SHIRLEY MILLEDGE V A-1 BUILDERS INC
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STATE OF MICHIGAN
COURT OF APPEALS
SHIRLEY MILLEDGE,
UNPUBLISHED
February 10, 2009
Plaintiff-Appellant,
v
No. 281010
Wayne Circuit Court
LC No. 05-528372-CH
A-1 BUILDERS, INC.,
Defendant/Third-Party PlaintiffAppellee,
and
CITY OF DETROIT,
Defendant-Appellee,
and
E. B. ROOFING, CO., OLIVER HOME
IMPROVEMENT, INC., PHILIP GUADAGNI,
MAJESTIC HEATING AND COOLING, INC.,
JENKINS CONTRACTING SERVICES, INC.,
JOHN BROWN, JOHN MANNING, d/b/a
MANNING’S DOORS, INC., BUCKINGHAM
ELECTRIC, INC., and DONALD
WHEELWRIGHT,
Third-Party Defendants.
Before: Wilder, P.J., and Cavanagh and Murray, JJ.
PER CURIAM.
Plaintiff appeals as of right an order dismissing her claims against defendant, A-1
Builders, Inc. (“A-1”), because she failed to comply with a discovery order under MCR
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2.313(B)(2)(c).1 Plaintiff also appeals an earlier order granting summary disposition under MCR
2.116(C)(7) to defendant, the city of Detroit, because plaintiff’s negligence claims were barred
by governmental immunity.2 Finally, plaintiff challenges a subsequent order denying her motion
for reconsideration. We affirm.
This case arises out of plaintiff’s participation in the city of Detroit’s Minor Home Repair
Program (“MHRP”). The MHRP is a federally-funded program that provides home repairs for
low-income homeowners. The city of Detroit’s Planning and Development Department (“PDD”)
reviews MHRP applications, assists applicants in locating skilled contractors, and distributes the
funding to contractors for completed work. Homeowners pay nothing for the repairs, but they
must agree to a self-reducing two-year lien on their homes for the amount of the construction.
Plaintiff was accepted for MHRP funding. PDD selected A-1 as the contractor. Then,
plaintiff and A-1 contracted for the completion of $42,810 in repairs.
Ultimately, PDD paid A-1 $43,207 for work on plaintiff’s home. However, plaintiff
contested the quality of A-1’s work. PDD inspected the home, agreed that additional repairs
were necessary and approved a $12,538 estimate from a different contractor. Before the repairs
could be made, however, PDD required plaintiff to revise her application for MHRP funding.3
Also, PDD required plaintiff to agree to a lien for the value of the completed work. She refused
and PDD closed her case. Plaintiff subsequently sued A-1 and city of Detroit for negligence and
breach of contract. She claimed that city of Detroit negligently selected an unqualified
contractor and failed to monitor the work.
Plaintiff’s first claim on appeal is that the trial court improperly granted city of Detroit’s
motion for summary disposition, finding it immune to her negligence claims. She argues that the
city of Detroit’s acts giving rise to the case were ultra vires. She also argues that the proprietary
function exception barred governmental immunity. We disagree. This Court may review
plaintiff’s unpreserved claims if consideration is necessary to a proper determination of the case
or if the question is one of law and all the facts necessary for its resolution have been presented.
Steward v Panek, 251 Mich App 546, 554; 652 NW2d 232 (2002). This Court reviews de novo
the applicability of governmental immunity and a trial court’s order granting summary
1
This same order dismissed A-1’s third-party claims.
2
In plaintiff’s statement of questions presented, she challenges the trial court’s order granting
city of Detroit’s motion for summary disposition of her contract claim. However, plaintiff does
not address the contract claim in her argument. Therefore, the trial court’s order dismissing
plaintiff’s breach of contract claim is not properly before this Court. Flint City Council v
Michigan, 253 Mich App 378, 393 n 2; 655 NW2d 604 (2002) (“this Court will not search for
authority to support a party’s position, and the failure to cite authority in support of an issue
results in its being deemed abandoned on appeal.”).
3
City of Detroit alleged that plaintiff inaccurately reported the number of occupants in the home
and their incomes.
