Court Opinion

ID: 848783
Source: CourtListenerOpinion
Date Created: 2013-03-01 23:52:22.496306+00
Date Added: 2024-06-11T09:01:01.833966
License: Public Domain

Michigan Supreme Court
                                                                       Lansing, Michigan 48909
____________________________________________________________________________________________
                                                                C h i e f J u s ti c e             J u s t ic e s
                                                                Maura D. Corrigan                  Michael F. Cavanagh

Opinion
                                                                                                   Elizabeth A. Weaver
                                                                                                   Marilyn Kelly
                                                                                                   Clifford W. Taylor
                                                                                                   Robert P. Young, Jr.
                                                                                                   Stephen J. Markman
____________________________________________________________________________________________________________________________

                                                                                          FILED JULY 9, 2003

                PARKWOOD LIMITED DIVIDEND

                HOUSING ASSOCIATION,

                        Plaintiff-Appellee,

                v                                                                        Nos.   120410, 120411

                STATE HOUSING DEVELOPMENT AUTHORITY,

                        Defendant-Appellant.

                BEFORE THE ENTIRE BENCH

                MARKMAN, J.

                        We granted leave to appeal to consider the jurisdiction

                of the Court of Claims over this case, which involves a

                contractual claim for declaratory judgment against a state

                agency.       The Court of Appeals, relying on Silverman v Univ of

                Michigan Bd of Regents, 445 Mich 209; 516 NW2d 54 (1994),

                determined that the Court of Claims lacked subject-matter

jurisdiction because the complaint did not request monetary

damages.     Because we conclude that the Court of Claims has

exclusive jurisdiction over the claim, we reverse the judgment

of the Court of Appeals. 

                    I.   FACTS   AND   PROCEDURAL HISTORY

      In   1973,     plaintiff,         a    limited     dividend     housing

association, received a mortgage from defendant Michigan State

Housing Development Authority to finance the construction of

an   apartment     complex   for       low-income      and   moderate-income

residents. In September 1998, plaintiff informed defendant of

its intention to pay off the mortgage on October 1, 1998, and

requested a payoff letter showing the amount due.                   Plaintiff

also inquired whether the balances in all escrow and reserve

accounts would be applied against the amount due or paid

directly to plaintiff.       In response, defendant indicated that

it would retain any amounts remaining in the accounts after

payment of the full limited dividend to which plaintiff was

entitled.1    Plaintiff then filed a “Complaint for Declaratory

      1
        The State Housing Development Authority Act, MCL

125.1493(b), allows the authority to establish a reasonable

and proper rate for cumulative dividends payable to members of

limited dividend housing associations and provides that on

dissolution of the limited dividend housing association, any

surplus shall be paid to the authority:

           That every member of a limited dividend

      housing association shall be deemed, by acceptance

      of a beneficial interest in the limited dividend

                                               (continued...)

                                        2

Relief” in the Wayne Circuit Court, seeking a declaration that

the money contained in certain escrow accounts belonged to

plaintiff and that plaintiff would be entitled to possession

of the accounts when plaintiff paid the full balance due under

the mortgage.    The circuit court dismissed the case, finding

that the claim was within the exclusive jurisdiction of the

Court of Claims. 

     Plaintiff appealed from the circuit court's dismissal,

and refiled its complaint in the Court of Claims.           Both

parties filed motions for summary disposition.     The Court of

Claims granted summary disposition for defendant.     Plaintiff

appealed from the Court of Claims judgment.

     The Court of Appeals consolidated plaintiff’s two appeals

and, in a split decision, reversed.2    The majority determined

     1
      (...continued)

     housing association or by executing the document of

     basic organization, to have agreed that he or she

     at no time shall receive from the limited dividend

     housing association any return in excess of the

     face value of the investment attributable to his or

     her respective interest plus cumulative dividend

     payments at a rate which the authority determines

     to be reasonable and proper, computed from the

     initial date on which money was paid or property

     delivered in consideration for the interest; and

     that upon the dissolution of the limited dividend

     housing association, any surplus in excess of those

     amounts shall be paid to the authority or to any

     other regulating governmental body as the authority

     directs.

     2
         Unpublished opinion per curiam, issued October 26, 2001

                                                  (continued...)

                                3

that, because plaintiff’s complaint sought only a declaratory

judgment concerning the ownership of certain money, contingent

on certain circumstances, and did not seek monetary damages,

the   circuit    court   possessed    subject-matter     jurisdiction.

