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### STATE OF MICHIGAN

COURT OF APPEALS

WILLIAM SCOTT KINCAID, ERAINA POOLE, GEORGE POOLE, a nd MARY BELL,

Plaintiffs-Appellants, FOR PUBLICATION June 11, 2015 9:10 a.m.

v No. 318906 Genesee Circuit Court CITY OF FLINT, a municipal corporation. LC No. 12-098490-CZ

Defendant-Appellee.

Before: D ONOFRIO , P.J., and B ORRELLO and S TEPHENS , JJ.

S TEPHENS , J.

Plaintiffs, all residents of the defendant, appeal as of right the order of the circuit court granting defendant’s motion for summary disposition and denying plaintiffs’ motion to amend their complaint. We reverse and remand.

I. BACKGROUND

On August 15, 2011, the defendant’s finance director, Michael Townsend sent a notice of a proposed 3.5% water and sewerage rate increase to be effectiv e September 16, 2011, to the city council and mayor. The increase was proposed to meet a project ed fiscal year deficit in the water fund of $14,789,666 as well as a sewer fund deficit of $8 ,078,917. Council adopted the proposal and the mayor signed it.

Shortly thereafter defendant was declared to be in a state of financial emergency. 1 On November 28, 2011, Governor Rick Snyder appointed Michael Brown as the Emergency Manager (EM) of defendant under the Emergency Manager Law, Publ ic Act 4 of 2011. 2 On

1 MCL 141.1545, former MCL 141.1214 lists the four instances in which a financial emergency exists.

2 Former MCL 141.1501 et seq .; At the time, former MCL 141.1515(4) provided the Governor with the authority to appoint an emergency manager:-2- May 5, 2012, after being informed by newly appointed finance di rector Gerald Ambrose of the financial disarray of the water and sewer funds for defendant, EM Brown created Emergency Order No. 31. Order No. 31 ratif ied and confirmed the water an d sewer rates implemented under Townsend on September 16, 2011, and additionally raised water a nd sewer rates, 12.5% and 45%, respectively.

After the Emergency Order by Brown, plaintiffs in this suit fi led a complaint seeking this Court’s original jurisdiction pursuant to Const 1963, art 9, §§ 31-32. The claim of error in that case was that defendant violated the Headlee Amendment 3 . This Court dismissed plaintiffs’ claims without a hearing, finding that the rate increases from September of 2011 and those set to take place in July of 2012 were “revisions of existing user fee s that do not implicate the Headlee Amendment.” Plaintiffs’ claims not relating to the Headlee Ame ndment were dismissed for lack of original jurisdiction. Kincaid v Flint , unpublished order of the Court of Appeals, entered June 29, 2012 (Docket No. 310221), lv den 493 Mich 871 (2012).

After the case before this Cour t was dismissed, plaintiff file d the instant action. The essence of the case was a claim that the rate increases in Sept ember of 2011 were made contrary to city ordinances: § 46-52.1,and § 46-57 and that the defendan t had illegally pooled the funds collected for the water and sewer fund and used them to pay gen eral obligations not related to sewer or water expenses. Plaintiffs requested that the trial c ourt certify a class action suit against defendant for all sewer and water customers of defendant, decla re that the rate increases were an illegal tax under the Headlee Amendment, and cease the co-mingl ing funds. Additionally, plaintiffs requested monetary re lief in the form of a refund of the illegally collected rates and for damages caused to defendant’s residents that were left without water and sewer service.

In lieu of filing an answer, defendant moved the trial court t o grant it summary disposition pursuant to MCR 2.116(C) (6), (7), and (8). Howeve r, before defendant’s motion for summary disposition was heard, plaintiffs moved the trial court for leave to amend their complaint asking for leave t o allege a violation of MCL 123.131 (2), (3). 4

Upon the confirmation of a finding of a financial emergency, th e governor shall declare the local government in r eceivership and shall appoint an emergency manager to act for and in the place and stead of the governing body and the office of chief administrative of ficer of the local government.

3 Specifically, the Headlee Amendment to the state constitution provides standing to “[a]ny taxpayer of the state” to bring s uit in this Court to enforce t he tax provisions of §§ 25 to 31.

