Case Name: MUDGE v. MACOMB COUNTY
Court: Michigan Supreme Court
Jurisdiction: Michigan
Decision Date: 1998-07-01
Citations: 458 Mich. 87
Docket Number: Docket No. 103985
Parties: MUDGE v MACOMB COUNTY
Judges: Mallett, C.J., and Brickley, Cavanagh, and Kelly, JJ., concurred with Taylor, J.
Reporter: Michigan Reports
Volume: 458
Pages: 87–140

Head Matter:
MUDGE v MACOMB COUNTY
Docket No. 103985.
Argued November 5, 1997
(Calendar No. 6).
Decided July 1, 1998.
Tanya J. Mudge and Jonathon Brown brought an action in the Macomb Circuit Court against Macomb County, the Macomb County Sheriff, and the sheriff’s department, alleging that the sheriff’s department had obtained ex parte orders from the judge assigned to their respective criminal cases, seizing their bond monies for reimbursement of the expenses of their incarceration in the Macomb County jail. An amended complaint further alleged that the defendants had breached MCL 801.81 et seq.; MSA 28.1770(1) et seq., the Prisoner Reimbursement to the County Act, in failing to commence a civil action within the prescribed period, precluding them from retaining a portion of their bond monies. They further asserted that the acts and omissions of the defendants violated 42 USC 1983 because they amounted to an unconstitutional deprivation of their property in violation of the Fifth and Fourteenth Amendments of the United States Constitution. The court, Deborah A. Servitto, J., denied the defendants’ motion for summary disposition. Thereafter, the defendants filed a counterclaim under the prisoner reimbursement act and also moved for rehearing or reconsideration. The court granted reconsideration and entered an order summarily dismissing the plaintiffs’ amended complaint. The Court of Appeals, D. E. Holbrook, Jr, P.J., and Reilly and G. W. Hood, JJ., reversed and remanded the case in an opinion per curiam, holding that the defendants had acted ultra vires of the act in obtaining the ex parte orders and that a municipality could be sued under 42 USC 1983 for unconstitutional or illegal policies or customs. The Court further held that liability could be imposed for deliberate indifference to a person’s constitutional or statutory rights, and that the defendants could not plead a counterclaim under the prisoner reimbursement act because the six-month limitation period had expired (Docket No. 140863). The defendants appeal.
In an opinion by Justice Taylor, joined by Chief Justice Mallett, and Justices Brickley, Cavanagh, and Kelly, the Supreme Court held-.
The existence of postdeprivation remedies does not necessarily bar the plaintiffs’ claim brought under 42 USC 1983; a predepriva tion hearing could have been provided. The expiration of a limitation period does not foreclose a recoupment defense as long as the plaintiff’s action is timely.
1. Actions that violate a state statute, but do not also violate the federal constitution or a federal statute, are not actionable under 42 USC 1983. The plaintiffs’ amended complaint alleged that defendants’ conduct violated the prisoner reimbursement act. However, the plaintiffs also pleaded 42 USC 1983 as a separate count, alleging that the defendants’ actions violated their rights under the Fifth and Fourteenth Amendments of the federal constitution. If the defendants’ conduct violated the federal constitution, the fact that the conduct also violated the prisoner reimbursement act is of no moment and is not a ground allowing a court to find that plaintiffs have not alleged a cause of action under 42 USC 1983.
2. The federal remedy is supplementary to the state remedy; the state remedy need not first be sought and refused before the federal is invoked. Because the plaintiffs’ § 1983 claim is not necessarily barred by the existence of postdeprivation remedies, the fact that the plaintiffs could have asked the trial court or the Court of Appeals to vacate or overturn the ex parte orders when they finally learned of them is no bar to the § 1983 claim.
3. The Court of Appeals erred in holding that the defendants could not plead a counterclaim under the prisoner reimbursement act simply because the then-existing six-month limitation period had expired. The expiration of a limitation period does not foreclose a recoupment defense as long as the plaintiff’s action is timely. Because the plaintiffs’ § 1983 complaint was timely filed, the expiration of the limitation period for a county to bring a prca action, in and of itself, was not a bar to defendants seeking recoupment under the prca. However, while the plaintiffs’ allegations are sufficient to state a cause of action for a violation of their due process rights, further factual development is necessary to determine the nature and extent of the county policy. Until this further development occurs, an evaluation of plaintiffs’ claim that defendants’ have unclean hands is inappropriate.
Justice Weaver concurred in parts i and n of the majority opinion.
Affirmed in part, reversed in part, and remanded.
