Court Opinion

ID: 9404462
Source: CourtListenerOpinion
Date Created: 2023-06-23 05:07:00.699403+00
Date Added: 2024-06-11T17:20:13.832621
License: Public Domain

If this opinion indicates that it is “FOR PUBLICATION,” it is subject to
                 revision until final publication in the Michigan Appeals Reports.

                          STATE OF MICHIGAN

                           COURT OF APPEALS

OAK FLINT LLC,                                                      UNPUBLISHED
                                                                    June 22, 2023
               Plaintiff-Appellant,

v                                                                   No. 362383
                                                                    Oakland Circuit Court
CITY OF BERKLEY,                                                    LC No. 2022-192704-CZ

               Defendant-Appellee.

Before: MARKEY, P.J., and JANSEN and K. F. KELLY, JJ.

PER CURIAM.

       Plaintiff appeals by right the trial court’s order granting summary disposition under MCR
2.116(C)(4), (7), and (8) in favor of defendant. Finding no errors warranting reversal, we affirm.

                      I. BASIC FACTS AND PROCEDURAL HISTORY

        In 2019, plaintiff, Oak Flint LLC, purchased property located at 27723 Woodward Avenue
in defendant City of Berkley, Michigan (the “City”). Plaintiff also entered into an agreement to
purchase an adjacent parcel located at 27701 Woodward Avenue. According to plaintiff, the
purpose of the purchase of 27723 Woodward and the agreement for the adjacent lot was to facilitate
the operation of “a medical marijuana provisioning center and an adult-use marijuana
establishment” within the City.

        Under the Berkley City Code of Ordinances (“City Code”), a prospective marijuana
business was required to be licensed by the state and the City. Thus, after obtaining
prequalification for a state-issued license, plaintiff submitted an application with the City for a
City-issued marijuana business license. The City Code limited the total number of licenses issued
to three.

        Because there were more than three license applications, the City engaged in a process to
select applicants “best suited” to operate a marijuana business in the City. Although plaintiff
believed it should have been “highly recommended” for a license, plaintiff’s application was
ultimately denied. One selection criterion highlighted prominently by plaintiff was the
requirement that plaintiff’s proposed development did not displace an existing operational business

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in the City. According to plaintiff, it intended to comply with this requirement because the seller
of the property it had an agreement with was going to relocate the business elsewhere. This
assertion was documented in an affidavit purportedly signed by the existing business owner but,
inadvertently, the affidavit was not included with plaintiff’s application materials. The omission
of the affidavit by plaintiff was not identified by the City when the City issued a “completeness
check form” sent to applicants. Thus, when Matthew Baumgarten, the city manager (“City
Manager”), scored plaintiff’s license application, he awarded 0 of 22 points for the criterion that
plaintiff’s proposed business would not displace an existing business.

        According to plaintiff, the City Manager’s scoring process violated the Open Meetings Act
(“OMA”), MCL 15.261 et seq. In separate proceedings in the trial court initiated by plaintiff and
other license applicants whose applications were denied, Yellow Tail Ventures, Inc v Berkley,
lower court case no. 20-184751-CZ (“Yellow Tail Ventures”), the trial court agreed and concluded
that the City violated the OMA when it scored the applications. The trial court invalidated the
scores and ordered that the City rescore the applications during an open meeting. The City
Manager held a meeting at Berkley City Hall to rescore the applications in compliance with the
trial court’s order. Plaintiff received the same score as in the previous round of scoring and was
not recommended by the City Manager to receive a license.

        Plaintiff appealed the City Manager’s decision to a hearing officer, who upheld the decision
to deny plaintiff’s application. During a January 18, 2022, the City Manager submitted his
recommendations on licenses for the City Council’s consideration. The City Council accepted the
City Manager and hearing officer’s recommendations and made a final decision to deny plaintiff’s
application for a license. Plaintiff subsequently filed a five-count complaint, alleging violations
of the OMA, the City Ordinance, and the Marihuana Regulation and Taxation of Marihuana Act
(“MRTMA”), MCL 333.27951 et seq., denial of due process, and asserted a claim of appeal to the
trial court concerning the denial of its license application.