4 MCL 123.141(2), (3), states: (2) The price charged by the cit y to its customers shall be at a rate which is based on the actual cost of serv ice as determined under the uti lity basis of ratemaking. This subsection shall not remove any minimum or maximu m limits imposed contractually between t he city and its wholesale custom ers during the remaining life of the contract. This subsection shall not appl y to a water system-3- Defendant responded to plaintiffs’ motion to amend their compl aint by arguing that it should be denied as futile. On February 15, 2013, the trial co urt heard the two outstanding motions. On June 21, 2013, the trial court entered an opinion and order granting summary disposition in favor of defenda nt. On July 12, 2013, plaintiff s moved the trial court to reconsider its decision to which the court entered an order permitting def endant to respond to plaintiffs’ motion for reconsideration. The court denied the motion on Oct ober 14, 2013. Plaintiffs now appeal the order granting defe ndant summary disposition.

During the pendency of this case in the trial court, Public Ac t 4 of 2011 was rejected by a majority of the electorate causing its repeal. 5 One month later on December 26, 2012, the Legislature approved the Local Financial Stability and Choice A ct, Public Act 436 of 2012, 6 effective March 28, 2013. 7 Many of the provisions of Public Act 436 of 2012 mirror those of Public Act 4 of 2011.

II. STANDARD OF REVIEW

The trial court ordered summa ry disposition under (C)(8) and t he parties base their arguments on that subsection before this Court, but our review of the record shows that the trial court went beyond the pleadings in making its decision as did b oth parties in making their arguments. Plaintiffs’ response to defendant’s motion for summ ary disposition relied on 16 exhibits. Plaintiffs also moved for summary disposition themse lves and cited exhibits outside the pleadings. The analysis of this case therefore will be don e under MCR 2.116(C)(10). See Cuddington v United Health Servs, Inc , 298 Mich App 264, 270; 826 NW2d 519 (2012)

that is not a contractual customer of another water department and that serves less than 1% of the population of the state. This subsection shall take effect with the first change in wholesale or retail rate by the city or its con tractual customers following the effective date of this subsection. Any city that has not adjusted rates in conformity with this subsection by April 1, 1982 shall include in the next ensuing rate period an adjustment to increase or decrease rates to wholesale or retail customers, so that each class of customer pays rates whi ch will yield the same estimated amount of revenue as if the rate adjustment had been retroactive to April 1, 1982. A city that is subject to section 5e of Act No. 279 of the Public Acts of 1909, being section 117.5e of the Michigan Compiled Law s, shall begin proceedings to determine rate changes pursuant to section 5e(b) of Act No. 279 of the Public Acts of 1909, being s ection 117.5e of the Michigan C ompiled Laws. (3) The retail rate charged to the inhabitants of a city, vill age, township, or authority which is a contractua l customer as provided by subsec tion (2) shall not exceed the actual cost of providing the service.

5 The state board of canvassers certified the vote on November 2 6, 2012. Public Act 72 of 1990 came back into effect while the referendum on Public Act 4 of 2 011 was pending.

6 MCL 141.1541 et seq

.
7 Public Act 436 of 2012 repeale d Public Act 72 of 1990, effecti ve March 28, 2013.-4- (“[B]ecause the trial court considered documentary evidence bey ond the pleadings, we construe the motion as having been grante d pursuant to MCR 2.116(C)(10). ”).

“This Court reviews decisions on motions for summary dispositi on de novo to determine if the moving party was entitled to judgment as a matter of law .” Alcona Co v Wolverine Environmental Prod, Inc , 233 Mich App 238, 245; 590 NW2d 586 (1998), lv den 461 Mich 8 54 (1999). A motion for summary disposition pursuant to MCR 2.116 (C)(10) “tests the factual sufficiency of the complaint.” Joseph v Auto Club Ins Assoc , 491 Mich 200, 206; 815 NW2d 412 (2012), reh den 815 NW2d 491 (2012). “In evaluating a moti on for summary disposition brought under this subsection, a tr ial court considers affidavi ts, pleadings, depositions, admissions, and other evidence submitted by the parties, MCR 2. 116(G)(5), in the light most favorable to the party opposing the motion.” Maiden v Rozwood , 461 Mich 109, 120; 597 NW2d 817 (1999). Summary disposition is proper where there is no “g enuine issue regarding any material fact.” Id . A party opposing a motion made pursuant to MCR 2.116(C)(10) has “the burden of showing that a genuine issue of disputed fact exists. ” Major v Auto Club Ins Assoc
, 185 Mich App 437, 440; 462 NW2d 771 (1990), lv den 437 Mich 923 (1991) (citations omitted). The opposing party may not rest upon mere allegations or denial in the pleadings, but must, by affidavit or other documentary evidence, set forth specific fac ts showing that there is a genuine issue for trial. Id . (citations omitted).

