COA concludes that contractual exclusion in standard commercial general liability insurance policies only excludes the assumption of the liability of a third party

In Travelers Property Casualty Company of American v Peaker Services, Inc., No. 315070, the Court of Appeals addressed the scope of an exclusion found in a standard commercial general liability insurance policy.  This exclusion barred coverage for damages the insured must pay "by reason of the assumption of liability in a contract."  The insurance company argued that this exclusion applied to a claim against an insured for a breach of contract, resulting from machinery that had been improperly calibrated by the insured, causing property damage to a third party.  The insurer contended that, but virtue of the warranties that had allegedly been breached, the insured had contractually assumed its own liability and the exclusion applied.  The Court of Appeals disagreed, finding that the definition of "assumption" as well as the bulk of persuasive authority from other courts all weighed in favor of the conclusion that this exclusion is only triggered by the insured's assumption of the legal obligations or responsibilities of another party.  Thus, because the insured did not contractually assume the liabilities of another party, the exclusion did not apply.  Read More

MSC holds that there is no right to a jury trial in shareholder oppression cases

In Madugula v Taub, No 146298, the Michigan Supreme Court addressed the issue of whether there is a right to a jury trial for shareholder oppression claims brought under MCL 450.1489 (“§ 489”) of the Business Corporation Act. Ultimately, the court held that because a shareholder oppression claim is equitable in nature, there is no statutory or constitutional right to a jury trial.  Instead, it must be heard by a court of equity. Accordingly, the Michigan Supreme Court reversed the Court of Appeals’ decision and the trial court’s judgment in favor of Madugula and remanded the case for further proceedings. Read More

MSC finds that the Michigan Business Tax Act did not repeal the Multistate Tax Compact

In International Business Machines Corp v Department of Treasury, No. 146440, the Michigan Supreme Court held that the Michigan Business Tax Act (the “BTA”), MCL 208.1101 et seq., did not repeal the Multistate Tax Compact (the “Compact”), MCL 205.581 et seq.  The Compact, enacted in 1970, was designed to facilitate equitable taxation of multi-state tax payers.  It provides a three-factor apportionment formula that taxpayers may use in place of Michigan’s other apportionment methods.  IBM applied the Compact’s apportionment method and claimed a $5,955,218 tax refund for 2008.  The Department of Treasury ruled that the BTA, enacted in 2008 (repealed in 2012), governed IBM’s income apportionment and allowed for only a $1,253,609 tax refund—a difference of $4.7 million.  The Court of Claims granted summary disposition to the Department and the Court of Appeals affirmed.   Read More

Fifth Amendment and MCL 15.393 do not preclude introduction of police officers’ false statements in subsequent prosecution for obstruction of justice

In People v. Hughes, People v. Harris, and People v. Little, Nos. 316072, 317158, and 317272, respectively, the Michigan Court of Appeals reversed and remanded for reinstatement of obstruction of justice charges against all three defendants—police officers who made false statements during an internal investigation.  The Michigan Court of Appeals concluded that the defendants’ statements, made during the internal investigation and subject to reservation of their Fifth Amendment right to remain silent, could not be used against them in any criminal prosecution for the specific crimes which formed the basis of the disciplinary proceeding.  However, the Fifth Amendment does not preclude use of the statements against the officers in a subsequent collateral prosecution for obstruction of justice.  Further, the Court also concluded that MCL 15.393 precludes the use of a police officer’s truthful “involuntary statement” against that officer in a criminal prosecution.  Here, the officers provided false information during the course of the internal investigation.  Accordingly, MCL 15.393 does not preclude introduction of the false statements.
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COA holds that paternity must be contested and decided by a court for a man to be an “affiliated father” under the Revocation of Paternity Act

In Glaubius v Glaubius, No 318750,  the Michigan Court of Appeals held that categorization as an “affiliated father”  under the Revocation of Paternity Act (RPA) requires that a dispute or question as to a man’s paternity was raised and in fact resolved by a court.  Under the RPA, the classification of a man into one of four “father” categories determines the requirements for revoking his paternity. Read More
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