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disposition pursuant to MCR 2.116(C)(7). Roby v City of Mount Clemens, 274 Mich App 26, 28;
731 NW2d 494 (2006).
Under the governmental tort liability act, MCL 691.1407(1), a governmental agency is
shielded from tort liability if it is engaged in the exercise or discharge of a governmental
function. Roby, supra, p 29. The term “governmental function” is broadly construed, and the
statutory exceptions to immunity are narrowly construed. Maskery v University of Michigan
Board of Regents, 468 Mich 609, 614; 664 NW2d 165 (2003). MCL 691.1401(f) defines a
governmental function as an “an activity that is expressly or impliedly mandated or authorized
by constitution, statute, local charter or ordinance, or other law.” Roby, supra, p 29. In contrast,
ultra vires activity is that which is not expressly or impliedly authorized by law. Coleman v
Kootsillas, 456 Mich 615, 619; 575 NW2d 527 (1998).
City of Detroit’s charter provides for a department that will act as a local public agency
for purposes of federally funded urban renewal and similar projects. Detroit Charter, § 7-501.
Accordingly, city of Detroit designated PDD to distribute HUD funding through the MHRP.
Although the charter does not expressly mandate the many powers of PDD, it is implied that its
distribution of funds to low-income homeowners needing home repairs would include the power
to review applicants, assess necessary home repairs, select contractors with winning bids, and
pay contractors for completed work. Indeed, plaintiff conceded PDD’s authority to select a
contractor when she signed a contractor release form. Given these implied powers, city of
Detroit was engaged in a governmental function when PDD selected and paid A-1 for plaintiff’s
home repairs. Roby, supra, 29, citing MCL 691.1401(f). Consequently, city of Detroit was
shielded from plaintiff’s claim that it was negligent in selecting and monitoring A-1. Id.
Therefore, the trial court properly granted city of Detroit’s motion for summary disposition
pursuant to MCR 2.116(C)(7).
Contrary to this conclusion, plaintiff alleges that city of Detroit’s selection of and
payment to A-1 constituted ultra vires acts. For instance, plaintiff claims that city of Detroit
committed “[f]raud, [w]aste, and [a]buse” of federal funding. She claims that it was improper to
pay A-1 for “blotched” work. She also notes that A-1 estimated the project would cost $43,810,
but city of Detroit ultimately paid A-1 $43,207. Plaintiff claims that the difference between
these amounts, $603, is “hidden in the City’s undercover enterprise, or coffer.” Finally, plaintiff
claims that city of Detroit’s acts were motivated by its intent to retaliate against her for a prior
lawsuit against city of Detroit’s police department.
Governmental immunity applies to a governmental agency even when it improperly
performs a general governmental function that is authorized by law. Richardson v Jackson
County, 432 Mich 377, 385; 443 NW2d 105 (1989). Again, city of Detroit’s selection of and
payment to A-1 was a governmental function. Therefore, even if the selection and payment were
improper as plaintiff claims, governmental immunity applies. Roby, supra, 29, citing MCL
691.1401(f). City of Detroit’s improper execution of a governmental function authorized by law
would not make its acts ultra vires. Therefore, plaintiff’s argument for the ultra vires exception
to governmental immunity fails.
In addition to her ultra vires claim, plaintiff relies on the proprietary function exception to
governmental immunity. Under the proprietary function exception, a defendant that is engaged
in a governmental function may be precluded from governmental immunity if the function is
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proprietary in nature. Coleman, supra, pp 620-621, citing MCL 691.1413. To constitute a
proprietary function, “[t]he activity (1) must be conducted primarily for the purpose of producing
a pecuniary profit, and (2) it cannot be normally supported by taxes and fees.” Id., p 621.
To determine if an activity is conducted primarily for the purpose of producing a
pecuniary profit, this Court may consider whether it actually generates profit. Coleman, supra, p
621. This factor is not dispositive, but may be relevant to the agency’s intent. Id. This Court
may also consider where the profit is deposited and where it is spent. Id.
If the profit is deposited in the governmental agency’s general fund or used to
finance unrelated functions, this could indicate that the activity at issue was
intended to be a general revenue-raising device. If the revenue is used only to pay
current and long-range expenses involved in operating the activity, this could
indicate that the primary purpose of the activity was not to produce a pecuniary
profit. [Id.]
Pursuant to the first prong of the proprietary function test, the primary purpose of MHRP
is to distribute federal funds to low-income homeowners for repairs. Coleman, supra, p 621.
The primary purpose is not to produce a pecuniary profit. Participating homeowners pay
nothing. Instead, city of Detroit uses federal funds from HUD to pay for the repairs.
