Justia Michigan Supreme Court Opinion Summaries

Defendant Benjamin Taub founded Dataspace, Incorporated, in 1994. In 2002, Taub hired plaintiff Rama Madugula as vice president of sales and business development for Dataspace. Around this time, Dataspace also hired an individual named Andrew Flower. Taub was Dataspace's sole shareholder until 2004, when Madugula and Flower became part owners, with Madugula purchasing 29% of the outstanding shares and Flower purchasing 20%. Pursuant to a stockholders agreement, Taub became president, secretary, and treasurer of Dataspace, while Madugula and Flower became vice presidents. After becoming a shareholder, Madugula continued to work for Dataspace. In 2007, Flower exercised his right under the buy-sell agreement and voluntarily withdrew from Dataspace. Taub and Madugula purchased Flower's shares, increasing Madugula's interest to about 36% of the shares. Around this time, with Dataspace allegedly struggling, Taub switched the focus of Dataspace to marketing a new product that it developed called JPAS, a software platform. At the time, Madugula did not object to the new focus. In August 2007, Taub terminated Madugula's employment with Dataspace. Because of his termination, Madugula no longer received a salary from Dataspace, but he maintained his board position and his interest in the company. Madugula sued Taub and Dataspace, asserting: (1) shareholder; (2) breach of the duty of good faith; (3) common-law fraud and misrepresentation; (4) exemplary damages; (5) an appointment of a receiver; and (6) an accounting of Dataspace. Madugula sought damages, the removal of Taub as a director of Dataspace, the appointment of a receiver to protect the value of his stock in Dataspace, an accounting of Dataspace, and all other relief that he was entitled to in equity or law. The circuit court granted summary judgment in favor of Taub and Dataspace, dismissing all counts against them except Madugula's claim of shareholder oppression. After its review, the Supreme Court concluded that the plaint language of Michigan's shareholder-oppression statute, did not afford a claimant a right to a jury trial and, instead, expressed a legislative intent to have shareholder-oppression claims heard by a court of equity. Furthermore, the Court held that violations of a shareholder agreement may constitute evidence of shareholder oppression pursuant to the statute. Because the trial court erred by submitting plaintiff's claim to the jury and allowing it to award an equitable remedy, the Court of Appeals erred by affirming the trial court's judgment in favor of plaintiff. View "Madugula v. Taub" on Justia Law

This case began as a dispute between the parties regarding whether plaintiff owed tax under the now-repealed Single Business Tax Act (SBTA) related to plaintiff's contributions to its Voluntary Employees' Beneficiary Association (VEBA) trust fund for 1997 through 2001. In this case, the issue for the Supreme Court to decide was what actions a taxpayer must take under MCL 205.30 of the Revenue Act to trigger the accrual of interest on a tax refund. The Court held that in order to trigger the accrual of interest, the plain language of the statute requires a taxpayer to: (1) pay the disputed tax; (2) make a “claim” or "petition" for a refund; and (3) "file" the claim or petition. "Although a "claim" or "petition" need not take any specific form, it must clearly demand, request, or assert a right to a refund of tax payments made to the Department of Treasury that the taxpayer asserts are not due. Additionally, in order to "file" the claim or petition, a taxpayer must submit the claim to the Treasury in a manner sufficient to provide the Treasury with adequate notice of the taxpayer’s claim." View "Ford Motor Co. v. Dept. of Treasury" on Justia Law

George Badeen (a licensed collection agency manager) and Midwest Recovery and Adjustment, Inc. (a licensed collection agency that Badeen owned and operated) brought a class action against PAR, Inc.; Remarketing Solutions; CenterOne Financial Services, LLC; and numerous other lenders and forwarding companies doing business in Michigan. Plaintiffs alleged that defendant "forwarding companies" acted as collection agencies under Michigan law but did so without a license, in violation of MCL 339.904(1), and that defendant lenders, who hired the forwarding companies, violated Michigan law by hiring unlicensed collection agencies, in violation of MCL 445.252(s). Plaintiffs further alleged that the violations injured them by impeding their business while not complying with Michigan law. Defendants moved for summary judgment, arguing that the forwarding companies did not satisfy the definition of "collection agency" because the phrase "soliciting a claim for collection" in that statute referred to asking the debtor to pay the debt, which the forwarding companies did not do. The court granted defendants’ motion. The Court of Appeals affirmed. Upon review, the Supreme Court concluded that the forwarding companies indeed did fall within the statutory definition of collection agencies. Accordingly, the Court vacated Part III(B) of the Court of Appeals' judgment, and remanded this case to the Circuit Court for further proceedings. View "Badeen v. PAR, Inc." on Justia Law

