officers and their assessments of criminal

modes and patterns. United States v Arvizu, 534 US

266, 273; 122 S Ct 744; 151 L Ed 2d 740 (2002).

The Gant Court did not expressly define the meaning

of the phrase “reasonable to believe,” nor did it expound

on when it is reasonable for an officer to believe that the

passenger compartment of a vehicle might contain

evidence of the crime for which the vehicle’s occupant

was arrested, but it did provide strong clues regarding

what is reasonable. The Court said that the offenses of

arrest in Belton (unlawful possession of marijuana) and

Thornton (unlawful possession of marijuana and crack

2012] P

EOPLE V

AVERNIER

585

cocaine) supplied “a basis for searching the passenger

compartment of an arrestee’s vehicle and any con-

tainers therein.” Gant, 556 US at 344. The Court also

gave examples of offenses for which there is no reason

to believe that evidence relevant to the crime of

arrest would be found in the vehicle, such as civil

infractions and driving without a valid license. Id. at

343-344. Gant also specifically stated that “the of-

fense of arrest will supply a basis for searching the

passenger compartment of an arrestee’s vehicle and

any containers therein.” Id. at 344.

The legality of the search in this case was based on

the second prong of the Gant holding, that “it is

reasonable to believe the vehicle contains evidence of

the offense of arrest.” Id. at 347, 351. Upon review de

novo, we conclude that the trial court’s factual findings

were consistent with the testimony and other evidence

in the record.

Before his search of defendant’s vehicle,

the arresting officer had information from another

police officer that defendant was driving erratically and

was possibly driving while intoxicated. When the officer

activated his overhead lights to indicate to defendant to

stop his vehicle, defendant’s vehicle ran over a curb

before it stopped. When the officer conducted the field

sobriety tests, defendant acted confused and was not

able to complete the tasks. Defendant told the officer

that he had recently had surgery. The officer placed

defendant in the police car. Although he was not hand-

cuffed at the time, defendant was not able to get out of

the police car. Then, the officer received information

from defendant’s brother that defendant was taking

OxyContin for pain. On the basis of the totality of the

The video of the arrest and search was not supplied to this Court.

However, we conclude that the evidence in the record is sufficient to

address and answer this question.

586 295 M

ICH

582 [Mar

circumstances and his common sense in light of his

training and experience, the police officer decided that

defendant was under arrest and to search defendant’s

vehicle. The officer stated two reasons why he searched

the vehicle: (1) “he was under arrest I was going to

impound his vehicle...[and] [i]nventory it,” and (2) “I

was also looking for some sort of narcotic or maybe his

pain medication that might have been in the vehicle....

Something that would show me why he was driving so

badly.”

In deciding defendant’s motion to suppress evidence,

the trial court determined that the officer had

a sufficient reasonable suspicion based upon all those

factors for him to conduct a search to determine whether

there was any narcotics or prescription bottles that might

have been in the vehicle that would further support his

determination that there was–the Defendant had been in

fact driving while impaired by drugs.

We hold that the facts known to the police officer at

the time of the search, coupled with his common sense,

based on his experience, training, and the totality of the

circumstances, were sufficient for the trial court to

conclude that it was reasonable to believe that the

vehicle might contain evidence of driving under the

influence of drugs, “the offense of arrest.” The search of

defendant’s vehicle did not violate the Gant exception

to the Fourth Amendment. The court did not clearly err

in its factual findings. Upon review de novo, we hold

that the trial court did not err by denying defendant’s

motion to suppress the evidence found during the

search of his vehicle.

Affirmed.

ONOFRIO

,P.J., and S

TEPHENS

and R

ONAYNE

RAUSE

JJ., concurred.

2012] P

EOPLE V

AVERNIER

587

HOUSTON v GOVERNOR

Docket Nos. 308724 and 308725. Submitted February 29, 2012, at

Lansing. Decided March 7, 2012, at 9:00 a.m. Reversed, 491 Mich

876.

Frank Houston, Edna Freier, Christy Jenson, and others filed an

action in the Ingham Circuit Court against the Governor and the

Oakland County Board of Commissioners challenging the consti-

tutionality of 2011 PA 280, which amended provisions of MCL

46.401, MCL 46.402, and MCL 46.403. The act reduced the

number of commissioners that a county with a population greater

than 50,000 may have and provided for reapportionment in

counties that were not in compliance with the newly reduced level

of commissioners. In addition, the act changed the membership of

the apportionment commission for certain counties. The amend-

ments in effect reduced only the size of the Oakland County Board

of Commissioners and required it to adopt a reapportionment plan

for districts from which its members were elected. The court,

William E. Collette, J., ruled that the act was unconstitutional and

granted summary disposition in favor of plaintiffs. The court

concluded that 2011 PA 280 was a local act that the Legislature

had failed to enact in compliance with Const 1963, art 4, § 29; that

it amounted to an unfunded mandate enacted in violation of the

Headlee Amendment, Const 1963, art 9, § 29; and that it would

not allow a proper opportunity for judicial review of the required

new apportionment before the next election. The Oakland County

Board of Commissioners (Docket No. 308724) and the Governor

(Docket No. 308725) appealed.

The Court of Appeals held:

1. Const 1963, art 4, § 29 prohibits the Legislature from enact-

ing a local or special act when a general act could be applicable.

When a local or special act is passed, it may not take effect until

of each house and a majority of the electors voting in the district

affected approve it. Courts examine the substance of the act rather

than its form when evaluating whether it is a local or special act.

If a statute cannot apply to other units of government, it is not a

general act. Moreover, when a statute can affect only one munici-

pality within a specific time frame, the existence of practically

588 295 M

ICH

588 [Mar

impossible scenarios by which the statute can apply to other

municipalities does not remove the statute from being considered

an unconstitutional local act. The circuit court properly deter-

mined that 2011 PA 280 violated Const 1963, art 4, § 29. The

30-day apportionment requirement in MCL 46.401(2) applied only

to counties that were not in compliance with the act on the very

day the act became effective, specifically, only to Oakland County.

The act was therefore a local law because it was directed at, and

applied only to, Oakland County.

2. Courts must uphold the constitutionality of an act to the

greatest extent possible, and an entire act will not be invalidated if

an offending provision can be severed from the act. The circuit

court erred by invalidating 2011 PA 280 in its entirety. Because the

first sentence of MCL 46.401(2), as amended by 2011 PA 280,

which sets forth the procedure for reducing the number of com-

missioners if a county has more commissioners than allowed,

constituted a local act that violated Const 1963, art 4, § 29, that

sentence had to be struck from the act, but the remainder of the

act was a valid statute of general application.

3. It was unnecessary to address the alternative bases offered

by the circuit court for concluding that the act was unconstitu-

tional.

Affirmed in part, reversed in part, and remanded for entry of

an order invalidating the first sentence of MCL 46.401(2) but

upholding the constitutionality of the remainder of the act.

ETER

,P.J., concurring in part and dissenting in part, would

have held that 2011 PA 280 was constitutional in its entirety and

reversed the circuit court’s decision. Judge M

ETER

concluded that

2011 PA 280 was a general law because all counties are subject to

the requirements of the act. In addition, he would have held that

the circuit court erred by concluding that the act violated the

Headlee Amendment and by holding that the act unconstitution-

ally deprived Oakland County electors of the right to seek judicial

review of the reapportionment required by the act.

Sachs Waldman (by Mary Ellen Gurewitz) for Frank

Houston, Edna Freier, Christy Jenson, Loretta Cole-

man, Jim Nash, David Richards, and Eric Coleman.

Honigman Miller Schwartz & Cohn LLP (by John D.

Pirich and Andrea L. Hansen) for the Oakland County

Board of Commissioners.

2012] H

OUSTON V

OVERNOR

589

Bill Schuette, Attorney General, John J. Bursch,

Solicitor General, Richard A. Bandstra, Chief Legal

Counsel, and Ann M. Sherman and Christina M. Grossi,

Assistant Attorneys General, for the Governor.

Before: M

ETER

,P.J., and M. J. K

ELLY

and R

ONAYNE

RAUSE

,JJ.

M. J. K

ELLY

, J. This case involves plaintiffs’ challenge

to the constitutionality of 2011 PA 280 (Public Act 280).

The circuit court determined that Public Act 280 is

unconstitutional and granted summary disposition in

favor of plaintiff. The Oakland County Board of Com-

missioners appealed that order by right in Docket No.

308724, and the Governor appealed the same order by

right in Docket No. 308725. We conclude that Public

Act 280 contains a provision that constitutes a local act.

Because the Legislature enacted Public Act 280 without

complying with the requirements of Const 1963, art 4,

§ 29, that provision of the act is unconstitutional.

Accordingly, while we agree with the circuit court’s

conclusion that a portion of Public Act 280 is unconsti-

tutional, we do not agree that the whole act is therefore

also unconstitutional. For that reason, we affirm in

part, reverse in part, and remand this case to the circuit

court.

I. FACTUAL BACKGROUND

After the 2010 decennial census, but before the

enactment of Public Act 280, the apportionment com-

mission for Oakland County adopted a reapportion-

ment plan for the Oakland County Board of Commis-

sioners. The apportionment commission adopted the

plan consistently with the statutory scheme applicable

to the apportionment of county boards of commission-

590 295 M

ICH

588 [Mar

PINION OF THE

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ers. See MCL 46.401 et seq. Thereafter, the Legislature

enacted Public Act 280, which the Governor signed on

December 19, 2011.

With Public Act 280, the Legislature amended key

provisions of MCL 46.401, MCL 46.402, and MCL

46.403. The Legislature amended MCL 46.401(1) to

reduce the maximum number of commissioners that a

county may have from 35 to 21. It also amended MCL

46.401 to include a new subsection, MCL 46.401(2),

which provides for reapportionment in counties that

were not in compliance with the newly reduced level of

commissioners:

If a county is not in compliance with [MCL 46.402] on

the effective date of the amendatory act that added this

subsection, the county apportionment commission of that

county shall, within 30 days of the effective date of the

amendatory act that added this subsection, apportion the

county in compliance with [MCL 46.402]. For subsequent

apportionments in a county that is apportioned under this

subsection, the county apportionment commission of that

county shall comply with the provisions of subsection (1).

In addition, the Legislature amended MCL 46.403(1)

to change the membership of the apportionment com-

mission for certain counties: “In a county with a popu-

lation of 1,000,000 or more that has adopted an optional

unified form of county government under 1973 PA 139,

MCL 45.551 to 45.573, with an elected county execu-

tive, the county apportionment commission shall be the

county board of commissioners.”

The practical effect of these amendments was to reduce

the Oakland County Board of Commissioners—and only

the Oakland County Board of Commissioners—from 35 to

21 members and require the Oakland County Board of

Commissioners to adopt a reapportionment plan for the

districts from which its members will be elected.

2012] H

OUSTON V

OVERNOR

591

PINION OF THE

OURT

The circuit court examined Public Act 280 and deter-

mined that it was unconstitutional on three grounds: it

determined that Public Act 280 was a local act and that

the Legislature had failed to enact it in compliance with

Const 1963, art 4, § 29; that it amounted to an un-

funded mandate enacted in violation of the Headlee

Amendment, see Const 1963, art 9, § 29; and that it

would not allow a proper opportunity for judicial review

of the required new apportionment. As more fully

explained below, we agree that Public Act 280 is uncon-

stitutional in part because it is a local act that was

enacted in contravention of Const 1963, art 4, § 29.

II. ANALYSIS

A. STANDARD OF REVIEW

This Court reviews de novo a trial court’s decision to

grant summary disposition. Barnard Mfg Co, Inc v

Gates Performance Engineering, Inc, 285 Mich App 362,

369; 775 NW2d 618 (2009). Similarly, this Court reviews

de novo whether an act was enacted in violation of

Michigan’s Constitution. See Taxpayers of Mich

Against Casinos v Michigan, 471 Mich 306, 317-318;

685 NW2d 221 (2004). This Court presumes that a

statute is “constitutional unless its unconstitutionality

is clearly apparent.” McDougall v Schanz, 461 Mich 15,

24; 597 NW2d 148 (1999).

B. LOCAL ACTS

Since the adoption of Michigan’s 1908 Constitution,

see Const 1908, art 5, § 30, there has been a provision

limiting the Legislature’s authority to enact local or

special acts. With Const 1963, art 4, § 29, the people of

this state provided that the Legislature “shall pass no

local or special act in any case where a general act can

592 295 M

ICH

588 [Mar

PINION OF THE

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be made applicable” and, when the Legislature elects to

pass a local or special act, the act shall not take effect

“until approved by two-thirds of the members elected to

and serving in each house and by a majority of the

electors voting thereon in the district affected.” The

people adopted this limitation in order to prevent the

Legislature’s “ ‘pernicious practice’ ” of passing local

acts, which amounted to “ ‘a direct and unwarranted

interference in purely local affairs and an invasion of

the principles of local self-government.’ ” Advisory

Opinion on Constitutionality of 1975 PA 301, 400 Mich

270, 286; 254 NW2d 528 (1977), quoting Attorney Gen-

eral ex rel Dingeman v Lacy, 180 Mich 329, 337-338; 146

NW 871 (1914). This practice led to abuse because the

“ ‘representatives from unaffected districts were usu-

ally complaisant, and agreed to its enactment without

the exercise of that intelligence and judgment which all

legislation is entitled to receive....’”Advisory Opin-

ion, 400 Mich at 286.

When evaluating whether an act is a local or special act,

courts will examine the substance of the act rather than

its form. Rohan v Detroit Racing Ass’n, 314 Mich 326,

349; 22 NW2d 433 (1946). Further, the fact that an act

contains limitations—such as a population threshold—

that appear to target a single municipality does not

remove the act from general application if it is possible

that another municipality or county might someday

qualify for inclusion:

The probability or improbability of other counties or cities

reaching the statutory standard of population is not the test

of a general law. In the above cases the acts were sustained as

general upon the hypothesis that other municipalities would

attain the provided population. By the same token, it must be

assumed here that other counties will [meet the criteria.]

Unless the act works under such conditions, it is a local, not

2012] H

OUSTON V

OVERNOR

593

PINION OF THE

OURT

a general act. [City of Dearborn v Wayne Co Bd of Supervi-

sors, 275 Mich 151, 157; 266 NW 304 (1936).]

“However, where the statute cannot apply to other

units of government, that is fatal to its status as a

general act.” Michigan v Wayne Co Clerk, 466 Mich 640,

643; 648 NW2d 202 (2002).

In holding Public Act 280 to constitute an unconsti-

tutional local act, the circuit court emphasized that on

its effective date Public Act 280 will only affect Oakland

County—Oakland County alone will lose commission-

ers and be required to undertake a second apportion-

ment within 30 days of the act’s effective date. To the

extent that Public Act 280 requires reapportionment

within 30 days of its enactment, we agree with the

circuit court’s conclusion that it is a local act. In this

regard, we conclude that our Supreme Court’s decision

in Wayne County Clerk is dispositive.

In Wayne County Clerk, the Legislature enacted a

public act that would have required the city of Detroit

to place a proposal on the August 6, 2002, election ballot

to change an at-large system of electing its city council

to a single-member district plan of organization. Wayne

County Clerk, 466 Mich at 641. The statute at issue in

Wayne County Clerk did not mention Detroit by name.

Id. at 642. Rather, it “purport[ed] to apply to any city

with a population of more than 750,000 that has a

nine-member at-large elected city council.” Id. How-

ever, only Detroit met that population requirement. Id.

Our Supreme Court first recognized that population-

based statutes “have been upheld against claims that

they constitute local acts where it is possible that other

municipalities or counties can qualify for inclusion if

their populations change.” Id. Nevertheless, the Court

held that the statute at issue did not qualify as a general

act because, even if another city reached the population

594 295 M

ICH

588 [Mar

PINION OF THE

OURT

threshold of 750,000 and had a nine-member at-large

council, the statute would not apply because of the

requirement that the proposition appear on the August

6, 2002 ballot. Because there would not be a census

before that date, no other city could meet the popula-

tion requirement. Id. at 643. Accordingly, our Supreme

Court concluded that the statute did not validly direct

placement of the proposition on the August 6, 2002,

ballot because it was not passed by a

vote of the

Legislature as required by Const 1963, art 4, § 29. In

other words, the statute at issue in Wayne County Clerk

was unconstitutional because it was an improperly

adopted local act. Id. at 643-644.

As in Wayne County Clerk, it is manifest that Public

Act 280 is—at least in part—directed at a single locality:

Oakland County. Oakland County alone would be re-

quired to reduce the number of members on its county

board of commissioners and undertake a second reappor-

tionment of its county board of commissioners within 30

days of the effective date of the act. Moreover, as in Wayne

County Clerk, there is no realistically possible way in

which any other locality could be affected by these re-

quirements within that 30-day time frame.

Defendants attempt to refute this fact by imagining

hypothetical situations in which other counties could

enlarge the number of members on their county com-

missions and adopt new forms of county governance so

as to become subject to the requirement of Public Act

280 that they reduce the size of their county commis-

sions and undertake reapportionment. But defendants’

attempts do not alter the fact that the first sentence of

MCL 46.401(2), as amended by 2011 PA 280, will

invariably apply only to Oakland County. It is implicit

in the Wayne County Clerk holding that when a statute

can affect only one municipality within a specific time

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frame, practically impossible scenarios should not re-

move the statute from being considered an unconstitu-

tional local act. Particularly, our Supreme Court consid-

ered it decisive that no other city could qualify under

the statute “because there will be no new census before

that date [August 6, 2002].” Wayne Co Clerk, 466 Mich

at 643. Obviously, the statute at issue in Wayne County

Clerk was passed before the August 6, 2002, election

date that it implicated. And, at least in theory, one

might imagine a scenario in which Congress required a

new census to have been conducted in the interval

between the passage of the statute at issue and the

August 6, 2002, election. After all, US Const, art I, § 2,

cl 3 does not preclude Congress from providing for a

census to be conducted more frequently. But our Su-

preme Court did not adopt a test premised on such

imaginings; rather, the Court recognized the practical

reality that there would be no new census before

August 6, 2002. We likewise decline defendants’ invita-

tion to consider strained and unrealistic scenarios in

order to uphold the constitutionality of what is mani-

festly a local act.

For similar reasons, we must respectfully disagree

with our dissenting colleague. The dissent notes that

1966 PA 261 had a similar 30-day provision for reap-

portionment, but the key difference here is that the

other criterion in 1966 PA 261—namely the statement

that it applied to counties with a population under

75,000—clearly rendered that apportionment require-

ment applicable to multiple counties. In contrast, be-

cause it applies only to counties that are not in compli-

ance with the act on the very day that the act becomes

effective, the 30-day apportionment requirement in

Public Act 280 will plainly apply to only one county:

Oakland County. MCL 46.401(2), as amended by 2011

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PA 280.

Indeed, under the act’s terms, even if every

other county suddenly and miraculously became non-

compliant on the day after the act became effective,

those counties—unlike Oakland County—would not

have to reduce their commissioners and reapportion

until the time set for “subsequent apportionments,”

which can only mean the next decennial census. Id.

Accordingly, we must conclude that the 30-day reappor-

tionment requirement was intended to target Oakland

County alone—and that makes it a local act.

C. SEVERABILITY

Although we agree with the circuit court’s conclusion

that Public Act 280 is unconstitutional to the extent

that it targets Oakland County alone, we do not agree

that the remaining portions of the act constitute an

impermissible local act. Because we must uphold the

constitutionality of the act to the greatest extent pos-

sible, we will not invalidate the entire act if the offend-

ing provisions can be severed from the act. Avis Rent-

A-Car Sys, Inc v City of Romulus, 400 Mich 337,

348-349; 254 NW2d 555 (1977). Because it is undis-

puted that it was not enacted in compliance with Const

1963, art 4, § 29, we hold that the first sentence of

MCL 46.401(2), as amended by 2011 PA 280,

is uncon-

This Court will not uphold an act as a general act when it is plain that

the requirements are a “manifest subterfuge” designed to limit its

application to only one locality. Avis Rent-A-Car Sys, Inc v City of

Romulus, 400 Mich 337, 345 n 7; 254 NW2d 555 (1977) (noting that an

act with a population requirement that does not provide for the inclusion

of other localities as they reach the population requirement is a local act).

This sentence reads: “If a county is not in compliance with [MCL

46.402] on the effective date of the amendatory act that added this

subsection, the county apportionment commission of that county shall,

within 30 days of the effective date of the amendatory act that added this

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stitutional and should be struck from the act. In all

other respects, Public Act 280 is a valid statute of

general application.

III. CONCLUSION

For these reasons, we affirm the circuit court’s grant

of summary disposition with respect to the unconstitu-

tionality of the first sentence of MCL 46.401, as

amended by 2011 PA 280, as an improperly enacted

local act. However, we do not agree that the remaining

provisions of the act are invalid on the same basis; those

provisions are sufficiently general to have been passed

without meeting the requirements of Const 1963, art 4,

§ 29. Moreover, given our resolution of this issue, we

need not address the alternate bases proffered by the

circuit court for concluding that 2011 PA 280 is uncon-

stitutional. The practical effect of our decision today is

to permit Oakland County to retain its current level of

commissioners and its current apportionment until

after the next decennial census.

As such, the trial

court’s concerns about an unfunded mandate and the

lack of judicial oversight of the reapportionment pro-

cess are no longer of concern. Therefore, we conclude

that the circuit court erred to the extent that it invali-

dated the entire act as unconstitutional. For these

reasons, we affirm the circuit court’s order in part,

reverse it in part, and remand for entry of an order

subsection, apportion the county in compliance with [MCL 46.402].”

MCL 46.402, as amended by 2011 PA 280.

The remaining provision of MCL 46.401(2), as amended by 2011 PA

280, states: “For subsequent apportionments in a county that is appor-

tioned under this subsection, the county apportionment commission of

that county shall comply with the provisions of subsection (1).” Thus,

Oakland County will not have to comply with amended MCL 46.401,

which incorporates amended MCL 46.402, until the next reapportion-

ment.

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invalidating the offending sentence of the act, but

otherwise upholding the constitutionality of the act.

Affirmed in part, reversed in part, and remanded for

further proceedings consistent with this opinion. We do

not retain jurisdiction. Because there were important

issues of public concern, we order that no party may tax

its costs. MCR 7.219(A).

ONAYNE

RAUSE

, J., concurred with M. J. K

ELLY

,J.

ETER

,P.J. (concurring in part and dissenting in

part). Because I believe that 2011 PA 280 is constitu-

tional in its entirety, I respectfully dissent from the part

of the majority opinion that invalidates the first sen-

tence of MCL 46.401(2). I would reverse the decision of

the circuit court and uphold the act as written.

In concluding that the first sentence of MCL

46.401(2), as amended by 2011 PA 280, is unconstitu-

tional as an improperly adopted local law, the majority

finds dispositive Michigan v Wayne Co Clerk, 466 Mich

640; 648 NW2d 202 (2002). The statute at issue in that

case applied to a city with a population of 750,000 or

more with a city council composed of nine at-large

council members. Id. at 642. Only Detroit met the

criteria and thus was required to place a particular

question on the ballot at the August 6, 2002, general

election. Id. The Supreme Court, in deciding whether

the statute was a general or local act, stated:

In this case, the statute plainly fails to qualify as a

general act. Even if another city reaches a population of

750,000, and has a nine-member at-large council, [2002 PA]

432 would not apply because of its requirement that the

proposition appear on the ballot at the August 6, 2002,

election. No other city can meet that requirement because

there will be no new census before that date. [Id. at 643.]

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MCL 46.401, as amended by 2011 PA 280, provides:

(1) Within 60 days after the publication of the latest

United States official decennial census figures, the county

apportionment commission in each county of this state

shall apportion the county into not less than 5 nor more

than 21 county commissioner districts as nearly of equal

population as is practicable and within the limitations of

[MCL 46.402].

(2) If a county is not in compliance with [MCL 46.402]

on the effective date of the amendatory act that added this

subsection, the county apportionment commission of that

county shall, within 30 days of the effective date of the

amendatory act that added this subsection, apportion the

county in compliance with [MCL 46.402]. For subsequent

apportionments in a county that is apportioned under this

subsection, the county apportionment commission of that

county shall comply with the provisions of subsection (1).

MCL 46.402, as amended by 2011 PA 280, provides:

County Population Number of Commissioners

Under 5,001 Not more than 7

5,001 to 10,000 Not more than 10

10,001 to 50,000 Not more than 15

Over 50,000 Not more than 21

MCL 46.403(1), as amended by 2011 PA 280, states:

Except as otherwise provided in this subsection, the

county apportionment commission shall consist of the

county clerk, the county treasurer, the prosecuting attor-

ney, and the statutory county chairperson of each of the 2

political parties receiving the greatest number of votes cast

for the office of secretary of state in the last preceding

general election. If a county does not have a statutory

chairperson of a political party, the 2 additional members

shall be a party representative from each of the 2 political

parties receiving the greatest number of votes cast for the

office of secretary of state in the last preceding general

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election and appointed by the chairperson of the state

central committee for each of the political parties. In a

county with a population of 1,000,000 or more that has

adopted an optional unified form of county government

under 1973 PA 139, MCL 45.551 to 45.573, with an elected

county executive, the county apportionment commission

shall be the county board of commissioners. The clerk shall

convene the apportionment commission and they shall

adopt their rules of procedure. A majority of the members

of the apportionment commission shall be a quorum suffi-

cient to conduct its business. All action of the apportion-

ment commission shall be by majority vote of the commis-

sion.

There is a fundamental difference between the stat-

ute at issue in Wayne County Clerk and 2011 PA 280.

The crux of the statute as discussed in Wayne County

Clerk was the requirement that a certain question be

placed on the ballot on August 6, 2002. Wayne Co Clerk,

466 Mich at 642. Because of this temporal limitation, it

was not possible for a city other than Detroit to be

subject to the requirement of the statute. Id. at 642-

643. All counties, by contrast, are subject to the require-

ments of 2011 PA 280. As stated by the Oakland County

Board of Commissioners on appeal: “The [number] of

allowable commissioners applies immediately to every

county with a population over 50,000, which includes

multiple counties, not just Oakland County. There are

at least 35 counties that this limitation will apply to

upon the effective date, and it will continue to apply to

every county that ever reaches 50,000 in the future.”

While the ballot requirement in Wayne County Clerk

applied only to Detroit, the limitation on commissioners

at issue here applies to multiple counties. It is a general

law, not a local law.

Even if I were to focus on the action of “reduction” in determining

whether the act, or whether the first sentence of MCL 46.402(2), is

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The circuit court focused, as does the majority, on the

procedural requirement stating that

[i]f a county is not in compliance with [MCL 46.402] on the

effective date of the amendatory act that added this sub-

section, the county apportionment commission of that

county shall, within 30 days of the effective date of the

amendatory act that added this subsection, apportion the

county in compliance with [MCL 46.402].

A similar 30-day requirement was included in the

county apportionment act as originally enacted. 1966

PA 261.

The act stated, in part:

In counties under 75,000, upon the effective date of

this act, the boards of supervisors of such counties shall

have not to exceed 30 days into [sic] which to apportion

their county into supervisor districts in accordance with

the provisions of this act. If at the expiration of the time

as set forth in this section a board of supervisors has not

so apportioned itself, the county apportionment commis-

sion shall proceed to apportion the county under the

provisions of this act. [MCL 46.401, as added by 1966 PA

261.]

general or local—i.e., even if I were to conclude that a “reduction” of

commissioners by multiple counties must be necessary in order for the

act or the sentence to be a general law—it would be possible for a county

such as Wayne to modify its charter before the effective date of 2011 PA

280 to have more than 21 commissioners and thus be required to

undertake a “reduction.” Unlike the majority, I do not find this possibility

akin to the possibility of a new census occurring in Wayne County Clerk.

In Wayne County Clerk, the act in question was passed in 2002, with an

effective date of June 6, 2002. See 2002 PA 432. It was fundamentally

impossible that a time-consuming new census could have been completed

before the August 6, 2002, election referred to in the act. See Wayne Co

Clerk, 466 Mich at 643.

I include this information not to imply, misleadingly, that the 30-day

provision in 1966 PA 261 applied to only one county but instead to

illustrate that in enacting 2011 PA 280 the Legislature was following a

template, including an immediate compliance provision, set forth years

ago for the county apportionment act.

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In Kizer v Livingston Co Bd of Comm’rs, 38 Mich App

239, 246; 195 NW2d 884 (1972), the Court analyzed the

county apportionment act and considered whether the

30-day period that allowed for self-apportionment ap-

plied only to the time immediately following the enact-

ment of the statute or whether it applied after each

census. The Court concluded that the 30-day period was

a single exception allowing for self-apportionment for

30 days after enactment of the statute. Id. at 256. In In

re Apportionment of Tuscola Co Bd of Comm’rs 2001,

466 Mich 78, 84 n 6; 644 NW2d 44 (2002), the Michigan

Supreme Court expressed “concerns” about the holding

in Kizer but declined to resolve the issue anew. 2011 PA

280 sets forth a clearer directive with regard to the

30-day compliance period following the effective date of

the act. I cannot conclude that the inclusion of a

compliance provision for the period immediately follow-

ing the effective date of the act somehow transforms

this general act, or a part of this general act, into a local

act that must be voided. As noted in Chamski v Wayne

Co Bd of Auditors, 288 Mich 238, 258; 284 NW 711

(1939), statutes should be construed, if possible, to give

full effect to every provision.

Chamski is a somewhat analogous case. In Chamski,

the Michigan Supreme Court considered whether a

statute that related to the selection and number of

probate judges and that contained certain population

classifications was a general act or an invalid local act.

Id. at 253, 257. Although the Court did not provide a

particularly detailed analysis concerning the applicabil-

ity of the law to various counties, it did conclude that

because “[t]he act in question provides a specific

method for its application to other counties as they

acquire greater population,” it came within the rule

specifying that an act applying to only one city or

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county may nonetheless be valid as a general act if it

could, in the future, apply to others. Id. at 256-257. The

Court also stated:

It is contended by plaintiff the “open end” provided in

the act is closed by operation of two clauses contained

therein, one that:

“A selection as herein provided shall be made within

fifteen days of the effective date of this act;”

and the other:

“Provided, That any county that has failed to elect an

additional probate judge, or judges, under this section,

prior to July one, nineteen hundred thirty-two, shall be not

entitled to elect any additional judge, or judges, under the

provisions of this section.” [Id. at 257.]

The Court stated that “[i]f the legislature had intended

the above clauses to prevent inclusion of counties

subsequently acquiring the required population, it

would not have provided a method for such inclusion”

and that “[t]he clauses pointed out were to promote

speedy action on the part of counties having the re-

quired population.” Id. at 257-258. The Court held the

act in question constitutional. Id. at 258.

Although I conclude above that the 21-commissioner

limit at issue in the present case clearly applies to

multiple counties already, 2011 PA 280 also provides a

mechanism for counties to be reevaluated in the future

to ensure that they comply with the various commis-

sioner limits. There must be a certain reapportionment

within 30 days of the effective date of 2011 PA 280, but

2011 PA 280 also provides a mechanism for reappor-

tionments in the future. As such, 2011 PA 280 as a

whole falls within the general parameters of the Cham-

ski holding and is constitutional.

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MCL 46.403(1), as amended by 2011 PA 280, provides

that “[i]n a county with a population of 1,000,000 or

more that has adopted an optional unified form of

county government under 1973 PA 139, MCL 45.551 to

45.573, with an elected county executive, the county

apportionment commission shall be the county board of

commissioners.” This provision, too, is a general law,

not a local law. As again aptly stated by the Oakland

County Board of Commissioners on appeal, the require-

ment

concerning the composition of the county apportionment

commission applies to each and every county that ever

meets the three stated requirements and there is no time

limitation for doing so. Because multiple counties could

easily achieve this result,

[

]

certainly by the next census,

2011 PA 280 easily passes the ‘test’ for a general law....

Wayne County Clerk and Chamski are applicable to

MCL 46.403, as amended by 2011 PA 280, and indicate

that this section is constitutional.

I conclude that the circuit court erred by ruling that

2011 PA 280 is unconstitutional as an improperly

enacted local act. My conclusion is informed in part by

the axiom that “[s]tatutes...must be construed in a

constitutional manner if possible.” Gora v City of Fern-

dale, 456 Mich 704, 711; 576 NW2d 141 (1998). As

noted in City of Owosso v Pouillon, 254 Mich App 210,

213; 657 NW2d 538 (2002), “[s]tatutes are presumed to

be constitutional unless their unconstitutionality is

clearly apparent.” I find no clearly apparent unconsti-

tutionality in assessing whether any part of 2011 PA

280 constitutes a local act.

By upholding MCL 46.403, the majority implicitly concludes that

multiple counties could achieve this result, but it simultaneously con-

cludes that it will be impossible for a county such as Wayne to enlarge its

number of commissioners before the effective date of 2011 PA 280.

