Case Title: PARKWOOD LTD DIVIDEND HOUSING ASSN V STATE HOUSING DEVELOP AUTH

Citation: 

Docket Number: 120411

State: michigan

Court: Michigan Supreme Court

Date: 2003-07-09T00:00:00Z

Document:
____________________________________________________________________________________________ 
____________________________________________________________________________________________________________________________ 
                                          
Michigan Supreme Court
Lansing, Michigan 48909 
Chief Justice 
Justices 
Maura D. Corrigan 
Michael F. Cavanagh 
Elizabeth A. Weaver 
Marilyn Kelly 
Clifford W. Taylor 
Robert P. Young, Jr. 
Opinion 
Stephen J. Markman 
FILED JULY 9, 2003  
PARKWOOD LIMITED DIVIDEND  
HOUSING ASSOCIATION,  
Plaintiff-Appellee,  
v 
Nos. 120410, 120411  
STATE HOUSING DEVELOPMENT AUTHORITY,  
Defendant-Appellant.  
BEFORE THE ENTIRE BENCH  
MARKMAN, J.  
We granted leave to appeal to consider the jurisdiction  
of the Court of Claims over this case, which involves a  
contractual claim for declaratory judgment against a state  
agency.  The Court of Appeals, relying on Silverman v Univ of  
Michigan Bd of Regents, 445 Mich 209; 516 NW2d 54 (1994),  
determined that the Court of Claims lacked subject-matter  
jurisdiction because the complaint did not request monetary  
damages.  Because we conclude that the Court of Claims has  
exclusive 
jurisdiction over the claim, we reverse the judgment  
of the Court of Appeals.  
I. FACTS AND PROCEDURAL HISTORY  
In 
1973, 
plaintiff, 
a 
limited 
dividend 
housing  
association, 
received 
a 
mortgage 
from 
defendant 
Michigan 
State  
Housing Development Authority to finance the construction of  
an apartment complex for low-income and moderate-income  
residents.  
In 
September 1998, plaintiff informed defendant of  
its intention to pay off the mortgage on October 1, 1998, and  
requested a payoff letter showing the amount due. Plaintiff  
also inquired whether the balances in all escrow and reserve  
accounts would be applied against the amount due or paid  
directly to plaintiff.  In response, defendant indicated that  
it would retain any amounts remaining in the accounts after  
payment of the full limited dividend to which plaintiff was  
entitled.1  Plaintiff then filed a “Complaint for Declaratory  
1 The State Housing Development Authority Act, MCL 
125.1493(b), allows the authority to establish a reasonable 
and proper rate for cumulative dividends payable to members of 
limited dividend housing associations and provides that on 
dissolution of the limited dividend housing association, any 
surplus shall be paid to the authority:  
That every member of a limited dividend  
housing association shall be deemed, by acceptance 
of a beneficial interest in the limited dividend  
(continued...)  
2  
Relief” in the Wayne Circuit Court, seeking a declaration that  
the money contained in certain escrow accounts belonged to  
plaintiff and that plaintiff would be entitled to possession  
of the accounts when plaintiff paid the full balance due under  
the mortgage. The circuit court dismissed the case, finding  
that the claim was within the exclusive jurisdiction of the  
Court of Claims.  
Plaintiff appealed from the circuit court's dismissal,  
and refiled its complaint in the Court of Claims.  Both  
parties filed motions for summary disposition. The Court of  
Claims granted summary disposition for defendant. Plaintiff  
appealed from the Court of Claims judgment.  
The 
Court 
of 
Appeals 
consolidated 
plaintiff’s 
two 
appeals  
and, in a split decision, reversed.2  The majority determined  
1(...continued) 
housing association or by executing the document of 
basic organization, to have agreed that he or she 
at no time shall receive from the limited dividend  
housing association any return in excess of the 
face value of the investment attributable to his or  
her respective interest plus cumulative dividend 
payments at a rate which the authority determines 
to be reasonable and proper, computed from the 
initial date on which money was paid or property 
delivered in consideration for the interest; and 
that upon the dissolution of the limited dividend 
housing association, any surplus in excess of those 
amounts shall be paid to the authority or to any 
other regulating governmental body as the authority 
directs.  
2 Unpublished opinion per curiam, issued October 26, 2001 
(continued...)  
3  
   
