One Court of Justice

Though the board of veterinary medicine completed its disciplinary proceeding outside the statutory one-year time limit, the Court of Appeals in Department of Community Health v. Anderson held that this statutory requirement conveyed no substantive rights on the disciplined veterinarian and failure to comply with it did not warrant dismissal of the disciplinary action. The Court also reaffirmed that an agency’s credibility determinations are virtually unreviewable.

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In People v. Dunigan, the Michigan Court of Appeals rejected the defendant’s argument that he could not properly be convicted of home invasion because his status as the victim’s boyfriend gave him the right to be present in her home.  The Court found it immaterial that defendant spent some nights at the victim’s home and that she considered him to be her boyfriend. According to the Court, a “dating relationship” alone does not “entitle[] a person to be present in their partner’s dwelling at will.” The Court also found it significant that the victim repeatedly refused defendant’s requests for a key, garage door opener, and access codes to her home.

In People v. Lemons, the Court of Appeals reversed the trial court and held drug evidence seized by officers admissable.  The Court of Appeals held that the police officers’ warrantless search of the defendant’s condominium was justified under the emergency-aid exception to the warrant requirement.  Under the emergency-aid exception to the warrant requirement, officers may enter a residence without a warrant if they reasonably believe, based on specific facts, that a person within the residence is in need of immediate aid.  In this case, having been called to the scene by anonymous neighbor, the officers reasonably believed that there had been a home invasion based on the fact that the front door open was in the middle of the day in November.  Thus, the exception applied and the evidence obtained should have been admitted.  Moreover, the Court of Appeals noted that, even if the search did not fall within the emergency-aid exception, the exclusionary rule would be inappropriate because the officers acted in good faith and in the interest of protecting the public.

The C corporation plaintiff in Lear Corporation v. Department of Treasury sought to treat certain deductible expenses differently for the purposes of his federal and state tax returns.  The Court of Appeals held that, under the plain terms of Michigan’s Single Business Tax Act, a C corporation’s tax base must be identical to its federal taxable income.  Therefore, any expenses deducted for federal tax return purposes must be deducted for state tax return purposes in the same manner.  The Court reversed the Court of Claims decision to the contrary and remanded the case.

The defendant in People v. Bowling pleaded nolo contendere to first-degree home invasion, second-degree murder and resisting and obstructing.  Police officers attempted to arrest the defendant and his brother while they were committing a home invasion.  The defendant attempted to flee, but he was eventually apprehended.  His brother used a gun that he had stolen from the home and shot and killed a police officer.  The police officer also shot and killed the defendant’s brother.  The trial court sentenced the defendant as a fourth habitual offender to concurrent sentences of 50 to 100 years for first-degree home invasion, 100 to 150 years for second-degree murder, and 3 to 15 years for resisting and obstructing.  Because the defendant did not preserve the issue of whether his sentences constituted cruel and unusual punishment, the Court of Appeals’ review was limited to whether plain error affected the defendant’s substantial rights.  A sentence of 100 years for second-degree murder was within the sentencing guidelines range, which was 365 to 1200 months or life.  The court stated that a “sentence within the guidelines range is presumptively proportionate, and a proportionate sentence is not cruel or unusual.”  Slip op. at 3.  And even though the defendant’s age of 49 years ensured that he would spend the remainder of his life in prison, the court concluded that fact alone did not render the punishment cruel or unusual, especially considering the defendant’s lengthy criminal record.  Accordingly, the court affirmed the defendant’s sentences, but remanded for the administrative task of correcting an error in the judgment of sentence.