Additionally, the majority concluded that because the Court of

Claims only has jurisdiction over claims for monetary damages,

and   because   plaintiff’s      complaint   did   not   seek   monetary

damages,      the   Court   of     Claims    lacked      subject-matter

jurisdiction and its rulings were void.

      The dissenting Court of Appeals judge concluded that the

claim would ultimately result in money damages if plaintiff

were granted the relief requested in the complaint, and,

therefore, that the case was properly before the Court of

Claims.

      Defendant filed an application for leave to appeal, and

plaintiff filed an application for leave to cross-appeal the

Court of Claims decision on its merits. We denied plaintiff’s

application and granted defendant’s application, directing the

parties to address the jurisdictional question in the context

of the relevant statutes, MCL 600.6419 and 600.6419a, and this

Court’s decision in Silverman.3

      2
      (...continued)

(Docket Nos. 218433, 229448).

      3
          467 Mich 896 (2002).

                                     4

                        II.    STANDARD   OF   REVIEW

     In order to resolve this jurisdictional issue, we must

consider the Court of Claims Act.                 This is a question of

statutory   construction,      which      is    reviewed   de   novo   as   a

question of law.   Cruz v State Farm Mut Automobile Ins Co, 466

Mich 588, 594; 648 NW2d 591 (2002).

                        III.     DISCUSSION

                   A.    STATUTORY PROVISIONS

     The jurisdiction of the Court of Claims is provided by

statute.    The main statutory provision, MCL 600.6419, grants

the Court of Claims exclusive jurisdiction over certain claims

against the state and its subparts:

          (1) Except as provided in sections 6419a and

     6440, the jurisdiction of the court of claims, as

     conferred upon it by this chapter, shall be

     exclusive. . . . The court has power and

     jurisdiction: 

          (a) To hear and determine all claims and

     demands, liquidated and unliquidated, ex contractu

     and ex delicto, against the state and any of its

     departments, commissions, boards, institutions,

     arms, or agencies.

     In regard to the jurisdiction of the circuit courts, MCL

600.6419 provides:

          (4) This chapter shall not deprive the circuit

     court of this state of jurisdiction over . . .

     proceedings for declaratory or equitable relief, or

     any other actions against state agencies based upon

     the statutes of this state in such case made and

     provided, which expressly confer jurisdiction

     thereof upon the circuit court . . . .

                                    5

     Additionally, MCL 600.6419a, which was added in 1984,

gives the Court of Claims concurrent jurisdiction with the

circuit courts over any claim for equitable and declaratory

relief that is ancillary to a claim filed under § 6419: 

          In addition to the powers and jurisdiction

     conferred upon the court of claims by section 6419,

     the court of claims has concurrent jurisdiction of

     any demand for equitable relief and any demand for

     a declaratory judgment when ancillary to a claim

     filed pursuant to section 6419. The jurisdiction

     conferred by this section is not intended to be

     exclusive of the jurisdiction of the circuit court

     over demands for declaratory and equitable relief

     conferred by section 605.[4]

                               B.   CASE LAW

     Michigan      courts    have   interpreted        §    6419(1)(a)    “as

limiting the jurisdiction of the Court of Claims to actions

for money damages.”         AuSable Manistee Action Council, Inc v

Michigan,    182   Mich     App   596,    598;   452       NW2d   832   (1989)

(citations omitted).        This interpretation was first set forth

in Taylor v Auditor Gen, 360 Mich 146, 151; 103 NW2d 769

(1960), which was decided before the 1984 amendment, when this

Court, noting that the Court of Claims was created as a court

of limited jurisdiction having “no ‘equity side’ as that term

     4
         MCL 600.605 provides:

          Circuit courts have original jurisdiction to

     hear and determine all civil claims and remedies,

     except where exclusive jurisdiction is given in the

     constitution or by statute to some other court or

     where the circuit courts are denied jurisdiction by

     the constitution or statutes of this state. 

                                     6

is    employed   in    respect   of   the    jurisdiction   of   Michigan

courts,” concluded that the Court of Claims did not possess

jurisdiction over declaratory-judgment actions. 