This Court also reviews issues o f statutory interpretation de novo. Allen v Bloomfield Hills Sch Dist, 281 Mich App 49, 52; 760 NW2d 811 (2008).

When interpreting a statute, we follow the established rules of statutory construction, the foremost of whi ch is to discern and give effe ct to the intent of the Legislature. The first step when interpreting a statute is to examine its plain language, which provides the most reliable evidence of [legisla tive] intent. If the language of a statute is clear and unambiguous, the statute mus t be enforced as written and no further judicial construction is permitted. When an ambiguity does indeed exist, we may go beyond the statutory text to ascertain legislative intent. Effect should be given to every phrase, clause, and word in the statute and, whenever possible, no word should be treated as surplusage or r endered nugatory. [ People v. Carrier , ___ Mich App ___; ___ NW2d ___ (2015); slip op at 6-7 (citations and quotation marks omitted).].

III. CLAIMS OF ERROR

Plaintiffs’ claims of error are two: that water and sewer rate increases that occurred under Townsend in September 2011were not authorized by Flint Ordinanc es and that EM Brown did not have the authority to ratif y Townsend’s unauthorized increa ses and then further increase water and sewer rates in viola tion of the same ordinances.

A. ORDINANCE VIOLATIONS

The City of Flint Ordinances tha t plaintiffs claim were violat ed are:

Ordinance 46-52.1-5- (a) Every year the Director of Finance shall calculate and tra nsmit on or before April 15, to the Mayor and City Council the new water rate schedules with a complete itemization of water system costs for all class es of customers as given in § 46-52, for the purpose of calculating all bills for the forthcoming 12 months beginning July 1 of that y ear. The new water rate sched ules shall be published at least 30 days prior t o the date of implementation.

(b) Water rates shall be reviewed annually and the water perce ntage index (WRI) as applied to the water rate schedules shall be lim ited to an adjustment of 8% in any year unless:

(1) Such an adjustment is necessary to provide for all costs o f operation, maintenance, replacement and debt service of the wat er supply system;

or
(2) Such an adjustment is necessary to comply with applicable provisions of the city’s water supply revenue bond resolutions or ordinances.

and,

Ordinance 46-57.1

Every year the Director of Finance shall calculate and transmi t on or before April 15, to the Mayor and City Council the new sewage r ate schedules with a complete itemization of sewage system costs for all clas ses of customers as given in § 46-57, for the purpose of calculating all bills for the forthcoming 12 months beginning July 1 of that y ear. The new water rate sched ules shall be published at least 30 days prior t o the date of implementation.

Plaintiffs argue that the rate increases of September 2011 and those imposed by the EM failed to meet the notice and effective date requirement s of the ordinances and exceeded the percentage of increase allowed under the ordin ances. We agree in part.

The September 2011 35% water ra te increase was in violation of Flint Ordinance 46-52.1 because it was not published and noticed at least 30 days prior to its implementation and went into effect almost immediately in September 2011 instead of bei ng implemented over twelve months beginning on July 1 of the next fiscal year. The sewer rate increases were invalid for the same reasons under Ordinance 46-57.1. The sewer rates were not published and noticed 30 days prior to their implementation and were implemented soon after t he finance director’s recommendation instead of on Jul y 1 of the next fiscal year.