Chrysler Group, LLC and plaintiff LaFontaine Saline Inc. (LaFontaine), an authorized Chrysler automobile dealer, entered into a Dealer Agreement in 2007, granting LaFontaine the non-exclusive right to sell Dodge vehicles from its location in Saline, Michigan, and defined LaFontaine’s Sales Locality as "the area designated in writing to [LaFontaine] by [Chrysler] from time to time as the territory of [LaFontaine’s] responsibility for the sale of [Chrysler, Jeep, and Dodge] vehicles, vehicle parts and accessories . . . ." This case centered on whether the 2010 amendment of the Motor Vehicle Dealer Act (MVDA) (expanding the relevant market area) from a six-mile radius to a nine-mile radius, applied retroactively. Upon review, the Supreme Court concluded that it did not. The Court therefore vacated the judgment of the Court of Appeals and remanded this case to the Circuit Court for reinstatement of summary judgment in favor of Chrysler. View "LaFontaine Saline, Inc. v. Chrysler Group, LLC" on Justia Law

Miller-Davis Company was an "at risk" contractor for the Sherman Lake YMCA's natatorium project. Miller-Davis hired defendant Ahrens Construction, Inc., as a subcontractor to install similar roof systems on three rooms, including the natatorium. After nearly a decade of litigation and alternative dispute resolution proceedings, the indemnification contract underlying the troubled natatorium roof in this case was brought before the Supreme Court. The Court previously held that the six-year period of limitations of MCL 600.5807(8) applied to the parties’ indemnification contract. Upon further review, the Court held that the indemnity clauses in the parties’ subcontract applied here, because the plain language of the indemnification clauses extended to Ahrens’s failure to undertake corrective work as obligated by the subcontract. Furthermore, because the Sherman Lake YMCA made a "claim" upon Miller-Davis which triggered Ahrens’s liability under the indemnity clauses, Ahrens’ failure to indemnify caused the damages Miller-Davis sustained in undertaking the corrective work itself. Finally, the Court held that Miller-Davis’ claim was not barred by the six-year statute of limitations found in MCL 600.5807(8). Rather, Miller-Davis’ breach of contract claim for Ahrens’s failure to indemnify is distinct from its breach of contract claim based on Ahrens’s failure to install the roof according to specifications, and Miller-Davis’s indemnity action necessarily accrued at a later point. The Court reversed that portion of the Court of Appeals’ opinion discussing Miller-Davis’s indemnity claim, and remanded this case to the Circuit Court for entry of judgment in Miller-Davis’s favor and to determine whether Miller-Davis is entitled to attorney’s fees under the relevant indemnification clauses. View "Miller-Davis Co. v. Ahrens Construction, Inc." on Justia Law

The Isabella County Prosecuting Attorney filed a complaint for a temporary restraining order, a show-cause order, a preliminary injunction, and a permanent injunction, seeking to enjoin the operation of Compassionate Apothecary, LLC (CA), a medical-marijuana dispensary that was owned and operated by Brandon McQueen and Matthew Taylor. McQueen was a registered qualifying patient and a registered primary caregiver for three qualifying patients under the Michigan Medical Marijuana Act (MMMA). Taylor was the registered primary caregiver for two qualifying patients. They operated CA as a membership organization. The prosecuting attorney alleged that McQueen and Taylor’s operation of CA did not comply with the MMMA, was contrary to the Public Health Code (PHC), and, thus, was a public nuisance. The court denied the prosecuting attorney’s requests for a temporary restraining order, a show-cause order and injunction, concluding that the operation of CA was in compliance with the MMMA because the patient-to-patient transfers of marijuana that CA facilitated fell within the act’s definition of the “medical use” of marijuana. The prosecuting attorney appealed. The Court of Appeals reversed and remanded, concluding that defendants’ operation of CA was an enjoinable public nuisance because the operation of CA violated the PHC, which prohibits the possession and delivery of marijuana. Upon review, the Supreme Court concluded that the Court of Appeals reached the correct result because the act does not permit a registered qualifying patient to transfer marijuana for another registered qualifying patient’s medical use. Accordingly, the prosecuting attorney was entitled to injunctive relief to enjoin the operation of defendants’ business because it constituted a public nuisance. View "Michigan v. McQueen" on Justia Law

