The Michigan Supreme Court (MSC) will hear oral arguments in seven cases on Wednesday, December 4, beginning at 9:30 a.m., in the 6th floor courtroom at the Michigan Hall of Justice at 925 W. Ottawa in Lansing. Oral arguments will be livestreamed from the MSC website.
The notice of cases is posted on the Supreme Court’s oral arguments web page.
The following brief accounts may not reflect the way that some or all of the court’s seven justices view the case. The attorneys may also disagree about the facts, issues, procedural history, and significance of this case. For further details, contact the attorneys.
Wednesday, December 4
Morning Session – 9:30 a.m.
166575
HEATHER MALONE, (attorney Steven Hicks)
Plaintiff-Appellant,
v
(Appeal from Ct of Appeals)
(Livingston CC - McGivney, M.)
CONOR THOMPSON McRELL and ZHETMAN BRIGHTON, LC, (attorney Robert Goldstein)
Defendants-Appellees,
and
FARMERS INSURANCE EXCHANGE,
Defendant.
Defendant Conor McRell rear-ended plaintiff Heather Malone while delivering a pizza for a Jet’s Pizza owned by defendant Zhetman Brighton, LC. The plaintiff sued McRell and Zhetman. The plaintiff and McRell entered into a settlement agreement and McRell was dismissed from the case. The settlement agreement stated that the settlement between the plaintiff and McRell would not affect the plaintiff’s cause of action against Zhetman. Zhetman filed a motion for summary disposition, arguing, in part, that it cannot be held vicariously liable for McRell’s negligence because the plaintiff settled her claims against McRell. The trial court granted Zhetman’s motion for summary disposition and subsequently denied the plaintiff’s motion to set aside the stipulated order that dismissed her claims against McRell. The Court of Appeals affirmed the trial court in a 2-1 unpublished opinion. The Supreme Court remanded the case to the Court of Appeals for it to consider whether the 1995 amendment of MCL 600.2925d(a) abrogated the common-law rule that “a valid release of an agent for tortious conduct operates to bar recovery against the principal on a theory of vicarious liability, even though the release specifically reserves claims against the principal.” Theophelis v Lansing Gen Hosp, 430 Mich 473, 480 (1988) (opinion by Griffin, J.). On remand, the Court of Appeals answered that question in the negative and once again affirmed the trial court in a published opinion. The Supreme Court has ordered oral argument on the application to address: (1) whether the 1995 amendment of MCL 600.2925d(a) abrogated the common-law rule that “a valid release of an agent for tortious conduct operates to bar recovery against the principal on a theory of vicarious liability, even though the release specifically reserves claims against the principal.” Theophelis v Lansing Gen Hosp, 430 Mich 473, 480 (1988) (opinion by GRIFFIN, J.); and (2) if the 1995 amendment of MCL 600.2925d(a) did not abrogate this common-law rule, whether the Supreme Court should nonetheless abandon it. See Price v High Pointe Oil Co, Inc, 493 Mich 238, 258 (2013); People v Woolfolk, 497 Mich 23, 26 (2014); Theophelis, 430 Mich at 497-529 (opinion by LEVIN, J.).
—————
165824
LA DEVELOPERS, LLC, and DAVID BYKER, (attorney Jonathan Koch)
Petitioners-Appellants,
v
(Appeal from Ct of Appeals)
(Kent CC - Benson, C.)
DEPARTMENT OF LICENSING AND REGULATORY AFFAIRS—CORPORATIONS, SECURITIES, AND COMMERCIAL LICENSING BUREAU, (attorney Aaron Levin)
Respondent-Appellee.
