State Supreme Court to hear oral arguments in arbitration jurisdiction case

The Michigan Supreme Court will hear oral arguments in Lansing Nov. 8-10. Summaries of the cases to be heard Nov. 8 follow: Engenius, Inc v Ford Motor Company (case no. 141977) Attorney for plaintiff Engenius Inc and Engenius-Eu Limited: Mayer Morganroth Attorneys for defendant Ford Motor Company: Edward H. Pappas, Phillip J. DeRosier Issue: EnGenius, Inc. and EnGenius-EU, Ltd. sued Ford Motor Company for breach of contract. Ford's motion to compel binding arbitration was granted, and the arbitration panel, by a vote of 2-1, rendered an award in the plaintiffs' favor, finding that Ford had breached two contracts with the plaintiffs. But the arbitrators first determined that one of the contracts did not include an arbitration clause. Was it proper for the arbitration panel to retain jurisdiction over that contract and render an award for its breach? Background: EnGenius, Inc. (EnGenius) and EnGenius-EU, Ltd. (EEU) sued Ford Motor Company, claiming that Ford had violated two contracts with the EnGenius companies. The first contract was a technical support agreement referred to by the parties as the "FACTS Contract." That agreement called for EnGenius to provide technical support for the "FACTS system," an end-of-the-line vehicle testing system, for the life of Ford's use of the system. In return, Ford agreed to exclusively use EnGenius for support, and EnGenius agreed to maintain the resources and personnel necessary to support the system as it was phased out. The second contract was a five-year agreement known as the "eCATS Contract," under which EnGenius was to develop and implement the replacement system for the outdated FACTS system. To pursue the eCATS Contract, EnGenius agreed to create a European affiliate known as EEU, which would support the eCATS system in Ford's European plants. After EnGenius sued, Ford filed a motion, arguing that the parties had agreed to resolve such claims through binding arbitration. The court granted Ford's motion, and the matter was submitted to a three-member arbitration panel. By a vote of 2-1, the panel awarded EnGenius $22,689,898.43: $1,239,885 in lost profits for Ford's breach of the FACTS Contract, $14,425,954 for Ford's breach of the eCATS Contract, and $1,946,131 for tortious interference. The circuit court confirmed the arbitration award. Ford appealed, and the Court of Appeals affirmed the circuit court in an unpublished per curiam opinion. With respect to the FACTS Contract, Ford objected to the arbitration panel's conclusion that the document containing the arbitration clause was not part of the parties' agreement. But, argued Ford, if the arbitration agreement was not part of the parties' FACTS Contract, then the arbitration panel did not have jurisdiction to rule that the contract was breached. The Court of Appeals rejected this argument, ruling that Ford's successful effort to send all claims in the parties' dispute to binding arbitration amounted to an implicit agreement to allow the arbitrators to decide the makeup of the FACTS Contract and adjudicate related claims. The panel also concluded that, "once the trial court determined that there was a valid agreement to arbitrate, granted Ford's motion for summary disposition, and sent the entire dispute to arbitration, the arbitrators lacked the power to divest themselves of jurisdiction over the matter." Turning to Ford's next argument, the Court of Appeals was not persuaded that the arbitration panel made an improper damages award with respect to the eCATS Contract; the Court of Appeals concluded that the arbitration panel's award was proper compensation for work that had already been completed. Finally, the Court of Appeals ruled that arbitration panel did not err by finding that Ford tortiously interfered with EEU's relationship with its own employees. Ford appeals. ---------- Jones v Detroit Medical Center (case nos. 141624 and 151629) Attorney for the plaintiff Trenda Jones, Booker T. Jones, and Margaret Jones: Michael R. Dezsi Attorney for the defendant Detroit Medical Center and Sinai-Grace Hospital: Anita Comorski Attorney for the defendants Danny F. Watson, M.D., and William M. Leuchter, P.C.: Marc Saurbier Issue: Jamar Jones died from a rare allergic reaction to an anticonvulsant drug his doctor prescribed. The personal representatives of Jones' estate sued the doctor and other health care providers for medical malpractice. The trial court ruled that the anticonvulsant was the proximate cause of Jones' death; the Court of Appeals affirmed in a split published opinion. In determining whether the drug was the proximate cause of Jones' death, should the court consider whether it was probable that the drug would cause a fatal allergic reaction? Where the defendant's negligence has not been established, should the court grant partial summary disposition to the plaintiffs on the proximate causation issue? Background: Jamar Jones was injured in a single-vehicle rollover accident and taken to the emergency room at Detroit Medical Center/Sinai-Grace Hospital. Dr. Danny F. Watson, a neurologist, saw Jones; according to Watson's notes, Jones could not recall how the accident happened, and reported that family members had told him that, on several occasions, they saw him staring blankly and could not easily get his attention. The doctor diagnosed "[p]robable partial complex seizure disorder" and prescribed tegretol, an