Justia Michigan Supreme Court Opinion Summaries

Articles Posted in Civil Procedure
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Soaring Pine Capital Real Estate and Debt Fund II, LLC, filed suit against Park Street Group Realty Services, LLC; Park Street Group, LLC; and Dean Groulx, alleging multiple counts of breach of contract and fraud. Soaring Pine lent Park Street $1 million to “flip” tax-foreclosed homes in Detroit. The mortgage note had a stated interest rate of 20%, but there were fees and charges associated with the loan that, if considered interest, pushed the effective interest rate above 25%. The mortgage note also contained a "usury savings clause" stating that the note should not be construed to impose an illegal interest rate. After paying more than $140,000 in interest on the loan, Park Street discontinued further payments, arguing Soaring Pine violated the criminal usury statute, MCL 438.41, by knowingly charging an interest rate exceeding 25% and therefore was barred by the wrongful-conduct rule from recovering on the loan. Soaring Pine countered that the fees and charges associated with the loan were not interest and that the note had a usury savings clause that prevented it from charging a usurious rate. Soaring Pine further argued that, assuming it had engaged in criminal usury, it could still recover the loan principal and would only be precluded from collecting the interest. The trial court agreed with Park Street that the purported fees and expenses tied to the loan were really disguised interest, and there was no question of fact that Soaring Pine charged a criminally usurious interest rate. However, the court agreed with Soaring Pine that the usury savings clause was enforceable and that the appropriate remedy was to relieve Park Street of its obligation to pay the interest on the loan but not its obligation to repay the principal. The Michigan Supreme Court held that in determining whether a loan agreement imposes interest that exceeds the legal rate, a usury savings clause is ineffective if the loan agreement otherwise requires a borrower to pay an illegal interest rate. Seeking to collect an unlawful interest rate in a lawsuit, standing alone, was insufficient to trigger criminal liability under Michigan’s criminal usury statute. The appropriate remedy for a lender’s abusive lawsuit is success for the borrower in that lawsuit and appropriate civil sanctions, not a criminal conviction for usury. The Court reversed the appellate and trial courts to the extent they were inconsistent with the Supreme Court's holdings, and remanded this case for further proceedings. View "Soaring Pine Capital Real Estate v. Park Street Group Realty" on Justia Law

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Adora Wilmore-Moody, individually and as next friend of her minor son, brought an action against Mohammed Zakir and Everest National Insurance Company, alleging that Zakir had negligently rear-ended her vehicle, and sought personal protection insurance benefits from Everest for the injuries she and her son incurred as a result of the collision. Everest did not pay the benefits but instead rescinded plaintiff’s policy on the ground that plaintiff had failed to disclose that she had a teenaged granddaughter living with her when she applied for the insurance policy. Everest then brought a counterclaim seeking declaratory relief and moved for summary judgment of plaintiff’s claim against it under MCR 2.116(C)(10), arguing that it was entitled to rescind plaintiff’s policy because she had made a material misrepresentation in her insurance application. The trial court granted Everest’s motion. After this ruling, Zakir also moved for summary judgment, arguing that plaintiff was barred from recovering third-party noneconomic damages from him under the Michigan no-fault act because once Everett rescinded plaintiff’s insurance policy, she did not have the security required by statute at the time the injury occurred. The trial court granted Zakir summary judgment too. The Court of Appeals affirmed the grant of summary judgment to Everest, reversed as to Zakir, and remanded the case for further proceedings. Zakir appealed. The Michigan Supreme Court affirmed the appellate court: an insurer’s decision to rescind a policy post-accident does not trigger the exclusion in MCL 500.3135(2)(c). "Rescission is an equitable remedy in contract, exercised at the discretion of the insurer, and does not alter the reality that, at the time the injury occurred, the injured motorist held the required security. Rescission by the insurer post-accident is not a defense that can be used by a third-party tortfeasor to avoid liability for noneconomic damages." View "Wilmore-Moody v. Zakir" on Justia Law