that, because plaintiff’s complaint sought only a declaratory  
judgment 
concerning 
the 
ownership 
of 
certain 
money, 
contingent  
on certain circumstances, and did not seek monetary damages,  
the circuit court possessed subject-matter jurisdiction.  
Additionally, 
the 
majority concluded that because the Court of  
Claims 
only 
has 
jurisdiction over claims for monetary damages,  
and because plaintiff’s complaint did not seek monetary  
damages, 
the 
Court 
of 
Claims 
lacked 
subject-matter  
jurisdiction and its rulings were void.  
The dissenting Court of Appeals judge concluded that the  
claim would ultimately result in money damages if plaintiff  
were granted the relief requested in the complaint, and,  
therefore, that the case was properly before the Court of  
Claims.  
Defendant filed an application for leave to appeal, and  
plaintiff filed an application for leave to cross-appeal the  
Court of Claims decision on its merits.  We denied plaintiff’s  
application 
and 
granted 
defendant’s 
application, 
directing 
the  
parties to address the jurisdictional question in the context  
of the relevant statutes, MCL 600.6419 and 600.6419a, and this  
Court’s decision in Silverman.3  
2(...continued) 
(Docket Nos. 218433, 229448).  
3 467 Mich 896 (2002).  
4  
    
II. STANDARD OF REVIEW  
In order to resolve this jurisdictional issue, we must  
consider the Court of Claims Act.
 This is a question of  
statutory construction, which is reviewed de novo as a  
question of law.  Cruz v State Farm Mut Automobile Ins Co, 466  
Mich 588, 594; 648 NW2d 591 (2002). 
 III. DISCUSSION  
A. STATUTORY PROVISIONS  
The jurisdiction of the Court of Claims is provided by  
statute. The main statutory provision, MCL 600.6419, grants  
the 
Court 
of 
Claims 
exclusive jurisdiction over certain claims  
against the state and its subparts:  
(1) Except as provided in sections 6419a and 
6440, the jurisdiction of the court of claims, as 
conferred upon it by this chapter, shall be  
exclusive. . . . The court has power and  
jurisdiction:  
(a) To hear and determine all claims and 
demands, liquidated and unliquidated, ex contractu 
and ex delicto, against the state and any of its 
departments, commissions, boards, institutions, 
arms, or agencies.  
In regard to the jurisdiction of the circuit courts, MCL  
600.6419 provides:  
(4) This chapter shall not deprive the circuit 
court of this state of jurisdiction over . . . 
proceedings for declaratory or equitable relief, or 
any other actions against state agencies based upon 
the statutes of this state in such case made and  
provided, which expressly confer jurisdiction 
thereof upon the circuit court . . . .  
5  
 
 
Additionally, MCL 600.6419a, which was added in 1984,  
gives the Court of Claims concurrent jurisdiction with the  
circuit courts over any claim for equitable and declaratory  
relief that is ancillary to a claim filed under § 6419:  
In addition to the powers and jurisdiction 
conferred upon the court of claims by section 6419, 
the court of claims has concurrent jurisdiction of 
any demand for equitable relief and any demand for 
a declaratory judgment when ancillary to a claim 
filed pursuant to section 6419. The jurisdiction 
conferred by this section is not intended to be 
exclusive of the jurisdiction of the circuit court 
over demands for declaratory and equitable relief 
conferred by section 605.[4]  
B. CASE LAW  
Michigan courts have interpreted § 6419(1)(a) “as  
limiting the jurisdiction of the Court of Claims to actions  
for money damages.”  AuSable Manistee Action Council, Inc v  
Michigan, 182 Mich App 596, 598; 452 NW2d 832 (1989)  
(citations omitted).  This interpretation was first set forth  
in Taylor v Auditor Gen, 360 Mich 146, 151; 103 NW2d 769  
(1960), which was decided before the 1984 amendment, when this  
Court, noting that the Court of Claims was created as a court  
of limited jurisdiction having “no ‘equity side’ as that term  
4 MCL 600.605 provides:  
Circuit courts have original jurisdiction to 
hear and determine all civil claims and remedies, 
except where exclusive jurisdiction is given in the 
constitution or by statute to some other court or 
where the circuit courts are denied jurisdiction by 
the constitution or statutes of this state.  
6  
 
  
 
