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### STATE OF MICHIGAN

COURT OF APPEALS

CITY OF HUNTINGTON WOODS and CITY OF PLEASANT RIDGE,

Plaintiffs/Counter-DefendantsAppellants, FOR PUBLICATION June 11, 2015 9:15 a.m.

v No. 321414 Oakland Circuit Court CITY OF OAK PARK, LC No. 2013-135842-CZ

Defendant/Counter-PlaintiffAppellee,

and

45TH DISTRICT COURT,

Defendant/Appellee.

Before: J ANSEN , P.J., and S AWYER and F ORT H OOD , JJ.

P ER C URIAM

. Plaintiffs city of Huntington Woods and city of Pleasant Ridge appeal by leave granted the trial court’s order granting in part defendant city of Oak Park’s motion for summary disposition pursuant to MCR 2.116( C)(10). Plaintiffs argue on appeal that the trial court erroneously concluded (1) that plaintiffs have a statutory duty to contribute to the costs of operating the 45th District Court, and (2) that the city of Oak Park does not have a statutory duty to disburse to plaintiffs a portion of fees assessed against cr iminal defendants in 45th District Court proceedings and allocated to funds for building improveme nts and retiree health care benefits. We affirm.

I. HISTORY OF THE DISTRI CT COURT ORGANIZATION

Before July 1, 2012, the 45-B District Court served the cities of Huntington Woods, Pleasant Ridge, and Oak Park, and Royal Oak Township. Effectiv e July 1, 2012, the Legislature abolished the 45-B District Court and established in its place the 45th District Court, also serving the cities of Huntington Woods, Pleasant Ridge, and Oak Park, a nd Royal Oak Township. MCL 600.8123(4). The 45th district is a “district of the third cla ss,” meaning that it is “a district-2- consisting of 1 or more political subdivisions within a county and in which each political subdivision comprising the distri ct is responsible for maintain ing, financing and operating the district court within its resp ective political subdivision exce pt as otherwise provided in this act.” MCL 600.8103(3). In third-class di stricts in which the distric t court does not sit in each political subdivision within the district, one-third of specified fines and costs are to be paid to the nonseating political subdivision whos e law was violated. MCL 600. 8379(1)(c).

Defendants maintain that the 45th District Court and its prede cessor were historically underfunded, almost from the time of the 45-B District Court’s inception. In 1983, the Oak Park City Council passed a resolution requesting plaintiffs to provi de court facilities within each of their political subdivisions, or, alternatively, to enter into an agreement with Oak Park to share expenses of maintaining, financing, and operating the 45-B Dist rict Court, which was located within Oak Park’s political s ubdivision. Plaintiffs did not ac cept either proposal.

In 1995, the Oak Park City Council discussed the 45-B District Court’s plan to add a $5 charge per ticket to cover the cost of including district court retirees in Oak Park’s retiree health care plan. The council also discu ssed increasing “fees” or “fi nes” to fund construction of a new court facility. In September 1995, the State Court Administrat ive Office (SCAO) issued a report detailing the inadequacies of the Oak Park court facilities. T hese included noncompliance with current building standards for oc cupancy and fire safety, and i naccessibility of areas of the building for the disabled. Oak Park created a municipal buildi ng construction capital fund to account for expenditures made to construct a new district courtbuilding. This would be funded by a $5 per ticket charge on fines levied by the 45-B District Court. Oak Park also created an internal service fund to fund medi cal benefits for 45-B Distric t Court retirees. The revenues were collected through an additiona l $5 per ticket charge added to violation fees. In 2007, the Oak Park City Council unanimouslypassed a resolution to increa se the per ticket levies for the building fund and the retiree health plan fund from $5 to $10. The resolution also imposed $100 in costs for certain misdemea nors, to be allocated for the buil ding fund.

In fiscal year (FY) 2012-2013 (beginning July 1, 2012), the 45 th District Court distributed one-third of the building fund and retiree health c are fund assessments to plaintiffs, in the same manner that other costs and fines are distributed. De fendants apparently regard this distribution as an error. In October 2012, SCAO issued a report in which it found that there was no agreement in place for distribution of fines and costs to po litical subdivisions other than Oak Park. The report states:

The court distributed court co sts, with the exception of court costs titled as operational costs, using the method of one-third to the politic al subdivision whose ordinance was violated and two-th irds to the city of Oak Park d uring the review period. It should be noted that in fiscal year 2013, the court started distributing the operational costs using the method that was previously used for all other court
costs.

The SCAO report reviewed the history of the collection of court costs, beginning in August 1995. The court used an OPCS cas h code for receipting these co sts. From FY-1996 to FY-2012, the entire amount of cash received under these codes was distri buted to Oak Park, which allocated the distributions to the building fund and retiree he althcare fund. Beginning in May-3- 2007, the 45-B District Court began collecting court costs on m isdemeanor violations, using an OPBF cash code for receipting the funds. For FY-2007 through F Y-2012, the entire amount receipted under the OPBF cash code was distributed to Oak Park. SCAO calculated the amounts of court costs collected from vi olations occurring in plaintiff s’ political subdivisions, and distributed to Oak Park under the OPCS and OPBF codes, for the period from FY 1996 through FY 2012. The report provided more detailed breakdowns of amoun ts contributed to the building fund and retiree health care f und per fiscal year, for each pol itical subdivision.

