IN THIS ISSUE - Kerr Russell...2019/01/15 · Khachaturian ([email protected]) or Jenny Zavadil ([email protected]). 4 Michigan Defense Quarterly President

ARTICLES:

• TheDetroitBankruptcy:TheOlympicsofRestructuring

• ApplyingthePrinciplesofWartoYourLitigationCampaigns

• ThreeWaystoMitigateLitigationRisk

• Diversity,Civility,andDialogue

• SpringCleaningandYourImportantDocuments

• TransferringCottagePropertytoYourChildrenWithoutTaxIncreases

RePORTS:

• LegislativeReport

• MedicalMalpracticeReport

• AppellatePracticeReport

• LegalMalpracticeUpdate

• SupremeCourtUpdate

• CourtRulesUpdate

PLUS:

• MembertoMemberServices

• Scheduleofevents

• WelcomeNewMembers

Volume31,No.1July2014

IN THIS ISSUE:

P R O M O T I N G E X C E L L E N C E I N C I V I L L I T I G A T I O N

Vol.31No.1•July2014 3

MDTC Officers: MarkA.Gilchrist,President D.LeeKhachaturian,Vice President HilaryA.Ballentine,Treasurer RichardW.Paul,Secretary

MDTC Board of Directors: AngelaemmerlingBouffordBarbaraeckertBuchananMichaelI.ConlonConorB.DuganTerenceP.DurkinScottS.HolmesRichardJ.JoppichJohnMucha,IIIMatthewT.NelsonJoshuaRichardsonCarsonJ.TuckerRobertPaulVance

Executive Director: MadelyneC.Lawry

Publication Schedule: Publication Date Copy Deadline January December1April March1July June1October September1For information on article requirements, please contact MDTC at [email protected]

MDTC Promoting Excellence in Civil LitigationP.O.Box66GrandLedge,Michigan48837Phone:517-627-3745•Fax:517-627-3950www.mdtc.org•[email protected]

Michigan Defense Quarterly is a publication of the MDTC. All inquiries should be directed to Madelyne Lawry, (517) 627-3745.

President’sCorner........................................................................................... 4ARTICLES:TheDetroitBankruptcy:TheOlympicsofRestructuring JasonW.Bank.......................................................................................... 5ChannelingYourInnerNapoleon:ApplyingthePrinciplesofWartoYourLitigationCampaigns edwardPerdue...................................................................................... 12ThreeWaysforCorporateCounseltoMitigateLitigationRisk:AnAccountingexpert’sPerspective BarryJayepstein,Ph.D.,CPA,CFF........................................................ 17Diversity,Civility,andDialogue BrianD.einhorn................................................................................... 21SpringCleaningandYourImportantDocuments TaraL.Bachner..................................................................................... 25TransferringCottagePropertytoYourChildrenWithoutTaxIncreases ScottA.Breen....................................................................................... 26RePORTS:LegislativeReport GrahamK.Crabtree.............................................................................. 28MedicalMalpracticeReport GeoffreyM.Brown............................................................................... 30AppellatePracticeReport PhillipJ.DeRosierandTrentB.Collier.................................................. 32LegalMalpracticeUpdate MichaelJ.SullivanandDavidC.Anderson........................................... 38SupremeCourtUpdate JoshuaK.Richardson............................................................................ 40CourtRulesUpdate M.SeanFosmire.................................................................................... 44

AND:MembertoMemberServices....................................................................... 43Scheduleofevents........................................................................................ 45WelcomeNewMembers.............................................................................. 45

Vol.31No.1•July2014

Cite this publication as 31-1 Mich Defense Quarterly.

Editor’s Notes

Editor: [email protected]

Associate Editor:[email protected]



Articles:AllarticlespublishedintheMichiganDefenseQuarterlyreflecttheviewsoftheindividualauthors.TheQuarterlyalwayswelcomesarticlesandopinionsonanytopicthatwillbeofinteresttoMDTCmembersintheirpractices.AlthoughMDTCisanassociationoflawyerswhoprimarilypracticeonthedefenseside,theQuarterlyalwaysemphasizesanalysisoveradvocacyandfavorstheexpressionofabroadrangeofviews,soarticlesfromaplaintiff’sperspectivearealwayswelcome.Author’sGuidelinesareavailablefromLeeKhachaturian([email protected])orJennyZavadil([email protected]).

4 Michigan Defense Quarterly

President’s Corner

By:MarkA.Gilchrist,Smith Haughey Rice & Roegge

For the many unaware of my background, my Father is a lawyer who continues to practice today. I grew up among lawyers and am comfortable in their company. Most of my practice is devoted to representing lawyers and their firms accused of malpractice or ethical violations. I recognize what an incredible privilege it is being tapped to lead an organization tasked with improving the quality of civil litigation in Michigan.

Regarding my intentions for the upcoming year, I have goals directed both inward in the sense of fostering and expanding the strength of the organization itself, and outward to broaden the reach and influence of the organization in the legislative and policy making process.

As everyone knows, membership is the lynchpin of an organization like ours. Through the wise direction of my predecessors, hard work of MDTC’s leadership and creative decision making of our Executive Director, Madelyne Lawry, our membership numbers are just under all-time highs. When viewed in the context of recent economic times when many firms are scaling back paying for the professional affiliations of their attorneys, this is an enormous accomplishment. We should be very proud of this achievement under these trying conditions and I think it speaks to the tangible benefits we are able to provide our members, including high level and timely educational programming, access to the judiciary invariably present at our events and the educational and informative articles published in the Quarterly and e-Newsletter.

Also, to foster our growth we have expanded practice areas from those typically associated with our historical base. Given the success of tort reform in reducing the number of personal injury lawsuits and the attendant decline in attorneys practicing strictly in tort, MDTC has made a concerted effort at courting commercial attorneys who are just as likely to work on the plaintiff side of the “v” as the defendants. We have prioritized tailoring our educational offerings toward topics of interest to commercial litigators as well as inviting more purely commercial practioners in to the leadership of the organization. Continuing MDTC’s efforts to broaden our historical areas of practice will remain a priority throughout the next year.

Regarding our outward focus, MDTC has taken a more active role in the legislative process in recent years. Of course, our activities have been limited to only those issues which impact the quality and accessibility of the civil justice system. We have partnered with the Negligence Section of the State Bar who continue to remain an indispensable ally. Sometimes we have taken positions in concert with MAJ, sometimes we have interpreted issues differently. MDTC’s leadership recognizes that taking a more active role in the public policy arena is not without risk or consequence. MDTC will often take a position contrary to that of a member, or that attorney’s client or carrier. While we take the interests of each member seriously, our organizational focus has to remain broader. We are a group comprised of attorneys and will remain dedicated to advancing the interests of our membership as a whole, the practice of civil litigation in Michigan and the overall advancement of our profession.

I very much look forward to the challenge of leading this organization in the upcoming year. I will work hard on behalf of the membership and the organization to try and advance their interests. I am inspired by the stature of my predecessors who have held this title and can only hope to follow adequately in their footsteps. I look forward to seeing each of you at our various events throughout the upcoming year.

Mark A. Gilchrist President Smith Haughey Rice & Roegge 100MonroeCenterNWGrandRapids,MI49503(616)[email protected]

It is with great honor and humility that I write my first President’s Corner to address and inform our membership about recent happenings

with MDTC, and to share some of my goals for the upcoming year. Groucho Marx famously quipped “I would never join a club that would have me as a member.” At least with respect to this organization, Groucho was wrong and I appreciate the trust and confidence placed in me by being selected to head this esteemed group of attorneys.


INTRODUCTIONOnthedayofhisappointmentasDetroit’semergencyfinancialmanager,KevynOrrreferredtotheherculeantaskoffixingtheCity’sfinancialwoesasthe“OlympicsofRestructuring.”Mr.OrrhasofficiallyenteredthemedalroundbasedupontherecentfilingoftheCityofDetroit’sPlanofAdjustment,whichsetsforthhisproposalforrepaymentofcreditorsandhisvisionforimprovingservicesforCityresidents.Veryshortly,Mr.OrrwillattempttoearnthegoldmedalofrestructuringbyobtainingBankruptcyCourtapprovalofhisplan.ThesematerialsprovideanoverviewofmunicipalbankruptcyandDebtor’sbankruptcyfilingandexaminesomeofthecriticalissuesinDetroit’supcomingplanconfirmationhearing.

I. AUTHORITY FOR A MUNICIPALITY TO FILE CHAPTER 9

A. Who May File Chapter 9? “Municipality”isdefinedverybroadlyundertheU.S.BankruptcyCode.Itmeansa“politicalsubdivisionorpublicagencyorinstrumentalityofaState.”2A“politicalsubdivisionofaState”includescities,towns,counties,parishes,townships,villagesandthelike.3Courtshaveheldthatwhereastategrants“expresssovereignpowers”toanentitythatperformsgovernmentalfunctions,suchasacounty,itisa“politicalsubdivision.”4 “InstrumentalityofaState”hasabroadmeaningaswellandincludesschooldistricts,publicutilityboardsandbridgeandhighwayauthorities.Courtshaveheldthatatransitdistrictandevenanoff-trackbettingcompanymaybeconsideredinstrumentalitiesofstates.5

B. Authority to File Chapter 9 Chapter9isdraftedtocarefullynavigatethornyconstitutionalandpoliticalissues.ArticleIoftheU.S.ConstitutionauthorizesCongresstoenact“uniformLawsonthesubjectofBankruptciesthroughouttheUnitedStates.”Asaresult,whilestatelawcomesintoplayattimes(e.g.,issuesinvolvingpropertyrights),bankruptcylawisfederallaw.However,theTenthAmendmentguaranteesthesovereignpowersofstatesovertheirlocalunits.SothedraftersofChapter9werechargedwithincorporatingtheprinciplesoffederalbankruptcylawwithoutinfringingonastate’sconstitutionallymandatedauthority. InMichigan,municipalitiesareauthorizedtofileChapter9.Butthatdoesnotmeanamunicipalityhasaneasypathtobankruptcycourt.AlocalgovernmentalentityandschooldistrictinMichiganmayonlyfileChapter9throughanemergencyfinancialmanagerwhomustbeauthorizedbythe

The Detroit Bankruptcy: The Olympics of Restructuring1By:JasonW.Bank,Kerr,Russell and Weber, PLC

Jason W. Bank leadsKerr,RussellandWeber,PLC’sbank-ruptcyandrestructuringpractice.HehasrepresentednumerousdistressedcompaniesinawidevarietyofindustriesthroughtheChapter11andout-of-court

restructuringprocessfrombeginningtoend.Mr.Bankhasalsorepresentedcreditors’committees,trustees,receivers,securedlenders,landlords,pur-chasersofassetsandtradecreditorsinbankruptcyproceedingsandworkouts.Mr.BankhaslecturedextensivelyregardingChapter9municipalbank-ruptcyproceedingsandMichigan'semergencyfinancialmanagerstatutes.Since2005,Mr.BankhasbeenanadjunctprofessoratMichiganStateUniversityCollegeofLawandhastaughtclassesinbankruptcyandChapter11reorganization.

