Public workers prohibited from payroll PAC contributions

A bill to prohibit public employees from making payroll contributions to Political Action Committees landed on Gov. Rick Snyder’s desk, and he signed it yesterday.

Last year, the Michigan Supreme Court held in Michigan Education Ass’n v. Secretary of State that administration of payroll deductions for political contributions is prohibited by Section 57 of the Michigan Campaign Finance Act.

The legislature pounced on it, and passed House Bill 5085 and House Bill 5086, now Public Acts 30 and 31 of 2012.

Gov. Snyder also signed bills that eliminate 36 trial court judgeships, a move that will save an estimated $6 million annually.

Clearing the air on medical marijuana

It’s been a frequent complaint from lawmakers and law enforcement officers: Michigan’s Medical Marihuana Act, approved by voters in 2008, was so vague that it’s difficult for police officers and prosecutors to know exactly who is complying with the law, and who is taking advantage of what they think is a step toward legalizing marijuana.

The Michigan House Judiciary will take up a package of bills tomorrow to address some of the areas where the law could be a little clearer:

House Bill 4834 would require a photo identification on medical marijuana registration cards.

House Bill 4851 would define a patient-physician relationship in the context of medical marijuana use.

House Bill 4853 would enhance sentencing guidelines for medical marijuana providers who sell or furnish marijuana to unregistered people.

House Bill 4856 would allow for the transport of medical marijuana in a car.

The committee will meet Thursday at 10 a.m. in the House office building. The meeting will also be webcast live on House TV.

Bad-faith attorney fee rule: Bad news for insurance plaintiff

When fire destroyed Sherrill Travier’s Lincoln Park home, she filed a timely proof of loss with Auto Club, her homeowners’ insurer.

But shortly after the fire, the police visited the scene, took a whiff and thought they smelled arson. Unsurprisingly, the months crept by with no check from Auto Club.

Insurance investigations take time.

Travier lost patience and hired a lawyer, who sent Auto Club a demand letter.

Auto Club stonewalled. Travier sued. But before serving the complaint, seven months after the blaze, Travier’s attorney made several more unsuccessful payment demands.

“Remarkably,” said the Michigan Court of Appeals in Travier v. Auto Club Group Ins. Co., “Auto Club neither admitted nor denied Travier’s breach of contract averments ‘for lack of sufficient knowledge or information and [left] plaintiff to her proofs.'” That’s an interesting but valid way to deny the allegations under MCR 2.111(C)(3).

About a month later, Travier beefed up her claim that Auto Club was acting in bad faith. She alleged that Auto Club told her she would never see a dime unless she dropped her suit.

Three months later, Auto Club did an about-face, issued full payment for the actual cash value of Travier’s home and threw in the penalty interest.

Auto Club sought dismissal of Travier’s breach-of-contract and bad-faith claims. From the COA’s opinion:

Travier responded with a cross-motion for summary disposition contending that Auto Club had breached the insurance contract by failing to pay her claim within 30 days after its receipt of her proof of loss, and “that a nationally-accepted exception to the ‘American Rule’ authorizes attorney fees when a defendant, including an insurer, acts with bad faith before or during litigation.”

The trial court let the contract claim go forward and the parties settled their differences. But the trial court booted the attorney-fee claim.

The trial court had to, ruled the COA.

Michigan does not recognize an independent tort for bad faith in the handling of an insurance claim. Roberts v Auto-Owners Ins Co, 422 Mich 594, 608; 374 NW2d 905 (1985). On this basis, we must reject Travier’s argument that Auto Club’s allegedly dilatory handling of her claim entitles her to attorney fees.

Hey, wait, Travier argued on appeal, take a look at West Virginia. There, policyholders who have to sue insurance companies to get what they paid for — coverage for a loss — can collect attorney fees.

How true and how aggravating that it’s not that way in Michigan, said the COA.

While we sympathize with Travier’s frustration that adjustment of her claim consumed almost a full year, this Court has unequivocally rejected her attorney fee argument. In Burnside v State Farm Fire & Cas Co, 208 Mich App 422, 424; 528 NW2d 749 (1995), we specifically held that “the American rule precludes the recovery of attorney fees incurred as the result of an insurer’s bad-faith refusal to pay a claim.” …

Travier’s public policy arguments in favor of an exception to the American rule “have already been addressed by the Legislature by the enactment of the [Uniform Trade Practices Act, MCL 500.2001 et seq].”