In correspondence to Oak Park’s city manager, dated May 13, 20 13, plaintiffs and Royal Oak Township asserted that Oak Park “knowingly received and ret ained certain property owned by” plaintiffs, namely “various funds including a building fund , a retiree health care fund, and a serious misdemeanor fund.” Plaintiffs demanded return of the f unds, and cited SCAO’s accounting of $116,696.33 of Pleasant Ridge’s property, and $25 1,021.93 of Huntington Woods’s property. In response, the Oak Park City Council passe d a resolution declaring that money collected by the 45th District Court and transmitted to the building fund would be used for improvements for the 45th District Court, and money collect ed and transmitted to the retiree healthcare fund would be used only for the costs of retiree hea lthcare for district court employees. Defendants did not gr ant plaintiffs’ demand, leadin g to the instantlitigation.

II. PROCEDURAL HISTORY

Plaintiffs alleged in their complaint that defendants Oak Park and the 45th District Court violated their statutory duty under MCL 600.8379 to disburse on e-third of the costs and fees assessed for the building fund and retirees’ healthcare fund fr om 1996 to 2011. Plaintiffs referred to the October 2012 SCAO report finding that Huntingto n Woods and Pleasant Ridge were entitled to reimbursement of $251,021.93 and $111,696.33, respectively, because defendants wrongfully diverted co urt costs to the building fund and retiree healthcare fund instead of distributing one-thir d of these monies to plaintiffs . Plaintiffs asserted a claim for violation of MCL 600.8379 against both defendants, and a claim for statutory conversion under MCL 600.2919a against Oak Park only. Plaintiffs also asserted a claim for breach of contract, alleging that they were third-party beneficiaries of a contractbetween Oak Park and the 45th District Court, pursuant to whic h the court collected monies fo r Oak Park while acting as a trustee of funds generated from fines and costs on tickets and violations that arose in plaintiffs’ political subdivisions, and that the court breached its duty to tender the one-thir d portion of fines and costs owed to plaintiffs. Plaintiffs also asserted a claim for unjust enrichment, alleging that Oak Park retained and used for i ts own benefit the portion of f unds to which plaintiffs were entitled.

Oak Park filed a counter-complai nt for declaratory relief. Oa k Park asserted that all district funding units were required, pursuant to MCL 600.8104, MCL 600.8621, and MCL 600.8271, to contribute to the expenses of the district court o perating within their district. Oak Park sought a declaratory judgment that plaintiffs were require d to contribute to the expense of operating the 45th District Cour t, and that their responsibilit y to do so was not limited to the amount of fines and costs allocated to Oak Park under the statu tory one-third/two-thirds arrangement. In count II, Oak Park alleged that in 2012 and 20 13, the court administrator erroneously disbursed to plainti ffs a portion of the fees colle cted for the building fund and retiree healthcare fund. Oak Park sought a declaratory judgment that these funds were incorrectly-4- disbursed, and an order requiri ng plaintiffs to reimburse Oak P ark for the incorrect disbursements.

Oak Park moved for summary disposition pursuant to MCR 2.116(C )(7), (8), and (10). Oak Park asserted that the amounts collected for the building and retiree healthcare funds were fees, and therefore no t subject to distrib ution under MCL 600.8 379, which required distribution only of imposed fines and costs. Oak Park argued that plaintif fs failed to comply with the statutory mandate of MCL 600.8271( 1). Oak Park requested that the trial court declare that plaintiffs were required to sha re the expense of maintaining, f inancing, and operating the district court, in accordance with an agreement as authorized by MCL 600 .8104(3), or the formula set forth in MCR 8.201. Oak Park also argued that the doctrine of laches or, alternatively, the statute of limitations barred plai ntiffs from asserting their e ntitlement to a one-third disbursement of these fees.

In their response to Oak Park’ s motion, plaintiffs reviewed th e funding history for the district court. In December 1974, the city of Pleasant Ridge p assed a resolution approving an arrangement in which the district court would sit in Oak Park. In exchange for waiving the requirement that the court sit in Pleasant Ridge, Pleasant Ridg e would receive on e-third of all fines and costs assessed for offenses that originated in Pleasa nt Ridge. The city of Huntington Woods passed a similar resolution. Plaintiffs argued that defe ndants did not have the authority to collect fines and costs in excess of the two-thirds collection authorized by the resolutions. Citing SCAO’s review for the fiscal years 1996-2012, plaintiffs assert ed that the additional court costs collected by defendants for infr actions originating in the plai ntiff cities should have been distributed to plaintiffs pursuant to the statutory formula pre scribed in MCL 600.8379.

Plaintiffs also argued that Oak Park’s argument that MCL 600.8 104 mandated that plaintiffs help fund the 45th District Court was based on a mis interpretation of the statute. MCL 600.8014(2) states that “a distri ct funding unit shall be respo nsible for maintaining, financing, and operating the court only with in its political subdivision.” MCL 600.8014(3) provides that “district funding units within any district may agree among themselves any or all of the expenses of maintaining . . . the distri ct court.” Plaintiffs argued th at the district court was not within their political subdivisions, and ther efore, they were not responsibl e for the expenses set forth in this provision. They emphasized that MCL 600.8014(3) used the permi ssive term “may” instead of the directive “shall.” Plaintiffs remarked that the 45th Distr ict Court never presented a budget request to plaintiffs, and if it did, they would not have appro ved it because their populations and governmental operations budgets wer e significantly smaller thanOak Park’s. 1 Plaintiffs disputed Oak Park’s contention that the assessments at issue were fees, and not costs or fines, and were subject to MCL 600.8379(1)(c).