Justice Boyle, concurring in part and dissenting in part, stated that, to avoid confusion over assertion of recoupment in the contract setting as opposed to other contexts, a trial court ought to analyze the defendant’s right to assert the defense in light of Butt v United States, 295 US 247 (1935). The rule is clear: If a counterclaim or defense arises out of the same transaction, occurrence, or claim as the plaintiffs claim, it is in the nature of recoupment, and the statute of limitations is inapplicable as long as the plaintiff’s claim is timely and the defendant’s right to recoupment existed when the plaintiff’s claim arose. Recoupment beyond the statute of limitations will serve only to diminish or negate the defendant’s liability in damages to the plaintiff. Should the trial court resolve the issue with respect to the county’s conduct in such a way as to conclude that the § 1983 claim exists wholly outside the Zinermon dispute because the county sanctioned the alleged due process rationale by official act or custom, the conclusion that the county’s hands are unclean might be appropriate. Zinermon v Burch, 494 US 113 (1990). However, if the county merely hired someone to implement the prca and that person and the sheriff acted without the county’s sanction, the county should not be found to have unclean hands where it attempted in good faith to comply with the prca. Resolution of the issue now would amount to the Supreme Court resolving that the county’s official sanction was present, a conclusion not supported by the record. That the bond monies were retained in lieu of a statutory debt does not conclusively establish that the county intentionally sought to deny the prisoners their rights under the constitution or the prca, or otherwise committed inequitable conduct sufficient to invoke the doctrine of unclean hands. The record is wholly inadequate.
A plaintiff seeking to maintain a due process claim under § 1983 must allege a deprivation of a constitutionally protected interest in life, liberty, or property. In this case, the plaintiffs’ allegations are sufficient to state a cause of action for violation of their due process rights because the defendants seized their bond monies without a hearing of any kind and treated the bond monies as if they had been forfeited to the county and as if the ex parte orders attaching the bond monies already had been reduced to judgment without notice and a hearing. The due process violation alleged arises not from the use of an ex parte procedure, but from its misuse in contravention of the statutory procedures to effectuate a property deprivation without a hearing. However, there is confusion in the federal circuit courts of appeal regarding the principal case on which the majority relies, Zinermon v Burch, and its relationship to Parratt v Taylor, 451 US 527 (1981), and Hudson v Palmer, 468 US 517 (1984).
The difficulty confronting the courts in cases involving these types of claims is determining whether a given claim should be evaluated under the Parratt/Hudson doctrine, which teaches that where a government official engages in random and unauthorized activity that results in a deprivation of life, liberty, or property, due process is satisfied by adequate postdeprivation process. Zinermon, by contrast, appears to require predeprivation process in virtually all circumstances. The issue turns on Zinermon’s reference to the third prong of its apparent test that in order to trigger Parratt/Hudson, the defendant’s conduct must be unauthorized in the sense the term is used in Parratt and Hudson. The courts’ difficulty lies in determining when the conduct of the official actor is sufficiently authorized that the plaintiff may avoid the Parratt/Hudson doctrine. If Parratt/Hudson is interpreted narrowly, a plaintiff may successfully state a § 1983 cause of action where an official actor’s allegedly unconstitutional conduct is wholly outside the discretion delegated to the actor in the context of applicable procedural safeguards, i.e., where the alleged deprivation was in direct procedural contravention of the state statute authorizing the very deprivation that occurred. Alternatively, if Parratt/Hudson is interpreted broadly, and postdeprivation process is available, the plaintiff may not maintain the § 1983 cause of action where the official actor’s allegedly unconstitutional conduct was not authorized by the delegation of discretion.
Justice Weaver concurred in part i of Justice Boyle’s opinion.
210 Mich App 436; 534 NW2d 539 (1995) affirmed in part and reversed in part.
James M. Hacker and Lawrence A. Baumgartner (Jerald R. Lovell, of counsel), for plaintiffs.
O'Leary, O'Leary, Jacobs, Mattson, Perry & Mason, PC. (by John P. Jacobs and Kenneth L. Herrington), for defendants.
Amici Curiae:
Johnson, Rosati, Gálica, Labarge, Aseltyne & Field, PC. (by Marcia L. Howe), for Michigan Defense Trial Association.
Garan, Lucow, Miller, Seward & Becker, PC. (by Rosalind Rochkind), for Michigan Municipal League and Michigan Municipal Liability and Property Pool.
Cohl, Stoker & Toskey, P.C. (by Peter A. Cohl and John R McGlinchey), for Michigan Association of Counties and Michigan Sheriffs Association.

Opinion:
Taylor, J.
Tanya Mudge and Jonathon Brown filed a lawsuit in the Macomb Circuit Court against Macomb County, Macomb County Sheriffs Department, and William Hackel, Macomb County Sheriff. Plaintiffs alleged that the sheriff's department had obtained ex parte orders from the judge assigned to their respective criminal cases, seizing their bond monies for reimbursement of the expenses of their incarceration in the Macomb County jail. Plaintiffs' amended complaint alleged two causes of action: (1) breach of state law under the Prisoner Reimbursement to the County Act (PRCA), MCL 801.81 et seq.) MSA 28.1770(1) et seq., and (2) a violation of 42 USC 1983. The breach of state law count alleged that defendants had failed to commence a civil action within the prescribed period that would have potentially allowed defendants to obtain a portion of their bond monies under the PRCA. Plaintiffs thus sought return of their bond monies because their money had been converted without statutory authority. Plaintiffs also asserted that the acts and omissions of defendants had violated 42 USC 1983 because they amounted to an unconstitutional deprivation of their property in violation of the Fifth and Fourteenth Amendments of the United States Constitution.
