Justia Michigan Supreme Court Opinion Summaries

Plaintiffs were taxpayers and school districts seeking a declaratory judgment that the amount of funding appropriated by the Legislature to fund new and increased recordkeeping requirements was materially deficient. Consistent with the Supreme Court's construction of the "Headlee Amendment" and its court rules, the Court required that plaintiffs bringing an action charging inadequate funding of a legislative mandate under the Headlee Amendment must allege and prove not only that the funding was insufficient, but the type and extent of the harm. In this opinion, the Court made clear that this burden included the requirement that the plaintiff show the specific amount of underfunding where the Legislature has made at least some appropriation of funds. The special master in this case applied this burden of proof and dismissed plaintiffs’ claims when plaintiffs stated at trial that they would not provide proofs establishing the specific amount of underfunding. The Court of Appeals reversed, requiring plaintiffs only to provide evidence that the methodology used by the Legislature to determine the amount of the appropriation was materially flawed, and remanded the case to the special master for further proceedings. The Supreme Court found that the Court of Appeals’ standard was inconsistent with its requirement that a plaintiff alleging inadequate funding must show the type and extent of the funding shortfall. Plaintiffs were properly instructed regarding the burden of proof by the special master before trial and failed to offer proofs concerning the specific amount of the alleged shortfall. Thus, the Supreme Court reversed the judgment of the Court of Appeals and entered a judgment in favor of defendants. View "Adair v. Michigan" on Justia Law

Heather Hannay brought an action against the Department of Transportation (MDOT), seeking damages for injuries she suffered when a salt truck driven by one of MDOT’s employees ran a stop sign and struck her car. After a bench trial, the court awarded Hannay $474,904 in noneconomic damages, $767,076 for work-loss benefits, and $153,872 in expenses for ordinary and necessary services. MDOT appealed, and Hannay cross-appealed. Harold Hunter, Jr., brought an action in the Genesee Circuit Court against David Sisco, Auto Club Insurance Association, and the city of Flint Transportation Department seeking damages for injuries suffered when a dump truck owned by Flint and driven by Sisco sideswiped Hunter’s vehicle. Flint moved for summary judgment. The court denied the motion. Flint appealed. The Court of Appeals in Hannay v. Dep’t of Transp concluded that economic damages are compensable under the motor vehicle exception, while the Court of Appeals in Hunter v. Sisco concluded that noneconomic damages are not compensable under this exception. Upon review of both cases, the Supreme Court concluded that “bodily injury” was a category of harm for which governmental immunity from tort liability was waived under MCL 691.1405 and for which damages that naturally flow were compensable. The Court therefore held that a plaintiff could bring a third-party tort action for economic damages, such as work-loss damages, and noneconomic damages, such as pain and suffering or emotional distress damages, against a governmental entity if the requirements of MCL 500.3135 have been met. In Hannay, the Court concluded that the work-loss damages in dispute were too speculative (plaintiff was in school to become a hygienist, not an actual hygienist at the time of the accident) to support the damages award as presented at trial. The Court affirmed the appellate court in Hannay with respect to the type of damages recoverable for bodily injury under the motor vehicle exception to governmental immunity, but reversed on plaintiff's claim for work-loss damages as a dental hygienist. In Hunter the Court reversed the appellate court with respect to the type of damages recoverable for bodily injury under the motor vehicle exception to governmental immunity. Both cases were remanded for further proceedings in their respective trial courts. View "Hannay v. Dept. of Transp." on Justia Law

