One Court of Justice

In Walter Toebe Constr. Co. v. Department of Treasury, No. 291764, published on Sept. 2, 1010, after release on July 27, 2010, the Michigan Court of Appeals considered whether property is considered industrial personal property based on the definition contained in the general property tax act (“GBTA”), rather than the assessor’s classification.  The now-repealed single business tax act defined industrial personal property as personal property “classified as industrial personal property” under the GBTA.  Thus, the Court of Appeals concluded, the SBTA did not import the definition of industrial personal property from the GBTA, but rather the classification of the property by the tax assessor.  Because the tax assessor had determined the property was commercial personal property – albeit erroneously – the Treasury Department was entitled to rely on that classification and was not required to make an independent assessment of the property.

In an opinion released after the Michigan Supreme Court’s July 31 end of term, the Court reinvigorated the latent-ambiguity doctrine by holding that the word “all” in a liability release did not actually mean “all” where extrinsic evidence demonstrated that the parties to the release meant less than “all.”

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A search of the defendant’s car after he was arrested and in police custody was unconstitutional under Arizona v. Gant, 129 S. Ct. 1710 (2009), decided on the day of the defendant’s suppression hearing.  In Gant, the Supreme Court ruled that police may search a vehicle incident to an arrest only “when the arrestee is unsecured and within reaching distance of the passenger compartment at the time of the search,” or when it is “reasonable to believe evidence relevant to the crime of arrest might be found in the vehicle.”  129 S. Ct. at 1719.  In People v. Short, No. 292288 (published Aug. 26, 2010), the Michigan Court of Appeals explained that Gant applied retroactively, and the police search of the defendant’s car was unconstitutional.  But exclusion of evidence is not an automatic remedy for an unlawful search.  The exclusionary rule is designed to deter police misconduct, and therefore, courts have recognized a good-faith exception to the rule.  Addressing this issue of first impression, the Court of Appeals concluded that an officer’s reliance on valid case law which was later overturned may form the basis of an officer’s good faith and avoid exclusion of the disputed evidence at trial.  Because the search was lawful under well-established case law at the time of the arrest, the Court of Appeals upheld the trial court’s application of the good faith exception to the exclusionary rule.

Defendant Tion Terrell was convicted of assault with intent to murder and related crimes after a non-lethal shooting incident.  After his conviction, the defendant moved for a new trial and offered the testimony of his codefendant.  The codefendant, who had invoked his Fifth Amendment privilege against self-incrimination and was acquitted at trial, testified post-trial that the victim had been armed and that someone other than the defendant shot the victim.  The trial court granted a new trial based on newly discovered evidence.  In People v. Terrell, No. 286834 (published Aug. 26, 2010), the Court of Appeals reversed the order for new trial, holding that the testimony of the codefendant was not newly discovered evidence, and therefore a new trial was not warranted.  In this issue of first impression, Judge Borrello, joined by Judge Meter, adopted the approach of the majority of federal circuit courts:  a codefendant’s post-trial exculpatory testimony constitutes newly available evidence, but it is not newly discovered if the defendant knew or should have known of the evidence before or during trial.  The Court of Appeals stressed that the codefendant’s testimony was not new to the defendant, and the defendant did not seek available remedies to overcome the potential prejudice caused by his codefendant’s refusal to testify, such as severance of trial and limited immunity.  Judge Borrello’s opinion can be found here.  Judge Shapiro concurred in the result, but believed that the Court of Appeals should have applied the test articulated by the Court of Appeals for the First Circuit, which assesses such testimony on a case-by-case basis, rather than applying a bright-line rule.  You can find Judge Shapiro’s concurring opinion here.

The Michigan Court of Appeals published its per curiam opinion on August 12, 2010 in Dawe v. Dr. Reuvan Bar-Levav & Assocs., P.C., No. 269147, on remand from the Michigan Supreme Court.  The Supreme Court reversed the Court of Appeals™ original opinion and held that a patient may pursue a common-law, medical-malpractice claim against her treating mental-health professional if the professional negligently placed the patient in danger of harm from another patient.  Our discussion of the Michigan Supreme Court™s March 30, 2010 decision remanding the case to the Court of Appeals can be found here.