The petitioners – LA Developers, LLC, and David Byker – issued promissory notes to repurchase the interests of their investors in a condominium development in Costa Rica. One of the investors filed a complaint with the Department of Licensing and Regulatory Affairs—Corporations, Securities, and Commercial Licensing Bureau (the “Bureau”). In finding that there was a securities law violation, the Bureau first determined that the promissory note constituted a “security,” which is necessary for this matter to fall within the Bureau’s jurisdiction and for the petitioners to be subject to a cease-and-desist order and a fine for omitting material information relevant to the purchase of the security. In making that determination, the Bureau adopted and applied the “family resemblance test” announced in Reves v Ernst & Young, 494 US 56 (1990). The petitioners appealed to the Kent Circuit Court, which held that the Reves test conflicted with existing Michigan law and that the instrument at issue was not a security. The Court of Appeals, in a published opinion, reversed the circuit court, concluding that the Reves test is the appropriate test. The petitioners filed an application for leave to appeal in the Supreme Court, arguing that the Legislature provided a five-factor test set forth in MCL 451.2102c(c)(i)(A)-(E) to be used for determining whether contractual arrangements, like notes, are securities, and the Court of Appeals erred by instead adopting the Reves test created by federal courts. The Supreme Court has ordered oral argument on the application to address: (1) whether the five-factor test embedded in MCL 451.2102c(c)(i)(A)-(E) is to be applied when determining whether a promissory note is a “security” as that term is defined under MCL 451.2102c or, alternatively, (2) whether the test to be applied is the “family resemblance test” announced in Reves v Ernst & Young, 494 US 56 (1990).
—————
166297
PEOPLE OF THE STATE OF MICHIGAN, (attorney Mitch Tibbs)
Plaintiff-Appellee,
v
(Appeal from Ct of Appeals)
(Wayne CC - Ramsey, K.)
NATALIE CHRISTINA NELSON, (attorney Wade Fink)
Defendant-Appellant.
The defendant pulled out a handgun during a confrontation with her boyfriend. Following a jury trial, she was convicted of felonious assault, felony-firearm, and domestic violence. The issue at trial was whether the defendant acted in self-defense. According to the defendant, her boyfriend threatened to kill her while he was choking her. The trial court excluded evidence of the threat to kill her during the defendant’s direct examination, but the evidence was admitted during her cross-examination. The Court of Appeals, in a 2-1 unpublished opinion, affirmed the defendant’s convictions, holding that the trial court’s error in not admitting the victim’s threat toward the defendant was harmless because later in her testimony the defendant was able to state the victim’s threat to kill her. The Supreme Court has ordered oral argument on the application to address: (1) whether the harmless error test in People v Lukity, 460 Mich 484 (1999), should be refined or amended, see generally People v Parsley, 500 Mich 1033, 1033 (2017) (Larsen, J., concurring); and (2) whether—under the Lukity standard or otherwise—the defendant is entitled to relief for the trial court’s erroneous exclusion on direct examination of the defendant’s testimony regarding a threat made by the victim.
—————
166329, 166333
JOSEPH RUMAN, DAVID J. PETERS, and CYNTHIA A. PETERS, on Behalf of Themselves and All Others Similarly Situated, ((attorney Gregory Hanley)
Plaintiffs-Appellants,
v
(Appeal from Ct of Appeals)
(Macomb CC - Toia, J.)
CITY OF WARREN MICHIGAN, (attorney Mark Roberts)
Defendant-Appellee.
—————
JOHN BATE, on Behalf of Himself and All Others Similarly Situated, (Shawn Head)
Plaintiff-Appellant,
v
(Appeal from Ct of Appeals)
(Macomb CC - Toia, J.)
CITY OF ST. CLAIR SHORES MICHIGAN, (attorney Sonal Mithani)
Defendant-Appellee.
