Court Opinion

ID: 4103592
Source: CourtListenerOpinion
Date Created: 2016-12-01 08:09:36.990727+00
Date Added: 2024-06-11T14:35:20.108946
License: Public Domain

STATE OF MICHIGAN

                           COURT OF APPEALS

ALLEN PARK RETIREES ASSOCIATION, INC,                               UNPUBLISHED
and RUSSELL PILLAR and all others similarly                         November 29, 2016
situated,

               Plaintiffs-Appellants,

v                                                                   Nos. 327470; 329593
                                                                    Court of Claims
STATE OF MICHIGAN, DEPARTMENT OF                                    LC No. 13-000164-MZ
TREASURY, and CITY OF ALLEN PARK
EMERGENCY MANAGER,

               Defendants-Appellees.

Before: MURRAY, P.J., and CAVANAGH and WILDER, JJ.

PER CURIAM.

      In these consolidated appeals, plaintiffs appeal from two distinct Court of Claims orders.
In Docket No. 327470, plaintiffs have attempted1 to claim an appeal as of right from the Court of

1
   At the outset, we conclude that this Court lacks jurisdiction over Docket No. 327470 as an
appeal of right under MCR 7.203(A). Plaintiffs claim an appeal as of right under MCR
7.203(A)(2) (“The court has jurisdiction of an appeal of right filed by an aggrieved party from . .
. [a] judgment or order of a court or tribunal from which appeal of right to the Court of Appeals
has been established by law or court rule.”). In support, plaintiffs cite Attorney General v Blue
Cross Blue Shield of Mich, 291 Mich. App. 64, 75-76; 810 NW2d 603 (2010) (BCBSM), which, in
turn, cited Rooyakker & Sitz, PLLC v Plante & Moran, PLLC, 276 Mich. App. 146; 742 NW2d
409 (2007) (Rooyakker).
        BCBSM and Rooyakker are, however, distinguishable from the instant case for two
primary reasons. First, unlike BCBSM and Rooyakker, here the order appealed from did not
adjudicate the rights and liabilities of all of the parties. Although it may have adjudicated the
rights and liabilities of plaintiffs and EM Parker, the order appealed from did not adjudicate the
rights and liabilities of the state defendants. Second, again unlike BCBSM and Rooyakker, here
the order appealed from did not dispose of all claims. The transfer of EM Parker’s claims to
Wayne Circuit Court did not “dispose” of those claims. Moreover, even assuming, arguendo,

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Claims order denying plaintiffs’ motion to consolidate this case with plaintiffs’ case against
Emergency Manager Joyce Parker (EM Parker) and the City of Allen Park (Allen Park), and
instead transferring the emergency manager case to Wayne Circuit Court. In Docket No.
329593, plaintiffs appeal as of right from the Court of Claims order granting defendants
summary disposition of all of plaintiffs’ several claims. In both appeals, we affirm.

                                 I. FACTUAL BACKGROUND

        This case arises out of Allen Park’s insolvency, the resulting appointment of EM Parker,
the passage of the local financial stability and choice act (LFSCA), MCL 141.1541 et seq., and
actions taken by EM Parker both before and after the LFSCA’s effective date of March 28, 2013.
On March 8, 2013, EM Parker allegedly mailed a “form letter” to “all Allen Park retirees[.]” In
her letter, EM Parker informed the retirees that, as a cost-saving measure to avoid bankruptcy,
she intended to modify the healthcare coverage afforded to the retirees and their dependents by
Allen Park. She subsequently did so.

        In response, plaintiffs initiated this action on October 7, 2013, by filing a six-count
verified complaint in Ingham Circuit Court, which named as defendants Allen Park, EM Parker,
and the state defendants. Plaintiffs alleged that the LFSCA violates numerous provisions of our
1963 Constitution and asserted various contractual theories against EM Parker. Plaintiffs’
complaint acknowledged that Allen Park is located in Wayne County—not Ingham County—but
asserted that venue was nevertheless proper in Ingham Circuit Court.

        On December 6, 2013, EM Parker filed a motion to change venue, arguing that venue
was improper in Ingham County and requesting a change of venue to Wayne County. That same
day, the state defendants filed a notice of transfer, pursuant to a provision of the court of claims
act, MCL 600.6404(3), indicating that plaintiffs’ claims against the state defendants were being
transferred “effective immediately” to the Court of Claims.

