STATE TREASURER V DENNIS GUY ERDMAN
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STATE OF MICHIGAN
COURT OF APPEALS
STATE TREASURER,
UNPUBLISHED
July 9, 2002
Plaintiff-Appellee,
v
No. 227689
Wayne Circuit Court
LC No. 98-822086-CZ
DENNIS GUY ERDMAN,
Defendant-Appellant,
and
DANIEL GIG ERDMAN,
Intervening Defendant-Appellant,
and
FIRST FEDERAL OF MICHIGAN and
GILBERT ERDMAN,
Defendants.
Before: White, P.J., and Murphy and Fitzgerald, JJ.
PER CURIAM.
Defendant appeals as of right from the circuit court’s order granting plaintiff summary
disposition in this action for reimbursement of imprisonment costs under the State Correctional
Facility Reimbursement Act (SCFRA), MCL 800.401 et seq. We reverse.
I
Defendant Dennis Erdman has been incarcerated in state correctional facilities since
November 1989. On July 14, 1998, plaintiff State Treasurer brought suit under the SCFRA
against defendant, defendant’s father, Gilbert Erdman, and First Federal of Michigan, for
reimbursement of $177,560.00, representing defendant’s incarceration costs from November
1989 to July 15, 1998. On that date, the circuit court issued an order to show cause and ex-parte
order appointing a receiver, requiring that defendant show cause by September 4, 1998 why an
order should not be entered appropriating and applying his assets to reimburse the state for his
confinement, and appointing First Federal of Michigan as receiver of “the account(s) of
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Defendant Dennis Guy Erdman pending further order of this Court.” The circuit court ordered
First Federal to “place a hold (freeze) on the account(s) of Defendant Dennis Guy Erdman
pending further order of this Court.” The order also provided that defendant’s father, “Defendant
Gilbert Erdman is prohibited from transferring any assets held on deposit at First Federal of
Michigan in the name of Defendant Dennis Guy Erdman until further order of the Court.”
Defendant Dennis Erdman, proceeding in propria persona in the circuit court, responded
to plaintiff’s motions, and filed affirmative defenses, in which he asserted that the court lacked
jurisdiction over his father, Gilbert Erdman, and over defendant First Federal; that any monies
held by First Federal were in the name of and belonged to Gilbert Erdman; and that the SCFRA
did not apply to savings accounts of family members of a prisoner. Defendant requested that the
court stay proceedings, noting that he was still appealing his state convictions in federal court;
and that the court should grant an evidentiary hearing on the issue of ownership of the bank
accounts. In a brief filed August 31, 1998, defendant added that Gilbert Erdman had deposited
the monies while he (Dennis Erdman) was in prison, and had named him (Dennis Erdman) as
beneficiary of the four accounts. Defendant argued that since Gilbert Erdman had not died, the
monies belonged to Gilbert Erdman, and the SCFRA thus did not apply.
Defendant’s father, Gilbert Erdman, was served but never appeared in the suit, and
plaintiff never sought a default against him.
On September 4, 1998, plaintiff filed its response to defendant’s request for discovery,
response to complaint and affirmative defenses. Plaintiff stated in pertinent part:
1. Upon receipt of Defendant’s pleadings Plaintiff subpoenaed bank records at
issue. The records submitted in response are attached as exhibit 1 . . .
2. Exhibit one establishes that there are four accounts at issue.
3. Account number 349-3-04172-2 is held in the name of Dennis G. Erdman
(Defendant) as beneficiary, with Gilbert Erdman as trustee.
4. Account numbers 349-3-00573-4; 349-3-00574-2; and 349-3-00586-6 are each
held joint[ly] and severally by Dennis G. Erdman (Defendant) and Gilbert
Erdman. Each of these accounts is held under the Social Security Number of
Defendant Dennis G. Erdman.