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Elia Companies, LLC, filed suit against the University of Michigan Regents, alleging breach of contract; violations of Michigan’s anti-lockout statute; breach of covenant for quiet possession; constructive eviction; conversion; and unjust enrichment. In 2013, plaintiff entered into a 10-year lease with defendant to obtain space at the Michigan Union for establishing a coffee shop. In March 2017, defendant disclosed its plans to renovate the Union. Plaintiff’s complaint alleged that the parties’ lease required that they negotiate a relocation of the leased premises. However, defendant terminated the lease on April 20, 2018, based on plaintiff’s alleged default and ordered plaintiff to vacate the premises. Plaintiff filed this action in August 2018, and defendant, over plaintiff’s objection, filed a notice of transfer removing the case to the Court of Claims pursuant to MCL 600.6404(3) and MCL 600.6419(1) of the Court of Claims Act (the COCA). Defendant moved for summary disposition, arguing that plaintiff’s action had to be dismissed because plaintiff failed to comply with the notice and verification requirements of MCL 600.6431 of the COCA. The Court of Claims agreed and dismissed plaintiff’s case. Plaintiff appealed, and the Court of Appeals affirmed in part and reversed in part. The panel affirmed the dismissal of plaintiff’s ancillary claims on governmental-tort-immunity grounds but reversed the dismissal of plaintiff’s contract claim. The Michigan Supreme Court determined the Court of Appeals erred when it excused plaintiff’s failure to timely comply with MCL 600.6431. “All parties with claims against the state, except those exempted in MCL 600.6431 itself, must comply with the requirements of MCL 600.6431.” Judgment was reversed and the matter remanded to the Court of Claims for reinstatement of summary judgment granted in defendant’s favor. View "Elia Companies, LLC v. University Of Michigan Regents" on Justia Law

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In 2019, Susan Christie filed suit against Wayne State University, asserting age and disability discrimination under the Elliott-Larsen Civil Rights Act (the ELCRA); and the Persons with Disabilities Civil Rights Act (the PWDCRA). Christie took a medical leave of absence in February 2017 and returned to work on May 1, 2017. Plaintiff alleged that after her return to work, her supervisors questioned her about her age, asked her when she intended to retire, and had conversations with others in her presence regarding the ages of employees. Plaintiff received a negative job-performance review on September 22, 2017, allegedly the first negative review she had ever received, and defendant terminated her from her job on November 27, 2017. Defendant moved for summary judgment, arguing that MCL 600.6431(1) of the Court of Claims Act (the COCA), required plaintiff to file either a verified complaint with the Court of Claims or notice of intent to file suit with the Court of Claims within one year of the accrual of her claim; defendant maintained plaintiff’s claim was barred by governmental immunity because she failed to do either. The court denied the motion, concluding that MCL 600.6431(1) did not preclude plaintiff from filing her claim in the circuit court because the COCA notice requirements only applied to claims litigated in the Court of Claims. Defendant appealed that decision to the Court of Appeals. While the Court of Appeals ultimately concluded that it lacked jurisdiction to hear the appeal as a matter of right, it treated the appeal as though leave had been granted and affirmed the trial court’s order in an unpublished per curiam opinion. The Michigan Supreme Court reversed, finding the trial court erred by denying defendant’s motion for summary judgment. View "Christie v. Wayne State University" on Justia Law

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Plaintiff-appellant Mack Stirling lived in Leelanau County, Michigan since 1990. Petitioner’s wife, Dixie, owned two rental properties in Utah. The Stirlings filed joint tax returns for the pertinent tax years of 2016 to 2019. Neither Mack nor Dixie ever resided at the Utah properties. Instead, Dixie rented the properties to tenants who used the properties as their primary residences. Dixie claimed an applicable Utah tax exemption during the relevant tax years. Plaintiff applied for a principal residence exemption (PRE) on his Michigan home. Leelanau County denied the application because it concluded the Utah exemption rendered the Stirlings ineligible for the PRE. The Michigan Supreme Court disagreed: the Utah tax exemption at issue, which was available to landowners who rented their property to tenants, was not substantially similar to Michigan’s PRE, which was available only for a landowner’s principal residence. Accordingly, Plaintiff was eligible to claim the Michigan PRE. View "Stirling v. County of Leelanau" on Justia Law

