Opinion ID: 842333
Heading Depth: 1
Heading Rank: 8

Heading: plaintiffs failed to satisfy the demand requirements of mcl 129.61

Text: The underlying issue in this case is whether the use of public funds for benefits to same-sex partners of public employees is illegal. But the issue before this Court on appeal is whether a request for an investigation and a halting of the use of funds for such benefits constitutes an effective demand under MCL 129.61. The Court of Appeals decided that it did not and, therefore, held that the circuit court had properly granted summary disposition to defendants. I agree with both lower courts' determination that plaintiffs have not satisfied the demand requirements of MCL 129.61. MCL 129.61 provides: Any person or persons, firm or corporation, resident in any township or school district, paying taxes to such political unit, may institute suits or actions at law or in equity on behalf of or for the benefit of the treasurer of such political subdivision, for an accounting and/or the recovery of funds or moneys misappropriated or unlawfully expended by any public officer, board or commission of such political subdivision. Before such suit is instituted a demand shall be made on the public officer, board or commission whose duty it may be to maintain such suit followed by a neglect or refusal to take action in relation thereto. Security for costs shall be filed by the plaintiff or plaintiffs in any such suit or action and all costs and expenses of the same shall be paid by the person or persons instituting the same unless and until a recovery of such funds or moneys be obtained as the result of such proceedings. The confusion in this case arises because the statute requires a demand . . . on the public officer, board or commission whose duty it may be to maintain such suit followed by a neglect or refusal to take action in relation thereto but does not clearly define what action a plaintiff must demand. [2] By reading the statute as a whole and giving effect to every word, phrase, and clause, however, this issue is easily resolved. See Grimes v. Dep't of Transportation, 475 Mich. 72, 89, 715 N.W.2d 275 (2006). MCL 129.61 authorizes a taxpayer to bring suit for an accounting and/or the recovery of funds or moneys misappropriated or unlawfully expended. The statute requires that a demand be made on the party responsible for maintaining such suit. The dictionary definition of demand is to ask for with proper authority; claim as a right. Random House Webster's College Dictionary (2001). It follows that, in order to make an effective demand, a plaintiff must ask the party responsible for maintaining [the] suit to undertake the action that the suit would accomplish, which is an accounting [3] and/or the recovery of funds or moneys misappropriated or unlawfully expended. In this case, plaintiffs sent letters to the Attorney General, among others, requesting an investigation and a halting of the expenditure of future funds for benefits to same-sex partners of employees. The letters did not request any action with respect to past expenditures; it referred solely to the halting of future expenditures. Even assuming that those who received the letters included the proper party to maintain a suit, the demand requirement was still not satisfied. Plaintiffs never asked anyone, as MCL 129.61 requires, for an accounting of past expenditures or the recovery of funds wrongfully spent. Requiring plaintiffs to request the specific action that the suit would accomplish is consistent with the purpose of a demand requirement. The phrase before such suit is instituted indicates that the Legislature intended that the proper party be given notice and the first opportunity to act. See Chicago ex rel Konstantelos v. Duncan Traffic Equip. Co., 95 Ill.2d 344, 353-354, 69 Ill.Dec. 354, 447 N.E.2d 789 (1983) (holding that the purpose of a demand requirement in taxpayer lawsuits is to allow the legislative body the first opportunity to decide whether to take the requested action). The letters involved in this case did not request the specific action that would be accomplished by the taxpayer suit. Hence, the proper party was not given the first opportunity to review the matter and decide on its own whether to take this action.