Michigan Supreme Court Lansing, Michigan

Robert P. Young, Jr.,
Chief Justice

Michael F. Cavanag h Marilyn Kell y Stephen J. Markma n Diane M. Hathawa y Mary Beth Kell y Brian K. Zahra,

J ustices 

# 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 DE PARTMENT 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 applicati on for leave to appeal the August 2, 2011 judgment of the Court of Appeals is consid ered, and it is DENIED, because we are not persuaded that the question presented shou ld be reviewed by this Court.

M ARKMAN , J. ( dissenting ).

I respectfully dissent, and wo uld grant leave to appeal. Defendant West Michigan Community Mental Health System (WMCMH S) 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 pu blished opinion, the Court of Appeals affirmed.I, Corbin R. Davis, Clerk of the Mi chigan Supreme Cour t, 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 Co urt of Claims has exclusive jurisdiction “[t]o hear and determine a ll claims and demands, liquida ted and unliquidated, ex contractu and ex delicto, against the stat e and any of its depa rtments, commissions, boards, institutions, arms, or agen cies.” MCL 600.6419(1). In Parkwood Ltd Dividend Housing Ass’n v Stat e Housing Dev Auth , 468 Mich 763 (2 003), we held that the Court of Claims has exclusive jurisdic tion over a declaratory judgment action directly involving a

state contract.

In this case, the circuit c ourt held that it had jurisdic tion because the witnesses are

all “local individuals.” The C ourt of Appeals affirmed becaus e this is a “simple breach of contract [action] between two parties . . . neithe r of which is a state ag ency,” and stated:

That breach of the contract between plaintiffs and WMCMHS

occurred as a result of WMCMHS’s cont ract with defendants. Not being parties to the contract between defendants and WMCMHS, however, plaintiffs have no rights under that c ontract and could not seek a declaratory ruling regarding the contract with th e 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 th e 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 departme nt and (b) involved th e interpretation of a state contract. In order to avoid raising unn ecessary confusion concerning the exclusive jurisdiction of the Court of Claims, I would grant leave to appeal.