The Michigan Supreme Court will hear oral arguments November 4 and 5, beginning at 9:30 a.m. each day. The Court's oral arguments are open to the public.
Please note: the summaries that follow are brief accounts of complicated cases and may not reflect the way that some or all of the Court's seven justices view the cases. The attorneys may also disagree about the facts, the issues, the procedural history, or the significance of their cases. Briefs in the cases are online at http://www.courts.michigan.gov/supremecourt/Clerk/MSC_orals.htm. For further details about the cases, please contact the attorneys.
THURSDAY, NOVEMBER 4
MORNING SESSION:
WILCOX, et al. v STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY (case no. 138602)
Attorneys for plaintiffs Catherine Wilcox, individually, and as Next Friend of Isaac Wilcox, a minor: William W. Decker, Jr.
Attorney for defendant State Farm Mutual Automobile Insurance Company: Daniel S. Saylor
Attorney for amicus curiae John A. Braden: John A. Braden
Attorney for amicus curiae Michigan Catastrophic Claims Association: Jill M. Wheaton
Attorney for amicus curiae Coalition Protecting Auto No-Fault: Liisa R. Speaker
Attorney for amicus curiae Insurance Institute of Michigan: John A. Lydick
Trial Court: Kent County Circuit Court
At issue: After her son was injured in an automobile accident, the plaintiff sued the defendant insurance company, seeking personal protection insurance benefits under Michigan's no-fault act. She requested that the insurer cover the purchase of a handicap-accessible home, modifications to the home, and past rental costs. The trial court ruled that the insurance company was not liable for the family's entire housing costs, but only for the increased costs caused by the son's injuries. To what extent is the insurer liable under the no-fault act, MCL 500.3101 et seq., for housing expenses, modifications, and accommodations associated with the plaintiff's son's care? Was Griffith v State Farm Mutual Automobile Ins Co, 472 Mich 521 (2005), correctly decided?
Background: In November 2004, Catherine Wilcox's four-year-old son Isaac was injured in an automobile accident, leaving him a quadriplegic who cannot breathe on his own. State Farm Mutual Automobile Insurance Company was the Wilcox family's no-fault automobile insurance carrier at the time of the accident. Under MCL 500.3105(1), a no-fault insurer must pay benefits for "accidental bodily injury" arising out of the ownership, operation, maintenance, or use of a motor vehicle. MCL 500.3107(1)(a) provides that no-fault benefits are payable for "[a]llowable expenses consisting of all reasonable charges incurred for reasonably necessary products, services and accommodations for an injured person's care, recovery, or rehabilitation."
Four months after the accident, Isaac was discharged from a long-term pediatric ventilation facility at the University of Michigan. Upon his discharge, Isaac moved with his family into a partially barrier-free apartment in Howell. State Farm agreed to pay the full amount of rent in exchange for the family's agreement to pay for the utilities, maintenance, and other similar costs.
Soon afterward, the Michigan Supreme Court released its opinion in Griffith v State Farm Mutual Automobile Ins Co, 472 Mich 521 (2005). Griffith concerned the insurance company's obligation under the no-fault act to reimburse the plaintiff for food expenses. The Supreme Court held in Griffith that the insurance company was not obligated to cover the food expenses. The majority reasoned that that there was no evidence that the injured person's diet was different than that of a non-injured person, and that the food expenses were not part of his "care, recovery, or rehabilitation." To be covered, the plaintiff's expenses would have to be "casually connected to" his injury, the majority stated.
In the wake of Griffith, State Farm took the position that it was liable only for the amount in excess of the family's pre-accident rental cost; moreover, State Farm said, it was only required to pay that portion of the rent that was attributable to Isaac's injuries. State Farm began paying two-fifths of the total monthly rent, which covered Isaac and a caregiver. State Farm attributed the remaining three-fifths of the monthly rent payment to the other three Wilcox family members.
Wilcox sued State Farm, seeking reimbursement of the family's housing costs. After filing suit, the family moved to a $280,000 home with handicap-accessible features. In addition, the Wilcox family wanted modifications to the 4,000-square-foot home that would cost an estimated $260,000.
State Farm filed a motion for partial summary disposition, asking the trial judge to rule as a matter of law that State Farm was not liable for the full purchase price of the Wilcox family's home, but was only responsible for the reasonable costs associated with reasonably necessary modifications for Isaac's care, recovery, and rehabilitation. Wilcox filed a counter-motion for summary disposition. Among other things, she argued that State Farm was liable for $22,500.00 in past unpaid rental expenses, the full purchase price of the home, and the full cost of home modifications.
The trial judge ruled that State Farm was only liable for increased housing costs arising from Isaac's injuries. The judge further held that it was a question of fact for a jury to determine those costs.
Wilcox filed an application for leave to appeal in the Court of Appeals. About six weeks later, and before the Court of Appeals had made any ruling on her case, she filed an application for leave to appeal in the Supreme Court, asking for leave to bypass the Court of Appeals. The Court of Appeals issued a peremptory order remanding this case to the trial court for further proceedings. The panel held that "[w]hether a cost constitutes an allowable expense is a question of law and so, it is to be determined by the court, not the jury." The Court of Appeals directed the parties to submit evidence on each expense at issue to the trial court. After the Court of Appeals made this ruling, the Supreme Court granted Wilcox's application for leave to appeal.