       Relying on Taylor, Michigan courts have since adhered to

the view that the Court of Claims lacks jurisdiction over a

claim that is solely for declaratory relief.                 See, e.g.,

AuSable, supra at 598;       77th Dist Judge v Michigan, 175 Mich

App 681, 699; 438 NW2d 333 (1989).              However, in Greenfield

Constr Co, Inc v Dep’t of State Hwys, 402 Mich 172; 261 NW2d

718    (1978),   six    participating       justices   agreed,   in   five

separate opinions, that the circuit court lacked jurisdiction

over the plaintiff’s suit for declaratory judgment against a

state department.5      Id. at 198 (opinion by RYAN , J., COLEMAN and

FITZGERALD , JJ., concurring), 202 (opinion by LEVIN , J., KAVANAGH ,

C.J., concurring), 231 (WILLIAMS , J., concurring that the

circuit court lacks jurisdiction over a citizen suit against

a government agency for a declaratory judgment).             

       After the addition of § 6419a, the Court of Appeals noted

that, “The holding in Taylor, premised on the absence of an

equity side to the Court of Claims, was discredited in view of

the subsequent abolition of procedural distinctions between

       5
      Three justices also opined that the Court of Claims has

jurisdiction over a declaratory-judgment action against the

state. Id. at 200 (concurring opinion of COLEMAN , J.), 230

(opinion by LEVIN , J., KAVANAGH , C.J., concurring).

                                      7

the law and equity sides of a court docket.”           77th Dist Judge,

supra at 699.     Nonetheless, the Court in 77th Dist Judge

concluded “declaratory judgment is appropriate in the Court of

Claims only if the underlying dispute or controversy is of a

nature lending itself to an eventual remedy in money damages

against the state or one of its branches.”            Id. at 700. 

     In 1994, this Court in Silverman, supra at 216-217, noted

the uncertainty regarding the Court of Claims jurisdiction

over declaratory claims before the addition of § 6419a.

According to Silverman, with the enactment of § 6419a, “the

Legislature    authorized   the   Court       of   Claims   to   exercise

jurisdiction over claims for declaratory and equitable relief

against the state, provided that the plaintiff’s suit also

seeks money damages from the state or one of its agencies.”

Id. at 217.     Significantly, Silverman also noted that the

actual “nature of the claim,” not how the plaintiff phrases

the request for relief, controls whether the Court of Claims

possesses jurisdiction.     Id. at 216 n 7. 

                            C.    ANALYSIS

     Plaintiff concedes that this case involves a contract­

based claim.   However, plaintiff argues that, inasmuch as the

complaint sought declaratory relief only, the Court of Claims

did not possess jurisdiction, because MCL 600.6419(1)(a),

interpreted in light of MCL 600.6419a, only grants the Court

                                  8

of Claims exclusive jurisdiction over complaints that request

monetary damages.      Defendant, on the other hand, argues that,

because this is a contract-based claim against a state agency,

it comes squarely within the exclusive jurisdiction of the

Court of Claims under § 6419(1)(a). 

     In   order   to     resolve   the   jurisdictional   question

presented, we must first consider the “nature of the claim.”

Plaintiff’s prayer for relief states:

          WHEREFORE, Plaintiff requests that the court

     adjudicate and declare that the accounts which are

     the subject of this complaint are assets belonging

     to Plaintiff, subject to Defendant’s custodial

     rights while the mortgage is in force, and that

     Plaintiff shall be entitled to sole possession of

     the accounts at the time Plaintiff pays the full

     balance due under Defendant’s mortgage. Plaintiff

     also requests its costs and attorney fees and such

     other relief as the court determines to be just. 

From the face of the complaint, it is apparent that plaintiff

is seeking a declaration regarding its entitlement to money in

certain accounts, at such time that it prepays the mortgage.

Pursuant to MCR 2.605(A)(1),

     [i]n a case of actual controversy within its

     jurisdiction, a Michigan court of record may

     declare the rights and other legal relations of an

     interested party seeking a declaratory judgment,

     whether or not other relief is or could be sought

     or granted. 

Considering the language of the court rule, it appears that

plaintiff is seeking a court declaration regarding its rights

relative to the contract between the parties.      Plaintiff does

                                   9

not directly request monetary damages,6 although the complaint

pertains to money that is contained in certain accounts.

Instead, plaintiff asks for a court ruling regarding its

rights    and    the   effects       of    its   future    actions.     Thus,

plaintiff’s complaint may be properly characterized as seeking

solely declaratory relief.