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I also conclude that the circuit court erred by deeming

2011 PA 280 unconstitutional as a violation of the Headlee

Amendment, Const 1963, art 9, § 29. The Headlee

Amendment provides, in relevant part:

The state is hereby prohibited from reducing the state

financed proportion of the necessary costs of any existing

activity or service required of units of Local Government by

state law. A new activity or service or an increase in the

level of any activity or service beyond that required by

existing law shall not be required by the legislature or any

state agency of units of Local Government, unless a state

appropriation is made and disbursed to pay the unit of

Local Government for any necessary increased costs.

[Const 1963, art 9, § 29.]

By the plain language of the Headlee Amendment,

the state is only required to reimburse a locality for

“any necessary increased costs” of a new activity or

service or an increase in the level of an activity or

service required by a new law adopted by our Legisla-

ture. Perhaps the reapportionment of the Oakland

County Board of Commissioners required by 2011 PA

280 could be considered a “new activity” because it

requires a second or replacement reapportionment in

accordance with the new requirements for county com-

missions adopted by the act. I will assume as much,

without actually deciding the issue. Nevertheless, rea-

sonably considered, 2011 PA 280 does not impose “any

necessary increased costs” on Oakland County. Consid-

ering the aggregate effect of the reapportionment, it is

beyond any reasonable question that the cost reduction

to Oakland County for county commissioner salaries

resulting from the reduction of the Oakland County

Board of Commissioners from 35 to 21 members will far

outweigh the relatively minimal cost of the reapportion-

ment.

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At least implicitly, the circuit court’s conclusion to

the contrary depends on considering the costs of the

initial and mechanical aspects of the reapportionment

process for Oakland County under 2011 PA 280 as a

distinct activity in isolation from the savings flowing to

the county from the reduction in size of the county

commission under that reapportionment. I simply do

not believe that is a reasonable analysis. The overall

activity required of Oakland County by 2011 PA 280 is

to reduce the membership of its county commission

from 35 to 21 members and carry out redistricting as

provided for in the act to achieve that requirement. It

was unreasonable for the circuit court to disaggregate

the minimal costs associated with the redistricting from

the substantial savings that will be achieved by that

redistricting in considering the costs of this new activ-

ity.

Indeed, the “ ‘Headlee [Amendment], at its core, is

intended to prevent attempts by the Legislature “to shift

responsibility for services to the local government...in

order to save the money it would have had to use to

provide the services itself.” ’ ” Owczarek v Michigan, 276

Mich App 602, 611; 742 NW2d 380 (2007), quoting Adair

v Michigan, 470 Mich 105, 112; 680 NW2d 386 (2004),

quoting Judicial Attorneys Ass’n v Michigan, 460 Mich

590, 602-603; 597 NW2d 113 (1999). It is plain that this

purpose would not be served by regarding a redistricting

requirement that neither shifts state government services

onto a locality nor increases aggregate costs to that

To use an analogy, if a new state law required localities to send certain

notices via e-mail that had previously been required by state law to be

sent via ordinary mail through the postal service with a resulting cost

savings to the localities from substantially reduced postage expenses, it

would be absurd to regard any initial cost to the localities from buying the

necessary software for the e-mail system as a distinct new activity for

which the state would have to reimburse the localities under the Headlee

Amendment.

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locality as involving increased costs for which the state

must reimburse the locality.

I also reject the circuit court’s conclusion that 2011

PA 280 unconstitutionally deprives Oakland County

electors of a right to seek judicial review of the reappor-

tionment required by the act. The circuit court’s entire

analysis of this issue was predicated on the act’s not

allowing an elector the full 30-day period provided for

by MCL 46.406 to seek review in this Court of a plan for

reapportionment of a county commission.

However,

MCL 46.406 is merely a statutory provision, not a

constitutional one. The circuit court cited nothing to

establish that there is a constitutional right to a 30-day

period for an elector to seek judicial review of a county

commission reapportionment plan, and I am confident

that no constitutional provision has been interpreted to

provide such a specific time requirement. Moreover, it

appears undisputed that Oakland County has adopted

resolutions providing for the reapportionment process

to be completed by April 27, 2012, which would still

provide significant time for judicial review before the

May 15, 2012, filing deadline for candidates for the

August 2012 primary election. In any event, any claim

of a constitutional deprivation of a right to judicial

review by 2011 PA 280 would not be ripe until and

unless circumstances actually arise in which an elector

seeks such review of an actual reapportionment plan

and then contends that there is inadequate time for

MCL 46.406 states:

Any registered voter of the county within 30 days after the

filing of the plan for his county may petition the court of appeals

to review such plan to determine if the plan meets the require-

ments of the laws of this state. Any findings of the court of appeals

may be appealed to the supreme court of the state as provided by

law.

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proper judicial review. See Citizens Protecting Michi-

gan’s Constitution v Secretary of State, 280 Mich App

273, 282; 761 NW2d 210, aff’d on other grounds 482

Mich 960 (2008) (noting that a claim is not ripe “if it

rests upon contingent future events that may not occur

as anticipated, or may not occur at all”).

I would reverse in its entirety the circuit court’s

finding of unconstitutionality.

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WESTFIELD INSURANCE COMPANY v KEN’S SERVICE

Docket No. 300941. Submitted January 11, 2012, at Lansing. Decided

March 8, 2012, at 9:00 a.m. Leave to appeal denied, 493 Mich 880.

Mark Robbins was injured during the performance of his duties as a

tow truck operator for Ken’s Service when a vehicle sideswiped the

tow truck and hit Robbins while Robbins was outside the tow

truck and operating the control levers positioned on the driver’s

side of the vehicle in order to extract a vehicle from a ditch. The

insurer of the vehicle that hit Robbins agreed to tender the full

limits of its policy to settle the claim. Robbins sought additional

compensation from Westfield Insurance Company, Ken’s Service’s

insurer, under the underinsured motorist coverage provided in the

Westfield policy. Westfield refused to pay on the basis of its

determination that Robbins had not been “occupying” the tow

truck at the time of the accident. Westfield’s policy provided for

underinsured coverage for an “insured” and defined an insured, in

part, to include anyone “occupying” a covered vehicle. The policy

defined “occupying” to mean “in, upon, getting in, on, out or off.”

Westfield then brought an action in the Antrim Circuit Court for a

determination of its obligations to Ken’s Service and Robbins

under its insurance contract. The court, Philip E. Rodgers, Jr., J.,

denied a motion for summary disposition by Ken’s Service and

Robbins and granted Westfield’s cross-motion for summary dispo-

sition. The court interpreted the contract to mean that Robbins

could prevail only if he could demonstrate that he was occupying

the vehicle by being “upon” it when he was struck. The court

determined that coverage depended on a person’s connectedness

with the activity of being a driver or passenger of the vehicle and

if the person’s activity or physical contact was incidental to being

a driver or passenger the person was “occupying” the vehicle and

therefore insured. The court stated that physical contact with the

vehicle alone was not relevant and that the dispositive issue was

whether Robbins’s actions were the natural and probable result of

being a driver or passenger. The court concluded that because

Robbins was operating the vehicle as a towing machine when he

was struck, his use was unrelated to being a driver or passenger of

the truck and Robbins was not covered under the policy. Ken’s

Service and Robbins appealed.

610 295 M

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The Court of Appeals held:

Although a person does not need to be physically inside a

vehicle to be “upon” it, physical contact with the vehicle by itself

does not establish that the person was upon the vehicle so as to be

“occupying” the vehicle. A person must be on or up and on a

vehicle in order to be “upon” it. At the time of the accident,

Robbins was not getting in the tow truck, nor was he getting in,

on, out, or off the tow truck. The trial court did not err by

concluding that Robbins was not occupying the vehicle when he

sustained bodily injury.

Affirmed.

M. J. K

ELLY

, J., dissenting, stated that the unrebutted affidavit

of Robbins indicates that he was leaning on the tow truck for

balance and support at the time he was struck. The definition of

“on” in the Random House Webster’s College Dictionary (1997) is

“so as to be or remain supported by or suspended from.” There-

fore, Robbins was “on” or “upon” and thus “occupying” the tow

truck in accordance with the policy’s definition of “occupying” and

coverage should have been afforded him. The trial court should

have granted summary disposition in favor of Ken’s Service and

Robbins.

NSURANCE —

-F

AULT —

OLICIES —

ORDS AND

HRASES —

PON —

CCUPY-

ING.

A person’s physical contact with an insured vehicle does not by itself

establish that the person was “upon” the vehicle so as to be

“occupying” the vehicle when the relevant no-fault insurance

policy defines “occupying” as “in, upon, getting in, on, out or off”;

one must be on or up and on a vehicle in order to be “upon” it.

Collins, Einhorn, Farrell & Ulanoff, P.C. (by Deborah

A. Hebert), for plaintiff.

Dingeman, Dancer & Christopherson, P.L.C. (by

Nathan P. Miller and Mark R. Dancer), for defendants.

Before: S

AWYER

,P.J., and W

HITBECK

and M. J. K

ELLY

JJ.

HITBECK

, J. In this declaratory judgment action

involving underinsured motorist coverage, the circuit

court granted summary disposition pursuant to MCR

2012] W

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2.116(C)(10) for plaintiff, Westfield Insurance Com-

pany. Defendants, Ken’s Service and Mark Robbins,

appeal as a matter of right. On appeal, they assert that

the trial court erred by misinterpreting the language in

the insurance contract to deny them coverage. We

affirm.

I. BASIC FACTS

On December 19, 2009, defendant Ken’s Service, a

tow truck company, dispatched one of its employees,

Mark Robbins, to assist a police officer, Roderick Vessey,

in removing his vehicle from a ditch on US-131. When

he arrived at the scene, Robbins got out of the tow truck

and connected the tow cables to the police vehicle.

While he was operating the control levers positioned on

the driver’s side of the tow truck, another driver, Ashley

See, sideswiped the tow truck and collided with Rob-

bins. Robbins suffered substantial injuries, including a

broken right arm and a protruding break of the right

tibia/fibula. Robbins represents that he is “crippled for

life.”

Harold Ingersoll owned the car that Ashley See was

driving. Ingersoll’s insurance company, Auto-Owners

Insurance Company, agreed to tender the full $100,000

limits of the policy to settle the claim. However, Robbins

sought additional compensation from Westfield Insur-

ance, Ken’s Service’s insurer, based on underinsured

motorist coverage obtained for the tow truck. Ken’s

Service had underinsured motorist coverage in the

amount of $1,000,000. The uninsured/underinsured

motorist endorsement to the Westfield Insurance policy

provided for underinsured coverage for the “insured,”

which the policy defined, in relevant part, to include

“[a]nyone [besides the named insured or a family mem-

612 295 M

ICH

610 [Mar

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ber] ‘occupying’ a covered ‘auto’....” Further, the

endorsement defined “occupying” to mean “in, upon,

getting in, on, out or off.”

Westfield Insurance refused to pay on the basis of its

determination that Robbins was not “occupying” the

vehicle at the time of the accident. Westfield Insurance

then commenced this action for a determination of its

obligations to Ken’s Service and Robbins under the

insurance contract.

Ken’s Service and Robbins moved for summary dis-

position. They claimed that Robbins was leaning on the

tow truck for balance and support when See struck him

and that this occurred while he was operating the

towing controls, which were located on the driver’s side

of the truck. Ken’s Service and Robbins asserted that

Westfield Insurance owed Robbins additional compen-

sation because his injuries greatly exceeded the negli-

gent driver’s $100,000 policy limit, and Robbins was an

“insured” under the terms of the underinsured motor-

ist endorsement to the policy because he was “occupy-

ing” the insured vehicle by leaning “upon” it.

Westfield Insurance responded, arguing that Robbins

was not occupying the tow truck when See struck him.

Westfield Insurance asserted that Robbins clearly had

both feet on the ground and had been outside the truck

for several minutes when he was hit and injured.

Westfield Insurance claimed that the term “upon” can

only be properly interpreted in the context of the word

“occupying.” Westfield Insurance maintained that Rob-

bins’s physical contact with the truck needed to be “in

the context” of being physically inside the truck, that

his actions were not “in the context” of being an

occupant, and that he therefore was not insured under

the policy.

2012] W

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The trial court interpreted the contract to mean that

Robbins could only prevail if he could demonstrate that

he was “occupying” the vehicle by being “upon” it when

he was struck. The trial court focused on the word

“occupying” and determined that coverage depended on

a person’s connectedness with the activity of being a

driver or passenger of the vehicle. According to the trial

court, if the activity or physical contact was incidental

to being a driver or passenger, then the person was

occupying the vehicle and therefore would be insured.

The trial court said that physical contact with the

vehicle alone was not relevant. According to the trial

court, the dispositive issue was whether Robbins’s

actions were the natural and probable result of being a

driver or passenger. Thus, on the basis of the fact that

Robbins was operating the vehicle as a towing machine

when he was struck, the trial court concluded that his

use was unrelated to being a driver or passenger of the

truck. Accordingly, the trial court ruled that Robbins

was not covered under the policy.

Ken’s Service and Robbins now appeal.

II. INTERPRETATION OF THE CONTRACT LANGUAGE

A. STANDARD OF REVIEW

This Court reviews de novo a trial court’s grant of

summary disposition.

The moving party must specifi-

cally identify the alleged undisputed factual issues and

support his or her position with documentary evidence.

The nonmoving party then has the burden to produce

Tillman v Great Lakes Truck Ctr, Inc, 277 Mich App 47, 48; 742 NW2d

622 (2007).

MCR 2.116(G)(3)(b) and (4); Maiden v Rozwood, 461 Mich 109, 120;

597 NW2d 817 (1999).

614 295 M

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PINION OF THE

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admissible evidence to establish disputed facts.

The

court must consider all the documentary evidence in

the light most favorable to the nonmoving party.

Fur-

ther, this Court reviews de novo a trial court’s interpre-

tation of contractual language.

B. APPLICABLE LEGAL PRINCIPLES

Courts treat insurance contracts no differently than

any other contract. Accordingly, we should give contrac-

tual language that is clear and unambiguous full effect

according to its plain meaning unless it violates the law

or is in contravention of public policy.

A court cannot

infer the parties’ “reasonable expectations” in order to

rewrite a clear and unambiguous contract.

Even if the

contractual language is poorly worded, it is not ambigu-

ous if it “ ‘fairly admits of but one interpretation[.]’ ”

The Michigan Supreme Court interpreted the iden-

tical contractual language at issue in this case in

Rednour v Hastings Mut Ins Co.

In Rednour,an

oncoming vehicle struck the plaintiff while he was

changing a flat tire on the insured vehicle.

The plain-

tiff was approximately six inches away from the insured

Wheeler v Shelby Charter Twp, 265 Mich App 657, 663; 697 NW2d 180

(2005).

MCR 2.116(G)(5); Maiden, 461 Mich at 120.

Archambo v Lawyers Title Ins Corp, 466 Mich 402, 408; 646 NW2d

170 (2002).

Wilkie v Auto-Owners Ins Co, 469 Mich 41, 51-52; 664 NW2d 776

(2003).

Id. at 59-62.

Nankervis v Auto-Owners Ins Co, 198 Mich App 262, 265; 497 NW2d

573 (1993), quoting Raska v Farm Bureau Mut Ins Co of Mich, 412 Mich

355, 362; 314 NW2d 440 (1982).

Rednour v Hastings Mut Ins Co, 468 Mich 241; 661 NW2d 562 (2003).

Id. at 242.

2012] W

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vehicle when the other car struck him.

He had loos-

ened the lug nuts on the wheel and was moving toward

the rear of the vehicle when the other car struck him.

The plaintiff claimed that he was an insured entitled to

no-fault benefits because he was “occupying” the ve-

hicle, as both the no-fault act and the language of the

policy defined that word. Specifically, the plaintiff ar-

gued that he was “ ‘upon’ ” the vehicle because he was

knocked into the insured vehicle and pinned between

the two vehicles during the collision.

The Michigan Supreme Court noted in Rednour that

its prior decision in Rohlman v Hawkeye-Security Ins Co

(Rohlman I)

had interpreted the meaning of “occupant”

under the no-fault statute.

The Rohlman I Court de-

clared that a person could not be an “occupant” under the

no-fault act unless they were “physically inside” the

vehicle when struck.

However, since the language of the

policy broadly defined “occupying” as “in, upon, getting

in, on, out or off” the insured vehicle, the Rohlman I

Court remanded the case for this Court to consider

whether the plaintiff’s conduct fell under the broader

definition of “occupying” stated in the policy.

On re-

mand, in Rohlman II, this Court noted that physical

contact with the insured person is required in order to be

“upon” the vehicle, although the person need not be

completely physically supported by the vehicle.

Id.

Id. at 249.

Rohlman v Hawkeye-Security Ins Co, 442 Mich 520, 522, 531; 502

NW2d 310 (1993) (Rohlman I), citing MCL 500.3111.

Rednour, 468 Mich at 246-247.

Rohlman I, 442 Mich at 532; see Rednour, 468 Mich at 247.

Rohlman I, 442 Mich at 522 n 1, 528 n 8, 535.

Rohlman v Hawkeye-Security Ins Co (On Remand), 207 Mich App

344, 357; 526 NW2d 183 (1994) (Rohlman II) (noting that a child could

be “on” a scooter by having one foot on it and another on the ground).

616 295 M

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610 [Mar

PINION OF THE

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While the Rednour Court agreed with the Rohlman

II statement that a person did not need to be physically

inside the vehicle to be “upon” it, it nevertheless held

that physical contact alone is insufficient to show that

“the person was ‘upon’ the vehicle so as to be ‘occupy-

ing’ the vehicle.”

Accordingly, the Court stated:

Plaintiff was not “occupying” the vehicle under the

policy definition of that term. He was outside the vehicle,

approximately six inches away from it. He was not in the

vehicle, nor was he getting in, on, out, or off the vehicle

when he was injured.

Plaintiff suggests that he was “upon” the car because he

was pinned against it after being struck. Physical contact

by itself does not, however, establish that a person is

“upon” a vehicle such that the person is “occupying” the

vehicle. The relevant dictionary definitions...clarify that

one must be on or up and on a vehicle in order to be “upon”

it. We reject the dicta in Rohlman II that suggests physical

contact alone may be sufficient to show that the person was

“upon” the vehicle so as to be “occupying” the vehicle.

[

]

C. APPLYING THE LEGAL PRINCIPLES

Here, the parties focused on the word “upon” and the

meaning of that word. In Rednour, the Supreme Court

interpreted the meaning of “upon” to mean “on or up

and on.” Robbins alleged that he was “upon” the truck

because he had both hands on it and was leaning

against the tow truck for balance and support at the

moment of impact. But, as the Michigan Supreme Court

stated in Rednour, “physical contact alone may [not] be

sufficient to show that the person was ‘upon’ the vehicle

so as to be ‘occupying’ the vehicle.”

At the time of

Rednour, 468 Mich at 250.

Id. at 249-250.

Id. at 250.

2012] W

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impact, Robbins was not in the vehicle, nor was he

getting in, on, out, or off the vehicle. In fact, Robbins

had been out of the vehicle for several minutes and was

operating the towing controls of the truck. Thus, we

conclude that the trial court did not err by concluding

that Robbins was not “occupying” the vehicle when he

sustained bodily injury.

We affirm.

AWYER

,P.J., concurred with W

HITBECK

,J.

M. J. K

ELLY

,J.(dissenting). Because I believe that the

trial court erred in its interpretation of the word

“upon” in the subject underinsured motorist insurance

policy, I would reverse its decision to grant summary

disposition in favor of plaintiff, Westfield Insurance

Company, and instead grant summary disposition in

favor of defendants, Ken’s Service and Mark Robbins.

Therefore, I must respectfully dissent.

Robbins worked for Ken’s Service as a tow truck

driver. On the evening of the accident, Robbins was

sent to tow a police vehicle out of a ditch. After

pulling his tow truck to the shoulder of the highway,

Robbins activated the emergency lights, got out of the

tow truck, hooked cables to the police cruiser, and

walked back to the truck’s bed. He then began the

process of pulling the police vehicle from the ditch by

activating the levers on a control panel located on the

driver’s side of the truck. He averred in an unrebut-

ted affidavit that he was leaning on the tow truck for

balance and support with both his hands touching the

truck; his right hand was on the control panel, and

with the left he grasped the truck’s railing. It was

then that a passing motorist struck him and caused

him serious injuries.

618 295 M

ICH

610 [Mar

ISSENTING

PINION BY

M. J. K

ELLY

,J.

At issue is Robbins’s entitlement to underinsured

motorist coverage under Westfield’s policy insuring the

tow truck. Under the policy, an “insured” is entitled to

uninsured or undersinsured motorist coverage result-

ing from “bodily injury” caused by “an accident.” The

policy provides that, if the named insured is an indi-

vidual, the insureds are the “Named Insured and any

‘family members’ ” as well as anyone “else ‘occupying’ a

covered ‘auto’ or a temporary substitute for a covered

‘auto.’ ”

Thereafter, the policy defines “occupying” as

“in, upon, getting in, on, out or off.” We are asked to

determine whether, under the definitions that Westfield

provided in its insurance policy, Robbins was “upon”

the tow truck at the time of the accident.

As noted by the majority, our Supreme Court has

interpreted this identical language. See Rednour v

Hastings Mut Ins Co, 468 Mich 241; 661 NW2d 562

(2003). In Rednour, the plaintiff was struck by an

oncoming vehicle while changing a flat tire on the

insured vehicle. Id. at 242. The plaintiff was approxi-

mately six inches away from the insured vehicle when

he was struck by the other car. He had loosened the lug

nuts on the wheel and was moving toward the rear of

the vehicle when he was hit. Id. The plaintiff claimed

that he was an insured entitled to no-fault benefits

because he was “occupying” the vehicle, as defined by

both the no-fault act and the language of the policy. He

argued that he was “upon” the vehicle because he was

Though not fully developed in the circuit court, Ken’s Service—a

business—was listed by the Westfield policy as “An Individual” with the

result being that his family members, who presumably did not drive this

large, commercial tow truck, would have been covered for these injuries

regardless of whether they were “upon” the vehicle and yet Robbins, the

employee who actually drove the tow truck on a regular basis and as part

of his employment duties, was not. This is not an issue before us on

appeal but remains a conundrum.

2012] W

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ISSENTING

PINION BY

M. J. K

ELLY

,J.

pinned between the two vehicles during the collision.

Id. at 249. The Court noted that it had already inter-

preted the meaning of “occupant” under the no-fault

statute and declared that a person could not be an

“occupant” under the no-fault act unless they were

“ ‘physically inside’ ” the vehicle when struck. See id. at

247, citing Rohlman v Hawkeye-Security Ins Co, 442

Mich 520, 531-532; 502 NW2d 310 (1993) (Rohlman I).

However, because the language of the policy in its case,

like the policy here, broadly defined “occupying” as

“ ‘in, upon, getting in, on, out or off’ ” the insured

vehicle, Rohlman I, 442 Mich at 528 n 8, the Court in

Rohlman I remanded the matter to this Court to

consider whether the plaintiff’s conduct fell under the

broader definition of “occupying” stated in the policy.

Id. at 535.

On remand, this Court noted that physical contact

with the insured vehicle is required to be “upon” the

vehicle, although the person need not be completely

physically supported by the vehicle. Rohlman v

Hawkeye-Security Ins Co (On Remand), 207 Mich App

334, 357; 526 NW2d 183 (1994) (Rohlman II) (noting

that a child could be “on” a scooter by having one foot

on it and another on the ground). While the Rednour

Court agreed with the Rohlman II statement that a

person did not need to be physically inside the vehicle to

be “upon” it, the Court nevertheless held that physical

contact alone is insufficient to show that “the person

was ‘upon’ the vehicle so as to be ‘occupying’ the

vehicle.” Rednour, 468 Mich at 250. The Court ex-

plained: “The relevant dictionary definitions . . . clarify

that one must be on or up and on a vehicle in order to

be ‘upon’ it.” Id.

More recently still, this Court analyzed the identical

contractual language in Bledsoe v Auto Owners Ins Co

620 295 M

ICH

610 [Mar

ISSENTING

PINION BY

M. J. K

ELLY

,J.

(On Remand), unpublished opinion per curiam of the

Court of Appeals, issued December 4, 2003 (Docket No.

236735). There the plaintiff’s foot was run over by a

truck while he was stopped at a toll booth to pay the

toll. While he was leaning on the insured vehicle and

bending over to locate some dropped change, the truck

attempted to pass him and ran over his foot. Id. at 2.

This Court noted that the insurance policy provided

greater coverage than that guaranteed under the no-

fault act. Id. After distinguishing Rednour, the Court in

Bledsoe concluded that the plaintiff was insured be-

cause he was “upon” the truck:

In the instant case, plaintiff testified that he was

balancing himself with one hand on the step of the insured

truck when the accident occurred. Even under the Red-

nour . . . Court’s restricted definitions, plaintiff was, ac-

cording to his testimony, “upon” the truck at the time of

the accident. We believe that a commonsense interpreta-

tion of the term “upon” leads to this conclusion. Moreover,

the Supreme Court in Rednour . . . indicated (1) that one

must be “on” a vehicle to be “upon” it and (2) that a

dictionary is an appropriate reference tool in giving mean-

ing to the terms at issue here. See [Rednour, 468 Mich at

250]. Random House Webster’s College Dictionary (1997)

lists the following as the first definition of “on”: “so as to be

or remain supported by or suspended from.” Plaintiff

testified that he was balancing himself with one hand on

the step of the truck when the accident occurred. If the

factfinder were to believe plaintiff’s testimony, then (1)

plaintiff clearly was being “supported by” the truck, (2) he

therefore was “occupying” the vehicle under the terms of

the Auto Owners’ policy, and (3) the parked vehicle exclu-

sion in [the] policy does not apply. The trial court properly

denied summary disposition to Auto Owners with respect

to the issue of PIP [personal protection insurance] benefits.

[Id. at 3.]

Although not binding precedent, I find this reasoning

persuasive. Robbins’s unrebutted affidavit indicates

2012] W

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ERVICE

621

ISSENTING

PINION BY

M. J. K

ELLY

,J.

that he was leaning on the tow truck for balance and

support at the time he was struck by the passing

automobile. Therefore, like the plaintiff in Bledsoe,he

was “on” (“supported by”) or “upon” and thus “occu-

pying” the vehicle in accordance with the policy. And

because there is no evidence to rebut that Robbins was

being supported by the vehicle, the trial court should

have granted summary disposition in favor of defen-

dants.

If Westfield wanted a more restrictive definition for

“occupying,” it could have chosen to insert a different

definition into its policy. As it is, the words it chose were

“in, upon, getting in, on, out or off.” And, because the

definition of “on” is “so as to be or remain supported by

or suspended from,” Robbins plainly demonstrated that

he comes within the policy’s definition of “occupying”

and coverage should have been afforded him.

For this reason, I respectfully dissent.

622 295 M

ICH

610 [Mar

ISSENTING

PINION BY

M. J. K

ELLY

,J.

PEOPLE v ELLIOTT

Docket No. 301645. Submitted January 12, 2012, at Lansing. Decided

March 8, 2012, at 9:05 a.m. Leave to appeal granted, 491 Mich 938.

Samuel Lee Elliott was convicted by a jury in the Jackson Circuit

Court of armed robbery, MCL 750.529. A man had entered a gas

station, told the attendant he had a gun, and demanded the store’s

money. Elliott was arrested the following day on the basis of his

brother’s identification and was interrogated after he was in-

formed of his rights pursuant to Miranda v Arizona, 384 US 436

(1966). The police interrogation ended after he invoked his right to

counsel. Three days later, while still in jail, Elliott confessed to a

parole officer when questioned about the robbery in conjunction

with being served with parole-violation charges. The parole officer

did not advise Elliott of his Miranda rights beforehand. Defense

counsel moved to suppress the confession, which the court, Tho-

mas D. Wilson, J., denied, concluding that the parole officer had

not acted as a law enforcement official when questioning Elliott.

Following his conviction and sentencing, Elliott appealed.

The Court of Appeals held:

1. The right against self-incrimination is guaranteed by both

the United States and the Michigan Constitutions, US Const, Am

V; Const 1963, art 1, § 17, and the protection against compelled

self-incrimination is construed the same for the Michigan Consti-

tution as its federal counterpart. When a criminal defendant is

subject to a custodial interrogation, before any questioning the

defendant must be advised of the rights set forth in Miranda,

which include the right to the presence of an attorney. Questioning

initiated by law enforcement officers after a person has been taken

into custody or otherwise deprived of his or her freedom of action

in any significant way constitutes a custodial interrogation. A

defendant is in custody if a reasonable person in the defendant’s

situation would believe that he or she was not free to leave and if

the relevant environment was inherently coercive. Statements an

accused made during a custodial interrogation are inadmissible

unless the accused knowingly, voluntarily, and intelligently waived

his or her rights.

2012] P

EOPLE V

LLIOTT

623

2. Elliott invoked his Fifth Amendment right to counsel when

he requested an attorney while being interrogated by the police,

and law enforcement officials were not constitutionally permitted

to initiate further custodial interrogation outside the presence of

his counsel. The parole officer’s discussion with Elliott in the jail’s

library three days later regarding parole-violation charges consti-

tuted custodial interrogation because a reasonable person in

Elliott’s situation would not believe he or she was free to leave and

the environment was inherently coercive. The parole officer’s

questioning constituted interrogation because her questions were

reasonably likely to elicit an incriminating response from Elliott.

3. Constitutional protections apply only to governmental ac-

tion. Miranda protections apply not only to custodial interrogation

by law enforcement officials, but also to those by persons acting in

concert with or at the request of the police. The trial court did not

clearly err when it concluded that the parole officer did not act in

concert with or at the request of the police. While the parole officer

reviewed the police report before interviewing Elliott, there was no

evidence that the interview was at the request of the police or in

collaboration with their investigation.

4. When a defendant is not informed of his or her Miranda

rights, statements elicited by a law enforcement official during a

custodial interrogation are not admissible because of the inher-

ently compelling pressures that undermine the individual’s will to

resist and to compel the defendant to speak. Parolees and proba-

tioners are under heavy psychological pressure to answer the

questions of their supervising officers when they would not

otherwise do so freely. The parolee-parole officer relationship is

adversarial because the parole officer is an agent of the state,

whose questions must be answered to avoid parole revocation.

Moreover, a parole officer is more likely to elicit incriminating

statements from a parolee with whom he or she has formed a

relationship than a police interrogator would be. When a parole

officer subjects a parolee to a custodial interrogation, there is

always the possibility that the questioning will lead to a criminal

prosecution. Thus, a parole officer is a law enforcement official for

purposes of Miranda. Statements made by a parolee to a parole

officer during a custodial interrogation are inadmissible in a

subsequent trial if the parolee invoked his or her right to counsel

before questioning began. The trial court erred by denying El-

liott’s motion to suppress his confession because he had invoked

his right to counsel during an earlier police interrogation and he

was still in custody when he was interviewed by and confessed to

his parole officer.

624 295 M

ICH

623 [Mar

5. The trial court’s failure to suppress Elliott’s statements to

his parole officer was not harmless error beyond a reasonable

doubt because there was a reasonable possibility that those

statements might have contributed to his conviction.

Reversed and remanded for a new trial.

1. C

ONSTITUTIONAL

AW —

ELF

-I

NCRIMINATION —

USTODIAL

NTERROGATION —

IRANDA

ARNINGS

When a criminal defendant is subject to a custodial interrogation,

before any questioning he or she must be advised of the rights set

forth in Miranda v Arizona, 384 US 436 (1966), which includes the

right to the presence of an attorney; questioning initiated by law

enforcement officers after a person has been taken into custody or

otherwise deprived of his or her freedom of action in any signifi-

cant way constitutes a custodial interrogation; a defendant is in

custody if a reasonable person in the defendant’s situation would

believe that he or she was not free to leave and if the relevant

environment was inherently coercive; statements an accused made

during a custodial interrogation are inadmissible unless the ac-

cused knowingly, voluntarily, and intelligently waived his or her

rights (US Const, Am V; Const 1963, art 1, § 17).

2. C

ONSTITUTIONAL

AW —

ELF

-I

NCRIMINATION —

IRANDA

ARNINGS —

OV-

ERNMENTAL

CTION

The protections of Miranda v Arizona, 384 US 436 (1966), apply not

only to custodial interrogations by law enforcement officials, but

also to those by persons acting in concert with or at the request of

the police (US Const, Am V; Const 1963, art 1, § 17).

3. C

ONSTITUTIONAL

AW —

ELF

-I

NCRIMINATION —

IRANDA

ARNINGS —

USTO-

DIAL

NTERROGATION —

AROLE

FFICERS

A parole officer is a law enforcement official for purposes of the

safeguards set forth in Miranda v Arizona, 384 US 436 (1966);

statements made by a parolee to a parole officer during a custodial

interrogation are inadmissible in a subsequent trial if the parolee

invoked his or her right to counsel before questioning began (US

Const, Am V; Const 1963, art 1, § 17).

Bill Schuette, Attorney General, John J. Bursch,

Solicitor General, Henry C. Zavislak, Prosecuting At-

torney, and Jerrold Schrotenboer, Chief Appellate Attor-

ney, for the people.

Patrick K. Ehlmann for defendant.

2012] P

EOPLE V

LLIOTT

625

Before: B

ECKERING

,P.J., and O

WENS

and S

HAPIRO

,JJ.