       On January 7, 2013, plaintiffs filed a motion for class certification in Ingham Circuit
Court, seeking to certify all Allen Park retirees as a plaintiff class. That same day, however, the
Ingham Circuit Court granted EM Parker’s motion to change venue, thereby transferring the
remaining Ingham Circuit Court action (i.e., plaintiffs’ case against EM Parker and Allen Park)
to Wayne Circuit Court.

        Roughly four months later, on May 12, 2013, plaintiffs filed an “expedited” motion to
transfer the circuit court action to the Court of Claims. In support, plaintiffs argued that (1)

that the transfer did dispose of plaintiffs’ claims against EM Parker, it did not dispose of
plaintiffs’ claims against the state defendants; ergo, it did not dispose of all claims in the action.
        For those reasons, we conclude that the order appealed from in Docket No. 327470 does
not qualify as a final order from which plaintiffs can claim an appeal as of right. Nevertheless, in
the interest of judicial economy, and given the fact that there is a consolidated appeal here
involving the same parties, in which plaintiffs have properly claimed an appeal as of right, we
exercise our discretion to consider Docket No. 327470 as on leave granted. See City of Detroit v
Michigan, 262 Mich. App. 542, 546; 686 NW2d 514 (2004).

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following the effective date of 2013 PA 164, which altered the subject-matter jurisdiction of the
Court of Claims, the Court of Claims had “exclusive” jurisdiction over claims against the state,
its departments, and its officers, (2) EM Parker qualifies as a state officer, (3) therefore, the
Wayne Circuit Court lacked subject-matter jurisdiction over plaintiffs’ action against EM Parker,
and (4) the Wayne Circuit Court should transfer plaintiffs’ claims against EM Parker to the Court
of Claims. The Wayne Circuit Court subsequently agreed with plaintiffs, holding that EM
Parker qualified as a state officer. Thus, the Wayne Circuit Court granted plaintiffs’ motion to
transfer plaintiffs’ claims against EM Parker to the Court of Claims.

       After the circuit court action was transferred to the Court of Claims, plaintiffs filed
another motion for class certification, again seeking to certify all Allen Park retirees as a plaintiff
class. Plaintiffs also filed a motion to consolidate the two cases they then had pending in the
Court of Claims, i.e., (1) the claims against the state defendants that had been transferred from
Ingham Circuit Court, and (2) the claims against EM Parker that had been transferred from
Wayne Circuit Court. Plaintiffs also sought leave to file a first amended complaint.

        In response, the state defendants and EM Parker argued that, because she is a local rather
than state official, the Court of Claims lacked subject-matter jurisdiction over the claims against
EM Parker. The state defendants and EM Parker further argued that plaintiffs should be denied
leave to amend their complaint because any amendment would be futile. Plaintiffs contended
that any new claims or theories added by plaintiffs’ amendment would be barred by a notice
provision of the court of claims act, MCL 600.6431.

        Ultimately, the Court of Claims decided to transfer plaintiffs’ claims against EM Parker
back to Wayne Circuit Court, reasoning that the circuit court had misinterpreted the jurisdictional
provisions of the court of claims act. The Court of Claims granted plaintiffs’ motion to file a
first amended complaint, reasoning that, because the state defendants had not yet filed any
responsive pleading to plaintiffs’ complaint, but had instead filed a motion for summary
disposition in lieu of an answer, plaintiffs were entitled to amendment as a matter of course.
Following the trial court’s decision to transfer plaintiffs’ claims against EM Parker back to
Wayne Circuit Court, plaintiffs filed a claim of appeal in this Court, thereby instituting Docket
No. 327470.

        Plaintiffs filed their first amended complaint on May 6, 2015. As in their original
complaint, plaintiffs asserted six counts, albeit via substantially different wording. In lieu of
answering plaintiffs’ first amended complaint, defendants filed a motion for summary disposition
under MCR 2.116(C)(4) (lack of subject-matter jurisdiction) and (C)(8) (failure to state a claim
upon which relief can be granted). Defendants argued, inter alia, that (1) plaintiffs’ first
amended complaint failed to allege that EM Parker’s actions were imputable to the state
defendants and, as such, did not allege a cognizable claim against the state defendants, (2)
because plaintiffs failed to file a claim against defendants in the Court of Claims, or notice of
their intent to file a claim, within six months of the date their claims allegedly accrued, those
claims were barred under MCL 600.6431(3), (3) in any event, even if plaintiffs’ claims were not
barred, those claims nevertheless fail on the merits.