The plaintiffs are two groups of taxpayers from the City of Warren and the City of St. Clair Shores. The plaintiffs brought separate lawsuits against the cities, claiming that they are owed refunds for taxes collected in violation of Const 1963, art 9, § 31, commonly known as the Headlee Amendment. The plaintiffs allege that the Michigan Fire Fighters and Police Officers Retirement Act, MCL 38.551 et seq. (Act 345), authorized a municipality to establish a police and fire employee pension plan and to impose a new tax to fund the obligations under the pension plan. They further allege that, under Act 345, the defendant cities were only entitled to impose taxes sufficient to fund the city’s actual contributions to the pension plan, and were not entitled to impose taxes to fund benefits such as health insurance costs. The plaintiffs contend that because the laws allowing municipalities to use taxes on retirees’ health insurance did not predate the Headlee Amendment, such expenses are prohibited unless separately authorized by popular vote. Because the defendants did not acquire separate voter approval before spending tax money on health insurance for their retired police and firefighters, the plaintiffs argue that the taxpayers they represent are entitled to refunds. The trial court concluded that Act 345 provided for the payment of retirement benefits, including healthcare benefits, so the authority predated the Headlee Amendment. The Court of Appeals affirmed in a published opinion. The Supreme Court has ordered oral argument on the applications to address: (1) whether the Fire Fighters and Police Officers Retirement Act, MCL 38.551 et seq., authorizes municipalities to fund health insurance and other benefits to their retired police and firefighters; (2) whether Act 28 of 1966 (MCL 38.571 and MCL 38.572) provides pre-Headlee Amendment authorization for a municipality to increase retirement benefits to retired police and firefighters, including healthcare benefits; and (3) whether the phrase “retirement system” in MCL 38.552(1) should be interpreted by reference to the definition of “retirement system” in MCL 38.2803 of the Protecting Local Government Retirement and Benefits Act, MCL 38.2801 et seq.
—————
Wednesday, December 4
Afternoon Session – 12:30 p.m.
166190
SIXARP, LLC, d/b/a PRAXIS PACKAGING SOLUTIONS, (attorney Jackie Cook)
Petitioner-Appellee,
v
(Appeal from Ct of Appeals)
(Tax Tribunal)
TOWNSHIP OF BYRON, (attorney Seth O-Loughlin)
Respondent-Appellant.
The petitioner applied to the respondent township for the eligible manufacturing personal property (EMPP) exemption. On February 9, 2021, the township assessor denied the request. The denial said that a taxpayer may appeal to the Board of Review, and that filing such a protest was necessary to protect the right to appeal to the Michigan Tax Tribunal (MTT). The township also sent the petitioner a notice of assessment with Board of Review information. The petitioner’s representative did not email a letter appeal to the assessor until March 10, 2021. Meanwhile, the township’s Board of Review had held its meetings. On March 11, 2021, the assessor emailed the petitioner and said the Board of Review had adjourned on March 9. On April 13, 2021, the petitioner filed a petition with the MTT, arguing that it qualified for the EMPP exemption and that its due process rights had been violated because the assessor did not give notice of the Board of Review’s meeting schedule and appeal deadlines and did not adequately explain the denial. The MTT granted the township’s motion for summary disposition under MCR 2.116(C)(4), concluding that it lacked jurisdiction because the petitioner did not protest at the Board of Review. The Court of Appeals, in a published opinion, reversed and remanded for further proceedings. The Court of Appeals concluded that the assessor’s denial failed to adequately inform the petitioner of the time or manner for appeal, and that as a result, the petitioner could bypass the requirement that it first protest to the Board of Review before appealing to the MTT. The Court of Appeals also concluded that the assessor’s denial deprived the petitioner of due process and that the remedy should be vesting the MTT with jurisdiction to consider the petitioner’s EMPP exemption claim. The Supreme Court has ordered oral argument on the application to address: (1) whether the assessor’s denial of the petitioner’s request for exemption as eligible manufacturing personal property satisfied the requirements of MCL 211.9m(3) and MCL 211.9n(3) and/or due process; (2) if not, whether the denial notice’s failure to satisfy those requirements relieved the petitioner of the requirement to protest the denial at the 2021 March Board of Review; and (3) whether the Michigan Tax Tribunal can exercise jurisdiction over this case.
166459
KATHRYN L. KIRCHER, (attorney Joseph Ahern)
Plaintiff-Appellee,
v
(Appeal from Ct of Appeals)
(Emmet CC - Hayes, R.)
BOYNE USA, INC., and STEPHEN KIRCHER, (attorney Kenneth Brooks)
Defendants-Appellants,
and
JOHN E. KIRCHER and AMY KIRCHER WRIGHT,
Defendants.
