Articles Posted in Michigan Supreme Court

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Plaintiffs were financing companies that sought tax refunds under Michigan’s bad-debt statute, MCL 205.54i, for taxes paid on vehicles financed through installment contracts. Defendant Department of Treasury (the Department) denied the refund claims on three grounds: (1) MCL 205.54i excluded debts associated with repossessed property; (2) plaintiffs failed to provide RD-108 forms evidencing their refund claims; and (3) the election forms provided by plaintiff Ally Financial Inc. (Ally), by their terms, did not apply to the debts for which Ally sought tax refunds. The Court of Claims and the Court of Appeals affirmed the Department’s decision on each of these grounds. The Michigan Supreme Court held the Court of Appeals erred by upholding the Department’s decision on the first and third grounds but agreed with the Court of Appeals’ decision on the second ground. Accordingly, the Court of Appeals was affirmed as to the second ground, and the matter reversed in all other respects. The case was remanded to the Court of Claims for further proceedings. View "Ally Financial, Inc. v. Michigan State Treasurer" on Justia Law

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AK Steel operated a steel mill within the Ford Rouge Manufacturing complex in Dearborn, Michigan. The steel mill was subject to air pollution control and permitting requirements under the federal Clean Air Act, and the Natural Resources and Environmental Protection Act (NREPA). South Dearborn Environmental Improvement Association, Inc. (South Dearborn) and several other environmental groups petitioned for judicial review of a decision of the Department of Environmental Quality (DEQ) to issue a permit to install (PTI) for an existing source under NREPA. In 2006, the DEQ issued Severstal Dearborn, LLC (the mill's prior owner) a PTI that authorized the rebuilding of a blast furnace and the installation of three air pollution control devices at the steel mill. In the years that followed, the permit was revised twice; each successive permit modified and replaced the preceding permit. Emissions testing performed in 2008 and 2009 revealed that several emission sources at the steel mill exceeded the level permitted. The DEQ sent Severstal a notice of violation, and after extended negotiations, they entered into an agreement, pursuant to which Severstal submitted an application for PTI 182- 05C, the PTI at issue in this case. The DEQ issued the permit on May 12, 2014, stating that the purpose of PTI 182-05C was to correct inaccurate assumptions about preexisting and projected emissions and to reallocate emissions among certain pollution sources covered by the PTI. On July 10, 2014, 59 days after PTI 182-05C was issued, South Dearborn and several other environmental groups appealed the DEQ’s decision in the circuit court. The issue for the Michigan Supreme Court's review reduced to how long an interested party has to file a petition for judicial review of a DEQ decision to issue a permit for an existing source of air pollution. The Supreme Court held MCL 324.5505(8) and MCL 324.5506(14) provided that such a petition must be filed within 90 days of the DEQ’s final permit action. Therefore, the circuit court correctly denied AK Steel Corporation’s motion to dismiss pursuant to MCR 2.116(C)(1) because the petition for judicial review was timely filed 59 days after the final permit action in this case. View "South Dearborn Environmental Improvement Assn. v. Dept. of Env. Quality" on Justia Law

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In 2014, Bruce Millar brought an action against the Construction Code Authority (CCA), Elba Township, and Imlay City, alleging violation of the Whistleblowers’ Protection Act (WPA); wrongful termination in violation of public policy; and conspiracy to effectuate wrongful termination and violate the WPA. Millar had performed mechanical and plumbing inspection services for the CCA, which had contracts with Imlay City and Elba Township to provide licensed inspections. Imlay City and Elba Township each wrote letters to the CCA directing it to terminate Millar’s inspection services within their communities. In response, the CCA drafted a letter to Millar stating that he would no longer perform inspections in those communities, but it was not until Millar arrived at work on March 31 that he was given a copy of the CCA. That same day, he was prevented from working in Imlay City. The circuit court granted summary judgment on all counts to defendants, ruling that the WPA claim was time-barred because the WPA violation occurred, at the latest, on March 27, when the CCA drafted its letter, and therefore Millar had filed his claim one day after the 90-day limitations period in MCL 15.363(1) had run. The court also concluded that the WPA preempted Millar’s public-policy claim. The Court of Appeals affirmed in an unpublished per curiam opinion. The Michigan Supreme Court reversed, finding the limitations period on plaintiff's WPA claim did not begin to run until the CCA letter was given to him, or March 31. Because plaintiff's complaint was filed 87 days later, it was timely filed under MCL 15.36.(1). View "Millar v. Construction Code Authority" on Justia Law