On remand, the Court of Appeals largely adopted Judge Smolenski™s dissent in the earlier Court of Appeals™ opinion and concluded that defendant psychiatrists owed a duty of care to their patient to protect her from harm by a third party.  Further, the Court of Appeals held that a reasonable jury could conclude that the defendants proximately caused the plaintiff™s injuries “ being shot by defendants™ former patient with whom she had been placed in group therapy. The defendants knew or should have known that the former patient would form improper emotional attachments to persons in his group therapy and that he might seek to harm those persons and therefore should not have placed the former patient in group therapy. Read more »

In a case of first impression, the Michigan Court of Appeals ruled in Cunningham v. Cunningham, No. 285541, that workers™ compensation benefits received during a marriage are marital property only to the extent that they compensate for wages lost during the marriage.  The Court further ruled that the workers™ compensation benefits paid during the marriage, but for wages lost by one of the parties before the marriage, were separate property.  However, when these separate funds were used to purchase the jointly titled marital home, they were commingled and became marital property. Read more »

On July 1, 2010, the Michigan Supreme Court published its Opinion in Foster v. Wolkowitz, holding a presumptive award of custody in an acknowledgment of parentage does not constitute an “initial custody determination” under the Uniform Child-Custody Jurisdiction and Enforcement Act (UCCJEA), MCL § 722.1101 et seq.  While a  presumptive award of custody is “part of a valid agreement into which the parents entered, and may be set aside only when a custody determination has been made by the judiciary,”  the presumptive award of custody was not a court order and cannot be an initial custody determination under the UCCJEA.  Therefore, because the UCCJEA requires initial custody determinations take place in the child’s home state, unless the home-state court expressly declines jurisdiction, and Illinois has been found to be the child’s home state, the Michigan courts were without power to act unless and until the Illinois courts declined jurisdiction. Read more »

On June 29, 2010, the Court of Appeals published Judge Shapiro’s majority opinion in McNeel v. Farm Bureau Insurance Company of Michigan, No. 285008.  This case arose out of a denial of insurance coverage for a house that was destroyed by fire on March 18, 2003.  On April 17, 2003, the insurer denied coverage on the grounds that the house was vacant and/or unoccupied.  The insurer contends that the trial court erred in denying its motion for summary disposition on the statute of limitations.  The relevant statute requires such an action “be commenced within 1 year after the loss . . .  The time for commencing an action is tolled from the time the insured notifies the insurer until the insurer formally denies liability.”  MCL § 500.2833(1)(q).  Here, the insurer argues that the claim filed in October 2004 was untimely, based on its formal denial of coverage via letter in June 2003.  The majority of the Court of Appeals disagreed, finding that there was a question of fact as to whether the June letter constituted a “formal denial” because, subsequent to the denial, the insured (through its independent claims adjuster) communicated with the insurer challenging the basis for the denial and the insurer considered the evidence and arguments, and then issued another denial letter in October 2003.  Specifically, the Court found that, under these circumstances, it was reasonable to infer that the insurer “withdrew its formal denial while it reinvestigated the claim.”  Thus, the Court upheld the denial of summary disposition to the insurer, and also made ancillary rulings about the jury instructions, interest, and costs.  Judge Kelly dissented from the majority’s opinion on the statute of limitations, arguing that it was undisputed that the insurer never withdrew its denial of coverage and, in fact, maintained that denial in writing several times.  Additionally, Judge Kelly argued that the affidavit from the independent adjuster that the carrier’s representative was reconsidering the claim in light of subsequent information was hearsay insufficient to create a question of fact.

In D’Andrea v. AT&T, No. 288483, defendant AT&T possessed a six-foot “Easement for Public Utilities” at the back of plaintiffs’ lot.  In the 1970s, AT&T installed a “crossbox cabinet” on the easement.  In 2005, AT&T replaced that cabinet with a new one, and also added additional cabinets, both above and beneath the ground.  The cabinets were placed on a concrete slab surrounded by bushes, and AT&T declined plaintiffs’ request to move the cabinets off of Plaintiffs’ property.  All of these items were within the easement’s boundaries, but plaintiffs complained that the new cabinets materially increased the burden on their property, because the new cabinets were bigger, reduced plaintiffs’ useable backyard area by almost half, and diminished the market value of the property.  The trial court granted summary disposition to AT&T.

The Court of Appeals reversed, holding that a fact finder could determine that AT&T’s activities went beyond the reasonable exercise of the use granted by the easement, even if those activities were confined entirely to the easement.   In reaching that conclusion, the Court rejected AT&T’s argument that the Land Division Act was relevant to the inquiry, and also rejected AT&T’s reliance on the fact that the local city and county authorities issued building permits for the cabinets.  The case was remanded for further proceedings.

A trial court may not deny a party the use of a peremptory challenge on the basis of the court’s desire to attain a racially proportionate jury, because the selection of jurors based on race violates the equal-protection guarantees of the federal and state constitutions.  So held the Michigan Supreme Court in Pellegrino v. Ampco System Parking, No. 137111, setting aside a $14.9 million jury verdict and remanding for a new trial.