        In response, plaintiffs argued that their claims were not barred by MCL 600.6431(3).
Plaintiffs argued that jurisdiction must be determined as of the inception of the case—here, when

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they filed their October 7, 2013 complaint in Ingham Circuit Court—and that, at that time,
jurisdiction was perfected in Ingham Circuit Court.

       After considering the matter, the Court of Claims issued an opinion and order granting
defendants summary disposition of all claims. At the outset, the Court of Claims decided in
defendants’ favor that EM Parker’s actions could not be imputed to the state defendants.
Nevertheless, “due to the significant import of plaintiffs’ constitutional claims,” the Court of
Claims proceeded to consider the substantive merits of those claims rather than “rest[ing] its
decision on the non-imputation of an emergency manager’s actions to the State[.]”

        Concerning the notice provision of the court of claims act, MCL 600.6431, the Court of
Claims decided that, contrary to defendants’ argument, plaintiffs were subject to the one-year
period under MCL 600.6431(1), not the six-month period for actions for “property damage or
personal injuries” under MCL 600.6431(3). Given the one-year period, the Court of Claims
decided that plaintiffs’ October 7, 2013 complaint in Ingham Circuit Court sufficed to satisfy
MCL 600.6431(1)—at least as to the claims alleged in the October 7, 2013 complaint. However,
the Court of Claims decided that the “new counts” added by plaintiffs’ first amended complaint,
specifically “new due process and contract impairment claims,” were barred by the one-year
notice period under MCL 600.6431(1). Further, the Court of Claims rejected all of plaintiffs’
constitutional challenges to the LFSCA and all of plaintiffs’ contract-based claims on the merits.

        Following the Court of Claims’ summary disposition decision in favor of defendants,
plaintiffs filed another claim of appeal in this Court, thereby instituting Docket No. 329593.

                                 II. STANDARD OF REVIEW

       Jurisdictional issues and those of statutory interpretation are reviewed de novo, Pecoraro
v Rostagno-Wallat, 291 Mich. App. 303, 311; 805 NW2d 226 (2011), as is the interpretation of
the court rules governing class actions and class certification, Henry v Dow Chem Co, 484 Mich.
483, 495; 772 NW2d 301 (2009).

                                        III. ANALYSIS

                           A. SUBJECT-MATTER JURISDICTION

       Plaintiffs first argue that the Court of Claims erred by concluding that the Wayne Circuit
Court had subject-matter jurisdiction over plaintiffs’ claims against EM Parker and further erred
by transferring those claims back to Wayne Circuit Court. We disagree.

       Notably, the Court of Claims never ruled that it lacked subject-matter jurisdiction to hear
and decide plaintiffs’ claims against EM Parker. Rather, the Court of Claims ruling was
premised on its decision that the Wayne Circuit Court had transferred the claims against EM
Parker to the Court of Claims based on an erroneous decision that the circuit court lacked
subject-matter jurisdiction over such claims.

        The Court of Claims properly concluded that the Wayne Circuit Court had subject-matter
jurisdiction over plaintiffs’ claims against EM Parker. Although the jurisdiction of the Court of
Claims is generally exclusive, see MCL 600.6419(1), under MCL 600.6421(4)(a), if a “matter is

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not transferred” from circuit court to the Court of Claims via a notice of transfer, “the
jurisdiction of the [C]ourt of [C]laims is not exclusive and the circuit . . . court may continue to
exercise jurisdiction over that matter.” Here, defendants never filed a notice of transfer
regarding plaintiffs’ claims against EM Parker. Hence, the Ingham Circuit Court retained
jurisdiction over those claims. The matter was subsequently transferred to the Wayne Circuit
Court on EM Parker’s motion. As such, the Court of Claims was correct in deciding that the
Wayne Circuit Court had subject-matter jurisdiction over plaintiffs’ claims against EM Parker.

        Moreover, the Court of Claims properly determined that the appropriate remedy was to
transfer the claims against EM Parker back to Wayne Circuit Court. When, in the mistaken
belief that it lacks subject-matter jurisdiction, a trial court of competent jurisdiction transfers a
matter to a different court under MCR 2.227, the court to which the matter was transferred must
transfer it back.2 Clohset v No Name Corp, 302 Mich. App. 550, 570; 840 NW2d 375 (2013).