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Helen Jordan, a nurse who was formerly employed by the predecessor to the Michigan Department of Health and Human Services, challenged in the Michigan Compensation Appellate Commission (MCAC) the decision of a magistrate that she was not entitled to disability benefits under the Worker’s Disability Compensation Act (WDCA). In 1995, plaintiff was working for defendant’s predecessor when she was injured during an altercation with a patient. Plaintiff was prescribed opioid medication to treat leg and back pain that she said resulted from the 1995 injury, and she used the opioid medication continuously after the incident and became dependent upon it. Plaintiff began receiving disability benefits under the WDCA in 1996. In 2015, plaintiff underwent an independent medical examination at defendant’s request pursuant to MCL 418.385. The doctor who conducted the examination concluded that any disability experienced by plaintiff was not the result of the 1995 incident, and defendant subsequently discontinued plaintiff’s benefits. Plaintiff applied for reinstatement of her benefits under the WDCA. The Michigan Supreme Court determined the agency record was too incomplete to facilitate “meaningful” appellate review: “Despite the MCAC’s conclusion, whether the experts agreed that plaintiff had a limitation of her wage-earning capacity in work suitable to her qualifications and training was not clear from the record.” Therefore, the Court concluded the Court of Appeals erred by deciding this case as a matter of law because further administrative proceedings were needed. View "Jordan v. Dep’t. of Health & Human Servs." on Justia Law

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Rouch World, LLC, and Uprooted Electrolysis, LLC, brought an action before the Michigan Court of Claims against the Department of Civil Rights and its director, seeking, among other relief, a declaratory judgment that the prohibition of sex discrimination in places of public accommodation under the Elliott-Larsen Civil Rights Act (ELCRA) did not bar discrimination based on sexual orientation or gender identity. The owners of Rouch World had denied a request to host the same-sex wedding of Natalie Johnson and Megan Oswalt at their facility, claiming that doing so would violate their religious beliefs. The owner of Uprooted Electrolysis had denied hair-removal services to Marissa Wolfe, a transgender woman, on the same basis. Johnson, Oswald, and Wolfe filed complaints with the Department of Civil Rights, which had issued an interpretive statement in 2018 indicating that the ELCRA’s prohibition against discrimination based on sex included sexual orientation and gender identity. The Department of Civil Rights opened an investigation into both of these incidents, but the investigations were stayed when plaintiffs brought this action. The Michigan Supreme Court held that the ELCRA encompasses discrimination on the basis of sexual orientation. The Court overruled the Court of Appeals decision in Barbour v. Dept. of Social Servs, 497 NW2d 216 (1993), and reversed in part the Court of Claims decision below. View "Rouch World LLC v. Department Of Civil Rights" on Justia Law

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Appellant Saugatuck Dunes Coastal Alliance, argued that lower courts erred when they found that the Michigan Zoning Enabling Act (MZEA) denied it standing to appeal the decisions of the Saugatuck Township Planning Commission (Commission). Prior Court of Appeals decisions relied on by the Saugatuck Township Zoning Board of Appeals (ZBA) and lower courts repeatedly and erroneously read the term “party aggrieved” too narrowly. The Michigan Supreme Court held that the MZEA did not require an appealing party to own real property and to demonstrate special damages only by comparison to other real-property owners similarly situated. The Supreme Court overruled several Court of Appeals decisions to the limited extent that they required: (1) real-property ownership as a prerequisite to being “aggrieved” by a zoning decision under the MZEA; and (2) special damages to be shown only by comparison to other real-property owners similarly situated. The Supreme Court explained, to be a “party aggrieved” under MCL 125.3605 and MCL 125.3606, the appellant must meet three criteria: (1) the appellant must have participated in the challenged proceedings by taking a position on the contested proposal or decision; (2) the appellant must claim some protected interest or protected personal, pecuniary, or property right that will be or is likely to be affected by the challenged decision; and (3) the appellant must provide some evidence of special damages arising from the challenged decision in the form of an actual or likely injury to or burden on their asserted interest or right that is different in kind or more significant in degree than the effects on others in the local community. A portion of the Court of Appeals' judgment was vacated, and the case was remanded back to the circuit court for reconsideration in light of the Supreme Court's holding here. View "Saugatuck Dunes Coastal Alliance v. Saugatuck Twp." on Justia Law

