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A Better Partnership
August 02, 2013

COA bemoans Wayne County record-keeping, clarifies party filing obligations, and grants standing to invalid entity claiming unjust enrichment

Your customers aren’t paying but you aren’t legally incorporated?  No worries.  File a claim for unjust enrichment . . . . just make sure you get a date stamped copy when you do it.  Those are the lessons learned from Bellevue Ventures, Inc. v. Morang-Kelly Investment, Inc.

According to the Michigan Court of Appeals, a party must ensure its pleadings are timely filed with the clerk, but it has no obligation to confirm the materials are filed by the clerk in the register of actions or the physical file.  Nor is a corporation obligated to comply with Michigan laws for incorporation in order to have standing under the equitable theory of unjust enrichment.

Plaintiff entered into a contract with Mr. Awdish, whom it claimed to be defendant's agent, for the sale of equipment to defendant.  After accepting the equipment and paying several invoices, defendant ceased making payments with $95,700 of the contract price unpaid.  The defendant claimed at trial that the equipment was faulty and that defendant was not a party to the contract made by Mr. Awdish.  Because they did not appear in the register of actions or the physical case file, the trial court struck Defendant's counter-complaint, amended answers, and amended affirmative defenses.  It then found in favor of plaintiff on the ground of unjust enrichment.

The Court of Appeals affirmed.  It noted that court rule, MCR 2.107(G), requires a party to confirm its materials have been filed “with” the clerk.  But the rule does not require the party to confirm that the clerk filed the materials or included them in the register of actions.  The trial court therefore erred in granted the motion to strike, but the error was harmless because the court still permitted the defendant to pursue the defenses and counterclaim.
The Court of Appeals went on to reject defendant's contentions that it should have been dismissed from the suit on the grounds that either the entity listed in the invoices was not a valid corporation or Mr. Awdish was not an agent of the defendant.  Because the defendant accepted, used, and continued to use the equipment in question, the defendant would be unjustly enriched if not required to compensate the plaintiff for the benefit it received.  Recovery was therefore appropriate, despite the defendant's assertions.

Finally, defendant argued that the court erred in proceeding as a bench trial when it had made a jury demand.  Though the plaintiff denied it, the register of actions reflected that a jury fee had been paid and a jury demand filed, while no jury demand appeared in the record or was mentioned in the plaintiffs’ filings.  Because of the record-keeping fiascos, and “much to the frustration of [the] Court,” the Court of Appeals had to remand for an evidentiary hearing on whether a jury demand was properly filed.

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