The plaintiff’s now-deceased husband had contributed to a state tax-exempt 403(b) retirement account during his employment at Michigan State University.  After his retirement, he transferred the money from the 403(b) account to a private Individual Retirement Account.  All of the money in the IRA originated from the 403(b) account.   When the plaintiffs received distributions from the IRA, they deducted the amount from their adjusted gross income on their state income tax return.  The Treasury Department objected, claiming the amount was subject to state income tax.  The Michigan Court of Appeals explained in Magen v. Department of Treasury that the determination of whether the distributions from the IRA were subject to state taxation required analysis and harmonization of two provisions of the tax code.  Under the first provision, distributions from a 403(b) account are tax-free; the second provision requires taxation of distributions from private IRAs.  The parties did not dispute that if the plaintiffs had placed the money from the 403(b) account in a bank account or ordinary investment account, the interest would be taxable, but the principal would remain tax-free.  Accordingly, the Court of Appeals concluded that the principal balance, when placed in an IRA, remained tax-free.  The court affirmed the trial court’s grant of summary disposition to the plaintiff.  Judge Wilder dissented, claiming that the plain language of the statute required taxation of distributions from a private IRA.

Because Michigan’s septage waste disposal statute explicitly states it does not preempt local ordinances imposing stricter requirements, the Court of Appeals in Gmoser’s Septic Service LLC v Michigan Septic Tank Association upheld East Bay Township’s mandate that all township septic waste be disposed of in the Grand Traverse facility.

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Citizens Bank foreclosed on a property and made a successful bid sufficient to satisfy the mortgagor’s outstanding principal and interest.  In Citizens Bank v. Boggs, Citizens Bank then brought suit against guarantors of the mortgagor’s loan obligations to collect unpaid taxes and insurance premiums.  The circuit court granted summary disposition in favor of defendants, ruling that the bank’s bid was a “full credit bid” that completely extinguished the mortgagor’s (and thus guarantor’s) obligations.

The Court of Appeals confirmed that Citizen Bank’s bid was a “full credit bid” despite failing to include unpaid taxes or insurance premiums.  The Court held a mortgagee can recover taxes, interest, insurance costs which it pays prior to a foreclosure sale in a deficiency action.  Since Citizens Bank had not paid any of the unpaid taxes before the sale, the Court of Appeals affirmed the circuit court on that point.  However, the Court ruled that the guarantors could be liable for insurance premiums paid by the bank prior to the foreclosure sale.

In In Re Miller Osborne Perry Trust, a Trust featured a “terror clause” which forfeited the benefits of any beneficiary who challenged the admission of the Trust to probate or any of the Trust’s provisions. Upon the death of the settlor, a beneficiary petitioned the probate court for declaratory relief, seeking to determine whether he had “probable cause” to challenge amendments to the Trust, which would render the terror clause unenforceable under MCL 700.7113.   The beneficiary explicitly stated that he was not actually challenging the Trust, but merely seeking a determination on the existence of probable cause if he were to take such an action.  The Trustee asked the probate court to find that the petitioner-beneficiary’s request for declaratory relief itself triggered the terror clause.  The probate court found no probable cause for challenging the trust, but also found that the petition did not implicate the terror clause.

The Michigan Court of Appeals noted in dicta that Mark Perry probably failed to allege a justiciable controversy by explicitly not challenging the trust.  However, the lower court’s authority to make a probable cause determination was not at issue on appeal.  The Court affirmed that the beneficiary’s petition did not trigger the terror clause, as by its own terms it did not actually challenge the Trust.

The petitioners in Drew v. Cass County owned three homes, and they sought a principal residence exemption for one of those homes, located on an island in Dowagiac, Michigan.  The petitioners claimed to live at the Dowagiac home with their six children for six months out of the year, and they submitted driver’s licenses, voter registration cards and tax returns listing the home as their residence.  The Michigan Tax Tribunal (MTT) denied the exemption, relying on utility bills that indicated very little usage and testimony from an area resident that nobody lived on the island.  In addition, the petitioners owned two other homes, and the children’s school was located less than one minute from one of the other homes.  The Michigan Court of Appeals affirmed in a per curiam opinion, noting the limited nature of its review of MTT decisions.  The court found persuasive the fact that the petitioners did not offer any evidence to counter the MTT’s evidence regarding utility usage.  In addition, the petitioners’ driver’s licenses, voter registration cards and tax returns were not conclusive proof of principal residence, but merely factors for the MTT to consider, and the weight to accord such evidence is within the MTT’s discretion.  Accordingly, the Court of Appeals affirmed the MTT’s decision.