Court Opinion

ID: 4016585
Source: CourtListenerOpinion
Date Created: 2016-07-18 07:08:58.66774+00
Date Added: 2024-06-11T14:44:47.531251
License: Public Domain

STATE OF MICHIGAN

                            COURT OF APPEALS

DAVID KIRCHER,                                                       UNPUBLISHED
                                                                     July 14, 2016
               Plaintiff-Appellant,

v                                                                    No. 325098
                                                                     Washtenaw Circuit Court
CHARTER TOWNSHIP OF YPSILANTI,                                       LC No. 07-000719-CC
RONALD FULTON, RUTH A. JAMNICK, and
BARNES & BARNES PROPERTIES,

               Defendants-Appellees.

Before: OWENS, P.J., and BORRELLO and O’BRIEN, JJ.

PER CURIAM.

       Plaintiff appeals as of right an October 3, 2014 order denying his motion to reopen this
case. For the reasons set forth in this opinion, we affirm.

                                       I. BACKGROUND

       This is the third appeal arising out of a series of disputes between plaintiff and defendant
Ypsilanti Charter Township (hereinafter defendant Township). See Ypsilanti Charter Twp v
Kircher, 281 Mich App 251; 761 NW2d 761 (2008) (Kircher I); Ypsilanti Charter Twp v
Kircher, unpublished opinion per curiam of the Court of Appeals, issued June 9, 2011 (Docket
No. 292661) (Kircher II).

         In October 2004, Washtenaw County authorities discovered that there was a sewage
backup at an apartment complex known as Eastern Highlands. At the time, plaintiff owned the
apartment complex. Authorities determined that plaintiff and/or his agents were pumping raw
sewage from a containment area into the Huron River. Kircher I, 281 Mich App at 255. The
trial court entered an ex-parte temporary restraining order enjoining plaintiff from continuing to
pump raw sewage in the river and authorizing defendant Township to enter the property to abate
any immediate dangers. Id. at 255-256. The trial court thereafter declared Eastern Highlands a
public nuisance and directed defendant Township to take reasonable steps to abate the nuisance.
Id. at 256. Upon doing so, defendant Township discovered numerous other code violations. Id.
at 257-258. The court then declared Eastern Highlands a public nuisance, directed plaintiff to
install smoke detectors, fire extinguishers, and fire hydrants, and ordered plaintiff to complete all
other requisite repairs as set forth in the defendant Township’s inspection reports. Id. at 259-

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260. Disregarding the court’s directives, plaintiff refused to comply with the order. Id. at 260-
261.

        Given his continuing refusal to comply, the trial court then entered an order appointing
“McKinley Properties or such other party as the township shall choose” as receiver. Kircher I,
281 Mich App at 262. The receivership was to last until the public nuisance was abated; the
receiver was directed “to make the premises economically viable.” Id. After plaintiff hired an
attorney and moved for reconsideration, the trial court entered an order that more precisely
defined the receiver’s duties and responsibilities. Id. at 262-263. Shortly thereafter, McKinley
Properties indicated that it did not want to serve as receiver and the trial court approved the
defendant Township’s request for defendant Barnes & Barnes Properties (Barnes) to be
appointed as receiver. Id. at 263. The receiver then sought, and the trial court ordered,
$1,702,480.70 to be paid by plaintiff to the receiver for the repairs made to Eastern Highlands.
Id. at 264-267.

        Approximately six months later, Barnes requested, and the trial court ordered, plaintiff to
pay $48,614.82 for attorney fees and $12,935.40 in costs. Kircher I, 281 Mich App at 267.
After plaintiff refused to comply with the order, Barnes commenced proceedings to sell Eastern
Highlands. Id. at 268. Following a Sheriff’s sale, Barnes acquired title to the complex. Id.
Plaintiff appealed, and while this Court found the majority of his arguments meritless, the Court
remanded for further proceedings to determine the appropriateness of Barnes’ claimed
expenditures. This Court also concluded that the trial court erred in permitting Barnes to charge
a 25-percent mark-up on all expenditures. Id. at 281. Additionally, the Court concluded that the
trial court erred in granting the receiver a lien against Eastern Highlands, in allowing the receiver
to foreclose that lien, and in confirming the judicial sale of the property. Id. at 281-285. Thus, it
also vacated the lien imposed by the trial court. Id. at 284-285.

        On remand, the trial court entered an order granting $2,259,786.09 to Barnes. Kircher II,
unpub op at 1. Plaintiff again appealed, arguing that the trial court’s order was based on
inadmissible evidence and was grossly excessive because it included fees for unnecessary
expenses and an improper markup. Id. On appeal, this Court rejected the majority of plaintiff’s
arguments, but again remanded the case to the trial court with direction to “recalculate its award
after subtracting any expenses that were already disallowed by this Court’s previous opinion.”
Id.

        In 2008, while plaintiff’s appeal in Kircher I was pending, he commenced the instant
proceeding, filing an inverse condemnation claim against the Township, Ruth A. Jamnick (the
Township supervisor), Ronald Fulton (the Township building inspector), and Barnes. Plaintiff
alleged that “[t]he taking by receivership was not for a public purpose, but was for the purpose of
transferring ownership from one private owner who is disfavored by Township Defendants to
another private owner who is favored by Township Defendants.” Plaintiff argued that the taking
of Eastern Highlands constituted an inverse condemnation, a due process violation, and a
trespass.

