Court Opinion

ID: 2756885
Source: CourtListenerOpinion
Date Created: 2014-12-03 14:04:06.610831+00
Date Added: 2024-06-11T11:26:53.208321
License: Public Domain

STATE OF MICHIGAN

                           COURT OF APPEALS

LASHAWN D. REDMOND and DESTINEE’S                                UNPUBLISHED
TRANSPORTATION,                                                  December 2, 2014

              Plaintiffs-Appellees,

v                                                                No. 313413
                                                                 Wayne Circuit Court
STATE FARM MUTUAL AUTOMOBILE                                     LC No. 10-011348-AV
INSURANCE COMPANY,

              Defendant-Appellant.

LASHAWN D. REDMOND,

              Plaintiff-Appellant,

DESTINEE’S TRANSPORTATION

              Plaintiff,

v                                                                No. 315416
                                                                 Wayne Circuit Court
STATE FARM MUTUAL AUTOMOBILE                                     LC No. 10-012108-AV
INSURANCE COMPANY,

              Defendant-Appellee.

Before: MURRAY, P.J., and JANSEN and SHAPIRO, JJ.

PER CURIAM.

        These consolidated appeals—arising from the same consolidated matter in the lower
court—are before this Court for consideration as on delayed leave granted. In Docket No.
315416, plaintiff Redmond appeals the circuit court’s May 17, 2012 opinion and order and
argues that the circuit court erred in concluding that the district court lacked subject matter
jurisdiction over her claims because she alleged in her complaint that her damages would not
exceed $25,000 and only requested relief in an amount not to exceed $25,000. We affirm.

                                              -1-
        In Docket No. 313413, defendant appeals the same circuit court opinion and order and
argues that (1) the circuit court erred in determining that the district court had subject matter
jurisdiction over plaintiff Destinee’s Transportation’s claims, (2) improper conduct and
inflammatory arguments made by plaintiffs’ trial counsel denied defendant a fair trial, requiring
reversal of the jury verdict, (3) the circuit court erred in affirming the district court’s award of
attorney fees pursuant to MCL 500.3148(1) because legitimate questions of fact existed
regarding plaintiffs’ claims, and (4) even if awarding attorney fees was appropriate pursuant to
MCL 500.3148(1), the circuit court erred in affirming the fee award because defendant
requested, but was denied, an evidentiary hearing regarding determination of the appropriate
amount of attorney fees to be awarded. We reverse the circuit court’s opinion and order to the
extent that it concluded that the district court had jurisdiction over Destinee’s Transportation’s
claims, and we vacate the district court’s judgment regarding these claims and order regarding
Destinee’s Transportation’s attorney fees because they are void. Because defendant’s remaining
issues are moot, we need not address them.

                           I. FACTS AND PROCEDURAL HISTORY

        This appeal arises out of an automobile accident that occurred on December 4, 2007, in
Redford in which Redmond sustained non-life-threatening injuries. Defendant State Farm
Mutual Automobile Insurance Company initially made payments on Redmond’s submitted
claims for no-fault insurance benefits for replacement services, medical bills, attendant care,
wage loss, and transportation services. However, months later on May 21, 2008, defendant sent
plaintiff Redmond a letter indicating that it was denying her claims.

        Redmond filed suit in the 36th District Court for breach of contract, and plaintiff
Destinee’s Transportation, Redmond’s transportation services provider, also filed suit in the
same court in a separate action.1 Specifically, Redmond alleged that, as a result of the collision,
she had incurred the following: (1) expenses for care, recovery, or rehabilitation, (2) wage loss,
(3) expenses for replacement services and attendant care, and (4) other personal protection
benefits, and Destinee’s Transportation sought compensation for the transportation services it
provided to Redmond. In Redmond’s complaint, she specifically alleged that “[t]he amount in
controversy is within the jurisdiction of this court because Plaintiff claims damages not in excess
of $25,000,” and stated that she sought “damages in whatever amount Plaintiff is found to be
entitled not in excess of [$]25,000, plus interest, costs, and no-fault attorney fees.” These actions
were consolidated for trial.

        Following a jury trial, the jury rendered a verdict in favor of plaintiffs and awarded them
an aggregate amount of $72,543.68, exclusive of statutory interest and attorney fees, surpassing
the $25,000 amount in controversy jurisdictional limit of the district court. Of the aggregate
amount, $63,793 was awarded to plaintiff Redmond for allowable expenses, wage loss, and
replacement services, plus an additional $16,025.36 in interest, and $8,750.68 was awarded to
plaintiff Destinee’s Transportation for transportation costs incurred by plaintiff Redmond, plus
an additional $2,625.20 in interest. Defendant objected to plaintiffs’ proposed judgment on the

1
    36th District Court Docket Nos. 08-146384 and 09-108801.