PEOPLE v FACKELMAN (case no. 139856)
Prosecuting attorney: Ana I. Quiroz
Attorney for defendant Charles V. Fackelman: John R. Minock
Trial Court: Monroe County Circuit Court
At issue: The defendant in this criminal case presented an insanity defense. A hospital psychiatrist examined the defendant and prepared a report, but did not testify at the trial, and his report was not admitted into evidence. Both experts who did testify at the defendant's trial reviewed the psychiatrist report, and the prosecutor used it at trial to impeach an expert witness for the defense. The jury found the defendant guilty but mentally ill. The Court of Appeals concluded that the prosecutor properly impeached the defense expert with the report, but improperly elicited testimonial hearsay during the examination of his own expert, violating Crawford v Washington, 541 US 36; 124 S Ct 1354; 158 L Ed 2d 177 (2004). However, that error was harmless, the Court of Appeals concluded. Was the content of the report testimonial in nature under Crawford? Did the introduction of the psychiatrist's opinion regarding the defendant's mental state constitute impermissible hearsay? Was any error harmless?
Background: Charles Fackelman's teenaged son was killed in an auto accident in March 2006. A year later, Fackelman drove to the house of Randy Krell, whom he blamed for his son's death; Fackelman threatened Krell and another person with a gun. Fackelman fled, but was eventually found and committed to a hospital. While there, he was examined by a psychiatrist, Dr. Agha Shahid. In his report, Shahid diagnosed Fackelman as suffering from a single episode of major depression, without psychosis.
Fackelman was charged with first-degree home invasion, two counts of felonious assault, and one count of felony-firearm. Fackelman claimed he was insane at the time of the offenses, and he called an expert witness who supported this claim. The prosecutor also called an expert witness, who concluded that Fackelman was depressed but not legally insane. When the prosecutor examined the two expert witnesses at trial, he read significant portions of Shahid's report, and he stressed Shahid's opinions during his closing argument. Shahid did not testify at trial, and his report was not admitted into evidence. The jury returned a verdict of guilty but mentally ill.
Fackelman appealed to the Court of Appeals, and asked that the court remand the case to the trial court for an evidentiary hearing concerning the prosecutor's use of Shahid's report, and whether defense counsel provided constitutionally ineffective representation. Among other things, Fackelman argued that the use of the report at trial violated his constitutional right to confront the witnesses against him, as described in Crawford v Washington, 541 US 36; 124 S Ct 1354; 158 L Ed 2d 177 (2004). In Crawford, the U.S. Supreme Court held that the Sixth Amendment's Confrontation Clause bars "admission of testimonial statements of a witness who did not appear at trial unless he was unavailable to testify, and the defendant had had a prior opportunity for cross examination."
The Court of Appeals granted the motion to remand. After holding an evidentiary hearing, the trial court affirmed Fackelman's convictions. The Court of Appeals then reviewed the trial court's ruling, and affirmed Fackelman's convictions in an unpublished per curiam opinion. The Court of Appeals held that the prosecutor properly used Shahid's report to impeach the defense expert. While the prosecutor erred in using the report to bolster questioning of the prosecution's expert, this error was harmless, the panel said, because there was ample other evidence to support the jury's verdict. The appeals court also rejected Fackelman's claim that his counsel provided constitutionally ineffective representation. Fackelman appeals.
TUS v HURT, et al. (case no. 139769)
Attorney for plaintiffs Dan-Kai Tus and Nu Chen Yen Tus: Mark H. Fink
Attorney for defendant Sterling Mortgage & Investment Company: Eden J. Allyn
Attorney for amicus curiae Michigan Bankers Association, Michigan Credit Union League, Michigan Association of Community Banks, Michigan Mortgage Lenders Association, and Michigan Mortgage Professionals Association: James H. Breay
Trial Court: Washtenaw County Circuit Court
At issue: The plaintiffs purchased property that the seller had mortgaged. The bank that issued the mortgage had misplaced the file, and the mortgage was not paid off at the time of the sale. Five years later, the bank foreclosed upon the property. The plaintiffs filed a quiet title action, seeking to obtain clear title to the property. The trial court held that the bank's delay prevented it from bringing a foreclosure action, but it awarded the bank a money judgment in the amount owed on the mortgage, and imposed a lien on the plaintiffs' property. The Court of Appeals reversed, holding that equity could not apply in a quiet title action and that the bank was entitled to judgment in its favor. Did the Court of Appeals reach the right result?
Background: In 1990, William Hurt purchased property at 2106 Jackson Place in Ann Arbor. Hurt obtained a mortgage from Sterling Mortgage and Investment Company. In 1991, the balance on the mortgage was $9,000, but no further payments were made after that date. After Hurt's death in 2000, his wife sold the property to Dan-Kai Tus and Nu Chen Yen Tus. The mortgage was not paid off at the closing of the sale, but Sterling Mortgage, which had misplaced its file, made no collection efforts until 2005. Sterling Mortgage then foreclosed by advertisement and obtained a sheriff's deed. Under MCL 600.3240(8), the Tuses had six months from foreclosure to redeem the property by paying the amount owed to Sterling Mortgage. Just before the six months expired, the Tuses filed a quiet title action. At the outset of the case, the trial court granted the Tuses' motion to extend the statutory redemption period, ruling that it would be extended until 30 days after the entry of the final order in this case. After a bench trial, the trial court ruled that, although Sterling Mortgage was authorized to foreclose on the property, it was unjustly enriched as a result of its undue delay in bringing foreclosure proceedings. Accordingly, the court granted the Tuses' claim to quiet title in their favor, but awarded Sterling Mortgage a money judgment in the amount of $27,351.54. The Tuses sought to tender payment to Sterling Mortgage, but the company refused to accept the payment and appealed to the Court of Appeals.