        On June 10, 2008, the case was stayed, pending the outcome of plaintiff’s motion to
disqualify certain circuit court judges. Following a denial of plaintiff’s motion, plaintiff applied
for leave to appeal in this Court, which was denied on February 26, 2009. Kircher v Charter

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Twp of Ypsilanti (Kircher III), unpublished order of the Court of Appeals, entered February 26,
2009 (Docket No. 288289). Thereafter, there was no activity in this case from February 2009
until August 2014, and the docket sheet indicates that the case was administratively closed.

        In the meantime, plaintiff filed for bankruptcy on February 8, 2012, in the United States
Bankruptcy Court for the Eastern District of Michigan. Following the proceeding, on August 25,
2014, plaintiff moved to reopen this case pursuant to 11 USC § 350. Plaintiff asserted that the
Bankruptcy Court did not include the instant case as an asset of the estate, and, therefore,
plaintiff was entitled to reopen the case.

         In response, defendants the Township, Jamnick, and Fulton1 responded, arguing that
plaintiff lacked standing as he no longer owned the property in question and that plaintiff failed
to preserve his claim by failing to disclose the claim as an asset during the bankruptcy
proceeding. In their response, defendants attached schedules of assets that plaintiff filed in
Bankruptcy Court. In the schedules, there was no mention of the instant case, other pending
litigation, or anything related to an inverse condemnation claim.

        On October 1, 2014, the circuit court denied plaintiff’s motion to reopen the case, holding
as follows:

          Plaintiff did not list the above titled pending case in his bankruptcy schedules.
          The bankruptcy Trustee issued his Final Report Account and Distribution Report
          on March 26, 2014. The U.S. Bankruptcy Court . . . closed the case on April 28,
          2014. The Trustee’s report is void of any mention of this pending action.
          Plaintiff’s argument that “the Bankruptcy Trustee did not include the inverse
          condemnation claims presented in this action as an asset of the estate and those
          bankruptcy proceedings are concluded” is disingenuous. The Bankruptcy Court
          did not include the claims because Plaintiff failed to list the claims on his
          bankruptcy schedule.

          11 USC 521(a)(1)(B)(i) requires that the debtor in bankruptcy must file a
          complete schedule of assets and liabilities. Causes of action are among the assets
          that must be disclosed on such a schedule. []Plaintiff is barred by judicial
          estoppel from asserting a claim that should have otherwise been addressed during
          the party’s bankruptcy proceeding.

       Thereafter, plaintiff moved for reconsideration and attached an email purportedly from
his bankruptcy attorney wherein the attorney stated as follows:

          I looked at the schedules and I do not see that we listed Kircher v Charter
          Township Case No. 07-719-CC. We did however list in the ‘assets’ portion of the
          schedules (Schedule ‘B’) various actions against the fire Marshall and the
          Township which would seem to include this case.

1
    Barnes did not respond to plaintiff’s motion.

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        The trial court denied plaintiff’s motion for reconsideration for failure to show palpable
error. This appeal ensued.

                                         II. ANALYSIS

        Apart from citing legal authority in a preface, plaintiff’s entire appellate argument
consists of the following paragraph:

       The defendant [sic] listed the asset as a cause of action “for the taking of Eastern
       Highlands” in schedule B, personal property continuation sheet, with all the
       causes of action. Exhibit one. The trustee did not choose to administer the claim
       despite the encouragement of the defendant [sic].

       In addition, for the first time on appeal, plaintiff includes a copy of a document, which,
according to plaintiff, is a copy of a portion of his “Schedule B” filing in bankruptcy court. The
copy shows item number 31 as “Claims & Counterclaims for inverse taking and violation of due
process” against defendants. Notably, this document conflicts with the Schedule B that
defendants submitted in the lower court, which did not reference any claims or counterclaims
and did not include an item numbered “31”.

        Plaintiff essentially asserts without further elaboration that he listed this lawsuit as an
asset during the bankruptcy proceedings and that the bankruptcy trustee “did not choose to
administer the claim.” Plaintiff’s argument amounts to nothing more than the assertion of a
position unsupported by the record and devoid of legal reasoning. See Wilson v Taylor, 457
Mich 232, 242; 577 NW2d 100 (1998) (quotation marks omitted) (“It is not sufficient for a party
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.”) Nevertheless, we have addressed
what appears to be the substance of plaintiff’s argument and determined that it lacks merit.

       The interpretation and application of a court rule is reviewed de novo as a question of
law. Cowles v Bank West, 476 Mich 1, 13; 719 NW2d 94 (2006). Likewise, whether judicial
estoppel is applicable is also reviewed de novo. Szyszlo v Akowitz, 296 Mich App 40, 46; 818
NW2d 424 (2012). Findings of fact are reviewed for clear error. Id. “A trial court’s findings are
considered clearly erroneous where [the Court is] left with a definite and firm conviction that a
mistake has been made.” Webb v Smith (After Remand), 204 Mich App 564, 568; 516 NW 2d
124 (1994).