In 2012, plaintiff Kathryn Kircher filed a lawsuit against defendant Boyne USA, Inc., after her brother, defendant Stephen Kircher, who is the majority shareholder and CEO of Boyne, fired her. The plaintiff and the defendants entered into a settlement agreement in May 2014. That agreement contained a provision that gave the plaintiff the right to redeem her shares of stock in the company. The plaintiff filed another lawsuit against Boyne in 2016. In April 2019, the parties entered into a supplemental settlement agreement. The agreement indicated that Boyne would purchase the plaintiff’s 2019 shares at a price that would be calculated pursuant to the formula set forth in the parties’ May 2014 settlement agreement. Meanwhile, in 2018, Boyne purchased, with borrowed funds, nearly $300 million in real estate and assets that it was previously leasing. Because the redemption price for the plaintiff’s shares was tied to Boyne’s debt, this purchase significantly reduced the 2019 redemption price. While the 2018 redemption price had been $773 per share, the 2019 redemption price was a negative $2,164.94 per share. In 2020, the plaintiff filed suit against the defendants, alleging that they breached the 2014 settlement agreement by entering into the 2018 real estate transaction that significantly added to Boyne’s debt and that the defendants acted in bad faith by refusing to agree to an alternative method to calculate the redemption price, as permitted by the 2014 settlement agreement. The trial court denied the defendants’ motion for summary disposition, concluding that there were questions of fact regarding whether the plaintiff could succeed on a theory that the defendants breached the implied covenant of good faith and fair dealing. The Court of Appeals affirmed in a published opinion. The Supreme Court has ordered oral argument on the application to address: (1) whether the implied covenant of good faith and fair dealing applies only as an interpretive tool to understand the express terms of a contract, compare Gorman v American Honda Motor Co, Inc, 302 Mich App 113, 133-134 (2013), with In re Vylene Enterprises, Inc, 90 F3d 1472, 1477 (CA 9, 1996); (2) whether the plaintiff stated a valid claim for breach of contract based on the defendants entering into the 2018 real estate transaction that significantly added to the debt of defendant Boyne USA, Inc.; and (3) whether the plaintiff stated a valid claim for breach of contract based on the defendants’ refusal to negotiate an alternative formula to calculate the redemption price of the plaintiff’s shares.
166473
DARNELL HAIRSTON, (attorney Christopher Cooke)
Plaintiff/Garnishor Plaintiff-
Appellee,
v
(Appeal from Ct of Appeals)
(Ottawa CC - Hulsing, J.)
JOSH LKU, ZEELAND FARM SERVICES, INC., ZEELAND FARM SOYA, INC., and ZFS LICENSING, INC.,
Defendants,
and
SPECIALTY INDUSTRIES, INC., (attorney Christopher Cooke)
Defendant-Appellee,
and
BURLINGTON INSURANCE CO., (attorney Erin Rodenhouse)
Garnishee Defendant-Appellant,
and EVANSTON INSURANCE CO.,
Garnishee Defendant.
The plaintiff lost his right hand and forearm in an accident at a soybean processing facility where he was employed. A jury found that defendant Specialty Industries, Inc. was grossly negligent in its design of the processing machinery. The trial court entered a judgment of almost $13.5 million against Specialty Industries. Specialty Industries is insured by Burlington Insurance Company and Evanston Insurance Company. Burlington and Evanston paid approximately $9.7 million of the judgment under the terms of their respective insurance agreements with Specialty Industries. The plaintiff sought to collect the remaining balance on the judgment from the insurers after Specialty Industries assigned its right to pursue legal action against them to the plaintiff. The plaintiff and Specialty Industries moved to conduct proceedings supplemental to judgment, specifically to obtain discovery from the insurers as to their alleged bad-faith refusal to allow Specialty Industries to accept the plaintiff’s settlement offers. The trial court denied the request for supplemental proceedings. The plaintiff then filed writs of garnishment against Burlington and Evanston. The trial court granted the insurers’ motions to quash and dismiss under MCR 2.116(C)(8), holding that the bad-faith claim cannot be litigated in a garnishment action because it is only a potential cause of action. The Court of Appeals held in a published opinion that the trial court abused its discretion when it held that a dispute over a bad-faith refusal to settle could not be litigated in a writ of garnishment. The Court of Appeals remanded the case to the trial court for further proceedings. The Supreme Court has ordered oral argument on the application to address whether a claim of bad-faith refusal to settle by an insurer can be litigated in a writ of garnishment. See MCR 3.101(G)(1); Rutter v King, 57 Mich App 152 (1974).
