One Court of Justice

On January 30, 2012, the Michigan Supreme Court denied 50 applications for leave to appeal and five motions for reconsideration. The Court vacated the September 2, 2010 judgment of the Court of Appeals and remanded Mitchell v. State Employees’ Retirement System, Case No. 141909, back to the State Employees’ Retirement Board for reconsideration of petitioner’s request for benefits in light of Nason v. State Employees’ Retirement System, 290 Mich App 416 (2010).  Additionally, the Court remanded the case of People v. Lackey, Case No. 143758, back to the Saginaw County Circuit Court, for a determination whether the defendant was properly awarded good-time and “trustee days” credit.  If necessary, the trial court was ordered to issue an amended Judgment of Sentence reflecting the proper sentencing credit and directed to forward a copy of the amended Judgment to the Michigan Department of Corrections.

The Court also vacated three Court of Appeals’ opinions and remanded the cases back to that court for further consideration.  Read more »

Rosa Parks’ Estate (Case No. 143419) was again the subject of two orders on January 27, 2012 by the Michigan Supreme Court.

In one order, the Court ordered the Wayne County Probate Court to implement a settlement agreement requiring installation of two individuals as co-PRs and co-trustees of the Will and Trust.  A month ago, the Court ordered that the Probate Court put these two individuals in charge of the Will and Trust, or explain why it was impracticable to do it.  The Probate Court chose to explain why it was impractical, but the Supreme Court rejected Wayne Probate’s analysis and required it be done anyway.

The Court also denied as untimely a request to seal its record, but noted that orders of the lower courts relating to sealing are still in effect.

Justice Markman dissented from a January 27, 2012 Order of the Supreme Court (No. 143563), and questioned why the bench was not moving more quickly on In Re Executive Message of the Governor.  The case is better known as the Brown v. Snyder lawsuit challenging the constitutionality of the Emergency Financial Managers statute.

The Order itself merely granted a motion for leave to file an amicus brief by the State AFL-CIO, and noted that the Executive Message ”remains under consideration.”  In August, the Governor filed an Executive Message asking the Circuit Court hearing the lawsuit to certify certain constitutional questions to the Supreme Court.  The matter is fully briefed, and Justice Markman’s dissent noted that either way, this case is of extreme public importance and needs to be decided without further delay.

Justices Cavanagh and Marilyn Kelly noted they would decline the request for certification of the Executive Message.

In an opinion on January 27, 2012 (No. 142076), the Supreme Court ordered the removal of 12th District Court (Jackson) Judge James M. Justin, based on the recommendation of the Judicial Tenure Commission.

The JTC’s master who heard the case found that Judge Justin, who has been on the bench since 1976, had committed seven of eight alleged counts of judicial misconduct.  Instances of misconduct which were found included: fixing his own, his wife’s and his staff’s traffic tickets; showing favoritism; and dismissing cases without presence of the prosecutor.  In addition, the Supreme Court directed that the JTC submit a bill of costs to assess against Judge Justin.

Although the entire bench joined the opinion, Justices Cavanagh, Marilyn Kelly, and Hathaway concurred in result only.

On January 24th, the Court of Appeals approved its November 2011 decision in People v. Allen, No. 299267 for publication.  In that case the Court was reviewing the trial court’s order for the payment of victim restitution to Blue Cross Blue Shield.  The defendant had been convicted of attempting to commit prescription fraud using a valid Blue Cross contract number.  The defendant was an employee for one of Blue Cross’ vendors and Blue Cross investigated the attempted purchase and made efforts to determine if there had been any other fraud.  The trial court awarded Blue Cross restitution based on the pro rata share of the Blue Cross department’s budget as determined by the amount of investigator time spent on this case.  The defendant argued that Blue Cross did not suffer financial harm because Blue Cross would have incurred the costs of the investigation (the salary of the investigator) regardless of the fraud.  The Court of Appeals affirmed the trial court’s conclusion that Blue Cross had been harmed and could be awarded restitution, reasoning that the loss of time that could have been spent on other things, amounts to direct financial harm.