Executive Summary

The City of Detroit is the largest municipality to file for bankruptcy in the United States. This article discusses municipal bankruptcy under Chapter 9 of the Bankruptcy Code and analyzes some of the issues that will be critical in determining the City’s ability to successfully emerge from bankruptcy.


governortosignandfileaChapter9petition. TheemergencyfinancialmanagerlawshaveacomplicatedhistoryintheState.In1990,theMichiganLegislatureenactedPublicAct72of1990,the“LocalGovernmentFiscalResponsibilityAct.”(“PA72”).ThisActempoweredtheStatetointervenewithrespecttomunicipalitiesfacingfinancialcrisisthroughtheappointmentofanemergencyfinancialmanagerwhowouldassumemanyofthepowersordinarilyheldbylocalelectedofficials.effectiveMarch16,2011,PA72wasrepealedandreplacedwithPublicAct4of2011,the“LocalGovernmentandSchoolDistrictFiscalAccountabilityAct.”(“PA4”).OnNovember5,2012,theMichiganvotersrejectedPA4byreferendum.ThisrejectionrevivedPA72. PA72remainedineffectuntilMarch28,2013,whenPublicAct436of2012,the“LocalFinancialStabilityandChoiceAct”wentintoeffect.(“PA436”).TheLegislatureenactedPA436onDecember13,2012,andthegovernorsignedthebillintolawonDecember26,2012

II. CHAPTER 9 ELIGIBILITY REQUIREMENT

A. Summary of Eligibility Rules OnceamunicipalitynavigatesthehurdlesatthestateleveltoobtainauthoritytofileaChapter9petition,itstillmayfaceabattleoverwhetheritiseligibletobeaChapter9debtor.AcreditororinterestedpartymaymovefordismissalandarguethatalocalgovernmentalunitisnoteligibleforChapter9relief.eligibilityrequirementsinChapter9aremuchmorestringentthaninotherbankruptcychapters.ItisrelativelyeasyforabusinesstofileaChapter11,butitismuchhardertoemergefromChapter11.OnceacompanyfilesChapter11,theburdenisoncreditorsorinterestedpartiesto

demonstratethatacaseshouldbedismissed. InChapter9,however,amunicipalityhastheburdentodemonstratethatitiseligibletofileChapter9.Amunicipalitymustbe“insolvent”onacash-flowbasis,meaningitisgenerallynotpayingitsdebtsastheybecomedue.Finally,amunicipalitymustintendtoeffectuateaplantoadjustitsdebts. Amunicipalitymustalsomeetatleastoneofthefollowingfourconditions:a)themunicipalityhasobtainedanagreementonaplanfromcreditorsholdingatleastamajorityamountof“impaired”claims

ineachclass;b)themunicipalityhasnegotiatedingoodfaithwithcreditorsbuthasfailedtoobtainanagreement;c)themunicipalityisunabletonegotiatewithcreditorsbecausenegotiationisimpracticable;ord)themunicipalityreasonablybelievesthatacreditormaytrytoobtainapreferentialpaymentortransferofthemunicipality’sassets.11USC§109(c).

B. Detroit Eligibility Trial and Ruling OnMarch1,2013,GovernorSnyderannouncedthatafinancialemergencyexistedwithintheCity.OnMarch15,2013,theStateofMichigan’sLocalemergencyFinancialAssistanceLoanBoardappointedKevynOrrasemergencyfinancialmanager(“eM”)fortheCityofDetroit

underPA436.AfterbecomingfamiliarwiththeCity’sbalancesheet,OrrcommencedaseriesofnegotiationswithcreditorsinanattempttoresolvetheCity’sfinancialcrisisoutsideofbankruptcyandlaythegroundworkforeligibilityifhedeterminedthatthedebtscouldnotberestructuredoutsideofabankruptcyfiling. Afteramonthofnegotiationswithsomeofitscreditorconstituencies(includingawell-publicizedJune14meetingwithapproximately150creditorrepresentatives),OrrconcludedthattheCitywasunabletonegotiate–andsawnoprospectfornegotiating–anout-of-courtresolutionthatwouldaddresstheCity’sfinancialwoesoutsideofaChapter9bankruptcy.Asaresult,OrrsubmittedawrittenrecommendationtotheGovernorandtheStateTreasurerthattheCityseekreliefunderChapter9oftheBankruptcyCode.OrrconcludedhehadnoreasonablealternativetorectifythefinancialemergencyoftheCityinatimelymanner. OnJuly18,2013,inaccordancewithsection18(1)ofPA436,OrrreceivedwrittenauthorizationfromGovernorSnydertocommenceaChapter9case.OnJuly18,2013at4:06p.m.easternTime,theCityfiledapetitionforreliefunderChapter9oftheU.S.BankruptcyCode. CertaincreditorshavearguedthetimingofthebankruptcyfilingwasdesignedtopreventrulingsthatmayhavebeenadversetotheCity’sabilitytofileChapter9.OnJuly3,2013,GracieWebsterandVeronicaThomasfiledacomplaintagainsttheStateofMichigan,GovernorSnyderandTreasurerAndyDilloninInghamCountyCircuitCourtseekingadeclaratoryjudgmentthatPA436wasunconstitutionalbecauseitpermitsaccruedpensionbenefitstobediminishedorimpairedinviolationofarticleIX,section24oftheMichigan

THE DETROIT BANKRUPTCY: THE OLYMPICS OF RESTRUCTURING

Onceamunicipalitynavigatesthehurdlesatthestateleveltoobtainauthoritytofilea

Chapter9petition,itstillmayfaceabattleoverwhetheritiseligibletobeaChapter9

debtor.



Constitution.ThecomplaintalsosoughtaninjunctionenjoiningthegovernorandtreasurerfromauthorizingtheDetroiteMtocommenceproceedingsunderChapter9oftheBankruptcyCode. OnJuly18,theInghamCircuitCourtcommencedahearingat4:15p.m.(afterthebankruptcyfiling)toconsiderreliefrequestedbytheplaintiffs.Thereafter,thejudgeenteredanOrderofDeclaratoryRelief,whichprovidedthat“PA436isunconstitutional...totheextentthatitpermitstheGovernortoauthorizeanemergencymanagertoproceedunderChapter9inanymannerwhichthreatenstodiminishorimpairaccruedpensionbenefits,”andGovernorSnyderhadnoauthorityunderMichiganlawtoauthorizetheeMtoproceedunderChapter9todiminishorimpairaccruedpensionbenefits.Finally,thejudgeorderedtheGovernortodirecttheeMtoimmediatelywithdrawtheChapter9petitionfiledonJuly18.6 TheBankruptcyCourtheldinitialhearingsonthescopeofthebankruptcystayandultimatelydeterminedthatthestayappliestoMr.Orr,GovernorSnyderandotherrelatedcityandstateofficials.Thereafter,theCourtsettrialdatestodeterminewhethertheCitywaseligibleforChapter9relief. Over100creditorsorinterestedpartiesfiledobjectionsallegingthattheCityofDetroitwasnoteligibleforChapter9orthatthebankruptcyshouldbedismissedbaseduponthethreatenedimpairmentofpensionbenefits.TheBankruptcyCourtheldatrialthatlastedseveraldaysanddeterminedthattheCityofDetroitwaseligibleforreliefunderChapter9. OnDecember5,2013,theBankruptcyCourtissueda150-pageOpinionRegardingeligibility(Doc1945,CaseNo.13-53846-swr).InitsOpinion,thecourtwrotethattheCityofDetroithadestablishedthatitmet

therequirementsforeligibilityunder11USC§109(c)byissuingthefollowingfindings:

• TheCityofDetroitisa “municipality”asdefinedin11 USC§101(40).

• TheCitywasspecifically authorizedtobeadebtorunder chapter9byagovernmental officerempoweredbyStatelawto authorizetheCitytobeadebtor underchapter9.

• TheCityis“insolvent”asdefined in11USC§101(32)(C).

• TheCitydesirestoeffectaplanto adjustitsdebts.

• TheCitydidnotnegotiateingood faithwithcreditorsbutwasnot requiredtobecausesuch negotiationwasimpracticable.

ThecourtfurtherheldthattheCityfiledthepetitioningoodfaithandthatthereforethepetitionisnotsubjecttodismissalunder11USC§921(c). ThecourtdeterminedthattheInghamCourtdeclaratoryjudgmentwasvoidbecauseitwasenteredaftertheCityfileditspetition,andthat28USC§1334(a)gavetheBankruptcy

CourtexclusivejurisdictiontodetermineallissuesrelatingtotheCity’seligibilitytobeaChapter9debtor.Thecourtalsoheldtheentryofthejudgmentviolated11USC§362(a)(3). Inawidelypublicizedportionoftheopinion,thecourtheldthattheBankruptcyCodepermitsthecourttopotentiallyimpairthefinancialbenefitsofpensionplans,despiteaprohibitionagainstdiminishingsuchbenefitsundertheMichiganConstitution.However,thecourtfurtherstatedthatthisrulingwasnotasignalthatthecourtwouldapproveaplanofadjustmentthatimpairedpensionsandindicatedthatanyimpairedtreatmentwouldbesubjecttothe“fairandequitable”requirementsofconfirmation(discussedfurtherbelow).

III. CREDITOR TREATMENT: SECURED AND UNSECURED DEBT Similartopersonalandbusinessbankruptcyproceedings,thecharacterizationoverwhetheradebtisasecuredorunsecureddebtisacriticalfeatureoftheChapter9process.InChapter11businesscases,acreditorwhohasavalidlienagainstassetsisentitledtoreceiveasadistributionthevalueofthecollateral(orastreamofpaymentsequaltothepresentvalueofthecollateral).Forexample,asecuredcreditorwithafirstprioritysecurityinterestinapieceofequipmentvaluedat$200,000shouldatleastreceive$200,000orpaymentsequaltothepresentvalueof$200,000throughthebankruptcyprocess. Municipalitiestypicallyincurdebtbysellingbonds.ThelargestclaimsinaChapter9caseareusuallyheldbybondholdersorinsurancecompanieswhoinsurethebonds.Thetwoprimarytypesofbondsaregeneralobligationbondsandspecialrevenuebonds. Amunicipaldebtorhasasignificantamountofleverageto

AfterbecomingfamiliarwiththeCity’sbalancesheet,Orrcommencedaseriesofnego-tiationswithcreditorsinanattempttoresolvetheCity’sfinancialcrisisoutsideofbankruptcyandlaythe

groundworkforeligibilityifhedeterminedthatthedebtscouldnotberestructuredout-sideofabankruptcyfiling.


adjustgeneralobligationdebtsbaseduponitssecuredstatus.