                                                -2-
jury verdict, arguing that (1) the jury award indicated that the amount in controversy exceeded
the $25,000 jurisdictional limit, (2) the district court lacked the authority to enter an amount
different than the jury award, and (3) the matter should be dismissed with prejudice because the
district court lacked subject matter jurisdiction. The district court acknowledged that it was
without jurisdiction “to enter a judgment in excess of $25,000.00 exclusive of costs, interest, and
attorney fees,” and ordered judgment in favor of Redmond in the amount of $25,000 and
judgment in favor of Destinee’s Transportation in the amount of $8,750.68, plus $2,625.20 in no-
fault interest. Defendant appealed this judgment to the circuit court.2

        In response to a motion filed by plaintiffs pursuant to MCL 500.3148(1), the district court
awarded attorney fees in the aggregate amount of $141,600, which consisted of $113,600 for
Redmond for her attorney (284 hours at $400 per hour) and $28,000 for Destinee’s
Transportation for its attorney (140 hours at $200 per hour). Redmond was also awarded
$2,246.25 in costs, plus the costs of deposing Redmond’s treating physician. Defendant also
appealed this order to the circuit court,3 and defendant’s two appeals were consolidated in the
circuit court.

        The district court dismissed both of defendant’s claims of appeal for failure to pay bond
on appeal and comply with appeal procedures, and the circuit court denied defendant’s motion to
reinstate the appeal. However, defendant then filed applications for leave to appeal to this
Court,4 and this Court peremptorily reversed the district court’s rulings that dismissed
defendant’s claims of appeal in the circuit court because “the district court failed to provide
seven days’ notice as required under MCR 7.101(G)” and, thus, “the circuit court should have
reversed the district court’s dismissals of the appeals.” Redmond v State Farm Mutual Auto
Insurance Co, unpublished order of the Court of Appeals, entered September 27, 2011 (Docket
No. 305336); Redmond v State Farm Mutual Auto Insurance Co, unpublished order of the Court
of Appeals, entered September 27, 2011 (Docket No. 305337). This Court remanded the cases to
the circuit court and ordered that the circuit court reinstate both claims of appeal and proceed to a
resolution on the merits.

         Because defendant’s appeals from the district court were consolidated in the circuit court,
the circuit court issued an opinion and order addressing both appeals, finding that the district
court lacked subject matter jurisdiction over Redmond’s claims, but did have subject matter
jurisdiction over the claims of Destinee’s Transportation. The circuit court found that because
Redmond failed to make a specific demand for damages, rather than a general demand, her claim
was improperly pleaded under MCR 2.111(B)(2). The circuit court went on to conclude that
because the opening statements and closing arguments of Redmond’s attorney clearly expressed
that Redmond was requesting damages far in excess of the $25,000 jurisdictional limit of the
district court, the district court lacked subject matter jurisdiction over Redmond’s action and its
judgment was void.            However, the circuit court concluded that because Destinee’s

2
    Wayne Circuit Court Docket No. 10-011348-AV.
3
    Wayne Circuit Court Docket No. 10-012108-AV.
4
    Docket Nos. 305336 and 305337.

                                                -3-
Transportation’s claims were within the district court’s jurisdictional limit, the district court
could maintain subject matter jurisdiction over that action. Regarding defendant’s substantive
issues involving Destinee’s Transportation that are relevant on appeal, the circuit court found
that the district court did not abuse its discretion by awarding attorney fees to Destinee’s
Transportation’s counsel. The circuit court reversed the district court’s judgment in favor of
Redmond, remanded her case for entry of an order of dismissal, and reversed the award of
attorney fees for her counsel, and the circuit court affirmed the district court judgment with
respect to Destinee’s Transportation and affirmed the award of attorney fees for its counsel.
Defendant filed a motion for rehearing or reconsideration, and plaintiffs filed a motion for
reconsideration or for remand to amend the complaint. These motions were denied, and the
parties sought and were granted leave to appeal to this Court.

                                  II. STANDARD OF REVIEW

        We review questions of law, such as whether the district court has subject matter
jurisdiction on the facts presented in a case, de novo. Moody v Home Owners Insurance
Company, 304 Mich App 415, 426; 849 NW2d 31 (2014).