  
 
is employed in respect of the jurisdiction of Michigan  
courts,” concluded that the Court of Claims did not possess  
jurisdiction over declaratory-judgment actions.  
Relying on Taylor, Michigan courts have since adhered to  
the view that the Court of Claims lacks jurisdiction over a  
claim that is solely for declaratory relief.
 See, e.g.,  
AuSable, supra at 598; 77th Dist Judge v Michigan, 175 Mich  
App 681, 699; 438 NW2d 333 (1989).  However, in Greenfield  
Constr Co, Inc v Dep’t of State Hwys, 402 Mich 172; 261 NW2d  
718 (1978), six participating justices agreed, in five  
separate opinions, that the circuit court lacked jurisdiction  
over the plaintiff’s suit for declaratory judgment against a  
state department.5 Id. at 198 (opinion by RYAN, J., COLEMAN and  
FITZGERALD, 
JJ., 
concurring), 202 (opinion by LEVIN, J., KAVANAGH,  
C.J., concurring), 231 (WILLIAMS, J., concurring that the  
circuit court lacks jurisdiction over a citizen suit against  
a government agency for a declaratory judgment).   
After the addition of § 6419a, the Court of Appeals noted  
that, “The holding in Taylor, premised on the absence of an  
equity side to the Court of Claims, was discredited in view of  
the subsequent abolition of procedural distinctions between  
5 Three justices also opined that the Court of Claims has 
jurisdiction over a declaratory-judgment action against the 
state. 
Id. at 200 (concurring opinion of COLEMAN, J.), 230  
(opinion by LEVIN, J., KAVANAGH, C.J., concurring).  
7  
 
the law and equity sides of a court docket.”  77th Dist Judge,  
supra at 699. 
Nonetheless, the Court in 77th Dist Judge  
concluded 
“declaratory judgment is appropriate in the Court of  
Claims only if the underlying dispute or controversy is of a  
nature lending itself to an eventual remedy in money damages  
against the state or one of its branches.” Id. at 700.  
In 1994, this Court in Silverman, supra at 216-217, noted  
the uncertainty regarding the Court of Claims jurisdiction  
over declaratory claims before the addition of § 6419a.  
According to Silverman, with the enactment of § 6419a, “the  
Legislature authorized the Court of Claims to exercise  
jurisdiction over claims for declaratory and equitable relief  
against the state, provided that the plaintiff’s suit also  
seeks money damages from the state or one of its agencies.”  
Id. at 217.  Significantly, Silverman also noted that the  
actual “nature of the claim,” not how the plaintiff phrases  
the request for relief, controls whether the Court of Claims  
possesses jurisdiction. Id. at 216 n 7.  
C. ANALYSIS  
Plaintiff concedes that this case involves a contract­
based claim.  However, plaintiff argues that, inasmuch as the  
complaint sought declaratory relief only, the Court of Claims  
did not possess jurisdiction, because MCL 600.6419(1)(a),  
interpreted in light of MCL 600.6419a, only grants the Court  
8  
of Claims exclusive jurisdiction over complaints that request  
monetary damages.  Defendant, on the other hand, argues that,  
because this is a contract-based claim against a state agency,  
it comes squarely within the exclusive jurisdiction of the  
Court of Claims under § 6419(1)(a).  
In 
order 
to 
resolve 
the 
jurisdictional 
question  
presented, we must first consider the “nature of the claim.”  
Plaintiff’s prayer for relief states:  
WHEREFORE, Plaintiff requests that the court 
adjudicate and declare that the accounts which are 
the subject of this complaint are assets belonging 
to Plaintiff, subject to Defendant’s custodial 
rights while the mortgage is in force, and that 
Plaintiff shall be entitled to sole possession of 
the accounts at the time Plaintiff pays the full 
balance due under Defendant’s mortgage. Plaintiff  
also requests its costs and attorney fees and such 
other relief as the court determines to be just.  
From the face of the complaint, it is apparent that plaintiff  
is seeking a declaration regarding its entitlement to money in  
certain accounts, at such time that it prepays the mortgage.  
Pursuant to MCR 2.605(A)(1),  
[i]n a case of actual controversy within its  
jurisdiction, a Michigan court of record may 
declare the rights and other legal relations of an 
interested party seeking a declaratory judgment, 
whether or not other relief is or could be sought 
or granted.  
Considering the language of the court rule, it appears that  
plaintiff is seeking a court declaration regarding its rights  
relative to the contract between the parties.  Plaintiff does  
9  
not directly request monetary damages,6 although the complaint  
pertains to money that is contained in certain accounts.  
Instead, plaintiff asks for a court ruling regarding its  
rights and the effects of its future actions.  Thus,  
plaintiff’s 
complaint 
may 
be 
properly 
characterized 
as 
seeking  
solely declaratory relief.  
In light of our conclusion that this case involves a  
complaint for declaratory relief only, we must next consider  
whether this claim falls within the exclusive jurisdiction of  
the Court of Claims pursuant to § 6419(1)(a).  In resolving  
this issue of statutory interpretation, our primary aim is to  
effect the intent of the Legislature.  Wickens v Oakwood  
Healthcare Sys, 465 Mich 53, 60; 631 NW2d 686 (2001).  First,  
we examine the language of the statute. 
Id. 
“If the  
statute's language is clear and unambiguous, we assume that  
the Legislature intended its plain meaning, and we enforce the  
statute as written.”  Id., citing People v Stone, 463 Mich  
558, 562; 621 NW2d 702 (2001).  
The plain language of § 6419(1)(a), the primary source of  
jurisdiction for the Court of Claims, does not refer to claims  
for money damages or to claims for declaratory relief.  
6 It is noteworthy, however, that at oral argument, 
plaintiff’s counsel indicated that this case “involves a 
million and a half dollars approximately,” and thus that the 
losing party will likely seek to return to this Court for 
consideration of the merits of the case.  
10  
 