Defendants filed a motion for summary disposition asserting several grounds. After the trial court denied the motion, defendants filed a counterclaim asserting, inter alia, a right to recoupment under the PRCA. Plaintiffs then filed a motion seeking summary disposition of defendants' counterclaim, arguing such a counterclaim was barred given that the limitation period under the prca had expired. Defendants also filed a motion for rehearing or reconsideration regarding the denial of their motion for summary disposition. The trial court subsequently granted reconsideration and entered an order summarily dismissing plaintiffs' amended complaint. The trial court never ruled on plaintiffs' motion to summarily dismiss the counterclaim because the counterclaim became moot upon dismissal of plaintiffs' complaint.
Plaintiffs appealed as of right, and the Court of Appeals reversed and remanded for further proceedings. 210 Mich App 436; 534 NW2d 539 (1995). Defendants filed an application for leave to appeal, which this Court initially denied, but ultimately granted in response to defendants' motion for reconsideration. Our order granting defendants' application for leave to appeal was limited to three questions: (1) whether a violation of the PRCA constituted a federal due process violation, (2) whether an action for damages was barred because the withholding of funds was pursuant to an order issued by the circuit court, and (3) whether defendants' claim for reimbursement under the PRCA could be raised by counterclaim after the time for bringing an action under the statute had expired. 454 Mich 890 (1997).
Plaintiffs were charged with unspecified criminal charges in the Macomb Circuit Court. Brown posted a $10,000 cash bond on May 17, 1988, to secure his release on bail. On October 5, 1988, while the charges were still pending against Brown, the sheriffs department requested, on an ex parte basis, that the judge assigned to Brown's criminal case, enter an order.
The prefatory language in the order that the court signed stated that the Sixteenth Judicial Circuit was in possession of a sum of $10,000 and that it appeared that defendant "has/will" have incurred reimbursement charges as a consequence of the criminal case. The introductory language further indicated that the "Sheriff's Reimbursement Program for the County of Macomb" was requesting that the $10,000 be deposited with the department in lieu of payment toward reimbursement fees provided for under the prca. The order entered in Brown's case concluded as follows: "Therefore it is ordered, that the sum of $10,000 be released forthwith, and made payable to the County of Macomb for payment of reimbursement fee(s) upon conclusion of said matter(s), or until further order of the Court." Brown was eventually sentenced to six months in jail on June 22, 1989. Defendants' counterclaim indicates that Brown received a financial history form from the sheriff on or about June 27, 1989. Thus, the ex parte order seizing Brown's money was apparently entered before he was convicted and more than eight months before he was requested to provide financial information. The sheriff's department apparently never served a copy of the ex parte order on Brown or the attorney representing him in his criminal case. It also appears that Brown first learned that his bond monies had been subject to the October 5, 1988, ex parte order after he was sentenced and he sought return of his bond money.
A somewhat similar scenario occurred with reference to Mudge. A cash bond of $1,100 was posted by Mudge on December 20, 1988. Apparently soon after being sentenced to four months in jail, the sheriff's department requested the judge assigned to preside over Mudge's criminal charges to enter an order on an ex parte basis. The prefatory language and the actual language in the order that was entered was identical to the order entered with reference to Brown, except that the order recited that $1,000 was in the Court's possession and that it was to be released and "made payable to the County of Macomb for payment of reimbursement fee(s) upon conclusion of said matter(s), or until further order of the Court." Mudge's bond money appears to have been seized two months before she received defendants' financial status form. As with Brown, the ex parte order apparently was not served on Mudge or the attorney who was representing her in her criminal case. Mudge was released from jail on November 17, 1989. On March 21, 1990, Mudge was sent a form demand letter from the "County of Macomb Reimbursement Department." This letter indicated that Mudge had a current balance due of $1,140 and that payment of $125 was due. The letter further stated that the account would be turned over to a collection agency unless a payment was received within ten days.
The Court of Appeals held that defendants had acted ultra vires of the PRCA when they obtained ex parte orders from the circuit court. Id. at 440-441. It also vacated the ex parte orders, ordered that the bond monies be returned, and found that defendants' recoupment counterclaim was barred. The Court of Appeals went on to hold that a municipality could be sued under 42 USC 1983 for unconstitutional or "illegal policies or customs" and that liability could be imposed for deliberate indifference to a person's constitutional or "statutory rights." Id. at 445.
I
Defendants assert that the Court of Appeals erred in holding that a violation of the PRCA is actionable under § 1983, because violations of state statutes are not actionable under § 1983. Defendants are correct that actions violating a state statute, that do not also violate the federal constitution or a federal statute, are not actionable under 42 USC 1983. See, e. g., Huron Valley Hosp v City of Pontiac, 887 F2d 710, 714 (CA 6, 1989) (42 USC 1983 is limited to deprivations of federal statutory and constitutional rights; it does not cover official conduct that allegedly violates state law). Accord Crawford-El v Britton, 523 US 574; 118 S Ct 1584; 140 L Ed 2d 759 (1998) (the very purpose of § 1983 is to provide a remedy for the violation of federal rights).
Plaintiffs' amended complaint alleged that defendants' conduct violated the prca. However, plaintiffs also pleaded 42 USC 1983 as a separate count, alleging defendants' actions violated their rights under the Fifth and Fourteenth Amendments of the federal constitution. If defendants' conduct violated the federal constitution, the fact that the conduct also violated the prca is of no moment and is not a ground allowing a court to find that plaintiffs have not alleged a cause of action under 42 USC 1983. Zinermon v Burch, 494 US 113, 124-125; 110 S Ct 975; 108 L Ed 2d 100 (1990) (a plaintiff may bring a § 1983 action for an unlawful search and seizure [in violation of the Fourth Amendment of the constitution] despite the fact that the search and seizure also violated the state's constitution or statutes).
