JAMES D BLAIR V CITY OF LANSING
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STATE OF MICHIGAN
COURT OF APPEALS
TERRY J. McKANE,
FOR PUBLICATION
January 30, 2001
9:05 a.m.
Plaintiff/Cross-DefendantAppellant,
v
CITY OF LANSING, BOARD OF TRUSTEES
OF THE CITY OF LANSING EMPLOYEES'
RETIREMENT SYSTEM, and DAVID C.
HOLLISTER,
No. 218182
Ingham Circuit Court
LC No. 96-084458-CL
Defendants/Cross-PlaintiffsAppellees,
and
DOUGLAS RUBLEY, TONY BENAVIDES,
SHARON BOMMARITO, JOHN BRODIE, RITA
PONTZ, and RONALD KRUGER,
Defendants-Appellees.
_________________________________________
JAMES D. BLAIR,
Plaintiff-Counter-DefendantAppellant,
v
CITY OF LANSING, BOARD OF TRUSTEES
OF THE CITY OF LANSING EMPLOYEES'
RETIREMENT SYSTEM, and DAVID C.
HOLLISTER,
Defendants/Counter-PlaintiffAppellees,
No. 218582
Ingham Circuit Court
No. 97-086786-CL
Updated Copy
March 30, 2001
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and
TONY BENAVIDES, SHARON BOMMARITO,
JOHN BRODIE, RONALD KRUGER, RITA
PONTZ, and DOUGLAS RUBLEY,
Defendants-Appellees.
Before: Sawyer, P.J., and Murphy and Fitzgerald, JJ.
PER CURIAM.
In Docket No. 218182, plaintiff Terry J. McKane, a former mayor of the city of Lansing,
appeals as of right the order granting defendants' motion for summary disposition. In Docket No.
218582, plaintiff James D. Blair, a former city clerk of the city of Lansing, appeals as of right the
order granting defendants' motion for summary disposition. We affirm.
The parties agree that the pertinent facts are not in dispute and that this matter was
appropriate for resolution by summary disposition. In 1971, McKane was elected to the Lansing
city council and served as a council member for nearly eleven years. In November 1981,
McKane was elected mayor of the city of Lansing, assuming the duties of office on January 1,
1982. Plaintiff retired pursuant to an early retirement program (ERP) one year before his third
term of office was to expire. The ERP afforded enhanced benefits and was approved by the city
council during McKane's term as mayor.
On January 1, 1974, Blair took office as a Lansing city council member. He served in
that capacity until he was elected Lansing city clerk in 1990. Blair served as city clerk until
January 5, 1993, when he retired pursuant to the ERP.
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After McKane and Blair retired, defendant David C. Hollister became the elected mayor
of the city of Lansing. During Hollister's term, the Lansing city attorney determined that the
resolution that created the ERP was invalid as applied to elected officials. The city notified
McKane and Blair that their enhanced retirement benefits attributable to the ERP would be
terminated.
McKane and Blair filed separate federal lawsuits alleging that the termination of their
early retirement benefits was improper under five separate theories: (1) deprivation of property
without due process of law pursuant to 42 USC 1983; (2) deprivation of property without due
process of law pursuant to state constitutional law; (3) breach of contract; (4) diminishment of
retirement benefits in violation of Const 1963, art 9, ยง 24; and (5) promissory estoppel.
The federal district court issued written opinions in each case. The court concluded that
the legislation that created the ERP was invalid and void ab initio because it was enacted by
resolution rather than by ordinance in violation of the Lansing city charter. Thus, the court held
that plaintiffs did not have a property interest that is subject to due process protection because the
resolution creating the early retirement benefits was not passed in a manner consistent with state
law. In sum, the court held that plaintiffs "cannot have a constitutionally protected right in
benefits to which [they] are not entitled." The court granted summary judgment of the federal
law claim, but declined to exercise jurisdiction over the state claims and dismissed the state
claims without prejudice.
McKane appealed the federal district court decision to the federal circuit court. On
September 18, 1996, McKane filed the present action in the Ingham Circuit Court raising the
same causes of action as raised in the federal court action. The Ingham Circuit Court stayed the
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proceedings until a decision was rendered by the federal circuit court. On August 14, 1997, Blair
filed the present action in the Ingham Circuit Court raising causes of action that had been raised
in the federal district court action.
On January 14, 1998, the 6th Circuit Court of Appeals issued a decision in the McKane
case. In reaching its conclusion, the court made a decision on each of McKane's causes of action
that he alleged created a legitimate expectation of entitlement to enhanced retirement benefits.1
On December 2, 1998, the trial court granted summary disposition in the Blair case in
favor of defendants on the ground that the federal court's finding that the ERP was invalid as an
ultra vires act was res judicata and precluded recovery under the state claims. On February 10,
1999, the trial court granted summary disposition in the McKane case in favor of defendants on
the basis of res judicata.
The initial question here is whether plaintiffs' state claims, which were brought with the
federal action, are precluded by the doctrine of res judicata. Michigan has adopted the broad
application of the rule of res judicata. Gose v Monroe Auto Equipment Co, 409 Mich 147; 294
NW2d 165 (1980). Under this theory, claims that were actually litigated are barred from the
second action, as well "as those claims arising out of the same transaction which plaintiff could
have brought, but did not." Id. at 160. As a general rule, res judicata will apply to bar a
subsequent relitigation based on the same transaction or events, regardless of whether the
subsequent litigation is pursued in a federal or state forum. See Pierson Sand & Gravel, Inc v
Keeler Brass Co, 460 Mich 372, 380; 596 NW2d 153 (1999).
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Here, in concluding that the ERP was void ab initio and that McKane did not have a
property right entitled to due process protections, the 6th Circuit Court of Appeals rendered a
decision on each of McKane's state law claims. These decisions by the federal court are binding
with respect to McKane's state court claims. Therefore, res judicata bars further litigation of
these claims.
In addition, the federal district court's ruling in the Blair case that the ERP was void ab
initio as an ultra vires act is binding with respect to Blair's state law claims. Because each of
Blair's issues in this case is premised on a finding that the federal court erred in finding that the
enactment of the ERP was not an ultra vires act, the arguments must fail.2
Affirmed.
/s/ David H. Sawyer
/s/ William B. Murphy
/s/ E. Thomas Fitzgerald
1
These included (1) Resolution 201, (2) the personnel tie-bar provisions, (3) common law or
implied contract, (4) the Michigan Constitution, (5) promissory estoppel, and (6) past custom and
practice.
2
Plaintiffs' contention that defendants' affirmative defenses are barred by laches is misplaced.
The doctrine of laches is available only as a defense to protect against a plaintiff who sits on his
rights so long that the ability of the defendant to defend would be prejudiced. Further, the
doctrine of judicial estoppel does not preclude the city's position that the ERP was invalid,
because the prior lawsuit against the city involving the ERP was dismissed on the grounds of
standing and laches. The court in that suit never reached a determination of the city's claim that
the ERP was invalid.
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