      In light of our conclusion that this case involves a

complaint for declaratory relief only, we must next consider

whether this claim falls within the exclusive jurisdiction of

the Court of Claims pursuant to § 6419(1)(a).                  In resolving

this issue of statutory interpretation, our primary aim is to

effect the intent of the Legislature.                     Wickens v Oakwood

Healthcare Sys, 465 Mich 53, 60; 631 NW2d 686 (2001).                  First,

we examine the language of the statute.                      Id.      “If   the

statute's language is clear and unambiguous, we assume that

the Legislature intended its plain meaning, and we enforce the

statute as written.”           Id., citing People v Stone, 463 Mich

558, 562; 621 NW2d 702 (2001). 

      The plain language of § 6419(1)(a), the primary source of

jurisdiction for the Court of Claims, does not refer to claims

for   money     damages   or    to    claims     for   declaratory    relief.

      6
       It is noteworthy, however, that at oral argument,

plaintiff’s counsel indicated that this case “involves a

million and a half dollars approximately,” and thus that the

losing party will likely seek to return to this Court for

consideration of the merits of the case.

                                          10

Rather, in broad language, this provision grants the Court of

Claims exclusive jurisdiction of “all claims and demands,

liquidated and unliquidated, ex contractu and ex delicto,

against the state . . . .”       Because the present case involves

a contract-based claim for declaratory relief against a state

agency,   we   conclude   that   it   falls    within    the    exclusive

jurisdiction of the Court of Claims under the plain language

§ 6419(1)(a).7

     In   reaching     this   conclusion,     we   recognize     that   in

Silverman this Court suggested that the circuit court is the

appropriate    forum   for    complaints    against     the    state   that

request only declaratory relief.        Silverman, supra at 217 (“A

complaint seeking only money damages against the state must be

filed in the Court of Claims.              A complaint seeking only

equitable or declaratory relief must be filed in circuit

court.”). As previously discussed, the idea that the Court of

Claims lacks jurisdiction over declaratory-judgment actions

was first articulated by this Court in Taylor in 1960 and was

premised on the lack of an equity side to the Court of Claims.

Subsequently, the Court of Appeals in 77th Dist Judge, supra

     7
       We construe the enactment of § 6419a as having added to

this jurisdiction by clarifying that the Court of Claims also

has jurisdiction over other declaratory and equitable claims,

specifically, those that relate neither to contract nor

tort—over which the circuit court would otherwise have

exclusive jurisdiction—when those claims are ancillary to a

claim within the court’s exclusive jurisdiction under § 6419.

                                  11

at 699, indicated that Taylor’s holding was “discredited” on

the basis of the later “abolition of procedural distinctions

between the law and equity sides of a court docket.”        Despite

this, and despite the plain language of the statute, cases

have continued, with the exception of Greenfield, to interpret

the jurisdiction granted by § 6419(1)(a) as extending only to

claims for money damages.       As we have indicated, however, §

6419(1)(a) clearly provides the Court of Claims with exclusive

jurisdiction over “all claims and demands, liquidated and

unliquidated, ex contractu and ex delicto, against the state

. . . .”      In light of this language, we conclude today that

the grant of exclusive jurisdiction conveyed to the Court of

Claims by § 6419(1)(a) includes jurisdiction over declaratory­

judgment actions against the state that involve contract or

tort without more; that is, the claim need not expressly claim

money damages.       We disavow any contrary statements found in

Taylor and Silverman.8

     In reaching this conclusion, we recognize that, with

regard   to    the   jurisdiction   of   the   circuit   court,   our

     8
      In addition, we disavow similar statements contained in

various Court of Appeals cases, including 77th Dist Judge and

AuSable. 

     However, we specifically reaffirm the statements in

Silverman recognizing that the nature of the claim, rather

than how the plaintiff phrases the request for relief,

controls how a court will characterize the claim. 

                                 12

constitution provides that “[t]he circuit court shall have

original jurisdiction in all matters not prohibited by law

. . . .”   Const 1963, art 6, § 13.9   In addition, § 6419(4)

recognizes that the circuit court has jurisdiction over

     proceedings for declaratory or equitable relief, or

     any other actions against state agencies based upon

     the statutes of this state in such case made and

     provided, which expressly confer jurisdiction

     thereof upon the circuit court . . . .

In our view, § 6419(1)(a), by its explicit grant of exclusive

jurisdiction to the Court of Claims of “all claims and demands

. . . ex contractu and ex delicto” against the state, deprives

“by law” the circuit court of jurisdiction over these types of

claims. Under the language of MCL 600.605, § 6419(1)(a) is an

instance “where exclusive jurisdiction is given . . . by

statute to some other court . . . .”     Thus, we construe §

6419(4) as maintaining the jurisdiction of the circuit court

over those declaratory claims against the state that do not

involve contract or tort.10

     9
      Similarly, MCL 600.605, which is quoted in its entirety

in n 4, grants circuit courts jurisdiction over “all civil

claims and remedies, except where exclusive jurisdiction is

given . . . by statute to some other court . . . .” (Emphasis

added.)