The notice of cases is posted on the Supreme Court’s oral arguments web page.
The following brief accounts may not reflect the way that some or all of the court’s seven justices view the case. The attorneys may also disagree about the facts, issues, procedural history, and significance of this case. For further details, contact the attorneys.
Wednesday, December 4
Morning Session – 9:30 a.m.
166575
HEATHER MALONE, (attorney Steven Hicks)
Plaintiff-Appellant,
v
(Appeal from Ct of Appeals)
(Livingston CC - McGivney, M.)
CONOR THOMPSON McRELL and ZHETMAN BRIGHTON, LC, (attorney Robert Goldstein)
Defendants-Appellees,
and
FARMERS INSURANCE EXCHANGE,
Defendant.
Defendant Conor McRell rear-ended plaintiff Heather Malone while delivering a pizza for a Jet’s Pizza owned by defendant Zhetman Brighton, LC. The plaintiff sued McRell and Zhetman. The plaintiff and McRell entered into a settlement agreement and McRell was dismissed from the case. The settlement agreement stated that the settlement between the plaintiff and McRell would not affect the plaintiff’s cause of action against Zhetman. Zhetman filed a motion for summary disposition, arguing, in part, that it cannot be held vicariously liable for McRell’s negligence because the plaintiff settled her claims against McRell. The trial court granted Zhetman’s motion for summary disposition and subsequently denied the plaintiff’s motion to set aside the stipulated order that dismissed her claims against McRell. The Court of Appeals affirmed the trial court in a 2-1 unpublished opinion. The Supreme Court remanded the case to the Court of Appeals for it to consider whether the 1995 amendment of MCL 600.2925d(a) abrogated the common-law rule that “a valid release of an agent for tortious conduct operates to bar recovery against the principal on a theory of vicarious liability, even though the release specifically reserves claims against the principal.” Theophelis v Lansing Gen Hosp, 430 Mich 473, 480 (1988) (opinion by Griffin, J.). On remand, the Court of Appeals answered that question in the negative and once again affirmed the trial court in a published opinion. The Supreme Court has ordered oral argument on the application to address: (1) whether the 1995 amendment of MCL 600.2925d(a) abrogated the common-law rule that “a valid release of an agent for tortious conduct operates to bar recovery against the principal on a theory of vicarious liability, even though the release specifically reserves claims against the principal.” Theophelis v Lansing Gen Hosp, 430 Mich 473, 480 (1988) (opinion by GRIFFIN, J.); and (2) if the 1995 amendment of MCL 600.2925d(a) did not abrogate this common-law rule, whether the Supreme Court should nonetheless abandon it. See Price v High Pointe Oil Co, Inc, 493 Mich 238, 258 (2013); People v Woolfolk, 497 Mich 23, 26 (2014); Theophelis, 430 Mich at 497-529 (opinion by LEVIN, J.).
—————
165824
LA DEVELOPERS, LLC, and DAVID BYKER, (attorney Jonathan Koch)
Petitioners-Appellants,
v
(Appeal from Ct of Appeals)
(Kent CC - Benson, C.)
DEPARTMENT OF LICENSING AND REGULATORY AFFAIRS—CORPORATIONS, SECURITIES, AND COMMERCIAL LICENSING BUREAU, (attorney Aaron Levin)
Respondent-Appellee.