The Wayne County Employees Retirement System and the Wayne County Retirement Commission filed suit against Wayne Charter County and the Wayne County Board of Commissioners, alleging that a county ordinance defendants enacted in 2010 concerning the retirement system violated Const. 1963, art 9, sec. 24 and the Public Employment Retirement System Investment Act (PERSIA). The ordinance placed a $12 million limit on the balance of the retirement system’s reserve for inflation equity known as the Inflation Equity Fund (IEF), which was funded by investment earnings on pension assets. The ordinance also placed a $5 million limit on a discretionary distribution of money from the IEF known as the “13th check,” which had been made annually in varying amounts to eligible retirees and survivor beneficiaries to help fight the effects of inflation. The ordinance required any amount in the IEF exceeding the $12 million cap to be debited from the IEF and credited to the assets of the defined benefit plan, where it would be used to offset or reduce the annual required contribution (ARC) that the county was required to make to the defined benefit plan. The county filed a counterclaim alleging, among other things, that the retirement commission had violated its fiduciary duties by mismanaging the retirement system’s assets. The trial court granted defendants’ motion for summary judgment regarding plaintiffs’ constitutional and statutory objections to the ordinance, and plaintiffs appealed. After its review, the Supreme Court concluded that the Court of Appeals correctly held that the $32 million offset against the county’s ARC violated PERSIA for the reasons stated in the Court of Appeals opinion. The portion of the Court of Appeals opinion concluding that the intrasystem transfer of retirement system assets would violate PERSIA without the corresponding offset to the ARC was vacated, as were the portions of the opinion discussing the constitutional implications of the amended ordinance in relation to Const. 1963, art 9, sec. 24 and the determination that the transferred funds, once returned to the IEF, must be used only for the purposes of that fund. The Supreme Court affirmed the appellate court in all other respects, and remanded the case for further proceedings. View "Wayne County Employees Retirement System v. Wayne Charter County" on Justia Law

Plaintiff initiated a FOIA request, and ultimately this FOIA lawsuit, to receive materials related to pending criminal proceedings that were in defendants’ possession, including video surveillance recordings created by private businesses. Defendants asserted that the surveillance recordings were not public records within the meaning of FOIA and, as a result, did not need to be disclosed. The parties did not dispute that video recordings were “writings” within the meaning of FOIA. Nor did they dispute that these particular video surveillance recordings were “in the possession of” and “retained by” defendants, both of which are public bodies. What was in dispute was whether the recordings were in the possession of or retained by defendants “in the performance of an official function, from the time [they were] created.” "What ultimately determines whether records in the possession of a public body are public records within the meaning of FOIA is whether the public body prepared, owned, used, possessed, or retained them in the performance of an official function. To this point, the Supreme Court agreed with the dissenting Court of Appeals judge that the recordings at issue in this case were public records because they were in the possession of or retained by defendants “in the performance of an official function, from the time [they were] created.” The Supreme Court reversed the appellate and trial courts' decisions inconsistent with its holding in this case, and remanded the case for entry of an order denying defendants' motion for summary judgment. View "Amberg v. City of Dearborn" on Justia Law

Defendant Deandre Woolfolk was convicted by a jury for first-degree murder and possessing a firearm during the commission of a felony for his part in a fatal shooting that took place two hours before his 18th birthday. He was sentenced for life without the possibility of parole for the murder conviction, and a consecutive two-year term for the possession charge. Defendant appealed, arguing that his sentence violated the Eighth Amendment because he was not yet 18 when the crime was committed. The Court of Appeals affirmed the convictions but remanded for resentencing. The State appealed, but the Supreme Court affirmed, finding that for the purposes of "Miller," defendant remained under the age of 18 at the time he committed murder, and therefore was entitled to be treated in accordance with the Miller rule. View "Michigan v. Woolfolk" on Justia Law

While working on a fall clean-up job for defendant All Star Specialists Plus, Inc., defendant Joseph Derry was loading leaves into a truck using a leaf vacuum machine when the machine tipped over, injuring him. At the time, All Star had three insurance policies issued by Auto-Owners Insurance Company: (1) a commercial general liability policy, (2) a commercial automobile insurance (no-fault) policy, and (3) a commercial workers’ compensation policy. The general liability policy excludes from coverage “[a]ny obligation of the insured under a workers[’] compensation . . . law,” and the no-fault policy excludes coverage for “any expenses that would be payable under any workers[’] compensation law . . . .” Derry brought a negligence suit against All Star and one of its owners, Jeffery Harrison, for his injuries and sued Auto-Owners for no-fault benefits. Plaintiff Auto-Owners later filed this declaratory judgment action, seeking a determination that Derry was an employee of All Star and, thus, that the only insurance coverage available was under the workers’ compensation policy. The trial court concluded that because it was uncontroverted that Derry held himself out to the public to perform the same services as the work he performed for All Star, Derry was an independent contractor at the time of his injury and not an employee, and that Derry was therefore entitled to coverage under Auto-Owners’ general liability and no-fault policies. The court denied Auto-Owners’ motion for summary judgment and granted summary judgment in favor of Derry. Auto-Owners appealed to the Court of Appeals, and the panel affirmed in part and reversed in part. The panel affirmed the trial court’s conclusion that Derry was an independent contractor for purposes of the Worker's Disability Compensation Act (WDCA). However, the panel only reached this conclusion because it was bound under MCR 7.215(J)(1) to follow the Court of Appeals’ prior decision in "Amerisure." A special panel was convened, and in a published 4-3 decision, the majority reversed the trial court’s order granting summary judgment in favor of Derry and, thus, its determination that Derry was an independent contractor. Because the Supreme Court believed the term “employee” as defined in the WDCA was properly interpreted in "Amerisure," the Court reversed the Court of Appeals. View "Auto-Owners Insurance Co. v. All Star Lawn Specialists Plus, Inc." on Justia Law