A. General Obligation Bonds Generalobligationbondsarebackedbythefullfaithandcreditoftheissuer,payablefromgeneraltaxrevenuesandotherincomeofthedebtor,butarenotsecuredbyapledgeofspecificrevenueorotheridentifiableassets.CreditorsholdinggeneralobligationbondsareunsecuredcreditorsinaChapter9case.Asgeneralunsecuredcreditors,thesecreditorsfacetheriskofreceivingpenniesonthedollartowardstheirclaims.

B. Special Revenue Bonds Thisstreamofincomearisesfromidentifiabletaxfeesgeneratedbyaspecificutilityorprojectthatthebondsfinanced.SpecialrevenuebondsarethemostcommonformofsecureddebtintheChapter9case.Typically,specialrevenuebondsareusuallynonrecourse.Inotherwords,thebondsarepayableonlyfromthepledgedrevenue,andintheeventofdefault,thebondholdershavenoclaimagainstthemunicipality’sgeneralfundorothernon-pledgedrevenuesorassets. Section902(2)oftheBankruptcyCodedefinesspecialrevenuetoincludeanyofthefollowing:

• Receiptsfromtheownership, operationordispositionof transportation,utilityorother projectsorsystemsofthedebtor, includingproceedsofborrowings tofinancetheprojectsorsystems.

• Specialexcisetaxesimposedon particularactivitiesortransactions.

• Incrementaltaxreceiptsfromareas benefittedbytax-increment financing.

• Otherrevenueorreceiptsderived fromparticularfunctionsofthe debtor.

• Taxesleviedtosupportspecific projects,excludinggeneraltaxes leviedtofinancegeneralpurposes ofthedebtor.

C. Detroit Bankruptcy Legalargumentsconcerningthesecuredstatusofvariousbondsandotherobligationshaveplayedasignificantroleinthebankruptcyproceeding.Initially,theCityarguedthatunlimitedtaxgeneralobligationbonds(“UTGO”)wereunsecured,

whichbondholdersarguedwascontrarytoestablishedlegalprecedentsinmunicipallaw.Recently,theCityhasreachedatentativesettlementwithUTGOholdersandtheirinsurers.Bondinsurerswillbepaid74centsonthedollarandthebondholderswillbemadewholebytheinsurers. AsignificantfocusoftheChapter9proceedinghasbeentheill-fatedSwapsdealthattheCityofDetroitenteredintoin2005toavoida$400millionterminationpenalty.TheCity’sfirsttwoattemptstosettleits“Swaps”obligationswithBankofAmerica,MerrillLynchandUBSwererejectedbythecourt.Finally,thecourtapprovedtheCity’s$84millionsettlementwiththesebanks,which

ensuredthattheCitywouldreceiveastreamofcriticalcasinorevenuegoingforward.

IV. PLAN OF ADJUSTMENT AND CONFIRMATION PROCESS

A. Key Components InaChapter11business,thedebtorisrequiredtofileaplanwhichsetsforthitsproposedrestructuring(orsale)ofitsbusinessoperationsorassetsandproposedtreatmentofcreditorsundertheplan.Creditorshavetherighttovoteontheplanorfileobjectionstotheplan.Ultimately,theBankruptcyCourtdetermineswhethertoapprovetheplanataconfirmationhearing. InordertosuccessfullyemergefromChapter9,themunicipaldebtorisrequiredtofileaplanofadjustment,whichissimilartotheChapter11planandincorporatesmanyoftheChapter11statutoryprovisions.Section901providesthat§1123(a)(1)-(5)appliesinChapter9cases.

Theplanmust includethefollowing:

• Theplanmustdividecreditor claimsintoclasses.Tobeinthe sameclass,claimsmustbe substantiallysimilar;however,not allsubstantiallysimilarclaimsmust beinthesameclass.Creditorsmay challengetheseparateclassification ofsimilarclaimsifthedebtoris attemptingtomanipulatevotes (votingonaplanisbyclass).

• Theplanmustspecifyclassesof claimsthatarenotimpairedbythe plan.Aclassofclaimsisnot impairediftheplanleavesitslegal, equitableandcontractualrights unaltered.

• Theplanmustspecifythetreatment ofclassesofclaimsthatare impaired.

• Theplanmusttreatallclaimsina


Inawidelypublicizedportionoftheopinion,thecourtheldthattheBankruptcyCodeper-mitsthecourttopotentiallyimpairthefinancialbenefitsofpensionplans,despiteaprohibitionagainstdiminish-ingsuchbenefitsundertheMichiganConstitution.


classequally(unlessparticular claimantsagreetoless-favorable treatment).

• Theplanmustprovideadequate meansfortheplan’s implementation.7

Theplanmayinclude,butisnotrequiredtoinclude,thefollowing:

• Theplanmayimpairorleave unimpairedanyclassofsecuredor unsecuredclaims.

• Theplanmayprovideforthe assumption,rejectionorassignment ofexecutorycontractsand unexpiredleases.

• Theplanmayprovideforthe settlementofclaimsheldbythe debtoragainstthirdparties,orthe retentionandenforcementofsuch claims.

• Theplanmayprovideforthesaleof propertytofundtheplan.

• Theplanmaymodifytherightsof securedcreditors(butmaynot interferewithaspecialrevenue pledge).

• Theplanmayprovideother provisionsnotinconsistentwiththe BankruptcyCode.8 Section901incorporates§1129(a)(2),whichrequiresthattheproponentoftheplancomplywiththeapplicableprovisionsoftheCode.Section901alsoincorporates§1125,whichrequiresthemunicipaldebtortofileandobtainapprovalofadisclosurestatementunder§1125andtransmitthedisclosurestatementtoallcreditorsentitledtovoteontheplan,alongwithaballotforvotingandothermaterials. SomeofthekeyprovisionsoftheChapter9confirmationprocessaresetforthbelow.

1. Good faith Section901incorporates§1129(a)(3),whichrequiresthattheplanbeproposedingoodfaithandnotbyanymeansforbiddenbylaw(includingnonbankruptcylaw).CourtsconsideringaChapter9planwilllikelyapplyatotalityofthecircumstancestesttodeterminethedebtor’sgoodfaithinfilingaplan.Likecertainotherareasofthelaw,thegoodfaithtestoftenresemblesa“smelltest”ora“knowitwhenyouseeit”test.Aplanwhichprefersoneclassofgeneralunsecuredcreditorsoveranotherclassthatissimilarlysituatedwithoutajustifiablebusinessreason,maybeanexampleofbadfaith.

2. Impairment of claims and acceptance of plan Section901requiresthateachclassofclaimsthatisimpairedundertheplanhasacceptedtheplan.Aclassofclaimsisimpairedunlesstheplanleavesunalteredthelegal,equitableandcontractualrightsofcreditorsintheclass.Aclassofclaimsthatisnotimpairedbytheplanconclusivelyispresumedtohaveacceptedtheplanandisnotentitledtovote.Aclassacceptsaplaniftheplanisacceptedbyholdersofatleasttwo-thirdsofthetotalamountofclaimsvotingandamajorityinnumberofclaimsactuallyvoting.Onlyclaimsthatvotecountindeterminingwhetheraplanhasgarneredtherequiredacceptance.

3. Cramdown Ifallimpairedclassesdonotaccepttheplan,thecourtmayneverthelessconfirmtheplaniftheplandoesnotdiscriminateunfairlyandisfairandequitablewithrespecttoeachimpairedclassthathasnotacceptedtheplan.Aplandoesnotdiscriminateunfairlyifit“[p]rotectsthelegalrightsofadissentingclassinamannerconsistentwiththetreatmentofotherclasseswhoselegalrightsare

intertwinedwiththoseofthedissentingclass.”

4. Best interest of creditors test Under§943(b)(7)oftheBankruptcyCode,aChapter9debtormustdemonstratethatitsplansatisfiesthebestinterestofcreditorstest.Thebestinteresttestrequiresthatthecourtfindthattheproposedplanprovidesabetteralternativeforcreditorsthanwhattheyalreadyhave.SincecreditorscannotproposeaplanorconvertacasetoChapter7,theonlyalternativetoadebtor’splanisdismissal.Often,anypossibilityofpaymentunderaChapter9planisperceivedbycreditorsasabetteralternative.9

5. Feasibility test Inordertoconfirmaplan,thebankruptcycourtmustfindthattheplanisfeasible.Chapter9doesnotincorporatetheChapter11feasibilitytestunder§1129(a)(11).However,theSupremeCourtcase,Kelley v Everglades Grainage Dist,10setforththetestinChapter9regardingfeasibility.Kelleyrequiresabankruptcyjudgetoevaluateaproposedplanofadjustmentandengageindetailedfact-findingtodeterminetheassetsandliabilitiesofthedebtor.Inaddition,thejudgeisrequiredtoanalyzetheproposedplanofadjustmentwithrespecttoprojectedrevenuesandexpenses.Thecourtisrequiredtoevaluatethelikelihoodofperformanceandtheavailabilityoffundsandrevenuestomeetthedebtor’sobligationsundertheplan.Inanutshell,thefeasibilityrequirementsetsaceilinginorderto“preventtheChapter9debtorfrompromisingmorethanitcandeliver.”11 Thebestinteresttestisa“floorrequiringreasonableeffortatpaymentofthecreditorsbythemunicipaldebtor”andthefeasibilityrequirementisaceilingthat“preventsthechapter9debtorfrompromisingmorethanitcandeliver.”12Inordertodetermine



feasibility,thecourtisalsorequiredtofindthataplanmustallowadebtortorepayitspre-petitiondebtsandcontinuetoprovideessentialgovernmentalservices.“Althoughsuccessneednotbecertainorguaranteed,moreisrequiredthanmerehopes,desiresandspeculation.”13

B. Detroit’s Plan of Adjustment TheCityofDetroitfileditsfirstPlanofAdjustmentonFebruary21,2014.Justtwomonthslater,onApril25,2014,theCityfileditsThirdAmendedPlanofAdjustment.Assettlementsarereached,theCitywillcontinuetofileamendedplans.ItishighlylikelythattheCitywillcontinuetofileamendedplansuptothedateoftheconfirmationhearingontheplan.Theconfirmationprocessisextremelyfluid,anddealsareoftenreachedonthecourthousestepspriortoaconfirmationhearing. AnyonemayreviewDetroit’splanoranydocumentsfiledinthebankruptcycase,freeofcharge,atwww.kccllc.net/Detroit.