The petitioners – LA Developers, LLC, and David Byker – issued promissory notes to repurchase the interests of their investors in a condominium development in Costa Rica. One of the investors filed a complaint with the Department of Licensing and Regulatory Affairs—Corporations, Securities, and Commercial Licensing Bureau (the “Bureau”). In finding that there was a securities law violation, the Bureau first determined that the promissory note constituted a “security,” which is necessary for this matter to fall within the Bureau’s jurisdiction and for the petitioners to be subject to a cease-and-desist order and a fine for omitting material information relevant to the purchase of the security. In making that determination, the Bureau adopted and applied the “family resemblance test” announced in Reves v Ernst & Young, 494 US 56 (1990). The petitioners appealed to the Kent Circuit Court, which held that the Reves test conflicted with existing Michigan law and that the instrument at issue was not a security. The Court of Appeals, in a published opinion, reversed the circuit court, concluding that the Reves test is the appropriate test. The petitioners filed an application for leave to appeal in the Supreme Court, arguing that the Legislature provided a five-factor test set forth in MCL 451.2102c(c)(i)(A)-(E) to be used for determining whether contractual arrangements, like notes, are securities, and the Court of Appeals erred by instead adopting the Reves test created by federal courts. The Supreme Court has ordered oral argument on the application to address: (1) whether the five-factor test embedded in MCL 451.2102c(c)(i)(A)-(E) is to be applied when determining whether a promissory note is a “security” as that term is defined under MCL 451.2102c or, alternatively, (2) whether the test to be applied is the “family resemblance test” announced in Reves v Ernst & Young, 494 US 56 (1990).
—————
166297
PEOPLE OF THE STATE OF MICHIGAN, (attorney Mitch Tibbs)
Plaintiff-Appellee,
v
(Appeal from Ct of Appeals)
(Wayne CC - Ramsey, K.)
NATALIE CHRISTINA NELSON, (attorney Wade Fink)
Defendant-Appellant.
The defendant pulled out a handgun during a confrontation with her boyfriend. Following a jury trial, she was convicted of felonious assault, felony-firearm, and domestic violence. The issue at trial was whether the defendant acted in self-defense. According to the defendant, her boyfriend threatened to kill her while he was choking her. The trial court excluded evidence of the threat to kill her during the defendant’s direct examination, but the evidence was admitted during her cross-examination. The Court of Appeals, in a 2-1 unpublished opinion, affirmed the defendant’s convictions, holding that the trial court’s error in not admitting the victim’s threat toward the defendant was harmless because later in her testimony the defendant was able to state the victim’s threat to kill her. The Supreme Court has ordered oral argument on the application to address: (1) whether the harmless error test in People v Lukity, 460 Mich 484 (1999), should be refined or amended, see generally People v Parsley, 500 Mich 1033, 1033 (2017) (Larsen, J., concurring); and (2) whether—under the Lukity standard or otherwise—the defendant is entitled to relief for the trial court’s erroneous exclusion on direct examination of the defendant’s testimony regarding a threat made by the victim.
—————
166329, 166333
JOSEPH RUMAN, DAVID J. PETERS, and CYNTHIA A. PETERS, on Behalf of Themselves and All Others Similarly Situated, ((attorney Gregory Hanley)
Plaintiffs-Appellants,
v
(Appeal from Ct of Appeals)
(Macomb CC - Toia, J.)
CITY OF WARREN MICHIGAN, (attorney Mark Roberts)
Defendant-Appellee.
—————
JOHN BATE, on Behalf of Himself and All Others Similarly Situated, (Shawn Head)
Plaintiff-Appellant,
v
(Appeal from Ct of Appeals)
(Macomb CC - Toia, J.)
CITY OF ST. CLAIR SHORES MICHIGAN, (attorney Sonal Mithani)
Defendant-Appellee.
The plaintiffs are two groups of taxpayers from the City of Warren and the City of St. Clair Shores. The plaintiffs brought separate lawsuits against the cities, claiming that they are owed refunds for taxes collected in violation of Const 1963, art 9, § 31, commonly known as the Headlee Amendment. The plaintiffs allege that the Michigan Fire Fighters and Police Officers Retirement Act, MCL 38.551 et seq. (Act 345), authorized a municipality to establish a police and fire employee pension plan and to impose a new tax to fund the obligations under the pension plan. They further allege that, under Act 345, the defendant cities were only entitled to impose taxes sufficient to fund the city’s actual contributions to the pension plan, and were not entitled to impose taxes to fund benefits such as health insurance costs. The plaintiffs contend that because the laws allowing municipalities to use taxes on retirees’ health insurance did not predate the Headlee Amendment, such expenses are prohibited unless separately authorized by popular vote. Because the defendants did not acquire separate voter approval before spending tax money on health insurance for their retired police and firefighters, the plaintiffs argue that the taxpayers they represent are entitled to refunds. The trial court concluded that Act 345 provided for the payment of retirement benefits, including healthcare benefits, so the authority predated the Headlee Amendment. The Court of Appeals affirmed in a published opinion. The Supreme Court has ordered oral argument on the applications to address: (1) whether the Fire Fighters and Police Officers Retirement Act, MCL 38.551 et seq., authorizes municipalities to fund health insurance and other benefits to their retired police and firefighters; (2) whether Act 28 of 1966 (MCL 38.571 and MCL 38.572) provides pre-Headlee Amendment authorization for a municipality to increase retirement benefits to retired police and firefighters, including healthcare benefits; and (3) whether the phrase “retirement system” in MCL 38.552(1) should be interpreted by reference to the definition of “retirement system” in MCL 38.2803 of the Protecting Local Government Retirement and Benefits Act, MCL 38.2801 et seq.