Defendants argue that plaintiffs may not assert a § 1983 claim because of the existence of postdeprivation state remedies. To determine whether this argument is correct, we turn to Zinermon. In Zinermon, the Court explained that there are three kinds of claims that may be brought against a state under the Due Process Clause of the Fourteenth Amendment. Id. at 125. The Court said that the first is a claim against a state for a violation of many of the rights under the Bill of Rights. The Court said that the second § 1983 claim is a bar against certain arbitrary, wrongful government actions regardless of the fairness of the procedures used to implement them. With regard to these two types of claims, the Zinermon Court stated: "the constitutional violation actionable under § 1983 is complete when the wrongful action is taken." Id.
The Court further explained that the Due Process Clause also encompasses a third type of protection, a guarantee of fair procedure. Id. at 125. The Court said that the existence of state remedies is sometimes relevant to this third type of § 1983 claim. Unlike the first two types of claims, the constitutional violation under this third type is not complete when the deprivation occurs: it is not complete unless and until the state fails to provide due process. Under the third type, a statutory provision for a postdeprivation hearing, or a common-law tort remedy for erroneous deprivation, may satisfy due process.
The Zinermon Court then clarified that the existence of a postdeprivation remedy is only relevant when the state is unable to provide predeprivation process because of the random and unpredictable nature of the deprivation. The Court concluded:
In situations where the State feasiblely can provide a predeprivation hearing before taking property, it generally must do so regardless of the adequacy of a postdeprivation tort remedy to compensate for the taking. [Id. at 132.][ ]
Plaintiffs' amended complaint specifically asserted that defendants' acts and omissions had deprived them of procedural due process. Thus, we analyze plaintiffs' claim under the third type of claim that may be asserted under 42 USC 1983.
Pursuant to Zinermon, plaintiffs have alleged a § 1983 claim that is not automatically barred because of the existence of postdeprivation remedies. This is because: (1) the seizing of plaintiffs' bond monies was not necessarily random or unpredictable (the fact that the ex parte orders were on preprinted forms and stated that "the Sheriff's Reimbursement Program to the County" was requesting the money contradicts any argument that defendants' actions were random and unpredictable), and (2) a predeprivation hearing could have been provided. Accord Hudson v Palmer, 468 US 517, 532-533; 104 S Ct 3194; 82 L Ed 2d 393 (1984) (postdeprivation remedies do not satisfy due process where a deprivation of property is caused by conduct pursuant to established state [here municipal] procedure, rather than random and unauthorized action), Augustine v Doe, 740 F2d 322, 329 (CA 5, 1984) (Parratt v Taylor, 451 US 527; 101 S Ct 1908; 68 L Ed 2d 420 [1981], applies only when the nature of. the challenged conduct would render provision of predeprivation procedural safeguards impracticable or infeasible), and Alexander v Ieyoub, 62 F2d 709 (CA 5, 1995) (the Parratt/Hudson doctrine did not foreclose a § 1983 claim because the "random and unauthorized" element necessary for its application was absent where the challenged actions were in accordance with customary procedures).
Plaintiffs have properly alleged that they could have been provided, and therefore should have been provided, with notice and an opportunity to be heard before their bond monies were seized, or at least been provided with an opportunity to contest the matter at a show cause hearing. As the Sixth Circuit has explained:
The touchstone of procedural due process is the fundamental requirement that an individual be given the opportunity to be heard "in a meaningful manner." [Citations omitted.] Many procedural due process claims are grounded on violations of state-created rights, as is the case here; rights that do not enjoy constitutional standing. However, the right to a hearing prior to the deprivation is of constitutional stature and does not depend upon the nature of the right violated. [Howard v Grinage, 82 F3d 1343, 1349 (CA 6, 1996).]
Similarly, the United States Supreme Court has stated:
Although "[m]any controversies have raged about the cryptic and abstract words of the Due Process Clause," as Mr. Justice Jackson wrote for the Court in Mullane v Central Hanover Tr Co, 339 US 306 [70 S Ct 652; 94 L Ed 865] (1950), "there can be no doubt that at a minimum they require that deprivation of life, liberty or property by adjudication be preceded by notice and opportunity for hearing appropriate to the nature of the case." Id. at 313. . In short, "within the limits of practicability," id. at 318, a State must afford to all individuals a meaningful opportunity to be heard if it is to fulfill the promise of the Due Process Clause. [Boddie v Connecticut, 401 US 371, 377-379; 91 S Ct 780; 28 L Ed 2d 113 (1971).]