anticonvulsant. Watson also ordered an electroencephalogram (EEG), which was normal. Jones began taking the medication as prescribed. A second EEG was normal, but Watson believed that he could not exclude a seizure disorder; he told Jones to continue taking the anticonvulsant. Several days later, Jones returned to the emergency room, where he reported having a fever, a sore throat, an inability to eat due to pain, and swollen lips and mouth. Doctors diagnosed Jones with Stevens-Johnson syndrome, a potentially fatal dermatological condition caused by a severe allergic reaction; less than two weeks later, Jones died of Stevens-Johnson syndrome, complicated by pneumonia. The parties' medical experts agreed that the odds of a patient developing the syndrome, sometimes referred to as toxic epidermal necrolysis, are from one in a million to one in several hundred thousand, and that there is no way to determine in advance which patients are likely to suffer such a reaction. The personal representatives of Jones' estate sued Watson, his professional corporation, and the hospital; the plaintiffs claimed that Jones' reaction to the tegretol caused his allergic reaction and death. Watson breached the standard of care by prescribing tegretol when he could not conclusively diagnose Jones as suffering from a seizure disorder, the plaintiffs asserted. The plaintiffs also alleged that Watson breached the standard of care by failing to advise Jones that he might have an allergic reaction to the medication. The plaintiffs argued that they were entitled to a ruling that the tegretol caused Jones' death. The defendants filed a counter motion, arguing the case should be dismissed because the doctor could not have foreseen that Jones would suffer the extremely rare allergic reaction. The trial court agreed with the plaintiffs that Jones was an "eggshell plaintiff" -- a plaintiff who was unusually susceptible to injury -- and that Watson and the other defendants could be held liable for his unusual allergic reaction. The trial court therefore granted partial summary disposition in favor of the plaintiffs and denied the defendants' motion. The court's order noted that the only issue remaining for trial was whether Watson breached the standard of care. The defendants sought leave to appeal to the Court of Appeals. In a split published opinion, the Court of Appeals affirmed the lower court, concluding that Stevens-Johnson syndrome was a foreseeable risk that was included in the literature accompanying the drug. Reasonable jurors could not dispute that the plaintiffs had shown the drug to be the proximate cause of Jones' death, the Court of Appeals majority said. The dissenting judge noted that, where there is no intervening cause, the test for proximate cause is not whether the plaintiff's injury was foreseeable. Rather, contended the dissenting judge, the proper test is whether the injury was the "natural and probable result of the negligent conduct." Because reasonable jurors could disagree on this question, the dissenting judge would have reversed the trial court's grant of partial summary disposition. The defendants appeal. ---------- People v Williams (case no. 141161) Attorney for the plaintiff the People of the State of Michigan: Charles F. Justian Attorney for the defendant Glenn Terrance Williams: Peter Ellenson Issue: The defendant entered a retail store intending to rob it, suggested to a clerk that he had a weapon, but fled without taking anything. The defendant pleaded guilty to armed robbery, but after sentencing, he sought to withdraw his guilty plea. The defendant argued that he could not be guilty of armed robbery because he did not take anything from the store. The trial court denied the motion, concluding that the defendant's attempt to commit a larceny was sufficient to support the armed robbery conviction. The Court of Appeals affirmed the defendant's conviction in a split published opinion. Is a completed larceny necessary to sustain an armed robbery conviction? Background: Glenn Williams entered the Admiral Tobacco store in Muskegon County and approached the store clerk, who was behind the cash register. Standing to the side of the register and holding his hand inside his coat, Williams told the clerk, "[Y]ou know what this is, just give me what I want." Williams fled, however, without obtaining anything. Williams was arrested and charged as a fourth felony offender, with armed robbery and assault with intent to rob while armed. Williams agreed to plead guilty to armed robbery. At the plea hearing, Williams admitted that he entered the Admiral Tobacco store with his hand under his coat, intending to steal money. The prosecutor and defense counsel agreed that the facts were sufficient to support a conviction for armed robbery. Williams was sentenced to 24 to 40 years in prison. Williams later moved to withdraw his guilty plea; he claimed that, because he did not take anything from the store, he was not guilty of armed robbery, MCL 750.529. The armed robbery statute states that a person is guilty of armed robbery if he "engages in conduct proscribed under section 530 [MCL 750.530]" and "in the course of engaging in that conduct, possesses a dangerous weapon or an article used or fashioned in a manner to lead any person present to reasonably believe the article is a dangerous weapon, or who represents orally or otherwise that he . . . is in possession of a dangerous weapon . . . ." MCL 750.530(1) explains