         In lieu of an answer, the City moved for summary disposition, asserting plaintiff failed to
state a claim for an OMA violation and was barred under res judicata and collateral estoppel from
asserting statutory claims The City also contended that the trial court lacked subject-matter
jurisdiction to consider plaintiff’s claim of appeal. The court agreed and granted the City’s motion.
This appeal followed.

                                   II. OPEN MEETINGS ACT

       Plaintiff first argues the trial court erred when it concluded that plaintiff failed to state a
claim under the OMA. We disagree.

                                  A. STANDARD OF REVIEW

        This Court reviews de novo a trial court’s decision on a motion for summary disposition.
Maple Manor Rehab Ctr, LLC v Dept of Treasury, 333 Mich App 154, 163; 958 NW2d 894 (2020).
The trial court granted summary disposition in the City’s favor as to the OMA claim under MCR
2.116(C)(8), which states that summary disposition is appropriate when “[t]he opposing party has
failed to state a claim on which relief can be granted.” “A motion under MCR 2.116(C)(8) may
be granted only where the claims alleged are so clearly unenforceable as a matter of law that no

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factual development could possibly justify recovery.” Maple Manor Rehab, 333 Mich App at 162-
163 (quotation marks and citation omitted). The plaintiff’s factual allegations in the complaint
must be taken as true, and the trial court may only consider the pleadings when making a decision
on the motion. Ass’n of Home Help Care Agencies v Dep’t of Health and Human Servs, 334 Mich
App 674, 684 n 4; 965 NW2d 707 (2020).

        This Court also reviews de novo questions of statutory interpretation. Moore v Genesee
Co, 337 Mich App 723, 727; 976 NW2d 921 (2021). “If a statute is unambiguous, it must be
applied as plainly written, and [the Court] may not read any unstated provisions into the statute.”
Id. at 728.

                                         B. ANALYSIS

        Under the OMA, “[a]ll meetings of a public body shall be open to the public and shall be
held in a place available to the general public.” MCL 15.263(1), as amended by 2018 PA 485.1 A
“meeting” under the OMA is defined, in relevant part, as “the convening of a public body at which
a quorum is present for the purpose of deliberating toward or rendering a decision on a public
policy . . . .” MCL 15.262(b). All “decisions” of a public body must be made at a meeting open
to the public. MCL 15.263(2). A “decision,” in turn, is a “determination, action, vote, or
disposition upon a motion, proposal, recommendation, resolution, order, ordinance, bill, or
measure on which a vote by members of a public body is required and by which a public body
effectuates or formulates public policy.” MCL 15.262(d). Lastly, and except for exceptions not
relevant here, “[a]ll deliberations of a public body constituting a quorum of its members must take
place at a meeting open to the public.” MCL 15.263(3).

         This Court recently addressed the trial court’s decision in Yellow Tail Ventures that the
initial scoring of the applications by the City Manager violated the OMA. In Yellow Tail Ventures,
Inc v Berkley, ___ Mich App ___, ___; ___ NW2d ___ (2022) (Docket Nos. 357654, 357666, &
358242), slip op at 8-9, we concluded that the trial court erred when it held that the City violated
the OMA when it formed a “scoring committee” to score the applications. This was so because
“[e]ven though the City manager was aided by other officials and staff, there was no delegation of
decision-making duties to these persons.” Id. at 8.