Plaintiff asserts that city of Detroit resembles a business because it selects contractors
with “low-ball bidding” practices. However, the general manager of PDD, Jannie Warren, stated
that contractors are selected considering the amount of the bid and its acceptability, the
contractors’ present availability to complete the project, and their experience with the required
repairs. This practice does not suggest intent to profit, but rather, intent to use federal funds in
the most appropriate manner.
Plaintiff also asserts that a profit was generated from her project. She claims that A-1
profited because PDD paid it for incomplete or unsatisfactory work. There are no facts to
suggest that A-1 did not complete work valued at $43,207. In her deposition, Warren stated
payments would not have been made to A-1 unless the repairs had been approved and completed.
In any event, whether A-1 profited is not relevant to the question of city of Detroit’s proprietary
intent.
Alternatively, plaintiff claims city of Detroit profited from the $603 that was estimated
for her project, but not paid to A-1. However, city of Detroit countered that neither PDD, nor its
individual employees, “pocket[ed]” federal funds. Instead, funds allotted to plaintiff’s project,
but determined to be unnecessary, would have been used to repair homes for other “worthy and
qualified applicants.” Following Coleman, supra, p 621, plaintiff failed to demonstrate
proprietary intent because the unnecessary funds allotted to her project were not placed in city of
Detroit’s general fund or used for unrelated functions, but instead, solely funded other MHRP
applicants.
Pursuant to the second prong of the proprietary function test, MCL 691.1413 does not
require that “[t]he activity need only be one which is normally supported by taxes or fees.” Hyde
v University of Michigan Bd of Regents, 426 Mich 223, 260 n 32; 393 NW2d 847 (1986). In this
case, MHRP was funded by HUD, not city of Detroit’s tax revenue or fees. Nevertheless, federal
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tax revenue arguably created and funds HUD. Therefore, the second prong of the test is not
satisfied. Given that the primary purpose of MHRP was not proprietary and the urban renewal
was supported by taxes, plaintiff’s argument for the proprietary purpose exception to
governmental immunity fails.
Next, plaintiff makes passing references to vicarious liability and respondeat superior.
However, she does develop these arguments by applying the theories to her case. Therefore,
plaintiff’s claim is not properly before this Court. Flint City Council v Michigan, 253 Mich App
378, 393 n 2; 655 NW2d 604 (2002).
Similarly, on appeal, plaintiff implies that city of Detroit’s individual employees are
liable for negligence and not entitled to immunity. However, plaintiff did not preserve this
argument for the trial court’s consideration by alleging individual liability in her pleadings.
Attorney Gen v Pub Service Comm, 243 Mich App 487, 494; 625 NW2d 16 (2000).
Nevertheless, plaintiff claims that the trial court should have imposed the immunity requirements
for individual governmental employees under MCL 691.1407(2).4 However, only the agency
immunity requirement, governmental function, was at issue. Thus, plaintiff’s claim that the trial
court applied the improper “standard of review” fails.
Alternatively, plaintiff requests that this Court remand for her to amend the complaint to
include city of Detroit’s individual employees’ liability. However, plaintiff did not file a motion
with the trial court to amend her complaint. Again, plaintiff fails to cite authority indicating that
she is entitled to remand for such a motion. Because this Court will not search for authority to
support a party’s position, plaintiff’s request for an amendment to her complaint is abandoned.
Flint City Council, supra, p 393 n 2.
Plaintiff also contends that the trial court erred in granting city of Detroit’s motion for
summary disposition prior to the completion of discovery. We disagree.
“Generally, a motion for summary disposition is premature if granted before discovery on
a disputed issue is complete.”’ Oliver v Smith, 269 Mich App 560, 567; 715 NW2d 314 (2006),
quoting Peterson Novelties, Inc v City of Berkley, 259 Mich App 1, 24-25; 672 NW2d 351
(2003). ‘“However, summary disposition may nevertheless be appropriate if further discovery
does not stand a reasonable chance of uncovering factual support for the opposing party’s
position.”’ Id., quoting Peterson, supra p 25.
4
MCL 691.1407(2) provides:
Governmental employees are immune from liability for injuries they cause during
the course of their employment if they are acting or reasonably believe they are
acting within the scope of their authority, if they are engaged in the exercise or
discharge of a governmental function, and if their conduct does not amount to
gross negligence that is the proximate cause of the injury or damage. [See Love v
City of Detroit, 270 Mich App 563, 565; 716 NW2d 604 (2006).]