Plaintiffs' allegations are sufficient to state a cause of action for violation of their due process rights, under Zinermon, irrespective of the prca, because they have alleged that the county, or its agents, acting within the confines of the county's prisoner reimbursement policy, seized plaintiffs' bond monies without providing for a hearing of any kind. If plaintiffs' allegations are true, defendants treated the bond monies as if they had been forfeited to the county and as if already reduced to a judgment, without affording plaintiffs procedural due process through notice and a hearing and "took" any defenses plaintiffs may have had to a claim for reimbursement without a hearing, show cause or otherwise. Plaintiffs were entitled to a hearing where a court could consider their support obligations, if any. Thus, we reject defendants' claim that plaintiffs' § 1983 action is barred by plaintiffs' failure to exhaust postdeprivation state remedies.
n
Having determined that the existence of post-deprivation remedies does not bar plaintiffs' § 1983 claim, we turn to the question whether the claim is barred because the withholding of funds occurred pursuant to orders issued by the circuit court. Defendants' argument regarding this issue is that plaintiffs' § 1983 claim should be barred because plaintiffs never asked the judge who entered the ex parte orders or the Court of Appeals to vacate or overturn the orders. Thus, defendants contend that plaintiffs were not free to file an independent § 1983 lawsuit in order to effectuate return of their bond monies, i.e., to collaterally attack the orders. Defendants assert that § 1983 should never be used as a state tort law, postjudgment, or appellate substitute. We reject defendants' argument.
Zinermon, supra at 124, quoted with approval the following language from Monroe v Pape, 365 US 167, 183; 81 S Ct 473; 5 L Ed 2d 492 (1961):
It is no answer that the State has a law which if enforced would give relief. The federal remedy is supplementary to the state remedy, and the latter need not be first sought and refused before the federal one is invoked.
Given the fact that plaintiffs' § 1983 claim is not necessarily barred by the existence of postdeprivation remedies, the fact that plaintiffs could have asked the circuit judge or the Court of Appeals to vacate or overturn the ex parte orders when they finally learned of them is no bar to plaintiffs' § 1983 action.
In granting leave to appeal regarding this particular issue, we anticipated that defendants might argue that they cannot be held responsible for any constitutional violation that may have occurred because the direct "cause" of any constitutional violation was the trial court's issuance of the ex parte orders and not the sheriff's department's request that the orders be entered. See, e.g., the discussion and cases cited in Mayor of the City of Lansing v Ku KLux Klan (After Remand), 222 Mich App 637, 643 ff; 564 NW2d 177 (1997). We deem the issue of causation inadequately briefed and do not reach it. As we explained in Mitcham v Detroit, 355 Mich 182, 203; 94 NW2d 388 (1959):
It is not enough for an appellant in his brief simply to announce a position or assert an error and then leave it up to this Court to discover and rationalize the basis for his claims, or unravel and elaborate for him his arguments, and then search for authority either to sustain or reject his position. The appellant himself must first adequately prime the pump; only then does the appellate well begin to flow.
m
Having determined that plaintiffs' § 1983 claim is not necessarily barred by the existence of post-deprivation remedies and that the causation issue is inadequately briefed, we turn to the question whether defendants' claim for the seldom invoked defense of recoupment under the prca may be raised by counterclaim after the time for bringing an action under the statute has expired.
Count VI of defendants' counterclaim alleged that Mudge and Brown had incurred debts of $1,100 and $3,765 respectively under the prca and that all or a portion of plaintiffs' damages, interest, attorney fees, and claims were negated, forfeited, reduced, diminished, mitigated, and legally voided on account of plaintiffs' liabilities under the PRCA.
Plaintiffs filed a motion for summary disposition, arguing that the counterclaim should be dismissed because defendants had not filed the counterclaim within the then-applicable six-month limitation period. As previously indicated, the trial court never ruled on plaintiffs' motion because the counterclaim became moot when the court granted reconsideration and granted defendants' motion for summary disposi tion of the plaintiffs' complaint. The Court of Appeals reversed the trial court's summary dismissal of the plaintiffs' complaint, holding that defendants' actions were in violation of the PRCA. The ex parte orders were vacated and the bond monies ordered returned. The Court of Appeals said that defendants' opportunity to seek reimbursement under the prca was lost because it had vacated the ex parte orders and because the limitation period of the PRCA had lapsed. Id. at 443.
Defendants assert that the Court of Appeals erred arguing: "[Virtually any otherwise valid, but time-barred, action, can always be resurrected, defensively speaking, by a counterclaim, if the legal effect of that counterclaim is to negate or to reduce the principal claim, as long as the defensive countercomplaint does not seek any more than the damages which are claimed by the plaintiff." We agree that the Court of Appeals erred in simply stating that defendants could not seek recoupment by a counterclaim under the prca merely because the then-existing six-month limitation period had expired.
The defense of recoupment refers to a defendant's right, in the same action, "to cut down the plaintiff's demand, either because the plaintiff has not complied with some cross obligation of the contract on which he or she sues or because the plaintiff has violated some legal duty in the making or performance of that contract." 20 Am Jur 2d, Counterclaim, Recoupment, etc., § 5, p 231. Recoupment is "a doctrine of an intrinsically defensive nature founded upon an equitable reason, inhering in the same transaction, why the plaintiff's claim in equity and good conscience should be reduced." Pennsylvania R Co v Miller, 124 F2d 160, 162 (CA 5, 1941).