—————
Wednesday, December 4
Afternoon Session – 12:30 p.m.
166190
SIXARP, LLC, d/b/a PRAXIS PACKAGING SOLUTIONS, (attorney Jackie Cook)
Petitioner-Appellee,
v
(Appeal from Ct of Appeals)
(Tax Tribunal)
TOWNSHIP OF BYRON, (attorney Seth O-Loughlin)
Respondent-Appellant.
The petitioner applied to the respondent township for the eligible manufacturing personal property (EMPP) exemption. On February 9, 2021, the township assessor denied the request. The denial said that a taxpayer may appeal to the Board of Review, and that filing such a protest was necessary to protect the right to appeal to the Michigan Tax Tribunal (MTT). The township also sent the petitioner a notice of assessment with Board of Review information. The petitioner’s representative did not email a letter appeal to the assessor until March 10, 2021. Meanwhile, the township’s Board of Review had held its meetings. On March 11, 2021, the assessor emailed the petitioner and said the Board of Review had adjourned on March 9. On April 13, 2021, the petitioner filed a petition with the MTT, arguing that it qualified for the EMPP exemption and that its due process rights had been violated because the assessor did not give notice of the Board of Review’s meeting schedule and appeal deadlines and did not adequately explain the denial. The MTT granted the township’s motion for summary disposition under MCR 2.116(C)(4), concluding that it lacked jurisdiction because the petitioner did not protest at the Board of Review. The Court of Appeals, in a published opinion, reversed and remanded for further proceedings. The Court of Appeals concluded that the assessor’s denial failed to adequately inform the petitioner of the time or manner for appeal, and that as a result, the petitioner could bypass the requirement that it first protest to the Board of Review before appealing to the MTT. The Court of Appeals also concluded that the assessor’s denial deprived the petitioner of due process and that the remedy should be vesting the MTT with jurisdiction to consider the petitioner’s EMPP exemption claim. The Supreme Court has ordered oral argument on the application to address: (1) whether the assessor’s denial of the petitioner’s request for exemption as eligible manufacturing personal property satisfied the requirements of MCL 211.9m(3) and MCL 211.9n(3) and/or due process; (2) if not, whether the denial notice’s failure to satisfy those requirements relieved the petitioner of the requirement to protest the denial at the 2021 March Board of Review; and (3) whether the Michigan Tax Tribunal can exercise jurisdiction over this case.
166459
KATHRYN L. KIRCHER, (attorney Joseph Ahern)
Plaintiff-Appellee,
v
(Appeal from Ct of Appeals)
(Emmet CC - Hayes, R.)
BOYNE USA, INC., and STEPHEN KIRCHER, (attorney Kenneth Brooks)
Defendants-Appellants,
and
JOHN E. KIRCHER and AMY KIRCHER WRIGHT,
Defendants.