1. Update regarding plan process and settlement discussions Aftersignificantnegotiationandfacilitativemediation,Detroit’spensionboardsandaretireegroupreachedtentativeagreementswiththeCity.Municipalretirees’pensioncheckswillbereducedby4.5%,farlessthantheinitialproposalofa26%cut.Retiredpoliceofficersandfirefighterswouldnotreceiveanycutstotheircurrentpensionchecks.Costoflivingincreaseswillbeeliminatedformunicipalretireeswhileretiredpoliceofficersandfirefighterswouldreceivesmallincreases.Inaddition,theretireescommitteeinbankruptcyreachedanagreementwiththeCitywhichcappedtotalcutstomonthly

pensionbenefitsat20%andsetupa$450millionfundforretireehealthcare. Previously,mediatorsonthebankruptcycaseworkedoutanagreementwiththeCity,theState,theDetroitInstituteofArtsandvariouslocalcharitablefoundationsregardinga“GrandBargain”tosavetheDIAcollectionandinfusecashforretireesandCityworkers.Undertheagreement,variousentitieswouldcontribute$815millionintoarescuefundaimedatsofteningpensioncutsandsafeguardingtheart.Therescuefundwouldinclude$365millionfromnationalandlocalcharitablefoundations,a$100millionfund-raisingcommitmentfromtheDIAand$350millioninStatematchingfundsthatmustbeapprovedbytheMichiganLegislature. effectuationofthetentativeagreementsisdependentuponthefinalizationofvarioussettlementdocumentsandapprovalbythecreditorssubjecttothepensionreductionsormodificationswhogettovotetoacceptorrejecttheplan.Nevertheless,theagreements,iftheyreceiveafavorablevotebypensionersandareapprovedbytheBankruptcyCourt,wouldprovidetheCitywithanimpairedacceptingclassthattheCitywillneedinordertoconfirmtheplanunderthecram-downprovisions. Nevertheless,therearestillmajorcreditorsandinterestedpartieswhomaycontinuetobeathornintheCity’seffortstoemergefrombankruptcy.SyncoraGuaranteeInc.anditsaffiliatesandtheFinancialGuarantyInsuranceCo.havefilednumerousobjectionstovariousmotionsandappealsofvariousorders.TheyarealsoinsistingthattheCitytakemoreaggressiveactiontomarketandselltheDIAartcollection.ThereisalsosignificantworkthatneedstobedonerelatingtotheDetroitWaterandSewerageDepartmentandthecreationofapotentialregionalwaterauthority.

2. Important dates ThecourthasscheduledtheCity’splanconfirmationhearingtostartonAugust14,2014at9:00a.m.,withadditionaldatessetforAugust15,August18-22,August25-29,September2-5,September8-12,September15-19,andSeptember22-23,2014.

Conclusion Thereisstillasignificantamountofheavy-liftingthatisrequiredinorderfortheCitytoemergefrombankruptcy.Nevertheless,thedealsstruckwithvariouscreditorconstituentsinrecentdaysdemonstrateapositivemomentumtowardapprovaloftheplanofadjustment.Whiletheconfirmationhearingwilllikelybelengthyandrequiresignificanttestimonyandevidence,theCityofDetroit’sgoaltoemergefrombankruptcybythefallappearstobeveryrealistic.1 Presented at MDTC’s 2014 Annual Meeting and Conference, reprinted with the author’s permission.2 11 USC § 101(40).3 2 Collier on Bankruptcy ¶ 101.40, 16th ed.4 See, e.g., In re County of Orange, 183 BR 594, 601 n 11 (Bankr CD Cal, 1995).5 See In re Westport Transit Dist, 165 BR 93, 95-96 (Bankr D Conn, 1994) (transit district); In re New York City Off-Track Betting Corp, 427 BR 256, 265 (Bankr SDNY, 2010) (off-track betting company).6 See Webster v State of Michigan, No. 13-734- CZ (July 19, 2013).7 See H. Dabney Slayton, Jr., Patrick Darby, Daniel G. Egan, Marc A. Levinson, George B. South, III, and Emily J. Tidmore, Municipalities in Peril: The ABI Guide to Chapter 9, American Bankruptcy Institute, 2d ed.8 Id.9 In re Mount Carbon Metro Dist, 242 BR 18, 34 (Bankr D Colo, 1999).10319 US 415 (1943).11Mount Carbon, 242 BR at 34.12 Id.13 Id at 35.



Channeling your inner Napoleon: Applying the Principles of War to Your Litigation CampaignsBy:edwardPerdue,Dickinson Wright PLLC

Edward Perdue isamemberatDickinsonWrightPLLC’sGrandRapids,Michiganoffice.HeservedasanartilleryofficerintheUnitedStatesMarineCorpsincludingserviceasaforwardobserverandforwardaircontrol-

lerwiththe2ndBattalion,8thMarineRegimentduringthePersianGulfWar.edpracticesintheareasofcomplexcommerciallitigation,creditors’rights,realestatelitigation,productliabilityandinsurancedefense.DickinsonWrighthasfiveofficesthroughoutMichiganaswellasofficesinWashingtonD.C.,Nashville,Phoenix,Toronto,LasVegas,andColumbus,[email protected],616-336-1038.

Inthelate1980s,inthecourseofembracingaphilosophyknownasManeuverWarfare,theUnitedStatesMarineCorpsformalizedapolicyofeducatingitsjuniorofficersnotonlywithrespecttoleadershipandsmallunittactics,butalsoinwhatcanbelooselytermed“theartofwar.”NolongerwouldsuchloftygroundbereservedtoWarCollegecurriculumsdesignedforseniorofficers.

Consequently,irrespectiveoftheirfutureoperationalspecialties,alllieutenantsattendingtheMarineCorp’sBasicSchoolinQuantico,VA(includingtheauthor)wereexposedtoacourseofstudythatincludedanextensivereadinglistandacurriculuminvolvingcertainlargelyuniversalstrategicmaximsknownas“theprinciplesofwar.”MostpeopleassociatetheprinciplesofwarwiththeFrenchgeneralandemperorNapoleon,andmakethefurtherassumptionthathewasthefatherofsuchprinciples.

Inactuality,Napoleonwasthefatherofonlyonetacticalinnovation(thedivisionalsquare).Hisgreatnessstemmednotfromthedevelopmentofanystrategicconcepts,butfromhisuniqueabilitytocompile,understandandapplyinthecourseofhiscampaignstheprincipleshelearnedfromexhaustivestudyofsuchmastersasJuliusCaesar,HannibalandAlexander.Hehadanunequaledabilitytoapplythosestrategictoolstotheparticularenemy,terrainanddispositionofforceshewasfacingtoconceiveandexecuteawinningstrategy.

Napoleonfoughtoversixtymajorbattlesinhiscareer,andonlyneartheendofhisreignwhenhisphysical,spiritualandmentalpowersbegantowanewouldheexperiencemajordefeats.Hewasultimatelydeposed(forasecondtime)afterbeingeclipsedatWaterloobyGreatBritain’sDukeofWellington.ThereWellington,attheheightofhispowers,hadtosomeextentdecipheredNapoleon’stendenciesanddevelopedhisowntacticalinnovation(theuseofreverseslopestoreducetheimpactofartillerybombardment)whichcontributedgreatlytohissuccessatWaterloo.

TheprinciplesofwarNapoleonsoexpertlyemployedinbattleareinmanycasesapplicabletocivilactionsandbusiness.WhatfollowsbelowisalistingofeachprincipleofwarasadoptedbytheUnitedStatesmilitary(asothernationscollateandcategorizethemdifferently),abriefsynopsisofitsmilitarymeaning,andsomesuggestionsonhowthatstrategicconceptmayapplytocivillitigation.TheseprinciplesaretaughttoMarinesusingtheacronymMOOSeMUSS:Mass,Objective,Offensive,Surprise,economyofForce,Maneuver,UnityofCommand,SecurityandSimplicity.

Massinvolvestheconcentrationofadecisiveamountofcombat

Executive Summary

This article, written from the perspective of a lawyer who served as an artillery officer in the United States Marine Corps, outlines the prin-ciples of war Napoleon employed in battle, briefly describes their military meaning, and suggests how each strategic concept may apply to civil litigation.

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poweratacriticaltimeandlocation.IntheageoftheNapoleonicwars,thattypicallyinvolvedthemassingofactualtroops,cavalryandartilleryatthecriticaljuncture.Todaythisconceptisspokenofintermsofmassingeffects(andnottroops),giventhelethalityofmodernweaponsystemsandtheneedfordispersementtominimizethedangertomassedtroops.eitherway,theconceptinvolvesbringingasmuchdecisiveforcetobearaspossible,intherightspotandatthekeymoment.

Inlitigationmatters,veryoftenthetrialdateorstartofarbitrationisthecriticalpointintime.examplesofhowcounselcanmasshisassetsforemploymentatthatjunctureincludea)ensuringthatonehasengagedandpreparedallnecessaryexperts;b)staffingthecasewithsufficientattorneysandparalegals;c)arrangingforspecialistsneededtoprepareorpresentanimationsordemonstrativeaids;andd)coordinatingtheeffortsofalltheseplayerstoensuretheirworkproductorassistanceisreadyandavailableatthatcriticalmoment.Masscanalsobeachievedbybeingfullyandcompletelypreparedforallphasesoftrialonthefirstday.

Objectiveistheneedtodirectallofone’soperationstowardawell-definedanddispositivegoal.Themilitarynolongerthinksinlineartermsofstrictlygaininggeographicalobjectives,butratherofdestroyinganenemy’sabilityandwilltofight.Napoleonfullyunderstoodthatdestructionoftheenemyforcewasalwayshismainpurpose,whilehisAustrianandPrussianopponentswereinmanycasesblindedbytheperceivedneedtoholdanddefendstrategicallymeaninglessfortresses

orotherground.Insimilarfashion,itbehooves

litigationcounseltoavoidlinearfocusonmerelyobtainingajudgmentornocauseverdict.Theultimateobjectivemaybemoreakintoobtainingacertainamountofmoney(bywhatevermeans),orofresolvingthedefenseofamatterinawaythatlowersthetransactioncoststotheclientwellbelowthatofobtainingasummaryjudgmentornocauseverdict.Irrespectiveofwhatthatgoalis,leadcounselmustensurethathisefforts(andthoseofhisteam)arestrictlyfocusedonmeetingtheobjectiveandnoton

tangentialoretherealbenefitsthatprovetobeadistractionofeffortandmanpower.