ECKERING

,P.J. Defendant, Samuel Lee Elliott, ap-

peals as of right his conviction by a jury of armed

robbery, MCL 750.529. The trial court sentenced defen-

dant as a fourth-offense habitual offender, MCL 769.12,

to 15 to 30 years’ imprisonment.

The police arrested defendant for violating his parole

after receiving information that he had committed a

robbery. The police advised defendant of his Miranda

rights and interrogated him. Defendant ultimately in-

voked his right to counsel, and the interrogation ended.

Three days later, a parole officer served defendant with

parole-violation charges while defendant was still in

jail. The parole officer did not advise defendant of his

Miranda rights before asking him for his statement

regarding the robbery charge. Defendant told the parole

officer that he had committed the robbery. Defendant’s

confession to the parole officer was admitted during his

trial, after which he was convicted of the charged

offense. At issue in this case is whether the trial court

erred when it denied defendant’s motion to suppress his

statements to the parole officer and, if so, whether the

error was harmless. We reverse and remand for a new

trial.

I. FACTS AND PROCEDURAL HISTORY

On June 16, 2010, a man entered an Admiral gas

station at about 3:15 a.m. and asked the cashier for a

pack of Marlboro Reds cigarettes. The man then told

the cashier that he had a gun and that the cashier

needed to give him the money from the register. The

man wore a University of Michigan fleece pullover

Miranda v Arizona, 384 US 436; 86 S Ct 1602; 16 L Ed 2d 694 (1966).

626 295 M

ICH

623 [Mar

and a University of Michigan hat. The cashier noticed

what appeared to be a handgun protruding from the

waistband of the man’s shorts. The cashier gave the

man the pack of cigarettes and $157 from the register,

including a marked $2 bill. The man then left the gas

station.

The next day, defendant’s brother contacted the police

and told them that defendant had robbed the gas station.

The police arrested defendant later that day for violating

his parole and took him to the Jackson County Jail. The

police then searched the residence where defendant was

staying and obtained a hat and fleece pullover purportedly

belonging to defendant that matched those worn by the

robber. On June 18, 2010, detectives went to the jail,

advised defendant of his Miranda rights, and interrogated

him about the robbery. Defendant answered several ques-

tions, stated that he did not rob the gas station, and then

invoked his right to an attorney, at which point the

interrogation ended.

On June 21, 2010, Cheryl Evans, a parole officer,

went to the jail to “serve [defendant] parole violation

charges and get his statement” regarding the robbery.

Before meeting with defendant, Evans received the

police report and spoke with Detective Ed Smith about

the fact that defendant was a suspect for the armed

robbery of the gas station. A deputy escorted defendant

from his jail cell to the jail library, where Evans inter-

viewed him. Evans did not read defendant his Miranda

rights. Evans served defendant with his parole-

violation charges relating to the robbery and asked

defendant for his statement regarding the robbery. Ac-

cording to Evans, defendant told her that he had robbed

the gas station. After the interview, Evans called Smith

and informed him that defendant had confessed to the

2012] P

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LLIOTT

627

robbery. On June 24, 2010, defendant was arraigned on

the charge of armed robbery.

On the first day of trial, but before jury selection,

defendant moved to suppress the statements that he

had made to Evans on June 21, 2010. Defense counsel

stated that “the main issue” with respect to the motion

was whether a parole officer constitutes a law enforce-

ment officer for Fifth Amendment purposes. Defense

counsel argued as follows, in pertinent part:

My argument, Judge, is that un-Mirandized statements

obtained by Cheryl Evans, a parole agent, in the jail is an

inherently coercive custodial condition, which is envisioned

by Miranda. And that’s the type of situation where...in

order for the statements to come in as evidence...you

need to have advised the suspect of his Miranda warnings

and his right to counsel and everything that comes along

with it.

***

...Ibelieve that Cheryl Evans was acting as an agent of

the government. There’s a special relationship between her

and Sam Elliott and, to make it even worse, it was in the

jail. He was under arrest; he’d been there since the

seventeenth.

***

Now, I know that the police advised him of his rights

back on the eighteenth in this case, three days before. But

he invoked his rights then and I don’t think you can keep

coming back....Once you invoke your rights, questioning

must stop. It did here, but then [Evans] came back, and I

don’t think you can come back again and start re-

questioning where there has been an invocation of your

constitutional right to counsel.

The prosecutor emphasized that under this Court’s

decision in People v Littlejohn, unpublished opinion

628 295 M

ICH

623 [Mar

per curiam of the Court of Appeals, issued September

11, 1998 (Docket No. 195286), a parole officer is not a

law enforcement officer for purposes of Miranda. The

prosecutor argued that defendant’s statements to

Evans were admissible because Evans was not work-

ing in concert with the police, but was interviewing

defendant as a parole officer. Smith then testified

about the nature of his conversation with Evans

before she interviewed defendant: “The gist of our

conversation was [Evans] asked...whether or not

there was anything she could not bring up during her

conversation with [defendant] and I told her no, that

he had invoked his rights and I would not be speaking

with him again.” Smith testified that this was the

only conversation he had with Evans about the case

before Evans interviewed defendant. Smith further

testified that he was not aware of any other officers

talking to Evans about the case or asking Evans to try

and obtain information from defendant.

The trial court stated that the Miranda issue before

it was “very unclear from the precedent that’s out

there.” “There’s a patchwork of law out there. There’s

nothing definitive on this position.” The trial court then

analyzed the motion to suppress under Littlejohn and

concluded that defendant’s statements to Evans were

admissible:

Looking at People v Littlejohn, Number 195286, al-

though it’s not a...published case, it does state that:

“The parole officer testified she was not a police officer

or a certified law enforcement officer.... Said she was

acting independently from the police and that her only

reason for speaking to the defendant was to advise him of

the parole violation charges, to advise him of his rights for

a preliminary hearing on those charges, and to determine if

2012] P

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LLIOTT

629

he would agree to waive the hearing. Under these circum-

stances, we conclude that the parole officer was not a law

enforcement official.”

And that’s really the main question: is a parole officer

acting in this capacity, not in concert with the law enforce-

ment -- a law enforcement official.

***

Based on the guidance from People v Littlejohn and the

circumstances outlined within that case, the Court’s going

to find that the parole officer was not acting in concert and

the testimony I’ve heard here and the stipulated facts was

not acting in concert with the police. She was there to

advise [defendant] of the charges. The information she

obtained previously was to understand what was going on

so that she could advise [defendant] of the parole violation

charges. And, under these circumstances, she was not...a

law enforcement official and, therefore, the confession will

come in. The statements made...toherwill come in.

Evans testified at trial that defendant confessed to

committing the robbery. Following his conviction, the

trial court sentenced defendant as a fourth-offense

habitual offender to 15 to 30 years’ imprisonment.

Defendant now appeals as of right.

II. SUPPRESSION OF STATEMENTS TO PAROLE OFFICER

Defendant argues that the trial court erred when it

denied his motion to suppress his statements to Evans

because as a parole officer, Evans was a law enforce-

ment officer for purposes of Miranda who subjected

him to a custodial interrogation after he had invoked

his right to counsel three days earlier. We agree.

The trial court later entered an amended judgment of sentence,

indicating that defendant’s sentence was to run consecutively to his

preexisting sentences related to the parole violations.

630 295 M

ICH

623 [Mar

A. STANDARD OF REVIEW

When we review a trial court’s factual findings with

respect to a motion to suppress, we defer to the trial

court unless the court’s findings are clearly erroneous.

People v Herndon, 246 Mich App 371, 395; 633 NW2d

376 (2001). A finding is clearly erroneous if this Court is

“left with a definite and firm conviction that a mistake

has been made.” People v Muro, 197 Mich App 745, 747;

496 NW2d 401 (1993). We review de novo a trial court’s

ultimate decision on a motion to suppress. People v

Lapworth, 273 Mich App 424, 426; 730 NW2d 258

(2006).

B. MIRANDA AND CUSTODIAL INTERROGATION

The right against self-incrimination is guaranteed by

both the United States and the Michigan Constitutions.

US Const, Am V; Const 1963, art 1, § 17. “[T]he protec-

tion against compelled self-incrimination in the Michi-

gan Constitution [is] construed the same as its federal

counterpart.” People v Bender, 452 Mich 594, 637; 551

NW2d 71 (1996) (B

OYLE

, J., dissenting). In Miranda v

Arizona, 384 US 436, 444; 86 S Ct 1602; 16 L Ed 2d 694

(1966), the United States Supreme Court established

“procedural safeguards...to secure the privilege

against self-incrimination.” Under Miranda, when a

criminal defendant is subjected to a custodial interro-

gation, the defendant must be warned before any ques-

tioning that he or she has “a right to remain silent, that

any statement [the defendant] does make may be used

as evidence against him [or her], and that [the defen-

dant] has a right to the presence of an attorney, either

retained or appointed.” Id. A “custodial interrogation”

is defined as “questioning initiated by law enforcement

officers after a person has been taken into custody or

otherwise deprived of his freedom of action in any

2012] P

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LLIOTT

631

significant way.” Id. When determining whether a de-

fendant was “in custody,” courts consider both whether

a reasonable person in the defendant’s situation would

believe that he or she was free to leave and “whether

the relevant environment present[ed] the same inher-

ently coercive pressures as the type of station house

questioning at issue in Miranda.” Howes v Fields, 565

US ___; 132 S Ct 1181, 1189-1190; 182 L Ed 2d 17

(2012). “Interrogation refers to express questioning and

to any words or actions on the part of police that the

police should know are reasonably likely to elicit an

incriminating response from the subject.” People v

Raper, 222 Mich App 475, 479; 563 NW2d 709 (1997).

Statements of an accused made during a custodial

interrogation are inadmissible unless the accused

knowingly, voluntarily, and intelligently waived his or

her Fifth Amendment rights. People v Tierney, 266

Mich App 687, 707; 703 NW2d 204 (2005); see also

Miranda, 384 US at 444-445.

“[T]he Fifth Amendment right to counsel is a corol-

lary to the amendment’s stated right against self-

incrimination and to due process.” People v Marsack,

231 Mich App 364, 372-373; 586 NW2d 234 (1998). “The

right to counsel found in the Fifth Amendment is

designed to counteract the inherently compelling pres-

sures of custodial interrogation...and to secure a

person’s privilege against self-incrimination by allow-

ing a suspect to elect to converse with the police only

through counsel.” People v Williams, 244 Mich App 533,

539; 624 NW2d 575 (2001) (citations and quotation

marks omitted). “In Edwards v Arizona, 451 US 477,

484; 101 S Ct 1880; 68 L Ed 2d 378 (1981), the United

States Supreme Court established the bright-line rule

that an accused, having expressed a desire to deal with

the police only through counsel, may not be subject to

further interrogation by the authorities until counsel

632 295 M

ICH

623 [Mar

has been made available unless the accused initiates

further communication.” People v McRae, 469 Mich

704, 715; 678 NW2d 425 (2004); see also Marsack, 231

Mich App at 374 (“The procedural safeguards for the

Fifth Amendment adopted in Miranda...require that

the police discontinue the questioning of a suspect when

a request for counsel is made.”); Miranda, 384 US at

444-445 (“If...[the defendant] indicates in any man-

ner and at any stage of the process that he wishes to

consult with an attorney before speaking there can be

no questioning.”).

In this case, it is not disputed that defendant’s June

18, 2010, police interrogation constituted a custodial

interrogation under Miranda. While defendant was

under arrest, detectives questioned him about the rob-

bery for which he was a suspect. See Miranda, 384 US

at 444. Thus, defendant had a Fifth Amendment right

to have counsel present during this interrogation. Id.at

444-445; see also Tierney, 266 Mich App at 710 (“A

criminal defendant has a constitutional right to counsel

during interrogation.”). It is not disputed that defen-

dant requested an attorney during this interrogation.

By requesting an attorney, defendant invoked his Fifth

Amendment right to counsel. See Fare v Michael C, 442

US 707, 719; 99 S Ct 2560; 61 L Ed 2d 197 (1979)

(“[T]he Court fashioned in Miranda the rigid rule that

an accused’s request for an attorney is per se an

invocation of his Fifth Amendment rights, requiring

that all interrogation cease.”). Defendant having in-

voked his right to counsel, law enforcement officers

were not constitutionally permitted to initiate further

custodial interrogation outside the presence of counsel.

Miranda, 384 US at 444-445; McRae, 469 Mich at 715.

On June 21, 2010, Evans went to the jail to serve

defendant with parole-violation charges, question de-

2012] P

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LLIOTT

633

fendant about the robbery, and obtain defendant’s

“statement.” By this time, defendant had been in jail

for three days. A deputy escorted defendant from his jail

cell to the jail’s library for the meeting. During the

questioning, Evans obtained incriminating statements

from defendant. Evans never advised defendant of his

Miranda rights, his attorney was not present during

the meeting, and the record does not indicate that an

attorney had even been made available to defendant.

Given these facts, a reasonable person in defendant’s

situation would have believed that he or she was not

free to leave, and the environment presented “the same

inherently coercive pressures as the type of station

house questioning at issue in Miranda.” Howes, 565 US

at ___; 132 S Ct at 1189-1190. Like the defendants in

Miranda, defendant was suspected of committing a crime,

arrested, and questioned while he was in jail—an environ-

ment unfamiliar to defendant—several days after his

arrest about the crime for which he was arrested. See

Miranda, 384 US at 456-457, 491-497. Thus, defendant

was in custody at the time of his meeting with Evans.

See

Howes, 565 US at ___; 132 S Ct at 1189-1190. Further-

more, Evans’s express questioning of defendant about the

robbery in an attempt to obtain defendant’s statement

We note that the present case is distinguishable from Howes because

the defendant in that case was questioned by authorities while he was

serving a jail sentence, i.e., while he was living in jail. Howes, 565 US at

___; 132 S Ct at 1185, 1193. Moreover, the defendant was questioned

about a crime unrelated to his incarceration. Id. at ___; 132 S Ct at 1185.

In contrast, the authorities did not question defendant in the present

case while he was serving a jail sentence; rather, defendant was ques-

tioned shortly after he was arrested, and the questioning focused on the

reason for his arrest. Thus, unlike the defendant in Howes, defendant in

this case was not questioned in “familiar surroundings” but was “cut off

from his normal life and companions” by an arrest and “abruptly

transported” to a “police-dominated atmosphere” for questioning. Id. at

___; 132 S Ct at 1190-1191. The “inherently compelling pressures” that

were lacking in Howes were present here. Id. at ___; 132 S Ct at 1191.

634 295 M

ICH

623 [Mar

constituted an interrogation because her questions were

reasonably likely to elicit an incriminating response from

defendant. See Raper, 222 Mich App at 479.

Therefore, Evans subjected defendant to a custodial

interrogation. And, to the extent that Evans was a law

enforcement officer under Miranda, her questioning of

defendant violated defendant’s Fifth Amendment

rights. See Edwards,451USat485(“We...emphasize

that it is inconsistent with Miranda and its progeny for

the authorities, at their instance, to reinterrogate an

accused in custody if he has clearly asserted his right to

counsel.”).

C. MIRANDA’S APPLICATION TO PAROLE OFFICERS

“[C]onstitutional protections apply only to govern-

mental action.” See People v Anderson, 209 Mich App

527, 533; 531 NW2d 780 (1995). While the Miranda

Court opined that Miranda’s constitutional safeguards

apply whenever a law enforcement officer initiates a

custodial interrogation, Miranda, 384 US at 444, the

Court’s subsequent decisions illustrate that Miranda is

not limited to custodial interrogation performed by law

enforcement officers who are police officers. See, e.g.,

Estelle v Smith, 451 US 454, 468-469; 101 S Ct 1866; 68

L Ed 2d 359 (1981) (holding that Miranda applies to

psychiatrist during court-ordered psychiatric inquiry);

Mathis v United States, 391 US 1, 4; 88 S Ct 1503; 20 L

Ed 2d 381 (1968) (holding that Miranda applies to

internal revenue agents conducting tax investigations).

Moreover, this Court has held that Miranda safeguards

apply to a person who is “acting in concert with or at

the request of the police.” Anderson, 209 Mich App at

533; see also People v Grevious, 119 Mich App 403, 407;

327 NW2d 72 (1982) (“It is also clear that [Miranda]

warnings may be required even though the interrogator

2012] P

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LLIOTT

635

is not technically a police officer but rather someone

acting with or at the request of police authority.”).

The trial court in the present case concluded that

defendant’s statements to Evans were admissible for

two reasons: (1) Evans was not acting in concert with or

at the request of the police and (2) a parole officer, such

as Evans, is not a law enforcement officer for Miranda

purposes.

We conclude that the trial court did not clearly err

when it determined that Evans did not act in concert

with or at the request of the police. See Herndon, 246

Mich App at 395. Evans testified that her purpose for

interviewing defendant was to serve defendant with his

parole-violation charges and obtain his statement re-

garding the robbery. Evans also testified that she re-

ceived the police report of the robbery and spoke to a

detective about the robbery before conducting her in-

terview. Smith testified that he spoke to Evans before

she interviewed defendant, and the record does not

indicate that any other police officer spoke with Evans

about the case before she interviewed defendant. Noth-

ing in the record indicates that Evans interviewed

defendant at the request of the police or in collaboration

with their investigation. Thus, we are not left with a

“definite and firm conviction” that the trial court erred

by finding that Evans did not act in concert with or at

the request of the police. See Muro, 197 Mich App at

747.

However, notwithstanding the trial court’s finding

that Evans was not acting in concert with or at the

request of the police, the question remains whether

Evans was a law enforcement officer under Miranda as

a matter of law given her status as a parole officer and

therefore precluded from interrogating defendant after

he invoked his right to counsel.

636 295 M

ICH

623 [Mar

In Minnesota v Murphy, 465 US 420; 104 S Ct 1136; 79

L Ed 2d 409 (1984), the United States Supreme Court

addressed the admissibility under the Fifth Amendment

of statements made to a probation officer. The defendant

in Murphy had arranged a meeting with his probation

officer at the officer’s office. Id. at 423. During the

meeting, the defendant made incriminating statements to

the probation officer, who then secured an arrest and

detention order for the defendant. Id. at 424. The Su-

preme Court held that the defendant’s incriminating

statements to the probation officer were admissible even

though the probation officer did not comply with

Miranda. Id. at 430-433. The Court explicitly based its

holding on the fact that the defendant was not in custody

when the probation officer questioned him because “there

was no formal arrest or restraint on freedom of movement

of the degree associated with a formal arrest.” Id. at 430

(quotation marks and citations omitted). According to the

Court, the probation interview was “arranged by appoint-

ment at a mutually convenient time” and did not take

place in “an unfamiliar atmosphere” or “an interrogation

environment.” Id. at 433. Furthermore, the defendant

“was not physically restrained and could have left the”

interview at any time. Id. Importantly, however, the Court

noted that its constitutional inquiry would have been

different had the defendant been in custody at the time of

the interview:

We emphasize that [the defendant] was not under arrest

and that he was free to leave at the end of the meeting. A

different question would be presented if he had been inter-

viewed by his probation officer while being held in police

custody or by the police themselves in a custodial setting.

[Id. at 429 n 5 (emphasis added).]

The case now before this Court presents the exact

different question to which the Murphy Court alluded.

2012] P

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LLIOTT

637

The Michigan Supreme Court has not addressed the

application of Miranda to parole officers. However, this

Court has specifically addressed the issue, albeit

through unpublished opinions. See People v Stokes,

unpublished opinion per curiam of the Court of Ap-

peals, issued July 17, 2007 (Docket No. 269345); Little-

john, unpub op at 1-2.

In Littlejohn, the trial court admitted into evidence

statements that the defendant made to a parole officer

who did not advise the defendant of his Miranda rights

before an interview. Littlejohn, unpub op at 1-2. On

appeal, this Court affirmed the trial court’s admission

of the statements for two reasons. Id. at 2. First, the

Littlejohn Court concluded that the parole officer did

not subject the defendant to an interrogation because

the defendant’s statements were “volunteered” and

“not the result of questioning or of behavior calculated

to elicit an incriminating response.” Id. Second, the

Court concluded that the parole officer “was not a law

enforcement official” and “was acting independently

from the police” solely “to advise [the defendant] of

parole violation charges, to advise him of his right to a

preliminary hearing on those charges, and to determine

if he would agree to waive the hearing.” Id.

Similarly, in Stokes this Court upheld the admission

of statements that a defendant made to a parole officer

who did not advise the defendant of his Miranda rights

before an interview. Stokes, unpub op at 4-5. Relying on

our previous decision in Anderson, 209 Mich App at

533, the Stokes Court emphasized that “ ‘[a] person

who is not a police officer and is not acting in concert

with or at the request of the police is not required to

give Miranda warnings before eliciting a statement.’ ”

Id. at 4, quoting Anderson, 209 Mich App at 533. The

Stokes Court concluded that the “defendant’s parole

638 295 M

ICH

623 [Mar

officer was not a police officer conducting a custodial

interrogation.” Stokes, unpub op at 4. Furthermore, the

Court opined that the parole officer had acted indepen-

dently from the police and spoke to the defendant solely

to advise him of parole-violation charges and his right

to a preliminary hearing and to determine whether the

defendant would waive the hearing. Id. at 4-5.

We note, however, that while this Court’s decisions in

Littlejohn and Stokes are persuasive authority for our

constitutional inquiry, they are not precedentially bind-

ing on this Court under the rule of stare decisis. MCR

7.215(C)(1); see also People v Green, 260 Mich App 710,

720 n 5; 680 NW2d 477 (2004). Moreover, we recognize

that while decisions of the federal circuit courts of

appeals are also not precedentially binding on this

Court, see People v Oliver, 170 Mich App 38, 47-49; 427

NW2d 898 (1988), our decisions in Littlejohn and Stokes

conflict with various federal circuits that have ad-

dressed the application of Miranda to parole and pro-

bation officers. See, e.g., United States v Newton, 369

F3d 659, 663-664, 679-680 (CA 2, 2004) (applying

Miranda safeguards to questions of a parole officer to a

defendant); United States v Andaverde, 64 F3d 1305,

1310-1311 (CA 9, 1995) (holding that custodial state-

ments made to probation officers are subject to the

same Miranda analysis as statements made to law

enforcement officers); United States v Bland, 908 F2d

471, 473-474 (CA 9, 1990) (ordering a new trial for a

defendant because a parole officer’s Miranda warning

was inadequate); United States v Deaton, 468 F2d 541,

544 (CA 5, 1972) (stating that a parole officer must give

Miranda warnings during a custodial interrogation of a

parolee).

In Deaton, for example, the defendant’s parole officer

testified at the defendant’s trial about incriminating

2012] P

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LLIOTT

639

statements made to him by the defendant in response to

“direct interrogation by the parole officer when [the

defendant] was in custody” and “without the officer

having given [the defendant] the warnings required by

Miranda.” Deaton, 468 F2d at 544. The United States

Court of Appeals for the Fifth Circuit held that the

defendant’s statements to his parole officer were inad-

missible at trial as the parole officer had not advised the

defendant of his Miranda rights. Id. As a basis for its

holding, the Deaton court explained that “[a] parolee is

under heavy psychological pressure to answer inquiries

made by his parole officer, perhaps even greater than

when the interrogation is by an enforcement officer.”

Id.

In addition to these federal circuits, there is persua-

sive authority from various state appellate courts hold-

ing that Miranda applies to parole and probation offic-

ers. See, e.g., State v Willis, 64 Wash App 634, 639-640;

825 P2d 357 (1992) (community corrections officers);

State v Sargent, 111 Wash 2d 641, 652-653; 762 P2d

1127 (1988) (probation officers); State v Roberts,32

Ohio St 3d 225, 231; 513 NE2d 720 (1987) (probation

officers); Marrs v State, 53 Md App 230, 235; 452 A2d

992 (1982) (probation officers); State v Magby, 113 Ariz

345, 348-349; 554 P2d 1272 (1976) (probation officers);

State v Gallagher, 38 Ohio St 2d 291, 296-297; 313

NE2d 396 (1974), vacated on other grounds 425 US 257

(1976), reinstated on remand 46 Ohio St 2d 225 (1976)

(parole officers); State v Williams, 486 SW2d 468,

473-474 (Mo, 1972) (parole officers); State v Lekas, 201

Kan 579, 584-588; 442 P2d 11 (1968) (parole officers).

In Marrs, police officers arrested the defendant on

trespassing charges. Marrs, 53 Md App at 231-232. In

the presence of two police officers, the defendant’s

640 295 M

ICH

623 [Mar

probation officer questioned the defendant in a police

vehicle and also at the police station regarding an arson

that had occurred about one year earlier. Id. According

to the probation officer, he questioned the defendant so

that he could “make a proper recommendation as to

whether [the defendant’s] bail bond and probation

should be revoked” and “at no time gave [the defen-

dant] Miranda warnings.” Id. at 232. The defendant

initially denied involvement in the arson, but after

requesting that the police officers leave, he admitted to

his probation officer that he was involved in the arson.

Id. The defendant’s statement to the probation officer

was admitted into evidence at his trial for arson, and

the defendant was convicted. Id. The Maryland Court of

Special Appeals held that the defendant’s statement to

his probation officer was not admissible at trial because

the defendant had not been advised of his Miranda

rights. Id. at 235. The court opined that the probation

officer’s motivation for questioning the defendant was

immaterial as long as the probation officer’s conduct

was likely to elicit an incriminating statement. Accord-

ing to the court, if questioning constituted an interro-

gation under Miranda, the questioning “ ‘does not

become something else because the interrogator’s main

purpose is [something other] than the procuring of

incriminating statements, even though self-

incrimination may be foreseen as a windfall.’ ” Id. at

235-236 (citation omitted). The court focused on the

relationship between probation officers and probation-

ers when determining that Miranda safeguards ap-

plied:

It seems to us that an accused, whose essential obliga-

tion it is to “report to” and “answer questions posed by a

probation officer,” United States v. Rea, 678 F.2d 382 (2nd

Cir.1982), is under even heavier psychological pressure to

answer questions put by his probation officer, a figure of

2012] P

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LLIOTT

641

both authority and trust. A probationer, who often talks to

his supervising officer as a counselor and confidante, might

very well assume that any statements made by him are in

some way confidential thus bringing into play the man-

dates of Miranda. [Id. at 233.]

In Roberts, the Ohio Supreme Court similarly consid-

ered the relationship between probation officers and

probationers before holding that a probation officer

must give Miranda warnings before questioning an

in-custody probationer. See Roberts, 32 Ohio St 3d at

231. After discussing the reasoning of the Marrs court,

the Roberts court emphasized that there is a “deceptive

effect engendered by the in-custody questioning of a

probationer by his probation officer.” Id. at 230. In

explaining the potential for abuse in the probationer-

probation officer relationship, the court quoted Justice

Thurgood Marshall’s dissent in Murphy. Id. Justice

Marshall opined:

It is true, as the majority points out, that the discussion

between a probation officer and a probationer is likely to be

less coercive and intimidating than a discussion between a

police officer and a suspect in custody. Ante, at 1144, 1145

[Murphy, 465 US at 433]. But it is precisely in that fact that

the danger lies. In contrast to the inherently adversarial

relationship between a suspect and a policeman, the rela-

tionship between a probationer and the officer to whom he

reports is likely to incorporate elements of confidentiality,

even friendship. Indeed, many probation officers deliber-

ately cultivate such bonds with their charges. The point

should not be overstated; undoubtedly, few probationers

are entirely blind to the fact that their probation officers

are ‘peace officer[s],...allied, to a greater or lesser extent,

with [their] fellow peace officers.’ Fare v. Michael C., 442

U.S. 707, 720, 99 S.Ct. 2560, 2569, 61 L.Ed.2d 197 (1979).

On the other hand, many probationers develop “relation-

ship[s] of trust and confidence” with their officers. Id.,at

722 []. Through abuse of that trust, a probation officer can

elicit admissions from a probationer that the probationer

642 295 M

ICH

623 [Mar

would be unlikely to make to a hostile police interrogator.

[Murphy, 465 US at 459-460 (Marshall, J., dissenting).]

Although we are mindful of this Court’s previous un-

published decisions in Stokes and Littlejohn that do not

apply Miranda to parole officers, we are persuaded that

the better rule is that articulated by the Deaton, Marrs,

and Roberts courts and adhered to by the other juris-

dictions listed.

The rationale for the suppression of statements elic-

ited during a custodial interrogation by a law enforce-

ment officer who does not adhere to Miranda is to

“combat” the “inherently compelling pressures which

work to undermine the individual’s will to resist and to

compel him to speak where he would not otherwise do

so freely.” Miranda, 384 US at 467; see also Williams,

244 Mich App at 539. Such “inherently compelling

pressures” exist in the relationship between a parolee

and a parole officer. Indeed, this Court has recognized

that “both parolees and probationers are under heavy

psychological pressure to answer inquiries made by

their supervising officers.” People v Faulkner, 90 Mich

App 520, 524; 282 NW2d 377 (1979) (quotation marks

and citations omitted). This heavy psychological pres-

sure exists because of the unique relationship between

a parolee and parole officer.

On the one hand, the parolee-parole officer relation-

ship often becomes a relationship of trust and confi-

dence, as does the probationer-probation officer rela-

tionship addressed by Justice Marshall in Murphy. See

Murphy, 465 US at 459-460 (Marshall, J., dissenting).

As a parolee develops trust and begins to confide in a

parole officer, the parole officer is more likely to elicit

from the parolee incriminating statements that the

parolee would likely not make to a police interrogator.

2012] P

EOPLE V

LLIOTT

643

On the other hand, the parolee-parole officer rela-

tionship is adversarial. A parole officer is an agent of

the state. Generally, as a condition of parole, a parolee is

obligated to report to and answer his or her parole

officer’s questions to avoid the revocation of parole. See

generally Faulkner, 90 Mich App at 524-525 (noting

that the director of a half-way house was required to

give Miranda warnings before interrogating the defen-

dant when the defendant was not free to refuse to

answer the director’s questions). If a parole officer has

reasonable grounds to believe that a parolee has vio-

lated the conditions of his or her parole, MCL 791.239

provides the officer with statutory authority to arrest

the parolee. Cf. Anderson, 209 Mich App at 534 (holding

that a South Carolina juvenile corrections officer super-

visor was not required to give Miranda warnings to the

defendant before he confessed to involvement in two

shootings because the officer did not have authority to

arrest or detain). Thus, when a parole officer questions

an in-custody parolee in a circumstance that is likely to

elicit an incriminating response, the parolee is “assur-

edly...faced with a phase of the adversary system

and...notinthepresence of [a] perso[n] acting solely

in his interest.” See Estelle, 451 US at 467 (quotation

marks and citation omitted). In Estelle, such adver-

sarial questioning necessitated the use of Miranda

safeguards by a court-ordered psychiatrist who exam-

ined a defendant and ultimately testified during the

penalty phase of the defendant’s trial:

That [defendant] was questioned by a psychiatrist des-

ignated by the trial court to conduct a neutral competency

examination, rather than by a police officer, government

informant, or prosecuting attorney, is immaterial. When

[the psychiatrist] went beyond simply reporting to the

court on the issue of competence and testified for the

prosecution at the penalty phase on the crucial issue of

644 295 M

ICH

623 [Mar

[defendant’s] future dangerousness, his role changed and

became essentially like that of an agent of the State

recounting unwarned statements made in a postarrest

custodial setting. During the psychiatric evaluation, [defen-

dant] assuredly was “faced with a phase of the adversary

system” and was “not in the presence of [a] perso[n] acting

solely in his interest.”

***

. . . Because [defendant] did not voluntarily consent to

the pretrial psychiatric examination after being informed

of his right to remain silent and the possible use of his

statements, the State could not rely on what he said to [the

psychiatrist] to establish his future dangerousness. If, upon

being adequately warned, [defendant] had indicated that

he would not answer [the psychiatrist’s] questions, the

validly ordered competency examination nevertheless

could have proceeded upon the condition that the results

would be applied solely for that purpose. [Estelle, 451 US at

467-468 (citation omitted; emphasis added) (italicized al-

terations in original).]

Furthermore, when a parole officer subjects a parolee to

a custodial interrogation, there is always the possibility

that the parole officer’s questioning will lead to a

criminal prosecution. The existence of such a possibility,

the Supreme Court held, necessitated the use of

Miranda safeguards by an internal revenue agent:

It is true that a ‘routine tax investigation’ may be

initiated for the purpose of a civil action rather than

criminal prosecution....Buttaxinvestigations frequently

lead to criminal prosecutions, just as the one here did....

And, as the investigating revenue agent was compelled to

admit, there was always the possibility during his investi-

gation that his work would end up in a criminal prosecu-

tion. We reject the contention that tax investigations are

immune from the Miranda requirements for warnings to

be given a person in custody. [Mathis, 391 US at 4 (empha-

sis added).]

2012] P

EOPLE V

LLIOTT

645

Accordingly, given the heavy psychological pressure

on a parolee to respond to a parole officer’s questions

the parolee would not otherwise do so freely, see

Miranda, 384 US at 467; Faulkner, 90 Mich App at 524;

Deaton, 468 F2d at 544, we hold that a parole officer is

a law enforcement officer for purposes of Miranda.