As explained in Warner v Sullivan, 249 Mich 469, 471; 229 NW 484 (1930):
Recoupment is a creature of the common law. It presents to the court an equitable reason why the amount payable to the plaintiff should be reduced, and the plaintiff will not be permitted to insist upon the statute of limitations as a bar to such a defense when he is seeking to enforce payment of that which is due him under the contract out of which the defendant's claim for recoupment arises. [Emphasis added.]
Accord Bull v United States, 295 US 247, 261-262; 55 S Ct 695; 79 L Ed 1421 (1935) (the defense of recoupment is never barred by the statute of limitations as long as the main action itself is timely). See also anno: Claim barred by limitation as subject of setoff, counterclaim, recoupment, cross bill, or cross actions, 1 ALR2d 630, § 14, pp 666-667 ("Almost without exception the cases which deal with recoupments . . . ran to the effect that if a defendant's claim is in fact a recoupment the general statutes of limitation do not defeat it; on the contrary it may be availed of defensively so long as plaintiff's cause of action exists"). Thus, the expiration of a limitation period does not foreclose a recoupment defense as long as the plaintiff's action is timely. Given that plaintiffs' § 1983 complaint was timely filed, the expiration of the limitation period for a county to bring a prca action, in and of itself, was not a bar to defendants seeking recoupment under the prca. However, as previously indicated, defendants still have to show that plaintiffs did not comply with some cross obligation or legal duty under the PRCA in order to seek recoupment.
As an alternative basis for upholding the Court of Appeals, plaintiffs argue that defendants' recoupment counterclaim should be barred because defendants have unclean hands. We first note that this argument was not made to the trial court. Because of this, neither plaintiffs nor defendants submitted affidavits or other documentary evidence bearing upon this question. Further, this issue was not reached by the Court of Appeals. Under such circumstances, it would be unwise and premature for this Court to consider this argument. While we have found that plaintiffs' allegations are sufficient to state a cause of action for a violation of their due process rights, further factual development is necessary to determine the nature and extent of the county policy. Until this further factual development occurs, an evaluation of plaintiffs' claim that defendants have unclean hands is inappropriate.
We affirm in part, reverse in part, and remand for further proceedings.
Mallett, C.J., and Brickley, Cavanagh, and Kelly, JJ., concurred with Taylor, J.
Weaver, J. I concur only in parts I and n.
42 USC 1983 provides: "Every person who, under color of any statute, ordinance, regulation, custom, or usage of any State . . . subjects, or causes to be subjected, any citizen of the United States or other person within the jurisdiction thereof to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured in an action at law, suit in equity, or other proper proceeding for redress . . .
Section 8 of the prca authorizes a county to seek an ex parte order, pending a hearing on an order to show cause, restraining a defendant from disposing of known property if necessary to protect the county's right to obtain reimbursement under the act. MCL 801.88; MSA 28.1770(8). However, the ex parte orders issued against Mudge and Brown's bond monies were not issued pending a show cause hearing, and there was no attempt to demonstrate that ex parte orders were necessary to protect the county's right to reimbursement under the act.
The prca only authorizes seeking reimbursement from inmates who have been convicted of a felony. MCL 801.83; MSA 28.1770(3). We disagree with the concurrence's statement, post, p 112, n 3, that the prca is not an exclusive remedy provision. The statutory language says the county may file an action if it wishes to obtain a judgment against an inmate that has been convicted of a felony. Use of the word "may" merely suggests that counties are not required to pursue costs of incarceration from inmates that are convicted of felonies. We further reject the concurrence's suggestion, id,., p 110, n 1, that a county need not postpone seeking an ex parte order until after conviction. MCL 801.88(2); MSA 28.1770(8)(2) does not allow a county to obtain an ex parte order in the hope that an incarcerated individual will eventually be convicted of a felony rather than, e.g., being acquitted or convicted of a misdemeanor or having the charges dismissed. There is no basis for concluding that the statute allows for the issuance of ex parte orders if necessary to protect the county's potential rather than actual right to reimbursement. The concurrence suggests that any "well-counseled potential obligor would dispose of any assets" that otherwise might be available to satisfy a judgment and suggests that any counsel that did not advise his client to dispose of assets would be incompetent. Post, p 111, n 1. This analysis overlooks several things, first, the concurrence's concerns could equally be stated with reference to any civil defendant. Second, the concurrence is overlooking the law regarding fraudulent conveyances.
The Court of Appeals statement that Brown's bond monies were seized the day after he received the financial status form on June 27, 1989, is in error. 210 Mich App 441, n 2.
Brown later signed an order on June 28, 1989, in which he approved and consented to the release of his bond. The order, as initially drafted, provided that $6,000 was to go to Brown and $4,000 was to go to the attorney who had represented him in the criminal case. However, the actual order entered had handwriting on it stating that the money was to be returned "after payment to Macomb County Sheriff of $3,765." Defendants argue that Brown's consent to the order returning his bond is a bar to his cause of action. The trial court rejected the argument that Brown's signing of the order barred his claim because Brown contested the voluntariness of his signature and the record showed different copies of the same order with significantly different information handwritten thereon. The Court of Appeals did not address this argument of the defendants. We decline to find that Brown's claim is barred by the order returning his bond money, given that the Court of Appeals did not address the issue and the fact that our order granting leave to appeal was limited to three issues and the significance of the order returning Brown's bond money was not one of them. Indeed, defendants' application for leave to appeal sought to raise four issues and the fourth issue was the significance of the order Brown signed. This Court, however, only granted leave to appeal regarding the first three issues defendants raised in their application. Because it is possible that the trial court may, after further development of the record, determine that the order returning bond monies is tantamount to a consent judgment, we find that the Court of Appeals erred in ordering defendants to return Mr. Brown's bond monies.