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In plaintiff’s case, the discovery deadline passed on May 8, 2007. Afterward, plaintiff
did not request additional discovery from the parties. As we concluded, supra, the facts obtained
from completed discovery do not support the ultra vires or proprietary function exceptions.
Furthermore, on appeal, plaintiff does not articulate how further discovery will uncover factual
support for an additional exception to governmental immunity. Absent an articulated
“reasonable chance” for such factual support, we conclude that summary disposition was not
premature. Oliver, supra, p 567, quoting Peterson, supra, p 25.
Plaintiff next claims on appeal that the trial court improperly granted A-1’s motion for
dismissal pursuant to MCR 2.313(B)(2)(c). We disagree. This Court reviews a trial court’s
imposition of discovery sanctions pursuant to MCR 2.313(B)(2)(c) for an abuse of discretion.
Traxler v Ford Motor Co, 227 Mich App 276, 286; 576 NW2d 398 (1998). An abuse of
discretion occurs when the decision results in an outcome falling outside the range of principled
outcomes. Barnett v Hidalgo, 478 Mich 151, 158; 732 NW2d 472 (2007).
MCR 2.313(B)(2)(c) authorizes a trial court to “enter an order dismissing a proceeding or
rendering a judgment by default against a party who fails to obey an order to provide discovery.”
Kalamazoo Oil Co v Boerman, 242 Mich App 75, 86; 618 NW2d 66 (2000). Such a drastic
sanction requires the trial court’s careful consideration of the circumstances of the case. Id. The
plaintiff’s failure to facilitate discovery must not be accidental or involuntary. Id. Instead, the
failure should be flagrant and wanton. Id. To determine the appropriate sanction, trial courts
should consider the following factors:
(1) Whether the violation was wil[l]ful or accidental; (2) the party’s history of
refusing to comply with discovery requests (or refusal to disclose witnesses); (3)
the prejudice to the [other party]; (4) actual notice to the [other party] of the
witness and the length of time prior to trial that the [other party] received such
actual notice; (5) whether there exists a history of [the party’s] engaging in
deliberate delay; (6) the degree of compliance by the [party] with other provisions
of the court’s order; (7) an attempt by the [party] to timely cure the defect, and (8)
whether a lesser sanction would better serve the interests of justice. [Bass v
Combs, 238 Mich App 16, 26; 604 NW2d 727 (1999), overruled in part on other
grounds Dimmitt & Owen Financial, Inc v Deloitte & Touche (ISC), LLC, 481
Mich 618, 628; 752 NW2d 37 (2008).]
In January 2007, Judge John D. O’Hair, acting for Judge Robert L. Ziolkowski, entered a
discovery order.5 The order required plaintiff to submit a description of her damages by January
26, 2007. The order also required the parties to agree to an inspection date. Finally, the order
scheduled discovery to close on May 8, 2007.
5
Judge Ziolkowski recused himself following a grievance by plaintiff. Judge Warfield Moore
replaced him, but also subsequently recused himself. Judge Moore’s replacement, Judge
Gershwin Allen Drain, entered the orders now challenged on appeal.
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Relying on MCR 2.313(B)(2)(c), the trial court dismissed plaintiff’s claims against A-1
because she failed to comply with Judge O’Hair’s discovery order. The trial court found that an
inspection had not occurred even though Judge O’Hair’s order required its completion by May 8,
2007. The trial court accepted that one inspection was rescheduled by defendants and third-party
defendants because of a conflict with a status conference scheduled for the same day. However,
the facts demonstrate that the primary responsibility for the failed inspection rested with
plaintiff’s willful refusals. Bass, supra, p 26. At least four inspections were scheduled and
noticed. However, plaintiff either failed to attend or filed objections to each of them. Despite
Judge O’Hair’s order that an inspection was necessary, plaintiff subsequently claimed that her
personal videotaping of the home would adequately document the damages in place of the
inspection. The trial court noted that plaintiff’s refusals were significant because an inspection
was essential to the nature of her claims. Plaintiff’s history of willfully refusing to comply with
the inspection weighed in favor of the imposition of a sanction. Id.
The trial court also concluded that plaintiff failed to comply with Judge O’Hair’s June 26,
2007, deadline for the description of damages. Under Bass, supra, p 26, a trial court should
consider whether the plaintiff’s violation was willful or accidental. Three days before the
description deadline, plaintiff’s attorneys moved to withdraw.