Plaintiffs’ argument that the increases also violated Ordinanc e 46-52.1 by increasing the water rates above 8% is not supported by the ordinance language . Ordinance 46-52.1 envisions that water rate increases be limited to an adjustment of 8%, bu t allows for uncapped increases in the event “the adjustment is n ecessary to provide for all costs of operation, maintenance,-6- replacement and debt service of the water supply system’ or . . . to comply with applicable provisions of the city’s water supply revenue bond resolutions and ordinances.” The defendant’s then finance director, Townsend, sent an August 2011 letter to Mayor Walling and City Council, providing justification for the amount of the increase. In tha t letter, Townsend stated that the water fund was operating at a $3.21 million loss and that the c ity was not meeting its state bond requirements to operate with revenues greater than 125% of the amount of debt service of the bonds. Townsend explained that the rate increases would help c over the rate increases the city paid to Detroit and the Drinking Water Revolving Fund Bonds. T his Court has no basis to find those statements invalid. While the notice, publication and im plementation of the water and sewer rate increases were not authorized, the percentage of inc rease for the rates was not a violation of the ordinances.

Plaintiffs challenge the EM’s r ate increases under Order No. 3 1 on the same basis as they challenged the September 2011 increases. However, EM Brown’s w ater and sewer rate increases of 12.5% and 45% respectively, did not violate Flint Ordinances 46-52.1 and 46-57.1. On May 5, 2012, EM Brown published notice of the increases and that they were to be effective July 1, 2012. The Order complied with the notice, publication and implementation provisions of 46-52.1 and 46-57.1. Plaintiffs again argue that any increase in water rates over 8% is not authorized under 46-52.1, but as discussed above, the language of the ordinance does not support that argument. The language of Order No. 31 established both o f the excepted instances in 46- 52.1 that allow for an increase in water rates greater than 8%. The Order explained that defendant was required under MCL 141.121 8 to set sewer rates that were sufficient to cover the costs of operating the water and sewer systems and that Townsen d’s increase was insufficient to

8 MCL 141.121, the Revenue Bond Act of 1933, provides in pertine nt part: (1) Rates for services furnished by a public improvement shall be fixed before the issuance of the bonds. The rates s hall be sufficient to provid e for all the following: (a) The payment of the expenses of administration and operatio n and the expenses for the maintenance of the public improvement as may be necessary to pr eserve the public improvement in good repair and working order. (b) The payment of the interest on and the principal of bonds payable from the public improvements when the bonds become due and payable. (c) The creation of any reserve for the bonds as required in t he ordinance. (d) Other expenditures and funds for the public improvement as the ordinance may require. (2) The rates shall be fixed a nd revised by the governing body of the borrower so as to produce the amount described in subsection (1). The borrower s hall covenant and agree in the ordinance authorizing the issuance of the bonds and on the face of each bond to maintain at all times the rates for services furnished by the public improvemen t sufficient to provide for the amount described in subsection (1). Rates pledged for the paym ent of bonds that are fixed and established pursuant to a contract or lease shall not be subjec t to revision or change, except in the manner provided in the lease or contract.-7- meet defendant’s obligation under state law. The Order stated that additional increases were necessary “to cover the costs of operating the water and sewer systems and pay outstanding bonded indebtedness on the water system.”

B. RATIFICATION AUTHORITY OF THE EMERGENCY MANAGER

EM Brown not only increased water and sewer rates with the ena ctment of Order No. 31, but also purported to expressly ratify and confirm the Septembe r 16, 2011 rate increases. The issue of first impression for this Court is whether EM Brown wa s granted the authority to ratify the unauthorized acts of another public official. We conclude that the Legislature did not delegate the power to ratif y to an emergency manager.

The EM is a creature of the Legislature with only the power an d authority to do what is granted by statute. EM Brown derived his authority from the fo rmer Emergency Manager Law, PA 4 of 2011. 9 That authority was not as broad as defendant argues. We do n ot agree with defendant that Public Act 436 of 2012, the successor statute to PA 4 of 2011, ratified all the actions of the EM taken under PA 4. MCL 141.1570(1)(a)-(e), st ates that “[a]ll of the following actions that occurred under the former 2011 PA 4” became effect ive under 2012 PA 436:

(a) A determination by the state treasurer or superintendent of public instruction pursuant to a preliminary review of the existence of probable f inancial stress or a serious financial problem in a local government.