As for plaintiff Mudge, we find no error in the Court of Appeals ordering the return of her bond monies, given that her monies, were not taken in compliance with the prca. Contrary to the assertion of the concurrence, post, p 111, n 2, we have not determined that the validity of the "orders" was inadequately briefed. Rather, we have only declined to determine the significance of the order returning bond monies that Brown signed because the Court of Appeals did not reach the question and because we did not grant leave regarding the question. Further, Mudge, unlike Brown, did not sign any order returning her bond money. The concurrence also states that the ex parte order relating to Mudge was valid unless reversed on direct appeal, id., but ignores the fact that the Court of Appeals did vacate the order. The concurrence is also in error when it states, id., that Mudge never sought to have the ex parte order reversed. Count i of Mudge's complaint sought this exact relief. We find the Court of Appeals invocation of MCR 7.216(A)(7) to vacate the circuit court's ex parte order confiscating Mudge's bond monies was proper.
The lower court record contains two July 17, 1989, orders that referred to Mudge. The orders are identical, except that on one of them the $1,000 amount is crossed out and $100 is written in its place.
In an unpublished order denying defendants' motion for rehearing, the Court of Appeals stayed that portion of its opinion requiring the return of the bond monies until defendants had exhausted their appellate remedies.
As amicus curiae Michigan Municipal League properly states in its brief: "no remedy is provided by § 1983 for the mere violation of state laws where the state conduct at issue is not violative of federal rights."
The Court referenced Parratt v Taylor, 451 US 527; 101 S Ct 1908; 68 L Ed 2d 420 (1981) (postdeprivation remedy is all the process that was due where a guard negligently lost a prisoner's $23 hobby kit), and Hudson v Palmer, 468 US 517; 104 S Ct 3194; 82 L Ed 2d 393 (1984) (postdeprivation remedy is all the process that was due where a guard deliberately destroyed some of a prisoner's property), as examples of cases where the state was unable to provide predeprivation process because of the random and unpredictable nature of the deprivation.
See also Gilbert v Homar, 520 US 924, 930; 117 S Ct 1807; 138 L Ed 2d 120 (1997):
This Court has recognized, on many occasions, that where a State must act quickly, or where it would be impractical to provide predeprivation process, postdeprivation process satisfies the requirements of the Due Process Clause.
The record also reflects that the county implemented its Prisoner Reimbursement program on May 27, 1985, that an employee was hired to implement the program after approval by the Board of Commissioners during an April 1985 meeting. In an April 1991 answer to an interrogatory, defendants stated that a "best estimate" was that only about fifty to sixty bonds per year were retained.
We note that we only granted leave to determine whether plaintiffs, as a matter of law, could bring a § 1983 claim based on the prca. Thus, further factual development in the trial court may affect the applicability of liability under Zinermon with respect to this case. The record is not clear regarding the nature and extent of the authority given to the sheriff or other county employees to implement the county's reimbursement program. As the Court of Appeals explained:
Although defendants acknowledge that the county's prisoner reimbursement program was the "dual creation" of the Macomb Circuit Court and the Macomb County Sheriff's Department, we are unable to determine from the limited record available whether the program, as implemented, was authorized by legislative act of the county's board of commissioners. [210 Mich App 447.]
Whether defendants ultimately will be held liable for the alleged due process violations in this case will only become apparent once the nature and extent of the county policy is more fully defined. Resolution of these issues is only appropriate after further factual development at the trial court level. We do not join the concurrence's assertion, post, p 139, n 30, that only nominal damages will be available in this case. Such a pronouncement is premature, given the fact that the kinds of damages that may be available have not been briefed and are not at issue.
MCL 801.87(3); MSA 28.1770(7)(3) provides: "Before entering any order on behalf of the county against the defendant, the court shall take into consideration any legal obligation of the defendant to support a spouse, minor children, or other dependents and any moral obligation to support dependents to whom the defendant is providing or has in fact provided support."
See Winters v Bd of Co Comm'rs, 4 F3d 848 (CA 10, 1993) (a pawnshop was found to have a viable § 1983 claim under procedural due process where the sheriff seized a pawned ring and returned it to the victim of theft without providing notice or a hearing to the pawnshop as required by statute to determine the proper owner of the ring).
Although not applicable to the case at bar, we note that the Prison Litigation Reform Act of 1995, 42 USC 1997e(a), forbids an incarcerated prisoner from filing an action under 42 USC 1983 with respect to prison conditions until available state administrative remedies have been exhausted. Brown v Toombs, 139 F3d 1102 (CA 6, 1998). Such exhaustion applies to cases filed on or after April 26, 1996, the effective date of the act. Id.
Overruled in part on different grounds by Monell v New York City Dep't of Social Services, 436 US 658; 98 S Ct 2018; 56 L Ed 2d 611 (1978).