                                  B. CLASS CERTIFICATION

        Plaintiffs next argue that the Court of Claims erred by granting defendants summary
disposition without first ruling on plaintiffs’ motion for class certification. We disagree.

       Plaintiffs’ argument is directly contravened by MCR 3.501(D), which provides, in
pertinent part,

             (2) A judgment entered before certification of a class binds only the
       named parties.

2
  Defendants contend that, because plaintiffs never filed a claim against EM Parker in the Court
of Claims (or notice of intent to file one), the Court of Claims should have concluded that it did
not have subject-matter jurisdiction over such claims at all. On that basis, defendants argue, the
Court of Claims should have dismissed plaintiffs’ claims against EM Parker rather than
transferring those claims back to Wayne Circuit Court. Defendants’ argument in this regard is
improper because (1) defendants are the appellees, (2) seek a decision more favorable than the
one rendered by the Court of Claims, and (3) have not filed a cross-appeal. See Barrow v Detroit
Election Comm, 305 Mich. App. 649, 683; 854 NW2d 489 (2014). Moreover, defendants’
argument is directly contravened by established case law. It is true that our Supreme Court has
held, “When a court lacks subject-matter jurisdiction to hear and determine a claim, any action it
takes, other than to dismiss the action, is void.” Reed v Yackell, 473 Mich. 520, 548; 703 NW2d
1 (2005), quoting Bowie v Arder, 441 Mich. 23, 56; 490 NW2d 568 (1992). However, our
Supreme Court has also recognized that “MCR 2.227(A)(1) allows a court to transfer an action to
another tribunal when it ‘determines that it lacks jurisdiction of the subject matter of the action.’
” Hodge v State Farm Mut Auto Ins Co, 499 Mich. 211, ___; ___ NW2d ___ (2016). Thus, even
assuming, arguendo, that the Court of Claims lacked subject-matter jurisdiction over the claims
against EM Parker, it was nevertheless appropriate for the Court of Claims to transfer those
claims back to Wayne Circuit Court.

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              (3) A motion for judgment (including partial judgment) under MCR 2.116
       may be filed and decided before the decision on the question of class certification.
       A judgment entered before certification in favor of a named party does not
       preclude that party from representing the class in the action if that is otherwise
       appropriate.

Thus, contrary to plaintiffs’ argument, it is clear that the Court of Claims’s judgment binds only
the named parties to this action, not any putative class members. Moreover, the Court of Claims
did not commit error by issuing its judgment without first ruling on plaintiffs’ motion for class
certification.

                              C. NOTICE UNDER MCL 600.6431

        Finally, plaintiffs argue that the Court of Claims erred by holding that the “new” claims
asserted in plaintiffs’ first amended complaint were barred under MCL 600.6431. On the
contrary, we conclude that all of plaintiffs claims in this action were barred under that statute.

       MCL 600.6431 provides,

               (1) No claim may be maintained against the state unless the claimant,
       within 1 year after such claim has accrued, files in the office of the clerk of the
       court of claims either a written claim or a written notice of intention to file a claim
       against the state or any of its departments, commissions, boards, institutions, arms
       or agencies, stating the time when and the place where such claim arose and in
       detail the nature of the same and of the items of damage alleged or claimed to
       have been sustained, which claim or notice shall be signed and verified by the
       claimant before an officer authorized to administer oaths.

              (2) Such claim or notice shall designate any department, commission,
       board, institution, arm or agency of the state involved in connection with such
       claim, and a copy of such claim or notice shall be furnished to the clerk at the
       time of the filing of the original for transmittal to the attorney general and to each
       of the departments, commissions, boards, institutions, arms or agencies
       designated.

               (3) In all actions for property damage or personal injuries, claimant shall
       file with the clerk of the court of claims a notice of intention to file a claim or the
       claim itself within 6 months following the happening of the event giving rise to
       the cause of action.

        Concerning the above statute, the Court of Claims decided that plaintiffs were subject to
the one-year period under MCL 600.6431(1), not the six-month period for actions for “property
damage or personal injuries” under MCL 600.6431(3). The Court of Claims accepted plaintiffs’
contention that their claims accrued on the date of EM Parker’s March 8, 2013 letter to the Allen
Park retirees, and for the purposes of this analysis we also accept, without deciding, the premise
that plaintiffs’ claims accrued on March 8, 2013. Given the one-year period, and the March 8,
2013 accrual date, the Court of Claims decided that plaintiffs’ October 7, 2013 complaint
sufficed to satisfy MCL 600.6431(1), at least as to the claims alleged in the October 7, 2013
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complaint. However, the Court of Claims decided that any “new counts” added by plaintiffs’
first amended complaint were barred by the one-year notice period under MCL 600.6431(1).