Plaintiff, who was injured while working in Genesee County, filed a workers’ compensation claim. While his claim was pending, defendants, in their capacity as administrators of the workers’ compensation hearing system, advised plaintiff that the Genesee County hearing site where plaintiff’s case was assigned would be closed and that all pending cases from the county, including plaintiff’s, would be transferred to the State Secondary Complex in Dimondale, which is about 70 miles away in Eaton County. Plaintiff brought a mandamus action to compel defendants to maintain the Genesee County hearing site. The trial court granted mandamus relief, and in a divided and published opinion, the Court of Appeals affirmed. The issue before the Supreme Court was whether the trial court abused its discretion by issuing a writ of mandamus compelling defendants to ensure that hearings in workers’ compensation cases were held in the county in which the alleged injury occurred. The Court disagreed with the Court of Appeals, finding that plaintiff did not have a clear legal right to a hearing in Genesee County. Defendants, accordingly, did not have a clear legal obligation to hold the hearing there either. The trial court was reversed, and direct to enter judgment denying plaintiff's complaint for mandamus. View "Younkin v. Zimmer" on Justia Law

Michele Dupree sued Auto-Owners Insurance Company, seeking to recover, under her homeowners’ insurance policy, the full cost of repair or replacement for the personal property that was destroyed in a fire at her home. Because the parties did not agree on the extent of the personal property loss, the parties submitted separate appraisals to an umpire under the process set forth in the insurance policy. The umpire issued an appraisal award that set forth the full replacement cost, the applicable depreciation, and the actual cash value loss of the property. Defendant paid plaintiff the actual cash value of the property but refused to pay the full replacement cost on the ground that plaintiff had failed to submit proof, in accordance with the replacement-cost provision of her insurance policy, that she had actually replaced the damaged property. The court denied defendant’s motion for summary judgment and granted summary judgment to plaintiff. Defendant appealed. The Court of Appeals, affirmed in an unpublished opinion per curiam. On appeal, the issue before the Supreme Court was whether plaintiff’s appraisal award entitled her to only the actual cash value of her damaged personal property or whether defendant was liable for the full replacement cost of that property, i.e., actual cash value plus the applicable depreciation amount. The Supreme Court reversed, finding that plaintiff was not entitled to the full replacement cost of her property because she did not submit proof of actual loss in accordance with her policy. Defendant was liable for only the actual cash value of plaintiff’s damaged personal property. View "Dupree v. Auto-Owners Insurance Company" on Justia Law

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

International Business Machines Corporation (IBM) brought an action in the Court of Claims against the Department of Treasury to challenge the department's ruling that IBM was not entitled to apportion its business income tax base and modified gross receipts tax base using a three-factor apportionment formula provided in the Multistate Tax Compact (MCL 205.581 et seq.) and was instead required to apportion its income using the sales-factor formula in the Business Tax Act (MCL 208.1101 et seq.) when calculating its state taxes for 2008. IBM moved for summary judgment under MCR 2.116(C)(10), and the department moved for summary judgment under MCR 2.116(I)(2). After a hearing, the Court of Claims denied IBM's motion and granted the department's motion, holding that the BTA mandated the use of the sales-factor apportionment formula. The Court of Appeals affirmed in an unpublished opinion per curiam. After review, the Supreme Court concluded that IBM was entitled to use the Compact's three-factor apportionment formula for its 2008 Michigan taxes and that the Court of Appeals erred by holding otherwise on the basis of its erroneous conclusion that the Legislature had repealed the Compact's election provision by implication when it enacted the BTA. Furthermore, the Court held that IBM could use the Compact's apportionment formula for that portion of its tax base subject to the modified gross receipts tax of the BTA. View "International Business Machines Corp. v. Dept. of Treasury" on Justia Law