In an unpublished per curiam opinion, the Court of Appeals reversed, ruling that the trial court had no authority to extend the statutory redemption period and that Sterling Mortgage was entitled to judgment in its favor. The foreclosure was lawful, the appeals court held, because it occurred within the 15-year statute of limitations; therefore, the Tuses' interest in the property was extinguished, the panel said. "The trial court's decision to quiet title in the Tuses' names, despite the determination that Sterling [Mortgage] was lawfully entitled to foreclose on the mortgage, constituted an impermissible attempt to act in equity to avoid the application of a statute," the court explained. The Court of Appeals was not persuaded by the Tuses' claim that Sterling Mortgage would be unjustly enriched, because the Tuses could have prevented the alleged windfall to Sterling Mortgage by redeeming the property within the statutory redemption period. The Tuses appeal.
AFTERNOON SESSION:
GREAT WOLF LODGE OF TRAVERSE CITY, LLC v MICHIGAN PUBLIC SERVICE COMMISSION, et al. (case nos. 139541-2, 139544-5)
Attorney for plaintiff Great Wolf Lodge of Traverse City, LLC: Leland R. Rosier
Attorneys for defendant Michigan Public Service Commission: Vincent J. Leone, Anne M. Uitvlugt
Attorneys for defendant Cherryland Electric Cooperative: Gary P. Gordon, Shaun M. Johnson
Attorney for amicus curiae Association of Businesses Advocating Tariff Equality: Robert A. W. Strong
Attorneys for amicus curiae Michigan Electric Cooperative Association and Michigan Electric & Gas Association: Shaun M. Johnson, James A. Ault
Attorney for amicus curiae Michigan Municipal Electric Association: Jeffery V. Stuckey
Trial Court: Ingham County Circuit Court
At issue: Cherryland Electric Cooperative provided service to a farm for many years and maintained a "service drop" at the property after the farm was no longer in operation. The plaintiff purchased the property to construct a water park and resort. Cherryland Electric claimed that it was entitled to continue providing electricity to the customer on the property, and it eventually did. A dispute about the rate Cherryland Electric charged led the plaintiff to file a complaint for a partial refund with the Michigan Public Service Commission. An administrative law judge ordered a refund with interest, and fined Cherryland Electric. The MPSC agreed that Cherryland Electric had the right to provide electricity to the premises and that the plaintiff was entitled to a refund, but did not order interest or a fine. The circuit court affirmed, except that it remanded for determination of the amount of interest and a fine. The Court of Appeals reversed as to Cherryland Electric's right to provide electricity to the premises. Does Cherryland Electric have the right to service the premises? Is the MPSC required by statute (MCL 460.558) to impose a fine? Must the MPSC order interest on a refund?
Background: Great Wolf Lodge's water park resort is located on 48 acres in the Traverse City area. The land is part of a 120-acre parcel that was previously farmed by the Oleson family. Cherryland Electric Cooperative claims that it has provided electrical service at that location since the 1940s. Cherryland Electric had an electrical line, known as a service drop, running to one building when Great Wolf Lodge bought the property in 2001, but no electricity was being provided to the property at that time. Great Wolf Lodge solicited bids for electric services from Cherryland Electric, Traverse City Light & Power, and Consumers Power. Traverse City Light & Power won the bidding process, and it entered into a contract with Great Wolf Lodge in December 2001. But when construction of the resort was about to begin, Cherryland Electric asserted that it was entitled to provide electricity to the resort. Accordingly, in 2002 and again in 2003, Great Wolf Lodge entered into an agreement with Cherryland Electric to provide electricity. But Great Wolf Lodge later filed a complaint with the Michigan Public Service Commission, claiming that Cherryland Electric had overcharged Great Wolf Lodge. Great Wolf Lodge asserted that it was entitled to a refund of the excess charge, and also disputed that Cherryland Electric had the right to provide electricity to the resort. An administrative law judge ordered Cherryland Electric to refund the overpayment with interest, but he agreed with Cherryland Electric that it had a right to furnish electricity to the resort. The MPSC reviewed the administrative law judge's ruling and vacated the award of interest and the fine, but affirmed all other aspects of the ruling. Cherryland Electric had the right to service the resort, the MPSC said, because the "site itself," rather than the property owner or a particular building, was the "customer" for purposes of MPSC's Rule 411. Accordingly, the MPSC explained, neither a change in ownership nor the loss or addition of a building creates a new customer. The MPSC observed that "once a utility has extended service to a customer, the utility then has the right to serve the entire premises . . . ."
Great Wolf Lodge appealed to the circuit court. The circuit court remanded the case to the MPSC, directing it to impose a fine and interest on Cherryland Electric, but affirmed the administrative decision in all other respects. Both Great Wolf Lodge and the MPSC appealed to the Court of Appeals. In a published per curiam opinion, the Court of Appeals held that Great Wolf Lodge was not obligated to obtain electrical services from Cherryland Electric. Rule 411 defined "customer" as the buildings and facilities served by a provider; in this case, there was no such building or facility, the appellate panel stated. The Court of Appeals remanded the case for further factual development and also affirmed the circuit court's ruling that a fine and interest must be imposed on Cherryland Electric. Cherryland Electric and the MPSC appeal.