       This Court has previously explained as follows:

       A debtor loses all rights to his or her property when he or she files for bankruptcy.
       11 USC 541(a). A party filing for bankruptcy must list all of his or her assets on
       the bankruptcy schedule, 11 USC 521(a)(1), including “all legal or equitable
       interests of the debtor in property as of the commencement of the case.” 11 USC
       541(a)(1). “[I]t is well established that the interests of the debtor in property
       include causes of action.” Bauer v. Commerce Union Bank, 859 F.2d 438, 441
       (CA 6, 1988) (quotation marks and citations omitted). Moreover, “the right to

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       pursue causes of action formerly belonging to the debtor . . . vests in the trustee
       for the benefit of the estate. The debtor has no standing to pursue such causes of
       action.” Id. (quotation marks and citation omitted). The debtor can only bring
       suit on a vested asset if the trustee abandons it or the court gives permission.”

       Furthermore, an asset cannot possibly be abandoned by the bankruptcy trustee
       where it was not listed as an asset during the bankruptcy proceedings. []A cause
       of action that is known about and filed before the filing of bankruptcy is an asset
       and properly belongs to the bankruptcy estate whether or not it was listed on the
       schedule. [Young v Ind Bank, 294 Mich App 141, 143-144; 818 NW2d 406
       (2011) (quotation marks and citations omitted) (emphasis added).]

         In this case, it cannot be disputed that plaintiff knew of his inverse condemnation claim at
the time that he filed for bankruptcy. Therefore, because plaintiff knew of the challenge, the
claim belongs to the bankruptcy estate. Young, 294 Mich App at 144. Thus, plaintiff’s only
means of saving the claim was by permission of the Bankruptcy Court or abandonment by the
trustee. Id. at 143-144. It is undisputed that the Bankruptcy Court did not give plaintiff
permission to pursue the claim; indeed, the lower court record supports that the Bankruptcy
Court was not aware of the claim. In addition, the lower court record shows that the claim was
not listed as an asset and therefore it could not be abandoned. Id. Here, the only evidence in the
lower court record regarding the bankruptcy disclosures shows that plaintiff did not list the
inverse condemnation claim. To the extent plaintiff presents a conflicting portion of Schedule B
on appeal, that document was not presented to the trial court and cannot be considered on appeal.
See Sherman v Sea Ray Boats, Inc, 251 Mich App 41, 56; 649 NW2d 783 (2002) (“This Court’s
review is limited to the record established by the trial court, and a party may not expand the
record on appeal.”) In short, because plaintiff did not obtain permission from the Bankruptcy
Court to pursue the inverse condemnation claim and because the claim was not listed and
therefore could not be abandoned, plaintiff does not have standing to raise the claim. Young, 294
Mich App at 144.

        Moreover, because plaintiff failed to list this claim as an asset during the bankruptcy
proceedings, judicial estoppel bars plaintiff’s claim. Spohn v Van Dyke Pub Schs, 296 Mich App
470, 479; 822 NW2d 239 (2012). Judicial estoppel, an equitable doctrine, “prevents a party from
prevailing in one phase of a case on an argument and then relying on a contradictory argument to
prevail in another phase.” Id. (citation and internal quotation marks omitted). In the context of
bankruptcy cases, a finding of judicial estoppel requires the following: (1) a plaintiff takes a
position that is contrary to one he or she asserted during the bankruptcy proceedings; (2) the
Bankruptcy Court adopted the contrary position as part of the final disposition; and (3) a
plaintiff’s omission was not the result of mistake or inadvertence. Id. at 480-481. The lower
court record supports that all three requirements for judicial estoppel are satisfied. As noted,
plaintiff did not disclose the inverse condemnation claim as an asset, the Bankruptcy Court did
not administer the lawsuit, and there is nothing to support a conclusion that plaintiff’s failure to
disclose was the result of mistake or inadvertence. Accordingly, plaintiff is judicially estopped
from asserting the claim and the trial court did not err in denying his motion to reopen the case.
Id. at 481-488.

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        Finally, to the extent plaintiff attempts to raise in the statement of facts section of his
brief on appeal various other arguments, such as those relating to alleged due process violations,
we decline to address those arguments as they were not raised in the statement of questions
presented. MCR 7.212(C)(5); Wallad v Access BIDCO, Inc, 236 Mich App 303, 309; 600 NW2d
664 (1999). Furthermore, these arguments are no different than those raised in plaintiff’s
previous appeals relating to this dispute, and, as this Court has previously recognized, the Court
is bound by its previous decisions in this matter under the law-of-the-case doctrine. Kircher II,
unpub op at 4-5, citing Ashker v Ford Motor Co, 245 Mich App 9, 13; 627 NW2d 1 (2001).

       Affirmed. Having prevailed in full, defendants may tax costs. MCR 7.219(A).

                                                            /s/ Donald S. Owens
                                                            /s/ Stephen L. Borrello
                                                            /s/ Colleen A. O'Brien

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