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On Tuesday, June 22, 2010, the Michigan Court of Appeals published its opinion in Rose v. Rose, Case No. 286568.  In Rose, the Court of Appeals considered when a trial court may modify a party’s spousal support obligation, under MCR 2.612(C)(1), where the Judgment of Divorce provides that the spousal support award is nonmodifiable.  Ultimately, the Court of Appeals concluded that the failure of defendant’s business did not constitute an extraordinary circumstance allowing the Court to modify the spousal support award, pursuant to MCR 2.612(C)(1)(f), where vacating this provision of the Judgment of Divorce would detrimentally affect plaintiff-wife’s substantial rights.  A copy of the Court’s opinion is here.  Our previous post discussing the oral argument in Rose can be found here. Read more »

On June 22, 2010, the Court of Appeals released Judge Borrello’s opinion in People v. Bryant, No. 280073,involving a claim that a defendant’s Sixth Amendment right to an impartial jury, drawn from a fair cross-section of the community, was violated when his Kent County jury venire of 42 only had one African-American.  This argument had been made previously immediately after the defendant’s conviction, and the Court of Appeals had remanded the matter for an evidentiary hearing.  The trial court conducted such hearings, but found no Sixth Amendment violation and upheld the conviction.  The Court of Appeals disagreed, finding an unintentional computer error systematically caused underrepresentation of African-Americans on jury venires, and reversed and remanded the case for a new trial. 

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The Court of Appeals has just published its opinion in United Services Auto Association v. Michigan Catastrophic Claims Association, No. 289579, as authored by Judge Donofrio.  This case arises from costs associated with a Florida accident, which were paid under a Michigan no-fault insurance policy and for which the insurer seeks statutory reimbursement from the MCCA.  The trial court concluded that because the insurer did not pay a premium to MCCA for this vehicle, it was not entitled to reimbursement and awarded summary disposition to MCCA.  On appeal, the Court of Appeals concluded that the car involved in the accident was not required to be licensed in Michigan and thus the statutory duty to reimburse was not triggered, and affirmed summary disposition on that basis.  Specifically, the Court relied on the facts showing that the insured had moved to Florida, purchased/registered the car in Florida, and had never driven (or intended to drive) the car in Michigan, to conclude that the vehicle was not required to be registered in Michigan, and thus not required to be insured in Michigan.

On June 22, 2010, the Court of Appeals approved its per curiam opinion in TBCI, P.C. v. State Farm Mutual Automobile Insurance Co., No. 288853, for publication.  In this case a service provider was seeking to recover no-fault benefits to cover services provided to an insured.  In prior litigation between the insured and the no-fault insurer, a trial court had determined that the relevant claim was fraudulent and rejected the claim for benefits.  The Court of Appeals found that initial determination of fraud barred the service provider’s subsequent litigation by res judicata.  Specifically, it held that the insurer stood in the shoes of the insured in asserting the insurance claim, and thus was a privy of the insured and bound by the legal judgments that applied to the insured.  Therefore, the Court of Appeals affirmed the trial court’s award of summary disposition of the service provider’s claim against the no-fault insurer.

In Shepherd Montessori Center Milan v. Ann Arbor Charter Township, the Michigan Supreme Court rejected a religious entity’s equal-protection challenge to the denial of a zoning variance because the religious entity failed to demonstrate disparate treatment of similarly situated entities based on religion.  Accordingly, the Court reversed the decision of the Court of Appeals and reinstated summary disposition in favor of the defendants.  Justice Hathaway wrote the unanimous decision for the Court. Read more »

In Woodman v. Kera LLC, the Michigan Supreme Court ruled that a preinjury liability waiver signed by a parent on behalf of his or her child are not enforceable under common law because, absent special circumstances, a parent has no authority to bind his or her child by contract.  The Court unanimously voted to affirm the result of the Court of Appeals decision, with four justices voting to uphold the Court of Appeals’ reasoning.  Justice Young wrote the lead opinion joined, for the most part, by Chief Justice Kelly and Justices Hathaway and Weaver.  Justice Cavanagh concurred in the result, albeit because he believed that the poorly drafted release did not apply.  Justices Corrigan and Markman also concurred in the result, but dissented from the reasoning of the lead opinion and would have held that a parental preinjury waiver is enforceable. Read more »