(b) The appointment of a review team.

(c) The findings and conclusion contained in a review team repo rt submitted to the governor.

(d) A determination by the governor of a financial emergency in a local government.

(e) A confirmation by the governor of a financial emergency in a local government.

The actions taken by the state treasurer, the appointed review team and the governor remain effective and were not required to be re-approved with 2012 PA 436. Notably, actions taken by the EM are not included.

We also reject defendant’s argum ent that an act of the EM is a n act of the governor and that the EM derives power to ratify from the governor. Former MCL 141.1519(1)(dd) and (ee) state that an EM’s authority is limited to the local level. An EM “[e]xercise[s] solely, for and on behalf of the local government,” and “exercise[s] any power or authority of any officer, employee, department, board, commission, or other similar entit y of the local government,

9 Former MCL 141.1501 et seq

.-8- whether elected or appointed, re lating to the operation of the local government.” MCL 141.1519(1)(dd), (ee). Thus, the EM acts in place of numerous persons, but they are all local government officials. Former 2011 PA 4 10 and 2012 PA 436 11 each provides that the governor may delegate his duties to the t reasurer. Notably, there is no similar provision regarding the delegation of any authority to the EM. Rather, the EM serves a t the pleasure of the governor. 12

The EM’s responsibilities and authority under former 2011 PA 4 are listed in former sections MCL 141.1515 through MCL 141.1530. Those provisions a re similarly stated in sections MCL 141.1549 through MCL 141.1564 under 2012 PA 436. Of all the powers granted to the EM, ratification is not one of them. Ratification, in b oth the former 2011 PA 4 and 2012 PA 436, is explicitly granted to the actions of certain persons and entities. Under the former 2011 PA 4, “[a]ll proceedings and actions taken by the governor , the state treasurer, or a review team . . . are ratified and are enforceable as if the proceedin gs and actions were taken under this act, and a consent agreement entered into . . . is ratified and is binding and enforceable.” Former MCL 141.1512(6). 2012 PA 436 contains n early identical languag e:
All proceedings and actions taken by the governor, the state tr easurer, the superintendent of public instruction, the local emergency finan cial assistance loan board, or a review team under former 2011 PA 4, . . . are ratif ied and are enforceable as if the proceedings and actions were taken under this act, and a consent agreement entered into under former 2011 PA 4, . . . th at was in effect immediately prior to the effective date of this act is ratified and is binding and enforceable under this act. [MCL 141.1544(6).]

The clear difference between 2011 PA 4 and 2012 PA 436 is that PA 436 adds “the superintendent of public instruction” and “the local emergency financial assistance loan board.” Neither PA 4 nor PA 436 ratifies actions taken by the EM. Furt her, the EM’s power to supersede local government authority does not extend to the state officer s and entities listed above. 13 Consequently, the Legislature di d not grant the EM the power of ratification, nor d id the actions of the EM taken under 2011 PA 4 sur vive the electors’ referendu m of that Act.

Absent the power of ratification, defendant urges this Court t o look elsewhere for the EM’s authority to approve the unauthorized 2011 water and sewer rate increases. Defendant

10 Former MCL 141.1515(10).

11 MCL 141.1549(8).

12 Former MCL 141.1515(5)(d); MCL 141.1549(3)(d).

13 The EM’s power is superior to an d supersedes that of local gov ernment officials and entities. Former MCL 141.1519(1)(ee); MCL 141.1552(1)(ee). The EM does n ot usurp the authority of the superintendent of public instruction. See e.g. MCL 141.155 4(c). The EM is not an appointed member of the financial assistance loan board or revi ew team. Former MCL 141.1212; MCL 141.1544.-9- argues that the additional powers granted to an emergency manag er in former MCL 141.1519 14 authorized the EM to raise water and sewer rates notwithstandin g the ordinances. Under that section,

An emergency manager may take 1 or more of the following additi onal actions with respect to a local governme nt which is in receivership, no twithstanding any charter provision to the contrary:

(a) Analyze factors and circumstances contributing to the finan cial emergency of the local government and initiat e steps to correct the conditio n.
We are not persuaded by this argument. MCL 141.1519 applies in the instance where the EM, after having analyzed the factor s and circumstances contributin g to the financial emergency, initiates some action to alleviate the emergency. In other words, some affirmative act is required of the EM. “The word ‘initiate’ is a synonym of the word ‘comm ence.’ ” Fast Air, Inc. v. Knight , 235 Mich App 541, 544; 599 NW2d 489 (1999) citing Black's Law Dictionary (5th ed). In turn, the plain and ordinary meaning of the word commence is “to begin; start,” The American Heritage Dictionary (4th Ed 2006) and “begin” is defined as “to take the first ste p in performing an action.” Id. 15 MCL 141.1519, then in effect, supported the 12.5% water and 4 5% sewer rates initiated by the EM after his appointment. Those increases wer e initiated after the EM was provided with information from his appointed finance director G erald Ambrose of the operating losses of both the water and sewer systems and were implemented to correct those conditions. Although the EM had the authority to institute the change in ra tes notwithstanding any charter provision to the contrary under the former MCL 141.1519(1)(a), as discussed above, the increases complied with the noti ce, publication and implementat ion guidelines of city ordinances 46-52.1 and 46-57.1. MCL 141.1519(1)(a) however, does not supp ort the action taken by the EM to expressly ratify and confirm the increases recommended by Townsend. In that instance, the EM did not “initiate” the steps to correct the condition by an affirmative act, but rather approved the steps already taken by someone else. Because the EM did not initiate those increases, MCL 141.1519(1)(a) does not apply.

In light of our analysis, we conclude that defendant violated its own ordinances, 46-52.1 and 46-57.1, by increasing water and sewer rates without first providing notice a nd publication to its residents thirty days prior and by not waiting to implement those rates until July 1 of the next fiscal year. We also conclude that Order No. 31 did not rectif y the violations.

The trial court’s grant of summa ry disposition to defendant wa s premised on its understanding of the E M’s authority as broa d, substantial and c omplete. Our decision today only highlights that authority for a closer look at the statutory bo undaries of the EM’s power.

14 Now, MCL 141.1552.

15 See SBC v J.T. Crawford, Inc , unpublished opinion per curiam of the Court of Appeals, issue d November 27, 2007 (Docket No. 275334), p. 5.-10- Because we disagree with the tria l court’s conclusion that the EM had the authority to ratify, we reverse its order granting de fendant summary disposition.

C. COMINGLING OF FUNDS

Next, this Court must consider whether the trial court properl y summarily disposed of plaintiffs’ claims regarding comingling of funds. Plaintiffs a ssert that defendant placed water and sewer rate fees from custom ers into a pooled cash account w ith other funds, used the water and sewer funds to pay general obligations of defendant in viol ation of the Revenue Bond Act of 1933, and that this practice led to a deficit in the water and sewer funds which precipitated the increases by Townsend and EM Brown. Plaintiffs’ arguments rely entirely on the motion being granted pursuant to MCR 2.116(C)(8). Indeed, plaintiffs mainta in that the trial court should not have considered the affidavit of Pamela Hill, a certified publi c accountant and auditor of defendant’s financial statements, nor held it against plaintiff s for not providing any evidence to the contrary, because subrule (C)( 8) requires the trial court t o disregard evidence outside the pleadings. However, as has been discussed, this motion was gra nted pursuant to MCR 2.116(C)(10).

Plaintiffs argue that defendant illegally comingled funds. We find no merit to this claim. A party opposing a motion made pursuant to MCR 2.116(C)(10) has “the burden of showing that a genuine issue of disputed fact exists.” Major , 185 Mich App at 440. The opposing party may not rest upon mere allegations or denials in the pleadings, but must, by affidavit or other documentary evidence, set forth specific facts showing that the re is a genuine issue for trial. Id