Statements made by a parolee to a parole officer during

a custodial interrogation are inadmissible in a subse-

quent trial if the parolee invoked the right to counsel

before questioning.

Therefore, we conclude that the

statements defendant made to Evans while he was in

custody were inadmissible at trial and that the trial

court erred by denying defendant’s motion to suppress.

D. HARMLESS ERROR

A preserved constitutional error occurring during the

presentation of the case to a jury, i.e., a nonstructural

error, is not grounds for reversal if the error was

harmless. People v Miller, 482 Mich 540, 559; 759 NW2d

850 (2008); People v Anderson (After Remand), 446

Mich 392, 406; 521 NW2d 538 (1994). A preserved

constitutional error is harmless if it is “clear beyond a

reasonable doubt that a rational jury would have found

the defendant guilty absent the error.” People v Hyde,

285 Mich App 428, 447; 775 NW2d 833 (2009) (quota-

tion marks and citations omitted). “There must be no

‘reasonable possibility that the evidence complained of

might have contributed to the conviction.’ ” Id., quoting

We emphasize that we do not address whether the statements would

be admissible in a subsequent parole revocation hearing. We note,

however, that the Supreme Court has stated that “the revocation of

parole is not part of a criminal prosecution and thus the full panoply of

rights due a defendant in such a proceeding does not apply to parole

revocations.” Morrissey v Brewer, 408 US 471, 480; 92 S Ct 2593; 33 L Ed

2d 484 (1972); see also People v Hardenbrook, 68 Mich App 640, 644-646;

243 NW2d 705 (1976).

646 295 M

ICH

623 [Mar

Anderson, 446 Mich at 406; see also Chapman v Cali-

fornia, 386 US 18, 23; 87 S Ct 824; 17 L Ed 2d 705

(1967).

In addition to eliciting Evans’s inadmissible testi-

mony, the prosecution presented evidence that defen-

dant smoked Marlboro cigarettes, which was the brand

of cigarettes that the robber told the cashier to give

him. Defendant’s brother testified that defendant re-

turned home on the night of the robbery wearing

clothes that matched the description of the clothes worn

by the robber and with $152. The $152 included a $2

bill, which corresponded to the money that the robber

stole from the gas station. Defendant’s brother reported

defendant to the police. Moreover, the prosecution pre-

sented evidence that defendant frequently wore a Uni-

versity of Michigan fleece pullover and a University of

Michigan hat that matched the description of the pull-

over and hat worn by the robber.

Notwithstanding this evidence of defendant’s guilt,

there remains a “reasonable possibility” that defen-

dant’s statements to Evans “might have contributed to

the conviction.” See Anderson, 446 Mich at 406 (quota-

tion marks and citation omitted). The gas-station cash-

ier was unable to identify defendant as the robber.

Although defendant’s brother testified against him, the

defense introduced evidence of the brother’s prior con-

victions both to impeach the brother and also as a basis

for arguing that the brother committed the robbery and

falsely accused defendant. Moreover, in both his open-

ing and closing statements, the prosecutor emphasized

the importance of Evans’s testimony regarding defen-

dant’s incriminating statements. In his opening state-

ment, the prosecutor said, “[M]ost importantly, you will

hear that the Defendant confessed to someone that he

did this armed robbery.” And in his closing argument,

2012] P

EOPLE V

LLIOTT

647

the prosecutor described Evans as “probably the most

crucial” witness. The prosecutor’s statements under-

score the importance of defendant’s incriminating

statements in the prosecution’s case and demonstrate a

reasonable possibility that defendant’s incriminating

statements might have contributed to his conviction.

See id.

Accordingly, we conclude that the trial court’s failure

to suppress defendant’s statements to Evans was not

harmless error beyond a reasonable doubt. Therefore,

we reverse defendant’s conviction and remand for a

new trial.

Reversed and remanded for proceedings consistent

with this opinion. We do not retain jurisdiction.

WENS

and S

HAPIRO

, JJ., concurred with B

ECKERING

P.J.

648 295 M

ICH

623 [Mar

HOFFMAN v BARRETT (ON REMAND)

Docket No. 289011. Submitted November 15, 2011, at Lansing. Decided

March 8, 2012, at 9:10 a.m. Leave to appeal denied, 493 Mich 925.

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 court, James C. Kingsley, J., granted summary disposi-

tion 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

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)

(Hoffman I). On remand in the trial court, Battle Creek Health

Systems was dismissed as a defendant. Barrett moved for sum-

mary disposition, asserting that plaintiff’s notice of intent and

affidavit of merit were deficient. Plaintiff conceded that the

2012] H

OFFMAN V

ARRETT

) 649

affidavit of merit was 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,

AVIS

,P.J., and D

ONOFRIO

and S

TEPHENS

, JJ., affirmed, 288 Mich App

536 (2010) (Hoffman II), holding that the trial court properly

determined that plaintiff’s notice of intent was sufficient when

read as a whole. The two-year statutory limitations period had

already expired and could not thereafter be tolled when the suit

was filed on October 16, 2003. The saving period of MCL 600.5852,

which provides an additional two years for filing after the appoint-

ment 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 and the action was timely filed. The Court of Appeals

noted in Hoffman II that Waltz did not apply because this case was

filed after Omelenchuk was decided and the saving period expired

within 182 days after Waltz was decided. The Court stated that

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. Because Waltz did not

apply but Omelenchuk did, plaintiff’s filing of the notice of intent

tolled the saving period. The Court further noted that the filing of

a complaint and an affidavit of merit, even a defective one, tolls the

limitations period until the affidavit of merit is successfully

challenged. The Hoffman II Court reasoned that the filing of the

notice of intent tolled the saving period for 182 days, but there

were in addition 146 days remaining in the saving period at that

time. When the suit was filed, there remained 101 days within

which plaintiff could have filed. Because plaintiff still had this time

available upon the successful challenge to the affidavit of merit,

the trial court’s dismissal was properly without prejudice. Finally,

the Court of Appeals held in Hoffman II that plaintiff’s expert was

qualified to sign the affidavit of merit because, 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. Barrett sought leave to

appeal in the Supreme Court, which held the application in

abeyance pending, in part, the decision in Ligons v Crittenton

Hosp, 490 Mich 61 (2011), which held that a medical malpractice

action must be dismissed with prejudice if a defective affidavit of

merit is filed after the expiration of both the statutory limitations

650 295 M

ICH

649 [Mar

period and the saving period. Following its decision in Ligons, the

Supreme Court, in lieu of granting Barrett’s application for leave

to appeal, vacated the Court of Appeals’ opinion in Hoffman II and

remanded the case to the Court of Appeals for reconsideration in

light of Ligons. 490 Mich 890 (2011).

On remand, the Court of Appeals held:

1. Key to the Supreme Court’s decision in Ligons was the

applicability of Waltz, in which the Court determined that MCL

600.5856 tolls only statutes of limitation or repose and does not

toll the wrongful death saving period provided in MCL 600.5852.

Because Waltz is inapplicable in the present case, Ligons does not

affect the previous decision of the Court of Appeals in Hoffman II

that plaintiff’s filing of her notice of intent tolled the saving period

and the filing of her complaint and affidavit of merit would have

tolled the running of the additional time provided under the saving

provision. Because there remained time within which plaintiff

could refile her suit, the trial court properly dismissed the action

without prejudice.

2. In reviewing the sufficiency of a notice of intent, the entire

notice must be read and considered as a whole, rather than

piecemeal. The information in the notice need only be detailed

enough to allow the potential defendant to understand the claimed

basis of the impending malpractice action and need only be set

forth with the same level of specificity as would be required of

allegations in a complaint or other pleading in order to give fair

notice.

3. 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 Barrett’s alleged inaction. All the required

information is plainly apparent from reading the notice of intent

as a whole. Although the notice of intent could have been better, it

was sufficient.

4. MCL 600.2912d(1) and MCL 600.2169 provide that a plain-

tiff 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 a board certification identical to that of the defendant

physician, if the defendant physician is so certified. However,

because irrelevant testimony is generally inadmissible, the plain-

tiff’s expert need only specialize or be certified in subfields

relevant to the expert’s intended testimony. Therefore, a plaintiff’s

expert need only match the specialty engaged in by the defendant

physician during the course of the alleged malpractice and, if the

defendant physician is board-certified in that specialty, the plain-

2012] H

OFFMAN V

ARRETT

) 651

tiff’s expert must also have a board certification in that specialty.

The mere fact that a defendant has a specialty that the plaintiff’s

expert lacks does not automatically disqualify the plaintiff’s expert

from properly signing the plaintiff’s affidavit of merit.

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.

Aardema, Whitelaw & Sears-Ewald, PLLC (by Do-

lores Sears-Ewald and Timothy P. Buchalski), for Peter

Barrett, M.D.

ON REMAND

Before: D

ONOFRIO

,P.J., and K. F. K

ELLY

and S

TEPHENS

JJ.

URIAM

. This case is before us on remand from

our Supreme Court for reconsideration in light of

Ligons v Crittenton Hosp, 490 Mich 61; 803 NW2d 271

(2011) (Ligons II), in which the Court held that a

medical malpractice action must be dismissed with

prejudice if a defective affidavit of merit (AOM) is filed

after the expiration of both the statutory limitations

period and the saving period. Hoffman v Barrett, 490

Mich 890 (2011). Key to the Court’s decision in Ligons

was the applicability of Waltz v Wyse, 469 Mich 642; 677

NW2d 813 (2004), in which the Court determined that

MCL 600.5856 tolls only statutes of limitations or

repose and does not toll the wrongful death saving

period provided in MCL 600.5852. See Ligons II, 490

Mich at 74-76, 89-90. Because Waltz is inapplicable in

652 295 M

ICH

649 [Mar

the present case, as our Supreme Court previously

determined,

Ligons II does not affect our previous

decision, and we again affirm.

I. FACTUAL BACKGROUND AND PROCEDURAL HISTORY

This case is before this Court for the third time. In

Hoffman v Barrett, 288 Mich App 536, 538-539; 794

NW2d 67 (2010) (Hoffman II), vacated 490 Mich 890

(2011), we set forth the pertinent facts and procedural

history:

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

(BCHS). Defendant, Dr. Peter Barrett, was as-

signed 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.

This matter has been before this Court previously, in

Docket No. 258982. Plaintiff was appointed personal rep-

resentative on July 27, 2001. Plaintiff provided defen-

dants

with a notice of intent to sue, pursuant to MCL

600.2912b(1), on March 3, 2003. Plaintiff commenced 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) (Mullins I), rev’d Mullins v St Joseph

Mercy Hosp, 480 Mich 948 (2007) (Mullins II). Under a

See Hoffman v Barrett, 480 Mich 981 (2007) (Hoffman I); Mullins v St

Joseph Mercy Hosp, 480 Mich 948 (2007) (Mullins II).

2012] H

OFFMAN V

ARRETT

) 653

retroactive application of Waltz, plaintiff’s suit had been

filed after the wrongful death saving period had expired.

The Court of Appeals affirmed the trial court’s determi-

nation. Hoffman 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 re-

manded the case to the trial court for the entry of an

order denying defendants’ motion for summary disposi-

tion and for further proceedings. Hoffman v Barrett, 480

Mich 981 (2007) [Hoffman I].

_____________________________________________________

Battle Creek Health Systems was originally a named

defendant, but was dismissed before the summary disposi-

tion order at issue in this appeal.

Battle Creek Health Systems was still a defendant at

the time of the prior appeal.

In Mullins II, our Supreme Court held that Waltz did

not apply to any actions filed after the decision in Omelen-

chuk v City of Warren, 461 Mich 567; 609 NW2d 177 (2000),

and before 182 days after the decision in Waltz. Omelen-

chuk was decided on March 28, 2000, and Waltz was

decided on April 14, 2004; the date 182 days later would be

October 13, 2004. This matter was filed between those

dates, so Waltz does not apply.

_____________________________________________________

On remand, defendant Dr. Barrett again moved for

summary disposition, arguing that plaintiff’s notice of

intent to file suit and AOM were deficient. The trial

court determined that the notice of intent was ad-

equate, and plaintiff conceded that her AOM was defec-

tive. The trial court dismissed this case without preju-

dice. On appeal, defendant argues that the trial court

should have dismissed this action with prejudice.

654 295 M

ICH

649 [Mar

II. EFFECT OF LIGONS II ON HOFFMAN II

Defendant argues that dismissal with prejudice was

required because there was no time remaining for

plaintiff to timely refile her lawsuit. In Hoffman II, this

Court disagreed and determined that, because Waltz is

inapplicable, plaintiff’s filing of her notice of intent

tolled the saving period. This Court stated, in relevant

part, in Hoffman II, 288 Mich App at 540-543:

The malpractice presumably happened on or before

January 24, 2001. There is a two-year statutory limitations

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 limitations period had already

expired and could not thereafter be tolled. The saving

period, MCL 600.5852, provides an additional two years

after the appointment of a personal representative; plain-

tiff was appointed personal representative on July 27,

2001, so the saving period would have expired on July 27,

2003, see, generally, Ligons v Crittenton Hosp, 285 Mich

App 337, 351-355; 776 NW2d 361 (2009) [Ligons I],

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.

***

[A]s observed, this case was filed after Omelenchuk v

City of Warren, 461 Mich 567; 609 NW2d 177 (2000), was

decided, and the saving period expired 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

2012] H

OFFMAN V

ARRETT

) 655

period of limitations would be tolled. Waltz, 469 Mich at

653-654.... Because Waltz does not apply, but Omelen-

chuk 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 sufficient, so dismissal without

prejudice was proper.

Plaintiff conceded that the affidavit of merit was defec-

tive. Nevertheless, filing a complaint and an affidavit of

merit—even a defective one—tolls the limitations period

until the affidavit is successfully challenged. Kirkaldy v

Rim, 478 Mich 581, 585-586; 734 NW2d 201 (2007)....

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

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 dismissal was properly

without prejudice.

_____________________________________________________

While we cite this case for several legal propositions

conveniently summarized therein, we offer no opinion as to

the correctness of Ligons [I]. Ligons [I] is not controlling in

this matter because the action in Ligons [I] was filed on

April 7, 2006, which, unlike the filing in the instant matter,

was more than 182 days after Waltz was decided. There-

fore, Waltz was applicable in Ligons [I] but is not applicable

here. See footnote 3 of this opinion.*

_____________________________________________________

On July 29, 2011, our Supreme Court decided Ligons

II, in which it determined that dismissal with prejudice

was required in circumstances similar to the instant

case. In that case, the plaintiff filed two AOMs, both of

which were defective. Ligons II, 490 Mich at 77-79. He

failed to commence his lawsuit within the limitations

period, but filed his complaint and accompanying AOMs

within the saving period provided by MCL 600.5852. Id.

at 89. Because the AOMs were defective, however, and

See supra at 654—R

EPORTER

656 295 M

ICH

649 [Mar

the plaintiff was unable to amend the AOMs retroac-

tively, dismissal with prejudice was required. Id. at

79-90. The Ligons II Court stated:

Although the timely filing of a defective AOM tolls the

limitations period until a court finds the AOM defective, an

AOM filed during a saving period after the limitations

period has expired tolls nothing, as the limitations period

has run and the saving period may not be tolled. In this

case, because the limitations period had run before the

complaint was filed, plaintiff cannot amend his defective

AOMs retroactively. Given that the saving period has

expired, plaintiff’s case had to be dismissed with prejudice.

[Id. at 90 (emphasis added).]

As the emphasized language in the preceding para-

graph indicates, Waltz was applicable in Ligons. Thus,

pursuant to Waltz, the plaintiff’s filing of the AOMs did

not toll the saving period. Ligons II, 490 Mich at 74-76,

89-90. In this case, however, Waltz is not applicable.

Hoffman I, 480 Mich at 981; Mullins II, 480 Mich at

948. Accordingly, as stated previously in Hoffman II,

288 Mich App at 542, plaintiff’s filing of her notice of

intent tolled the saving period and the filing of her

complaint and AOM would have tolled the running of

the additional time provided under the saving provi-

sion. Because there remained time within which plain-

tiff could refile her suit, the trial court properly dis-

missed the action without prejudice.

III. REMAINING ISSUES

Defendant also argues that plaintiff’s notice of intent

was insufficient and contends that plaintiff’s expert was

not qualified to sign the AOM or offer standard-of-care

testimony against him. Because Ligons II does not

implicate those issues, and our Supreme Court vacated

this Court’s entire opinion in Hoffman II, we adopt

2012] H

OFFMAN V

ARRETT

) 657

verbatim our previous analysis of those issues in Hoff-

man II, 288 Mich App at 543-551:

Defendant next argues that the notice of intent was

insufficient because it failed to contain a statement ex-

plaining the manner in which defendant’s alleged breach of

the standard of care resulted in plaintiff’s decedent’s

injuries.

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 information, al-

though no particular format is required. Ligons [I], 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 accurate. 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 defendants 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 notice

must be read and considered as a whole, rather than

piecemeal, Ligons [I], 285 Mich App at 344.

Plaintiff’s notice of intent provided,

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

healthcare professionals, entities and/or facilities as well as

their employees or agents, actual or ostensible, who were

involved in the evaluation, care and/or treatment of

EDGAR BROWN, DECEASED.

658 295 M

ICH

649 [Mar

“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 Emer-

gency Room. He was found to have multiple rib fractures

and a right pneumothorax.

[8]

Dr. Peter Barrett was as-

signed 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 taken on January

20, 2001 and his last abdominal x-ray was taken on

January 19, 2001. Mr. Brown was discharged 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.

2012] H

OFFMAN V

ARRETT

) 659

“b. Performed full physical examinations of a patient in

circumstances such as Edgar Brown[’s], including respira-

tory 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 condi-

tion 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.

“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[’s], including respira-

tory and abdominal assessments on a regular basis.

“c. Adequately assess and intervene for respiratory

compromise 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

660 295 M

ICH

649 [Mar

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.

“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 condi-

tion 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.

2012] H

OFFMAN V

ARRETT

) 661

“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. However,

the proper way to review the notice of intent is as a whole,

rather than viewing one part in isolation. Ligons [I], 285

Mich App at 344. Significantly, a notice of intent is insuf-

ficient if it “only provides notice or only provides ‘a

statement.’ It must do both.” Esselman [v Garden City

Hosp, 284 Mich App 209, 220; 772 NW2d 438 (2009)]. The

required notification need only to be set forth with the

same level of specificity as “would be required of allega-

tions 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 proxi-

mate 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 diagnosable life-threatening conditions that inevi-

tably 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

662 295 M

ICH

649 [Mar

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.

Defendant 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 consid-

erations being premature at the affidavit-of-merit stage of

proceedings. 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 physician, if the defendant

physician is so certified. Grossman, 470 Mich at 596. Dr.

Barrett is board-certified by the American Board of Tho-

racic 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.

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 generally inad-

missible, id. at 568-572, the plaintiff’s expert need only

specialize or be certified in subfields relevant to the ex-

pert’s intended testimony, id. at 559. Therefore, a plain-

tiff’s expert need only match “the specialty engaged in by

the defendant physician during the course of the alleged

malpractice, and, if the defendant physician is board certi-

fied in that specialty, the plaintiff’s expert must also be

board certified in that specialty.” Id. at 560; see also

Gonzalez v St John Hosp & Med Ctr (On Reconsideration),

2012] H

OFFMAN V

ARRETT

) 663

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

[sic] of

brown pus was removed, surrounds the lungs. A significant

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

gallbladder, a necrotic liver, intestinal

ileus, and acalculous cholecystitis.

Clearly, a significant

portion of the decedent’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 specialized

testimony pertaining to thoracic surgery. Therefore, plain-

tiff’s expert was qualified to sign the affidavit of merit.

_____________________________________________________

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 defen-

dants, 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.

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).

Abnormal presence of air inside the pleural cavity,

which is the membrane-lined cavity in the thorax sur-

rounding the lungs.

664 295 M

ICH

649 [Mar

An obstruction or blockage of the intestine or bowel.

A tube inserted into the stomach through the nose,

used for feeding or for removing fluids.

A collapsed lung.

Empyema is an accumulation of pus in the body

cavity. Pleuritis is an inflammation of the lining around the

lungs.

Again, an obstruction or blockage of the intestine.

This issue is moot in the instant appeal, given

plaintiff’s concession that the affidavit of merit was other-

wise defective, but we address the matter because it will

become relevant upon plaintiff’s refiling the action.

<http://www.abts.org/sections/Definition_of_Thorac/

index.html> (accessed May 5, 2010).

Slightly less than 3

cups.

Necrosis refers to localized death of cells or tissue

because of injury or disease, rather than as a result of

natural causes.

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.

_____________________________________________________

Affirmed.

ONOFRIO

,P.J., and K. F. K

ELLY

and S

TEPHENS

,JJ.,

concurred.

2012] H

OFFMAN V

ARRETT

) 665

KBD & ASSOCIATES, INC v GREAT LAKES FOAM

TECHNOLOGIES, INC

Docket No. 303044. Submitted March 6, 2012, at Lansing. Decided March

15, 2012, at 9:00 a.m.

KBD & Associates, Inc. filed an action in the Jackson Circuit Court

against Great Lakes Foam Technologies, Inc., claiming that Great

Lakes Foam had breached the parties’ commission contract when

it failed to pay KBD’s owner, Roger Lyons, a commission for sales

that occurred after Great Lakes Foam terminated its business

relationship with Lyons. Lyons approached Great Lakes Foam in

2005 to determine whether it was interested in manufacturing

foam seat cushions for Isringhausen, Inc. Great Lakes Foam

agreed, and Lyons was paid a 5 percent commission on all sales to

Isringhausen. Great Lakes Foam was contacted by Isringhausen in

April 2009 and informed that Lyons was banned from their facility

and that it would no longer deal with Lyons as a sales represen-

tative. Great Lakes Foam thereafter informed Lyons that it was

terminating their business relationship. Although Great Lakes

Foam continued to sell foam parts to Isringhausen through March

2010, it did not pay any commissions to Lyons for the sales

occurring after his termination. Lyons argued that he was entitled

to posttermination sales commissions on the basis that he was the

procuring cause of Great Lakes Foam’s sales to Isringhausen. The

parties filed cross-motions for summary disposition. The court,

Chad C. Schmucker, J., originally denied Lyons’s motion and

granted summary disposition in favor of Great Lakes Foam, but

then granted KBD’s motion for reconsideration. The court deter-

mined that there was a question of fact about whether the

Isringhausen business would have continued without future ac-

count servicing from a representative once Lyons was terminated.

Following a bench trial, the court entered judgment in favor of

Great Lakes Foam, finding that Lyons was not entitled to the

commissions because the agreement required him to perform

significant account servicing and he committed the first material

breach of the commission contract when he was banned from

Isringhausen’s premises. KBD appealed.

The Court of Appeals held:

666 295 M

ICH

666 [Mar

1. Sales agents are entitled to posttermination commissions for

sales they procured during their time with a former employer,

regardless of whether they concluded and completed the sale. The

procuring-cause doctrine applies when the parties have a contract

governing the payment of sales commissions but the contract is

silent regarding the payment of posttermination commissions. The

basic principle behind the procuring-cause doctrine is the notion of

fair dealing. Thus, if the principal cancels the authority of the

agent, the agent would still be able to recover the commission if

the agent was the procuring cause. In this case, the customer

(Isringhausen) canceled Lyons’s authority, not Great Lakes Foam.

Lyons’s services were terminated as an attempt by Great Lakes

Foam to retain Isringhausen as its client, not an attempt to avoid

payment of Lyons’s commission. Accordingly, the rationale under-

pinning the procuring-cause doctrine was not applicable to the

facts of this case.

2. A court must look to the parties’ contract when analyzing a

claim for posttermination commissions. When the terms of a

contract are contested, the finder of fact determines its actual

terms. However, a sales agent who commits the first substantial

breach of a commission contract is not entitled to recover postter-

mination commissions. If account servicing was a term of the

contract, then Lyons’s ban from Isringhausen’s plant constituted

a breach of the parties’ contract because Lyons would not have

been able to perform his servicing obligations. The circuit court

properly determined that summary disposition was inappropriate

because there was a question of fact regarding the terms of the

parties’ commission contract, specifically whether, and if so to

what extent, the contract required Lyons to service the account.

3. The decision to admit evidence is within the court’s discre-

tion and will not be disturbed on appeal absent an abuse of that

discretion. A court’s decision whether to impose discovery sanc-

tions is also reviewed for an abuse of discretion. Plaintiff failed to

move to compel the production of posttermination e-mails between

Isringhausen and Great Lakes Foam. Therefore, an order to

compel production was never entered pursuant to MCR 2.313(A),

and sanctions for failure to produce the e-mails could not be

imposed under MCR 2.313(B)(2). Contrary to KBD’s argument,

deposition testimony regarding the e-mails provided notice of their

existence. Even if it was error to admit the posttermination

e-mails, it was harmless because the circuit court’s ultimate

decision on whether account servicing was part of the commission

contract was based primarily on Lyons’s own testimony.

2012] KBD & A

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667

4. The law of the case doctrine provides that a ruling by an

appellate court on a particular case binds the appellate court and

all lower tribunals with respect to that issue. However, a trial court

has unrestricted discretion to review its previous decisions, and

the law of the case doctrine does not preclude a trial court from

reversing its prior decision. Because there had been no ruling by

an appellate court in this case, the circuit court had authority to

grant KBD’s motion for reconsideration and reverse its prior

decision granting summary disposition in favor of Great Lakes

Foam.

5. The circuit court’s judgment did not contravene its order

granting KBD’s motion for reconsideration. In its initial order

granting summary disposition in favor of Great Lakes Foam, the

circuit court determined that Lyons’s account-servicing obliga-

tions were significant enough to render the procuring-causes

doctrine inapplicable because Lyons committed the first material

breach when he was banned from Isringhausen’s plant. However,

when the court granted KBD’s motion for reconsideration, it never

determined that the procuring-cause doctrine was applicable;

rather, the circuit court determined that there was an issue of fact

regarding Lyons’s service obligation, thus making summary dis-

position inappropriate.

6. The circuit court’s findings on the issue of Lyons’s account-

servicing obligations under the terms of the commission contract

were not against the great weight of the evidence.

Affirmed.

1. A

GENCY —

RINCIPAL AND

GENT —

ALES

OMMISSIONS —

ROCURING

-C

AUSE

OCTRINE

Sales agents are entitled to posttermination commissions for sales

they procured during their time with a former employer, regard-

less of whether they concluded and completed the sale; the

procuring-cause doctrine applies when the parties have a contract

governing the payment of sales commissions but the contract is

silent regarding the payment of posttermination commissions; the

basic principle behind the procuring-cause doctrine is the notion of

fair dealing; if the principal cancels the authority of the agent, the

agent is still able to recover the commission if the agent was the

procuring cause.

2. A

GENCY —

RINCIPAL AND

GENT —

OSTTERMINATION

ALES

OMMISSIONS —

REACH OF

OMMISSION

ONTRACT

A court must look to the parties’ contract when analyzing a claim for

posttermination commissions; when the terms of a contract are

668 295 M

ICH

666 [Mar

contested, the finder of fact determines its actual terms; a sales

agent who commits the first substantial breach of a commission

contract is not entitled to recover posttermination commissions; a

substantial breach occurs when the sales representative is unable

to fulfill its account-servicing obligations under the contract

because the customer banned the sales representative from its

premises or otherwise refused to deal with the principal’s agent.

3. C

OURTS —

UBSEQUENT

EVERSALS —

AW OF THE

ASE

OCTRINE

The law of the case doctrine provides that a ruling by an appellate

court on a particular case binds the appellate court and all lower

tribunals with respect to that issue; the doctrine does not prevent

a trial court from exercising its unrestricted discretion to review

its prior decision to correct an error.

Couzens, Lansky, Fealk, Ellis, Roeder & Lazar, P.C.

(by Phillip L. Sternberg), for KBD & Associates, Inc.

Warner Norcross & Judd, LLP (by James Moskal),

for Great Lakes Foam Technologies, Inc.

Before: R

ONAYNE

RAUSE

,P.J., and D

ONOFRIO

and F

ORT

OOD

,JJ.

ONOFRIO

, J. Plaintiff appeals as of right the circuit

court’s judgment in favor of defendant following a

bench trial. Because the court properly denied plain-

tiff’s motion for summary disposition, it did not err by

admitting evidence of posttermination communications

at trial, its judgment did not contravene the great

weight of the evidence, and it did not misinterpret the

procuring-cause doctrine, we affirm.

Plaintiff is a manufacturer’s representative firm owned

and operated by Roger Lyons. Its sole function is to serve

as a sales representative to various companies. Defendant

manufactures and supplies foam and foam-padded prod-

ucts. In approximately 1997 Lyons approached defen-

dant’s primary owner, William MacCready, regarding the

possibility of defendant manufacturing a foam armrest to

2012] KBD & A

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669

sell to a company named Findlay Industries. MacCready

agreed to manufacture the armrests and paid Lyons a five

percent commission on armrest sales. According to Mac-

Cready, the commission was based on Lyons managing the

account because MacCready had no personnel to perform

that function. The agreement was not reduced to writing

and lasted for one or two years until Findlay Industries

went out of business.

In 2005, Lyons again approached MacCready and

inquired whether MacCready was interested in manu-

facturing foam seat cushions for Isringhausen, Inc.

MacCready agreed to the deal and paid Lyons a five

percent commission on all sales to Isringhausen. Again,

the agreement was not reduced to writing, but Lyons

and MacCready both claimed that the deal was intended

to be a continuation of the armrest agreement.

Defendant produced between 25 and 30 different

parts for Isringhausen (the 2005 project). According to

Lyons, once production on the 2005 project began, his

servicing obligations were minimal, and he spent most

of his time attempting to obtain new business for

defendant from Isringhausen and other companies.

MacCready maintained, however, that Lyons’s commis-

sion was contingent on his performance of account

manager functions and that Lyons’s account-servicing

responsibilities were significant.

On April 3, 2009, Tim Packer, defendant’s coowner

and general manager, received an e-mail from an Isring-

hausen employee informing him that Isringhausen

would no longer allow Lyons to represent defendant.

The e-mail stated that Isringhausen no longer wished to

deal with Lyons “in the future effective immediately”

and indicated that all future correspondence would be

between Isringhausen’s and defendant’s personnel di-

670 295 M

ICH

666 [Mar

rectly. The e-mail further stated that Lyons was not to

contact Isringhausen for any reason whatsoever and

that if defendant found this unacceptable, Isringhausen

would make arrangements to locate a different foam

supplier. Consequently, Packer and MacCready in-

formed Lyons that they were terminating their rela-

tionship with him. Although defendant eventually lost

the Isringhausen account, it continued to sell parts to

Isringhausen through March 2010, generating approxi-

mately $1.4 million in sales between the time that

Lyons was terminated and the time that the sales were

discontinued. Defendant did not pay any sales commis-

sions to Lyons after his termination.

Thereafter, plaintiff filed suit against defendant for

breach of the parties’ commission contract. Plaintiff

alleged that it had fulfilled its obligations under the

contract and that Lyons was responsible for procuring

all of defendant’s sales to Isringhausen. Plaintiff fur-

ther alleged that Lyons was entitled to a five percent

commission on all of defendant’s sales to Isringhausen

that occurred after Lyons’s termination.

The parties filed cross-motions for summary disposi-

tion pursuant to MCR 2.116(C)(10). Lyons argued that

he was entitled to posttermination sales commissions

because he was the procuring cause of defendant’s sales

to Isringhausen. Defendant, on the other hand, argued

that the procuring-cause doctrine was inapplicable be-

cause Lyons was responsible for a significant amount of

account servicing, which he was unable to perform after

Isringhausen banned him from its premises. Defendant

also argued that the doctrine was inapplicable because

Lyons committed a material breach of contract when he

was banned from Isringhausen’s premises.

Initially, the trial court denied Lyons’s motion and

granted summary disposition in favor of defendant. The

2012] KBD & A

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671

court determined that Lyons’s servicing responsibilities

were significant enough to render the procuring-cause

doctrine inapplicable. The trial court also determined

that the doctrine was inapplicable because Lyons com-

mitted the first material breach of contract by getting

himself banned from Isringhausen’s premises. Thereaf-

ter, Lyons moved for reconsideration, which the trial

court granted. The trial court reasoned that, viewing

the facts in the light most favorable to plaintiff, there

was a question of fact regarding whether the postter-

mination orders “would have come in anyway,” despite

that Lyons was no longer servicing the account. The

trial court further stated that even though it deter-

mined that Lyons had committed the first breach, “the

first breach only becomes significant if there were

customer service requirements.”

The case proceeded to a two-day bench trial, follow-

ing which the trial court entered a judgment in defen-

dant’s favor. The court concluded that the commission

agreement required Lyons to perform significant ac-

count servicing, which, although not a full-time job, was

significant enough that defendant had to replace Lyons.

The trial court further concluded that because of Ly-

ons’s significant service obligations, he committed the

first material breach when he was banned from Isring-

hausen’s premises.