Michigan’s Legislature is often accused of enacting solutions to problems that not everyone agrees actually exist.

Travier’s case illustrates a real problem. Anyone willing to bet on a legislative solution?

UPDATE (3/1/12): AAA’s attorney, James Gross, responded to this blog post with the following:

I represented the Auto Club on appeal in the Travier case, which was the subject of your recent blog, \Bad-faith attorney fee rule: Bad news for insurance plaintiff\.  I am writing in order to correct some egregious factual inaccuracies and omissions in the opinion and, therefore, in your blog account.

In more than 30 years of practice, this is not the first factually skewed opinion I’ve seen from the Court of Appeals.  I view such opinions as unfortunate, but probably unavoidable.  However, in light of your republication of the Travier factual account to your readership, I feel compelled to set the record straight.

First, the assertion that \the months crept by with no check from Auto Club\ is false.  In fact, on September 24, 2009 — one month after Plaintiff submitted her proof of loss — Auto Club issued a check for more than $13,000 for Plaintiff’s living accommodations.  Between then and the end of November, Auto Club paid an additional $54,000 on the claim.

Second, Plaintiff did not hire her attorney because she \lost patience\.  Although the record does not reflect the exact date she actually retained her attorney, it does show that she had him as of August 7, 2009, two weeks before she submitted her claim, while she was still being interviewed by the police in connection with the fire.

Third, ACIA did not tell Plaintiff \she would never see a dime unless she dropped her suit\.  Actually, by the time Plaintiff amended her Complaint to allege bad faith, Auto Club had already paid more than 670,000 dimes.

Fourth, although it triggered the amendment of the Complaint, the basis for the bad faith claim was not the attempt to have the suit dismissed.  Rather, it was the absence of a response from an attorney in Auto Club’s Legal Department — who was not adjusting the claim (which was not formally in suit) and who had, in fact, directed that it be paid — to the demand letters from Plaintiff’s attorney.  At no time did Plaintiff’s attorney attempt to contact the claims representative who was adjusting the claim, either personally or through Plaintiff’s public adjuster (who was in frequent contact with the claims representative).  Consequently, no sense of urgency or even impatience for payment was ever communicated to the claims representative prior to the suit being served.  Even so, Auto Club paid several thousand dollars in penalty interest for the delay.

Finally, your conclusion that this case \illustrates a real problem\ is accurate but misdirected.  As demonstrated by the foregoing — which is fully supported by the record  — the Court of Appeals’ opinion is long on attitude but woefully short on factual accuracy.  You cannot be faulted too severely for relying on the opinion to accurately reflect the case.  However, let this episode be a cautionary tale.  Before republishing an opinion’s factual account in the context of advocating \reforms\, you should pick up the phone and do a modicum of fact checking with the attorneys.

Thank you for your attention to this matter.

NYT details how police get innocent people to confess

In The New York Times, David K. Shipler wrote an eye-opening column caled “Why Do Innocent People Confess?” detailing interrogation procedures and tactics, ethical and otherwise, that lead people to confess to crimes they didn’t commit.

One of the anecdotes had police helping a 16-year old suspect change his story to fit circumstantial evidence they had regarding a murder after his version, which he was making up, didn’t fit.

They wanted a diagram of the crime scene, he later told his court-appointed lawyer, Richard Foxall, but whatever he drew was so inaccurate that the police never produced it. When he described escaping in one direction after the killing, they corrected him, because they knew from witnesses that the shooter had gone the opposite way. When he didn’t mention an alley nearby, they told him about it, and he incorporated it into his statement. “Now we’re getting somewhere,” said one officer, as Felix recalled to his lawyer.

So, they demanded, where was the gun? Felix denied having a gun. “That’s when they really got out of control and started yelling at him,” Mr. Foxall said. “He started to feel personally threatened.” Slyly, he made up something demonstrably untrue: that he had left the gun with his grandfather. “I thought this was brilliant,” his lawyer said, because it discredited the tale. “He doesn’t have a grandfather. Both grandfathers are dead.”

Once the police had badgered a rough murder confession from Felix, they taped it.

Charges against him were eventually dismissed when he had an airtight alibi: at the time of the murder, he was in a juvenile detention facility. The situation led to the Oakland (Ca.) police changing its interrogation taping policy so that all of the questioning is recorded, rather than just the confession.