ROBELIN v SPECTRUM HEALTH HOSPITALS, et al. (case no. 139860)
Attorney for plaintiff Raquel Robelin, Conservator, for Teija McCall: Mark R. Granzotto
Attorney for defendants Spectrum Health Hospitals, d/b/a Spectrum Health-East Campus, John Hartmann, M.D., and Advantage Health Physicians, P.C.: Jon D. Vander Ploeg
Attorney for amicus curiae Michigan State Medical Society: Joanne Geha Swanson
Attorney for amicus curiae Michigan Association for Justice: David R. Parker
Trial Court: Kent County Circuit Court
At issue: The plaintiff's baby suffered a stroke within 24 hours of birth. The plaintiff contends that the defendant hospital and doctor committed medical malpractice and that their malpractice caused her child's stroke. The plaintiff intends to call a pediatric neurologist as an expert witness on causation, but the defendants sought to strike him from the plaintiff's witness list, arguing that his theories were not accepted in the scientific community. Following a two-day evidentiary hearing, the trial court denied the defendants' motion, concluding that the neurologist's opinions were sufficient to be presented to the jury. The Court of Appeals affirmed, finding that the lower court properly analyzed the doctor's proffered testimony and did not abuse its discretion by concluding that he should be allowed to testify. Does the expert's proposed testimony meet the criteria of MCL 600.2955 and MRE 702?
Background: Within 24 hours of her birth, Teija McCall suffered a stroke; she has serious neurological impairments as a result. Her mother, Raquel Robelin, sued Spectrum Health Hospitals, and the physician who attended Robelin during labor and delivery, for medical malpractice. Dr. Ronald Gabriel, a Los Angeles pediatric neurologist, is one of Robelin's expert witnesses. He testified that hypoxia, as indicated by a late deceleration pattern in the fetal heart rate, is an indicator of stroke. Gabriel asserted that the defendants failed to properly monitor the fetal heart rate and, as a result, failed to take action to prevent the infant's stroke. While it was not possible to be completely certain about what had happened to the infant, Gabriel said, "in the "absence of an alternative explanation," the "most likely explanation is thrombus formation due to decreased velocity of internal carotid blood flow due to the abnormal changes in fetal heart rate." None of the events or evidence during labor could really predict what would happen, he added, but they were of some value in reconstructing what might have happened, and in excluding "other potential causes."
After taking Gabriel's deposition, the defendants filed a motion to strike him from Robelin's witness list. They contended that Gabriel's theories about the cause of the infant's stroke were not accepted in the scientific community, and that his opinions were not supported by sufficient facts and data. Following a two-day evidentiary hearing, the trial court denied the defendants' motion. Although Gabriel's testimony was probably not the majority position in the field, the court said, his theories had a "foundation in fact and in science" and were based, at least to a reasonable degree, upon "demonstrable data." That was sufficient, the trial court ruled, to allow Gabriel's opinions to be presented to a jury.
The defendants appealed, but the Court of Appeals affirmed the trial court's ruling in an unpublished per curiam opinion. The trial court did not abuse its discretion in concluding that Gabriel's testimony was admissible, the Court of Appeals said, citing Michigan Rule of Evidence 702 and MCL 600.2955. Under MRE 702, a court can admit expert testimony if the court determines that "(1) the testimony is based on sufficient facts or data, (2) the testimony is the product of reliable principles and methods, and (3) the witness has applied the principles and methods reliably to the facts of the case. " MCL 600.2955 provides in part that ... a scientific opinion rendered by an otherwise qualified expert is not admissible unless the court determines that the opinion is reliable and will assist the trier of fact. In making that determination, the court shall examine the opinion and the basis for the opinion, which basis includes the facts, technique, methodology, and reasoning relied on by the expert...." The trial court had properly applied both the evidence rule and the statute, the Court of Appeals said. "[N]ovelty or a lack of general acceptance is not necessarily fatal to admission of scientific evidence," the appellate panel stated. The Court of Appeals continued, "Defendants argue that it is impossible to prospectively predict a stroke. .... Dr. Gabriel actually testified that he used "the totality of the database" to retrospectively analyze the available medical information and thus determine the most probable time of and reason for that stroke's occurrence, using process of elimination." The defendants appeal.
PEOPLE v ACEVAL (case no. 138577)
Prosecuting attorney: Jason W. Williams
Attorney for defendant Alexander Aceval: David L. Moffitt
Trial Court: Wayne County Circuit Court
At issue: At the defendant's first trial on drug charges, the prosecutor offered testimony from a confidential informant who was part of the defendant's drug enterprise. The informant lied about certain matters relating to his role in order to conceal the fact that he was the informant. Police officers who were involved in the investigation also testified falsely in support of the informant's version of events. The trial judge was aware of this, but allowed the trial to proceed. The trial ended in a mistrial, with a hung jury. Before the defendant could be retried, the perjury came to light. The prosecutor was removed from the case and the trial judge stepped down. The case was reassigned, and set for a second trial. When new evidence came to light suggesting that the defendant solicited perjury to aid his defense, the defendant pled guilty. Does the prosecution's acquiescence in the presentation of perjured testimony in order to conceal the identity of a confidential informant amount to misconduct that deprived the defendant of due process? If so, what is the remedy - a new trial, or dismissal of the charges?
Background: Alexander Aceval and others were engaged in transporting cocaine from Texas for distribution in Michigan. A confidential informant, who was involved in the plan, provided information to the police about the scheme. The police arrested all involved, including the confidential informant. Aceval was charged with drug-related offenses for his alleged role in the drug scheme. During an evidentiary hearing and at trial, the confidential informant lied about certain matters relating to his role -- for example, he stated that he had had no contact with two investigating officers until the date of Aceval's arrest. The two officers also gave false testimony to support the informant's version of events. With the trial judge's agreement, the prosecutor and police made a special record of the false testimony, with the judge stating that she was concerned that the informant would be in "grave danger" if he was revealed as the informant at trial. The jury could not agree on a verdict, and the trial judge declared a mistrial. Soon after, it came to light that the prosecutor and judge might have intentionally allowed the jury to hear perjured testimony. The prosecutor was removed from the case and the trial judge stepped down.
