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A Better Partnership

August 2014

Aug 2014
August 29, 2014

COA clarifies procedure for changing child custody due to military service

Under Michigan law, courts are prohibited from filing a motion to change child custody "during the time a parent is in active military duty" unless there is clear and convincing evidence that a change is in the child's best interest. MCL 722.27(1)(c). In Kubicki v. Sharpe, No. 317614, the Court of Appeals clarified that a court is free to make a change if the request is filed before active military duty begins. But the court must consider the child's wishes according to MCL 722.31(4).

Aug 2014
August 28, 2014

COA holds that Cadillac's mayor cannot independently and finally fire a civil service commissioner under MCL 38.504

In Mayor of Cadillac v. Blackburn, No. 312803, the Michigan Court of Appeals held that: (1) circuit courts have original jurisdiction over disputed mayoral removals of civil services commissioners; and (2) the circuit court’s involvement in the process does not run afoul of the separation of powers in Michigan’s Constitution.

Aug 2014
August 28, 2014

COA vacates its earlier holding that voluntary mergers must be recorded in the chain of title to comply with the foreclosure by advertisement statute

In Federal Home Loan Mortgage Association v. Kelley, No. 315082, the Court of Appeals vacated its June 24, 2014 opinion and on reconsideration issued a new opinion that reached the same result but without holding that CitiMortgage, Freddie Mac's predecessor in interest, had violated the foreclosure-by-advertisement statute.  That initial holding relied in part on a theory that the property does not succeed in a merger "by operation of law."  The court eliminated that part of its opinion, and its merger property-succession theory,concluding that it need not address the validity of a foreclosure sale under the recording act where defendants failed to show prejudice.  As such, the Court reversed the circuit court’s order and remanded for reinstatement of the district court’s order terminating defendants’ possession of the residential property foreclosed upon.  Click here to see our prior blog post on the initial opinion.

Disclaimer:  Warner Norcross & Judd filed an amicus brief for the Michigan Bankers Association on reconsideration, requesting the relief granted in this recent order.

Aug 2014
August 27, 2014

COA concludes that defendant owed a duty to protect plaintiff from ice-covered parking lot where crossing that lot was the only way for plaintiff to reach her car

In Attala v. Orcutt, No. 315630, plaintiff was seeking to recover for injuries suffered when she fell crossing the completely ice-covered parking lot of her apartment building to reach her vehicle.  The Court of Appeals affirmed the trial court's conclusion that the open and obvious doctrine did not preempt the landlords' duty to protect plaintiff from this hazard.  Specifically, the Court of Appeals noted that, under Michigan law, the landowner still retains a duty to protect against a hazard that is either effectively unavoidable, or that poses a substantial risk of serious injury or death.  Here, the Court concluded that the ice-covered lot was effectively unavoidable, because the plaintiff had no choice but to walk across the lot to reach her car, which was necessary to get to her class and turn in a required paper.  Judge Riordan disagreed, filing a dissent, arguing that plaintiff still had a choice about whether to venture onto the ice-covered surface, and that there was not a sufficient factual basis to support the majority's conclusion that plaintiff was compelled by the circumstances to walk onto the parking lot.  

Aug 2014
August 26, 2014

COA holds that companies can be liable for unpaid taxes of a company they purchase

In P.J. Hospitality, Inc. v. Department of Treasury, No. 314302, the Michigan Court of Appeals held that a purchaser of a business was liable for the target's unpaid Michigan taxes under MCL 205.27a(1) when it did not escrow funds in conjunction with the purchase. Furthermore, the tax liability is not limited to the fair market value of the purchased business when the purchaser offers no evidence of the fair market value. Finally, for proceeds from the sale to be exempt from collection for unpaid taxes, the proceeds must be applied to a superior security interest; the mere existence of a superior interest is not enough.

Aug 2014
August 21, 2014

COA rejects constitutional challenge to the transfer of the Court of Claims jurisdiction from the Ingham County Circuit Court to the Court of Appeals

The Court of Claims hears certain claims brought against the State.  In 2013, the Michigan Legislature transferred the jurisdiction of that Court from the Ingham County Circuit Court to the Court of Appeals.  In Okrie v State of Michigan, No. 913550, the Court of Appeals considered the original action petition challenging the constitutionality of that statute.  Although the Court of Appeals raised questions about the wisdom of this transfer of jurisdiction, it ultimately concluded that this facial challenge to the statute must fail because the Court of Claims is a legislatively created court, and assigning the Court of Claims cases to Court of Appeals judges does not require those judges to hold incompatible offices, and such judges are capable of being impartial decision makers even though other judges from the Court of Appeals would conduct the direct appellate review of Court of Claims decisions.

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