Plaintiff filed another motion for summary disposition, under MCR 2.116(C)(9),
asserting that “[d]efendant’s only claim is that the funds at issue belong not to him, but to Gilbert
Erdman.” Plaintiff attached an affidavit of defendant’s father, Gilbert Erdman, stating:
Now comes Defendant, Gilbert Erdman, and states that the funds in First Federal
of Michigan, account #349-3-04172-2, are his funds and his alone and that Dennis
Guy Erdman is only a beneficiary of these funds. The other accounts held in First
Federal of Michigan, namely account numbers 349-03-000573-4, 349-03-000574
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2, and 349-03-000586-6, belong to Dennis Guy Erdman and Gilbert Erdman
claims no interest in them.[1]
Defendant Dennis Erdman’s response to plaintiff’s motion and accompanying affidavits
asserted that:
Defendant Gilbert Erdman suffers from “Senile Demensia” [sic] due to his
advanced age and poor health. Defendant Gilbert Erdman’s affidavit is not
knowing, due to his diminished capacity.
This Court should ask Defendant Gilbert Erdman: “Where and whom did you get
the check from for the moneys with regards to account numbers 349-3-00573-4,
349-3-00574-2, and, 349-00586-6? Amber Lawson was the person that had given
Defendant Gilbert Erdman the check for approximately $50,000.00; not
Defendant Dennis Guy Erdman #205858, see attached, Sworn Affidavit of Dennis
Guy Erdm#205858 [sic].
***
. . . Summary disposition is not appropriate. There is a genuine issue of material
facts [sic].
Gilbert Erdman passed away on December 28, 1999. On January 12, 2000, plaintiff filed
a “supplemental pleading in support of plaintiff’s motion for summary disposition,” which noted
Gilbert Erdman’s passing and asserted that defendant was now the sole owner of the bank
accounts.
On January 21, 2000, defendant, still proceeding in propria persona, filed supplemental
affirmative defenses, a memorandum, and an affidavit, asserting that his brother, Daniel Erdman,
was the sole heir to and executor of Gilbert Erdman’s estate, that the court lacked subject matter
jurisdiction, that plaintiff failed to state a claim, that plaintiff lacked the legal capacity to sue
Gilbert Erdman’s estate, and that the court should thus deny plaintiff’s third motion for summary
disposition and issue a scheduling order forthwith. Defendant noted that Gilbert Erdman had
been 82 years old, terminally ill with cancer for a very long time, and on medication, when he
signed the affidavit at plaintiff’s behest.
Without a hearing, the circuit court granted plaintiff’s third motion for summary
disposition.2
1
The affidavit is notarized and dated May 17, 1999.
2
The circuit court’s final opinion and order stating in pertinent part:
Summary Disposition is GRANTED as Defendant Dennis G. Erdman has failed
to show cause why an order should not be entered at this time appropriating and
applying Defendant Dennis G. Erdman’s assets to reimburse the State of
(continued…)
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II
This Court permitted Daniel Erdman, brother of defendant Dennis Erdman, to intervene
in this appeal.3 Daniel Erdman resides in Texas and has proceeded in propria persona. Daniel
(…continued)
Michigan for the cost of Dennis G. Erdman’s confinement in a correctional
facility, and specifically:
1. 90% of Defendant Dennis G. Erdman’s assets be paid to the State of
Michigan as reimbursement for expenses incurred for his incarceration. This
amount is not to exceed the actual costs of incarceration.
2. Any funds currently on deposit in the account(s) currently held in
receivership by First Federal of Michigan or its successor in interest Charter One
Bank F.S.B., including accounts numbered 349-3-00573-4, 349-3-00574-2 and
349-3-00586-6 shall be disbursed as follows:
a. 90% to the “State of Michigan” . . . Attn: SCFRA
b. 10% to Defendant Dennis G. Erdman.
3. All receiverships shall be terminated upon the above disbursements.
4. This case shall be dismissed without prejudice, and without costs to
either party.
3
Daniel Erdman filed a motion to file an amicus curiae brief in this Court. This Court treated it
as a motion to intervene, and granted the motion by order dated January 18, 2001. Daniel
Erdman submitted a sworn affidavit to this Court stating inter alia that:
5. Somehow, the State of Michigan Attorney General had found about [sic] . . .
and, obtained an ex parte court order, freezing the above bank accounts at First
Federal of Michigan, and, by preventing my father from withdrawing his moneys
from the bank.