Plaintiff first argues that the trial court erroneously

denied its motion for summary disposition because

defendant failed to produce evidence of significant

account servicing that defendant was required to per-

form after Lyons’s termination. We review de novo a

trial court’s decision on a motion for summary disposi-

tion. Coblentz v City of Novi, 475 Mich 558, 567; 719

NW2d 73 (2006). Under MCR 2.116(C)(10), summary

disposition may be granted when “there is no genuine

672 295 M

ICH

666 [Mar

issue as to any material fact, and the moving party is

entitled to judgment or partial judgment as a matter of

law.” When deciding a motion under (C)(10), the court

must consider the pleadings, affidavits, depositions,

admissions and other documentary evidence in the light

most favorable to the nonmoving party. Corley v Detroit

Bd of Ed, 470 Mich 274, 278; 681 NW2d 342 (2004).

“The law in Michigan is that sales agents are entitled

to post-termination commissions for sales they pro-

cured during their time at the former employer.” Stubl

v T A Sys, Inc, 984 F Supp 1075, 1095 (ED Mich, 1997).

In Reed v Kurdziel, 352 Mich 287, 294-295; 89 NW2d

479 (1958), the seminal case in Michigan discussing the

procuring-cause doctrine, our Supreme Court stated:

It would appear that underlying all the decisions is the

basic principle of fair dealing, preventing a principal from

unfairly taking the benefit of the agent’s or broker’s

services without compensation and imposing upon the

principal, regardless of the type of agency or contract,

liability to the agent or broker for commissions for sales

upon which the agent or broker was the procuring cause,

notwithstanding the sales made have been consummated

by the principal himself or some other agent. In Michigan,

as well as in most jurisdictions, the agent is entitled to

recover his commission whether or not he has personally

concluded and completed the sale, it being sufficient if his

efforts were the procuring cause of the sale. In Michigan

the rule goes further to provide if the authority of the agent

has been cancelled by the principal, the agent would

nevertheless be permitted to recover the commission if the

agent was the procuring cause. [Citations omitted.]

The procuring-cause doctrine applies when the parties

have a contract governing the payment of sales commis-

sions, but the contract is silent regarding the payment

of posttermination commissions. See id.

2012] KBD & A

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Plaintiff argues that Lyons was entitled to postter-

mination commissions because the uncontested evi-

dence showed that he was the procuring cause of

defendant’s sales to Isringhausen. Plaintiff contends

that at the time of Lyons’s termination there was no

work left to be performed with respect to the 2005

project other than minor ministerial tasks. Plaintiff

further contends that the trial court erroneously relied

on Roberts Assoc, Inc v Blazer Int’l Corp, 741 F Supp

650, 655 (ED Mich, 1990), a nonbinding, federal deci-

sion in which that court stated:

If subsequent purchase orders are submitted by a cus-

tomer which involve no additional servicing or negotiation,

then the salesman securing the original account may well

be entitled to commissions on those sales. Of course, in the

usual case each subsequent order will require some further

customer services and under those circumstances the agent

securing the previous order will have no claim for addi-

tional commissions. It is a question of fact for the jury

whether subsequent purchases were effectuated by addi-

tional customer services or were made solely on the force of

the original representations.

Plaintiff asserts that Roberts does not accurately de-

scribe the procuring-cause doctrine because the mere

fact that some further customer servicing is required

does not justify termination of commissions. Plaintiff

appears to argue that when additional posttermination

servicing is required, the court must balance the agent’s

pretermination efforts against the principal’s postter-

mination efforts to determine if the agent is still the

procuring cause of the sale. Applying this balancing

test, plaintiff asserts that he was entitled to summary

disposition because defendant failed to produce evi-

dence that it provided significant posttermination ac-

count servicing.

674 295 M

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666 [Mar

The basic principle behind the procuring-cause doc-

trine is the notion of fair dealing. Reed, 352 Mich at 294.

It is unfair to allow a principal to terminate an agent

and avoid paying commissions on sales that the agent

procured. Thus, “if the authority of the agent has been

cancelled by the principal, the agent would nevertheless

be permitted to recover the commission if the agent was

the procuring cause.” Id. at 295. Here, Lyons’s author-

ity was not canceled by the principal. Rather, Isring-

hausen, the customer, canceled Lyons’s authority.

Moreover, defendant’s termination of Lyons was an

attempt to retain its customer and not an attempt to

avoid paying Lyons’s commission. Under these circum-

stances, the principles underpinning the procuring-

cause doctrine are simply inapplicable.

In addition, summary disposition was inappropriate

because the parties disputed the terms of the commis-

sions contract. When analyzing a claim for posttermi-

nation commissions, the first step is to look at the

parties’ contract. Reed, 352 Mich at 294. Contrary to

plaintiff’s argument, defendant presented evidence of

the servicing efforts it provided to Isringhausen after

Lyons’s termination. Both MacCready and Packer tes-

tified during their depositions that Lyons was hired to

be a full-service account manager and that Lyons’s

commission was contingent on his management of the

account. Packer explained that “[m]anaging an account

could entail many things, working with an engineering

department, working with the quality department,

working with the purchasing department, having the

pulse of your customer, making sure the customer is

happy.” In contrast, Lyons testified that his commission

was not contingent on servicing the account. Lyons

acknowledged that he considered certain account-

servicing tasks to be his responsibility; however, he

maintained that those tasks were infrequent and had

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no impact on his commission. “Generally, when the

terms of a contract are contested, the actual terms of

the contract are to be determined by the jury....”

Butterfield v Metal Flow Corp, 185 Mich App 630,

636-637; 462 NW2d 815 (1990).

The servicing requirements of the parties’ contract

are important because they pertain to the issue of

breach. A sales agent who commits the first substantial

breach of a commissions contract is not entitled to

recover posttermination commissions. See Butterfield,

185 Mich App at 637. If account servicing was a term of

the contract, which the parties dispute, then being

banned from Isringhausen’s premises was a breach of

the parties’ contract because Lyons could no longer

perform his servicing obligation. Depending on the

significance of the servicing requirements, Lyons’s ban

could be considered a substantial breach of contract, in

which case defendant would not be required to continue

performing under the contract. See id. Thus, the trial

court properly determined that summary disposition

was inappropriate.

Plaintiff next argues that the trial court erred by

allowing Packer to testify about e-mail communications

that Packer had with representatives at Isringhausen

after Lyons’s termination. Plaintiff contends that the

trial court should have excluded Packer’s testimony

because the e-mails were never produced during discov-

ery. Plaintiff preserved this issue for our review by

objecting to the admission of Packer’s testimony on the

same basis that it now asserts on appeal. See Klapp v

United Ins Group Agency, Inc (On Remand), 259 Mich

App 467, 475; 674 NW2d 736 (2003). The decision to

admit evidence is within the trial court’s discretion and

will not be disturbed on appeal absent an abuse of

discretion. Edry v Adelman, 486 Mich 634, 639; 786

676 295 M

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666 [Mar

NW2d 567 (2010). We also review for an abuse of

discretion a trial court’s decision whether to impose

discovery sanctions. McDonald v Grand Traverse Co

Election Comm, 255 Mich App 674, 697; 662 NW2d 804

(2003). “An abuse of discretion occurs when the trial

court chooses an outcome falling outside the range of

principled outcomes.” Edry, 486 Mich at 639.

Pursuant to MCR 2.313(A), a party may move for

an order compelling discovery. MCR 2.313(B)(2) sets

forth various mechanisms by which a trial court may

enforce a discovery order and sanction disobedient

parties. MCR 2.313(B)(2) applies, however, only “[i]f

a party...fails to obey an order to provide or permit

discovery....”Because plaintiff did not file a motion

to compel production of the posttermination e-mails,

the trial court never entered an order compelling

their production.

Plaintiff argues that it had no opportunity to file a

motion to compel discovery because it was unaware that

the posttermination e-mails existed. A review of Pack-

er’s deposition testimony, however, shows otherwise.

During his deposition, plaintiff’s counsel questioned

Packer at length regarding e-mails that had been ex-

changed after Lyons’s termination and specifically

asked whether such e-mails had been produced. Packer

responded, “I produced a lot of e-mails and they were—I

didn’t differentiate as far as I recollect between before

and after. You asked for all e-mails involved with the

customer and I gave them to you as far as I recollect.”

Plaintiff’s counsel further questioned Packer regarding

posttermination e-mails, and Packer testified that such

communications had occurred. Counsel asked Packer to

produce the e-mails if he had not already done so, and

Packer agreed to do so. Because Packer admitted that

posttermination e-mails had been exchanged, plaintiff

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was aware of their existence. Therefore, the record does

not support plaintiff’s contention that it was unaware

that the e-mail communications existed. Because plain-

tiff was aware of the communications, it could have filed

a motion to compel their production.

In any event, even if the trial court erred by admit-

ting Packer’s testimony, the error does not warrant

reversal. Error requiring reversal may not be predi-

cated on an evidentiary ruling unless a substantial right

of the party was affected. MRE 103(a); Craig v Oak-

wood Hosp, 471 Mich 67, 76; 684 NW2d 296 (2004). The

trial court based its decision primarily on Lyons’s

testimony rather than on Packer’s. Regarding whether

the 2005 project was “on autopilot,” the trial court

stated, “I didn’t think some of Mr. Packer’s testimony

was well enough documented to be convincing, but

quite frankly I thought Mr. Lyons’ testimony was....”

The court continued:

I mean—I mean his—your own deposition testimony

and testimony here about different things that you did with

pricing, even some of the liaison with this...this PPAP,I

mean the visits, the—the—the trip reports, these don’t

suggest to me, you know, an autopilot contract that things

are just coming in if it’s on autopilot.

Thus, even if the trial court erred by admitting Packer’s

testimony regarding posttermination e-mail communi-

cations, any error was harmless given the court’s reli-

ance on Lyons’s testimony, which it found more con-

vincing.

Plaintiff next argues that the trial court’s judgment

was against the great weight of the evidence because it

was contrary to the court’s determination that the

procuring-cause doctrine was applicable, which plaintiff

asserts the court determined in its ruling on plaintiff’s

motion for reconsideration. Plaintiff contends that the

678 295 M

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666 [Mar

trial court’s “about face” regarding the applicability of

the procuring-cause doctrine contravened the “law of

the case.” “Whether the law of the case doctrine applies

is a question of law that we review de novo.” Shade v

Wright, 291 Mich App 17, 21; 805 NW2d 1 (2010).

Further, under the great weight of the evidence stan-

dard, we defer to the trial court’s findings of fact, which

we will affirm unless the evidence clearly preponderates

in the opposite direction. McIntosh v McIntosh, 282

Mich App 471, 474; 768 NW2d 325 (2009).

Plaintiff’s argument is somewhat difficult to under-

stand. It appears that plaintiff is arguing that because

the procuring-cause doctrine applies only when a con-

tract is silent regarding posttermination sales commis-

sions, and the trial court determined pretrial that the

procuring-cause doctrine was applicable, it must have

determined that the parties’ contract was silent regard-

ing posttermination commissions. Plaintiff contends

that the trial court’s subsequent determination that

Lyons was entitled to a five percent commission only if

he serviced the account contravened the court’s previ-

ous ruling because it showed that the parties had

reached an agreement regarding posttermination sales

commissions.

The law of the case doctrine holds that a ruling by an

appellate court on a particular issue binds the appellate

court and all lower tribunals with respect to that issue.

Grievance Administrator v Lopatin, 462 Mich 235,

259-260; 612 NW2d 120 (2000). There was no ruling by

an appellate court in this case. Rather, the trial court

granted plaintiff’s motion for reconsideration and re-

versed its previous decision granting summary disposi-

tion for defendant. “[A] trial court has unrestricted

discretion to review its previous decision,” and “the law

of the case doctrine [does] not preclude [a] trial court

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from reversing its prior decision.” Meyer & Anna

Prentis Family Foundation, Inc v Barbara Ann Kar-

manos Cancer Institute, 266 Mich App 39, 52-53; 698

NW2d 900 (2005). Therefore, the law of the case doc-

trine is inapplicable.

In addition, plaintiff’s argument that the trial court’s

judgment contravened its order granting plaintiff’s mo-

tion for reconsideration lacks merit. In its initial order

granting summary disposition in defendant’s favor, the

trial court determined that Lyons’s servicing obligations

were significant enough to render the procuring-cause

doctrine inapplicable. The court also determined that the

doctrine was inapplicable because Lyons committed the

first material breach given the significance of his servicing

obligations. Contrary to plaintiff’s argument, in its deci-

sion granting plaintiff’s motion for reconsideration, the

trial court never determined that the procuring-cause

doctrine was applicable to the facts of this case. Rather,

the court simply determined that there was an issue of

fact regarding Lyons’s servicing obligations. Moreover, the

court determined that a question of fact existed regarding

the issue of breach because the breach became significant

only if Lyons’s servicing obligations were significant.

Therefore, the trial court’s judgment did not contravene

its order granting plaintiff’s motion for reconsideration.

Further, the trial court’s findings were not against the

great weight of the evidence. The court concluded, based

on Lyons’s own testimony, that Lyons was required to

perform significant account servicing. Lyons testified that

his involvement in the 2005 project was minimal, but he

acknowledged that he worked with Isringhausen on pric-

ing issues and was part of defendant’s negotiation team,

though he did not have authority to set prices. Lyons also

dealt with some quality issues on behalf of defendant. He

testified that at the time of his termination he went to

680 295 M

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666 [Mar

Isringhausen’s premises once a week. He maintained that

although the majority of his time there was spent on new

projects, about 25 percent of his time was dedicated to the

2005 project.

In addition to Lyons’s testimony, the trial court relied

on several e-mails that Lyons sent to defendant, which

defendant characterized as trip logs. The e-mails generally

discussed Lyons’s trips to Isringhausen and summarized

the issues with which he had dealt when he was there.

Several e-mails related to pricing discussions that Lyons

had with Isringhausen personnel. Lyons had also dis-

cussed with Isringhausen personnel the implementation

of a cost reduction plan, quality issues, tooling repairs, and

the preproduction part-approval process.

From this evidence, the trial court concluded that

Lyons was required to perform significant account

servicing. The trial court reasoned, in pertinent part:

The—I think the key is, you know, we’ve talked about is,

was this sort of something that was on autopilot where

there are just some—some de minimous [sic] or ministerial

customer service obligations. I didn’t think some of Mr.

Packer’s testimony was well enough documented to be

convincing, but quite frankly I thought Mr. Lyons’ testi-

mony was—I thought these were—that there were more—

certainly way more than de minimous [sic] or—or ministe-

rial work. I mean—I mean his—your own deposition

testimony and testimony here about different things that you

did with pricing, even some of the liaison with this...this

PPAP, I mean the visits, the—the—the trip reports, these

don’t suggest to me, you know, an autopilot contract that

things are just coming in if it’s on autopilot. And some of the

trip report stuff was related to new business. But—and

I’m—I’m trying to—that’s what makes it harder.

If—if it was no—if this was your only dealings with

Isringhausen and this was the only contract there’s over-

whelming time spent there. You had other business with

Isringhausen. You had the new business, which is—is not

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part of this. But even taking those off I’m—I’m convinced

that there was—there was some significant customer ser-

vice obligations.

They weren’t, you know, every week like in the one case,

you know, going and checking the shelves, how much needs to

be done, but they were periodically things with pricing and

this that [sic] came up that were significant. I don’t think

it...took a full time person to replace you by any means. But

I think it was certainly more than—than an hour a week on

average if you look at what happened from the time this—you

know, not count this—this start up time. Even if you disre-

gard, you know, the...2005, but from the—from those years

on with the changes that came about in this and your own

description of it, I thought there...were significant account

manager responsibilities.

Now were these just sort of volunteer things to sort of

keep the customer happy to show that you were attentive

and—and, you know, just doing it in your own regard

without being required to, but I don’t think that’s what it

was. I think you were—I think this was part of your—of

your agreement to provide account service responsibilities.

They were—they would vary from time to time how much

they were. It—if it was just sort of a volunteer thing I

wouldn’t—these trip reports I mean I’d say, this—I’m not

required to do this, just send me my five percent check, I’m

not going to send you these reports. There’s certainly some

evidence that that was expected of you.

When that’s expected that you’re going to do this and

it’s of some significance, way less than full time, that’s why

I think this is sort of a—of a windfall. I mean it doesn’t

mean—you know, I’m not saying that they—everything

that—I mean Isringhausen did this on their own that they

banned you. And they’re not blaming them for that. I think

it turned out to be a windfall for them because I don’t think

it took nearly as much to replace you and to—to fill in these

things as—as you would have earned.

But I think they had to replace you with someone.

Someone had to take over this. It wasn’t—I don’t think it

was, you know, ninety five percent of Mr. Packer’s time, but

682 295 M

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666 [Mar

if it was fifteen or twenty percent I think that is sufficient.

It isn’t required to be a full time job. To me it is just far

more from your own testimony more than de minimous

[sic] or—or ministerial.

***

And then when you get banned I think that is—I think

that is a breach of the agreement. I think that was a first

breach. I think it takes it out of the context of simply an

autopilot procuring cause. This was—there were responsi-

bilities with this. You can no longer do those.

The trial court’s findings were not against the great

weight of the evidence.

Finally, plaintiff argues that the trial court misinter-

preted the procuring-cause doctrine by focusing on

duties that Lyons performed before his termination,

instead of focusing on the servicing obligations that

defendant was required to perform after Lyons’s termi-

nation. Plaintiff’s argument lacks merit. The trial court

did not misinterpret the procuring-cause doctrine.

Rather, it heard testimony and admitted evidence re-

garding Lyons’s servicing obligations because such tes-

timony was relevant to the obligations that defendant

was required to perform after Lyons’s termination. As

previously discussed, the evidence did not clearly pre-

ponderate against the trial court’s finding that Lyons

was required to perform significant servicing obliga-

tions in order to receive his five percent commission.

Accordingly, plaintiff’s argument lacks merit.

Affirmed. Defendant, being the prevailing party, may

tax costs pursuant to MCR 7.219.

ONAYNE

RAUSE

,P.J., and F

ORT

OOD

, J., concurred

with D

ONOFRIO

,J.

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McCOIG MATERIALS, LLC v GALUI CONSTRUCTION, INC

Docket No. 301599. Submitted February 15, 2012, at Detroit. Decided

March 15, 2012, at 9:05 a.m.

McCoig Materials, LLC, brought an action in the Macomb Circuit

Court against Galui Construction, Inc., and Ohio Casualty Insur-

ance Company (which provided a performance bond), seeking to

recover for Galui’s alleged breach of contract and to collect on the

performance bond for Galui’s purported failure to pay for concrete

ordered from McCoig and delivered to Galui under the terms of an

open-account contract between McCoig and Galui. The contract

required Galui to notify McCoig in writing of any defect in

materials or nonconformity to specifications within 15 days from

receipt of the materials and of any yield complaints within 48

hours after receipt, and required any action to be brought within

one year of the delivery of the materials. Between August 5, 2008,

and September 18, 2008, McCoig furnished concrete to Galui for

work performed on a project in the city of Center Line. Galui did

not notify McCoig of any defects and did not file a lawsuit within

one year after the materials were supplied. Between November 1,

2008, and December 3, 2008, McCoig delivered concrete to Galui

for work on a project in the city of Warren. Galui allegedly failed to

pay for the concrete supplied for the Warren project. On April 1,

2010, McCoig filed this action seeking to compel payment of the

balance due for the Warren project. On April 30, 2010, Galui filed

an answer, affirmative defenses, and a counterclaim. In its affir-

mative defenses Galui asserted that it was entitled to offsets,

backcharges, and costs incurred to correct defective concrete

provided by McCoig. Galui’s counterclaim asserted breach of

contract and breach of warranty arising from allegedly defective

concrete materials furnished for the Center Line project. McCoig

moved for summary disposition of Galui’s counterclaim, relying on

the one-year limitations period in the contract, and for summary

disposition with regard to its complaint, alleging that there were

no disputed issues of material fact. The court, Donald G. Miller, J.,

entered an order dismissing Galui’s counterclaim and denying

summary disposition with regard to McCoig’s complaint without

prejudice. McCoig again moved for summary disposition, asserting

that there was no genuine issue of material fact regarding Galui’s

684 295 M

ICH

684 [Mar

obligation to pay for the materials for the Warren project, noting

that Galui accepted the goods without objection. Galui responded,

contending that there were genuine issues of material fact regard-

ing the outstanding balance, but not raising an issue regarding any

alleged defective concrete. The court denied the motion, stating

that the dismissal of Galui’s counterclaim did not preclude Galui

from asserting its potential costs to replace the defective concrete

on the Center Line project as a defense to McCoig’s claim for

breach of contract on the Warren project. The court stated that

Galui’s ability to assert recoupment as a defense necessarily

created a question of fact regarding the balance due McCoig.

McCoig moved for reconsideration, challenging the court’s deci-

sion to raise sua sponte the defense of recoupment and alleging

that the doctrine of recoupment did not apply because it only

applied to debts arising from the same transaction. The court

denied the motion for reconsideration, stating that because Galui

ordered materials for both projects under a single contract, recoup-

ment applied. The court stated that the mere fact that Galui had

separate contracts with Warren and Center Line for the projects

did not transform McCoig’s delivery of materials to Galui under

one contract into separate contracts with Galui. The court held

that the failure to plead recoupment as an affirmative defense

could be cured by amendment, and deemed Galui and Ohio

Casualty to have so amended their affirmative defenses. The Court

of Appeals granted McCoig’s application for leave to appeal.

The Court of Appeals held:

1. A claim for recoupment must be premised on the same

contract or transaction. The categorization of the parties’ agree-

ment as a single contract or an open account is not determinative.

The claim for recoupment by the defendant must be premised on

the same transaction raised in the plaintiff’s complaint, and the

defendant must prove that the plaintiff is in breach of the contract

from which the defendant seeks recoupment. When a defendant

accepts goods or construction without timely objection or reserva-

tion, the defendant is barred from raising the recoupment defense.

2. The trial court erred by denying McCoig’s second motion for

summary disposition by raising sua sponte the recoupment de-

fense. The plain language of the contract reveals that, although it

is an open-account contract, the transactions were to be treated as

discrete events or separate transactions. Galui did not timely raise

an objection to the materials provided in the Center Line project

and the contract set forth a one-year period of limitations. Addi-

tional deliveries did not extend the limitations period. It would

render nugatory the provision of the contract containing a 15-day

2012] M

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requirement regarding notice of defects if Galui was permitted to

raise the issue of any alleged defects in the Center Line project in

this litigation involving the Warren project. The purpose of recoup-

ment, to prevent a multiplicity of suits, would not be served

because any issues regarding the alleged defects in the Center Line

project would rely on separate and distinct evidence. The trial

court erred by denying McCoig’s second motion for summary

disposition on the basis of recoupment. The order denying the

second motion for summary disposition is reversed and the case is

remanded to the trial court for further proceedings

Reversed and remanded.

ONTRACTS —

REACHES OF

ONTRACT —

ECOUPMENT

A claim for recoupment must be premised on the same contract or

transaction; the categorization of the parties’ agreement as a

single contract or an open account is not determinative; the claim

must be premised on the same transaction raised in the plaintiff’s

complaint and the defendant must prove that the plaintiff is in

breach of the contract from which the defendant seeks recoup-

ment; the defendant is barred from raising the recoupment

defense when the defendant accepts goods or construction without

timely objection or reservation; once a party accepts a particular

phase of construction, it cannot utilize the defense of recoupment.

Finkel Whitefield Selik (by David E. Sims and Daniel

G. LeVan) for McCoig Materials, LLC.

Frasco Caponigro Wineman & Scheible, PLLC (by J.

Christian Hauser and Jonathan D. Ordower), for Galui

Construction, Inc., and Ohio Casualty Insurance Com-

pany.

Before: S

AAD

,P.J., and K. F. K

ELLY

and M. J. K

ELLY

,JJ.

URIAM

. In this action alleging breach of con-

tract, plaintiff, McCoig Materials, LLC, appeals by leave

granted the trial court’s order denying its second mo-

tion for summary disposition. The trial court denied

this motion for summary disposition and plaintiff’s

motion for reconsideration, holding that defendant,

686 295 M

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684 [Mar

Galui Construction, Inc.,

was entitled to raise the

affirmative defense of recoupment. We reverse and

remand for proceedings consistent with this opinion.

I. BASIC FACTS AND PROCEDURAL HISTORY

Plaintiff filed this litigation to recover for defen-

dant’s alleged breach of contract and to collect on the

performance bond (provided by Ohio Casualty Insur-

ance Company) for defendant’s purported failure to pay

for concrete ordered and delivered pursuant to an

open-account contract. Plaintiff operates a business

manufacturing and selling concrete materials for use in

construction projects. Plaintiff receives orders from

specific customers for an exact amount of concrete

material to be delivered to a particular job site. Plain-

tiff’s employees deliver the concrete to the job site in

accordance with the purchaser’s instructions. After the

material is delivered to the job site, the employee gives

a delivery ticket to the purchaser and provides a carbon

copy of the delivery ticket to plaintiff’s accounting

department. After obtaining the delivery ticket, the

accounting department creates an invoice for all mate-

rials delivered that day and mails the purchaser the

invoice. At the end of each month, a statement of

account is created that delineates all charges for mate-

rials, payments by the purchaser, and any credits is-

sued.

Plaintiff also named as a defendant the provider of the performance

bond, Ohio Casualty Insurance Company. However, Ohio Casualty’s

liability would be as the bond provider and, accordingly, throughout this

opinion, “defendant” refers to Galui Construction only. In addition,

plaintiff’s initial motion for summary disposition sought, in part, dis-

missal of Galui Construction’s counterclaim. The trial court dismissed

the counterclaim, and it is not an issue in this appeal. Thus, for ease of

reference, we will refer to McCoig Materials only as “plaintiff” and Galui

Construction only as “defendant.”

2012] M

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Defendant performs concrete construction work. On

February 7, 2007, plaintiff entered into a contract with

defendant for the sale of concrete materials on a revolv-

ing basis. The contract provided that the goods were

furnished to defendant on an open-account basis, but if

defendant failed to pay, the account would be modified

to require cash on delivery until the account was made

current. The contract between the parties provided, in

relevant part:

This is a contract to obtain materials on open account

from...McCoig Materials, LLC (“McCoig”). Buyer under-

stands and expressly acknowledges that it is executing this

Agreement with McCoig for the purchase of concrete

materials on open account (McCoig shall be referred to as a

Seller throughout this Agreement)....

***

7. Defects/Limitation of Liability: Notice of any

defect in materials or nonconformity to specifications shall

be made in writing within 15 days from receipt of such

materials, after which any such claim for such defect or

nonconformity shall be deemed waived, except that yield

complaints must be made in writing no later than 48 hours

after receipt of materials. Seller’s liability for such defec-

tive or nonconforming materials shall be limited, under

any theory of law, to their replacement or refund of the

purchase price. Seller shall have the right to inspect and

satisfy itself as to the validity of any such claims. Seller

shall have no responsibility for damage or shortage of any

materials unless such damage or shortage is noted on the

delivery ticket and materials claimed to be damaged are

held and made available for Seller’s inspection. IN THE

CASE OF ALL CLAIMS MADE AGAINST SELLER, IN-

CLUDING BUT NOT LIMITED TO CLAIMS FOR FAIL-

URE OR DELAY IN DELIVERY, SELLER SHALL IN NO

EVENT BE LIABLE FOR ANY LOSS [SIC] PROFITS,

SPECIAL OR CONSEQUENTIAL DAMAGES. NO AC-

TION, REGARDLESS OF FORM, ARISING OUT OF THE

688 295 M

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684 [Mar

TRANSACTIONS UNDER THIS AGREEMENT MAY BE

BROUGHT BY BUYER MORE THAN ONE YEAR AFTER

THE MATERIALS SUPPLIED PURSUANT TO ANY OR-

DER UNDER THIS AGREEMENT HAVE BEEN DELIV-

ERED.

SELLER DISCLAIMS ANY AND ALL WARRANTIES,

WHETHER EXPRESSED OR IMPLIED, INCLUDING,

BUT NOT LIMITED TO, ANY IMPLIED WARRANTY OF

MECHANTABILIYT [SIC] OR FITNESS FOR A PAR-

TICULAR PURPOSE, EXCEPT AS OTHERWISE PRO-

VIDED HEREIN UNLESS MADE SPECIFICALLY IN

WRITING, SIGNED BY AN OFFICER OF SELLER, AND

ATTACHED TO AND MADE PART OF THIS CON-

TRACT.

Between August 5, 2008, and September 18, 2008,

plaintiff furnished concrete to defendant for work per-

formed on a project in the city of Center Line. Pursuant

to the terms of the contract, defendant was required to

notify plaintiff of any defects within 15 days from

receipt. Defendant did not timely notify plaintiff of any

defects regarding the concrete used in the Center Line

project, and it did not file a lawsuit within one year after

the materials were supplied. Between November 1,

2008, and December 3, 2008, plaintiff delivered con-

crete to defendant for repair work in the city of Warren.

Defendant allegedly failed to pay for the goods supplied

for the city of Warren project. On April 1, 2010, plaintiff

filed this litigation to compel payment, asserting that a

balance of $51,837.93 was due and owing for the deliv-

eries for defendant’s Warren project.

On April 30, 2010, defendant filed an answer, affir-

mative defenses, and a counterclaim in response to

plaintiff’s complaint. In its affirmative defenses, defen-

dant asserted that it was entitled to offsets, back-

charges, and costs incurred by defendant to correct

defective concrete provided by plaintiff. Defendant’s

2012] M

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counterclaim asserted breach of contract and breach of

warranty by plaintiff arising from the defective con-

crete materials furnished for the city of Center Line

project.

On July 23, 2010, plaintiff moved for summary

disposition of defendant’s counterclaim pursuant to

MCR 2.116(C)(7), relying on the one-year limitations

period set forth in the February 7, 2007 contract be-

tween the parties. Plaintiff also moved for summary

disposition of its complaint under MCR 2.116(C)(10),

contending that there was no genuine issue of material

fact regarding the terms of the agreement, the concrete

was delivered as promised, and defendant failed to pay

the money owed without justification. On August 24,

2010, defendant filed a brief in opposition to the motion

under MCR 2.116(C)(10), alleging that there were dis-

puted issues of material fact regarding the quality of the

concrete supplied by plaintiff and the amount due and

owing in light of plaintiff’s misapplication of payments.

On September 8, 2010, the trial court entered an order

dismissing defendant’s counterclaim and denying plain-

tiff’s motion for summary disposition of its complaint

without prejudice.

On October 7, 2010, plaintiff filed its second motion

for summary disposition pursuant to MCR

2.116(C)(10), asserting that there was no genuine issue

of material fact regarding defendant’s obligation to pay

plaintiff for materials sold in connection with the War-

ren project. Plaintiff also alleged that defendant was

obligated to pay the contract price because it accepted

On October 20, 2009, the city of Center Line sent defendant a list of

work items that needed to be corrected. Despite this notice from the city,

defendant did not file its own lawsuit against plaintiff at that time.

Rather, defendant only raised the issue of defects in response to plaintiff’s

complaint for breach of contract.

690 295 M

ICH

684 [Mar

the goods at issue without objection. On October 25,

2010, defendant filed a brief in opposition to this

motion, contending that there were genuine issues of

material fact regarding any outstanding balance as well

as the propriety of the interest charges. In this brief,

defendant did not raise an issue regarding any alleged

defective concrete.

On November 9, 2010, the trial court issued an

opinion and order denying plaintiff’s second motion for

summary disposition. The trial court rejected defen-

dant’s challenge to the balance due and the argument

that plaintiff misapplied payments. Nonetheless, the

trial court denied plaintiff’s motion, holding that defen-

dant could recoup potential costs it suffered as a result

of defective concrete plaintiff supplied for the Center

Line project:

Significantly, the dismissal of defendant Galui Construc-

tion’s counterclaim does not preclude it from asserting its

potential costs to replace the defective concrete on the

Center Line project as a defense to plaintiff’s claim for

breach of contract on the Warren project. See Mudge v

Macomb County, 458 Mich 87, 106-107; 580 NW2d 845

(1998) (“plaintiff will not be permitted to insist upon the

statute of limitations as a bar to such a defense when he is

seeking to enforce payment of that which is due him under

the contract out of which the defendant’s claim for recoup-

ment arises”).

Defendant Galui Construction’s ability to assert recoup-

ment as a defense necessarily creates a question of fact as

to any balance due plaintiff.

On November 29, 2010, plaintiff moved for reconsid-

eration of the summary disposition ruling, challenging

the trial court’s decision to raise sua sponte the defense

of recoupment, an issue not raised or briefed by defen-

dant. In light of the trial court’s dismissal of defen-

dant’s counterclaim, the only remaining issue in the

2012] M

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case involved the misapplication of payments. Plaintiff

alleged that the doctrine of recoupment did not apply

because it only applied to debts arising from the same

transaction. Defendant contested the quality of the

concrete supplied for the city of Center Line project,

and plaintiff’s complaint challenged the payments made

for the city of Warren project.

On December 9, 2010, the trial court issued an

opinion and order denying plaintiff’s motion for recon-

sideration. The trial court held, in relevant part:

Plaintiff’s argument regarding the misapplication of

recoupment in avoidance of the statute of limitations under

Mudge v Macomb County, 458 Mich 87, 106-107; 580 NW2d

845 (1998) lacks merit.