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Norman Champine brought an action against the Michigan Department of Transportation in the Court of Claims alleging that defendant had breached its duty to maintain I-696. Plaintiff was driving on I-696 in Macomb County when a large piece of concrete dislodged from the road and crashed through the windshield of his car, causing serious injuries. The Court of Claims granted summary judgment in favor of defendant on the basis that plaintiff had failed to provide proper notice under MCL 691.1404. The court reasoned that plaintiff’s separate notice to defendant was inadequate because it was not filed in the Court of Claims, the complaint itself could not serve as notice, and the complaint had not identified the exact location of the highway defect. Plaintiff appealed, and the Court of Appeals affirmed in an unpublished per curiam opinion, holding that the filing of a complaint could not satisfy the statutory notice requirements. The Court of Appeals declined to address whether plaintiff also failed to adequately describe the location of the incident, even assuming plaintiff’s complaint could serve as proper notice. The Michigan Supreme Court determined “notice” was not defined by MCL 691.1404, so courts were permitted to consider its plain meaning as well as its placement and purpose in the statutory scheme. "The plain meaning of the word 'notice' in the context of the statute indicates only that the governmental agency must be made aware of the injury and the defect. The statute does not require advance notice beyond the filing of the complaint, and the Court of Appeals erred by holding otherwise. Plaintiff properly gave notice by timely filing his complaint in the Court of Claims." Nonetheless, the case had to be remanded to the Court of Appeals for that Court to address whether the complaint adequately specified the exact location and nature of the defect as required by MCL 691.1404(1). View "Champine v. Department of Transportation" on Justia Law

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Dean McMaster brought a negligence action against DTE Energy Company, Ferrous Processing and Trading Company (Ferrous), and DTE Electric Company (DTE), seeking compensation for injuries he sustained when a metal pipe fell out of a scrap container and struck him in the leg. DTE, the shipper, contracted with Ferrous to sell scrap metal generated by its business. DTE and Ferrous moved for summary judgment, and the trial court granted the motion as to DTE but denied the motion as to Ferrous. McMaster settled with Ferrous and appealed with regard to DTE. The Court of Appeals affirmed, reasoning that DTE did not have a duty to warn of or protect McMaster from a known danger, relying on the open and obvious danger doctrine. McMaster sought leave to appeal to the Michigan Supreme Court, and the Supreme Court peremptorily vacated Part III of the opinion and remanded the case to the Court of Appeals for consideration of DTE’s legal duty under the law of ordinary negligence. On remand, the Court of Appeals again affirmed the trial court, finding that the common-law duty of a shipper was abrogated by Michigan’s passage of MCL 480.11a, which adopted the federal motor carrier safety regulations as part of the Motor Carrier Safety Act (the MCSA). The Supreme Court disagreed, holding that the common-law duty of care owed by a shipper to a driver was not abrogated by MCL 480.11a. As an issue of first impression, the Court adopted the “shipper’s exception” or “Savage rule” to guide negligence questions involving participants in the trucking industry, as this rule was consistent with Michigan law. Applying this rule, the Supreme Court affirmed on alternate grounds, the grant of summary disposition to DTE Electric Company (DTE) because there existed no genuine issue of material fact that DTE did not breach its duty to plaintiff. View "McMaster v. DTE Energy Company" on Justia Law