that a person is guilty of robbery who, "in the course of committing a larceny . . . uses force or violence against any person who is present, or who assaults or puts the person in fear . . . ." Section 530 adds that the phrase "in the course of committing a larceny" includes "acts that occur in an attempt to commit the larceny, or during the commission of the larceny, or in flight or attempted flight after the commission of the larceny, or in an attempt to retain possession of the property." MCL 750.530(2). Relying on this subsection, the prosecutor responded that Williams could be convicted of armed robbery based on his attempt to commit a larceny. The trial court agreed and denied Williams' motion to withdraw his plea. Williams appealed to the Court of Appeals, which affirmed in a split published opinion. The majority concluded that the statutory language defining robbery and armed robbery, which the Legislature amended in 2004, now encompassed robbery attempts; a completed larceny is no longer required for an armed robbery conviction, the majority said. The dissenting judge did not agree, saying that the Legislature, in response to a ruling from the Michigan Supreme Court, People v Randolph, 466 Mich 532 (2002), merely sought to clarify that robbery "encompasses acts that occur before, during, and after the larceny." Williams appeals. ---------- People v Watkins (case no. 142031) Attorney for the plaintiff the People of the State of Michigan: Timothy A. Baughman Attorney for the defendant Lincoln Anderson Watkins: Gail Rodwan Issue: The defendant was charged with having a sexual relationship with a 12-year-old girl; at trial, the prosecution presented evidence that the defendant had an earlier sexual relationship with another minor. MCL 768.27a states that, "in a criminal case in which the defendant is accused of committing a listed offense against a minor, evidence that the defendant committed another listed offense against a minor is admissible and may be considered for its bearing on any matter to which it is relevant." The defendant challenges his convictions for criminal sexual conduct, arguing, among other matters, that the evidence admitted under MCL 769.27a deprived him of his constitutional rights. Does MCL 768.27a conflict with MRE 404(b) and, if so, does the statute prevail over the court rule, see McDougall v Schanz, 461 Mich 15 (1999), and Const 1963, art 6, § 1 and § 5? Does MCL 768.27a violate a defendant's due process right to a fair trial? Does MCL 768.27a interfere with the judicial power to ensure that a criminal defendant receives a fair trial, a power exclusively vested in Michigan courts under Article 6, section 1 of the Michigan state constitution? Background: Lincoln Watkins was charged with first-degree and second-degree criminal sexual conduct, based on allegations that he committed sexual acts with his then-12-year-old babysitter. The prosecution sought to admit evidence that Watkins had also committed similar sexual acts with a different girl who had occasionally babysat for Watkins' children. Watkins was tried three times, with his first trial ending in a hung jury and the second in a mistrial. At a third trial, following a ruling from the Court of Appeals, the trial court allowed the evidence of the other babysitter to be admitted. The Court of Appeals cited MCL 768.27a, which states that, "in a criminal case in which the defendant is accused of committing a listed offense against a minor, evidence that the defendant committed another listed offense against a minor is admissible and may be considered for its bearing on any matter to which it is relevant." A jury convicted Watkins of four counts of first-degree criminal sexual conduct and one count of second-degree criminal sexual conduct. The trial court sentenced Watkins to concurrent prison terms of 25 to 40 years for each first-degree criminal sexual conduct conviction, and to 10 to 15 years for second-degree criminal sexual conduct. Watkins appealed to the Court of Appeals. He argued that his right against double jeopardy was violated when the trial court tried him a third time, contending that the prosecutor's misconduct caused the mistrial. Watkins also argued that his constitutional rights were violated when the court admitted the evidence of the other babysitter; MCL 768.27a violated his fundamental right to the presumption of innocence, Watkins maintained. Watkins also argued that the statute conflicted with Michigan Rule of Evidence 404(b), which excludes evidence of "other crimes, wrongs, or acts ... to prove the character of a person in order to show action in conformity therewith." Moreover, the statute infringed upon the Michigan Supreme Court's authority to regulate the conduct of trial, Watkins said. He further argued that the trial court should not have admitted evidence under MCL 768.27a without first considering whether it was unfairly prejudicial and prohibited under MRE 403, which provides that even relevant evidence may be excluded "if its probative value is substantially outweighed by the danger of unfair prejudice, confusion of the issues, or misleading the jury ...." But the Court of Appeals affirmed Watkins' convictions in an unpublished opinion. The appellate court rejected his double-jeopardy argument, concluding that the record did not show that the prosecutor intended to provoke a mistrial. While agreeing that MCL 768.27a and MRE 404(b) conflict, the appellate panel noted