1 According to plaintiffs, Pleasant Ridge has approximately 2,50 0 residents, and its budget for the 2013-2014 fiscal year was $2,400,000. Huntington Woods has approximately 6,000 residents, and had a total budget for 2013-2014 fiscal year of $6,800,000. In contrast, Oak Park has 30,000 residents, and operate s on a 2013-2014 annual budgetgreater than $45,000,000.-5- Oak Park argued in response that the district court was underf unded by plaintiffs and Royal Oak Township, and the court facility was “sorely inadequa te.” Oak Park cited the 1996 Comprehensive Annual Financial Report, which explained that the assessments beginning in 1995-1996 addressed the problems of retiree healthcare and buil ding expenses. They reiterated that the charges for the build ing fund and healthcare fund were not costs, and were kept in segregated accounts, pursuant to generally accepted accounting practices.

Regarding plaintiffs’ argument that the SCAO reports referred to the assessments as costs, Oak Park argued that the report was not intended as a le gal analysis of whether the collected payments for the building and healthcare funds were f ees or costs. Oak Park denied that waiving the requirement f or the court to sit in plaintiffs ’ jurisdictions relieved plaintiffs of their obligation under MCL 600.8103(3) to contribute to the exp enses for operating the district
court.

The 45th District Court filed a brief concurring with Oak Park ’s summary disposition motion and asserting its own motion for summary disposition. I t asserted that the municipalities within the district could not a gree on a means of supporting th e district court, so Oak Park became the control unit, because of its population size, caselo ad volume, and available space for court operations. The municipa lities could not agree on a form ula for expense and cost sharing, and thus complied with the statutory default mechanism. MCL 60 0.8103, MCL 600.8104, and MCL 699.8379. However, the 45th District Court was never adequ ately funded. Consequently, it began assessing additional fees for building improvement and retiree healthcare to compensate for inadequate funding.

The 45th District Court cited Oak Park’s annual budget for FY 2013-2014 as evidence that the court required the assessments to cover expenses and o bligations not paid by plaintiffs. The 45th District Court contended that plaintiffs had not met t heir responsibility for appropriating their fair share to ward the cost of operating the district court, leaving it to Oak Park to make up the difference. Until July 1, 2012, Oak Park’s burden was offset by the portion of fines and costs distributed pursuant to MCL 600.8379(1)(c), the building and healthcare fees, and other fees, charges, or pena lties. The 45th District Court argued that plaintiffs’ obligation to finance, maintain, and support the district court was not limit ed to the two-thirds allocation of fines and costs pursuant to MC L 600.8379, and that the two-thir ds portion allocated to the court was not sufficient to cover plaintiffs’ obligations to financia lly support court operations. The 45th District Court also argued that even if the assessed fees were subject to distribution under MCL 600.8379, plaintiffs would not be entitled to the fees beca use plaintiffs were historically derelict in their duties to f inance court operations.

The trial court granted summary disposition for defendants pur suant to MCR 2.116(C)(10). The court concluded in its order that pursuant t o “the clear language of MCL 600.8104 and MCL 600.8271(1), all political subdivisions,” incl uding the parties, are “responsible for the funding of t he 45th District Court.” The trial court ordered plaintiffs to comply with MCL 600.8271(1) “upon receipt of a Chief Judge line item budget which shall also be in with accord with MCR 8.201(A).” The court granted Oak Pa rk the authority to establish a fund for court building improveme nts. It determined that funds designated for the building fund and retiree healthcare fund were “not fines and costs subject t o distribution under MCL 600.8379.” The trial court indicated that its order was not fi nal, because Oak Park’s claim for-6- return of revenues incorrectly allocated to plaintiffs from Jul y 1, 2012 to June 30, 2013, had not been resolved.

III. ANALYSIS

Plaintiffs argue that MCL 600.8104 provides that where the dis trict court serves more than one political subdivision, bu t sits in only one of them, t he political subdivision where the court sits is responsible for the financial operation of the co urt. Plaintiffs contend that any obligation they have to support th e 45th District Court is sati sfied by the district court’s retention of two-thirds of the fines and costs assessed against litigants for legal violations that originate in plaintiffs’ political subdivisions.

We review de novo a trial court’s decision on a motion for summary disposition. Mercantile Bank Mtg Co, LL C v NGPCP/BRYS Centre, LLC, 305 Mich App 215, 223; 852 NW2d 210 (2014). A motion for summary disposition pursuant to MCR 2.116(C)(10) tests the factual sufficiency of the complaint. Corley v Detroit Bd of Ed
, 470 Mich 274, 278; 681 NW2d 342 (2004). “When deciding a motion for summary disposition un der MCR 2.116(C)(10), a court must consider the pleadings, affidavits, depositions, adm issions, and other documentary evidence submitted in the light most favorable to the nonmoving party.” Ernsting v Ave Maria College , 274 Mich App 506, 509; 736 NW2d 574 (2007). “Summary disposi tion is proper under MCR 2.116(C)(10) if the documentary evidence shows that there i s no genuine issue regarding any material fact and the moving party is entitled to judgment as a matter of law.” Id.

This issue mainly involves questions of statutory construction , which are reviewed de

novo. Cheboygan Sportsman Club v Cheboygan Co Prosecuting Attorney , 307 Mich App 71, 75; 858 NW2d 751 (2014). The fundamental goal when constrainin g a statute is to “determine and give effect to the intent of the Legislature, with the pres umption that unambiguous language should be enforced as written.” Id. The provisions of the statute should be read “reasonably and in context.” McCahan v Brennan , 492 Mich 730, 739; 822 NW2d 747 (2012). Courts “must give effect to every word, phrase, and clause in a statute and avoid an interpretation that renders nugatory or surplusage any part of a statute.” Hannay v Dep’t of Transp , 497 Mich 45, 58; 860 NW2d 67 (2014). Under the principle of in paria materia , statutes that relate to the same subject or share a common purpose must be read together as one law. Titan Ins Co v State Farm Mut Auto Ins Co , 296 Mich App 75, 83; 817 NW2d 621 (2012).