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In several cases consolidated for review, the issue common to all was whether the Michigan Department of Health and Human Services could recover from beneficiaries’ estates an amount equivalent to certain Medicaid benefits paid to, or on behalf of, those beneficiaries during their lifetimes. Pursuant to the Michigan Medicaid estate-recovery program (MMERP), DHHS asserted creditor claims in the amount of those benefits against the estates of four deceased beneficiaries. In each case, the estate prevailed in the probate court and DHHS appealed. The Court of Appeals consolidated the appeals and reversed in part, concluding that DHHS could pursue its claims for amounts paid after MMERP’s July 1, 2011 implementation date, but not for amounts paid between that date and the program’s effective date, July 1, 2010. One estate appealed to the Michigan Supreme Court, arguing due process barred DHHS from recovering any amount paid before 2013, when the agency had directly notified the estate’s decedent of MMERP. DHHS applied for leave to appeal in all four cases, arguing that the Court of Appeals had erred in concluding that the agency was not entitled to recover the amounts paid between July 1, 2010, and July 1, 2011. The Supreme Court concluded DHHS was not barred from pursuing estate recovery for amounts paid after July 1, 2010. View "In re Gorney Estate" on Justia Law

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Michael and Jacqueline Ray, acting as coconservators for their minor child, Kersch Ray, filed an action against Eric Swager, Scott Platt, and others, in part alleging that Swager was liable for the injuries suffered by Kersch when Kersch was struck by an automobile driven by Platt. Kersch was thirteen years old and a member of the Chelsea High School cross-country team at the time of the accident; Swager was the coach of the team and a teacher at the high school. Kersch was struck by the car driven by Platt when Kersch was running across an intersection with his teammates and Swager during an early morning team practice. Plaintiffs alleged that Swager had instructed the runners to cross the road even though the “Do Not Walk” symbol was illuminated. Swager moved for summary judgment, arguing that as a governmental employee he was entitled to immunity from liability. The trial court denied Swager’s motion, concluding that whether Swager’s actions were grossly negligent and whether he was the proximate cause of Kersch’s injuries (and therefore not entitled to immunity under the GTLA) were questions of fact for the jury to decide. Plaintiffs appealed. In an unpublished per curiam opinion, the Court of Appeals reversed and remanded, reasoning Swager was immune from liability under MCL 691.1407(2) because reasonable minds could not conclude that Swager was the proximate cause of Kersch’s injuries; rather, Platt’s presence in the roadway and Kersch’s own actions were the immediate and direct causes of Kersch’s injuries, and the most proximate cause of Kersch’s injuries was being struck by a moving vehicle. Plaintiffs appealed. The Michigan Supreme Court concluded the Court of Appeals incorrectly analyzed proximate cause under the Governmental Tort Liability Act, reversed and remanded for further proceedings. View "Ray v. Swager" on Justia Law

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The Judicial Tenure Commission (JTC) filed a formal complaint against Sixth Circuit Judge Lisa Gorcyca, alleging two counts of judicial misconduct arising from a hearing at which she found three children in contempt of court. The contempt hearing arose in the context of a protracted and acrimonious divorce and custody case. The two younger children, 10-year-old RT and 9-year-old NT, were ordered to participate in parenting time in respondent’s jury room with their father. LT was not scheduled for parenting time with his father on that day, but he came to the court with his siblings. After the children refused to communicate with their father, respondent held a show cause hearing to determine why all three children should not be held in contempt. Among other things, respondent told LT that he was defiant, contemptuous, and “mentally messed up.” She held him in direct contempt of court and ordered LT to be confined at Oakland County Children’s Village. Respondent then addressed RT and NT, who were initially apologetic and indicated that they would try to comply with the court’s order but later stated that they would prefer to go with LT to Children’s Village. All three children were handcuffed and removed from the courtroom. The JTC special master found respondent committed misconduct by: (1) finding LT in contempt of a nonexistent parenting-time order; (2) giving the children’s father the keys to the jailhouse thereby depriving the children of the opportunity to purge their contempt; (3) making a gesture indicating that LT was crazy and making disparaging remarks about the children; and (4) misrepresenting to the JTC that the gesture was intended to communicate LT’s moving forward with therapy. The JTC adopted the master’s findings with one exception: the JTC disagreed with the master that respondent misrepresented the meaning of the gesture and concluded that her answer was merely misleading. The JTC recommended that the appropriate discipline for respondent’s misconduct was a 30-day suspension without pay and costs. After review of the record the Michigan Supreme Court agreed in part with the Commission’s conclusion that respondent committed judicial misconduct, but was not persuaded that the recommended sanction was appropriate. Instead, the Court held public censure was proportionate to the judicial misconduct established by the record. The Court rejected the Commission’s recommendation to impose costs, fees, and expenses against respondent under MCR 9.205(B). View "In re Hon. Lisa Gorcyca" on Justia Law