Duringtheearlystagesofacaseitmayalsobehelpfultoconferwiththeclienttoformaconsensusonwhattheobjectiveis,andtothenplanbackwardsfromthetrialdatebyidentifyingthetasksandintermediateobjectivesthatneedtobeaccomplishedalongthewayandwhenthoseneedtobedone.

Offensiveisarguablythemostimportantoftheprinciplesdiscussedhere.Itcanbesummarizedastheprocessofseizingandmaintainingtheinitiativeinawaythatdisruptstheenemy’sabilitytoengageineffectiveoperations.Forexample,oftenthroughthespeedofhisadvancesandtheunusuallyquick

tempoofhisoperations,Napoleonwasabletosurpriseandconfusehisenemy,andtherebygainandmaintaintheinitiative.Bygainingtheinitiativehewasabletoimposehiswillontheenemy,andcorrespondinglydenytheenemythetimeandclarityneededtoeffectivelyexecuteoperationswhichcouldinterferewiththeachievementofhisobjective.

Havingidentifiedandcommunicatedtheobjectiveforthecivilaction,anddraftedaplanorworklisttoachievethatend,howcancounselseizeandmaintaintheinitiative?Onemethodistobegindroppingproverbialbombs(providedthereisaneedforthemandtheyarenotadvancedforsomeimproperpurpose).Thedetermined,methodicalandtimelyexecutionofthetasksontheworklistwillservethispurpose.

Ifservingapleadinginstatecourt,perhapsoneattachesrequeststoadmit,interrogatoriesanddiscoveryrequeststotheservicepackage.Ifrequiredtowaituntilthemeetandconferasrequiredbythefederalrulesofcivilprocedure,thosepaperscangooutimmediatelyafterthemeetandconferisconcluded.Depositionsarerequestedtoimmediatelyfollowthedeadlinesforthediscoveryresponses.Thirdpartywitnessesarecontacted,interviewedandfavorableaffidavitsareobtained.Motionsinliminearepreparedwellinadvance.Inall,thewhirlwindofyourexecutionmakesitdifficultforopposingcounseltoeffectivelyformulatehisownplansandmeethisownobjectives.Ifexecutedcorrectly,anuptempooffensivebreedsrewardsdisproportionatetoitssubstantivemerits.

Arelatedconceptisgetting“inside”youropponent’s“OODALoop.”TheOODAloopisthemonikerforaconceptualdecision

Napoleonfoughtoversixtymajorbattlesinhiscareer,andonlyneartheendofhisreignwhenhisphysical,

spiritualandmentalpowersbegantowanewouldheexperiencemajordefeats.

APPLYING THE PRINCIPLES OF WAR TO YOUR LITIGATION CAMPAIGNS

Vol. 31 No. 1 • July 2014

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makingsequenceconsistingofthefollowingsteps:Observe,Orient,Decide,andAct.TheOODALoopconceptwasdevelopedbyAirForceColonelandstrategistJohnBoydtohelpwarfightersunderstandthewaystheirdecisionmakingprocesscanhelpthemwinandsurviveincombatsituations.

Originallydesignedtoexplainthethoughtprocessofasingleactor,suchasafighterpilotengagedinadogfight,theOODAconcepthasbeenexpandedtotacticalandstrategiclevelmilitarydecisionmaking,andisnowappliedtothecivilianworld’scommercialoperationsandlearningprocesses.

TheOODAisactuallyarecurringdecisionmakingcycle,oraseriesofloops,thatisgeneratedwitheachnewchangingfactorordevelopment. “Gettinginside”youropponent’sloopmeansthatyouareprocessingandreactingtoinformationatapacefasterthanhewillultimatelybeabletorespondto.Statedanotherway,ifyoumaintainarapiddecisionmakingtempo(whichisfasterthanyouropponent’s),youwillultimatelydefeatyouropponent’sabilitytoeffectivelyreacttoyouractions.Theinherentchaosandconfusionofasituationiseffectivelyembracedandfunneledtowardtheopponentwhileyoucontinuetotakeactionswhicharedesignedtoachieveyourobjective.Applyingthisconcepttolitigation,onecanseehowanoffensivemindsetandaggressivetempoarecriticalelementstokeepinmindwhendesigningandprosecutingthecampaign.

Surprise,whichinmilitarytermsgoeshandinhandwithdeception,isaforcemultiplyingconcept.Achievingsurprise,eitherwithrespecttotempo,directionorlocationofmain

effort,timing,orthesizeofforce,canresultinsuccesswhichisdisproportionatetotheamountofeffortexpended.Napoleon’stroops,forexample,thoughwearyfromlongandrepeatedforcedmarches,marveledathisabilitytowinbattleswiththeirfeetinsteadofbyforceofarms.Confoundinghisenemiesonmanyoccasionsbyseeminglyappearingoutofnowherewellintheirrearorastridetheirlinesofcommunications,Napoleonwonasmanybattlesthroughunexpectedmaneuver,deceptionandsurpriseashedidthroughapplicationoffirepower.

Inthelitigationcontext,counselshouldmakeeveryefforttokeephisopponentoffbalance.Considerhowyoucanbestsurpriseopposingcounselwiththefocusofyourproofsorargument.Itisoftensaidthatbythetimeoftrial,itiscleartobothsidesexactlywhattheopposinglineofattackwillbe.Iftruewithrespecttoyourpresentation,thatisadisservicetoyourclient.Thisisnotadvocating“trialbysurprise,”butratherthemaintenanceofconfidentialityaboutthefocusofone’smaineffortattrial.

Asanexample,surprisecanbeachievedbyallowingopposingcounseltobelieveyourfocuswill

besubjectAwheninfactitwillbesubjectB.Onecanethicallyandappropriatelydiscloseallfactsandexhibitstoopposingcounselwithoutrevealingone’sstrategy.Powerfuldemonstrativeexhibitsmayalsobeusefultoachievesurprisethoughonemustsatisfyanydisclosureobligationsanderronthesideofdisclosuretoensuresuchvisualaidsarenotexcluded.

economyofForceisthecounterbalancetotheprincipleofMass.Ifoneistoconcentratecriticalresourcesatadecisiveplaceandtime,theremustbeacorrespondingdrawingofassetsfromother,non-criticalareas.Combatpowershouldnotbewastedonsecondaryornon-essentialefforts.Napoleononceallowedajuniorstaffofficertosuggesttheallocationofforcesattheoutsetofacampaign.Thestaffofficeralignedthetroopsincarefullyequalmeasuresatequaldistancesalongtheboundaryofthefrontier.Commentingonthedisposition,Napoleonstated:“Verypretty,butwhatdoyouexpectthemtodo?Collectcustomsduties?”

Ascrunchtimeapproachesinacase,shouldleadcounselbeengagedintypingupvoluminousdepositiondesignationsubmissionsorotherministerialtasks?ApplyingeconomyofForcewoulddictatethatsuchtasksbeassignedtolegalassistantsorparalegals.Totheextentleadcounselhasthesupportofsecondorthirdchairattorneys,hemaybeabletodelegatethelaboriousreviewofvoluminousdepositiontranscriptsusedinthepreparationofcrossexaminationoutlines.Leadcounselcouldinsteadbefocusedonthecoordinationandmarshallingofallhislitigationsupportassets,andofcraftingandfinetuningthedeliveryofhiscentralmessageattrialthroughhisdirectexaminationsand

Irrespectiveofwhatthatgoalis,leadcounselmustensurethathisefforts(andthoseofhisteam)arestrictlyfocusedonmeetingtheobjectiveandnotontangentialoretherealbenefitsthatprovetobeadistractionofeffortand

manpower.


Michigan Defense Quarterly

15

openingandclosingstatements.Maneuverinitsmostbasic

formreferstothemovementofforcesinrelationtothepositionoftheenemy.effectivetacticsofteninvolvetheemploymentof“fireandmaneuver.”Withfireandmaneuverenemyforcesarefixed(preventedfrommoving)andmentallyoccupiedbyfire(suchasartilleryormachinegunfire),whileone’sownforcesapproachtheenemyfromanunexpecteddirectiontodeliverthedecisiveblowinclosequarters.OneofNapoleon’stwofavoritestrategieswasknownasthemanoeuvresurlesderrieres,andthatinvolvedtheabovementionedmethodofpositioninghismainforcebehindtheenemyoracrosshislinesofcommunication.

TheothersuccessfulstrategyemployedbyNapoleontimeandagainwasthe“centralposition.”ThatstrategywasdesignedtoallowFrenchforcestobemovedalonginteriorlinessothattheywereabletoconcentratesuperiorforcesatthecriticalplaceandtimetodefeatadividedenemy,eventhoughtheywereoutnumberedoverallinthetheaterofoperations.Napoleon’sFirstItaliancampaign(1796-97)andtheopeningphasesoftheWaterlooCampaign(LignyandQuatreBras)aregoodexamplesofhisemploymentofthislineofthinking.Onecaneasilyseehowthecentralpositionphilosophycouldbeusedtofocusonandsequentiallydisposeoftwoormoreopponentsinthesamecivilaction.

Asmentionedintheopeningabove,theconceptofManeuverhasmoregloballycometorepresentanarguably“new”wayofthinkingabouttheprosecutionofstrategiccampaigns.However,because(asNapoleonshowsus)itisfactuallyincorrecttosuggestthattheconceptofmaneuverisin

anysense“new,”itismoreaccuratetodescribethephilosophyofmaneuverasonewhichistheantithesistothe“old”tired,bloodyandlargelyineffectivepracticeofmakingfrontalassaults.Itisinthatsensethatlitigatorscanembracethissomewhatnebulousconcept.Dowhatisunexpectedanddonotmakeyourapproachwhereyouropponentexpectsyouto.Usepermissiblesurpriseanddeceptiontomakeyourpointsinanunexpectedmanner,withneworunrevealedtechnologyorinsomeothermethodthatyouropponentisnotexpecting.Thepossibilitiesforapplicationofthisprinciplearelimitedonlybyone’simagination.

InamilitarysenseUnityofCommandaddressestheneedforaneffectivecampaigntobeledbyoneindividualwiththeauthoritytodirectallaspectsoftheoperation.UnityofCommandistheantithesisofrulebycommittee.Ithasproventrueovertheagesthatforceswhichareledbyonepersonwhocanexerciseasingularandcohesiveconceptwillfarebetterthancampaignswhicharesubjecttodividedcommand.Theadvantageofaunifiedcommandisthatitallowsthecommandertodirectoperationstowardasingularpurposewithoutthedemoralizingandpotentiallydisastrouseffectofhavingconflictingdirectivesissuedtothecommand.