In 2012, plaintiff Kathryn Kircher filed a lawsuit against defendant Boyne USA, Inc., after her brother, defendant Stephen Kircher, who is the majority shareholder and CEO of Boyne, fired her. The plaintiff and the defendants entered into a settlement agreement in May 2014. That agreement contained a provision that gave the plaintiff the right to redeem her shares of stock in the company. The plaintiff filed another lawsuit against Boyne in 2016. In April 2019, the parties entered into a supplemental settlement agreement. The agreement indicated that Boyne would purchase the plaintiff’s 2019 shares at a price that would be calculated pursuant to the formula set forth in the parties’ May 2014 settlement agreement. Meanwhile, in 2018, Boyne purchased, with borrowed funds, nearly $300 million in real estate and assets that it was previously leasing. Because the redemption price for the plaintiff’s shares was tied to Boyne’s debt, this purchase significantly reduced the 2019 redemption price. While the 2018 redemption price had been $773 per share, the 2019 redemption price was a negative $2,164.94 per share. In 2020, the plaintiff filed suit against the defendants, alleging that they breached the 2014 settlement agreement by entering into the 2018 real estate transaction that significantly added to Boyne’s debt and that the defendants acted in bad faith by refusing to agree to an alternative method to calculate the redemption price, as permitted by the 2014 settlement agreement. The trial court denied the defendants’ motion for summary disposition, concluding that there were questions of fact regarding whether the plaintiff could succeed on a theory that the defendants breached the implied covenant of good faith and fair dealing. The Court of Appeals affirmed in a published opinion. The Supreme Court has ordered oral argument on the application to address: (1) whether the implied covenant of good faith and fair dealing applies only as an interpretive tool to understand the express terms of a contract, compare Gorman v American Honda Motor Co, Inc, 302 Mich App 113, 133-134 (2013), with In re Vylene Enterprises, Inc, 90 F3d 1472, 1477 (CA 9, 1996); (2) whether the plaintiff stated a valid claim for breach of contract based on the defendants entering into the 2018 real estate transaction that significantly added to the debt of defendant Boyne USA, Inc.; and (3) whether the plaintiff stated a valid claim for breach of contract based on the defendants’ refusal to negotiate an alternative formula to calculate the redemption price of the plaintiff’s shares.
166473
DARNELL HAIRSTON, (attorney Christopher Cooke)
Plaintiff/Garnishor Plaintiff-
Appellee,
v
(Appeal from Ct of Appeals)
(Ottawa CC - Hulsing, J.)
JOSH LKU, ZEELAND FARM SERVICES, INC., ZEELAND FARM SOYA, INC., and ZFS LICENSING, INC.,
Defendants,
and
SPECIALTY INDUSTRIES, INC., (attorney Christopher Cooke)
Defendant-Appellee,
and
BURLINGTON INSURANCE CO., (attorney Erin Rodenhouse)
Garnishee Defendant-Appellant,
and EVANSTON INSURANCE CO.,
Garnishee Defendant.
The plaintiff lost his right hand and forearm in an accident at a soybean processing facility where he was employed. A jury found that defendant Specialty Industries, Inc. was grossly negligent in its design of the processing machinery. The trial court entered a judgment of almost $13.5 million against Specialty Industries. Specialty Industries is insured by Burlington Insurance Company and Evanston Insurance Company. Burlington and Evanston paid approximately $9.7 million of the judgment under the terms of their respective insurance agreements with Specialty Industries. The plaintiff sought to collect the remaining balance on the judgment from the insurers after Specialty Industries assigned its right to pursue legal action against them to the plaintiff. The plaintiff and Specialty Industries moved to conduct proceedings supplemental to judgment, specifically to obtain discovery from the insurers as to their alleged bad-faith refusal to allow Specialty Industries to accept the plaintiff’s settlement offers. The trial court denied the request for supplemental proceedings. The plaintiff then filed writs of garnishment against Burlington and Evanston. The trial court granted the insurers’ motions to quash and dismiss under MCR 2.116(C)(8), holding that the bad-faith claim cannot be litigated in a garnishment action because it is only a potential cause of action. The Court of Appeals held in a published opinion that the trial court abused its discretion when it held that a dispute over a bad-faith refusal to settle could not be litigated in a writ of garnishment. The Court of Appeals remanded the case to the trial court for further proceedings. The Supreme Court has ordered oral argument on the application to address whether a claim of bad-faith refusal to settle by an insurer can be litigated in a writ of garnishment. See MCR 3.101(G)(1); Rutter v King, 57 Mich App 152 (1974).
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