Marcy Hill, Patricia Hill, and Christopher Hill brought an action against Sears, Roebuck & Co., Sears Logistic Services, Inc., Merchant Delivery, Inc., Exel Direct, Inc., Mark Pritchard, Timothy Dameron, and others, seeking to recover damages for injuries and property damage incurred when Marcy Hill released natural gas through an uncapped gas line and plaintiffs’ home burned down following Patricia Hill’s attempt to light a candle. Defendants were prior owners of the home and the parties who sold, delivered, and installed an electric washer and dryer purchased by Marcy Hill in 2003. Hill’s mother had directed the installers to place the washer and dryer in the same location where the prior owners’ gas dryer had been situated. The prior owners had turned off the gas to the line supplying their dryer, but had not capped off the line when they moved, taking their dryer with them. In 2007, four years after the electric dryer’s installation, during which time it had functioned without incident, Hill inadvertently opened the valve on the gas line. Marcy and Patricia Hill smelled gas throughout the day but did not act on this information, despite both women’s knowledge that the smell of natural gas required safety precautions. Plaintiffs’ home exploded that night when Patricia Hill attempted to light the candle with a lighter. Plaintiffs asserted that the installers had negligently installed the dryer and failed to discover, properly inspect, cap, and warn plaintiffs about the uncapped gas line. The court denied the retailers’, delivery companies’, and installers’ motions for summary judgment. The installers, Mark Pritchard and Timothy Dameron, appealed. The Court of Appeals affirmed. The retailers, delivery companies, and the installers filed separate applications for leave to appeal. Upon review of the matter, the Supreme Court concluded that the delivery and installation of the washer and dryer did not create a new dangerous condition with respect to the uncapped gas line or make an existing dangerous condition more hazardous. The hazard associated with the uncapped gas line was present when the installers entered the premises and when they left; the danger posed by the uncapped gas line was the same before and after the installation. Any liability of the retailers or the delivery companies would have resulted from their agency relationship with the installers. The circuit court erred by denying the summary judgment motions. The case was reversed and remanded for entry of an order granting defendants summary judgment. View "Hill v. Sears, Roebuck & Co." on Justia Law

Plaintiff Cedroni Associates, Inc. was the lowest bidder on a public contract. The issue before the Supreme Court was whether Plaintiff had a valid business expectancy for the purpose of sustaining a claim of tortious interference with business expectancy. The trial court held that Plaintiff did not have such an expectancy, but a divided appellate court held that a genuine issue of material fact existed in that regard. Because the Supreme Court agreed with the trial court and the Court of Appeals dissent that Plaintiff did not have a valid business expectancy, the Supreme Court reversed the appellate court's judgment and reinstated the trial court's order granting Defendant's motion for summary judgment. View "Cedroni Associates, Inc. v. Tomblinson, Harburn Associates, Architects & Planners, Inc." on Justia Law

The issue before the Supreme Court in this case was whether a limitations period applied to an action for breach of a construction contract. The Court of Appeals held that the limitations period applied in this case, and that the statute's six-year limit expired before Plaintiff Miller-Davis Company filed its complaint. The appellate court reversed the judgment of the trial court that had awarded Plaintiff damages. Plaintiff argued on appeal to the Supreme Court that a different statute of limitations for breach of contract controlled, and the period prescribed by that statute was the applicable statute for this action. Upon review of the two statutes of limitations, the Supreme Court agreed with Plaintiff. The limitation in both statutes is six years, however, the period runs from "the date the claim first accrued." The Court reversed the appellate court's judgment because there was a question about the date Plaintiff's action accrued. The Court remanded the case for further proceedings. View "Miller-Davis Co. v. Ahrens Construction, Inc." on Justia Law

At issue in this case was whether the trial court abused its discretion when it concluded that Defendants Richco Construction, Inc. (Richco) and Ronald Richards, Jr. were personally notified of the default judgment against them and denied their motion to set aside that judgment. The suit arose from a contractual relationship between Plaintiff Lawrence M. Clarke, Inc. (Clarke) and Defendant. Clarke worked on a residential subdivision in 2003, and hired Richco as a subcontractor to work on the sewer system. Richco's work did not satisfy the local governing municipality, and after efforts to repair were unfruitful, Clarke contracted with another party to finish the work. Clark filed a breach of contract and fraud complaint against Richco. The process server attempted to serve Richco at its business address on file with the state, but Richco had vacated the premises and left no forwarding address. Clarke continued in its efforts to locate Richco and refiled its complaint. The trial court permitted alternative service through mailing notice to last-known addresses and a classified advertisement in the local paper. With no response, Clarke moved for a default judgment that the court granted. Upon review of the trial court record, the Supreme Court found that the trial court abused its discretion by finding that Richco was personally notified, and that Richco was entitled to relief from the default judgment. The Court reversed and remanded the case back to the trial court for further proceedings. View "Lawrence M. Clarke, Inc. v. Richco Construction, Inc." on Justia Law