MCL 600.8103(3) defines a “district of the third class” as “a district consisting of 1 or more political subdivisions with in a county and in which each p olitical subdivision comprising the district is responsible for maintaining, financing and oper ating the district court within its respective political subdivision e xcept as otherwise provided i n this act.” MCL 600.8104 provides, in pertinent part:

(1) The term “district fundi ng unit” or “district control unit ” means:

* * *

(b) The city or the township in districts of the third class e xcept as provided in subdivision (c).-7- * * *

(2) Except as otherwise provided in this act, a district fundi ng unit shall be responsible for maintaining, fina ncing, and operating the court only within its political subdivision. In districts of the third class a polit ical subdivision shall not be responsible for the expenses o f maintaining, financing, or o perating the district court, traffic bureau, or small claims division incurred in any other political subdivision except as provi ded by section 8621 and other provis ions of this act.

(3) One or more district fundi ng units within any district mayagree among themselves to share any or all of the expenses of maintaining, financing, or operating the district court. To become effective such agreeme nts must be approved by resolution adopted by the governing body of the res pective political subdivisions entering into the agreement, and upon approval suc h agreements shall become effective and binding in accordance with, to the e xtent of, and for such period stated in that agreement.

Under this statute, each plaintiff, as a city in a third-class district, qualifies as a “district funding unit” or “district control unit” of the 45th District. Under s ubsection (2), plaintiffs are not responsible for the expenses of maintaining, financing, or oper ating the 45th District Court in Oak Park, except as otherwise provided by MCL 600.8621, or othe r provisions of the act.

MCL 600.8621(1) provides:

District court recorders and reporters shall be paid by each d istrict control unit. In districts consisting of more than 1 district control unit, each district control unit shall contribute to the salary in the same proport ion as the number of cases entered and commenced in the district control unit bears to the number of cases entered and commenced in the district, as determined by t he judges of the district court under rules pres cribed by the supreme court.

MCL 600.8271(1) provides:

The governing body of each district funding unit shall annuall y appropriate, by line-item or lump-sum budget, funds for the ope ration of the district court in that district. However, before a governing b ody of a district funding unit may appropriate a l ump-sum budget, the chief judge of the judicial district shall submit to the governing body of the district fun ding unit a budget request in line-item form with appropriate detail. A court tha t receives a line-item budget shall not exceed a line-it em appropriation or transfer f unds between line items without the prior approval of the governing body. A court that receives a lump-sum budget shall not exceed that budget without the prior approval of the governing body.

MCL 600.8379 provides, in pertinent part:

(1) Fines and costs assessed in the district court shall be pa id to the clerk of the court who shall appr opriate them as follows:-8- (a) A fine imposed for the violation of a penal law of this st ate and a civil fine ordered in a civil infracti on action for violation of a la w of this state shall be paid to the county treasurer a nd applied for library purposes a s provided by law.

(b) . . . In districts of the third class, costs imposed for the violation of a penal law of this state or ordered in a civil infraction action for the violation of a law of this state shall be paid to the treasurer of the politic al subdivision where the guilty plea or civil infraction admission was entered or where the trial or civil infraction action he aring took place.

(c) . . . In districts of the third class, all fines and cost s, other than those imposed for the violation of a penal law of this state or order ed in a civil infraction action for the violation of a law of this state, sha ll be paid to the political subdivision whose law was violated, except that where fines and costs are assessed in a political subdi vision other than the politica l subdivision whose law was violated, 2/3 shall be p aid to the political subdivisio n where the guilty plea or civil infraction admission was entered or where the tri al or civil infraction action hearing took place and the balance shall be paid to the political subdivision whose law was violated.

(d) In a district of the third class, if each political subdiv ision within the district, by resolution of its governing body, agrees to a dist ribution of fines and costs, other than fines imposed for the violation of a penal la w of this state or ordered in a civil infraction action for the violation of a law of this state, differently than as provided by this section, th e distribution of those fines and costs among the political subdivi sions of that district shall b e as agreed to. An existing agreement applicable t o the distributio n of fines and costs shall apply with the same effect to the distribution of civil fines and cos ts ordered in a civil infraction actions.

(e) A civil fine imposed upon a person for violation of a prov ision of a code or an ordinance of a political subdivision of this state r egulating the operation of a commercial vehicl e that substantially correspond s to a provision of the Michigan vehicle code, 1949 PA 300, MCL 257.1 to 257.923, s hall be paid to the county treasurer and allocated as follows:

( i ) Seventy percent to the political subdivision in which the cit ation is issued.

( ii ) Thirty percent for librar y purposes as provided by law.

(f) A civil fine imposed upon a person for violation of a prov ision of a code or an ordinance regulating the operation of a commercial v ehicle adopted by a city, township, or village pursuant to section 1 of 1956 PA 6 2, MCL 257.951, shall be paid to the county treas urer and allocated as follows:

( i ) Seventy percent to the political subdivision in which the cit ation is issued.-9- ( ii ) Thirty percent for librar y purposes as provided by law.

