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A Better Partnership

April 2014

Apr 2014
April 18, 2014

COA holds that breach-of-trust claims, regardless of how they are styled, are barred by the limitations period applicable to breach-of-trust claims

In Ducharme v Ducharme, the Michigan Court of Appeals held that breach-of-trust claims styled as tort claims are barred by one-year statute of limitations applicable to breach-of-trust claims. Further, a beneficiary’s letter questioning the trustee’s annual report may be a basis for showing the beneficiary had notice of potential claims.

Apr 2014
April 17, 2014

MSC holds that a claim for breach of an indemnity provision of a contract accrues separately from a claim for breach of the underlying contract

In Miller-Davis Co. v. Aherns Construction, Inc., the Michigan Supreme Court found that a general contractor's contractual indemnity claim against a subcontractor was not time barred even though the subcontractor's faulty construction took place more than six years before the contractor filed its suit.  The Court concluded that even though the contractor's claim that the faulty construction itself breached the parties' contract was barred by the applicable six year limitations period, the contractor's claim that subcontractor had breached the indemnity provisions of that contract was an independent claim that accrued separately.  Specifically, the Court held that the indemnity claim necessarily accrued after the subcontractor's breach of performing work to applicable specifications.  Indeed, the Court concluded that there could not have been a claim by the owner against the general contractor that would have triggered the subcontractor's indemnity obligation until the non-conforming work was discovered in February 2003, only about two years before the suit was filed.  Thus, the breach of the indemnity obligation was timely.  Additionally, based upon evidence that the general contractor had agreed with the owner to perform corrective work, the Court concluded that the owner had made a claim against the general contractor which triggered the subcontractor's indemnity obligations under the contract.  Finally, the Court concluded that the general contractor's indemnity claim did not need to establish that the nonconforming work caused the owner's moisture problems.  Instead, the general contractor merely needed to prove that incurred losses because of the subcontractor's failure to indemnify for the corrective work.   

Apr 2014
April 16, 2014

COA finds workers’ compensation hearings must be held in same locality as injury under plain language of statute

In Younkin v. Zimmer, the Court of Appeals upheld the trial court’s writ of mandamus ordering the Michigan Administrative Hearing System and Michigan Department of Licensing and Regulatory Affairs (LARA) to hold workers’ compensation hearings in the locality in which the injury occurred.  The court determined that the plain language of MCL 418.851 limited the geographic area in which the agencies could hold hearings.

Apr 2014
April 16, 2014

Individual Plaintiff requesting child support did not need to personally attend hearing for entry of a default judgment

In Macomb County v. Anderson, the Court of Appeals held that the mother of a minor child, who was seeking child support for that child, did not need to personally appear at a hearing for the entry of a default judgment for support against the alleged father.  In doing so, the Court of Appeals reversed the trial court's denial of a motion for default judgment and subsequent denial of a motion for reconsideration.  The Court of Appeals determined that there was nothing in the statute that required the custodial parent's presence at such a hearing and that the statute allowed the prosecuting attorney to act the attorney for the petitioner in support actions.   The Court reasoned that requiring the presence of the custodial parent would undermine the ability of the state to represent the public interest and seek support, even where the custodial parent was uncooperative.  Further, because the father had not responded to a verified complaint there were no issues, such as custody, in dispute where the custodial parent's presence would be required to resolve.       

Apr 2014
April 16, 2014

COA reverses school truancy adjudication finding that there was insufficient evidence that absences from school due to fear of bullying and related illnesses were "willful"

In the case of People v. Napieraj, the trial court adopted a Family Division referee's decision that the a student was guilty of truancy where that student had been absent from school without a doctor's note, even though the student's mother had kept him home because of the student's fear of bullying and related physical symptoms, such as vomiting.  The Court of Appeals reversed this decision and remanded the case for dismissal.  The Court noted that, under the applicable truancy statute, the absences needed to be "willful" and that here, as the student was subject to bullying and, sometimes would be physically ill in the mornings because of the fear of bullying, the mother exercised reasonable parental discretion in keeping the child home and that those absences were not "willful."  Additionally, the Court of Appeals specifically rejected the referee's position that any absence without a doctor's note, is truancy.  

Apr 2014
April 12, 2014

COA holds that life tenants can claim statutory exemption from local school operating tax

Believe it or not, there is still such a thing as a life tenancy, and it can qualify as a principle residence under the General Property Tax Act.  In Flowers v Township of Bedford, the Court of Appeals held that a life tenant is an “owner” of property under MCL 211.7dd(a) and, therefore, qualifies for the principle residence exemption under MCL 211.7cc.

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