My father did go to the bank and attempt to withdraw the funds; but, was
prevented from withdrawing the same; pursuant to a ex parte [sic] court
order from the Plaintiff-Appellee. [Emphasis added.]
Also attached to Daniel Erdman’s appellate brief is an affidavit of his wife, Lorena Erdman,
attesting that she witnessed Gilbert Erdman’s last will and testament, and that Gilbert Erdman
complained to her that the state through its attorneys “forced him to sign an affidavit based upon
threats of forfeiture of his entire estate over moneys owed the State of Michigan by Dennis Guy
Erdman.” Lorena Erdman’s affidavit states that Gilbert Erdman told her “immediately after he
was sued by the State of Michigan, he attempted to withdraw the funds that were held at First
Federal of Michigan. The bank manager refused . . . based upon a ex parte [sic] order freezing
the bank accounts.”
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Erdman submitted as an exhibit a document purporting to be Gilbert Erdman’s last will and
testament, dated November 1, 1999:
I, Gilbert /Erdman . . . being of sound mind and in contemplation of the certainty
of death, do hereby declare this instrument to be my last will and testament.
I hereby revoke all previous wills and codicils.
I direct that the disposition of my remains be as per my son Daniel Erdman’s
instructions.
I give all the rest and residue of my entire estate to my son Daniel Erdman and no
one else. Also, the Certificate of Deposits [sic] in First Federal of Michigan Bank
that are in my name and beneficiary to my other son Dennis Erdman is [sic]
revoked by me and now is to go to my other son Daniel Erdman only. Dennis
Erdman gets nothing from my Estate.
If none of my designated beneficiaries services [sic] me, I give all the rest of my
estate to my Daughter in law Lorena B. Erdman. If neither Daniel or Lorena
Erdman survives me, I give all the rest and residue of my estate to my heirs as
determined by the laws of the State of Michigan, to descent and distribution.
Dennis Erdman gets nothing.
I appoint Daniel Erdman only as executor of this will, to serve without bond.
Should Daniel Erdman only be unable or unwilling to serve, then I appoint Lorena
Erdman to act as executor of this will.
I herewith affix my signature to this will on this the First day of November, 1999 .
. . the present [sic] of the following witnesses and subscribed this will at my
request, and in my presence.[4]
III
Defendant Dennis Erdman argues on appeal that a plain reading of the SCFRA evinces
that prisoner’s families can not be held financially liable for prisoner’s costs. Plaintiff
acknowledges that the SCFRA does not apply to assets held solely by a prisoner’s family
members,5 but argues that defendant fails to recognize that plaintiff sought a portion of defendant
4
Gilbert Erdman’s will was witnessed by Daniel G. Erdman, Lorena Erdman, and Lourdes
Acevedo.
5
The SCFRA provides in pertinent part:
Sec 1a. As used in this act:
(a) “Assets” means property, tangible or intangible, real or personal,
belonging to or due a prisoner . . . including income or payments to such prisoner
(continued…)
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Dennis Erdman’s assets. Plaintiff argues that the circuit court’s factual finding that the funds in
the First Federal accounts were an asset of defendant Dennis Erdman was not clearly erroneous.
We review the circuit court’s grant of summary disposition de novo. Smith v Globe Life
Ins Co, 460 Mich 446, 454; 597 NW2d 28 (1999). The circuit court went beyond the pleadings
in considering plaintiff’s motion, thus we consider it under MCR 2.116(C)(10). A motion under
MCR 2.116(C)(10) tests the factual support for a claim. Id. The documentary evidence filed or
submitted must be viewed in the light most favorable to the opposing party. Id. “If the opposing
party fails to present documentary evidence establishing the existence of a material factual
dispute, the motion is properly granted.” Id. at 455, quoting Quinto v Cross & Peters Co, 451
Mich 358, 363; 547 NW2d 314 (1996).