MCL 600.8261 provides that “[c]our t facilities shall be provid ed at those places where the court sits.” In districts of the third class, court facili ties “shall be provided by each political subdivision where the court si ts.” MCL 600.8251(4) provides as follows for third-class districts:

In districts of the third class, the court shall sit at each c ity having a population of 3,250 or more and within each township having a p opulation of 12,000 or more and at other places as the judges of the distric t determine. The court is not required to sit in any political subdivision if th e governing body of that subdivision by resolution a nd the court agree that the cou rt shall not sit in the political subdivision.

MCR 8.201 provides:

(A) Duties of Clerks of Each Third-Class Control Unit Having aClerk.

(1) On the last day of March, June, September, and December of each year, the clerk of each third-class control unit having a clerk (see MCL 600.8281) shall determine the total number of civil and criminal cases fi led during the preceding three months in the district and each political subdi vision of the district under subrule (B). These figures are the total number of cases entered and commenced in that district and e ach political subdivision.

(2) The clerk shall determine t he total cost of maintaining, f inancing, and operating the district cou rt within the district.

(3) The clerk shall determine the proper share of the costs to be borne by each political subdivision by use of the following formula: (th e number of cases entered and commenced in each political subdivision divided by the total number of cases entered and commenced in the district) multiplied by the total cost of maintaining, financing, and opera ting the district court.

(4) The clerk shall determine the proper share of the salary o f the court reporter or recorder under MCL 600.8621(1) by use of the follow ing formula: (the number of cases entered and commenced in each political subdivi sion divided by the total number of cases enter ed and commenced in the district ) multiplied by the total salary of the court reporter or recorder.

(5) The clerk shall certify the figures determined under subru les (A)(3) and (4) to the treasurer of each political subdivision in the d istrict. Payment by each political subdivision of any unpaid portion of its certifi ed share of the cost and salaries is then due.

Plaintiffs deny a statutory oblig ation to provide financial su pport for the district court, relying on the following empha sized language in MCL 600.8104(2) and (3):-10- (2) Except as otherwi se provided in this act, a district fundin g unit shall be responsible for maintaining, financing, and operating the court only within its political subdivision . In districts of the third class a political s ubdivision shall not be responsible for the expenses of mainta ining, financing, or ope rating the district court, traffic bureau, or small claims di vision incurred in any other political subdivision except as provided by section 8621 and other provisions of thi s act.

(3) One or more district funding units within any district may agree among themselves to share any or all of the expense s of maintaining, financing, or operating the district court . To become effective such agreements must be approved by resolution adopted by the governing body of the res pective political subdivisions entering into the agreement, and upon approval suc h agreements shall become effective and binding in accordance with, to the e xtent of, and for such period stated in that agreement. [Emphasis added.]

Plaintiffs overlook the limiting introductory language at the b eginning of § 8104(2), “except as otherwise provided in this act,” and the similar language at th e end of that subsection, which again specifies that the provisions of that subsection apply “e xcept as provided by section 8621 and other provisions of this act.”

MCL 600.8621 requires each district funding unit to contribute to the salaries of district court recorders and reporter s. MCL 600.8271(1) states that the governing body of each district funding unit “shall annually appropriate . . . funds for the op eration of the district court in that district.” It is well established “that the term ‘may’ is perm issive,’ . . . as opposed to the term ‘shall,’ which is considered ‘mandatory.’ ” Manuel v Gill , 481 Mich 637, 647; 753 NW2d 48 (2008). By using the mandatory term “shall,” instead of the pe rmissive term “may,” MCL 600.8271(1) clearly requires each d istrict funding unit to prov ide funding for the district court. Reading these provisions of the Revised Judicature Act together , in accordance with the doctrine of in pari materia , the statutory scheme clearlyimposes on all district funding units in a thirdclass district a duty to provide financial support for the district court, regardless of which political subdivision the court is seated. Titan Ins Co , 296 Mich App at 83.

Plaintiffs argue that if there is such a requirement, it is no t triggered until the chief judge submits a proposed budget to the funding unit. Plaintiffs rely on the second sentence in § 8271(1), which states that “before a governing body of a dist rict funding unit may appropriate a lump-sum budget, the chief judge of the judicial district sha ll submit to the governing body of the district funding unit a budget request in line-item form wi th appropriate detail.” The statutory provision goes on to state that “[a] court that recei ves a line-item budget shall not exceed a line-item appropriation or transfer funds between line items without the prior approval of the governing body” and “[a] court that receives a lump-sum budget shall not exceed that budget without the prior approval of the governing body.” The relevant context of this requirement pertains to the choice of a lump-sum budget over a line-item budget, not to the funding unit’s financial obligation.

Plaintiffs argue that the provision in MCL 600.8379(1)(c), whi ch provides for the onethird/two-third allocation of fines and costs assessed where th e “fines and costs are assessed in a political subdivision other than the political subdivision whos e law was violated,” provides the-11- means by which a funding unit other than the funding unit where the district court sits fulfills its obligation to support the district court. Nothing in MCL 600.8 379 supports this interpretation. Section 8379 provides a formula for revenue sharing, but does n ot indicate that the revenue allocation satisfies the distri ct funding unit’s obligation.