 
 
  
Rather, in broad language, this provision grants the Court of  
Claims exclusive jurisdiction of “all claims and demands,  
liquidated and unliquidated, ex contractu and ex delicto,  
against the state . . . .”  Because the present case involves  
a contract-based claim for declaratory relief against a state  
agency, we conclude that it falls within the exclusive  
jurisdiction of the Court of Claims under the plain language  
§ 6419(1)(a).7  
In reaching this conclusion, we recognize that in  
Silverman this Court suggested that the circuit court is the  
appropriate forum for complaints against the state that  
request only declaratory relief.  Silverman, supra at 217 (“A  
complaint seeking only money damages against the state must be  
filed in the Court of Claims.  A complaint seeking only  
equitable or declaratory relief must be filed in circuit  
court.”).  As previously discussed, the idea that the Court of  
Claims lacks jurisdiction over declaratory-judgment actions  
was first articulated by this Court in Taylor in 1960 and was  
premised on the lack of an equity side to the Court of Claims.  
Subsequently, the Court of Appeals in 77th Dist Judge, supra  
7 We construe the enactment of § 6419a as having added to  
this jurisdiction by clarifying that the Court of Claims also 
has jurisdiction over other declaratory and equitable claims, 
specifically, those that relate neither to contract nor 
tort—over which the circuit court would otherwise have  
exclusive jurisdiction—when those claims are ancillary to a 
claim within the court’s exclusive jurisdiction under § 6419.  
11  
 
 
 
 
at 699, indicated that Taylor’s holding was “discredited” on  
the basis of the later “abolition of procedural distinctions  
between the law and equity sides of a court docket.”  Despite  
this, and despite the plain language of the statute, cases  
have 
continued, 
with 
the exception of Greenfield, to interpret  
the jurisdiction granted by § 6419(1)(a) as extending only to  
claims for money damages.  As we have indicated, however, §  
6419(1)(a) 
clearly 
provides the Court of Claims with exclusive  
jurisdiction over “all claims and demands, liquidated and  
unliquidated, ex contractu and ex delicto, against the state  
. . . .”  In light of this language, we conclude today that  
the grant of exclusive jurisdiction conveyed to the Court of  
Claims 
by 
§ 
6419(1)(a) 
includes 
jurisdiction 
over 
declaratory­
judgment actions against the state that involve contract or  
tort without more; that is, the claim need not expressly claim  
money damages.  We disavow any contrary statements found in  
Taylor and Silverman.8  
In reaching this conclusion, we recognize that, with  
regard to the jurisdiction of the circuit court, our  
8In addition, we disavow similar statements contained in 
various Court of Appeals cases, including 77th Dist Judge and  
AuSable.  
However, we specifically reaffirm the statements in 
Silverman recognizing that the nature of the claim, rather 
than how the plaintiff phrases the request for relief, 
controls how a court will characterize the claim.  
12  
 