A second trial was scheduled. Before the trial began, a witness came forward and said that Aceval had asked him to provide false testimony. Aceval then decided to plead guilty to one count of delivering over 1,000 grams of cocaine. He was sentenced in accord with the agreement to a 10- to 15-year prison term.
Aceval sought leave to appeal, but the Court of Appeals denied his application. The Michigan Supreme Court remanded the case to the Court of Appeals for consideration of two issues, including whether the prosecution's "acquiescence in the presentation of perjured testimony amounts to misconduct that deprived the defendant of due process such that retrial should be barred." On remand, in a published opinion, the Court of Appeals affirmed Aceval's plea-based conviction. The Court of Appeals held that, in this case, a retrial was the remedy for the prosecutor's acquiescence in the presentation of perjured testimony at Aceval's first trial. Aceval received this remedy when his first trial ended in a hung jury and a mistrial was declared, the Court of Appeals said. While the judge and prosecutor's conduct was "plainly reprehensible," the Court of Appeals explained, Aceval was not prejudiced because he received the remedy due to him - a new trial. The panel therefore affirmed Aceval's plea-based conviction.
Aceval appealed. The Michigan Supreme Court initially denied leave to appeal, with three justices voting to grant leave to appeal, three justices voting to deny leave to appeal, and one justice not participating. Aceval filed a motion for reconsideration, at which time the Court voted to grant leave to appeal.
Friday, November 5
Morning Session
KLOOSTER v CITY OF CHARLEVOIX (case no. 140423)
Attorney for petitioner Nathan Klooster: Steven F. Stapleton
Attorneys for respondent City of Charlevoix: James G. Young, Bryan E. Graham
Attorney for amicus curiae State Tax Commission and Department of Treasury: Steven B. Flancher
Attorney for amicus curiae Taxation Section of the State Bar of Michigan: Paul V. McCord
Attorney for amicus curiae Michigan Municipal League, Michigan Association of Equalization Directors, Michigan Assessors Association, and Michigan Townships Association: Steven D. Mann
Lower Court: Michigan Tax Tribunal
At issue: The petitioner owns taxable real property subject to the caps on valuation imposed by Proposal A (Const 1963, art 9, § 3) and the General Property Tax Act. He and his father owned the property as joint tenants with the right of survivorship. The petitioner became the sole owner when his father died in 2005. The respondent city issued an assessment notice for tax year 2006 indicating that, because of a transfer of ownership, the property was not subject to the Proposal A cap. As a result, the taxable value of petitioner's property increased. The petitioner appealed, claiming that his ownership of the property did not come about as a result of a "conveyance" within the meaning of MCL 211.27a(7)(h) of GPTA. The Tax Tribunal affirmed the assessment. In a published opinion, the Court of Appeals reversed the Tax Tribunal, and held that the petitioner's property is still subject to the cap because transfer of title by death of a joint tenant is not an uncapping transfer of ownership. Must a "conveyance," under MCL 211.27a, be made by a written instrument? If so, does the deed creating the joint tenancy qualify as such an instrument?
Background: In 1994, Michigan voters approved Proposal A, which amended article 9, § 3 of the Michigan constitution to limit the annual increase in property tax assessments, and authorized enabling legislation to accomplish this change. The Legislature fixed the cap on assessment increases to either 5 percent of the assessed value of the property for the previous year, or the increase in the rate of inflation from the previous year, whichever is less. The limitation on assessment increases does not apply after certain transfers of ownership occur. This process is referred to as "uncapping."
The property involved in this case is located at 908 May Street in Charlevoix. James Klooster initially owned the property with his wife as tenants by the entireties. By 2004, the wife had relinquished her interest, and James Klooster owned the property with his son, Nathan Klooster, with the two holding the property as joint tenants with the right of survivorship. On January 11, 2005, James died and, by operation of law, Nathan became the sole owner of the property. On September 10, 2005, Nathan executed a quitclaim deed creating a joint tenancy with right of survivorship with his brother, Charles Klooster.
In early 2006, the assessor for the city of Charlevoix sent Nathan and Charles a notice of assessment, taxable valuation and property classification form. This form stated that, based on a transfer of ownership, the property's taxable value had been reassessed using the actual true cash value of the property. As a result, the taxable value of the property increased from $37,802 to $72,300.
Nathan Klooster filed a petition with the Board of Review, claiming that the assessor erred in uncapping the property because there had been no transfer of ownership. After the board denied the appeal, Klooster appealed to the Tax Tribunal, which affirmed the taxable value for the property. The tribunal ruled that the transfer of ownership to Klooster by virtue of his father's death was a conveyance within the meaning of GPTA. In addition, the Tax Tribunal ruled that the statutory joint tenancy exception did not apply to the transfer because Klooster was not an original owner or an already existing joint tenant at the time the joint tenancy was created.
Klooster appealed by right to the Court of Appeals, claiming that the transfer of ownership between himself and his father was not a "conveyance," and even if it was, it qualified for the exemption for joint tenancy transfers. In a published per curiam opinion, the Court of Appeals reversed the Tax Tribunal. By using the word "conveyance," the Legislature had employed a legal term of art, the appeals court determined. Because "conveyance" requires transfer of title by a written instrument, the Court of Appeals concluded that James' death and transfer of title by operation of law did not constitute a "conveyance" under GPTA such that the assessed value/taxable value of the property would be uncapped. Since the transfer of sole title to Klooster was not a conveyance, he met the exception for joint tenancy transfers because James was an original owner at the time the joint tenancy was created, the appellate court said, and no other statutory conditions applied. The city of Charlevoix appeals.