Plaintiffs also argue that there is sufficient evidence of the existence of oral agreements between each plaintiff and defe ndants, in which defendants agre ed to refund one-third of revenues from tickets and fines originating in plaintiffs’ poli tical subdivisions, and plaintiffs would not incur any additional e xpenses related to the operatio n of the 45th District Court. They argue that the evidence shows that the parties formed oral agre ements in 1974, or, alternatively, that the parties’ conduct establishes an implied-in-fact agreem ent. Plaintiffs rely on the 1974 resolutions in support of the existence of a contractual agreem ent. The resolution adopted by the Pleasant Ridge City Commission on December 10, 1974, acknowledg es the abolition of the Municipal Court for the city of Pleasant Ridge, and the creatio n of the 45-B District Court to serve the three cities and Royal Oak Township. The resolution states that the judges of the Oak Park Municipal Court will become the district court judges. It also states that these judges “conferred with the appropriate officials of the City of Pleasant Ridge and with the City Commission and have agreed that the court location requirement of MCLA 600.8251(3) shall be waived and that the district court for the 45-B District shall not be required to sit in the City of Pleasant Ridge.” The resolution further states that “the City of Pleasant Ridge will not incur any expenses in connection with the operation of the new district c ourt and will receive one-third of all fines assessed which originate in the City of Pleasant Ridg e.” Huntington Woods adopted a substantially sim ilar resolution.

Oak Park counters that a search of its records for the years 1 974 and 1975 revealed no record of a resolution or agreement pertaining to funding and t he operation of the 45-B District Court. Indeed, the 1983 Resolution, CM-04-290-83, clearly indi cates that there was no agreement between the communities. The minutes of the April 3, 1983 Oak Park City Council meeting indicate that the council passed a resolution concernin g the 45-B District Court. The resolution states, in pertinent part:

WHEREAS, since January 1, 1975 the City of Oak Park, as the di strict control unit for the 45-B District Court, has borne the total e xpense of operating said Court located within its municipal offices, and since 1975 the subsidy from the City of Oak Park General Operating Fund required to maintai n the operations of said Court has grown from Fifteen Thousand Sixty-Three Dolla rs ($15,063) to an estimated subsidy of Two Hundred Forty Nine Thousand One Hun dred Fourteen Dollars ($249,114) in fiscal year 1983-84 . . . and

WHEREAS, the Judges of the 45-B District Court have expressed to the City of Oak Park their inabilityto properly dispose of cases o n their docket due to the inadequacy of facilities . . . and have expressed their des ire and intent to have the 45-B District Court sit in other political subdivisions wi thin the 45-B District Court boundaries, unless adequate facilities are provided withi n the political subdivision of the City of Oak Park and . . .

NOW, THEREFORE, BE IT R ESOLVED AS FOLLOWS:-12- 1. That the City of Huntington Woods, City of Pleasant Ridge a nd Township of Royal Oak each are hereby requested, pursuant to Se ction 8261 of Public Act 154, to provide court facilities within each of thei r political subdivisions, and to provide for the maintenance, financing and operation of the 45B District Court within their political subdivisions as requi red by Section 8104 of Public Act 154.

2. That in the alternative, the City of Hunting Woods, City of Pleasant Ridge and Township of Royal Oak are hereby requested t o enter into an agreement with the City of Oak Park to share all the expenses o f maintaining, financing and operating the 45-B District Court at a location w ithin the boundaries of the political subdivision of the City of Oak Park . [Council Meeting minutes, April 5, 1983, 48-51, Oak Park Exhibit 3.]

MCL 600.8104(3) provides that district funding units “may agre e among themselves to share any or all of the expenses of . . . operating the distric t court,” but “[t]o become effective such agreements must be approved by resolution adopted by the g overning body of the respective political subdivisions entering into the agreement.” Here, there are no such resolutions. Plaintiffs’ resolutions state that they “will not incur any expense in connection with the operation of the new Distri ct Court,” but plaintiffs have n ot provided any ev idence that Oak Park or the 45th District Court assented to these resolutions.

Plaintiffs alternatively argue that the parties’ conduct demon strates an implied contract. “A contract is implied where the intention as to it is not mani fested by direct or explicit words between the parties, but is to be gathered by implication or pr oper deduction from the conduct of the parties, language used or things done by them, or other per tinent circumstances attending the transaction.” Miller v Stevens , 224 Mich 626, 632; 195 NW 481 (1923). However, MCL 600.8104(3) provides that such agreements are effective only wh en “approved by resolution adopted by the governing body of the respective political subdi visions.” “In general, where comprehensive legislation prescr ibes in detail a course of cond uct to pursue and the parties and things affected, and designates specific limitations and except ions, the Legislature will be found to have intended that the statute supersede and replace the com mon law dealing with the subject matter.” Trentadue v Buckler Automatic Lawn Sprinkler , 479 Mich 378, 389; 738 NW2d 664 (2007) (citation omitted). Plaintiffs cannot establish the exi stence of a valid agreement respecting their funding obliga tions without satisfying the req uirements of MCL 600.8104(3).

Moreover, plaintiffs have failed to establish a genuine issue of fact regarding whether a valid contract was formed. “The essential elements of a contra ct are parties competent to contract, a proper subject matte r, legal consideration, mutuali ty of agreement, and mutuality of obligation. Mallory v Detroit , 181 Mich App 121, 127; 449 NW2d 115 (1989). “An implied contract must also satisfy the elements of mutual assent and co nsideration.” Id. “The essence of consideration—whatever form it takes—is that there be a bargain ed-for exchange between the parties.” Calhoun Co v Blue Cross Blue Shield of Mich , 297 Mich App 1, 13; 824 NW2d 202 (2012). Plaintiffs state that their implied contract with Oak Park provides that they will receive one-third of all fines and costs assessed for offenses that ori ginated in their respective jurisdictions, and tha t they would no t incur any expenses in co nnection with operating the district court. This alleged agreement lacks consideration, because pla intiffs do not promise anything in-13- exchange for their relief from t heir obligation to provide fina ncial support. Accordingly, plaintiffs cannot establish the existence of a valid contract l imiting their financial obligations to the one-third/two-thirds r evenue sharing provision.