The piece is an adaptation taken from Shipler’s new book “Rights at Risk: The Limits of Liberty in Modern America.”

COA reduction: Why not sooner?

Two days ago, we posted news of the Court of Appeals reduction from 28 judges to 24. In the post, I was critical of the timetable, of which there really isn’t one. The four judges who will be removed will essentially get to choose who they are and when they leave, beholden only to the 70-year-old limitation.

So if the goal of this reduction is to lower the budget for the Court of Appeals by four judgeships and staff, it’s not happening in any defined future.

This morning, SBM Blog, the State Bar’s blog, asked the question “Why not pull the plug right away?” and offered three reasons:

  1. Downsizing judgeships without degrading services requires thoughtful planning, good management — and time. The phased-in eliminations allow for an orderly, workable transition.
  2. The judges in courts identified as having excess judgeships will not be idle. The workload analysis identified 45 excess judgeships, but also found that there was a need for 35 new judgeships in other jurisdictions.  At the recommendation of the Supreme Court, the Legislature has enacted legislation phasing out the excess judgeship, but has not created any new judgeships. Michigan’s constitution wisely provides for “one court of justice” administered by the Supreme Court, which means that the excess capacity available through the phased-in eliminations can be used to address the need for judicial services in the “under-judged” jurisdictions.
  3. To ensure balance of powers, the Michigan Constitution protects the seats of judges for the duration of their terms.

The post refers, I think, to all judicial reductions. While I find it strange that some of the local courts are being consolidated immediately but others three years from now,1 at least those are defined times for the courts to be consolidated. The Court of Appeals has no timeline for its reduction. And that’s where I respectfully disagree.

1  Some of these changes happened after the original plan was made, protecting some cities’ judgeships from the chopping block.

Only one of these bullets answers the post’s question, and only partially at that. First, it’s not really a phased-in reduction.  A phased-in reduction would be one in which each judgeship and staff reduction takes place at staggered times, but by a timetable. Under this bill, that doesn’t necessarily happen. If four judges (one from each district) decide not to run at the same time or choose to retire at the end of the year, the reduction will happen at the same time. What are the chances of four judges stepping down at the same time? Probably slim, but it’s possible.

Also, as I wrote on Wednesday, all judges can continue to seek re-election until they turn 70. So if judges run and lose, the judgeship isn’t eliminated until the successor quits/retires. And if he loses an election … it could take more than 10 years for the full plan to run its course.

Second, while the “extra” judges certainly are going to be hearing cases, the reason the reduction was needed wasn’t simply because of budgetary reasons. It was because the Judicial Crossroads Task Force showed that filings dropped from 10,951 in 1989 to 6,177 in 2010. Part of that decrease may be attributable to a change in how files were counted (see the footnote on page 67), but it’s still a significant decrease. In fact, from filings dropped almost 25 percent from 2006 to 2010. In other words, the number of filings doesn’t justify the number of Court of Appeals judgeships.

Finally, as to the constitutional argument, that certainly provides a reason to allow four judges to finish their terms, but this reduction plan goes beyond that. It doesn’t end the judgeships of the next judge in each district whose term ends. It allows each judge to serve until they choose not to or the term that ends after they are 70.

SORNA became retroactive on August 1, 2008, 6th Cir. says

In U.S. v. Stevenson, two sex offenders convicted under state law were indicted under the federal Sex Offender Registration and Notification Act (SORNA) when they left Michigan without updating their registrations. They argued it couldn’t be applied retroactively to them because they were convicted of their crimes prior to SORNA’s enactment in 2006. The U.S. District Court (E.D. Michigan) agreed, finding that an Attorney General Interim Rule that made the SORNA requirements retroactive was invalid under U.S. v Cain.

The 6th U.S. Circuit Court of Appeals reversed, finding that the timing between the two cases distinguished them.

In Cain, the problem was that the Attorney General didn’t adhere to procedures for making new rules requiring retroactive application of SORNA under the Administrative Procedure Act in May 2007. The APA required a notice and comment period – a period during which Cain committed his alleged SORNA violation. In another decision, U.S. v. Utesch, the 6th said that the proposed rules couldn’t be applied in any event.