We conclude that a genuine issue of material fact remained regarding the ownership of
the accounts. From the outset of these proceedings, defendant Dennis Erdman disclaimed
ownership, and argued that he should be allowed to conduct discovery regarding the ownership
of the accounts. Gilbert Erdman was alive for 1 ½ years after plaintiff filed suit, and defendant
raised below that Gilbert Erdman suffered from dementia, was on medication, and that the
affidavit plaintiff procured from him was not knowingly or understandingly made. It is clear that
three of the First Federal accounts were jointly held between Gilbert and Dennis Erdman, and
plaintiff acknowledged that Gilbert Erdman had the right to all of the monies in those accounts
before he died in December 1999. Placing money in a joint bank account is not the equivalent of
making an inter vivos gift. Jacques v Jacques, 352 Mich 127, 134; 89 NW2d 451 (1958). The
depositor may at any time change the co tenants or simply withdraw the money. First Federal
Savings & Loan Ass’n v Savallisch, 364 Mich 168, 173; 110 NW2d 724 (1961); Rasey v
Currey’s Estate, 265 Mich 597, 601-602; 251 NW 784 (1933). However, the instant accounts
were frozen by the circuit court’s ex-parte order of July 14, 1998 appointing First Federal as
receiver of the accounts; thus Gilbert Erdman could not have withdrawn monies or changed the
beneficiary. Instead, defendant maintains, Gilbert Erdman demonstrated his intent to withdraw
the funds and change the beneficiary by attempting to make a withdrawal and making a will
naming intervening defendant Daniel Erdman sole heir and executor to his estate, including to
the accounts at issue.
Thus, prior to Gilbert’s death, a genuine issue was raised regarding the ownership of the
accounts. Under the circumstances that the issue was raised and the accounts were frozen before
(…continued)
from social security, worker’s compensation, veteran’s compensation, pension
benefits, previously earned salary or wages, bonuses, annuities, retirement
benefits, or from any other source whatsoever, but does not include any of the
following:
(i) The homestead of the prisoner up to $50,000.00 in value.
(ii) Money saved by the prisoner from wages and bonuses paid the
prisoner while he or she was confined to a state correctional facility. [MCL
800.401a.]
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Gilbert’s death, we reject plaintiff’s argument that defendant Dennis Erdman became sole owner
of the funds by operation of law on Gilbert’s death. Gilbert’s rights must be determined as of the
time the claim was made, and if it is determined that the funds were his, it must be determined
whether he was prevented from disposing of the funds in some other fashion by the receivership.
We conclude under these circumstances that summary disposition was improperly granted.
IV
Intervening defendant Daniel Erdman argues on appeal that only he has standing to seek
this Court’s review on behalf of Gilbert Erdman’s estate because the funds at issue belong to
him, as the sole heir to and executor of Gilbert Erdman’s estate. In an appellate reply brief,
defendant Dennis Erdman argues that he lacks standing for the same reason argued by
intervening defendant, and that his brother should be substituted as a party defendant for his
deceased father on behalf of Gilbert Erdman’s estate.
Plaintiff filed a brief in opposition to intervening defendant’s brief on appeal, arguing that
although intervening defendant Daniel Erdman does have standing to claim funds on behalf of
the estate, the claim lacks merit because to the extent the funds in the three First Federal accounts
belonged to Gilbert Erdman at all, they passed to joint account holder Dennis Erdman upon
Gilbert Erdman’s death and without becoming part of the estate. Plaintiff’s argument ignores,
however, that Gilbert Erdman was never defaulted, that defendant Dennis Erdman asserted
before Gilbert’s death that the funds belonged to Gilbert, and further asserted that Gilbert lacked
the capacity to protect his interests, and that Daniel Erdman asserts that Gilbert attempted to
withdraw the funds before his death but was not permitted to do so because of the receivership.6
Because it is not clear from the present record whether an estate has been opened and
whether Daniel Erdman has been appointed personal representative, we leave it to the circuit
court to determine the proper parties on remand.
Reversed and remanded for further proceedings. We do not retain jurisdiction.
/s/ Helene N. White
/s/ E. Thomas Fitzgerald
6
We recognize that these assertions are somewhat inconsistent regarding Gilbert’s capacity and
the significance of his actions, but these are matters to be resolved below.
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