In City of Lansing, the city filed an action in circuit court, seeking an injunction to have a rally planned to be held on the grounds of the Capitol moved to another site because of safety concerns. The defendant filed a counterclaim, asserting 42 USC 1983. The circuit court granted the requested injunction after hearing arguments from both sides. The Court of Appeals peremptorily reversed the injunction. On remand, the circuit court summarily dismissed the 42 USC 1983 action, concluding that the plaintiffs could not be held liable for seeking an overly broad injunction. The Court of Appeals affirmed, finding that the constitutional violation was caused by an act of the circuit court and not the act of the party who had requested the injunction. The Court of Appeals noted that a different holding could be expected if a party's misconduct taints the legal process so that the court's decision cannot be separated from the party's misconduct. The Court of Appeals stated that a merger of a party's actions with judicial action is sometimes implicated when judicial decisions are made on the basis of ex parte proceedings. The Court of Appeals also noted that Malley v Briggs, 475 US 335, 345-346; 106 S Ct 1092; 89 L Ed 2d 271 (1986), held that a magistrate's action in authorizing an arrest warrant did not insulate a police officer from personal liability under § 1983 for failure to exercise reasonable professional'judgment in making the threshold determination whether the facts alleged could possibly justify an arrest.
We agree with the Court of Appeals that, with regard to plaintiffs' § 1983 claim, the issue of causation is yet to be determined. 210 Mich App 448.
See also MCL 600.5823; MSA 27A.5823, which provides:
To the extent of the amount established as plaintiffs claim the periods of limitations prescribed in this chapter do not bar a claim made by way of counterclaim unless the counterclaim was barred at the time the plaintiffs claim accrued. [Emphasis added.]
The emphasized language in the statute refers to chapter 58 of the Revised Judicature Act. However, the time limitation within which a county has to file a claim under the prca, MCL 801.87(1); MSA 28.1770(7)(1), is not found in chapter 58. Thus, defendants are not entitled to assert MCL 600.5823; MSA 27A.5823 as a basis for permitting them a counterclaim under the prca.
We also take note of MCL 600.5821(4); MSA 27A.5821(4) which provides:
Actions brought in the name of the state of Michigan, the people of the state of Michigan, or any political subdivision of the state . for the recovery of the cost of maintenance, care, and treatment of persons in hospitals, homes, schools, and other state institutions are not subject to the statute of limitations and may be brought at any time without limitation, the provisions of any statute notwithstanding.
If a county jail can be properly considered a "state institution," see, e.g., Moreton v Secretary of State, 240 Mich 584, 591-592; 216 NW 450 (1927), and if MCL 801.87(1); MSA 28.1770(7)(1) is not read as an exception to MCL 600.5821(4); MSA 27A.5821(4), see, e.g., Detroit v Michigan Bell, Telephone Co, 374 Mich 543, 558; 132 NW2d 660 (1965); Atlas v Wayne Co Bd of Auditors, 281 Mich 596, 599; 275 NW 507 (1937), two issues we do not reach because they have not been briefed, this statute might allow defendants' counterclaim notwithstanding the expiration of the prca limitation period.
Thus, we apply the general recoupment rule from Am Jur 2d typically applied in contract cases to this case. The concurrence would apply the same transaction rule from Bull, supra, and would allow recoupment even if plaintiffs did not violate some cross obligation or legal duty under the prca. We find it appropriate to apply the Am Jur rule because the prca is akin to a contract in that it placed certain duties and obligations on the parties, not existing at common law and thus not reimbursable before enactment of the prca, relating to possible reimbursement for certain costs of incarceration.
Stachnik v Winkel, 394 Mich 375, 382, 386; 230 NW2d 529 (1975); Falk v State Bar of Michigan, 411 Mich 63, 113, n 27; 305 NW2d 201 (1981); Seguin v Madison, 328 Mich 600, 607; 44 NW2d 150 (1950); Rust v Conrad, 47 Mich 449, 454; 11 NW 265 (1882).
Thus we do not join in the concurrence's claim, post, p 117, that the ex parte orders can be viewed as a misinterpretation of the requirements of the act or were inartfully drafted. All parties including these defendants are presumed to know the law. Grand Rapids Independent Publishing Co v Grand Rapids, 335 Mich 620, 630; 56 NW2d 403 (1953). Omitting the required hearing cannot fairly be characterized as inartful drafting. We also reject the concurrence's claim that the county's attempt to operate in good faith is demonstrated by the fact that the ex parte orders were obtained in the venue mandated by the statute, i.e., Macomb County. Post, p 117, n 6. The more likely explanation is traceable to the fact that, after all, the money was being held in the Macomb Circuit Court. This is something Willie Sutton (a notorious bank robber from an earlier era who when asked why he robbed banks explained "that is where the money is") understood about venue and probably defendants did also.
We disagree with the concurrence's assertion that the trial court should consider the nature of the plaintiffs' conduct in evaluating the unclean hands issue.
"[The clean hands maxim] is a self-imposed ordinance that closes the doors of a court of equity to one tainted with inequitableness or bad faith relative to the matter in which he seeks relief, however improper may have been, the behavior of the defendant." [Stachnik, n 21 supra, p 382 (emphasis added).]