One Court of Justice

Michigan’s Use Tax Act imposes a “tax for the privilege of using, storing, or consuming tangible personal property in this state.”  MCL 205.93(1).  The Act provides a tax exemption for fuel, supplies and repairs for vessels that are 500 tons or more and engaged in interstate commerce.  The plaintiff in Andrie, Inc. v. Department of Treasury, argued that a tug and barge, which operated together, constituted a single “vessel” under the Act.  The Michigan Court of Appeals disagreed, holding that under a plain reading of the statute, the exemption is intended to apply to a single vessel that is 500 tons or more, not two vessels that are connected or that operate as a single unit.  “If the Legislature intended the exemption to apply to multiple vessels working in unison,” the court reasoned, “it easily could have stated as such.”  Therefore, the tugs, which were less than 500 tons, did not qualify for the tax exemption.

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In Frowner v. Smith, No. 305704, the Michigan Court of Appeals held that where a parent seeks custody of a child from a third party, the trial court must determine whether all the relevant factors, including the child’s best interests, demonstrate that the child should remain with the third party.  The parent does not need to make the threshold showing of a change in circumstance to gain custody.  Read more »

On April 26, 2012, the Michigan Supreme Court granted the request of the Judicial Tenure Commission for the appointment of Hon. Donald G. Miller as Master in In re Hon. Deborah Ross Adams, No. 144985.

In Eastbrook Homes, Inc. v. Department of Treasury, the Michigan Court of Appeals held that the improvements a builder made to property were taxable when the builder re-conveyed property back to the purchaser of custom built home.  In Eastbrook, the builder of custom homes would require the buyer of the home to quitclaim the property to the builder as security for the contract price for the home.  Once construction was complete and the buyer paid the contract price, the builder would quitclaim the property back to the buyer.  The treasury argued that the quitclaim deeds should be subject to tax under Michigan’s tax statutes which require a tax on the conveyance of “any interest in property,” subject to certain exemptions.  One exemption includes “a written instrument given as security” or “a discharge of the security interest,” and the builder argued that the conveyance was within the scope of this exemption.  The Court of Appeals concluded that the conveyance was taxable because there was no language in the quitclaim deed reserving any property rights to the buyer, and quitclaim deeds are generally considered to convey all of the grantor’s interest unless some interest is explicitly reserved.  Accordingly, the re-conveyance did more than just discharge a security interest; it actually transferred all of the property rights in the lot and the improvements made by the builder were therefore taxable.

In People v. Eisen, the Michigan Court of Appeals affirmed the defendant’s convictions of three counts of first-degree criminal sexual conduct and one count of third-degree criminal sexual conduct.  The Court held that the jury instructions regarding the first-degree charge were imperfect but sufficiently protected the defendant’s rights.  The Court reasoned that the instructions were plainly erroneous because they omitted the requirement that the victim must have been under thirteen years of age at the time of the crime, but the effect of this error was significantly reduced because the jury verdict form did reflect the requirement that the victim must be younger than 13.  With respect to the third-degree charge, which requires “force or coercion,” the Court held that there was sufficient evidence to sustain the conviction because of the long history of abuse, and the victim’s testimony that she was scared and believed the sexual conduct would happen whether she wanted it or not.  The court concluded that force or coercion exists “whenever a defendant’s conduct induces a victim to reasonably believe that the victim has no practical choice because of the history of child sexual abuse or for some other similarly valid reason.” 

Even though a mother had primary physical custody of a child under a judgment of divorce, it was still possible for the child to be considered “domiciled” with the father for purposes of Michigan no-fault personal protection benefits.  In Grange Insurance Co of Mich v. Lawrence, the Court of Appeals addressed whether the father’s no-fault insurer was responsible for personal protection benefits in connection with death of the child in a motor vehicle accident pursuant to the No-Fault Act’s requirement that personal protection insurance applies to relatives of the insured who are ”domiciled in the same household.”  The Court noted that there was no restriction that limits domicile to a single principal residence, and thus it was possible for the child to be domiciled with both parents.  Here, given that the child had possessions at both homes, and had a room at each where she spent significant time, she was domiciled with both parents and thus the father’s insurer was liable for personal protection benefits.  The Court determined that although the mother had primary physical custody through the divorce, the proper inquiry was where the child actually resided and here she resided with both parents.  Thus, the Court of Appeals affirmed the lower court’s judgment finding the father’s insurer liable for personal protection benefits.

In lieu of granting leave to appeal in People v. Garrett, No. 144213, the Michigan Supreme Court vacated the sentences of the trial court, and remanded the case for resentencing.  On remand, the trial court shall sentence the defendant within the appropriate sentencing guidelines range, or articulate on the record a substantial and compelling reason for departing from them.

The Court ordered that the application in People v. Zamora, No. 144218, be held in abeyance pending the decision in People v. Vaughn, No. 142627, pending on appeal before the Court.  The Court ordered that the application in Lemerand v. University of Michigan Regents, No. 144186, be held in abeyance pending the decision in McCahan v. Brennan, No. 142765, pending on appeal before the Court.

The Court denied 108 applications for leave to appeal, 7 motions for reconsideration, and 1 application to bypass a decision by the Court of Appeals.

On April 20, 2012, the Michigan Supreme Court held that a person could not be charged with resisting and obstructing a police officer if the person struggled with officers who had entered the person’s home unlawfully.   By statute, MCL 750.81d, it is a crime to resist or obstruct a police officer.  Under the common law, however, a person may resist illegal police conduct, including unlawful arrests and unlawful entries into constitutionally protected areas.  The Court considered whether the criminal statute abrogated that common-law right, and it held that it does not.

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In Kelly Services, Inc. v. Department of Treasury, No. 303736, the Court of Appeals held that royalties from the licensing of trademarks, trade names, and know-how should be excluded from total-sales calculations under the Single Business Tax Act (“SBTA”), MCL 208.51.  There, the taxpayer-petitioners had not included such royalty income in their calculations.  Treasury audited the petitioners and assessed a deficiency.  The petitioners appealed to the Tax Tribunal and moved for summary disposition.  The Tax Court granted the motion.  The Court of Appeals affirmed. Read more »

In People v. Goree, the defendant presented evidence that he shot his neighbor in self-defense, and the jury found him not guilty of two assault charges.  But after the trial court instructed the jury that self-defense cannot excuse a felony-firearm offense, the jury found the defendant guilty of the felony-firearm charge.  Felony-firearm prohibits possession of a firearm during the commission of a crime.  The Court of Appeals reversed and remanded, concluding that the trial court erred when it instructed the jury that self-defense cannot excuse a felony-firearm offense.  The Court of Appeals relied on Michigan Supreme Court precedent that held that self-defense applies to the charge of being a felon in possession of a firearm – in that case the defendant took the weapon from an assailant and then shot him in self-defense.  In this case, because the defendant presented evidence from which a jury could conclude – and in fact did conclude – that he acted in self-defense when he used his weapon, the trial court’s erroneous instruction was prejudicial.