Significantly, plaintiff’s motions for summary disposi-

tion evidence but a single Contract for Materials on Open

Account with defendant Galui Construction. Indeed, as

explained by Julie Moran’s [McCoig Materials’ credit man-

ager] affidavit submitted in support of plaintiff’s second

motion for summary disposition, defendant Galui Con-

struction “ordered concrete materials on account in con-

nection with various projects”, including the Warren and

Center Line projects, “[i]n accordance with that agree-

ment”. Consequently, as defendant Galui Construction

ordered materials for both projects under a single contract,

recoupment does apply.

The mere fact that Galui Construction had separate

contracts with Warren and Center Line for the projects

does not transform plaintiff’s delivery of materials under

one contract to defendant Galui Construction into separate

contracts with defendant Galui Construction. Indeed, the

separate deliveries of materials are but a continuing trans-

action under the one contract. Hence, plaintiff’s reliance on

the Contractor’s Bond for Public Buildings or Works Act,

MCL 129.201 et seq., and Construction Lien Act, MCL

570.1101 et seq., is distinguishable.

***

692 295 M

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684 [Mar

Finally, any failure to plead recoupment as an affirmative

defense can be cured by amendment. MCR 2.111(F)(3). De-

fendants Galui Construction and Ohio Casualty Insurance

are deemed to have so amended their affirmative defenses.

We granted plaintiff’s application for leave to appeal.

II. STANDARD OF REVIEW

A trial court’s ruling on a motion for summary dispo-

sition presents a question of law subject to review de novo.

Shepherd Montessori Ctr Milan v Ann Arbor Charter

Twp, 486 Mich 311, 317; 783 NW2d 695 (2010). Summary

disposition pursuant to MCR 2.116(C)(10) is proper when

there is no genuine issue of material fact and the moving

party is entitled to judgment as a matter of law. Rose v

Nat’l Auction Group, 466 Mich 453, 461; 646 NW2d 455

(2002). The moving party has the initial burden to support

its claim for summary disposition by affidavits, deposi-

tions, admissions, or other documentary evidence. Quinto

v Cross & Peters Co, 451 Mich 358, 362; 547 NW2d 314

(1996). The burden then shifts to the nonmoving party to

demonstrate that a genuine issue of disputed fact exists

for trial. Id. The nonmoving party may not rely on mere

allegations or denials in the pleadings. Id. Affidavits,

depositions, and documentary evidence offered in support

of, and in opposition to, the motion are considered only to

the extent that the content or substance would be admis-

sible as evidence. Maiden v Rozwood, 461 Mich 109,

120-121; 597 NW2d 817 (1999). A trial court’s ruling

regarding a motion for reconsideration is reviewed for an

abuse of discretion. In re Moukalled Estate, 269 Mich App

708, 713; 714 NW2d 400 (2006). However, when the issue

involves a question of law, the ruling is reviewed de novo.

Id.

McCoig Materials LLC v Galui Constr Inc, unpublished order of the

Court of Appeals, entered January 5, 2011 (Docket No. 301599).

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III. ANALYSIS

Plaintiff alleges that the trial court erred by applying

recoupment to an open-account contract when the

projects at issue constituted discrete transactions. We

agree.

A. APPLICABLE LAW

“The essential elements of a contract are parties

competent to contract, a proper subject matter, legal

consideration, mutuality of agreement, and mutuality

of obligation.” Mallory v Detroit, 181 Mich App 121,

127; 449 NW2d 115 (1989). Issues regarding the proper

interpretation of a contract or the legal effect of a

contractual clause are reviewed de novo. Fodale v Waste

Mgt of Mich, Inc, 271 Mich App 11, 16-17; 718 NW2d

827 (2006). When interpreting a contract, the examin-

ing court must ascertain the intent of the parties by

evaluating the language of the contract in accordance

with its plain and ordinary meaning. In re Egbert R

Smith Trust, 480 Mich 19, 24; 745 NW2d 754 (2008). If

the language of the contract is clear and unambiguous,

it must be enforced as written. Id. A contract is unam-

biguous, even if inartfully worded or clumsily arranged,

when it fairly admits of but one interpretation. Holmes

v Holmes, 281 Mich App 575, 594; 760 NW2d 300

(2008). Every word, phrase, and clause in a contract

must be given effect, and contract interpretation that

would render any part of the contract surplusage or

nugatory must be avoided. Woodington v Shokoohi, 288

Mich App 352, 374; 792 NW2d 63 (2010).

“Recoupment is, in effect, a counterclaim or cross

action for damages.” Smith v Erla, 317 Mich 109, 112;

26 NW2d 728 (1947). Recoupment is also an affirmative

defense that must be properly pleaded. Ladd v Reed,

694 295 M

ICH

684 [Mar

320 Mich 167, 171; 30 NW2d 822 (1948). The defense of

recoupment is applicable to “claims arising out of the

same contract or transaction.” Id. (citations omitted).

The defendant bears the burden of proving that the

plaintiff breached the contract from which the defen-

dant seeks a setoff or recoupment. Oakland Metal

Stamping Co v Forest Indus, Inc, 352 Mich 119, 125; 89

NW2d 503 (1958).

In Mudge v Macomb Co, 458 Mich 87, 106-107; 580

NW2d 845 (1998), the Supreme Court addressed the

application of recoupment:

The defense of recoupment refers to a defendant’s right,

in the same action, “to cut down the plaintiff’s demand,

either because the plaintiff has not complied with some

cross obligation of the contract on which he or she sues or

because the plaintiff has violated some legal duty in the

making or performance of that contract.” 20 Am Jur 2d,

Counterclaim, Recoupment, etc., § 5, p 231. Recoupment is

“a doctrine of an intrinsically defensive nature founded

upon an equitable reason, inhering in the same transac-

tion, why the plaintiff’s claim in equity and good conscience

should be reduced.” Pennsylvania R Co v Miller, 124 F2d

160, 162 (CA 5, 1941).

As explained in Warner v Sullivan, 249 Mich 469, 471;

229 NW 484 (1930):

“Recoupment is a creature of the common law. It

presents to the court an equitable reason why the amount

payable to the plaintiff should be reduced, and the plaintiff

will not be permitted to insist upon the statute of limitations

as a bar to such a defense when he is seeking to enforce

payment of that which is due him under the contract out of

which the defendant’s claim for recoupment arises.” [Em-

phasis added in Mudge.]

The expiration of a limitations period does not prevent

the defendant from raising a recoupment defense as

long as the plaintiff’s action is timely. Id. at 107.

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Recoupment decreases the plaintiff’s recovery by

reducing any judgment in its favor by any claim the

defendant may have to damages arising out of the same

contract or transaction. Morehouse v Baker, 48 Mich

335, 339; 12 NW 170 (1882). The purpose of recoup-

ment is to prevent a multiplicity of suits. Id. “But where

the cases are such that the issue upon the counter-claim

would be distinct from that on the plaintiff’s demand

and rest upon distinct evidence, the reasons for permit-

ting recoupment have little or no force, for ‘the nearer

the controversy is to being single and distinct, the more

likely is the jury to deal with it with full intelligence and

justice.’ ” Id. (citation omitted). Recoupment is only

applicable to the discharge of the plaintiff’s claim; it

cannot be utilized to “establish a demand for which the

defendant can take judgment.” Id. at 340.

A party cannot accept a particular phase of construc-

tion without prompt objection and then raise the re-

coupment defense. Wallich Ice Machine Co v Hanewald,

275 Mich 607, 615; 267 NW 748 (1936). The fact that

the underlying contract is an open account does not

constitute an entitlement to raise the recoupment de-

fense to all transactions between the parties:

It is a familiar rule that any damages may be recouped

for which a cause of action growing out of the same

transaction lies at the time of pleading. Plaintiff cannot

defeat a right to recoup on a contract which he must prove

in order to recover, by including other items with it in his

declaration and making a general claim for balance due on

the whole under an open account. [Holser v Skae, 169 Mich

484, 488; 135 NW 260 (1912).]

In Wallich Ice Machine Co, 275 Mich at 609, the

defendant purchased a refrigeration plant from the

plaintiff corporation in 1930. The purchase price was

payable in installments within 12 months. The defen-

696 295 M

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684 [Mar

dant defaulted on the payments and executed a series of

notes for the unpaid portion with the last one payable in

1932. When the plaintiff did not receive the principal

sum, it filed suit in 1934. Id. The defendant raised the

issue of recoupment to offset the amount due and owing

to the plaintiff, specifically asserting that the condition

of the plant and the refrigeration equipment was not as

promised. The Supreme Court rejected the recoupment

defense, holding that acceptance of a particular phase of

construction without prompt objection barred the de-

fense:

After having knowingly accepted this phase of the

construction or installation and having failed to make

anything like a reasonably prompt objection thereto, it is

now too late for defendant to assert this particular item of

recoupment. It savors too much of an afterthought.

As hereinbefore noted, defendant also attempts to assert

as recoupment loss of meats placed in the refrigerating

plant to the amount of approximately $200. Here again

defendant is decidedly tardy in urging this claim against

plaintiff. The record is devoid of testimony that he made

any claim for damage of this character to plaintiff prior to

framing his defense to this suit. [Id. at 615 (citations

omitted).]

Additionally, in Peerless Woolen Mills v Chicago Gar-

ment Co, 347 Mich 326, 327; 79 NW2d 500 (1956), the

plaintiff agreed in 1950 to deliver merchandise to the

defendant pursuant to a $5,000 extension of credit.

Merchandise was shipped on six occasions, but the

defendant failed to make payments or render sufficient

funds for three of the shipments. The plaintiff refused

to send further shipments and notified the defendant

that the contract was cancelled. Id. at 327-328. In

response to the lawsuit to collect the outstanding sums

for the deliveries made pursuant to the 1950 contract,

the defendant alleged that there had been shortages in

2012] M

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the merchandise that had been delivered pursuant to a

1949 contract between the parties. Id. at 328. The

Supreme Court rejected the claim for recoupment pre-

mised on the claimed shortages:

[T]he claim now presented does not arise out of the

subject matter of plaintiff’s action, and may not properly be

made the basis of a counterclaim. It amounts merely to an

unliquidated claim for damages alleged to have been sus-

tained in a wholly independent transaction. Had defendant

sought to maintain an action for damages...based on

alleged failure on plaintiff’s part to fully perform the 1949

agreement, it could not have prevailed under the generally

accepted rule, there being no proof or claim of fraud or

mistake.

...“Payment in full, without reservation, of an account

for goods purchased, precludes the buyer from subse-

quently asserting that the goods were not merchantable, or

that he was entitled to a credit for a shortage in packages

or for expense of cartage.” [Id. at 333.]

Accordingly, Michigan caselaw holds that a claim for

recoupment must be premised on the same contract or

transaction. The categorization of the parties’ agree-

ment as a single contract or an open account is not

determinative.

Rather, the claim for recoupment by the

defendant must be premised on the same transaction

raised in the plaintiff’s complaint, and the defendant

must prove that the plaintiff is in breach of the contract

from which the defendant seeks recoupment. Oakland

Metal Stamping Co, 352 Mich at 125; Morehouse,48

Mich at 340. When a defendant accepts goods or con-

struction without timely objection or reservation, the

The trial court also erred by relying on the statement by plaintiff’s

employee that there was only one contract. The duty to interpret and

apply the law is allocated to the courts, and the statement of a witness is

not dispostive. See Hottmann v Hottmann, 226 Mich App 171, 179-180;

572 NW2d 259 (1997).

698 295 M

ICH

684 [Mar

defendant is barred from raising the recoupment de-

fense. Wallich Ice Machine Co, 275 Mich at 615. This

transactional approach to the defense of recoupment is

consistent with federal law:

Furthermore, not all cases in which claim and counter-

claim arise from the same contract are appropriate for

recoupment. Where the contract itself contemplates the

business to be transacted as discrete and independent

units, even claims predicated on a single contract will be

ineligible for recoupment. [Malinowski v New York State

Dep’t of Labor, 156 F3d 131, 135 (CA 2, 1998).]

B. RECOUPMENT DEFENSE

In the present case, we conclude that the trial court

erred by denying plaintiff’s second motion for summary

disposition by raising sua sponte the recoupment de-

fense. A review of the plain language of the contract at

issue revealed that, although an open-account contract,

the transactions were treated as discrete events or

separate transactions. Defendant was required to raise

yield complaints within 48 hours after receipt and

defects or nonconformance issues within 15 days of

receipt. According to the plain language of the contract,

any litigation had to be commenced within one year

after delivery. Defendant did not timely raise an objec-

tion to the materials provided in the Center Line

project. Once a party accepts a particular phase of

construction, it cannot utilize the defense of recoup-

ment. Wallich Ice Machine Co, 275 Mich at 615; More-

house, 48 Mich at 339. The plain language of the

contract set forth a one-year period of limitations. In re

Egbert R Smith Trust, 480 Mich at 24. Additional

deliveries did not extend this limitations period. Fur-

thermore, there was a 15-day requirement regarding

notice of defects. If defendant was permitted to raise the

issue of any alleged defects in the Center Line project in

2012] M

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the litigation involving the Warren project, it would

render the limitation provisions of the contract nuga-

tory. Woodington, 288 Mich App at 374-375. Further-

more, the purpose of recoupment, to prevent multiplic-

ity of suits, would not be served because any issues

regarding the alleged defects in the Center Line project

would rely upon separate and distinct evidence. More-

house, 48 Mich at 339. Accordingly, the trial court erred

by denying plaintiff’s motion for summary disposition

on the basis of recoupment. In light of this holding, we

do not address plaintiff’s issue regarding discovery.

Reversed and remanded for proceedings consistent

with this opinion. We do not retain jurisdiction. Plain-

tiff, as the prevailing party, may tax costs. MCR 7.219.

AAD

,P.J., and K. F. K

ELLY

and M. J. K

ELLY

,JJ.,

concurred.

700 295 M

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684 [Mar

LAMKIN v ENGRAM

Docket No. 303008. Submitted March 13, 2012, at Detroit. Decided

March 15, 2012, at 9:10 a.m.

Mary Ann Lamkin filed petitions in the Livingston Circuit Court for

personal protection orders (PPOs) against Daniel Engram for

what Lamkin deemed to be harassing behavior. The parties were

neighbors. Engram and his family and visitors used an easement

through Lamkin’s property. Lamkin filed Supreme Court Admin-

istrative Office Forms CC 377 (petition for personal protection

order against stalking, nondomestic) and CC 380 (personal protec-

tion order, nondomestic). Although Lamkin did not request an ex

parte order on either petition form, she maintained that the court

clerk refused to process the petitions unless they were treated as

ex parte requests. The court, David J. Reader, J., denied her

petition without holding a hearing on the facts alleged or inter-

viewing Lamkin even though she had not requested ex parte relief

on either form. Lamkin moved for relief from the judgment or

reconsideration and specifically requested that a hearing on the

petitions be scheduled. Judge Reader thereafter disqualified him-

self, and the case was reassigned to Judge Carol Hackett Gara-

giola, who denied Lamkin’s motion, again without a hearing or

Lamkin’s being interviewed. Lamkin filed an additional motion for

reconsideration and requested a hearing or interview. Judge

Garagiola also denied that motion, concluding that Lamkin had

failed to present a palpable error warranting a different disposi-

tion. Lamkin appealed.

The Court of Appeals held:

MCL 600.2950a(1) governs PPOs for nondomestic matters. A

petitioner may seek a PPO to enjoin conduct prohibited under MCL

750.411h, 750.411i, or 750.411s. Unless a petitioner specifically

requests an ex parte order or the circuit court refuses to enter an ex

parte order and the petitioner does not subsequently request a

hearing, MCR 3.705(B)(1)(a) requires the court to hold a hearing or

interview the petitioner when considering a petition for a PPO. The

court rule requires the court to consider the testimony, documents,

and other evidence proffered to determine whether a respondent

engaged in the proscribed conduct. A petitioner seeking a PPO bears

2012] L

AMKIN V

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701

the burden of proving reasonable cause for its issuance. When the

basis for a PPO petition is a violation of MCL 750.411h, as here, the

petitioner must demonstrate that the respondent engaged in behav-

ior that constituted stalking. The circuit court erred by treating

Lamkin’s petitions as ex parte requests and dismissing them without

a hearing or an interview, both of which she repeatedly requested.

Vacated and remanded for further proceedings.

NJUNCTIONS —

ERSONAL

ROTECTION

RDERS —

EQUIREMENTS —

EARINGS

A petitioner may seek a personal protection order under MCL

600.2950a(1) to enjoin conduct prohibited under MCL 750.411h,

750.411i, or 750.411s; unless a petitioner specifically requests an

ex parte order or the circuit court refuses to enter an ex parte

order and the petitioner subsequently does not request a hearing,

MCR 3.705(B)(1)(a) requires the court to hold a hearing or

interview the petitioner when considering a petition for a personal

protection order; the petitioner bears the burden of proof, but the

court rule requires the court to consider the testimony, documents,

and other evidence proffered to determine whether the respondent

engaged in the proscribed conduct.

Godwin Legal Services, PLC (by Shaun Godwin), for

Mary Ann Lamkin.

Before: W

HITBECK

,P.J., and J

ANSEN

and K. F. K

ELLY

JJ.

K. F. K

ELLY

, J. Petitioner, Mary Ann Lamkin, appeals as

of right an order denying her petition for a personal

protection order (PPO) against respondent, Daniel En-

gram. We conclude that the circuit court committed re-

versible error when it dismissed Lamkin’s petition with-

out first interviewing Lamkin or conducting a hearing as

required by MCR 3.705. We therefore vacate the circuit

court’s dismissal and remand for further proceedings.

I. BASIC FACTS

Lamkin and Engram are neighbors with an obviously

contentious relationship. Engram’s family and visitors

702 295 M

ICH

701 [Mar

make frequent use of an easement through Lamkin’s

property. Lamkin sought a PPO against Engram for

what she deemed harassing behavior. To that end, on

January 11, 2011, Lamkin filled out State Court Admin-

istrative Office (SCAO) Form CC 377, titled “Petition

for Personal Protection Order Against Stalking (Non

Domestic),” as well as SCAO Form CC 380, titled

“Personal Protection Order (Non Domestic).”

The pe-

titions alleged that on January 10, 2011, Engram’s

daughter was “honking and playing loud music across

full length of Lamkin property.” It also alleged that on

February 14, 2009, Engram was involved in an accident

on Lamkin’s property, causing $1,700 worth of damage

and that he left the scene of the accident.

Lamkin’s petitions also referred to an “attachment,”

which Lamkin has included as an exhibit on appeal.

The attached document details numerous instances of

alleged harassment including (1) speeding by Engram

and his family across Lamkin’s property, (2) Engram’s

accident on Lamkin’s property and the resulting dam-

age, (3) harassing honking of car horns and blaring

music by Engram’s daughter and her friends while

driving on Lamkin’s property, (4) littering on Lamkin’s

property, (5) use of unlicensed, unauthorized all-terrain

In addition to the petition for a personal protection order against

Engram, Lamkin filed 10 other petitions for PPOs against Engram’s

family members and other neighbors. Lamkin’s husband, Steve Lamkin,

also filed 9 petitions against neighbors.

The attachment is not found within the lower court record. While a

party may not expand the record on appeal, Sherman v Sea Ray Boats,

Inc, 251 Mich App 41, 56; 649 NW2d 783 (2002), we do not believe that

plaintiff is attempting to present evidence not presented before the trial

court. Given the numerous PPOs that were sought and the numerous

references Lamkin makes to the attachment, we believe that it was

simply misfiled in the lower court. As such, we will consider plaintiff’s

attachment on appeal. Appellee has not filed a brief on appeal or

challenged the attachment in any way.

2012] L

AMKIN V

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703

vehicles on Lamkin’s property, (6) unauthorized pedes-

trian use of Lamkin’s property, (7) pet defecation on

Lamkin’s property, (8) malicious destruction and theft

of Lamkin’s private property, such as property markers

and a mailbox, and (9) the making of false statements

about Lamkin to a judge.

Both Form CC 377 and CC 380 provide the opportu-

nity to request that a PPO be entered ex parte. Section

6 of CC 377 allows a petitioner to mark a box next to the

following language: “I request an ex parte order be-

cause immediate and irreparable injury, loss, or damage

will occur between now and a hearing or because notice

itself will cause irreparable injury, loss, or damage

before the order can be entered.” Lamkin did not

request an ex parte order on Form CC 377. Form CC

380 also has an “ex parte” box to check if a petitioner is

requesting the immediate issuance of a PPO without

notice to a respondent. Lamkin did not check the “ex

parte” box on Form CC 380 either. In spite of the fact

that there was no request on either petition, Lamkin

maintains that the court clerk refused to process the

petitions unless they were treated as ex parte requests.

On January 12, 2011, Family Court Judge David J.

Reader denied Lamkin’s petitions in an order titled

“Order Denying Ex Parte Personal Protection Order,”

even though ex parte relief had not been requested. The

order stated that “[t]here is insufficient statutory basis

stated in the petition, and the case should be dis-

missed.” The order also indicated that the “[t]he case is

dismissed and file closed.” No hearing was held, nor was

Lamkin interviewed by the trial court. The standard

order form provided:

NOTE: IF YOU DESIRE A HEARING IN FRONT OF A

JUDGE, YOU MUST PETITION FOR SUCH A HEAR-

ING WITHIN 21 DAYS OR THIS ORDER BE-

704 295 M

ICH

701 [Mar

COMES FINAL. THE OPPOSITE PARTY MUST BE

NOTIFIED OF THE HEARING. THE COUNTY

CLERK WILL ASSIST YOU WITH FORMS.

Two days later, on January 14, 2011, Lamkin moved

the circuit court for relief from the judgment or for

reconsideration. Lamkin argued that she never in-

tended to apply for an ex parte order and always wanted

to have a hearing held on the matter. In her motion, she

specifically requested that the court schedule a hearing

on her petitions. Thereafter, Lamkin retained legal

counsel.

On February 3, 2011, Judge Reader entered an order

disqualifying himself and reassigning the case to Judge

Carol Hackett Garagiola. On February 18, 2011, Judge

Garagiola entered an order denying Lamkin’s motion

for relief from the judgment or reconsideration. Again,

no hearing was held and Lamkin was not interviewed.

In dismissing the motion, Judge Garagiola determined

that Judge Reader had the authority to dismiss the

petitions without a hearing and that Lamkin’s claims

(that she should not have been required to indicate that

she wanted an ex parte motion) were immaterial and

irrelevant to the dismissal of the petitions.

Through counsel, Lamkin again moved for reconsidera-

tion, arguing that she had attempted to request a hearing

when she applied for the PPOs. Lamkin maintained that

the clerk would not accept Lamkin’s petitions unless she

indicated on the form that she was requesting an ex parte

hearing. Lamkin also argued that Judge Reader had not

conducted an interview with Lamkin and did not inform

Lamkin that she could request a hearing if she did so

within 21 days. Lamkin argued that the failure to follow

the proper Michigan Court Rules denied her the court’s

adequate consideration of her petitions. Lamkin again

requested either a hearing or an interview.

2012] L

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NGRAM

705

On March 11, 2011, Judge Garagiola entered an

order denying Lamkin’s motion for reconsideration,

concluding that Lamkin had failed to present a palpable

error warranting a different disposition. Lamkin now

appeals as of right.

II. ANALYSIS

Lamkin petitioned for the PPOs under the statutory

authority of MCL 600.2950a. MCL 600.2950a(1) ad-

dresses the issuance of PPOs for nondomestic matters

and provides, in relevant part:

[A]n individual may petition the family division of

circuit court to enter a personal protection order to re-

strain or enjoin an individual from engaging in conduct

that is prohibited under section 411h, 411i, or 411s of the

Michigan penal code, 1931 PA 328, MCL 750.411h,

750.411i, and 750.411s. Relief under this subsection shall

not be granted unless the petition alleges facts that consti-

tute stalking as defined in section 411h or 411i, or conduct

that is prohibited under section 411s, of the Michigan penal

code, 1931 PA 328, MCL 750.411h, 750.411i, and 750.411s.

The petitioner for a PPO bears the burden of proof.

Kampf v Kampf, 237 Mich App 377, 385-386; 603 NW2d

295 (1999). Lamkin based her claim on a violation of

MCL 750.411h. Therefore, to obtain a PPO under MCL

600.2950a(1), Lamkin had to demonstrate that Engram

engaged in behavior that constituted “stalking.” “Stalk-

ing” is defined in MCL 750.411h(d) as “a willful course

of conduct involving repeated or continuing harassment

of another individual that would cause a reasonable

person to feel terrorized, frightened, intimidated,

threatened, harassed, or molested and that actually

causes the victim to feel terrorized, frightened, intimi-

dated, threatened, harassed, or molested.” To show

“harassment,” Lamkin needed to establish “repeated or

706 295 M

ICH

701 [Mar

continuing unconsented contact that would cause a

reasonable individual to suffer emotional distress and

that actually causes the victim to suffer emotional

distress. Harassment does not include constitutionally

protected activity or conduct that serves a legitimate

purpose.” MCL 750.411h(c). MCL 750.411h(e) provides

a nonexhaustive list of activities that constitute “un-

consented contact:”

(i) Following or appearing within the sight of that

individual.

(ii) Approaching or confronting that individual in a

public place or on private property.

(iii) Appearing at that individual’s workplace or resi-

dence.

(iv) Entering onto or remaining on property owned,

leased, or occupied by that individual.

(v) Contacting that individual by telephone.

(vi) Sending mail or electronic communications to that

individual.

(vii) Placing an object on, or delivering an object to,

property owned, leased, or occupied by that individual.

Lamkin argues that because she was not interviewed

by the trial court or afforded a hearing, she was denied

the opportunity to explain how Engram’s conduct con-

stituted harassment under MCL 750.411h(c), which

was in violation of MCR 3.705. We agree. Lamkin’s

claim requires interpretation of MCR 3.705. The inter-

pretation and application of court rules present ques-

tions of law to be reviewed de novo using the principles

of statutory interpretation. Henry v Dow Chem Co, 484

Mich 483, 495; 772 NW2d 301 (2009).

While the circuit court may not have abused its

discretion by denying Lamkin’s petitions on the facts

stated therein, we conclude that the circuit court erred

2012] L

AMKIN V

NGRAM

707

by dismissing the petitions without interviewing

Lamkin or holding a hearing. MCR 3.705 provides, in

relevant part:

(A) Ex Parte Orders.

(1) The court must rule on a request for an ex parte

order within 24 hours of the filing of the petition.

(2) If it clearly appears from specific facts shown by

verified complaint, written petition, or affidavit that the

petitioner is entitled to the relief sought, an ex parte order

shall be granted if immediate and irreparable injury, loss,

or damage will result from the delay required to effectuate

notice or that the notice will itself precipitate adverse

action before a personal protection order can be issued. In

a proceeding under MCL 600.2950a, the court must state in

writing the specific reasons for issuance of the order. A

permanent record or memorandum must be made of any

nonwritten evidence, argument, or other representations

made in support of issuance of an ex parte order.

***

(5) If the court refuses to grant an ex parte order, it shall

state the reasons in writing and shall advise the petitioner

of the right to request a hearing as provided in subrule (B).

If the petitioner does not request a hearing within 21 days

of entry of the order, the order denying the petition is final.

The court shall not be required to give such notice if the

court determines after interviewing the petitioner that the

petitioner’s claims are sufficiently without merit that the

action should be dismissed without a hearing.

(B) Hearings.

(1) The court shall schedule a hearing as soon as

possible in the following instances, unless it determines

after interviewing the petitioner that the claims are suffi-

ciently without merit that the action should be dismissed

without a hearing:

(a) the petition does not request an ex parte order; or

708 295 M

ICH

701 [Mar

(b) the court refuses to enter an ex parte order and the

petitioner subsequently requests a hearing.

***

(6) At the conclusion of the hearing the court must state

the reasons for granting or denying a personal protection

order on the record and enter an appropriate order. In

addition, the court must state the reasons for denying a

personal protection order in writing, and, in a proceeding

under MCL 600.2950a, the court must state in writing the

specific reasons for issuance of the order. [Emphasis

added.]

Court rules are interpreted using the same principles

that govern statutory interpretation. Wilcoxon v Wayne

Co Neighborhood Legal Servs, 252 Mich App 549, 553;

652 NW2d 851 (2002). The Court gives the language of

court rules their “plain and ordinary meaning.” Kloian

v Domino’s Pizza, LLC, 273 Mich App 449, 458; 733

NW2d 766 (2006). “If the language poses no ambiguity,

this Court need not look outside the rule or construe it,

but need only enforce the rule as written.” Id. “Shall”

indicates a mandatory provision. In re Credit Accep-

tance Corp, 273 Mich App 594, 600; 733 NW2d 65

(2007). The only circumstance in which the circuit court

is not required to conduct a hearing is if, after conduct-

ing an intervew, the court determines that the petition-

er’s claims are without merit. MCR 3.705(A)(5).

Lamkin maintains that she did not request ex parte

PPOs; rather, she wanted and expected to receive a

hearing on the matter or, at a minimum, an “interview”

with the circuit court. This was her right. MCR

3.705(B)(1)(a). However, for whatever reason, the court

treated Lamkin’s petitions as ex parte requests. Before

the court could simply deny the petitions, it was re-

quired to interview Lamkin or hold a hearing. Id. The

lower court record offers no indication that Lamkin was

2012] L

AMKIN V

NGRAM

709

interviewed concerning the merits of her claim. Lamkin

then had the right to request a hearing within 21 days

of the denial. Lamkin repeatedly invoked her right to a

hearing:

• On January 13, 2011, Lamkin filed a “Motion for

Relief From Order,” specifically requesting that the court

“allow a hearing pursuant to a request for hearing re-

quested by the Lamkin’s [sic] on all of the their [sic]

submitted petitions for personal protection orders.”

• On January 14, 2011, Lamkin filed a “Motion for

Relief From Judgment Order or in the Alternative a

Motion for Reconsideration,” again requesting that the

court “allow a hearing pursuant to a request for a hearing

requested by the Lamkin’s [sic] on all of the their [sic]

submitted petitions for personal protection orders.”

• On March 2, 2001, and through counsel, Lamkin filed

a “Motion for Reconsideration of Order Denying Petition-

er’s January 14, 2011, ‘Motion for Relief from Judgment or

in the Alternative a Motion for Reconsideration,’ ” request-

ing that the court “schedule any appropriate hearings or

interviews as required by court rules.”

We take issue not with the notice provided Lamkin

regarding her right to schedule a hearing, but with the

repeated denials of Lamkin’s clear requests.

We also note that the circuit court’s actions in

this case were in contravention of its own internal

rules governing PPOs. A petitioner seeking a

PPO in Livingston County must sign a

“VERIFICATION/ACKNOWLEDGMENT OF IN-

STRUCTIONS FOR FILING A PPO PETITION,”

which includes the following explanation:

The box on the petition asking for an ex-parte order

must be checked in order for the Court to review a request

for an immediate PPO. If the ex-parte box is not checked a

hearing before the judge will have to be set and both the

petitioner and respondent are noticed to appear.

710 295 M

ICH

701 [Mar

Also, in relevant part, the instructions to complete

Form CC 377 provide:

Follow these steps if you have NOT requested an ex

parte order on Form CC 375 or CC 377. If you

already filled out the petition and the judge refused

to issue an ex parte order, go to step 3.

1. Fill out the forms that apply to your situation

using the instructions on the forms.

2. File the Petition forms with the circuit court

clerk.

Take the forms to the circuit court clerk in the county

where you live. Bring 3 sets of statements from witnesses

and supporting documents if you have any. The circuit

court clerk will finish filling out the form, will attach your

written statements and supporting documents to the

proper copies, and will return copies of the form to you. Do

not lose these copies.

3. Ask for a hearing.

Ask the clerk to schedule a hearing. The clerk will give you

a Notice of Hearing (Form CC 381) to fill out. The clerk will

tell you if there are any other things you must do to

schedule the hearing. The clerk will give you copies of this

form and a blank Form CC 376 or CC 380.

Again, a petitioner seeking a PPO bears the burden

of proving reasonable cause for the issuance of a PPO.

Kampf, 237 Mich App at 385-386. When making that

determination, the circuit court is not limited to the

four corners of the petition itself; rather, it must con-

sider the testimony, documents, and other evidence

proffered to determine whether a respondent engaged

in harassing conduct. MCL 600.2950a. Nothing in the

statute or court rule suggests that the circuit court is

limited to considering the incidents alleged in the PPO

petition. Instead, our court rules specifically require the

circuit court to go beyond the PPO petition and either

interview the petitioner or provide an evidentiary hearing.

2012] L

AMKIN V

NGRAM

711

Because neither of these procedures was followed, the

matter must be remanded. In remanding this matter,

we take no position on the merits of Lamkin’s petitions.

Vacated and remanded for further proceedings con-

sistent with this opinion. We do not retain jurisdiction.

HITBECK

,P.J., and J

ANSEN

, J., concurred with K. F.

ELLY

,J.

