Court Opinion

ID: 6497125
Source: CourtListenerOpinion
Date Created: 2022-07-01 05:05:15.763716+00
Date Added: 2024-06-11T08:49:43.453362
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

ROBERT MURDOCK and CLAIRE MURDOCK,                                   UNPUBLISHED
                                                                     June 30, 2022
               Plaintiffs-Appellants,

v                                                                    No. 358530
                                                                     Cheboygan Circuit Court
BISHOP GMC CADILLAC, INC.,                                           LC No. 21-008827-NZ

               Defendant-Appellee.

Before: RONAYNE KRAUSE, P.J., and M. J. KELLY and YATES, JJ.

PER CURIAM.

         In this action alleging violations of the Michigan Consumer Protection Act, MCL 445.901
et seq., plaintiffs appeal as of right the trial court’s order granting summary disposition pursuant
to MCR 2.116(C)(10) in favor of defendant. Because the trial court resolved the case by going
straight to the merits instead of addressing its subject-matter jurisdiction as a threshold issue, we
reverse and remand for consideration of the trial court’s subject-matter jurisdiction.

                                 I. FACTUAL BACKGROUND

        In October 2020, plaintiffs leased a 2020 Cadillac XT4 from defendant, a new motor
vehicle dealership. The lease agreement reflected that the vehicle was “new” (the available options
on the form were “new” or “used”), but stated that the vehicle’s odometer read 3,021 miles. The
lease made clear that the “agreed upon value” of the vehicle was $44,010. Plaintiffs owed $7,048
at signing, but received a credit of $3,400 because of the accrued miles on the vehicle. Therefore,
plaintiffs paid $3,648 in cash at signing. The monthly payment under the lease was $391.91, and
the vehicle’s residual value at the end of the 39-month lease was identified on the lease agreement
as $25,137.

        In December 2020, plaintiffs discovered that the vehicle was involved in an accident before
they leased it. That news did not go over well. The next month, plaintiffs filed a complaint in
Cheboygan County Circuit Court alleging that defendant violated MCL 445.902(1)(d) of the
Michigan Consumer Protection Act, MCL 445.901 et seq., when it offered the vehicle as new and
when it did not disclose the accident. After answering the complaint, defendant moved for
summary disposition under MCR 2.116(C)(4) and (C)(10). Defendant contended in passing that

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Michigan law did not require it to disclose the accident and that the vehicle was not held out as
new. But the focus of defendant’s motion for summary disposition was that the circuit court lacked
subject-matter jurisdiction because “the damages do not exceed $25,000.00.” After a hearing, the
trial court granted the motion under MCR 2.116(C)(10), concluding that the record was undisputed
that the vehicle was “new” at the time the lease was signed and that, under Michigan law, defendant
was not required to disclose the accident. Plaintiffs now appeal the trial court’s ruling.

                                      II. LEGAL ANALYSIS

        Plaintiffs argue that the trial court’s two reasons for awarding summary disposition under
MCR 2.116(C)(10) to defendant were erroneous. Without evaluating the merits of the parties’
arguments or the trial court’s decision, we reverse because the trial court did not first determine
that it had subject-matter jurisdiction over plaintiffs’ claims before rendering a decision on the
merits. Defendant moved for summary disposition under MCR 2.116(C)(4) (subject-matter
jurisdiction) and (10) (no genuine issue of material fact). A grant or denial of summary disposition
is reviewed de novo. Maiden v Rozwood, 461 Mich 109, 118; 597 NW2d 817 (1999). Summary
disposition under MCR 2.116(C)(4) is warranted when “[t]he court lacks jurisdiction of the subject
matter.” “A trial court is duty-bound to recognize the limits of its subject-matter jurisdiction, and
it must dismiss an action when subject-matter jurisdiction is not present.” The Meisner Law Group
PC v Weston Downs Condo Ass’n, 321 Mich App 702, 714; 909 NW2d 890 (2017). Jurisdictional
issues are threshold questions that must be addressed before a trial court may reach the merits of a
claim. See Barshaw v Allegheny Performance Plastics, LLC, 334 Mich App 741, 752; 965 NW2d
729 (2020). “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.” City of Southfield v Shefa, LLC, ___ Mich App ___; ___ NW2d ___ (2022) (Docket No.
350885), slip op at 8, citing MCL 600.605. By virtue of MCL 600.8301(1), the district courts
possess “exclusive jurisdiction in civil actions when the amount in controversy does not exceed
$25,000.00.” Accordingly, if the amount in controversy in this case did not exceed $25,000, the
trial court was required to dismiss the complaint and was not permitted to render a determination
on the merits.

        Plaintiffs’ complaint alleged that “[t]he amount in controversy exceeds the District Court
jurisdiction limit of $25,000[,]” but defendant’s answer stated that “Defendant neither admits nor
denies the amount in controversy exceeds the jurisdiction of the District Court and leaves the
Plaintiff’s [sic] to their proofs.” Generally, “the pleadings determine the amount in controversy
for purposes of the court’s subject-matter jurisdiction.” Hodge v State Farm Mut Auto Ins Co, 499
Mich 211, 213; 884 NW2d 238 (2016). Therefore, “absent a finding of bad faith,” subject-matter
jurisdiction is “determined based on the amount alleged in the pleadings.” Id. at 221-222. But in
moving for summary disposition, defendant stated at the outset of its motion that relief under MCR
2.116(C)(4) should be granted because “the damages do not exceed $25,000.00.” And in the brief
in support of the motion, defendant argued that the bulk of the damages, i.e., $25,137, “is the price
to purchase the vehicle at the end of the lease which is an option at the Plaintiff’s discretion[,]” but
“[t]he Plaintiff has not exercised the option nor has the Plaintiff legally bound himself to purchase
the car[,]” so that component to damages is purely illusory. Defendant’s brief closed by asserting
“[t]hat this complaint does not exceed $25,000 and therefore [the case is] not appropriate in this
court which requires $25,000 in damages[.]” In other words, defendant plainly presented a direct

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challenge to the trial court’s subject-matter jurisdiction, strongly suggesting that the complaint was
filed in bad faith in circuit court, rather than in district court. The trial court, therefore, was bound
to address that threshold challenge to its subject-matter jurisdiction under MCR 2.116(C)(4) before
resolving the merits of the dispute. In doing so, the trial court must consider documentary evidence
beyond the pleadings to determine whether the amount in controversy could exceed $25,000. See
Meisner Law Group, 321 Mich App at 717-718. We express no opinion at this time, and none
should be implied, about the factual merits of defendant’s motion for summary disposition under
MCR 2.116(C)(4). With these directions, we remand the case for consideration of that threshold
issue as a necessary prelude to any decision on the merits.

        Reversed and remanded for proceedings consistent with this opinion. We do not retain
jurisdiction.

                                                                /s/ Amy Ronayne Krause
                                                                /s/ Michael J. Kelly
                                                                /s/ Christopher P. Yates

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