Arguably, plaintiff’s
noncompliance could have been an accidental consequence of the breakdown of her attorneyclient relationship. Nevertheless, plaintiff retained a new attorney on February 9, 2007.
However, she failed to submit the description until May 8, 2007. Thus, plaintiff’s failure to
timely cure the defect weighed in favor of the imposition of a sanction. Id.
In sanctioning a plaintiff, a trial court may additionally consider the plaintiff’s history of
refusing to comply with discovery requests. Bass, supra, p 26. In this case, plaintiff repeatedly
refused to comply with deposition requests. Plaintiff failed to attend scheduled and noticed
depositions on November 2, 2006, and December 4, 2006. On January 16, 2007, plaintiff
attended the deposition, but her counsel terminated it prematurely. Afterward, A-1 sent several
letters to plaintiff’s attorney requesting convenient dates to reschedule the deposition. However,
neither the attorney nor plaintiff responded. Again, the parties scheduled the continuation of
plaintiff’s deposition for May 14, 2007, and June 25, 2007, but plaintiff failed to attend. Only
one of plaintiff’s absences had been excused. Therefore, this history of refusing to comply with
requests for her deposition weighed in favor of the imposition of a sanction. Id.
The trial court also found that the delay resulting from plaintiff’s actions caused the case
to be two years old and prejudiced the other parties. It noted that the case had been repeatedly
continued and adjourned for the completion of discovery, but “really almost nothing happened.”
This prejudice also weighed in favor of the imposition of a sanction. Because the trial court
carefully considered the circumstances of the case and found that Bass factors weighed in favor
of the imposition of a sanction, we conclude that dismissal pursuant to MCR 2.313(B)(2)(c) was
not outside the range of principled outcomes. Barnett, supra, p 158. Therefore, the trial court
did not abuse its discretion.
Contrary to this conclusion, plaintiff notes that, on May 8, 2007, Judge Ziolkowski
verbally instructed her to submit a description of damages to her attorney for distribution to the
opposing parties. Consequently, plaintiff maintains that this instruction demonstrated Judge
Ziolkowski’s intent to adjourn Judge O’Hair’s discovery deadlines. However, courts speak
through their written orders. Until a judgment or order is written and signed, it is not effective.
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See In re Gazella, 264 Mich App 668, 677; 692 NW2d 708 (2005). Judge Ziolkowski did not
reduce the instruction to a written order, and therefore, this instruction did not supercede Judge
O’Hair’s discovery order. Thus, the trial court did not abuse its discretion when it relied solely
on that order.
Plaintiff next asserts that the trial court’s bias abrogated her due process rights. However,
plaintiff fails to cite any authority regarding the interplay between bias and due process.
Therefore, this argument is not properly before this Court. Flint City Council, supra, p 393 n 2.
Nevertheless, plaintiff’s claims fail to overcome the heavy presumption of judicial impartiality.
Cain v Dep’t of Corrections, 451 Mich 470, 497; 548 NW2d 210 (1996).
Plaintiff also contends that the trial court erred when it denied her motion for rehearing or
reconsideration of the orders granting summary disposition to City of Detroit and dismissing A1’s claims on the basis that plaintiff had not demonstrated palpable error. We disagree. This
Court reviews a trial court’s decision on a motion for reconsideration for an abuse of discretion.
Churchman v Rickerson, 240 Mich App 223, 233; 611 NW2d 333 (2000).
Under MCR 7.208A, a trial court may not set aside or amend an order while an appeal
from that order is pending. Hill v City of Warren, 276 Mich App 299, 307, 740 NW2d 706
(2007). Plaintiff filed her claim of appeal on October 2, 2007. This appeal was pending when
plaintiff filed her October 9, 2007, motion for rehearing or reconsideration. This Court had not
remanded for consideration of the motion. Consequently, the trial court lacked authority to
consider plaintiff’s motion to set aside the orders, and the trial court did not abuse its discretion
when it denied plaintiff’s motion, albeit for the wrong reason. Netter v Bowman, 272 Mich App
289, 308; 725 NW2d 353 (2006) (This Court “will not reverse the lower court when it reaches
the correct result, albeit for the wrong reason.”) Moreover, because the trial court lacked
authority to consider plaintiff’s motion, this Court need not address plaintiff’s additional claims
regarding palpable error and the necessity of a hearing or more thorough order.
Affirmed.
/s/ Kurtis T. Wilder
/s/ Mark J. Cavanagh
/s/ Christopher M. Murray
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