                                          III. ANALYSIS

        The central issue in both of these cases is whether the district court had subject matter
jurisdiction over the actions. MCL 600.8301(1) provides, “The district court has exclusive
jurisdiction in civil actions when the amount in controversy does not exceed $25,000.00.”
Conversely, 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.” Therefore, circuit courts in Michigan are courts of
general jurisdiction for civil matters, and district courts are courts of exclusive jurisdiction for
civil matters involving an amount in controversy that does not exceed $25,000. “[D]efects in
subject matter jurisdiction cannot be waived and may be raised at any time,” Moody, 304 Mich
App at 439, and “a court must at all times be cognizant of its own jurisdiction and sua sponte
question whether it has jurisdiction over a person or the subject matter of an action,” id. at 440.
Moreover, when a court lacks subject matter jurisdiction, any action other than dismissal is void.
Id.

                                    A. DOCKET NO. 315416

       Redmond argues that the circuit court erred in determining that the district court lacked
subject matter jurisdiction over Redmond’s cause of action because the district court was
required to retain jurisdiction unless there was a legal certainty that the amount in controversy, as
determined by the complaint, exceeded the jurisdictional amount of the district court.

        This Court recently decided the same legal issue regarding a consolidated appeal
involving two cases with nearly identical pertinent facts. In Moody, this Court addressed the
legal issue pertaining to “the jurisdiction of the district court under MCL 600.8301(1) when a
plaintiff presents evidence and argument of damages far in excess of the district court’s $25,000
amount in controversy jurisdictional limit.” Id. at 419. The plaintiffs—Moody and Hodge—

                                                -4-
both brought their actions in district court for first-party no-fault claims and presented proof of
damages that were far in excess of the $25,000 district court subject matter jurisdictional limit.
Id. at 419-426. This Court fully fleshed out the facts of Moody’s case, but provided only a brief
paragraph regarding Hodge. Id. at 425-426. It is clear from the facts, however, that Moody’s
complaint expressly stated that the “ ‘damages do not exceed $25,000.00,’ “ and that Moody
sought “ ‘damages in whatever amount Plaintiff is found to be entitled not in excess of
[$]25,000, plus interest, costs, and no-fault attorney fees.’ “ Id. at 420.

        In interpreting MCL 600.8301(1), this Court rejected the argument that subject matter
jurisdiction is determined by looking only to the allegations in the complaint and the prayer for
relief and held:

                  [T]he plain, ordinary, and legal meaning of “amount in controversy” under
         MCL 600.8301(1) is the amount the parties to a lawsuit dispute, argue about, or
         debate during the litigation. While the amount in controversy in a lawsuit will
         most often be determined by reviewing the amount of damages or injuries a party
         claims in his pleadings, the statute does not explicitly state this. . . . If the
         Legislature had intended to establish that the limits of the district court’s
         jurisdiction were to be determined solely based on the amount demanded in the
         complaint, it could easily have done so, but it did not. Rather, the Legislature
         used the phrase “amount in controversy,” which is the dollar value of the damages
         that are disputed in the lawsuit. Stated otherwise, it is the amount that the parties
         argue about, debate, or controvert. Here, Moody’s pretrial discovery answers, the
         arguments of Moody’s counsel before trial, and the presentation of evidence at
         trial, all showed that the amount in controversy in that case far exceeded the
         $25,000 subject matter jurisdiction of the district court. MCL 600.8301(1).
         Hodge similarly presented evidence of damages far exceeding the $25,000
         subject-matter jurisdiction of the district court.          Without subject matter
         jurisdiction over Moody’s and Hodge’s complaints, the only actions the district
         judges could have properly taken would have been to dismiss the cases, MCR
         2.216(C)(4), or transfer them to the circuit court, MCR 2.227(A)(1). [Moody, 304
         Mich App at 430-431, citing Fox v Univ of Michigan Bd of Regents, 375 Mich
         238, 242; 134 NW2d 146 (1965); Yee v Shiawassee Co Bd of Comm’rs, 251 Mich
         App 379, 399; 651 NW2d 756 (2002).]

This Court went on to reject the appellants’ argument that the district court’s subject matter
jurisdiction can be determined by limiting judgment to the jurisdictional amount, stating that this
position “is contrary to the long-standing rule adopted in Strong[5] of determining the subject-
matter jurisdiction of the court by the amount in controversy before a trial and the determination
of the facts by a judge or jury,” Moody, 304 Mich App at 433, and emphasized this point by
saying “magic words,” id., cannot confer jurisdiction and that the court must make its
“jurisdictional determination before the fact finding of the trial has concluded,” id. at 434

5
    Strong v Daniels, 3 Mich 466 (1855).

                                                 -5-
(emphasis in original). This Court affirmed the circuit court’s ruling that, pursuant to MCL
600.8301(1), the district court lacked jurisdiction with regard to Moody’s and Hodge’s cases. Id.
at 438.