PEOPLE v DOWDY (case no. 140603)
Prosecuting attorney: Joseph B. Finnerty
Attorney for defendant Randall Lee Dowdy: Christine A. Pagac
Attorney for amicus curiae Attorney General Michael A. Cox: Mark G. Sands
Attorney for amicus curiae Prosecuting Attorneys Association of Michigan: Terrence E. Dean
Attorney for amicus curiae Jane Poe, John Doe, Robert Roe, Mark Moe, and Larry Loe: Miriam J. Aukerman
Trial Court: Ingham County Circuit Court
At issue: The defendant, who had been convicted of five counts of first-degree criminal sexual conduct, was required to register as a sex offender with local law enforcement officials upon his release from prison. The defendant registered, and provided law enforcement with the address of the Lansing office of the Volunteers of America, where he had received meals and other services. When law enforcement officials learned that the defendant did not live at the address he provided, he was charged with violating the Sex Offender Registration Act. The trial court dismissed the charges, concluding that the defendant was homeless and could not comply with SORA; the Court of Appeals affirmed that ruling in a published opinion. Did the trial court err in dismissing the charges pending against the defendant for his failure to comply with SORA?
Background: Randall Lee Dowdy was convicted of multiple crimes, including five counts of first-degree criminal sexual conduct. When he was released from prison on November 2, 2002, Dowdy signed a form that explained his reporting responsibilities under the Sex Offender Registration Act, MCL 28.271 et seq. SORA provides that, when a sex offender is released from prison, the offender must "notify the local law enforcement agency or sheriff's department having jurisdiction where his . . . new residence or domicile is located . . . within 10 days after [he] changes or vacates his . . . residence, domicile, or place of work or education . . . ." MCL 28.725(1). The statute defines "residence" as "that place at which a person habitually sleeps, keeps his . . . personal effects, and has a regular place of lodging." MCL 28.722(g).
Dowdy last reported his address on November 6, 2003, when he gave law enforcement officers the address of Volunteers of America (430 North Larch) in Lansing. In 2006, Lansing police sought to verify Dowdy's address, and learned that he was not residing at the Volunteers of America. Dowdy was homeless at the time.
Dowdy was charged, as a third habitual offender, with five counts relating to this failure to comply with SORA. But the circuit court dismissed the charges, concluding that a homeless person, like Dowdy, could not comply with the statute.
The Court of Appeals affirmed the trial court's ruling in a published per curiam opinion. MCL 28.721a states that SORA was enacted to "better assist law enforcement officers and the people of this state in preventing and protecting against the commission of future criminal sexual acts by convicted sex offenders," the panel noted. Thus, the panel explained, SORA "provides for registering and reporting by individuals convicted of specified crimes where those individuals have either a domicile or residence." Domicile was not at issue in this case, the court stated, because the parties agreed that, as a homeless person, defendant did not have a "true, fixed principal, and permanent home." The Court of Appeals also determined that defendant had no residence, because he was homeless. The prosecutor appeals.
MICHIGAN EDUCATION ASSOCIATION v SECRETARY OF STATE (case no. 137451)
Attorney for plaintiff Michigan Education Association: Kathleen Corkin Boyle
Attorney for defendant Secretary of State: Heather S. Meingast
Attorney for amicus curiae Michigan Chamber of Commerce: Eric E. Doster
Attorney for amicus curiae Mackinac Center for Public Policy: Patrick J. Wright
Attorney for amicus curiae Michigan State AFL-CIO, SEIU Michigan State Council, and International Union, United Automobile, Aerospace, and Agricultural Implement Workers of America: Andrew Nickelhoff
Trial Court: Ingham County Circuit Court
At issue: Under collective bargaining agreements with the Michigan Education Association, various public school districts administer a payroll deduction plan for the MEA's political action committee. The Secretary of State concluded that the school districts' administration of the payroll deduction plan amounted to a "contribution" or expenditure" of public funds, in violation of the Michigan Campaign Finance Act. Does section 57(1) of the act, MCL 169.257(1), prohibit a school district from expending government resources for such a payroll deduction plan if the costs of the plan are prepaid by the MEA? Does a school district have the authority to collect and deliver payroll deductions for such contributions? What is the effect, if any, of Citizens United v Federal Election Commission, 558 US ___; 130 S Ct 876; 175 L Ed 2d 753 (2010), on this case?
Background: The Michigan Education Association is a voluntary labor organization that represents members employed by public schools, colleges, and universities; its political action committee is funded in part by MEA member payroll deductions. The MEA has collective bargaining agreements with various public school districts throughout Michigan; these agreements include a requirement that the school district employer administer a payroll deduction plan for contributions to the MEA's PAC. In 2006, the MEA asked the Secretary of State to issue a declaratory ruling that the school districts' administration of the payroll deduction program was not an "expenditure" under the Michigan Campaign Finance Act, and so did not violate the act. In a letter, the Secretary of State responded that the school districts could not continue to make and transmit the payroll deductions. She noted that Section 57(1) of the Campaign Finance Act prohibits the use of public funds to make "contributions" or "expenditures." Without an express statutory provision permitting public bodies to administer such payroll deduction plans, the Secretary of State wrote, she was "constrained to conclude that the school district is prohibited from expending government resources for a payroll deduction plan that deducts wages from its employees on behalf of the MEA-PAC." The Secretary of State also concluded that a violation of Section 57 could not be avoided by requiring the union to pay the anticipated costs of the payroll deduction system, because the act provided no such exception.