Itisnolessimportantforalegalcampaigntobedirectedtowardawell-definedgoalbyasingledesignatedleader.exercisingunityofcommand,leadcounselcanensurethatwhatiscontainedinthetrialbriefisconsistentwithwhatisintheproofs.Hemaysynchronizetheargumentstobemadeonopeningwiththeargumentsanddemandsbeingmadeintheclosing.The

proofsanddamagessoughtmustbeconsistentwiththeexpertconclusions.Themotionsinliminemustbeadvancedtoshapeandfocusthepresentationofevidenceattrialinawaythatmaximizesthechancesofachievingtheoverallobjective.Allofthesepiecesmustbecoordinatedtosupportthemessageandthemebeingcommunicatedtothefactfinder.Thebestwaytopresenttheseelementsharmoniouslyistohaveonepersonclearlyincharge.

TheprincipleofSimplicityappliesinwarfareinmuchthesamewayitappliesinothercontexts.Onemustunderstandthatnoplansurvivesfirstcontactwiththeenemyinitsentirety.effectivecommandersanticipatethatintheheatofbattletherewillbeacertainlevelofconfusionandmisunderstanding–commonlyreferredtoasthe“fogofwar.”Accordingly,one’sordersmustbesimpleandprecise.Oncetheplanofattackisrevealedandcommittedto,itshouldbeaggressivelypursuedwithoutdistraction.

Withregardtoplanning,oneneednottakeafrontalapproachinordertokeepthingsrelativelysimple.Forexample,onecanemployasimpleplanoffireandmaneuverwithtwoelements,abaseoffireandamaneuverelement,withoutoverlycomplicatingmatterswithintricatemovementsordelicatetiming.Napoleon’sopponentsinhisearlycampaigns,particularlytheAustrians,RussiansandPrussians,wererepeatedlyguiltyoffoolishlyattemptingtoexecuteextremelycomplicatedplanswithmanymovingpartsinthefaceofacomparablysingularmindandpurpose.

Similarly,onacase,tangentialandsecondarypointsandargumentsshouldbeavoided.


Vol. 31 No. 1 • July 2014

Thereisonlysomuchthatafactfindercanbeexpectedtograspintheheatofthetrial,andcounselshouldfocusonhowtobringallhisassetstobeartohammerhomethosekeyfactsandarguments.Totheextentyouareworkingwithsecondorthirdchairs,oraremanagingastaffwhileontrial,attempttomakeyourinstructionsandassignmentsclearandunderstandable.Communicatetheintentunderlyingyourinstructionstoallowforimprovisationandindependentthinkingbysubordinatesasnecessary.Finally,doyourbesttoanticipatetheunexpectedby,forexample,allocatingresourcesandtimetorespondtomotionsinlimineandbygenerallybeingcompletelypreparedfortrialinadvanceofthetrialdate.

Whenyouareengagedintherelativelysimpleactofexecutingapreparedandwell-rehearsedplan,trialislessstressfulandyouwillbeinamuchbetterpositiontoreacttotheinevitablesurprisesandunanticipatedchallengeswhichwillariseduringtrial.

Lastly,theprincipleofsecurityisacounterparttotheprincipleofsurprise.Itinvolvestakingmeasurestodenytheenemyknowledgeandinformationaboutyourownforces.Napoleonregularlyconcealedthedispositionandlineofmarchofhisforcesthroughtheemploymentofanextensivecavalryscreen.

Fromtheoutsetofacivilactionleadcounselcansetthetoneforestablishingthesecurityofone’sownstrategies.Considerenforcingapolicyofallowingonlyonepointofcontactforcommunicationsandnegotiationswithopposingcounsel.Communicatetheneedforyourteamtokeepyourplan,strategy,anticipatedmotions,andeventhe

natureofyourdemonstrativeexhibitsconfidentialwithintheboundsofethicsandlocalrules/practice.Thereislittlepurposeservedinrevealingsuchmattersprematurelytoopposingcounsel,evenifasked.Thetimeforunveilingone’smassedattackisatthepointintimewhenyouropponentcannolongereffectivelyrespond-notsoearlythathecanshoreuphisproofs,demonstrativeevidenceorwitnesslineup.

Insum,theprinciplesoutlinedherearetoolswhichcanbefittedtothecircumstancesandchallengesofeachindividualcase.Theymaynotallbebroughttobearinonecivilaction,andtheirapplicationmustbetailoredtofitthenatureofthecase.In

addition,applicationofstrategicthinkingdoesnotsuggesttheneedfordiscourtesyorunpleasantness.Rather,onecanemploytheprinciplesofwarwhileexercisingtheutmostcourtesytoopposingcounselandtheclosestadherencetotherulesofprocedureandprofessionalconduct.

Takethetimeuponreceivinganewlitigationfiletoidentifyyourclient’sobjective.Formulateaplanwhichputsthepiecestogetherthatwillachievethatgoal.executetheplanwithvigor.Beboldandaggressive,andkeepyourtrialstrategyconfidential.Trytoanticipateyouropponent’smovesandkeephimoffbalance.Whateveryoudo,doitwithélanandbedecisive-seizeyourdayincourt.


Researching and providing correct building code and life safety statutes and standards as they may affect personal injury claims, construction, and causation. Specializing in theories of OSHA and MIOSHA claims. Member of numerous building code and standard authorities, including but not limited to IBC [BOCA, UBC] NFPA, etc. A licensed builder with many years of tradesman, subcontractor, and general contractor (hands-on) experience. Never disqualified in court.

Ronald K. Tyson (248) 230-9561(248) 230-8476 [email protected]



Three Ways for Corporate Counsel to Mitigate Litigation Risk: An Accounting Expert’s PerspectiveBy:BarryJayepstein,Ph.D.,CPA,CFF,Cendrowski Corporate Advisors LLC

Onthemostbasiclevel,theroleofthegeneralcounselistoensurethattheorganizationisactingwithinthelimitsofthelaw.Additionally,corporatecounselshouldbeconcernedwithminimizingtherisksoflitigationagainstthecompany,includingthosepertainingtodisputesaboutthecompany’saccountingforspecifictransactionsorevents.Oftentimes,suchconflictsrequireorwouldbenefitfromtheuseofaccountingprofessionalsintheroleofconsultant,expertorthird-partytrieroffact.

Basedontheauthor’sexperienceasaCPAinvolvedinlitigationforoverthirtyyears,presentedbelowarethreekeywaysthatcorporatecounselcanmitigatetheriskoflitigationintheirorganizations:

1. Encourage the implementation of a comprehensive system of internal controls

Almostallmattersthatcouldevolveintolitigationoverthecompany’saccountingpractices–suchasallegationsofrevenuerecognitionfraud,using“cookiejarreserves”tosmoothearnings,orfailuretorecognizeexpensessuchasemployeestockoptiongrants–implicateinternalcontrolweaknessesthatshouldhavepreviouslybeenaddressedandresolvedbymanagement.Corporatecounselcanplayaroleinensuringthatappropriatecontrolsaredeveloped,implementedandmonitored.

In1992,theCommitteeofSponsoringOrganizationsoftheTreadwayCommission(COSO)publishedInternalControl--IntegratedFramework,anupdatedversionofwhichwasreleasedinmid-2013.1TheCOSOFrameworkdefinesinternalcontrolas“aprocess,effectedbyanentity’sboardofdirectors,managementandotherpersonnel,designedtoprovidereasonableassuranceregardingtheachievementofobjectives”inthreecategories:(i)effectivenessandefficiencyofoperations;(ii)reliabilityoffinancialreporting;and(iii)compliancewithapplicablelawsandregulations.Thescopeofinternalcontrolthereforeextendstopolicies,plans,procedures,processes,systems,activities,functions,projects,initiatives,andendeavorsofalltypesatalllevelsofacompany.

Mostpublicly-heldcompanies,subjecttoSarbanes-OxleyAct2reportingrequirements,usetheCOSOFrameworkasthebenchmarkforevaluationoftheircontrols,althoughthisisnotmandatory.Manyprivately-heldcompaniesstrivingforeffectivenessofcontrolsalsoemployeitherthefullCOSOFrameworkorasmallcompanyvariantpublishedby

Barry Jay Epstein, Ph.D., CPA, CFF, ([email protected])isaprincipalatCendrowskiCorporateAdvisorsLLC,wherehispracticeisconcentratedontechnicalconsultationsonU.S.GAAPandIFRS,andasaconsultingandtestifyingexpert

oncivilandwhitecollarcriminallitigationmatters.Dr.epsteinwastheauthoroftheHandbookofAccountingandAuditing(RIAThomsonReuters),andco-authorofWileyGAAP2010,WileyIFRS2010,WileyIFRSPoliciesandProcedures,andotherbooks.


AN ACCOUNTING EXPERT’S PERSPECTIVE

COSOin2006.3

TheAssociationofCertifiedFraudexaminers(ACFe)notesthatlackofinternalcontrolsisbyalargemarginthemostcommonlycitedfactorthatallowsfraudschemestosucceed,followedbyabsenceofmanagementreviewandover-rideofexistingcontrols).4Thisiscorroboratedbythefactthatsmallercompanies,typicallyhavingfewerorweakercontrols,arevictimizedmoreoftenthantheirlargerbrethren.Smallercompaniestendtorelymostheavilyonexternalauditstofindorpreventfraud,butstatisticscompiledbyACFeclearlyshowthatauditsarerarelyeffectiveatdetectingfraud–onereasontherearemanyaccountants’negligencesuits.

Clearly,iffraudistobepreventedordetectedinatimelymanner,theentitymusthavecomprehensive,effectiveinternalcontrols,aboutwhichcounselcanandshouldbeaforceforeducatingtheboardandmanagement.Properlydesigned,implementedandmaintainedcontrolscannotonlylargelypreventtheoccurrenceoffraud,butcanaideforensicaccountantsindetectingfraud,shoulditoccur,andinidentifyingtheguiltyparties.

2. Be proactive in dealing with external auditors

Financialstatementsaretheresponsibilityofmanagement,butareviewoftheauditors’workingpaperscanbevitaltounderstandingtheextentofmanagement’srelianceonandacquiescencetotheauditors’advice.Althoughmanagementaloneisresponsibleformakingfinancialreportingpolicydecisions,whenitseekstheauditors’adviceontechnical

issuestheauditorswilltypicallypreparea“memotofile”ontheadvicesoughtandoffered.

Corporatecounselshouldadvisemanagementtoalsofullydocumentitsownunderstandingofconsultationswithitsoutsideauditors.Intheeventof

allegationsoffinancialreportingimproprieties,thisdocumentationwillaidthelitigationteamdefendingmanagement,asitcanhelptoilluminatemanagement’sintentionsandmotivations,aswellastheextenttowhichitwasdiligentinseekingexpertguidance.