        Quoting Herald Co v Bay City, 463 Mich 111; 614 NW2d 873 (2000), the Court
distinguished the Michigan Supreme Court’s holding in Booth Newspapers, Inc v University of
Michigan Board of Regents, 444 Mich 211; 507 NW2d 422 (1993), a case plaintiff relies upon:

       “The important distinguishing feature of Booth was that the board was clearly a
       ‘public body’ that was subject to the OMA, and the various regents and subquorum
       groups had no independent authority to narrow the field, make a recommendation,
       or select a president. The board effectively sought to delegate its authority as a
       body subject to the OMA to various bodies of its own creation that it believed were

1
 Since the relevant time period of this case, MCL 15.263 has been amended several times. See
2020 PA 228; 2020 PA 254. None of the amendments are relevant to the issues in this case.
Accordingly, we will refer to the current version of the statute in all subsequent citations.

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         not subject to the OMA, for the express purpose of avoiding the requirements of
         the OMA.

                 Thus, the decision in Booth precluded an attempt by a public body to evade
         the OMA (and thus circumvent legislative intent) by delegating its authority. In
         this case, the city manager was assigned the task of recommending a new fire chief
         directly by the city charter, and, therefore, he required no delegation of authority
         from the city commission in order to perform that function. Under these
         circumstances, the Legislature, by electing not to include individuals in the
         definition of public body in the OMA, has exempted the city manager from its
         requirements.” [Yellow Tail Ventures, Inc, ___ Mich App at ___; slip op at 9,
         quoting Herald, 463 Mich at 134-135.]

       Thus, unlike in Booth, we held in Yellow Tail Ventures, Inc that “[t]here was no
impermissible delegation of authority to the City manager” when he scored the applications
because “the ordinance itself authorized the City manager to review the applications before
sending them to the City council.” Yellow Tail Ventures, Inc, ___ Mich App at ___; slip op at 9,
citing City Ordinance § 30-806(f)-(h).2 Importantly, as noted by the Court, “[t]he ultimate
decision on which applications were approved was made by the City council, all in accordance
with the OMA.” Yellow Tail Ventures, Inc, ___ Mich App at ___; slip op at 9.

       In addition to being binding precedent, MCR 7.215(C)(2), this Court’s holding in Yellow
Tail Ventures, Inc is law of the case. Farish v Dep’t of Talent and Economic Dev, 336 Mich App
433, 449; 971 NW2d 1 (2021) (“The law of the case doctrine holds that a ruling by an appellate
court on a particular issue binds the appellate court and all lower tribunals with respect to that

2
    Those subsections of the City Code state:
                 (f) Within 90 days of receiving the last completed application, the city
         manager shall recommend applications for site plan approval to the planning
         commission. The city manager may only recommend a number of applications for
         consideration equal to or less than the number of remaining licenses available for
         issuance. All other applicants shall be sent a written notice of rejection setting forth
         specific reasons why the city manager did not recommend their application for city
         council approval.

                (g) Upon receiving site plan approval from the planning commission,
         applicants shall move forward for final license approval from the city council as
         recommended by the city manager.

                (h) Upon submittal of the city manager’s recommended applications to the
         city council, the city shall publish and provide public notice of the city council
         meeting when the city council will consider the license applications. Notice shall
         be given not less than 14 days prior to the city council meeting. All written feedback
         shall be presented to the city council. [City Code, § 30-806(f)-(h) (emphasis
         added).]

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issue”) (quotation marks and citation omitted). In its complaint, plaintiff alleged that the City
violated the OMA when the City Manager scored the applications during an open meeting at
which, plaintiff alleged, the City Manager did not speak but sat quietly while scoring. Plaintiff
further alleged that the City Council “rubber stamped” the City Manager’s recommendations
without first openly deliberating on them. As in Yellow Tail Ventures, Inc and Herald, the City
Manager did not violate the OMA when he scored the applications because he was not subject to
the OMA nor was he acting under any delegation of authority from the City Council; rather, the
City Manager was acting under his explicit duties set forth in the City Ordinance. See City
Ordinance, § 30-806(f)-(h); see also Pinebrook Warren, LLC v Warren, ___ Mich App ___; ___
NW2d ___ (2022) (Docket Nos. 355989, 355994, 355995, 356005, 356011, 356017, 356023,
359269, & 359285), slip op at 18-19 (“A body that can only make recommendations is not a
governing body for purposes of the OMA because its authority does not include the power to
effectuate or formulate public policy.”).