The MEA filed a petition in the circuit court for review of the Secretary of State's decision. The circuit court concluded that the Secretary of State's ruling was arbitrary, capricious, and an abuse of discretion. The circuit judge agreed that, under Section 57, the administration of payroll deductions to a union PAC constitutes an "expenditure" under the Campaign Finance Act. But he concluded that, where the costs of administering such a system are reimbursed, "no transfer of value to the union PAC occurs, and therefore, an 'expenditure' has not been made" within the meaning of the act.
In a split published opinion, the Court of Appeals reversed. The majority held that Section 57(1) prohibits a public body, such as a school district, from using public resources "to make a contribution or expenditure . . . ." MCL 169.257(1). The cost associated with a payroll deduction system for a PAC is an "expenditure," the appellate court majority said. Advance reimbursement of the costs of the payroll deduction system does not alter that conclusion or prevent an expenditure from occurring, the majority said. The dissenting judge would have affirmed the circuit court's ruling, but for a different reason - that the administrative costs of such a payroll deduction system do not constitute an "expenditure" at all, as the Campaign Finance Act defines that term. He would have asked the parties to address additional issues.
The MEA appeals. The Supreme Court heard oral argument on the application, and then granted leave to appeal, directing the parties to address the effect, if any, of the United States Supreme Court's decision in Citizens United v Federal Election Commission, 558 US ___; 130 S Ct 876; 175 L Ed 2d 753 (2010), on this case.
Afternoon Session
IDALSKI v SCHWEDT, et al. (case no. 139960)
Attorney for plaintiff Kimberly Idalski: Allan S. Falk
Attorney for defendant State Farm Mutual Insurance Company: Devin R. Day
Trial Court: Livingston County Circuit Court
At issue: The plaintiff filed a first-party no-fault action against State Farm and then later amended the complaint to add a claim for uninsured motorist benefits. State Farm moved for dismissal of the uninsured motorist claim, arguing that the amended complaint was not filed within two years after the accident as required by the terms of the insurance policy. The trial court denied the motion, but the Court of Appeals reversed. Did the amended complaint relate back to the date plaintiff filed her original complaint? Is the two-year contractual limitations period valid under Rory v Continental Insurance Co., 473 Mich 457 (2005)? Should Rory be reconsidered?
Background: On July 25, 2005, Kimberly Idalski was injured in a two-vehicle accident with David Allen Schwedt. Idalski had a no-fault insurance policy with State Farm Mutual Insurance Company. Under the terms of the policy, State Farm became obligated to pay first-party no-fault personal protection insurance (PIP) benefits arising from Idalski's injuries. The traffic crash report prepared by the Michigan State Police indicated that Schwedt was also insured by State Farm; if so, State Farm would be responsible for indemnifying Schwedt against third-party tort liability for noneconomic damages if Idalski sustained a serious impairment of body function. MCL 500.3135(1). But in fact, Schwedt was not insured.
Idalski sued Schwedt and State Farm on March 1, 2007, asserting a third-party negligence claim against Schwedt and a first-party claim for PIP benefits against State Farm. On September 25, 2007, after learning that Schwedt was uninsured, Idalski filed an amended complaint, adding a claim for uninsured motorist benefits against State Farm. In response, State Farm filed a motion for partial summary disposition, seeking dismissal of the uninsured motorist claim. State Farm argued that the amended complaint was not filed within two years after the accident as required by the terms of the insurance policy. The trial judge first granted State Farm's motion for partial summary disposition, and dismissed the uninsured motorist claim. But later, the judge granted Idalski's motion for reconsideration and reinstated the uninsured motorist claim.
State Farm filed an interlocutory application for leave to appeal. The Court of Appeals granted leave to appeal and, in an unpublished per curiam opinion, reversed the trial court. The Court of Appeals based its ruling on Rory v Continental Insurance Co, 473 Mich 457 (2005). In Rory, the Michigan Supreme Court held that an insurance contract provision that imposed a one-year limitations period on claims for uninsured motorist benefits did not violate public policy and would be enforced. Applying Rory to the facts of this case, the Court of Appeals held that the policy provisions requiring Idalski to present her uninsured motorist claim and file a lawsuit within two years after the accident were enforceable. Idalski's contended that her uninsured motorist claim was timely because her amended complaint related back to the date her original complaint was filed. But the Court of Appeals rejected that argument, saying that the relation-back doctrine of Michigan Court Rule 2.118(D) could not be applied to nullify or modify contractual notice and limitations periods. Idalski appeals.
HORVATH v JOHNSON, et al. (case nos. 139996-7)
Attorney for plaintiff Ernest Horvath: John C. Cardello
Attorney for defendants Don Johnson and Suburban Mobility Authority for Regional Transportation, d/b/a SMART: Hal O. Carroll
Attorney for amicus curiae Michigan Association for Justice: Barry J. Gates
Trial Court: Wayne County Circuit Court
At issue: The plaintiff was injured when his leg was caught in the door of a bus operated by the defendant regional transportation authority. The plaintiff filed a claim for no-fault benefits with the defendant's third-party claims administrator within 60 days of his injury. More than 60 days after the accident, the plaintiff sued the transportation authority and the bus driver. The trial court denied several dispositive motions filed by the defendants, and the Court of Appeals affirmed. Did the plaintiff give notice of the tort claim within 60 days as required by MCL 124.419? Did operation of the bus fall within the motor vehicle exception to governmental liability, even though the bus was not moving at the time of the accident? Did the bus driver's actions amount to gross negligence?