712 295 M

ICH

701

PECIAL

RDERS

SPECIAL ORDERS

In this section are orders of the Court of general

interest to the bench and bar of the state.

Order Entered April 5, 2012:

HESSER V

ADISSON

LAZA

OTEL AT

ALAMAZOO

ENTER

, Docket No.

299776. The Court orders that the motion for reconsideration is granted,

and this Court’s opinion issued February 14, 2012, is hereby vacated. A

new opinion will be issued.*

* New opinion issued on April 19, 2012, as an unpublished opinion per

curiam (Docket No. 299776)—R

EPORTER

PECIAL

RDERS

801

INDEX-DIGEST

INDEX–DIGEST

ABUSE OF DISCRETION—See

VIDENCE

ACTIONS

TANDING

1. To have taxpayer standing, a taxpayer must have suf-

fered some harm distinct from that inflicted on the

general public; the fact that an individual may lose his

or her job because the individual’s employer failed to

secure the winning bid on a public contract is not the

type of injury contemplated by the standing inquiry

because bidders for public contracts generally have no

expectancy in the contract to be awarded. Groves v Dep’t

of Corrections, 295 Mich App 1.

2. The only circumstance that may provide a basis for an

action to review the bidding process is the presence of

evidence of fraud, abuse, or illegality, but such an action

must be brought by the proper public official. Groves v

Dep’t of Corrections, 295 Mich App 1.

3. The purpose of a declaratory judgment is to enable the

parties to obtain adjudication of rights before an actual

injury occurs, to settle a matter before it ripens into a

violation of the law or a breach of contract, or to avoid

multiplicity of actions by affording a remedy for declar-

ing in expedient action the rights and obligations of all

litigant; standing to seek a declaratory judgment exists

whenever a litigant meets the requirements of MCR

2.605; when a declaratory judgment is necessary to

guide a plaintiff’s future conduct in order to preserve

legal rights, there is an actual controversy and a declara-

tory judgment may be issued under MCR 2.605(A)(1),

and in those cases courts are not precluded from reach-

851

ing issues before actual injuries or losses have occurred;

to establish an “actual controversy” under the rule, a

plaintiff must plead and prove facts that demonstrate an

adverse interest necessitating the sharpening of the

issues raised. Ferrero v Walton Twp, 295 Mich App 475.

ACTIVE CLINICAL PRACTICE BY EXPERT

WITNESS—See

EGLIGENCE

ACTIVE CLINICAL PRACTICE OF NURSING—See

EGLIGENCE

ACTUAL CONTROVERSY—See

CTIONS

ADMISSION OF EVIDENCE—See

VIDENCE

ADVICE REGARDING EFFECTS OF PLEADING ON

IMMIGRATION STATUS—See

RIMINAL

AFFIDAVITS OF MERIT—See

EGLIGENCE

5, 6

AGENCY

RINCIPAL AND

GENT

1. Sales agents are entitled to posttermination commis-

sions for sales they procured during their time with a

former employer, regardless of whether they concluded

and completed the sale; the procuring-cause doctrine

applies when the parties have a contract governing the

payment of sales commissions but the contract is silent

regarding the payment of posttermination commissions;

the basic principle behind the procuring-cause doctrine

is the notion of fair dealing; if the principal cancels the

authority of the agent, the agent is still able to recover

the commission if the agent was the procuring cause.

KBD & Associates, Inc v Great Lakes Foam Technolo-

gies, Inc, 295 Mich App 666.

2. A court must look to the parties’ contract when analyz-

ing a claim for posttermination commissions; when the

852 295 M

ICH

terms of a contract are contested, the finder of fact

determines its actual terms; a sales agent who commits

the first substantial breach of a commission contract is

not entitled to recover posttermination commissions; a

substantial breach occurs when the sales representative

is unable to fulfill its account-servicing obligations un-

der the contract because the customer banned the sales

representative from its premises or otherwise refused to

deal with the principal’s agent. KBD & Associates, Inc v

Great Lakes Foam Technologies, Inc, 295 Mich App 666.

AGENTS—See

RAUD

AGENTS HELD IN CONTEMPT—See

ONTEMPT

AGGRAVATED PHYSICAL ABUSE—See

ENTENCES

2, 3

ALLOCATION OF INCOME—See

AXATION

AMOUNT OF RESTITUTION—See

ENTENCES

APPEAL BY RIGHT OF CONTEMPT ORDERS—See

ONTEMPT

APPORTIONMENT OF INCOME—See

AXATION

ARBITRATION

OLLECTIVE

ARGAINING

1. Whether a contract to arbitrate exists or has termi-

nated, and the enforceability of its terms, are judicial

questions that cannot be decided by an arbitrator; the

parties must provide clear and unmistakable evidence in

a contract that they agreed to remove the arbitrability

issue from the court’s jurisdiction. 36th Dist Court v

Michigan American Federation of State, County & Mu-

nicipal Employees Council 25, Local 917, 295 Mich App

502.

2. An individual’s right to arbitrate must be based on a

NDEX

-D

IGEST

853

viable contractual right to arbitration, and review of an

arbitrator’s decision is limited; a court may not review

an arbitrator’s factual findings but may review whether

the arbitrator acted within the scope of his or her

contractual authority or made an error of law that

clearly appears on the face of the award. 36th Dist Court

v Michigan American Federation of State, County &

Municipal Employees Council 25, Local 917, 295 Mich

App 502.

ARIZONA v GANT—See

EARCHES AND

EIZURES

1, 2

ATTORNEY FEES—See

NSURANCE

AUTOMOBILE SEARCHES—See

EARCHES AND

EIZURES

1, 2

AUTOMOBILES—See

OVERNMENTAL

MMUNITY

NSURANCE

BEST-INTEREST FACTORS—See

HILD

USTODY

IVORCE

1, 2

BEST INTERESTS OF CHILD—See

ARENT AND

HILD

BIDDING ON PUBLIC CONTRACTS—See

CTIONS

1, 2

ONSTITUTIONAL

BREACH OF CONTRACT FOR COMMISSIONS—See

GENCY

BREACH OF COVENANTS—See

ORTGAGES

BREACH OF CONTRACT—See

ONTRACTS

854 295 M

ICH

BURDEN OF PROOF—See

ANDAMUS

CANADA AS STATE FOR PURPOSES OF CHILD

CUSTODY ORDERS—See

ARENT AND

HILD

CASINO GAMING—See

TATUTES

CELLULAR TELEPHONES—See

RISONS AND

RISONERS

1, 2

CHAIN OF TITLE—See

ORTGAGES

CHANGE IN ESTABLISHED CUSTODIAL

ENVIRONMENT DETERMINATION—See

ARENT AND

HILD

CHANGE-OF-DOMICILE FACTORS—See

IVORCE

ARENT AND

HILD

CHANGES OF CHILD’S DOMICILE OR

RESIDENCE—See

HILD

USTODY

ARENT AND

HILD

1, 2

CHILD CUSTODY

See, also,

IVORCE

1, 2, 3

ARENT AND

HILD

1, 2

HANGES OF

HILD’S

OMICILE OR

ESIDENCE

1. A best-interest analysis under MCL 722.23 is not re-

quired when a movant has proven by a preponderance of

the evidence that a change of domicile is warranted

under MCL 722.31 and the relocation would not alter

any established custodial environment; MCL 722.31(4)

is a specific statute that applies to requests for a change

of domicile of the minor child, and if the Legislature had

wanted the best-interest factors of MCL 722.23 to be

NDEX

-D

IGEST

855

applied to the analysis of this issue they would have

been referred to specifically. Gagnon v Glowacki, 295

Mich App 557.

CIRCUMSTANCES INVOLVING ANY OTHER FELONY

IN CRIMINAL SEXUAL CONDUCT—See

RIMINAL

CIVIL CONTEMPT—See

ONTEMPT

1, 2, 3, 4

COLLECTIVE BARGAINING—See

RBITRATION

1, 2

ABOR

ELATIONS

CHOOLS

1, 2

COMMISSIONS ON SALES—See

GENCY

OURTS

COMPARATIVE NEGLIGENCE—See

EGLIGENCE

CONDITIONAL IMPRISONMENT—See

ONTEMPT

CONDUCT SUBSTANTIALLY INCREASING VICTIM’S

FEAR AND ANXIETY—See

ENTENCES

CONDUCTING BUSINESS FOR PURPOSES OF

VENUE—See

ENUE

1, 2

CONFERRING OF DISCRETION ON

FACT-FINDER—See

ONSTITUTIONAL

CONFESSIONS—See

RIMINAL

856 295 M

ICH

CONFLICTS OF ORDINANCES WITH STATE

LAWS—See

OURTS

CONSECUTIVE SENTENCING—See

ENTENCES

CONSPIRACY AS BASIS FOR LONG-ARM

JURISDICTION—See

OURTS

CONSTITUTIONAL LAW

See, also,

RIMINAL

EARCHES AND

EIZURES

1, 2

AIR AND

UST

REATMENT IN

NVESTIGATION

1. Under the Michigan Constitution, the right of all indi-

viduals, firms, corporations, and voluntary associations

to fair and just treatment in the course of legislative and

executive investigations and hearings may not be in-

fringed; an “investigation” is the act or process of

investigating, or the condition of being investigated; to

“investigate” is to search or examine into the particu-

lars of, or examine in detail; the passive collection of

information by the state from voluntary bidders for a

state contract as part of a preliminary information

gathering process does not constitute an investigation

(Const 1963, art 1, § 17). Groves v Dep’t of Corrections,

295 Mich App 1.

ELF

-I

NCRIMINATION

2. When a criminal defendant is subject to a custodial

interrogation, before any questioning he or she must be

advised of the rights set forth in Miranda v Arizona, 384

US 436 (1966), which includes the right to the presence

of an attorney; questioning initiated by law enforcement

officers after a person has been taken into custody or

otherwise deprived of his or her freedom of action in any

significant way constitutes a custodial interrogation; a

defendant is in custody if a reasonable person in the

defendant’s situation would believe that he or she was

not free to leave and if the relevant environment was

inherently coercive; statements an accused made during

a custodial interrogation are inadmissible unless the

accused knowingly, voluntarily, and intelligently waived

NDEX

-D

IGEST

857

his or her rights (US Const, Am V; Const 1963, art 1,

§ 17). People v Elliott, 295 Mich App 623.

3. The protections of Miranda v Arizona, 384 US 436

(1966), apply not only to custodial interrogations by law

enforcement officials, but also to those by persons acting

in concert with or at the request of the police (US Const,

Am V; Const 1963, art 1, § 17). People v Elliott, 295 Mich

App 623.

4. A parole officer is a law enforcement official for pur-

poses of the safeguards set forth in Miranda v Arizona,

384 US 436 (1966); statements made by a parolee to a

parole officer during a custodial interrogation are inad-

missible in a subsequent trial if the parolee invoked his

or her right to counsel before questioning began (US

Const, Am V; Const 1963, art 1, § 17). People v Elliott,

295 Mich App 623.

TATUTES

5. A statute is void for vagueness if it does not provide fair

notice of the proscribed conduct, is so indefinite as to

confer on the trier of fact unstructured and unlimited

discretion to decide when an offense has been commit-

ted, or is overbroad and impinges on protected First

Amendment rights. People v Douglas, 295 Mich App

129.

6. A statute may not be voided for conferring unstructured

and unlimited discretion on the fact-finder unless the

wording of the statute itself is vague; the wording of a

statute is not vague if it sufficiently provides people of

ordinary intelligence with notice of what conduct the

statute prohibits; a statute that clearly and plainly sets

forth the elements that the prosecution must prove does

not confer unstructured and unlimited discretion on the

fact-finder. People v Douglas, 295 Mich App 129.

7. The statutory requirement that all recordings distrib-

uted or possessed for the purpose of distribution bear

the manufacturer’s name and address applies only to

cases in which a person has commercially distributed a

recording or possessed a recording for commercial dis-

tribution (MCL 752.1052[1][d]; 752.1053). People v Dou-

glas, 295 Mich App 129.

CONSTITUTIONALITY OF STATUTES—See

TATUTES

858 295 M

ICH

CONTEMPT

IVIL

ONTEMPT

1. An order finding a party in civil contempt of court is not

a final order for purposes of appellate review by right,

but the right of a nonparty to appeal an adjudication of

contempt cannot be questioned even in the absence of a

final order; the same principle applies to individuals not

personally held in contempt, but sanctioned as decision-

makers to enforce a company’s compliance with a court

order (MCL 600.308[2]; MCR 7.202[6][a]). In re

Moroun, 295 Mich App 312.

2. Individuals who are officially responsible for the con-

duct of a corporation’s affairs are required to obey a

court order directed at the corporation, and they may be

sanctioned if they fail to take appropriate action within

their power to ensure that the corporation complies

with the court order. In re Moroun, 295 Mich App 312.

3. A civil contempt proceeding requires only rudimentary

due process, i.e., notice and an opportunity to be heard;

when contempt is committed outside the court’s view,

the court may punish the contemnor by fine or impris-

onment, or both, after proof of the facts charged has

been made by affidavit or other method and an oppor-

tunity has been given to defend; on a proper showing on

ex parte motion supported by affidavits, the trial court

must (1) order the accused person to show cause, at a

reasonable time specified in the order, why that person

should not be punished for the alleged misconduct or (2)

issue a bench warrant for the arrest of the person (MCL

600.1711[2]; MCR 3.606[A]). In re Moroun, 295 Mich

App 312.

4. Confinement or imprisonment may be imposed whether

the contempt is civil or criminal in nature; in the

context of civil contempt, the term of imprisonment

ceases when the contemnor complies with the court’s

order or no longer has the power to comply; the contem-

nor must be able to purge the contempt and obtain

release by committing an affirmative act or duty, and

the commitment order must specify the act or duty

(MCL 600.1715[2]). In re Moroun, 295 Mich App 312.

RIMINAL

ONTEMPT

5. The holder of a personal protection order is under no

obligation to act in a certain way; rather, when analyz-

NDEX

-D

IGEST

859

ing whether an individual is guilty of criminal contempt

for violating a personal protection order, the court must

look only at the behavior of that individual against

whom the personal protection order is held. In re

Kabanuk, 295 Mich App 252.

CONTRABAND—See

RISONS AND

RISONERS

1, 2

EARCHES AND

EIZURES

CONTRACTS

See, also,

NSURANCE

REACHES OF

ONTRACT

1. A claim for recoupment must be premised on the same

contract or transaction; the categorization of the par-

ties’ agreement as a single contract or an open account

is not determinative; the claim must be premised on the

same transaction raised in the plaintiff’s complaint and

the defendant must prove that the plaintiff is in breach

of the contract from which the defendant seeks recoup-

ment; the defendant is barred from raising the recoup-

ment defense when the defendant accepts goods or

construction without timely objection or reservation;

once a party accepts a particular phase of construction,

it cannot utilize the defense of recoupment. McCoig

Materials, LLC v Galui Construction, Inc, 295 Mich App

684.

CORPORATIONS

See, also,

ONTEMPT

ENUE

1, 2

ISSOLUTION

1. Woodbury v Res-Care Premier, Inc, 295 Mich App 232.

CORRECTING ERRORS IN PRIOR DECISIONS—See

OURTS

CORRECTIONAL FACILITIES—See

RISONS AND

RISONERS

1, 2

COURTS

YPOTHETICAL

PINIONS

1. It is generally improper to challenge a proposed initia-

860 295 M

ICH

tive until after the law is enacted; although there are

very rare cases in which there is a clear and unmistak-

able conflict between an initiative and a state law

necessitating prior court intervention, courts should

generally not render hypothetical opinions about pro-

posed amendments. Coalition for a Safer Detroit v

Detroit City Clerk, 295 Mich App 362.

URISDICTION

2. A court must have personal jurisdiction over a party

before it may require the party to comply with its

orders; while the plaintiff bears the burden of establish-

ing jurisdiction over the defendant, he or she need only

make a prima face showing of jurisdiction to defeat a

motion for summary disposition; if the parties present

conflicting affidavits, all factual disputes are resolved in

the plaintiff’s favor, and the plaintiff’s prima facie

showing is sufficient notwithstanding the presentation

of contrary evidence by the moving party; to determine

whether a Michigan court may exercise limited personal

jurisdiction over a defendant, this Court must deter-

mine (1) whether jurisdiction is authorized by Michi-

gan’s long-arm statute and (2) whether the exercise of

jurisdiction is consistent with the requirements of the

Due Process Clause of the Fourteenth Amendment.

Yoost v Caspari, 295 Mich App 209.

3. A Michigan court may exercise limited personal juris-

diction over an individual if a relationship exists be-

tween an individual or his or her representative and the

state arising out of doing an act or causing an act to be

done, or consequences to occur, in the state resulting in

an action for tort; if conspiracy is alleged as the basis for

jurisdiction, a conspirator not within the forum state

may be subject to the jurisdiction of the forum state on

the basis of the acts the coconspirator committed there;

to establish a prima facie case the party may not merely

allege that a conspiracy exists between the defendant

and another party over whom the court has jurisdiction;

rather, evidence or facts must support the allegations of

conspiracy; a prima facie case may be established using

reasonable inferences provided there is sufficient evi-

dence introduced to take the inferences out of the realm

of conjecture; there must be evidence that supports one

NDEX

-D

IGEST

861

theory of causation indicating a logical sequence of

cause and effect (MCL 600.705[2]). Yoost v Caspari, 295

Mich App 209.

UBSEQUENT

EVERSALS

4. The law of the case doctrine provides that a ruling by an

appellate court on a particular case binds the appellate

court and all lower tribunals with respect to that issue;

the doctrine does not prevent a trial court from exercis-

ing its unrestricted discretion to review its prior deci-

sion to correct an error. KBD & Associates, Inc v Great

Lakes Foam Technologies, Inc, 295 Mich App 666.

CREDITS—See

AXATION

CRIME VICTIMS—See

ENTENCES

CRIMINAL CONTEMPT—See

ONTEMPT

CRIMINAL LAW

See, also,

ARCENY

RISONS AND

RISONERS

1, 2

ONFESSIONS

1. To determine whether a confession is voluntary, the

court must consider the totality of the surrounding

circumstances to determine whether it was freely and

voluntarily made; a confession is voluntary if it is the

product of an essentially free and unconstrained choice

by its maker and the accused’s will has not been

overborne or his or her capacity for self-determination

criminally impaired; a court should consider various

factors, including the age of the accused; his or her lack

of education or intelligence level; his or her prior expe-

rience with the police or lack thereof; the repeated and

prolonged nature of the questioning; the length of

detention before the accused gave the statement in

question; the lack of any advice to the accused of his or

her constitutional rights; whether there was an unnec-

essary delay in bringing the accused in front of a

magistrate before he or she gave the confession;

whether the accused was injured, intoxicated, drugged,

862 295 M

ICH

or in poor health; whether the accused was deprived of

food, sleep, or medical attention; whether the accused

was physically abused; and whether he or she was

threatened with abuse. People v Ryan, 295 Mich App

388.

RIMINAL

EXUAL

ONDUCT

2. To convict a defendant of first-degree criminal sexual

conduct for penetration under circumstances involving

any other felony, the prosecution must prove that (1)

sexual penetration occurred and (2) it occurred under

circumstances involving the commission of any other

felony; there must be a direct relationship between the

felony and the penetration; the Legislature intended

that the circumstances involving the commission of the

other felony directly impact a victim, or recipient, of the

sexual penetration, and when construed in that manner,

the statute is not unconstitutionally vague; however, the

statute unconstitutionally invites arbitrary and abusive

enforcement when it is applied to situations in which

engaging in consensual legal sexual penetration is el-

evated to first-degree criminal sexual conduct solely

because a minor was present and the “victim” of the

sexual penetration was not impacted by the other felony

(MCL 750.520b[1][c]). People v Lockett, 295 Mich App

165.

ISSEMINATION OF

EXUALLY

XPLICIT

ATTER TO A

INOR

3. A person is guilty of disseminating sexually explicit

matter to a minor if that person knowingly exhibits to a

minor a sexually explicit performance that is harmful to

minors; for the purpose of the offense of disseminating

sexually explicit matter to a minor, to “disseminate” is

to sell, lend, give, exhibit, show, or allow to examine; and

to “exhibit” is to present a performance; a “sexually

explicit performance” is a motion picture, video game,

exhibition, show, representation, or other presentation

that, in whole or in part, depicts nudity, sexual excite-

ment, erotic fondling, sexual intercourse, or sadomas-

ochistic abuse; therefore, a person commits the offense

of disseminating sexually explicit matter to a minor if he

or she knowingly exhibits to a minor a depiction of

nudity, sexual excitement, erotic fondling, sexual inter-

course, or sadomasochistic abuse which is harmful to

minors (MCL 722.675[1][b]). People v Lockett, 295 Mich

App 165.

NDEX

-D

IGEST

863

FFECTIVE

SSISTANCE OF

OUNSEL

4. The United States Supreme Court’s decision in Padilla

v Kentucky, 559 US ___; 130 S Ct 1473 (2010), holding

that a criminal defense attorney must advise a defen-

dant of the effects of a plea on the defendant’s immigra-

tion status, does not apply retroactively to cases in

which a defendant’s conviction became final before

Padilla was decided; a conviction becomes final when

the time for a direct appeal expires. People v Gomez, 295

Mich App 411.

NTERROGATIONS

5. A defendant’s waiver of his or her rights under Miranda

v Arizona, 384 US 436 (1966), is voluntary if there is an

absence of police coercion; the waiver of the Miranda

rights must have been the product of a free and delib-

erate choice rather than intimidation, coercion, or de-

ception. People v Ryan, 295 Mich App 388.

ESSER

NCLUDED

FFENSES

6. A necessarily included lesser offense is an offense whose

elements are subsumed within the elements of a greater

offense; when evaluating whether an offense is a lesser

included offense, the crimes are to be analyzed with an eye

toward how the crimes were actually charged; if the

elements at issue are subsumed within the charged of-

fense, the crime is a necessarily included lesser offense;

when a conviction for a greater offense is reversed on

grounds affecting only the greater offense, an appellate

court may remand for entry of judgments of conviction on

necessarily included lesser offenses; when a jury cannot

convict a defendant of first-degree criminal sexual conduct

without finding that the defendant disseminated sexually

explicit matter to a minor, the latter offense is a necessarily

included lesser offense (MCL 722.675[1][b], MCL

750.520b[1][c]). People v Lockett, 295 Mich App 165.

CRIMINAL SEXUAL CONDUCT—See

RIMINAL

2, 6

ENTENCES

CUSTODIAL ENVIRONMENT—See

HILD

USTODY

IVORCE

ARENT AND

HILD

864 295 M

ICH

CUSTODIAL INTERROGATION—See

ONSTITUTIONAL

2, 3, 4

DAMAGE TO MOTOR VEHICLES OR TRAILERS—See

ARCENY

DE FACTO CORPORATIONS—See

ORPORATIONS

DECLARATORY JUDGMENTS—See

CTIONS

DEFECTS IN HIGHWAYS—See

OVERNMENTAL

MMUNITY

DEFICIENCY ACTION—See

ORTGAGES

DEFRAUDED PARTY’S DUTY TO CONDUCT

FURTHER INQUIRY—See

RAUD

DELAY IN PAYING BENEFITS—See

NSURANCE

DETERMINATION OF CONSTITUTIONALITY OF

ACTS—See

TATUTES

DIRECT FINANCIAL HARM IN RESTITUTION—See

ENTENCES

DISSEMINATION OF SEXUALLY EXPLICIT MATTER

TO A MINOR—See

RIMINAL

3, 6

DISSOLUTION—See

ORPORATIONS

DIVORCE

ARENT AND

HILD

1. A court may not issue an order that changes the

NDEX

-D

IGEST

865

established custodial environment of a child without

clear and convincing evidence that it is in the best

interest of the child; the court must determine whether

there is an established custodial environment with

either or both of the parties before making its original

custody determination (MCL 722.27[1][c]). Kessler v

Kessler, 295 Mich App 54.

2. A trial court rendering a custody decision must state on

the record its factual findings and conclusions regarding

each of the statutory factors for determining a child’s

best interests; these findings and conclusions need not

explicitly address every aspect of a given factor or

consider every piece of evidence entered and argument

raised by the parties (MCL 722.23). Kessler v Kessler,

295 Mich App 54.

ROPERTY

ETTLEMENT

3. A qualified domestic relations order executed in accor-

dance with the terms of a divorce judgment is part of the

property settlement and must be treated as part of the

final divorce judgment. Neville v Neville, 295 Mich App

460.

DOCTRINE OF IMPUTED KNOWLEDGE—See

EGLIGENCE

DOCTRINE OF THE LAW OF THE CASE—See

OURTS

DOMICILE CHANGES—See

HILD

USTODY

ARENT AND

HILD

1, 2

DUE PROCESS—See

ONTEMPT

EARCHES AND

EIZURES

DUPLICATION OF RECORDINGS—See

ONSTITUTIONAL

DURABLE MEDICAL SUPPLY PRODUCTS—See

NSURANCE

866 295 M

ICH

DUTY OF INSURER TO QUESTION

REASONABLENESS OF PROVIDER’S CHARGES—See

NSURANCE

DUTY TO DISCLOSE—See

RAUD

1, 2, 3

EFFECTIVE ASSISTANCE OF COUNSEL—See

RIMINAL

ELECTIONS—See

OURTS

EQUITABLE SUBROGATION—See

ORTGAGES

4, 5

ERRONEOUS INTERPRETATIONS OR

APPLICATIONS OF LAW—See

VIDENCE

ERRORS IN PRIOR DECISION—See

OURTS

ESTABLISHED CUSTODIAL ENVIRONMENT—See

HILD

USTODY

IVORCE

ARENT AND

HILD

EVIDENCE

See, also,

RIMINAL

EARCHES AND

EIZURES

1, 2

RRONEOUS

NTERPRETATIONS OR

PPLICATIONS OF

1. A trial court necessarily abuses its discretion when it

admits or excludes evidence on the basis of an erroneous

interpretation or application of law. Gay v Select Spe-

cialty Hospital, 295 Mich App 284.

RIOR

CTS

2. Evidence of other crimes, wrongs, or acts is not admis-

sible to prove the character of a person in order to show

action in conformity therewith; it may, however, be

admissible for other purposes; the rule applies to wit-

NDEX

-D

IGEST

867

nesses as well as criminal defendants (MRE 404[b][1]).

In re Kabanuk, 295 Mich App 252.

EVIDENCE SUPPORTING MANDAMUS—See

ANDAMUS

EX PARTE PERSONAL PROTECTION ORDERS—See

NJUNCTIONS

EXACT LOCATION OF ACCIDENT—See

OVERNMENTAL

MMUNITY

EXCESSIVE BRUTALITY—See

ENTENCES

EXCLUSION OF EVIDENCE—See

VIDENCE

EXCLUSIONARY RULE—See

EARCHES AND

EIZURES

1, 2

EXCUSABLE NEGLECT AS BASIS FOR RELIEF FROM

JUDGMENT—See

OTIONS AND

RDERS

EXISTENCE AND TERMINATION OF ARBITRATION

AGREEMENT—See

RBITRATION

EXPERT WITNESSES IN MEDICAL MALPRACTICE

ACTIONS—See

EGLIGENCE

2, 4, 5

ITNESSES

EXTRAORDINARY WRITS—See

ANDAMUS

FACTORS (b), (d), (e), (h), AND (j) FOR CHILD’S BEST

INTERESTS—See

ARENT AND

HILD

FACTUAL FINDINGS—See

IVORCE

2, 3

868 295 M

ICH

FAILURE TO FILE ANNUAL REPORTS—See

ORPORATIONS

FAILURE TO PAY ANNUAL FEES—See

ORPORATIONS

FAILURE TO PAY OR DELAY IN PAYING

BENEFITS—See

NSURANCE

FAILURE TO SECURE PUBLIC CONTRACTS—See

CTIONS

FAIR AND JUST TREATMENT IN

INVESTIGATION—See

ONSTITUTIONAL

FAMILY LAW—See

IVORCE

FIFTH AMENDMENT—See

ONSTITUTIONAL

2, 3, 4

RIMINAL

1, 5

FINAL JUDGMENTS—See

OTIONS AND

RDERS

FINAL ORDER—See

ONTEMPT

FINALITY OF CONVICTIONS—See

RIMINAL

FIREARMS—See

EARCHES AND

EIZURES

FIRST AMENDMENT—See

ONSTITUTIONAL

FIRST-DEGREE CRIMINAL SEXUAL CONDUCT—See

RIMINAL

2, 6

ENTENCES

NDEX

-D

IGEST

869

FORECLOSURES BY ADVERTISEMENT—See

ORTGAGES

2, 3

FOURTH AMENDMENT—See

EARCHES AND

EIZURES

1, 2

FRAUD

EFRAUDED

ARTY’S

UTY TO

ONDUCT

URTHER

NQUIRY

1. The general rule that there cannot be any fraud if the

party allegedly defrauded has the means to determine

for himself or herself the truth of the matter only

applies when the party allegedly defrauded was either

presented with the information and chose to ignore it or

had some other indication that further inquiry was

needed; when a defrauded party has troubled to exam-

ine some extrinsic evidence supporting a false state-

ment, that party owes no duty to the defrauder to

exercise diligence to uncover additional evidence disap-

proving the defrauder’s representations. Alfieri v Ber-

torelli, 295 Mich App 189.

ILENT

RAUD

2. Silent fraud and negligent misrepresentation both re-

quire a defendant to owe a duty to the plaintiff; silent

fraud is based on a defendant suppressing a material

fact that the defendant was legally obligated to disclose,

rather than making an affirmative misrepresentation; a

misleading incomplete response to an inquiry can con-

stitute silent fraud; a claim for negligent misrepresen-

tation requires a plaintiff to prove that a party justifi-

ably relied to his or her detriment on information

prepared without reasonable care by one who owed the

relying party a duty of care. Alfieri v Bertorelli, 295 Mich

App 189.

3. A duty to disclose may be imposed on a seller’s agent to

disclose newly acquired information that is recognized

by the agent as rendering a prior affirmative statement

untrue or misleading; this is especially true when the

agent knows that the buyer has a particular concern

with the subject matter of the statement; a duty to

disclose may arise solely because the buyer expresses a

particularized concern or directly inquires of the seller

regarding the subject matter. Alfieri v Bertorelli, 295

Mich App 189.

870 295 M

ICH

FRAUD IN AWARDING PUBLIC CONTRACTS—See

CTIONS

GAMING—See

TATUTES

GARBAGE TRUCKS—See

OVERNMENTAL

MMUNITY

GOOD-FAITH EXCEPTION TO EXCLUSIONARY

RULE—See

EARCHES AND

EIZURES

GOVERNMENTAL ACTION FOR PURPOSES OF

MIRANDA WARNINGS—See

ONSTITUTIONAL

GOVERNMENTAL IMMUNITY

IGHWAY

XCEPTION

1. Under the highway exception to governmental immunity,

a governmental agency with jurisdiction over a particular

highway has a duty to maintain the highway in reasonable

repair so that it is reasonably safe and convenient for

public travel; this includes the duty to maintain sidewalks;

a plaintiff alleging an injury from the agency’s failure to do

so must notify the governmental defendant of his or her

claim in a timely manner in order for the highway excep-

tion to apply; while the notice need not be in any particular

form, it must be provided within 120 days of the plaintiff’s

injuries and specify the exact location and nature of the

defect, the injury sustained, and the names of witnesses

known at the time; to qualify, the notice must specify

details such as the corner of the intersection at which the

alleged defect is located as well the side of the road on

which it is located (MCL 691.1401[e]; MCL 691.1402[1];

MCL 691.1404[1]). Thurman v City of Pontiac, 295 Mich

App 381.

OTOR

-V

EHICLE

XCEPTION

2. A governmental agency is immune from tort liability if

the agency is engaged in the exercise or discharge of a

governmental function; under the motor-vehicle excep-

tion to governmental immunity, however, a party can

maintain an action against a governmental agency for

NDEX

-D

IGEST

871

bodily injury and property damage resulting from the

negligent operation by any officer, agent, or employee of

the governmental agency, of a motor vehicle of which the

governmental agency is owner; “operation” requires

that the motor vehicle must have been operating as a

motor vehicle and only encompasses activities that are

directly associated with the driving of a motor vehicle;

temporary stops on the road to pick up garbage are

included within the operation of a garbage truck (MCL

691.1405, 691.1407[1]). Strozier v Flint Community

Schools, 295 Mich App 82.