        Plaintiff’s assertion that the City Council’s act of “rubber stamping” the City Manager’s
recommendations was a violation of the OMA is similarly without merit. There is no claim that
the City’s Council’s January 18, 2022 meeting was not open to the public. And plaintiff points to
no authority under the OMA that public bodies must conduct a certain level of qualitative
deliberation to pass muster. The OMA merely requires that when a public body makes a
“decision,” it does so during an open meeting. See MCL 15.263(2) (“All decisions of a public
body must be made at a meeting open to the public.”).

        Because the City Manager was not himself subject to the OMA, and because he acted
subject to his statutory authority to score the applications and make recommendations to the City
Council, the trial court did not err when it concluded that plaintiff failed to state a claim that the
City violated the OMA.

                                       III. RES JUDICATA

        Next, plaintiff argues the trial court erred when it granted summary disposition in the City’s
favor because neither res judicata nor collateral estoppel bar its claims. According to plaintiff, the
fact that the City was required to rescore the applications created a new cause of action that it could
not assert in Yellow Tail Ventures. Again, we disagree.

                                  A. STANDARD OF REVIEW

        The trial court granted summary disposition in the City’s favor under MCR 2.116(C)(7)
regarding plaintiff’s claims concerning the MRTMA and City Ordinance. Under that court rule,
summary disposition is proper “because of release, payment, prior judgment, immunity granted by
law, statute of limitations, statute of frauds, an agreement to arbitrate or to litigate in a different
forum, infancy or other disability of the moving party, or assignment or other disposition of the
claim before commencement of the action.” MCR 2.116(C)(7).

       Under MCR 2.116(C)(7) (claim barred by prior judgment, i.e., res judicata), this
       Court must consider not only the pleadings, but also any affidavits, depositions,
       admissions, or other documentary evidence filed or submitted by the parties. The
       contents of the complaint must be accepted as true unless contradicted by the

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        documentary evidence. This Court must consider the documentary evidence in a
        light most favorable to the nonmoving party. If there is no factual dispute, whether
        a plaintiff’s claim is barred under a principle set forth in MCR 2.116(C)(7) is a
        question of law for the court to decide. If a factual dispute exists, however,
        summary disposition is not appropriate. [RDM Holdings, Ltd v Continental
        Plastics Co, 281 Mich App 678, 687; 762 NW2d 529 (2008) (citations omitted).]

                                           B. ANALYSIS

        “The doctrine of res judicata is employed to prevent multiple suits litigating the same cause
of action.” ER Drugs v Dep’t of Health and Human Servs, 341 Mich App 133, 142; 988 NW2d
826 (2022) (quotation marks and citation omitted); see also MCR 2.203(A) (“In a pleading that
states a claim against an opposing party, the pleader must join every claim that the pleader has
against that opposing party at the time of serving the pleading, if it arises out of the transaction or
occurrence that is the subject matter of the action . . . .”). The doctrine of res judicata

        bars a second, subsequent action when (1) the prior action was decided on the
        merits, (2) both actions involve the same parties or their privies, and (3) the matter
        in the second case was, or could have been, resolved in the first. This Court has
        taken a broad approach to the doctrine of res judicata, holding that it bars not only
        claims already litigated, but also every claim arising from the same transaction that
        the parties, exercising reasonable diligence, could have raised but did not. [Dep’t
        of Environmental Quality v Sancrant, 337 Mich App 696, 709; 976 NW2d 874
        (2021) (quotation marks and citation omitted).]