In People v. Kabanuk, No. 301536, the defendant was convicted of criminal contempt for violating a personal protection order (PPO) when she lunged toward the PPO complainant in a courthouse and said, “I hate you,” among other things.  Citing People v. Freeman, 240 Mich. App. 235 (2000), the defendant claimed that the complainant was using the PPO as a “sword instead of a shield,” because the complainant came to the courthouse when she knew the defendant would be there.  The Court of Appeals explained that the sword/shield analysis in Freeman, which was contained in a footnote, referred to a poorly drafted PPO that prohibited the defendant from contacting the complainant at the defendant’s own address.  The Court of Appeals used this opportunity to “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.”

On Monday, January 23, 2012, the Michigan Supreme Court issued a statement regarding the motion for disqualification of Justice Markman in Lawrence v. Board of Examiners, Case No. 144191.  In his statement, Justice Markman explains that Plaintiff has filed a motion seeking to disqualify the Justice because he: 1) introduced opposing counsel as keynote speaker at a 2010 meeting as “one of the finest and most enterprising young men that I know”; and, 2) Justice Markman authored the forward to the opposing counsel’s book.

Justice Markman concluded no grounds exist for his disqualification under MCR 2.003.  He noted that he is judging the law, not the lawyer.  Merely knowing one of the attorneys involved in a case does not mean that the judge cannot remain impartial.  Further, Justice Markman stated that he has no financial interest in the book authored by opposing counsel, and therefore there is no reason that he cannot remain impartial in this case.

Justice Zahra has previously recused himself from this case because he was a member of the Board of Law Examiners in 2010 and participated in the decision that forms the basis of Plaintiff’s complaint.

On January 19, 2012, the Michigan Court of Appeals published its December 6, 2011 opinion in Malpass v. Department of Treasury, Nos. 299057-059, in which the court concluded that the plaintiffs could not treat income from two separate S corporations as income from a unitary business.  In this case, the plaintiffs filed amended tax returns, in which they applied apportionment factors under the Michigan Income Tax Act (ITA) to both companies as a unitary business.  The Treasury Department denied the amended returns, and the plaintiffs filed an appeal in the Court of Claims.  The Court of Claims granted summary disposition to the plaintiffs, determining that the plaintiffs’ businesses are unitary, and the ITA allowed apportionment as the plaintiffs had done in their amended returns.

The Court of Appeals first explained that under the Due Process and Commerce Clauses of the U.S. Constitution, states may not, when imposing an income-based tax, tax value earned outside their borders.  Accordingly, states employ a “unitary business principle,” which allows a state to tax multistate businesses on the share of business carried out in the taxing state.  The Court of Appeals recognized the “unitary characteristics” of the two businesses, but concluded that no provision in the ITA allows individuals “to combine their business income from separate businesses and then use a combined apportionment formula on the total.”  The Court of Appeals reversed the Court of Claims, holding that the plaintiffs may not combine business income from separate legal entities and then apportion it; rather, they must apportion income at the entity level.

Disclaimer:  Warner Norcross & Judd LLP represented the Appellees in this case.  An application for leave to appeal has been filed with the Michigan Supreme Court.

On January 19, 2012, the Michigan Court of Appeals issued its opinion in Woodbury v. Res-Care Premier, Inc., No. 297819.  Defendant Res-Care Premier, Inc. contracted to purchase a home from Defendant Ruth Averill in 2009.  The homeowners in Averill’s subdivision had entered into an agreement that required homeowners to offer the homeowners’ association, Plaintiff Center Woods, Inc., 30-day notice of any home sale and a right of first refusal.  Averill had not provided this notice.  However, Center Woods had failed to file its annual statements or pay its annual fees in 1992 and 1993, causing the corporation to be dissolved under MCL 450.2922.  Nonetheless, the trial court granted the plaintiffs summary disposition; it invalidated the sale because Averill had not complied with the notice and refusal provisions.  The Court of Appeals reversed, holding that Averill was not required to give notice to a dissolved corporation.

On January 19, 2012, the Michigan Supreme Court issued an order denying the plaintiff’s motion to disqualify Chief Justice Young and Justice Kelly in Parise v. Detroit Entertainment, LLC, No. 144072. Chief Justice Young and Justice Kelly rejected the plaintiff’s argument that an appearance of impropriety was created because Candice Miller for Congress donated to the Michigan Republican Party, and the Michigan Republican Party donated to their 2010 election campaigns. Chief Justice Young also held that the plaintiff’s allegations regarding her professional and consulting relationships were “too attenuated” to create an appearance of imprioriety.