. (citations omitted). The record reveals that defendant provide d evidence, in the form of an affidavit from Hill who was hired to audit municipalities, that defendant’s accounting system was entirely legal and was used by several other municipalities . Plaintiffs assert that Hill’s affidavit only evidences the practice of comingling without est ablishing the legality of the practice. While the trial court only mentioned the Hill affida vit in its order granting summary dismissal, it also had before it plaintiffs’ exhibits in suppor t of their response to defendant’s motion for summary disposition wh ich included an affidavit from city treasurer Douglas Bingaman. Bingaman’s affidavit stated that the water and sewer funds were in a single pooled cash account, but that funds which state law required to be mai ntained separately were excluded. Further, that the “account is intended to have each City fund, including the water and sewer funds, end up paying only its own operating and other expenses. ” Bingaman’s affidavit is evidence that defendant was following state law in regards to p ooled cash accounts. It was also evidence that the water and sewer funds were not being used to pay the general obligations of defendant. Hill’s affidavit averred knowledge of legal account ing practices that only certain accounts were excluded from being maintained in single pooled c ash accounts and that water and sewer funds were not excluded. Hill further averred that, “eac h participating fund’s share of the pooled cash account is accounted for,” meaning that the water a nd sewer funds were also accounted for. In response, plaintiffs provided no evidence of defendant’s accounting system being illegal. This Court’s decision in Major , 185 Mich App 437, quite plainly requires plaintiffs to provide some evidence that there is a disputed issue of fact. This, plaint iffs did not do. As such, the trial court was required to determine that th ere was no genuine issue of material fact for trial, and properly gr anted summary disposition on thi s issue. Id

.-11- III. MOTION TO AMEND

Plaintiffs last argue that it was error for the trial court to deny their request to amend their complaint. We agree.

“This Court reviews grants and denials of motions for leave to amend pleadings for an abuse of discretion.” Hakari v Ski Brule Inc , 230 Mich App 352, 355; 584 NW2d 345 (1998). “There are circumstances where a trial court must decide a matt er and there will be no single correct outcome; rather, there may be more than one reasonable and principled outcome. The trial court abuses its discretion when its decision falls outsi de this range of principled outcomes.” Pontiac Fire Fighters Union Local 376 v Pontiac , 482 Mich 1, 8; 753 NW2d 595 (2008).

“A party may amend a pleading once as a matter of course withi n 14 days after being served with a responsive pleading by an adverse party.” MCR 2. 118(A)(1). “Except as provided in subrule (A)(1), a party may amend a pleading only by leave o f the court or by written consent of the adverse party. Leave shall be freely given when justice so requires.” MCR 2.118(A)(2). “Because a court should freely grant leave to amend a complaint when justice so requires, a motion to amend should ordinarily be denied only for particular ized reasons.” Wormsbacher v Phillip R Seaver Title Co , 284 Mich App 1, 8; 772 NW2d 827 (2009), lv den 485 Mich 927 (2009). Those reasons include undue delay, bad faith or dilato ry motive, repeated failure to cure deficiencies by amendment prev iously allowed, undue prejudice, or where amendment would be futile. Miller v Chapman Contracting , 477 Mich 102, 105; 730 NW2d 462 (2007). Further, MCR 2.116(I)(5) states that when the trial court summarily disp oses of a case under subrules (C)(8), (C)(9), or (C)(10), the trial court “shall give the par ties an opportunity to amend their pleadings as provided by MCR 2.118, unless the evidence then be fore the court shows that amendment would not be justified.”

The trial court’s reason for denying plaintiffs’ motion to ame nd their complaint was that the “proposed amended complaint is in conflict with this decisi on.” The fact that an amended complaint would present issues at odds with the trial court’s d ecision does not appear to be an accepted particularized reason. A court must specify its reaso ns for denying the motion; a failure to do so requires reversal, unless amendment would be futile. Noyd v Claxton, Morgan, Flockhart & Vanliere, 186 Mich.App 333, 340; 463 NW2d 268 (1990). Because we cannot discern on what basis the trial c ourt denied plaintiffs’ motion to amend their complaint, we remand this issue to the trial c ourt. On remand, the trial cou rt is to consider the additional claims in plaintiffs’ proposed amended complaint and articulate its re asons for granting or denying the motion.-12- Reversed and remanded for proceedings consistent with this opi nion. We do not retain jurisdiction.

/s/ Cynthia Diane Stephens /s/ Pat M. Donofrio /s/ Stephen L. Borrello