        There is no dispute between the parties that the first two elements are satisfied. The lower
court’s decision in Yellow Tail Ventures resulted in a final order, and plaintiff and the City were
both parties to that action. Thus, the question in this case is whether the issues raised in plaintiff’s
complaint were or should have been raised in that case. See Sancrant, 337 Mich App at 709.

         In Count II of plaintiff’s complaint, plaintiff alleged that “[t]he procedure used by the City
Manager and his resulting decision-making was not ‘a competitive process’ intended to select the
‘best suited’ applicant to operate in compliance with MRTMA” because the City Manager did not
give plaintiff a full score for displacement of existing businesses and did not notify plaintiff that
the affidavit was missing. The fact that the plaintiffs raised different claims in Yellow Tail
Ventures—i.e., that the scoring criteria itself was inconsistent with the MRTMA—does not save
plaintiff’s claims. Res judicata bars not only claims that were actually litigated, but also claims
that it could have but did not litigate. Sancrant, 337 Mich App at 709. The claims in Count II
were known to plaintiff when it filed suit in Yellow Tail Ventures. At the time that complaint was
filed, the City Manager had already (1) failed to notify plaintiff that the affidavit had not been
included with the application; and (2) did not give plaintiff any points for displacement of existing
businesses. Thus, plaintiff could have but did not raise those issues in Yellow Tail Ventures and
res judicata bars their subsequent litigation.

        The same is true for Count III of plaintiff’s complaint. There, plaintiff alleged the City
violated the City Ordinance by “failing to apply the scoring criteria in an objective and consistent
manner, fail[ing] to obtain sufficient up to date information from applicants . . . , requiring Plaintiff

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to submit secondary affidavits supporting the sworn facts in its Application and failing to notify
Plaintiff of the omission of [the affidavit].” Like in Count II, these claims relate to issues known
to plaintiff at the time Yellow Tail Ventures was filed in the trial court. Plaintiff received the same
score from the City Manager in the first attempt at scoring as it did in the second. Thus, the same
criteria were used, whether they were “objective and consistent” or not. And, in both rounds of
scoring, the City allegedly did not obtain up to date information because it did not notify plaintiff
the affidaivt was missing. Accordingly, like Count II, plaintiff’s claims in Count III could have
but were not asserted in Yellow Tail Ventures.3

       Because the doctrine of res judicata barred plaintiff’s claims that the City violated the
MRTMA and the City Ordinance when it scored plaintiff’s application, the trial court did not err
when it granted summary disposition in the City’s favor.

                                      IV. CLAIM OF APPEAL

        Lastly, plaintiff contends the trial court erred when it dismissed plaintiff’s claim of appeal
for lack of subject-matter jurisdiction. We disagree.

                                   A. STANDARD OF REVIEW

         “MCR 2.116(C)(4) permits a trial court to dismiss a complaint when the court lacks
jurisdiction of the subject matter.” Southfield v Shefa, LLC, 340 Mich App 391, 406; 986 NW2d
607 (2022). “When viewing a motion under MCR 2.116(C)(4), this Court must determine whether
the pleadings demonstrate that the defendant was entitled to judgment as a matter of law, or
whether the affidavits and other proofs show that there was no genuine issue of material fact.”
Weishuhn v Catholic Diocese of Lansing, 279 Mich App 150, 155; 756 NW2d 483 (2008)
(quotation marks and citation omitted).

                                            B. ANALYSIS

       Claims of appeal to the circuit court are governed by MCR 7.100, et seq. An aggrieved
party has an appeal of right to the circuit court from

3
  The City also argued in the trial court and this Court that collateral estoppel bars plaintiff’s claims.
For collateral estoppel to apply, the City was required to show: “(1) a question of fact essential to
the judgment must have been actually litigated and determined by a valid and final judgment; (2)
the same parties must have had a full and fair opportunity to litigate the issue; and (3) there must
be mutuality of estoppel.” Sancrant, 337 Mich App at 707 (quotation marks and citation omitted).
We disagree that collateral estoppel would bar plaintiff’s claims. In Yellow Tail Ventures, the
plaintiffs alleged that the City Ordinance’s scoring system violated the MRTMA. While this case
also involves the City Ordinance and MRTMA, plaintiff’s claims are not related to whether the
former violates the latter, but rather whether the City violated both schemes when it improperly
scored plaintiff’s application. That issue of fact was not decided in Yellow Tail Ventures and,
therefore, collateral estoppel does not apply. See Sancrant, 337 Mich App at 707.