In 1972, the creators of a subdivision in Hillsdale, Michigan, adopted covenants that restricted all structures in the subdivision to residential use.  The covenants had a 25-year duration, “after which time said covenants shall be automatically extended for successive periods of ten years unless an instrument signed by a majority of the then owners of the lots had been recorded, agreeing to change said covenants in whole or in part.”  Defendants began operating a hair salon in their home in 2007 and, when Plaintiffs complained, persuaded a majority of their neighbors to sign an amendment to the covenant—in the middle of a 10-year renewal period—allowing for certain home-based businesses, including hair salons.  The trial court granted summary disposition to Defendants on Plaintiffs’ claims for declaratory and injunctive relief, but the Court of Appeals reversed, holding that the plain language of the renewal provision indicated that the 10-year period was a “restriction as to the frequency of amendment by less than a unanimous vote.”  Because the amendment was by less than unanimous vote, it could not take effect until the end of the 10-year extension period, i.e., in 2017.  Accordingly, Plaintiffs were entitled to summary disposition.  The case is Brown v. Martin, No. 289030.

On May 18, 2010, the Court of Appeals issued its per curiam opinion in People v. Fyda, No. 288421, affirming defendant’s jury conviction of solicitation of murder, and felony-firearm.  This case arose out of defendant’s expressed desire to kill his ex-wife.  A friend of the defendant contacted the police when he believed that the ex-wife was in danger, after she filed a motion seeking to recover damages related to mortgage payments.  The friend worked with the police to set up a meeting between defendant and an undercover officer posing as a killer for hire.  At the meeting, defendant asked the officer to “pop” his ex-wife, and gave him a handgun, pertinent information regarding his ex-wife, and a down payment of $200 on the total price of $700.

The jury convicted defendant under MCL § 750.157b(2), finding him guilty of solicitation to commit murder.  On appeal, defendant claimed ineffective assistance of counsel, due to his trial counsel’s failure to object to the trial court’s jury instructions, which included solicitation to inflict great bodily harm or act with a wanton and willful disregard of the likelihood that one’s behavior is to cause death or great bodily harm.  Relying on the same rationale as cases dealing with the crime of assault with intent to commit murder, the Court of Appeals held that a defendant cannot be found guilty of solicitation to commit murder without a finding of the necessary specific intent—an actual intent to kill.  Although the Court of Appeals concluded that trial counsel should have objected to this incorrect jury instruction, the Court of Appeals also concluded that this error did not affect the outcome of the case because there was consistent testimony that indicated premeditation. Read more »

On May 13, 2010, the Court of Appeals published its opinion in Miller v. Citizens Insurance Company, No. 290522.  In this case, a medical center that had provided services to an injured plaintiff was challenging the trial court’s decision to award the plaintiff’s attorney one-third of the medical expenses that the no-fault insurer agreed to pay pursuant to a settlement with the plaintiff.  In an opinion authored by Judge Cavanagh, the Court of Appeals affirmed the award of fees to the plaintiff’s attorney.  The Court of Appeals focused on the fact that there was a contingent fee agreement between the plaintiff and his attorney that entitled the attorney to a one-third share of any recovery—which, in this case, included the medical expenses owed to the center.  The center argued that this had the effect of reducing recovery they were entitled to, and that they did not have any agreement with the attorney for such a reduction.  In response, the Court of Appeals noted that the center was aware that plaintiff’s attorney was pursuing the recovery of these expenses, but chose not to intervene in the litigation or otherwise assert its rights independently.  Additionally, the Court of Appeals noted that the center received the benefits of the plaintiff’s attorney’s efforts and the resulting settlement, without incurring any of the expenses associated with obtaining that result.  Thus, the Court of Appeals cited the “common fund” rule that allows such fee recovery where the prevailing party creates a fund that benefits himself and others.  Here, the settlement benefited both the plaintiff and the medical providers, including the center.

On May 11, 2010, the Court of Appeals published its opinion in People v. Baker, No. 286769.  Through an opinion authored by Judge O’Connell, the Court of Appeals ordered that one of the defendant’s two home invasion convictions be vacated.  It was undisputed that the two separate convictions were based on a single, continuous home invasion.  The defendant argued that these multiple convictions violated constitutional protections against double jeopardy.  The prosecution argued that, because the defendant both intended/committed a sexual assault during the home invasion, and intended/committed larceny during the home invasion, the separate home invasion counts involved different essential elements and supported two separate convictions.  The Court of Appeals disagreed, finding that the essential element was the same: intent to commit, or commission of a felony.  The Court characterized the prosecution’s case as two different theories to establish that single necessary element.  However, two different theories did not support two separate convictions.  Therefore, the Court of Appeals ordered that one of the home invasion convictions be vacated.