        By so ruling, the Court of Claims erred, at least insofar as the Court of Claims held that
plaintiffs’ October 7, 2013 complaint sufficed to partially satisfy MCL 600.6431(1). The Court
of Claims should, instead, have ruled that all of plaintiffs’ claims against the state defendants
were barred by MCL 600.6431(1).

        Under the unambiguous language of MCL 600.6431(1), the requisite claim or notice of
intent to file a claim must be filed “within 1 year after such claim has accrued” and must be filed
by the claimant “in the office of the clerk of the court of claims[.]” Compliance with MCL
600.6431 is a “condition precedent to sue the state,” McCahan v Brennan, 291 Mich. App. 430,
433; 804 NW2d 906 (2011), “and a claimant’s failure to comply strictly with this notice
provision warrants dismissal of the claim, even if no prejudice resulted,” Rusha v Dep’t of
Corrections, 307 Mich. App. 300, 307; 859 NW2d 735 (2014). “By naming the Clerk of the
Court of Claims as the agent for the receipt of verified notice of potential claims, the Legislature
has established a clear procedure that eliminates any ambiguity about whether an attempted
notice is effective.” McCahan v Brennan, 492 Mich. 730, 744 n 24; 822 NW2d 747 (2012).

        Here, it is undisputed that plaintiffs filed their October 7, 2013 complaint in Ingham
Circuit Court, i.e., not “in the office of the clerk of the court of claims[.]”3 Thus, although the
October 7, 2013 complaint provided defendants with actual notice of the claims against them, it
was nevertheless insufficient to satisfy MCL 600.6431(1). The phrase “in the office of the clerk
of the court of claims” means precisely what it says: “in the office of the clerk of the court of
claims.” Id. at 748 n 29. Moreover, the lower court record establishes that plaintiffs never filed
“a written notice of intention to file a claim” in the Court of Claims, let alone one “signed and
verified by the claimant before an officer authorized to administer oaths.” It was only on May 6,
2015—more than a year after plaintiffs’ claim accrued—that plaintiffs filed their verified, first
amended complaint in the Court of Claims.

        Thus, the record establishes that plaintiffs failed to comply with MCL 600.6431. In
consequence, summary dismissal of all of plaintiffs’ claims against defendants was appropriate,
see Rusha, 307 Mich. App. at 307, and we need not analyze the remaining issues raised by
plaintiffs on appeal, Fisher v Blankenship, 286 Mich. App. 54, 70; 777 NW2d 469 (2009) (“[T]his
Court will affirm where the trial court came to the right result even if for the wrong reason.”).
Indeed, as a matter of judicial restraint we refuse to do so. See In re Forfeiture of 2000 GMC
Denali and Contents, ___ Mich App ___, ___ n 3; ___ NW2d ___ (2016) (Docket No. 328547);
slip op at 4 n 3 (noting “the fundamental principle of judicial restraint that courts should neither
anticipate a question of constitutional law in advance of the necessity of deciding it nor

3
  Although it is true that the Court of Claims was, at the time plaintiffs filed their October 7,
2013 complaint, housed by the Ingham Circuit Court, plaintiffs’ complaint was captioned “IN
THE 30TH JUDICIAL CIRCUIT OF INGHAM COUNTY,” was time-stamped with the seal
of the Ingham County Clerk, and contained allegations asserting that jurisdiction and venue were
proper in Ingham Circuit Court.

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formulate a rule of constitutional law broader than is required by the precise facts to which it is
to be applied.”) (quotation marks and citations omitted); see also In re MS, 291 Mich. App. 439,
442; 805 NW2d 460 (2011) (“[W]e will not address constitutional issues when, as here, we can
resolve an appeal on alternative grounds.”).

       Affirmed. As the prevailing parties, defendants may tax costs under MCR 7.219.

                                                            /s/ Christopher M. Murray
                                                            /s/ Mark J. Cavanagh
                                                            /s/ Kurtis T. Wilder

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