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             (1) a final judgment or final order of a district or municipal court, except a
       judgment based on a plea of guilty or nolo contendere;

             (2) a final order or decision of an agency governed by the Administrative
       Procedures Act, MCL 24.201 et seq.; and

               (3) a final order or decision of an agency from which an appeal of right to
       the circuit court is provided by law. [MCR 7.103(A)(1)-(3).]

        There is no dispute that plaintiff’s claim of appeal does not concern a final judgment from
a (1) district or municipal court, or (2) agency governed by the Administrative Procedures Act.
Thus, the threshold question is whether plaintiff’s claim of appeal was a final order “from which
an appeal of right to the circuit court is provided by law.” Under Const 1963, art 6, § 28, an
aggrieved party may seek review from

               All final decisions, findings, rulings and orders of any administrative officer
       or agency existing under the constitution or by law, which are judicial or quasi-
       judicial and affect private rights or licenses . . . . [Emphasis added.]

Thus, if plaintiff’s claim of appeal relates to a final order of an administrative officer or agency
that is judicial or quasi-judicial, the trial court would have subject-matter jurisdiction to entertain
it.

        Plaintiff’s reliance on Const 1963, art 6, § 28, is misplaced. The license application process
was not adversarial in nature. In Natural Resources Defense Council v Dep’t of Environmental
Quality, 300 Mich App 79, 86; 832 NW2d 288 (2013), this Court explained that not all government
“actions are taken in a judicial or quasi-judicial capacity.” Thus, “[t]o determine whether an
administrative agency’s determination is adjudicatory in nature, courts compare the agency’s
procedures to court procedures to determine whether they are similar.” Id. “Quasi-judicial
proceedings include procedural characteristics common to courts, such as a right to a hearing, a
right to be represented by counsel, the right to submit exhibits, and the authority to subpoena
witnesses and require parties to produce documents.” In its simplest form, the City Ordinance
required applicants to submit written narratives, materials, and fees to be considered for a license.
The applications would be scored on the basis of those submissions and those scores would be
submitted to the City Council for final decision. The City Council was not obligated to rely on
those scores nor obligated to issue any licenses at all. There was nothing inherently quasi-judicial
about the application process, such as the right to present or examine witnesses, submit exhibits,
or conduct a hearing in front of a neutral party. Instead, applications were submitted and
considered by the City Council in a public meeting. In fairness to plaintiff, the process below did
involve an appeal of the City Manager’s scores to a hearing officer, which arguably contained
aspects of a quasi-judicial proceeding. But even if the appeal hearing was “quasi-judicial,” the
hearing officer had no authority to issue a final decision—i.e., approve or deny plaintiff’s
application—and plaintiff does not argue otherwise. That decision rested with the City Council,
which, as explained above, did not act as a judicial or quasi-judicial agency. See id.

       Because plaintiff’s claim of appeal was not proper under MCR 7.103(A)(3) as it was not
from “a final order or decision of an agency from which an appeal of right to the circuit court is

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provided by law,” the circuit court lacked subject-matter jurisdiction to consider it. Thus, the trial
court did not err when it granted the City’s motion for summary disposition.

       Affirmed. The City, as the prevailing party, may tax costs. MCR 7.219(A).

                                                              /s/ Jane E. Markey
                                                              /s/ Kathleen Jansen
                                                              /s/ Kirsten Frank Kelly

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