Plaintiffs argue also that the trial court erred in determinin g that the monies allocated to the building fund and the retire e healthcare fund were exempt f rom the one-third/two-thirds split, because they are “fees” and not “costs.” The language of MCL 6 00.8379(1)(c) provides that “all fines and costs . . . shall be paid to the political subdivision whose law was violat ed, except that where fines and costs are assessed in a political subdivision o ther than the political subdivision whose law was violated, 2/3 shall be paid to the political subd ivision where the guilty plea or civil infraction admission was en tered or where the trial or ci vil infraction action hearing took place and the balance shall be paid to the political subdivisio n whose law was violated”. (Emphasis added.) Thus, we must determine whether the monies a llocated to the building and retiree healthcare funds are “fi nes” or “costs” within the mean ing of this provision.

MCL 600.4801 provides the following relevant definitions:

(a) “Costs” means any monetary amount that the court is author ized to assess and collect for prosecution, adjudication, or processing of criminal offenses, civil infractions, civi l violations, and parking viol ations, including court costs, the cost of prosecution, and the cost of providing court -ordered legal assistance to the defendant.

(b) “Fee” means any monetary amount, other than costs or a pen alty, that the court is authorized to impose and collect pursuant to a con viction, finding of responsibility, or other adjudica tion of a criminal offense, a civil infraction, a civil violation, or a parking violati on, including a driver license r einstatement fee.

(c) “Penalty” includes fines, f orfeitures, and forfeited recog nizances.

(d) “Civil violation” means a vi olation of a law of this state or a local ordinance, other than a criminal offense or a violation that is defined or designated as a civil infraction, that is punishable by a civil fine or forfeiture under the applicable law or ordinance.

Neither the building fund assessm ent nor the retiree healthcar e fund assessment qualify as a “cost” within the definition of MCL 600.4801(a). The charge was not assessed or collected for the prosecution, adjudication, or processing of criminal offens es, civil infractions, or other violations. Moreover, we are no t persuaded that the term “court costs” in § 4801(a) extends to money collected for a court bu ilding fund or court retiree heal thcare fund. In interpreting a statute, “effect should be given to every phrase, clause, and w ord in the statute,” and the “statutory language must be read and understood in its grammati cal context, unless it is clear that something different was intended.” Sun Valley Foods Co v Ward, 460 Mich 230, 238; 596 NW2d 119 (1999). MCL 600.4801(a) is a single sentence consisti ng of a subject (the term “costs”), a linking verb (“means”), and a predicate nominative. The predicate nominative of the sentence is “any monetary amount,” followed by a series of modi fiers. The first modifier is the subordinate clause, “that the court is authorized to assess and collect . . . .” The object of the-14- subordinate clause is the infin itive, “to assess and collect.” The infinitive is modified by a prepositional phrase that provi des a specific list of purposes for assessing and collecting the money, namely the actions of “prosecution, adjudication, or pro cessing,” which in turn are modified by the prepositional phrase giving a specific list of the objects of those three actions, “of criminal offenses, civil infractions, civil violations, and parking violations.” The list of included actions and corresponding objects being then complete, the sentence further modifies the list of actions and correspond ing objects wit h the particip ial phrase, “including court costs, the cost of prosecution, and the cost of providing court-ordere d legal assistance to the defendant.” “[I]t is a general rule of statutory, as well as g rammatical, construction that a modifying clause is confined to the last antecedent unless a co ntrary intention appears.” Dale v Beta-C, Inc , 227 Mich App 57, 69; 574 NW2d 697 (1997). Accordingly, the m odifying clause “including court costs” pertains to the last antecedent, “for p rosecution, adjudication, or processing of criminal offenses, civil infractions, civil viola tions, and parking violations.” “Court costs” is not a standalone item in the list of monetary charges or assessments that come within the definition of “costs.” Rather, “court costs” is an item included in the subset of costs relating to prosecution, adjudication, or the processing of cri minal offenses, civil infractions, civil violations, and parking violations. Accordingly, only co urt costs assessed and collected for those purposes are included in t he statutory definition of “cos ts” in MCL 600.4801(a).

Therefore, monies assessed and collected for the building fund and the retiree healthcare fund are not “costs” under MCL 600.4801(a). Such assessments c ome within the statutory definition of “fee,” which is defined as “any monetary amount, other than costs or a penalty, that the court is authorized to impose and collect pursuant to a con viction, . . . .” MCL 600.4801(b). Because a “fee” is not part of the allocation required by MCL 6 00.8379(1)(c), neither Oak Park nor the 45th District Court was required to distribute one-thir d of the assessment to plaintiffs.

Plaintiffs argue that the trial court erroneously relied on City of Muskegon v Muskegon Co , 63 Mich App 44; 233 NW2d 849 (1975). Although the trial cour t referenced that case, which was cited by Oak Park, itdid so only in the context of s ummarizing Oak Park’s argument. The court did not rely on that decision in support of its analy sis of the issue. We agree that the decision is not relevant to this case. In City of Muskegon , this Court addressed whether the plaintiff cities or the defenda nt county was responsible for pa ying witness fees for witnesses called by the cities in cases arising from the cities’ ordinanc es. This Court considered MCL 600.8323, which provides:

Witnesses in the district cour t shall be entitled to receive the same fees and mileage allowances to which witnesses in circuit court are enti tled. Where the county is responsible for such expenses in the circuit court, the district control unit for the place where the trial occurs shall be responsible for such expenses in the district court.