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The Judicial Tenure Commission (JTC) filed a formal complaint against 14-A District Court Judge J. Cedric Simpson, alleging three counts of judicial misconduct arising from a 2013 incident where Crystal Vargas, one of respondent’s interns, was involved in a motor vehicle accident near respondent’s home. Vargas immediately called respondent, and he arrived at the scene approximately 10 minutes later. As the investigating officer was administering a field sobriety test, respondent identified himself to the officer as a judge, had a conversation with Vargas without the officer’s permission. Vargas had a breath-alcohol content (BAC) over the legal limit, and she was placed under arrest. Respondent contacted the township attorney who would be handling Vargas’s case, said that Vargas was his intern. Respondent also contacted the attorney to discuss defense attorneys Vargas might retain. After an investigation into respondent’s conduct, the JTC filed its formal complaint alleging that respondent had interfered with the police investigation into the accident, interfered with Vargas’s prosecution, and made misrepresentations to the JTC. The master appointed to the case found by a preponderance of the evidence that respondent’s actions constituted judicial misconduct on all three counts. The JTC agreed with these findings and concluded that respondent’s conduct violated the Michigan Code of Judicial Conduct and also constituted misconduct in office and conduct clearly prejudicial to the administration of justice under Const 1963, art 6, section 30(2). The JTC recommended that respondent be removed from office and that costs be imposed. The Michigan Supreme Court concluded the JTC correctly found that respondent committed judicial misconduct, but it erred by concluding that removal from office was warranted. A suspension of nine months without pay was proportional to the misconduct. View "In re Hon. J. Cedric Simpson" on Justia Law

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In Docket No. 151800, Clam Lake Township and Haring Charter Township (the Townships) appealed the determination of the State Boundary Commission (the Commission) that an agreement entered into under the Intergovernmental Conditional Transfer of Property by Contract Act (Act 425 agreement) between the Townships was invalid. In Docket No. 153008, as the Commission proceedings in Docket No. 151800 were ongoing, TeriDee, LLC brought an action against the Townships, seeking a declaratory judgment that the Act 425 agreement was void as against public policy because it contracted away Haring’s zoning authority by obligating Haring’s zoning board to rezone pursuant to the agreement. The Act 425 agreement at issue here sought to transfer to Haring Charter Township an undeveloped parcel of roughly 241 acres of land in Clam Lake Township that was zoned for forest-recreational use. The agreement provided a description of the Townships’ desired economic development project, including numerous minimum requirements for rezoning the property. Approximately 141 acres of the land were owned by TeriDee LLC, the John F. Koetje Trust, and the Delia Koetje Trust (collectively, TeriDee), who wished to develop the land for commercial use. To achieve this goal, TeriDee petitioned the Commission to have the land annexed by the city of Cadillac. The Commission found TeriDee’s petition legally sufficient and concluded that the Townships’ Act 425 agreement was invalid because it was created solely as a means to bar the annexation and not as a means of promoting economic development. The Townships appealed the decision in the circuit court, and the court upheld the Commission’s determination, concluding that the Commission had the power to determine the validity of an Act 425 agreement. The Townships sought leave to appeal in the Court of Appeals, which the Court of Appeals denied in an unpublished order. The Michigan Supreme Court held: (1) the State Boundary Commission did not have the authority to determine the validity of the Act 425 agreement and could only find whether an agreement was "in effect"; and (2) an Act 425 agreement can include requirements that a party enact particular zoning ordinances, and the Court of Appeals erred by concluding to the contrary. TeriDee's annexation petition was preempted. Both cases were remanded to the circuit court for further proceedings. View "Clam Lake Township v. Dept. of Licensing & Reg. Affairs" on Justia Law

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Baruch SLS, Inc., a Michigan nonprofit corporation, sought exemptions from real and personal property taxes as a charitable institution under MCL 211.7o and MCL 211.9 for tax years 2010–2012. Petitioner based its request on the fact that it offered an income-based subsidy to qualifying residents of Stone Crest Assisted Living, one of its adult foster care facilities, provided those residents had made at least 24 monthly payments to petitioner. The Tax Tribunal ruled that Stone Crest was not eligible for the exemptions because petitioner did not qualify as a charitable institution under three of the six factors set forth in Wexford Med Group v City of Cadillac, 474 Mich 192 (2006). The Court of Appeals reversed with respect to two of the Wexford factors, but affirmed the denial of the exemptions on the ground that petitioner had failed to satisfy the third Wexford factor because, by limiting the availability of its income-based subsidy, petitioner offered its services on a discriminatory basis. The Michigan Supreme Court found the third factor in the Wexford test excluded only restrictions or conditions on charity that bore no reasonable relationship to a permissible charitable goal. Because the lower courts did not consider Baruch’s policies under the proper understanding of this factor, the Court vacated the Court of Appeals’ and Tax Tribunal’s opinions in part and remanded this case to the Tax Tribunal for further proceedings. View "Baruch SLS, Inc. v. Twp of Tittabawassee" on Justia Law

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In consolidated cases, two municipalities sought to provide electric service through municipal electric utilities. Central to both cases was the applicability Michigan Administrative Code Rule 411 (sometimes referred to as a utility’s right to first entitlement). Rule 460.3411 (Rule 411) was inapplicable when a municipal utility is involved and has not consented to the jurisdiction of the Michigan Public Service Commission (PSC). Additionally, under the circumstances of each case, the Michigan Supreme Court found there was not a customer already receiving service from another utility; accordingly, MCL 124.3 did not prevent either plaintiff from providing electric service. View "City of Holland v. Consumers Energy Co." on Justia Law