     10
       This jurisdiction of the circuit court is concurrent

with the jurisdiction of the Court of Claims over such claims

in the circumstances set out in § 6419a, see n 7. That is,

when such a declaratory action is ancillary to another claim

within the Court of Claims exclusive jurisdiction under §

6419, the circuit court and the Court of Claims have

                                               (continued...)

                               13

                      IV.    CONCLUSION

     For these reasons, we conclude that the Court of Claims

possesses exclusive subject-matter jurisdiction over this

case, which involves a contract-based complaint against a

state agency seeking solely declaratory relief. Today we hold

that pursuant to the plain language of § 6419(1)(a), the Court

of Claims has exclusive jurisdiction over complaints based on

contract or tort that seek solely declaratory relief against

the state or any state agency.             We disavow any contrary

statements found in our prior case law that have seemingly

interpreted § 6419(1)(a) as granting the Court of Claims

jurisdiction   over   claims    for    money   damages   only.   We,

therefore, reverse the judgment of the Court of Appeals on the

jurisdictional issue.       We remand to the Court of Appeals for

consideration of the merits of the Court of Claims rulings,

which were not previously considered. 

                                   Stephen J. Markman

                                   Maura D. Corrigan

                                   Michael F. Cavanagh

                                   Elizabeth A. Weaver

                                   Marilyn Kelly

                                   Clifford W. Taylor

                                   Robert P. Young, Jr.

     10
      (...continued)

concurrent jurisdiction over the declaratory action.

                                 14

              S T A T E     O F   M I C H I G A N

                          SUPREME COURT

PARKWOOD LIMITED DIVIDEND

HOUSING ASSOCIATION,

     Plaintiff-Appellee,

v                                           Nos. 120410, 120411

STATE HOUSING DEVELOPMENT AUTHORITY,

     Defendant-Appellant.

YOUNG, J. (concurring).

     I concur with the majority because it sets forth a

reasonable interpretation of MCL 600.6419(1), MCL 600.6419(4),

and MCL 600.6419a.   However, I write separately to encourage

the Legislature to reexamine these poorly drafted statutes. 

     It is extremely rare that the meaning of a statute cannot

be plainly or constructively ascertained.      If the clear and

unambiguous text does not provide a statute’s meaning, then an

application   of   the   well-established   rules   of   statutory

construction usually resolves any ambiguity.        I believe the

statutes conferring jurisdiction on the Court of Claims may

present one of those extremely rare instances where the

meaning of a statute, or set of statutes, cannot be clearly

determined through this process.

     While the majority selects a reasonable interpretation of

the Court of Claims statutory authority to resolve this

plaintiff’s    complaint,1     a   study       of    MCL     600.6419(1),    MCL

600.6419(4), and MCL 600.6419a suggests a host of potential

jurisdictional ambiguities that cannot be easily resolved by

the usual modes of judicial analysis.

     Perhaps    more   important,           because    the     jurisdictional

provisions     set   forth   in    the       Court     of    Claims   Act    are

unquestionably less than clear, it is possible that a future

court may find the jurisdictional reach of the Court of Claims

to be inconsistent with current practice.                     Because lack of

subject matter jurisdiction is a challenge that can be brought

at any time, even after a case is concluded, the effect of

such an interpretation could prove to be a significant barrier

to finality and thus to the efficient administration of

justice.

     Simply put, in my judgment, the statutory scheme enacted

by   the     Legislature     is    a        textbook        example   of    poor

draftsmanship.       Because      easily      applicable       subject     matter

jurisdiction guidelines are a basic and necessary prerequisite

     1
      For example, compare Silverman v Univ of Michigan Bd of

Regents, 445 Mich 209; 516 NW2d 54 (1994), which presents, in

my view, an alternative reasonable construction.

                                       2

to an efficient judicial system, I strongly encourage the

Legislature to reconsider the jurisdictional provisions in the

Court of Claims Act, MCL 600.6401 et seq., and to make more

clear its intent concerning the scope of the Court of Claims

jurisdiction,   including   the    jurisdictional   relationship

between the Court of Claims and our circuit courts.

                                  Robert P. Young, Jr.

                              3