that an earlier Court of Appeals panel had held that the statute prevails, allowing admission of the evidence in cases of sexual offenses against a minor. The Court of Appeals also held that, even if the trial court had conducted a balancing test under MRE 403, the evidence was admissible. Finally, the Court of Appeals was not persuaded that Watkins' due process rights were violated by the admission of the evidence. Watkins appeals. ---------- People v Pullen (case no. 142751) Attorney for the plaintiff the People of the State of Michigan: Sylvia L. Linton Attorney for the defendant Richard Kenneth Pullen: Edward M. Czuprynski Issue: The defendant has been charged with criminal sexual conduct and aggravated indecent exposure for acts allegedly committed against his 12-year-old granddaughter. The prosecution sought to introduce a 1989 police report that the defendant had also committed criminal sexual conduct against his then-16-year-old daughter. Under MCL 768.27a, "in a criminal case in which the defendant is accused of committing a listed offense against a minor, evidence that the defendant committed another listed offense against a minor is admissible and may be considered for its bearing on any matter to which it is relevant." But the trial court, acting on the defendant's motion, excluded the evidence under Michigan Rule of Evidence 403; the Court of Appeals affirmed the trial court. Does MCL 768.27a violate a defendant's due process right to a fair trial? Is the evidence described in MCL 768.27a admissible only if it is not otherwise excluded under MRE 403? Does MCL 768.27a interfere with the judicial power to ensure that a criminal defendant receives a fair trial, a power exclusively vested in Michigan courts under Article 6, section 1 of the Michigan Constitution? Background: Richard Pullen was charged with two counts of second-degree criminal sexual conduct and one count of aggravated indecent exposure, based on sexual contact with his then-12-year-old granddaughter. The granddaughter alleged that Pullen touched her breasts with his hands, touched her genitals under her clothes, and masturbated when he knew she was watching. Before the case went to trial, the prosecutor filed a notice of intent to use other acts evidence under MCL 768.27a. That statute states that, "in a criminal case in which the defendant is accused of committing a listed offense against a minor, evidence that the defendant committed another listed offense against a minor is admissible and may be considered for its bearing on any matter to which it is relevant." The prosecutor provided the trial court with a 1989 police report concerning sex abuse allegations made by Pullen's then 16-year-old daughter, who alleged that Pullen digitally penetrated her vagina and repeatedly touched her breasts, buttocks, and genital areas. She also stated that Pullen walked in on her when she was unclothed, and that he arranged to expose himself to her when he was bathing. Pullen allegedly admitted some of his daughter's accusations, but no criminal charges were ever filed. Pullen moved to exclude the evidence of the earlier sexual abuse, arguing that the evidence's probative value was substantially outweighed by the danger of unfair prejudice to him. The trial judge agreed, finding that the evidence should be excluded under Michigan Rule of Evidence 403. MRE 403 provides that evidence, even if relevant, "may be excluded if its probative value is substantially outweighed by the danger of unfair prejudice, confusion of the issues, or misleading the jury ...." The trial judge reasoned that he was required to perform the MRE 403 balancing test before admitting evidence under MCL 768.27a. As to the evidence that Pullen sexually abused his daughter, the prejudicial impact outweighed the probative value because the evidence involved more serious facts than those in the present case, the trial judge concluded: "Should this evidence be presented to the jury, it is highly probable that the jury would not be able to separate the two cases and would likely decide the case based on emotional impact rather than logical reasons. Thus, this evidence does not survive the balancing test of MRE 403 and is not admissible." The trial court also ruled that it would be "fundamentally unfair and a violation of due process" to force Pullen to defend accusations from over 20 years ago for which criminal charges were never filed. The prosecutor sought to overturn the trial court's ruling, but the Court of Appeals affirmed the trial court in an unpublished per curiam opinion. The panel noted that a prior Court of Appeals panel had upheld the constitutionality of MCL 768.27a in People v Pattison, 276 Mich App 613 (2007). In Pattison, the Court of Appeals also held that, even when evidence is admissible under MCL 768.27a, a trial court must weigh the probative value of the evidence against its prejudicial effect under MRE 403. In Pullen's case, the Court of Appeals ruled, the trial court properly considered whether the evidence should be excluded under MRE 403 as unfairly prejudicial. The appellate court further held that Pullen's case presented a "close" question, but that the trial court gave a reasoned explanation for its decision. Accordingly, the trial court did not abuse its discretion in deciding to exclude the evidence, the Court of Appeals concluded. The prosecutor appeals. Published: Mon, Nov 7, 2011

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