Background: On November 15, 2006, Ernest Horvath boarded a bus operated by Suburban Mobility Authority for Regional Transportation and driven by Don Johnson. As Horvath stepped down from the bus, which had come to a complete stop, the bus door closed on his left foot, and he fell to the pavement. Johnson opened the door and apologized; he later completed an accident report.
Horvath filed a claim for no-fault benefits on November 22, 2006, with SMART's third-party claims administrator. On May 17, 2007, Horvath sued SMART and Johnson for negligence. The defendants moved for summary disposition, asking the court to dismiss Horvath's claims; Horvath had failed to give timely notice of his negligence claim as required by § 419 of the Metropolitan Transportation Authorities Act of 1967, MCL 124.419, the defendants maintained. MCL 124.419 states "[t]hat written notice of any claim based upon injury to persons or property shall be served upon the authority no later than 60 days from the occurrence through which such injury is sustained . . . ." The trial court denied the motion, ruling that the notice of Horvath's no-fault claim was sufficient notice of the tort claim because the average person would not distinguish between the two.
The defendants moved for summary disposition a second time. They argued that Horvath's claim was barred by governmental immunity and did not fall within the motor vehicle exception because the bus was not moving at the time of his injury. The trial court denied this motion also, ruling that the act of exiting from a bus falls within the exception for operation of a motor vehicle. The defendants also argued that Horvath's claim against Johnson should be dismissed because Horvath had not presented any evidence that Johnson was grossly negligent, as Horvath is required to do to avoid governmental immunity. The court also denied this motion, concluding that there was a material dispute of fact regarding whether Johnson was grossly negligent in closing the door before Horvath had completely exited the bus.
The defendants appealed to the Court of Appeals, which affirmed the trial court's rulings in an unpublished per curiam opinion. The appeals court concluded that the plain language of MCL 124.419 only requires written notice of a claim and does not differentiate between types of claims. Because the no-fault claim provided specific information regarding Horvath's accident, it was adequate to satisfy the statutory requirement. The Court of Appeals also concluded that the bus was in operation at the time Horvath exited, so the motor vehicle exception to governmental immunity did apply. Finally, based on inferences from the bus driver's testimony, the Court of Appeals agreed with the trial court that there was a genuine issue of material fact regarding whether the driver was grossly negligent. The defendants appeal.
CALDERON, et al. v AUTO-OWNERS INSURANCE COMPANY (case no. 138805)
Attorneys for plaintiff Lori Calderon, as Guardian of Arthur Krumm, a Legally Incapacitated Person and for intervening plaintiff Functional Recovery, Inc.: Patrick J. Bagley, L. Page Graves
Attorney for defendant Auto-Owners Insurance Company: Michael L. Updike
Trial Court: Wayne County Circuit Court
At issue: Arthur Krumm sustained a closed head injury while riding as a passenger in a car that was involved in a single vehicle accident in North Carolina. Krumm did not have no-fault insurance. Was Krumm "domiciled in the same household" as his grandmother in Michigan for purposes of obtaining no-fault benefits from his grandmother's no-fault insurer? The trial court granted the defendant insurance company's motion for summary disposition. The Court of Appeals reversed, finding that there is a genuine issue of material fact as to whether Krumm was domiciled with his grandmother.
Background: Arthur Krumm suffered a closed head injury in a car accident while visiting friends in North Carolina in 2003. Krumm did not have automobile insurance. Lori Calderon, Krumm's sister and guardian, filed a claim on Krumm's behalf for no-fault benefits with Auto-Owners Insurance Company. Auto-Owners was liable for benefits, Calderon argued, because Krumm was domiciled in Fife Lake, Michigan with his grandmother Beverly Krumm, who had a no-fault insurance policy with Auto-Owners. Auto-Owners initially paid no-fault benefits to Krumm, but stopped doing so after an investigation led Auto-Owners to conclude that Krumm's main residence was not with his grandmother. Calderon then sued Auto-Owners, but the insurer filed a counter-claim seeking recovery of benefits it had already paid for Krumm. Functional Recovery, Inc. joined the suit against Auto-Owners, seeking to recover about $20,000 for occupational therapy, physical therapy, and speech therapy that Functional Recovery had provided to Krumm.
Auto-Owners filed a motion for summary disposition, arguing that Krumm was not domiciled with his grandmother in Michigan at the time of the accident. Auto-Owners relied on police reports involving Krumm that did not list his grandmother's address, as well as bank account and public safety records. Auto-Owners also relied on testimony from Krumm's wife about where she and Krumm lived during their marriage, and testimony from Krumm's later girlfriend about where he lived. Calderon opposed the motion, arguing that there was a question of fact as to whether Krumm was domiciled in his grandmother's household at the time of the accident. She relied on her own affidavit and deposition testimony, as well as the deposition testimony of other witnesses who testified that Krumm lived with his grandmother and considered her home to be his. Krumm's grandmother testified that she and her husband legally adopted Krumm as a child, and that he was never away from her home for more than three weeks at a time. After considering this testimony, the trial court granted Auto-Owners' motion and dismissed the case, concluding that no reasonable juror could find that Krumm was domiciled at his grandmother's house. Auto-Owners dismissed its counter-claim, and the plaintiffs appealed to the Court of Appeals. In an unpublished per curiam opinion, the Court of Appeals reversed the trial court and remanded the case to the trial court for further proceedings. The Court of Appeals held that the plaintiffs raised a factual question regarding Krumm's domicile at the time of the accident, and that summary disposition should not have been granted to Auto-Owners. Auto-Owners appeals.
Published: Thu, Nov 4, 2010