But, the Attorney General restarted the process using the proper procedure, finalizing the new guidelines on August 1, 2008. The court, using the same reasoning as in Utesch, determined that is the date SORNA became retroactively applicable.

Having found no compelling argument to the contrary, we hold today what we first concluded in Utesch: SORNA became retroactive to pre-enactment offenders on August 1, 2008. The district court therefore erred in dismissing the indictments of Flowers and Stevenson, who traveled after the SMART guidelines became final.

Michigan Legislature passes Court of Appeals reduction plan

The Michigan Legislature has passed SB 849, which would reduce the number of Court of Appeals judges from 28 to 24. The bill now goes to Gov. Rick Snyder for his signature.

Sounds good, right? I mean, the Judicial Crossroads Task Forceshowed that appeals filings are down so much that the state doesn’t need 28 judges and their staffs. But a review of the bill shows that the court might remain in its current bloated state for some time.

In its current state, there is no set timetable for the reduction to happen. The bill states that one judgeship in each of the state’s four districts will be eliminated if it becomes vacated. So really, it’s not even the next four judgeships to become vacated. Each district can only lose one, so if two are vacated, the seat with the shortest remaining term is the one that becomes eliminated.

If none are vacated via retirement, resignation, removal or death (unless there’s a fifth method to vacate a seat during a term), the seats can be eliminated if a sitting judge chooses not to run for re-election. Of course, if one runs and is defeated, under this bill, it wouldn’t trigger elimination of the seat (Not that it should, necessarily, as it would certainly stifle anyone’s aspirations to challenge a sitting judge. But it certainly could kick the proverbial can down the road even further.)There’s even a clause that protects the seat of Judge Amy Ronayne Krause, who was appointed by former Governor Jennifer Granholm last November and has yet to run for election. 

Michigan’s going to get a smaller judiciary eventually, just not as soon as you might have thought.

Frozen embryo could be hot potato on remand

When Jude and Jayane Stratford were divorced in 2008, they thought they had resolved all their issues, though they did go back to court in 2009 to finalize who would get the dog.

But a couple of years later, they realized they had forgotten about something — their leftover frozen embryo at a fertility clinic.

Jude filed a motion, in which he told the court that through a mutual mistake, the parties failed to disclose the embryo’s existence. He wanted to donate the embryo to the clinic so that some other couple could use it. Jayane wanted the donation to be for medical research only.

Judge Elwood Brown of the St. Clair County Circuit Court found that Jude had the “superior interest” in the embryo. Brown’s post-judgment modification order stated

“Plaintiff [Jude Stratford] may provide for the embryo to be donated anonymously by the fertility clinic for the purpose of adoption by another willing couple.

Jayane appealed.

The trial court’s order has several problems, the Michigan Court of Appeals ruled in Stratford v. Stratford. (Lawyers Weekly No. 08-77713 – 5 pages) (unpublished per curiam).

First, the order is too vague to be enforced.

The court’s order states, “That the plaintiff may provide for the embryo to be donated anonymously by the fertility clinic for the purpose of adoption by another willing couple.”

We conclude that the use of the permissive term “may” — as opposed to the mandatory term “shall” — renders the order inoperative. The court’s written opinion suggests that the court intended to resolve the dispute by granting plaintiff’s request to donate the embryo to the fertility clinic.

Nonetheless, the order neither grants nor denies the request. Rather, the order permits plaintiff to decide when and whether to donate the embryo.

Second, the order imposes obligations on a third party, the fertility clinic, “that the clinic may be unwilling to accept or unable to perform.” The COA noted that the clinic may not be able to make the embryo available for adoption, and might not be able or willing to accept the apparent restriction that only a couple, rather than an individual, can adopt the embroyo.

And who will pay the costs of keeping the embryo frozen until it is adopted, the COA wondered. The order doesn’t say. And what if Jude changes his mind — that could happen, the appeals court said, citing a law review article and several studies that documented changes of heart concerning the disposition of frozen embryos.

There are too many loose ends, the COA concluded.

And here’s a few other things to think about on remand, said the appeals court. We’re not sure whether the trial court could even modify the divorce judgment

Neither the motion nor the answer address the authority upon which the court was permitted to modify a final judgment based on mutual mistake more than two years after the judgment was final.

Beyond that, once the court decided who would get the dog, there was nothing left in the order requiring the court’s intervention, said the COA.