This Court concluded that “because the defendant county would n ot be responsible for witness and mileage fees for the municipalities’ witnesses in circuit c ourt, defendant county is not responsible for such fees in district court.” Id. at 45. Quoting the trial co urt’s opinion, this Court noted:-15- [P]laintiffs further argue that since Muskegon County is a fir st class district comprised solely of Muskegon County, therefore, as suc h, it is the sole district control unit involved and is responsible for witness f ees. The Plaintiffs further urge that witness fees are an integral part of maintena nce, financing and operation of a District Court. See MCL 600.8104(2) . . . . [ Id. at 46.]

The plaintiffs cited MCL 600.8104 for the statement that a poli tical subdivision in third-class districts “shall not be responsible for the expenses of maintai ning, financing, or operating the district court . . . incurred in any other political subdivisio n . . . .” City of Muskegon , 63 Mich App at 46-47. The defendants contended that ordinance violatio n expenses were never treated as an obligation of the county. Id. at 47. This Court agreed that “in both civil and criminal cas es, the municipality, as a litigan t, is required by R.J.A. s 8323 t o pay witness and mileage fees.” City of Muskegon , 63 Mich App at 53.

City of Muskegon is not helpful to the instant analysis, because the Court ther e did not analyze the issue of distinguishing costs from fees for purpose s of distribution under MCL 600.8379. Indeed, this Court quoted extensively from the trial court’s opinion, which used the terms interchangeably, as noted here:

Witness fees are not a part of or included in the maintenance, operating or financing of a court. The Court or forum per se is a passive e lement of the system. Theoretically, the Distr ict Control Unit might create t he court, maintain it, operate it, and a case may never be tried in it, or a proceedin g of any kind may never take place in it. Having created it, maintained, operate d and financed it, the District Control Unit has acqui tted its obligation under the st atute. It is the litigants and their supporting cas t (including their witnesses) who are the active participants in the pit. Witness fees are a part of the cost o f litigation, not an element of maintaining, operating or financing the court, and i t is the litigants who must initially pay their owncosts-whether those costs of l itigation, costs of prosecution, costs of defense, are ultimately recoverable depen ding upon result, is a matter determined by Statute or Court Rule. [ City of Muskegon , 63 Mich App

. at 52.]

Plaintiffs observe that the SCAO audit report referred to the charges as costs. The SCAO report referred to the building fund and retiree healthcare ass essments as “court costs” and “operational costs.” The report noted that the 45th District C ourt “distributed court costs, with the exception of court costs titled as operational costs . . .” until FY 2013, when it began distributing the operational costs. However, the SCAO report d id not address the legal question whether the building fund and re tiree health care fund assessme nts were costs subject to distribution. The terminology used in that report is not dispo sitive of the proper characterization of the charges for purposes of this case. Plaintiffs suggest t hat the trial court’s decision was premature, because discovery was not complete, and further disc overy could provide more evidence whether the assessments a re properly classified as cos ts or fees. However, the classification of the assessments as costs or fees is not a que stion of fact. It is a question of law, in which discovery woul d shed no further light.-16- Finally, we find no merit to plaintiffs’ argument that the Leg islature’s recent amendment of MCL 769.1k supports their position that the retiree health c are assessment and building assessment are actually costs subject to distribution. MCL 769 .1k addresses a trial court’s authority to impose costs when sentencing a criminal defendant. In People v Cunningham , 496 Mich 145, 154-155; 852 NW2d 118 (2014), our Supreme Court observed that the statute authorizes a court to impose costs at sentencing, but held that it did not authorize a court to impose “any cost,” but rather “only those costs that the Legisl ature has separately authorized by statute.” In response to the Cunningham decision, the Legislature amended MCL 769.1k, effective October 17, 2014. The enacting sections provide:

Enacting section 1. This amendatory act applies to all fines, costs, and assessments ordered or assessed under section 1k of chapter IX of the code of criminal procedure, 1927 PA 175, MCL 769.1k, before June 18, 20 14, and after the effective date of this amendatory act.

Enacting section 2. This amendatory act is a curative measure that addresses the authority of cour ts to impose costs under section 1k of chapter IX of the code of criminal procedur e, 1927 PA 175, M CL 769.1k, before the issuance of the supreme court opinio n in People v Cunningham, 496 Mich 145 (2014).

The decision in Cunningham , and the subsequent statutory a mendment, address the trial court’s authority to assess certain categories of costs against a convi cted criminal defendant. The issue presented in this case does not concern whether the 45th Distri ct Court or Oak Park has authority to impose the building or retiree healthcare fund assessments, but whether plaintiffs are entitled to a one-third split of those assessments under MCL 600.8379(1) (a). Neither the Cunningham decision nor the statutory amend ment of MCL 769.1k have any rel evance to the interpretation of MCL 600.4801.

Accordingly, we affirm the trial court’s determination that th e monies allocated to the building fund and the retiree healthcare fund are not subject t o the one-third/two-thirds distribution scheme in MCL 600.8379( 1)(a). In light of this de cision, it is unnecessary to address Oak Park’s alternative argument that the doctrine of laches sho uld also preclude plaintiffs from receiving a one-third distribution of monies collected for the building and retiree healthcare funds.

Affirmed and remanded for further proceedings. We do not reta in jurisdiction.

/s/ Kathleen Jansen /s/ David H. Sawyer /s/ Karen M. Fort Hood