constitution provides that “[t]he circuit court shall have  
original jurisdiction in all matters not prohibited by law  
. . . .”  Const 1963, art 6, § 13.9  In addition, § 6419(4)  
recognizes that the circuit court has jurisdiction over  
proceedings for declaratory or equitable relief, or 
any other actions against state agencies based upon 
the statutes of this state in such case made and  
provided, which expressly confer jurisdiction 
thereof upon the circuit court . . . .  
In our view, § 6419(1)(a), by its explicit grant of exclusive  
jurisdiction to the Court of Claims of “all claims and demands  
. . . ex contractu and ex delicto” against the state, deprives  
“by law” the circuit court of jurisdiction over these types of  
claims.  Under the language of MCL 600.605, § 6419(1)(a) is an  
instance “where exclusive jurisdiction is given . . . by  
statute to some other court . . . .”  Thus, we construe §  
6419(4) as maintaining the jurisdiction of the circuit court  
over those declaratory claims against the state that do not  
involve contract or tort.10  
9 Similarly, MCL 600.605, which is quoted in its entirety 
in n 4, grants circuit courts jurisdiction over “all civil 
claims and remedies, except where exclusive jurisdiction is  
given . . . by statute to some other court . . . .” (Emphasis  
added.)  
10 This jurisdiction of the circuit court is concurrent 
with the jurisdiction of the Court of Claims over such claims 
in the circumstances set out in § 6419a, see n 7.  That is, 
when such a declaratory action is ancillary to another claim 
within the Court of Claims exclusive jurisdiction under § 
6419, the circuit court and the Court of Claims have  
(continued...)  
13  
IV. CONCLUSION  
For these reasons, we conclude that the Court of Claims  
possesses exclusive subject-matter jurisdiction over this  
case, which involves a contract-based complaint against a  
state agency seeking solely declaratory relief. Today we hold  
that pursuant to the plain language of § 6419(1)(a), the Court  
of Claims has exclusive jurisdiction over complaints based on  
contract or tort that seek solely declaratory relief against  
the state or any state agency.  We disavow any contrary  
statements found in our prior case law that have seemingly  
interpreted § 6419(1)(a) as granting the Court of Claims  
jurisdiction over claims for money damages only.  We,  
therefore, reverse the judgment of the Court of Appeals on the  
jurisdictional issue. We remand to the Court of Appeals for  
consideration of the merits of the Court of Claims rulings,  
which were not previously considered.  
Stephen J. Markman 
Maura D. Corrigan 
Michael F. Cavanagh 
Elizabeth A. Weaver  
Marilyn Kelly 
Clifford W. Taylor 
Robert P. Young, Jr.  
10(...continued) 
concurrent jurisdiction over the declaratory action.  
14  
 
 
                                          
v 
S T A T E 
O F 
M I C H I G A N  
SUPREME COURT  
PARKWOOD LIMITED DIVIDEND  
HOUSING ASSOCIATION,  
Plaintiff-Appellee,  
Nos. 120410, 120411  
STATE HOUSING DEVELOPMENT AUTHORITY,  
Defendant-Appellant.  
YOUNG, J. (concurring).  
I concur with the majority because it sets forth a  
reasonable 
interpretation 
of 
MCL 
600.6419(1), 
MCL 
600.6419(4),  
and MCL 600.6419a. However, I write separately to encourage  
the Legislature to reexamine these poorly drafted statutes.  
It is extremely rare that the meaning of a statute cannot  
be plainly or constructively ascertained.  If the clear and  
unambiguous text does not provide a statute’s meaning, then an  
application of the well-established rules of statutory  
construction usually resolves any ambiguity.  I believe the  
statutes conferring jurisdiction on the Court of Claims may  
present one of those extremely rare instances where the  
 
 
meaning of a statute, or set of statutes, cannot be clearly  
determined through this process.  
While 
the 
majority 
selects 
a 
reasonable 
interpretation 
of  
the Court of Claims statutory authority to resolve this  
plaintiff’s complaint,1 a study of MCL 600.6419(1), MCL  
600.6419(4), and MCL 600.6419a suggests a host of potential  
jurisdictional ambiguities that cannot be easily resolved by  
the usual modes of judicial analysis.  
Perhaps more important, because the jurisdictional  
provisions set forth in the Court of Claims Act are  
unquestionably less than clear, it is possible that a future  
court may find the jurisdictional reach of the Court of Claims  
to be inconsistent with current practice.  Because lack of  
subject matter jurisdiction is a challenge that can be brought  
at any time, even after a case is concluded, the effect of  
such an interpretation could prove to be a significant barrier  
to finality and thus to the efficient administration of  
justice.  
Simply put, in my judgment, the statutory scheme enacted  
by 
the 
Legislature 
is 
a 
textbook 
example 
of 
poor  
draftsmanship.
 Because easily applicable subject matter  
jurisdiction 
guidelines 
are 
a 
basic 
and 
necessary 
prerequisite  
1For example, compare Silverman v Univ of Michigan Bd of  
Regents, 445 Mich 209; 516 NW2d 54 (1994), which presents, in 
my view, an alternative reasonable construction.  
2  
to an efficient judicial system, I strongly encourage the  
Legislature 
to 
reconsider 
the 
jurisdictional 
provisions 
in 
the  
Court of Claims Act, MCL 600.6401 et seq., and to make more  
clear its intent concerning the scope of the Court of Claims  
jurisdiction, including the jurisdictional relationship  
between the Court of Claims and our circuit courts.  
Robert P. Young, Jr.  
3