Intheeventoflitigation,areviewoftheauditors’workingpaperscanassistdefenseattorneysinunderstandinghowtheauditorscametorenderanunqualifiedauditopiniononfinancialstatementsthatarelatercontendedtohavecontainedmaterialerrorsordeliberateirregularities.Counsel,actingthroughtheboardauditcommitteeifappropriate,shouldseektoimpressupontheauditorstheneedtocommunicateandmemorializeallsuchdeliberations.

3. Control the risks inherent in mergers and acquisitions

Manyaccountingfraudallegationsariseinconnectionwithmergersandacquisitions,(M&A),includingtheuseofso-called“cookiejarreserves”asavehicletoprovideforfuturereportingofprofitableoperations.

Whenacquisitionsarelargelybasedonprojectedfutureprofitability,theuseofcontingentpayoutarrangements–mostcommonlyearn-outagreements–canhelpmitigatetheeffectsofinformationasymmetrywhichotherwisemayhinderthebuyer’sabilitytoreachafairtransactionprice.However,thebiggestconcernindevisingearn-outspertainstohowfutureprofitabilityistobemeasured.

Manycontractingpartiesbelievethat,byspecifyingtheuseofGenerallyAcceptedAccountingPrinciples(GAAP)tomeasurefutureperformance,disputescanbeobviated.However,asurprisinglylargenumberofdisagreementsdevelopevenwhenGAAPistheagreed-uponmetric,inpartbecausetherestillremainsasignificantamountofflexibilitywithinGAAP.Forthatreason,thesellershaveadutytocompletecomprehensiveduediligenceofthebuyers’financialreportingpractices,andspecificallyoftheaccountingtreatmentsaccordedtothosebusinesstransactionsandeventsthatmayplayarollinultimatepaymentsunderearn-outagreements.

Anunderstandingofrecentandforthcomingaccountingpronouncementsthatcouldalterfuturemeasurementsofperformancewillbeimportanttoprotectingtheseller’srights.Additionally,considerationshouldbegiventostipulatingtotheuseof“frozenGAAP,”whichallows

Whenacquisitionsarelargelybasedonprojectedfuture

profitability,theuseofcontin-gentpayoutarrangements–mostcommonlyearn-out

agreements–canhelpmiti-gatetheeffectsofinformationasymmetrywhichotherwise

mayhinderthebuyer’sabilitytoreachafairtransactionprice.


anyagreementtobeevaluatedinthefuturebasedoncurrentGAAPregulationsatthetimeitwassigned,forthedurationoftheearn-outperiod.

Anotheroptionisexplicitlydefiningaccountingrecognitionandmeasurementmethodsforthoseaccountingstandardsthatpermitchoicesamongalternativetreatments,suchasforinventorycosting,depreciationmethodsandcomputationofbaddebtreservesforvaluingcustomerreceivables.

Counselforbothsellerandbuyerhaverolestoplayinassuringthattheirclientoremployerisprotectedfromunanticipatedeffectsofcreative

accountinginterpretationsbycounter-partiesinsuchcircumstances.

1 Committee of Sponsoring Organizations of the Treadway Commission. Internal Control – Integrated Framework(2013). By Everson, Miles. E.A. et al. May 2013.

2 Sarbanes-Oxley Public Company Accounting Reform and Investor Protection Act of 2002 (SOX), Pub. L. No. 107-204, 116 Stat. 745 (2002), codifiedat15U.S.C.§7262.

3 Committee of Sponsoring Organizations of the Treadway Commission. Internal Control – over Financial Reporting – Guidance for Smaller Public Companies. By Everson, Miles et al. AmericanInstituteofCertifiedPublic Accountants, June 2006.

4 AssociationofCertifiedFraud Examiners. Report to the Nations on Occupational Fraud and Abuse – 2012 Global Fraud Study. 2012.

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Diversity, Civility, and DialogueBy:BrianD.einhorn,StateBarofMichiganPresident,Collins Einhorn Farrell PC

IfthereisasingleunifyingprinciplebehindAmericanlawandpolitics,it’sthis:listeningtoopposingviewsmakesuswiser.

Theartoflisteningisattheheartofourdailyworkaslawyersandjudges.Weworkupcasesbyseekingcolleagues’adviceandtestingideas—maybeoveracupofcoffee(orasteamingdoublelattemochawithtwosugars).Weemphasizediversitywhenwerecruitnewattorneystoourlawfirmsbecausewewantpeoplewhobringdifferentexperiencesandadifferentview.

Judgesareethicallyobligatedtomaketheirdecisionsonlyafterhearingfrombothsides,ensuringthattheirdecision-makingbenefitsfromtheback-and-forthofadvocacy.Appellatejudgesengageindialoguewithotherjudgesbeforeandafterhearingarguments.Writtenappellateopinionsareaccompaniedbyconcurrencesanddissents.

Inalltheseways,ourworkasattorneysembodiesthebeliefthatvettingideasamongthosewhoseviewsmaydifferfromourownhelpsexposeweaknessesandpromotesoundthinking.Dialoguemakesusbetter.

Anattorneycannotdevelopasuccessfulpracticewithoutentertainingothers’ideas.Itisthereasonwereviewbar-sponsoredlistservs,attenddiscussionsatmeetingsandprofessionalorganizations,andconsultprofessionaljournalsonaregularbasis.Mypoint:youcannotbeeffectiveasalawyerifyouexistinanechochamberofyourownthoughts;debateisthelaboratoryoflaw.

Democracy,too,dependsondebate.Candidatesforpoliticalofficecompeteinthemarketplaceofideas,vyingwithotherswithintheirpoliticalpartiesandbeyondtoconvincevotersthattheirpositionsarethemostsound.Onceelected,thetime-honoredtraditionisthattheydebateissuesonthelegislativefloororsubmittoquestioningfromskepticaljournalists.

Therearesharpelbowsinpolitics,buttheyarethrownwithapurpose.Attheirbest,thepoliticaljabsexposetheweaknessesincandidates’ideasandhighlightthepropositionsthat,inthepublic’sjudgment,havethemostpromise.Itisn’taperfectsystem.Buttherough-and-tumbleofdebateinthepoliticalarenahasmostlyservedournationformorethantwocenturies.

Discussionofopposingviewsissoessentialtoourlegalandpoliticalsystemsthatitisnotanexaggerationtosayitiscentraltowhatwemeanbythe“ruleoflaw.”Afairandjustgovernment—indeed,alegitimate

Reprinted with permission from the January 2014 issue of the Michigan Bar Journal.

Brian D. Einhorn


DIVERSITY, CIVILITY, AND DIALOGUE

government—mustfostertheairingofdifferentviews.Whenacommitmenttorealdialogueandopendebatebreaksdown,strangethingscanhappen.Michiganhasjustwitnessedsuchanevent.

OnOctober24,2013,statesenatorsintroducedSenateBill652.ThisbilltransferredallactionsagainstthestatefromtheLansing-basedCourtofClaimstoanewpanelcomposedoffourjudgesfromtheMichiganCourtofAppeals.Reasonablemindscandifferaboutwhetheritwasagoodideatohavefiveorsixjudges—fromonecountyrepresentingabout3percentofthestatepopulation—decidingallcasesthatarefiledagainstthestateofMichigan.Butregardlessofyourviewofthewisdomofthefundamentalchangethelegislationmakes,youshouldbetroubledbythewayitbecamelaw.

Thebillcameupsoquicklythatevenlobbyistswerecaughtunaware.ItwasintroducedintheSenateonOctober24,andreportedoutofcommitteeandpassedbytheSenatesixdayslater.TheSenatecommitteeheardtestimonyfromonlytwoindividuals—BobLaBrant,seniorcounselfortheSterlingCorporationsupportingthebill,1andBruceTimmons,2recentlyretiredlegislativecounselwhoworkedforlegislativeRepublicansforseveraldecades,opposingit.AttorneyGeneralBillSchuettefiledacardinsupportofthebill,butdidnottestify.

ThestateconstitutionrequiresthatabillbeinthepossessionofeachhouseforatleastfivedaysbeforetheHousecanpassit.WhentheHousereceivedthebillfromtheSenateonthesixthdayafteritsintroduction,wordabout

thebillhadbeguntospreadthroughoutthelegalcommunity.IntheHouse,thebillwasreferredtotherarelyusedGovernmentOperationsCommitteeratherthantheJudiciaryCommitteethattypicallyconsidersbillsaffectingthecourtsystem.ThecommitteeheardtestimonyfromtheSBMAppellatePracticeSection,theMichiganAssociationofJustice,theOaklandCountyBarAssociation,individualattorneys,andjudgesofthe30thCircuitCourt(fromwhosecourtthebilltransferredCourtofClaimsjurisdiction),andacceptedwrittenstatementsfromtheSBMNegligenceLawandAppellatePracticesections.Thethrustofmostofthetestimonywastoaskthattheprocessbeslowedsoamorecompleteanalysisofthebillcouldbeprovidedtoanswermanyofthequestionssurroundingthelegislation.

TheHouseGovernmentOperationsCommitteewasaskedtoconsiderandlistentowaysthebillcouldaccomplishwhatwasapparentlytheprimarypurposeofthelegislation—movingcasesfromtheInghamCountybench—withoutburdeningtheCourtofAppealsoraffectingrightsoflitigants.Butthebillpassedwithoutanychanges.

TheStateBardidnothaveanopportunitytoweighinonthebill.MichiganSupremeCourtAdministrativeOrder2004-01prohibitstheBarfromconsideringpendinglegislationforatleast14daysafterpostingnoticeonitswebsite.Theenactmentofthebill,fromproposaltosigningbytheGovernor,wassoswift—13days—thatwedidnothaveachancetopostthenoticeandwaittherequisite14daysbeforeitbecamelaw.

InenactingwhatisnowPublicAct164insuchsummaryfashion,thelegislatureignitedneedlessinnuendoandcynicismand,moreimportantly,depriveditselfofanessentialingredienttoanoptimalresult—ameaningfulairingofopposingviewpointsandconstructiveinput.

