Michigan Supreme Court

Lansing, Michigan

Robert P. Young, Jr.,

 Chief Justice

Michael F. Cavanagh

Marilyn Kelly

Stephen J. Markman

Diane M. Hathaway

Mary Beth Kelly

Brian K. Zahra, Justices

Order 

February 3, 2012 

143721 

MASON COUNTY and OCEANA COUNTY, 

Plaintiffs-Appellees, 

v SC: 143721 

 COA: 295365 

Mason CC: 08-000269-CK 

DEPARTMENT OF COMMUNITY HEALTH, 

DIRECTOR OF DEPARTMENT OF 

COMMUNITY HEALTH, DIRECTOR OF 

COMMUNITY MENTAL HEALTH SERVICES 

BUREAU, and DIRECTOR OF PROGRAM 

DEVELOPMENT CONSULTATIONS & 

CONTRACTS DIVISION, 

 Defendants-Appellants, 

and 

WEST MICHIGAN COMMUNITY MENTAL 

HEALTH SYSTEM, and RICHARD 

VANDENHEUVEL, 

 Defendants-Appellees. 

_________________________________________/ 

 On order of the Court, the application for leave to appeal the August 2, 2011 

judgment of the Court of Appeals is considered, and it is DENIED, because we are not 

persuaded that the question presented should be reviewed by this Court. 

 MARKMAN, J. (dissenting). 

 I respectfully dissent, and would grant leave to appeal. Defendant West Michigan 

Community Mental Health System (WMCMHS) refused to make lease payments on 

buildings it leased from plaintiffs Mason and Oceana Counties because the Department of 

Community Health (DCH), which funds WMCMHS, considered the lease agreements not 

to be arm’s-length transactions within the meaning of an Office of Management and 

Budget Circular, with which a contract between WMCMHS and codefendant DCH 

requires compliance. The circuit court granted plaintiffs’ motion for summary 

disposition, and in a published opinion, the Court of Appeals affirmed. 
I, Corbin R. Davis, Clerk of the Michigan Supreme Court, certify that the 

foregoing is a true and complete copy of the order entered at the direction of the Court. 

 _________________________________________ 

 Clerk

February 3, 2012 

0131 

 

2

 Codefendant DCH argues that the Court of Claims has exclusive jurisdiction in 

this case because plaintiffs’ claims pertain to the state’s contracts with WMCMHS and 

require state payments to WMCMHS. The Court of Claims has exclusive jurisdiction 

“[t]o 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.” MCL 600.6419(1). In Parkwood Ltd Dividend 

Housing Ass’n v State Housing Dev Auth, 468 Mich 763 (2003), we held that the Court of 

Claims has exclusive jurisdiction over a declaratory judgment action directly involving a 

state contract. 

 In this case, the circuit court held that it had jurisdiction because the witnesses are 

all “local individuals.” The Court of Appeals affirmed because this is a “simple breach of 

contract [action] between two parties . . . neither of which is a state agency,” and stated: 

 That breach of the contract between plaintiffs and WMCMHS 

occurred as a result of WMCMHS’s contract with defendants. Not being 

parties to the contract between defendants and WMCMHS, however, 

plaintiffs have no rights under that contract and could not seek a declaratory 

ruling regarding the contract with the state at the Court of Claims. [Mason 

Co v Dep’t of Community Health, 293 Mich App ___, ___ (2011), slip op at 

5.] 

The concern I have with this analysis is that plaintiffs did also bring this cause of action 

against DCH, and the issue decided by the circuit court was whether WMCMHS would 

be breaching its contract with DCH if it made the lease payments to plaintiffs. Thus, the 

action was (a) brought against a state department and (b) involved the interpretation of a 

state contract. In order to avoid raising unnecessary confusion concerning the exclusive 

jurisdiction of the Court of Claims, I would grant leave to appeal.