The COA ruled that the status quo should be preserved.

The frozen embryo will likely be a hot topic for the court, the parties, and the fertility clinic on remand.

Don’t give ’em any ideas

In Wisconsin, Gov. Scott Walker has made no bones about his feelings for workers, particularly those who belong to the unions representing public employees. There’s little doubt that Walker will have to do any soul-searching before signing a newly passed bill that ends punitive and compensatory damages in workplace discrimination cases.

At the same time, Michigan’s Legislature has had no trouble supporting bills that also have the potential to hit workers pretty hard. Notably, Michigan lawmakers last year reformed the state’s worker compensation system in a way that could drastically limit injured worker benefits. And this year, the legislature has been focused on bills that could strike a blow to unions.

The conservative Mackinac Center for Public Policy noted late last year that the pent-up demand for labor and employment reforms is still strong in the Legislature, and predicted that there is more to come this year.

So I wonder — how long will it take for this idea to blow across Lake Michigan and all the way into Lansing? We’ll see.

COA: $1.1M home must go

The Michigan Court of Appeals has ordered the complete or partial destruction of a $1.1 million home in Macomb County because the owners built it too close to their property lines.

The home owners, Simon and Saca Palushaj have been locked in an eight-year dispute with Gerald and Aileen Thom. The Thoms are the next-door neighbors who are insisting that deed restrictions in Washington Township’s Lakewood Hills Subdivision be enforced.

The restrictions at issue require homes to be 100 feet apart and at least 40 feet from the side lot line. The Palushaj’s home is 80 feet from the Thom’s and 28 feet from the side lot line.

When the Palushajs began construction, the Thoms expressed concerns about deed restriction violations. They were concerned enough that, in 2004, they tried to enjoin construction. The trial court refused to grant an injunction, opining that the deed restrictions were either unenforceable or inapplicable. The court apparently questioned the Thoms’ motives, offering “unclean hands” as another reason to deny them relief.

But the court also cautioned the Palushajs to proceed at their own risk. Proceed they did, building a 9,000 square foot home, complete with specialized construction to aid one of their children who has cerebral palsy.

The Thoms proceeded as well, taking an appeal to the COA. In 2007, the appeals court ruled that the restrictions were enforceable. The panel handed Judge James Biernat of the Macomb County Circuit Court the unenviable task of fashioning a remedy.

On remand, the Thoms pressed for demolition of the home, or at least enough of it to eliminate the deed restriction violation.

Biernat said there were some equities to balance. After holding a hearing, he visited the parties’ homes. Biernat apparently wasn’t impressed with the Thoms’ claims that they were being “crowded in” by the Palushajs’ home. The Palushajs, on the other hand, would be economically crippled if ordered to raze the home.

Biernat ordered the Palushajs to pay the Thoms $183,000 in costs and attorney fees, and to maintain landscaping that limits the view between the two properties.

The Thoms went back to the COA and argued Biernat lacked the discretion to balance the equities and to order a remedy that didn’t actually enforce the deed restrictions.

The COA agreed. The appeals panel noted that when the case was remanded to Biernat:

[T]he burden [was] on the trial court “for a determination of the appropriate remedy.” Accordingly, the trial court must fashion a remedy consistent with this opinion and consistent with the controlling opinion of [Webb v Smith (Aft Sec Rem), 224 Mich App 203; 568 NW2d 378 (1997)]. Thoms v Palushaj, unpublished opinion per curiam of the Court of Appeals, issued August 23, 2007 (Docket No. 286074)[.]

In Webb, a case almost factually identical to the Thom-Palushaj dispute, the COA “noted that the amount of damages the defendants would incur if an injunction was issued was wholly immaterial to the process of determining a remedy.” The Webb court correctly upheld the trial court’s decision to refrain from balancing the equities.

So, the Thoms’ remedy is exactly what they asked for, ruled the COA. Along with the ruling, there was an undercurrent of “can’t we all just get along?”

[W]e vacate the trial court’s order and remand with instructions to enter an order requiring defendants to bring their home into compliance with the applicable deed restrictions. …

While it appears from the record that plaintiffs are unlikely to reach a compromise with defendants that will allow defendants to maintain their home as it currently exists, we note that such a compromise would perhaps best serve the interests of each of the parties.

The case is Thom, et al. v. Palushaj, et al.