        Similarly, in Redmond’s complaint, she specifically alleged that “[t]he amount in
controversy is within the jurisdiction of this court because Plaintiff claims damages not in excess
of $25,000.00,” and stated that she sought “damages in whatever amount Plaintiff is found to be
entitled not in excess of [$]25,000.00, plus interest, costs, and no-fault attorney fees.” However,
in Redmond’s attorney’s opening statement, he indicated that Redmond sought (1) lost wages for
eight months of work at a job for which she was paid $18 per hour, (2) payment for “nursing-
type care” provided by her mother, (3) payment for household services provided by her mother at
a rate of $20 per day, and (4) payment of medical bills. Further, in explaining the verdict form to
the jury after the close of proofs, Redmond’s attorney discussed the dollar figures on the verdict
form, explaining: (1) $14,000 should be paid for attendant care, (2) Redmond has over $14,000
in medical bills, (3) Redmond has over $39,000 of wage loss damages, and (4) $17,000 is
appropriate for replacement services.6

        In light of these facts, Moody is directly on point, and we are bound by this decision
under the rule of stare decisis. MCR 7.215(C)(2).7 Despite the statements in her complaint
suggesting otherwise, Redmond “plainly claimed damages far in excess of the $25,000 ‘amount
in controversy’ limit of the district court’s subject matter jurisdiction,” Moody, Mich App at 437-
438, and the district court was certainly made aware of this by Redmond’s attorney’s opening
statement, presentation of proofs, and closing argument, id. at 430-431. Therefore, the district
court knew the amount in controversy exceeded its jurisdictional limit before the jury made its
factual findings, as was the case in Moody. Id. Thus, the district court was required to dismiss
Redmond’s complaint or transfer the matter to the circuit court, and its failure to do so renders its
judgments void for want of subject matter jurisdiction. Id. at 431. The circuit court correctly
recognized that Redmond’s attorney’s “opening statement demonstrates a presentation of claims
in excess of the jurisdictional limit” and his “closing argument clearly expressed a request for
damages far in excess of the district court’s jurisdictional limit.”8 In light of Moody, we affirm

6
  In her brief on appeal, Redmond characterizes her several claims for various no-fault benefits
as “alternative claims” and argues that the circuit court erred by concluding that presenting
evidence of these alternative claims of injuries that exceeded $25,000 rendered the district court
without subject matter jurisdiction over the action. However, the claims in Redmond’s
complaint were not pleaded as “alternative claims”; Redmond asserted the various damages she
incurred as a result of the automobile collision and indicated that defendant has or is expected to
refuse to pay these no-fault benefits.
7
  We offer no opinion about the issues raised by our concurring colleague, only to note, as he
did, that the Supreme Court has granted leave in Moody. See Moody v Home Owners Ins Co,
___ Mich ___; 853 NW2d 331 (2014).
8
  Redmond also argues that the circuit court erroneously concluded that the district court lacked
jurisdiction because Redmond improperly pleaded her complaint by being insufficiently definite
in her claim of damages. While the circuit court did, in its analysis of the subject matter

                                                -6-
the circuit court’s opinion and order to the extent that it concluded that the district court lacked
subject matter jurisdiction over Redmond’s cause of action.

                                    B. DOCKET NO. 313413

       Defendant argues that Destinee’s Transportation’s claims are derivative of Redmond’s
and are to be included within the total amount of benefits sought by Redmond against
defendant—and, thus, the total amount in controversy—such that the district court also did not
have subject matter jurisdiction over Destinee’s Transportation’s claims and the entire judgment
was void and should have been set aside by the circuit court.

         The threshold issue in this case is whether the district court had subject matter
jurisdiction over Destinee’s Transportation’s action in light of the fact that the damages alleged
by Destinee’s Transportation alone were far below the $25,000 jurisdictional limit of the district
court. This Court’s decision in Moody involved a third consolidated case—that of Moody’s
providers—which involved the same central legal issue presented here and involved pertinent
facts that are nearly identical to those in this case. In Moody, the providers argued that (1)
because their combined claims did not exceed the $25,000 jurisdictional limit, they should be
permitted to bring a direct claim against the defendant for no-fault benefits and (2) their claims
could “be saved by severing them after the fact of trial and judgment from the extra-
jurisdictional claims of Moody.” Id. at 440. In affirming the circuit court’s ruling that the
district court lacked subject matter jurisdiction, this Court held that there was virtual identity
between the providers’ and Moody’s claims and that the providers’ claims were derivative of
Moody’s, such that consolidation for trial merged the claims for purposes of determining the
amount in controversy and “the consolidated claims are the equivalent of a single plaintiff
asserting multiple claims against a single defendant.” Id. at 443. In reaching this holding, this
Court explained:

               [T]he providers’ claims are dependent on establishing Moody’s claim that
       he suffered “accidental bodily injury arising out of the . . . use of a motor
       vehicle,” MCL 500.3105(1), that they provided “reasonably necessary products,
       services and accommodations for [Moody’s] care, recovery, or rehabilitation,”
       MCL 500.3107(a), and that at the time of the accident, Moody was “domiciled in
       the same household” as his father who was insured by defendant Home Owners,
       MCL 500.3114(1). The providers’ and Moody’s claims with respect to the
       requisites of Home Owners liability are therefore identical. Because there is an
       identity between Moody’s claims and those of the providers and because the
       claims were consolidated for trial, we consider them merged for purposes of
       determining the amount in controversy under MCL 600.8301(1). . . .

jurisdiction issue, assert that Redmond’s claim was improperly pleaded pursuant to MCR
2.111(B)(2), the circuit court’s overall conclusion that the district court lacked subject matter
jurisdiction was based upon its conclusion that the damages requested by Redmond over the
course of the trial—pointing specifically to Redmond’s attorney’s opening statement and closing
argument—exceeded the $25,000 jurisdictional limit, not merely that the claim was improperly
pleaded.

                                                -7-
                                               ***

               Here, there is virtual identity between the providers’ and Moody’s claims,
       and Moody could have brought all the claims in a single case in which a single
       judgment is entered. Indeed, it is Moody’s claim against defendant Home Owners
       that the providers are allowed to assert because the no-fault act provides that
       “benefits are payable to or for the benefit of an injured person,” MCL 500.3112.
       But the providers’ PIP claims actually belong to Moody because the right to bring
       an action for personal protection insurance [PIP] benefits, including claims for
       attendant care services, belongs to the injured party. Thus, the injured party may
       waive by agreement his or her claim against an insurer for no-fault benefits, and a
       service provider is bound by the waiver. If an injured party waives a PIP claim, a
       service provider’s remedy is to seek payment from the injured person. [Id. at 440-
       443 (first set of brackets and second set of ellipsis added, first set of ellipsis and
       remainder of brackets in original, some internal citations and quotation marks
       omitted).]

         Similarly, Destinee’s Transportation, a provider, sued defendant pursuant to MCL
500.3112 for no-fault benefits for the transportation services it rendered for the benefit of
Redmond, the injured person, and this action was consolidated with Redmond’s action in the
district court. Because there is virtual identity between Destinee’s Transportation’s claims and
Redmond’s claims such that they all could have been brought in a single action involving a
single judgment, and because these separately filed actions were consolidated in the district
court, just as in Moody, we likewise conclude that these claims were merged for the purposes of
determining the amount in controversy pursuant to MCL 600.8301(1). Id. Therefore, the entire
judgment—including Destinee’s Transportation’s claims—is void for want of subject matter
jurisdiction because it was clear before the jury made its factual findings that the consolidated
claims exceeded the district court’s $25,000 jurisdictional limit. Id. We reverse the circuit
court’s opinion and order to the extent that it concluded that the district court had subject matter
jurisdiction over Destinee’s Transportation’s claims, and we vacate the district court’s judgment
regarding these claims and order regarding Destinee’s Transportation’s attorney fees because
they are void.

        Because we have concluded that the district court lacked the requisite subject matter
jurisdiction over Destinee’s Transportation’s claims and its judgments regarding these claims are
void, we need not reach defendant’s substantive issues as they are now moot because a judicial
determination regarding these issues would not have any practical legal effect. Id. at 446.
Moreover, because these moot issues are not matters of public significance that are likely to
recur and evade review, we are not compelled to review them. Id.; B P 7 v Bureau of State
Lottery, 231 Mich App 356, 359; 586 NW2d 117 (1998).

       In Docket No. 315416, we affirm the circuit court’s opinion and order to the extent that it
concluded that the district court lacked subject matter jurisdiction over Redmond’s claims. In
Docket No. 313413, we reverse the circuit court’s opinion and order to the extent that it
concluded that the district court had jurisdiction over Destinee’s Transportation’s claims, and we
vacate the district court’s judgment regarding Destinee’s Transportation’s claim and order

                                                -8-
regarding Destinee’s Transportation’s attorney fees because they are void for want of subject
matter jurisdiction.

       No costs to either side. MCR 7.219(A).

                                                         /s/ Christopher M. Murray
                                                         /s/ Kathleen Jansen

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