GUILTY PLEAS—See

RIMINAL

HEALTH PROFESSIONALS—See

EGLIGENCE

4, 5

HEARINGS ON PERSONAL PROTECTION

ORDERS—See

NJUNCTIONS

HIGHWAY EXCEPTION—See

OVERNMENTAL

MMUNITY

HOMESTEAD PROPERTY TAX CREDIT—See

AXATION

1, 3

HYPOTHETICAL OPINIONS—See

OURTS

IMMIGRATION STATUS—See

RIMINAL

IMPRISONMENT FOR CONTEMPT—See

ONTEMPT

IMPUTED KNOWLEDGE DOCTRINE—See

EGLIGENCE

INADVERTENCE AS BASIS FOR RELIEF FROM

JUDGMENT—See

OTIONS AND

RDERS

872 295 M

ICH

INCOME—See

AXATION

1, 3

INCOME TAX—See

AXATION

INDIRECT CONTEMPT—See

ONTEMPT

INEFFECTIVE ASSISTANCE OF COUNSEL—See

RIMINAL

INITIATIVES—See

OURTS

INJUNCTIONS

ERSONAL

ROTECTION

RDERS

1. A petitioner may seek a personal protection order under

MCL 600.2950a(1) to enjoin conduct prohibited under

MCL 750.411h, 750.411i, or 750.411s; unless a petitioner

specifically requests an ex parte order or the circuit court

refuses to enter an ex parte order and the petitioner

subsequently does not request a hearing, MCR

3.705(B)(1)(a) requires the court to hold a hearing or

interview the petitioner when considering a petition for a

personal protection order; the petitioner bears the burden

of proof, but the court rule requires the court to consider

the testimony, documents, and other evidence proffered to

determine whether the respondent engaged in the pro-

scribed conduct. Lamkin v Engram, 295 Mich App 701.

INSTRUCTION OF STUDENTS BY EXPERT

WITNESS—See

EGLIGENCE

INSURANCE

AILURE TO

AY OR

ELAY IN

AYING

ENEFITS

1. Bronson Methodist Hospital v Auto-Owners Ins Co, 295

Mich App 431.

-F

AULT

2. The no-fault act permits insurers to discover the whole-

sale cost to the provider of durable medical-supply

products, such as surgical implant products, that are

NDEX

-D

IGEST

873

billed separately and distinctly from other treatment

services and that require little or no handling or storage

by a provider for purposes of determining whether the

provider’s charges for the products to insureds are

reasonable under the act; the provider’s actual cost of

the products is not dispositive on the issue whether the

provider’s charges are reasonable, but is a factor that

affects the reasonableness of the charges (MCL

500.3101 et seq.). Bronson Methodist Hospital v Auto-

Owners Ins Co, 295 Mich App 431.

3. A person’s physical contact with an insured vehicle does

not by itself establish that the person was “upon” the

vehicle so as to be “occupying” the vehicle when the

relevant no-fault insurance policy defines “occupying”

as “in, upon, getting in, on, out or off”; one must be on

or up and on a vehicle in order to be “upon” it. Westfield

Insurance Company v Ken’s Service, 295 Mich App 610.

INTERMEDIATE CORRECTIONAL FACILITIES—See

RISONS AND

RISONERS

1, 2

INTERROGATIONS—See

ONSTITUTIONAL

2, 3, 4

RIMINAL

INVESTIGATIONS BY EXECUTIVE OR LEGISLATIVE

BRANCH—See

ONSTITUTIONAL

JOINT VENTURES—See

EGLIGENCE

JUDGMENTS—See

CTIONS

JUDICIAL REVIEW OF ARBITRABILITY—See

RBITRATION

JUDICIAL REVIEW OF ARBITRATION AWARDS—See

RBITRATION

JURISDICTION—See

ONTEMPT

OURTS

2, 3

874 295 M

ICH

LABOR RELATIONS

See, also,

CHOOLS

OLLECTIVE

ARGAINING

1. A notice to terminate a collective-bargaining agreement

must be clear and explicit; a notice of a desire to modify

the collective-bargaining agreement is not a notice of

termination and does not operate to terminate the

contract; a notice that refers to an intent to both modify

and terminate a contract, without specifying which, is

ambiguous and does not operate to terminate or modify

the contract; an ambiguous notice of an intent to modify,

amend, or terminate a collective-bargaining agreement

does not terminate the agreement. 36th Dist Court v

Michigan American Federation of State, County & Mu-

nicipal Employees Council 25, Local 917, 295 Mich App

502.

LARCENY

OTOR

EHICLES AND

RAILERS

1. The sentence for larceny from motor vehicles, house

trailers, trailers, and semi-trailers, is enhanced if dam-

age is done to any part of a motor vehicle, house trailer,

trailer, or semitrailer in the commission of the larceny;

the phrase “any part” of the trailer includes all portions

of the trailer in whatever degree, or whatever separate

or distinct pieces of the trailer, that were broken, torn,

cut, or otherwise damaged (MCL 750.365a[2][a] and [b],

[3]). People v Kloosterman, 295 Mich App 68.

LAW OF THE CASE—See

OURTS

LESSER INCLUDED OFFENSES—See

RIMINAL

LIMITED PERSONAL JURISDICTION—See

OURTS

2, 3

LOCAL ACTS—See

TATUTES

LOCATION OF DEFECT IN HIGHWAY—See

OVERNMENTAL

MMUNITY

NDEX

-D

IGEST

875

LONG-ARM STATUTE—See

OURTS

2, 3

MALPRACTICE—See

EGLIGENCE

2, 3, 4, 5

MANDAMUS

VIDENCE

UPPORTING

ANDAMUS

1. A writ of mandamus is an extraordinary remedy that

will only be issued if (1) the party seeking the writ has a

clear legal right to the performance of the specific duty

sought, (2) the defendant has the clear legal duty to

perform the requested act, (3) the act is ministerial, and

(4) no other remedy exists that might achieve the same

result; the party seeking mandamus has the burden of

establishing that the official in question has a clear duty

to perform the act. Coalition for a Safer Detroit v Detroit

City Clerk, 295 Mich App 362.

MEDICAL MALPRACTICE—See

EGLIGENCE

2, 3, 4, 5, 6

MEDICAL SUPPLY PRODUCTS—See

NSURANCE

MERE-VOLUNTEER RULE—See

ORTGAGES

MICHIGAN GAMING CONTROL AND REVENUE

ACT—See

TATUTES

MIRANDA RIGHTS—See

RIMINAL

MIRANDA WARNINGS—See

ONSTITUTIONAL

2, 3, 4

MISREPRESENTATION—See

RAUD

MISTAKE AS BASIS FOR RELIEF FROM

JUDGMENT—See

OTIONS AND

RDERS

876 295 M

ICH

MORTGAGES

REACH OF

OVENANTS

1. A single purpose entity (SPE) is an entity formed

concurrently with or immediately before the subject

transaction that is unlikely to become insolvent as a

result of its own activities and that is adequately insu-

lated from the consequences of any related party’s

insolvency; if remaining solvent is part of the SPE

covenants in a mortgage or loan document, an entity’s

insolvency breaches that covenant and may trigger

provisions making a mortgage or loan fully recourse.

Wells Fargo Bank, NA v Cherryland Mall Ltd Partner-

ship, 295 Mich App 99.

ORECLOSURES BY

DVERTISEMENT

2. Foreclosure generally extinguishes a mortgage, and

mortgages are nonrecourse absent an agreement to the

contrary; a deficiency action for money owed under a

mortgage following foreclosure by sale is permissible,

however, if the note provides that the loan was a

recourse loan. Wells Fargo Bank, NA v Cherryland Mall

Ltd Partnership, 295 Mich App 99.

3. The right to foreclose by advertisement is conferred by

statute, and strict compliance with the statutory provi-

sions is required; if the party foreclosing a mortgage by

advertisement is not the original mortgagee, a record

chain of title must have existed before the date of sale

evidencing the assignment of the mortgage to the party

foreclosing the mortgage; the statute makes no excep-

tion for mortgage interests acquired by operation of law

(MCL 600.3204[3]). Kim v JPMorgan Chase Bank, NA,

295 Mich App 200.

RIORITY OF

IENS

4. Equitable subrogation may be used when a senior

mortgagee discharges its mortgage of record and

contemporaneously takes and records a replacement

mortgage, so that the lending mortgagee may retain

its seniority as against intervening lienholders; how-

ever, the lending mortgagee seeking subrogation must

be the same lender that held the original mortgage

before the intervening interests arose, or a bona fide

successor in interest to the original lender, and the

application of equitable subrogation is subject to a

careful examination of the equities and of any poten-

NDEX

-D

IGEST

877

tial prejudice to the intervening lienholders. CitiMort-

gage, Inc v Mortgage Electronic Registration Systems,

Inc, 295 Mich App 72.

5. The “mere volunteer” rule, which provides that equi-

table subrogation may not be extended to a party that is

a mere volunteer who pays the mortgage but has no

interest in the land, does not apply when the new

mortgagee and the original mortgagee are the same.

CitiMortgage, Inc v Mortgage Electronic Registration

Systems, Inc, 295 Mich App 72.

MOTIONS AND ORDERS

ELIEF

ROM

INAL

UDGMENTS

1. A court may relieve a party from a final judgment, order,

or proceeding on the basis of mistake, inadvertence,

surprise, or excusable neglect or any other reason justi-

fying relief from operation of the judgment; the motion

must be made within a reasonable time, and for the

grounds stated in MCR 2.612 (C)(1)(a), within one year

after the judgment, order, or proceeding was entered or

taken (MCR 2.612[C][1][a] and [f], [2]). Neville v Nev-

ille, 295 Mich App 460.

MOTOR-VEHICLE EXCEPTION—See

OVERNMENTAL

MMUNITY

MOTOR VEHICLE SEARCHES—See

EARCHES AND

EIZURES

1, 2

MOTOR VEHICLES—See

NSURANCE

MOTOR VEHICLES AND TRAILERS—See

ARCENY

MULTISTATE BUSINESSES—See

AXATION

MUNICIPAL CORPORATIONS—See

OURTS

NECESSARILY INCLUDED OFFENSES—See

RIMINAL

878 295 M

ICH

NEGLIGENCE

OMPARATIVE

EGLIGENCE

1. Alfieri v Bertorelli, 295 Mich App 189.

EDICAL

ALPRACTICE

2. A medical professional’s practice must involve practice

in a clinical setting in order for the professional to be

engaged in an “active clinical practice” for purposes of

MCL 600.2169(1)(b); a medical professional can be in-

volved in the treatment of patients in a variety of ways

in a clinical setting without directly interacting with the

patients; the word “active” means that, as part of the

professional’s normal professional practice at the rel-

evant time, the professional was involved, directly or

indirectly, in the care of patients in a clinical setting.

Gay v Select Specialty Hospital, 295 Mich App 284.

3. A nurse who supervises other nurses in a hospital is

practicing nursing in a clinical setting for purposes of

the professional-time requirement of MCL

600.2169(1)(b) even though he or she does not directly

treat specific patients. Gay v Select Specialty Hospital,

295 Mich App 284.

4. A person may be qualified to testify as an expert on the

standard of care in a medical-malpractice action if

during the year immediately preceding the date of the

occurrence that is the basis for the claim or action the

person devoted a majority of his or her professional time

to the instruction of students in an accredited health

professional school or accredited residency or clinical

research program in the same health profession in

which the party against whom or on whose behalf the

testimony is offered is licensed; time spent preparing for

class, maintaining familiarity with new and evolving

professional techniques, and participating in meetings

designed to further the educational process is time

devoted to the instruction of students (MCL

600.2169[1][b][ii]). Gay v Select Specialty Hospital, 295

Mich App 284.

5. A health professional providing an affidavit of merit in a

medical malpractice action must review the plaintiff’s

notice of intent and all medical records supplied to him

or her by the plaintiff’s attorney concerning the allega-

tions contained in the notice; it is sufficient for the

health professional to indicate that he or she reviewed

NDEX

-D

IGEST

879

the records provided by the plaintiff’s counsel and that

in light of those records, the health professional is

willing and able to opine with respect to the defendant’s

negligence consistently with the elements set forth in

the statute governing affidavits of merit (MCL

600.2912d). Kalaj v Khan, 295 Mich App 420.

6. Hoffman v Barrett (On Remand), 295 Mich App 649.

NEGLIGENT MISREPRESENTATION—See

RAUD

2, N

EGLIGENCE

NO-FAULT—See

NSURANCE

2, 3

NONINSTRUCTIONAL SUPPORT SERVICES—See

CHOOLS

1, 2

NONPARTIES—See

ONTEMPT

NONRECOURSE LOANS—See

ORTGAGES

NOTICE OF CLAIMS—See

OVERNMENTAL

MMUNITY

NOTICE OF INTENT TO FILE SUIT—See

EGLIGENCE

NOTICE OF TERMINATION OF

COLLECTIVE-BARGAINING AGREEMENT—See

ABOR

ELATIONS

NURSES—See

EGLIGENCE

OBSCENITY—See

RIMINAL

OCCUPYING DEFINED—See

NSURANCE

OFFENSE VARIABLE 4—See

ENTENCES

880 295 M

ICH

OFFENSE VARIABLE 7—See

ENTENCES

2, 3

OFFENSE VARIABLE 10—See

ENTENCES

OFFENSE VARIABLE 14—See

ENTENCES

OFFICERS OF COMPANIES HELD IN

CONTEMPT—See

ONTEMPT

OPERATION OF A MOTOR VEHICLE—See

OVERNMENTAL

MMUNITY

ORIGINAL CHILD CUSTODY ORDERS—See

IVORCE

OTHER-ACTS EVIDENCE—See

VIDENCE

OVERBREADTH OF STATUTES—See

ONSTITUTIONAL

OWNERSHIP OF BUSINESSES—See

ENUE

PADILLA v KENTUCKY—See

RIMINAL

PARENT AND CHILD

See, also,

IVORCE

1, 2, 3

HILD

USTODY

1. A party to a custody order who requests a change of

domicile has the burden of establishing by a preponder-

ance of the evidence that the change is warranted; when

a custody order prohibits a parent from changing the

minor child’s legal residence to a different state without

the court’s permission the court must consider the

factors in MCL 722.31(4) when making a decision;

Canada is considered another state for changes in domi-

cile analysis; under MCL 722.31(4) the court must

NDEX

-D

IGEST

881

consider whether the change in legal residence has the

capacity to improve the quality of life for both the child

and the relocating parent, the degree to which each

parent has complied with the parenting-time aspect of

the custody order and the extent to which the planned

domicile change was inspired by that parent’s desire to

defeat or frustrate the parenting-time schedule, the

degree to which the parenting-time schedule could be

modified if the domicile change request was granted to

preserve and foster the parental relationship between

the child and each parent, the degree to which the

parent opposing the legal residence change is motivated

by a desire to secure a financial advantage with respect

to a support obligation, and whether any domestic

violence is involved; an increase in a relocating parent’s

earning potential may improve a child’s quality of life.

Gagnon v Glowacki, 295 Mich App 557.

2. If a trial court grants a change of domicile it must

determine whether there will be a change in the estab-

lished custodial environment; if the change of domicile

results in a change in the custodial environment, the

relocating parent must prove by clear and convincing

evidence that the change is in the minor child’s best

interest; it is possible to have a change of domicile

without a corresponding change in the established cus-

todial environment; however, a change in established

custodial environment will occur if it would turn a party

into a weekend-only parent. Gagnon v Glowacki, 295

Mich App 557.

ACTORS

(b), (d), (e), (h),

AND

(j)

FOR

HILD’S

EST

NTERESTS

3. Kessler v Kessler, 295 Mich App 54.

PAROLE OFFICERS—See

ONSTITUTIONAL

PAROLEES—See

RISONS AND

RISONERS

PARTISAN POLITICAL ACTIVITY—See

UBLIC

MPLOYEES

PERSONAL JURISDICTION—See

OURTS

2, 3

882 295 M

ICH

PERSONAL PROTECTION ORDERS—See

ONTEMPT

NJUNCTIONS

PLEAS IN CRIMINAL CASES—See

RIMINAL

POLITICAL ACTIVITY—See

UBLIC

MPLOYEES

POSTTERMINATION SALES COMMISSIONS—See

GENCY

POVERTY AS BASIS FOR PROPERTY TAX

EXEMPTION—See

AXATION

PRACTICE OF NURSING—See

EGLIGENCE

PRECEDENT TO JUSTIFY SEARCHES—See

EARCHES AND

EIZURES

PRIMA FACIE EVIDENCE—See

OURTS

PRINCIPAL AND AGENT—See

GENCY

1, 2

PRIOR ACTS—See

VIDENCE

PRIORITY OF LIENS—See

ORTGAGES

4, 5

PRISONS AND PRISONERS

ONTRABAND

1. A person may not sell, give, or furnish, or aid in the selling,

giving, or furnishing of, a cellular telephone or other

wireless communication device to a prisoner in a correc-

tional facility, or dispose of a cellular telephone or other

wireless communication device in or on the grounds of a

correctional facility; a “prisoner” is a person committed to

NDEX

-D

IGEST

883

the jurisdiction of the Department of Corrections who has

not been released on parole or discharged; release on

parole requires release into the community; a parolee

confined in a intermediate facility has not been released on

parole and, therefore, is a prisoner for the purpose of the

prohibition against providing cellular telephones to pris-

oners (MCL 800.281a[g], MCL 800.283a). People v

Armisted, 295 Mich App 32.

2. A person may not sell, give, or furnish, or aid in the selling,

giving, or furnishing of, a cellular telephone or other

wireless communication device to a prisoner in a correc-

tional facility, or dispose of a cellular telephone or other

wireless communication device in or on the grounds of a

correctional facility; the term “correctional facility” in-

cludes a state prison; a “state prison” is any facility

operated by the Department of Corrections to confine or

involuntarily restrain persons committed to its jurisdic-

tion; it is the purpose for which a facility is used, and not

its label, that determines its essential character as a state

prison; a secure intermediate facility operated by the

Department of Corrections from which the inmates cannot

not leave without permission is a state prison for the

purpose of the prohibition against providing cellular tele-

phones to prisoners (MCL 800.281a[e], MCL 800.283a).

People v Armisted, 295 Mich App 32.

PROCURING-CAUSE DOCTRINE—See

GENCY

PROPERTY SETTLEMENT—See

IVORCE

PROPERTY TAX EXEMPTIONS—See

AXATION

PROPOSED INITIATIVES—See

OURTS

PUBLIC ACTS—See

TATUTES

PUBLIC CONTRACTS—See

CTIONS

1, 2

ONSTITUTIONAL

884 295 M

ICH

PUBLIC EMPLOYEES

OLITICAL

CTIVITY

1. A public employee may engage in partisan political

activity except during those hours when that person is

being compensated for the performance of that person’s

duties as a public employee; a public employer may

regulate and even prohibit off-duty activity that ad-

versely interferes with job performance, but a public

employer may not completely curtail an employee’s

off-hours activity as a matter of policy simply because

the activity may conceivably interfere with job perfor-

mance; rather it may only deal with the adequacy of job

performance on a case-by-case basis. Ferrero v Walton

Twp, 295 Mich App 475.

PUBLIC SCHOOL EMPLOYEES—See

CHOOLS

PURGING CONTEMPT—See

ONTEMPT

QUALIFIED DOMESTIC RELATIONS ORDERS—See

IVORCE

QUESTIONING SUSPECTS—See

ONSTITUTIONAL

RAPE—See

RIMINAL

2, 6

ENTENCES

REASONABLENESS OF PROVIDERS CHARGES—See

NSURANCE

RECORDED INTERESTS—See

ORTGAGES

RECOUPMENT—See

ONTRACTS

RECOURSE LOANS—See

ORTGAGES

1, 2

NDEX

-D

IGEST

885

RECOVERY OF GAMBLING LOSSES—See

TATUTES

REFUNDS—See

AXATION

RELIANCE ON BINDING PRECEDENT TO JUSTIFY

SEARCHES—See

EARCHES AND

EIZURES

RELIEF FROM FINAL JUDGMENTS—See

OTIONS AND

RDERS

RENEWAL OF CORPORATE EXISTENCE

FOLLOWING DISSOLUTION—See

ORPORATIONS

REQUIREMENTS FOR AFFIDAVITS OF MERIT—See

EGLIGENCE

REQUIREMENTS FOR PERSONAL PROTECTION

ORDERS—See

NJUNCTIONS

RESIDENCE CHANGES—See

HILD

USTODY

ARENT AND

HILD

1, 2

RESTITUTION—See

ENTENCES

RESTRICTIONS ON POLITICAL ACTIVITIES DURING

WORK—See

UBLIC

MPLOYEES

RETROACTIVITY OF PADILLA v KENTUCKY—See

RIMINAL

RETURN OF SEIZED ITEMS—See

EARCHES AND

EIZURES

REVIEW OF MEDICAL RECORDS—See

EGLIGENCE

886 295 M

ICH

RIGHT TO ATTORNEY—See

ONSTITUTIONAL

2, 3, 4

SADISM—See

ENTENCES

SALES COMMISSIONS—See

GENCY

SANCTIONS—See

ONTEMPT

1, 2, 4

SCHOOLS

OLLECTIVE

ARGAINING

1. Positions in which individuals impart knowledge or

information to students may be subject to collective

bargaining by a public school employer under the pro-

visions of MCL 423.215(3)(f); there is no requirement

that the knowledge or information imparted relate to

the core curriculum of the school; collective bargaining

cannot include matters pertaining to third-party con-

tracts relative to noninstructional support services. Pon-

tiac School Dist v Pontiac Ed Ass’n, 295 Mich App 147.

2. There is no indication that the Legislature intended

state and federal regulations governing special educa-

tion, which define “instructional services” and “related

services,” to apply in construing the undefined term

“noninstructional support services” in MCL

423.215(3)(f). Pontiac School Dist v Pontiac Ed Ass’n,

295 Mich App 147.

SEARCH FOLLOWING RECENT VEHICLE

OCCUPANT’S ARREST—See

EARCHES AND

EIZURES

SEARCHES AND SEIZURES

XCLUSIONARY

ULE

1. The good-faith exception to the exclusionary rule ap-

plies when the police conduct a search in compliance

with binding appellate precedent that is later overruled;

searches conducted in objectively reasonable reliance on

binding appellate precedent are not subject to the exclu-

NDEX

-D

IGEST

887

sionary rule and the fruit of the searches need not be

suppressed. People v Mungo (On Second Remand), 295

Mich App 537.

2. The police may search a vehicle without a warrant

incident to a recent occupant’s arrest only if the arrestee

is within reaching distance of the passenger compart-

ment at the time of the search or it is reasonable to

believe that the vehicle contains evidence of the offense

of arrest; a trial court, in determining reasonableness,

must consider whether the facts known to the officer at

the time of the stop would warrant an officer of reason-

able caution to suspect criminal activity; the officer’s

conclusion must be drawn from reasonable inferences

based on the facts in light of the officer’s training and

experience; the reasonableness of an officer’s suspicion

is determined case by case on the basis of the totality of

all the facts and circumstances; those circumstances

must be viewed as understood and interpreted by law

enforcement officers, not legal scholars, and deference

should be given to the experience of the law enforcement

officers and their assessments of criminal modes and

patterns. People v Tavernier, 295 Mich App 582.

EAPONS

3. A criminal defendant is entitled to the return of prop-

erty seized in connection with his or her case after the

case is concluded unless there is a lawful reason to deny

its return; a police department’s return of noncontra-

band firearms to a defendant’s designee does not violate

MCL 750.224f(2). People v Minch, 295 Mich App 92.

SELF-INCRIMINATION—See

ONSTITUTIONAL

2, 3, 4

RIMINAL

1, 5

SELLER’S AGENTS—See

RAUD

SENTENCES

ONSECUTIVE

ENTENCING

1. A court may impose a term of imprisonment for a

conviction of first-degree criminal sexual conduct

(CSC-1) that is to be served consecutively to any term of

imprisonment imposed for any other criminal offense

arising from the same transaction; the language “any

888 295 M

ICH

other criminal offense” means a different offense and

can encompass additional violations of the same CSC-1

statute (MCL 750.520b[3]). People v Ryan, 295 Mich

App 388.

FFENSE

ARIABLE

2. “Sadism” for purposes of scoring offense variable 7

(aggravated physical abuse) is conduct that subjects a

victim to extreme or prolonged pain or humiliation and

is inflicted to produce suffering or for the offender’s

gratification; “torture” is the act of inflicting excruciat-

ing pain, as punishment or revenge, as a means of

getting a confession or information, or for sheer cruelty;

“excessive brutality” is savagery or cruelty beyond even

the usual brutality of a crime (MCL 777.37). People v

Glenn, 295 Mich App 529.

3. A defendant’s conduct may be found to have substan-

tially increased the victim’s fear and anxiety for pur-

poses of scoring offense variable 7 (aggravated physical

abuse) only if the conduct was designed to cause copious

or plentiful amounts of additional fear beyond the fear

and anxiety that are an inherent part of the crime;

circumstances inherently present in the crime must be

discounted for purposes of scoring the offense variable

(MCL 777.37). People v Glenn, 295 Mich App 529.

ESTITUTION

4. A trial court does not have discretion to order a con-

victed defendant to pay restitution; rather, it must order

the defendant to pay restitution and the amount must

fully compensate any victim of the defendant’s course of

conduct that gave rise to the conviction; in this context,

the term “victim” includes a sole proprietorship, part-

nership, corporation, association, governmental entity,

or any other legal entity that suffers direct physical or

financial harm as a result of a crime; to determine the

amount of restitution, the trial court must consider the

amount of the loss sustained by any victim as a result of

the offense; the phrase “course of conduct” must be

given a broad construction to effectuate the intent of the

Legislature and the remedial purpose of the statute; the

loss of time incurred by a company when an employee of

the company has spent time investigating a crime com-

mitted against it instead of working on other matters

may be a direct financial harm; the value of that harm

can be measured by assigning a value to the time spent

NDEX

-D

IGEST

889

on the investigation (MCL 780.766, MCL 780.767[1]).

People v Allen, 295 Mich App 277.

ENTENCING

UIDELINES

5. People v Lockett, 295 Mich App 165.

SENTENCING GUIDELINES—See

ENTENCES

2, 3, 5

SEPARATE AND DISTINCT BUSINESSES—See

AXATION

SEPARATE ENTERPRISE FOR PURPOSES OF

VENUE—See

ENUE

SEVERABILITY OF UNCONSTITUTIONAL PARTS OF

ACTS—See

TATUTES

SEXUAL PENETRATION—See

RIMINAL

SEXUALLY EXPLICIT PERFORMANCES OR

MATERIAL—See

RIMINAL

SILENT FRAUD—See

RAUD

2, 3

SINGLE-PURPOSE ENTITIES—See

ORTGAGES

SPECIAL EDUCATION—See

CHOOLS

STANDARD OF CARE—See

EGLIGENCE

STANDING—See

CTIONS

1, 2, 3

STATE PRISONS—See

RISONS AND

RISONERS

1, 2

890 295 M

ICH

STATUTES

See, also,

ONSTITUTIONAL

5, 6, 7

ONSTITUTIONALITY OF

TATUTES

1. Houston v Governor, 295 Mich App 588.

AMING

2. MCL 600.2939(1), which allows a party to recover for the

loss of money or goods through gaming, does not apply to

casino gaming in Detroit; § 3(3) of the Michigan Gaming

Control and Revenue Act (MGCRA), MCL 432.203(3),

provides that any law inconsistent with the MGCRA does

not apply to casino gaming in Detroit as provided for by the

MGCRA; the MGCRA applies specifically to legalized non-

Indian casino gambling in Detroit and a casino operating

in Detroit under the MGCRA is not subject to liability

under MCL 600.2939(1) for a patron’s gambling losses

because it would be inconsistent with the legalization of

casino gambling. Parise v Detroit Entertainment, LLC,

295 Mich App 25.

STATUTORY REQUIREMENTS FOR FORECLOSURE

BY ADVERTISEMENT—See

ORTGAGES

SUBROGATION—See

ORTGAGES

4, 5

SUBSEQUENT REVERSALS—See

OURTS

SURPRISE AS BASIS FOR RELIEF FROM

JUDGMENT—See

OTIONS AND

RDERS

TAX CREDITS—See

AXATION

TAX REFUNDS—See

AXATION

TAXATION

OMESTEAD

ROPERTY

REDIT

1. When a person’s homestead property tax credit exceeds

NDEX

-D

IGEST

891

the person’s tax liability for the tax year or if there is no

tax liability for the tax year, the amount of the credit not

used as an offset against the tax liability must, after

examination and review, be approved for payment, with-

out interest, to the person; that payment is not counted

as income for purposes of determining the person’s

qualification for an exemption from property taxes on

the basis of poverty (MCL 205.520[3]; MCL 211.7u[1]).

Ferrero v Walton Twp, 295 Mich App 475.

NCOME

2. The unitary-business principle provides that a state is

allowed to tax a multistate business on the apportioned

share of the multistate business it conducted in the

taxing state; all taxable income of a resident individual

from any source whatsoever, except that which is attrib-

utable to another state, is allocated to the state of

Michigan; business income attributed to Michigan and

one or more states is apportioned according to the

apportionment formula in the Income Tax Act; to apply

the apportionment formula, however, there must be

some sharing or exchange of value not capable of precise

identification or measurement that renders formula

apportionment a reasonable taxation method; to deter-

mine whether a multistate business is unitary or dis-

crete, a court must look at (1) economic realities, (2)

functional integration, (3) centralized management, (4)

economies of scale, and (5) substantial mutual interde-

pendence; in the absence of an underlying unitary

business, multistate apportionment is precluded and

income must be apportioned at the entity level. (MCL

206.110[1], MCL 206.115; Mich Admin Code, R 206.12).

Malpass v Dep’t of Treasury, 295 Mich App 263.

EFUNDS

3. A tax refund is not income because a refund returns

money to a taxpayer that need not have been paid; a tax

refund is not an independent payment to a taxpayer;

although there is a distinction between a tax refund and

a tax credit, a tax credit can function like a tax refund in

some cases; the homestead property tax credit does not

confer income and is not a program that transfers new

money to individuals; rather, it is intended to rebate a

portion of the property taxes a person has already paid

(MCL 206.520[3]). Ferrero v Walton Twp, 295 Mich App

475.

892 295 M

ICH

TERMINATION OF COLLECTIVE-BARGAINING

AGREEMENT—See

ABOR

ELATIONS

TIME SPENT INVESTIGATING THE CRIME AS BASIS

FOR RESTITUTION—See

ENTENCES

TOLLING A SAVING PROVISION—See

EGLIGENCE

TORTS—See

OVERNMENTAL

MMUNITY

TORTURE—See

ENTENCES

TOTALITY OF THE CIRCUMSTANCES

SURROUNDING CONFESSIONS—See

RIMINAL

TRAILERS—See

ARCENY

TRUE BUSINESS CONNECTION FOR PURPOSES OF

VENUE—See

ENUE

UNAUTHORIZED DUPLICATION OF RECORDINGS

FOR GAIN—See

ONSTITUTIONAL

UNITARY BUSINESSES—See

AXATION

UPON DEFINED—See

NSURANCE

VAGUENESS—See

ONSTITUTIONAL

5, 6, 7

RIMINAL

NDEX

-D

IGEST

893

VENUE

ORPORATIONS

1. Under MCL 600.1621(a), venue is proper in the county

in which (1) a defendant resides, (2) a defendant has a

place of business, (3) a defendant conducts business, or

(4) the registered office of a defendant corporation is

located; there must be a true business connection be-

tween the defendant and the selected venue in order for

venue to proper; for purposes of determining venue,

conducting business does not include the performance of

acts merely incidental to the business in which the

defendant is ordinarily engaged; venue lies in the county

where the defendant conducts its usual and customary

business, and the activity must be of such a nature as to

localize the business and make it an operation within

the county. Hills & Dales General Hospital v Pantig, 295

Mich App 14.

2. In Michigan, a corporation is an entity distinct and

separate from its owners even when it is owned by a

single individual; under MCL 600.1621(a), ownership of

a percentage interest in a separate enterprise, without

more, does not qualify as “conducting business” for

purposes of establishing venue; in the context of estab-

lishing venue, the conduct of a separate entity may not

be attributed to another entity through its percentage

ownership interest. Hills & Dales General Hospital v

Pantig, 295 Mich App 14.

VICTIMS OF CRIME—See

ENTENCES

3, 4

VIOLATIONS OF PERSONAL PROTECTIONS

ORDERS—See

ONTEMPT

VOID FOR VAGUENESS—See

ONSTITUTIONAL

5, 6

VOLUNTARINESS OF CONFESSIONS—See

RIMINAL

VOLUNTARINESS OF MIRANDA WAIVERS—See

RIMINAL

894 295 M

ICH

WAIVER OF MIRANDA RIGHTS—See

RIMINAL

WAIVER OF RIGHT TO ATTORNEY—See

ONSTITUTIONAL

WARRANTLESS SEARCHES—See

EARCHES AND

EIZURES

1, 2

WEAPONS—See

EARCHES AND

EIZURES

WIRELESS COMMUNICATIONS DEVICES—See

RISONS AND

RISONERS

1, 2

WITNESSES

See, also,

EGLIGENCE

2, 4, 5

XPERT

ITNESSES IN

EDICAL

ALPRACTICE

CTIONS

1. Hoffman v Barrett (On Remand), 295 Mich App 649.

WITNESSES’ PRIOR ACTS—See

VIDENCE

WORDS AND PHRASES—See

RIMINAL

NSURANCE

EGLIGENCE

RISONS AND

RISONERS

CHOOLS

ENTENCES

2, 4

WRITS—See

ANDAMUS

WRONGFUL-DEATH SAVING PROVISIONS—See

EGLIGENCE

NDEX

-D

IGEST

895