Obviousandimportantquestionswereleftunansweredasthebillspedtowardenactment.AtthetimetheSenateandHouse“considered”andthenpassedPublicAct164,theydidnotknow—and,insomecases,stilldonotknow—thefollowing:

• Theexactscopeofthe jurisdictionalexpansionof thenewCourtofClaims • Thenumberofcases immediatelytransferredtothe CourtofClaims • Theconstitutional implicationsofthebill; specifically,thebill’simpact ontherighttojurytrial3 • HowjurytrialsintheCourt ofClaimswouldbehandled (juryboxes,court reporters,etc.) • Thedueprocessimplications ofassigningappellatereview tojudgesinthesamecourt • HowappealsfromtheCourt ofClaimswouldbehandled • WhethertheCourtofClaims judgeswouldalsobein regularCourtofAppeals panelrotation • Anassessmentoftherelative convenienceforparties throughoutthestate • HowcostsofthenewCourt ofClaimssystemwouldbe assigned • Howjoinderworksifthe CourtofClaimscasesare/ wereassignedtoaspecial master



• Thebill’sfiscalimpact • Theroleofspecialmaster andwhoappointsthespecial master,andwhois responsibleforassessment andassignmentofcosts relatingtothespecialmaster • Howtoaddressthepractical andconceptualdifficultiesof mixinganappellatecourt withtheroleofatrialcourt ofrecord,including(1)how hearingpanelswillbe selectedtohearanddecide appealsfromdecisionsof fellowCourtofAppeals judgesand(2)howto accommodatejurytrials

• Howtohandlethejoinderof theCourtofClaimswith relatedcircuitcourtactions whenoneormoreofthe partieshasarighttojurytrial

Hadthesequestionsbeenaskedandansweredandopposingviewpointsfullyairedasthebillmovedthroughthelegislativeprocess,surelywewouldhavearrivedatabillthataccomplishedwhatthemajoritywanted—movingcasesawayfromasinglecircuitcourtbench—butinawaythatdidnotburdentheCourtofAppeals,stressthecourtsystem,andcausewidespreadconfusionanddisruptionthroughoutthe

legalcommunity.

In1998,PortuguesewriterJoseSaramagowontheNobelPrizeforhisnovelBlindness.4It’sajarringworkbuiltonasimplepremise:anepidemicofblindnesssweepsthroughatown.Theafflictedarelockedawayinanasylumwhere,existingintheinvisibilityofuniversalblindness,theyinflicthorribleactsoneachother.

Thesmall-scaleviolenceofBlindnessinvokesthestill-unimaginableviolenceofthetwentiethcentury,suggestingthattherootofbothisaninabilityto

perceiveothers’sharedhumanity.Saramago’sallegorycomesfullcircletowardthenovel’send,whenadoctorhintsthattheepidemicwasoneoftheheartratherthantheeyesorthehead:“Idon’tthinkwedidgoblind,Ithinkweareblind,Blindbutseeing,Blindpeoplewhocansee,butdonotsee.”5

Thesameepidemicisspreadingthroughoutourpoliticalsystem—inWashingtonandinstatelegislatures,andincivicdiscourseeverywhere.Butinsteadofrobbingusofoursight,itrobsusofhearing—orworse,wantingtohear.

Saramago’spainfullyaptallegoryforthetwentiethcenturysometimesseemstofittwenty-firstcenturypolitics,withonlyasmallalteration:Wearedeaf.Deafpeoplewhocanhear,butdonothear.

Justasscorched-earthlitigationstrategiesareinimicaltolong-termsuccessandgoodlaw,theviewthatideologicalpurityoneithersideoftheaisleismoreimportantthanopeninquiryandmeaningfuldialogueisadangertogoodpublicpolicy.Itrejectsthewisdomthatisembodiedinourlegalandpoliticaltraditions.

I’vepracticedlongenoughtoknowthatnothinglastsforever.PerhapsthedownsideofsteamrollerpoliticswillsoonbecomeobviousenoughtopromptnationalandstatelawmakersandWashingtontostop,reflect,andreturntofirstprinciples.Andtolisten.

Inthemeantime,wemustinsistofourpoliticiansandinourownlivesandpracticesthatdiversity,civility,anddialoguematter.Wecanleadbyexampleandcheeronthelawmakersof

bothpartieswhorecognizethathealthylawsaretheproductofhealthydebate.1 HistestimonybeforetheSenate committeeisavailableat http://www.senate.michigan.gov/ committees/Default.aspx?commid=62 (accessedDecember19,2013).2 HistestimonybeforetheHouse committeeisavailableat: http://house.michigan.gov/MHRPublic/ Committeelnfo.aspx?comkey=229 (accessedDecember19,2013).3 Thiswasanissuespecificallyflaggedby thegovernorbeforehesignedthebillas needingquickresolution.TheHousehas nowpassedHB5156topreserverightsto ajurytrial.4 Saramago,Blindness(NewYork:Harvest Books,1999).5 Id.at326.




• Deeds:evenifthedeedhasbeenrecorded,youneedtokeepitinasafeplace.Ifthedeedhasnotbeenrecorded,itisadvisablethatyouhavethedeedrecordedandthenkeptinasafeplace.

• Title Policy on Real Estate:Onlykeepthetitlepolicyforrealestatethatyoucurrentlyown.Ifyouhavesoldtherealestate,youdonotneedtokeepthetitlepolicy.

• Loan Documents: Onlykeeptheseiftheyrelatetorealestateyoucurrent-lyownoranyobligationthatisstilloutstanding.

• Tax Returns:Theseneedtoberetainedforsevenyears,aswellasanyassociateddocumentationthatwasusedinthepreparationofthereturns.

• Brokerage Statements:Year-endstatementsneedtobekeptforsevenyears.Assoonasyoureceivetheyearlystatementandhaverevieweditagainstthemonthlyorquarterlystatements,themonthlyorquarterlystate-mentscanbediscarded.

• Bank Statements/Cancelled Checks (if you get these): Thestatementsneedtoberetainedforsevenyearsiftheyrelatetoanytaxissuesthatareinclud-edonanyreturnsfiledforthepastsevenyears.

• Explanation of Benefits or other Healthcare Information:Theseshouldberetainedfortwoyearsoruntilthemedicalbillhasbeenpaidinfull.

• Utility Bills: Oncethebillhasbeenpaid,thereisnoneedtokeepthese.

• Credit Card Bills: Reviewthemmonthlyandkeepthemforsevenyearsifanyofthepurchasesarerelatedtoanytaxdeductionstakeninthepastsevenyears.

• Estate Planning Documents:Alwayskeepyourestateplanningdocumentsinasafeplacewhereyouandyourfamilycaneasilyfindthem.

Tara L. BachnerisamemberofWillingham&Cote,P.C.’sestatePlanningGroup.Herpracticefocusesonestateplanning,includingfederalestatetaxplan-ning,probateandtrustadminis-trationandournewprogramSimplyWills.

Spring Cleaning and Your Important DocumentsBy:TaraL.Bachner,Willingham & Cote, P.C.

Withspringcleaninguponus,severalclientshaveaskedwhat

typesofdocumentsshouldbekeptandforhowlong.Thefollowingaresomeofthemostcommondocumentsyouarelikelytohaveandsuggestionsabouttheappropriateamountoftimetoretainthem.


AMichiganlawwasrecentlyenactedwhichwillallowparentstotransferresidentialrealestate(includingcottages)totheirchildrenwithoutcertainpropertytaxincreases.ThesubstanceofthislawwentintoeffectDecember31,2013.Itisimportanttokeepthislawinmindwhenconsideringdecisionsregardingthetransferofrealestatetoyourchildren.

What Is the Problem? Thetransferofrealestateoftencausesanincreaseintheamountofpropertytaxesthatthenewownerwillhavetopayinthefuture.Inordertounderstandtheproblem,itisimportanttoconsiderhowthetaxablevalueiscalculated. Realestatehasbotha“stateequalizedvalue(SeV)”anda“taxablevalue.”Thestateequalizedvaluerepresentsone-halfofthefairmarketvalueofthepropertyasdeterminedbythelocalassessor.Thetaxablevalueistheamountthatissubjecttopropertytaxes.Intheyearafteryouacquirerealestate,theSeVandtaxablevaluearethesame.Indeterminingyourpropertytaxes,municipalitiesmultiplythetaxablevalue(nottheSeV)ofyourpropertybythemillagerate.Michiganlawlimitstheyearlyincreaseofthetaxablevalueofrealestate(nottheSeV)totherateofinflationor5%,whicheverisless.SincetheSeVisalwaysbasedonfairmarketvalue,theSeVoftenincreasesmorethanthetaxablevalue.

Why Does this Matter? Generally,thelongerthatrealestateisowned,thegreaterthegapbetweentheSeVandthetaxablevalue(sincepropertyvalueshavegenerallyincreasedovertime).Upona“transferofownership”(asdefinedbyMichiganlaw),thetaxablevalueisadjustedupwardtoequaltheSeV.Thisiscommonlycalled“uncapping”ofthetaxablevalue.Thispropertytransferandtheresulting“uncapping”cangreatlyincreasetheamountofpropertytaxesthatwillbeowed.

The Good News Historically,atransferofrealestatefromaparenttoachildwasconsidereda“transferofownership”thatuncappedthetaxablevalueoftherealestate.Thatoftencausedlargeincreasesinthepropertytaxesthatachildwouldhavetopay.Thisisespeciallytrueforcottagepropertythathasbeenownedbythesamefamilyformanyyears.

Transferring Cottage Property to Your Children Without Tax Increases By:ScottA.Breen,Willingham & Cote, P.C.

Scott A. BreenisamemberofWillingham&Cote,P.C.’sBusiness,RealestateandHospitalityandAlcoholBeverageGroups.HeisalsoafirmShareholder.Mr.Breenmaybereachedat517-324-1021or

[email protected].


TRANSFERRING COTTAGE PROPERTY TO YOUR CHILDREN WITHOUT TAX INCREASES

AsofDecember31,2013,thereisnolongeranuncappingofthetaxablevalueofrealestateif:(1)aparenttransfersresidentialrealestatetoachild(orfromachildtotheparent);and(2)theuseofthepropertydoesnotchangefollowingthetransfer.Thislawallowsparentstotransferpropertycharacterizedas“homestead”propertyaswellasothertypesofresidentialpropertysuchascottages.Thechildwouldhavetousethepropertyinthesamemannerastheparents.Forexample,thechild

wouldlikelynotbeabletoleaseacottagetoathirdpartyiftheparentswerenotdoingsopriortothetransfer.

The Bad News Asisoftenthecase,thereissomebadnewstofollowthegoodnews.Thereisonemajorproblemwiththenewlaw.Itiscurrentlyunclearwhetherthelawallowsapersonalrepresentativeoftheparent’sestate(orasuccessortrusteeoftheparent’strust)totransferthepropertytothe

childafterthedeathoftheparent.Taxpractitionersareattemptingtogetclarificationonthisissuethroughanamendmenttothelaw. Thisuncertaintymakesestateplanningevenmoreessentialbecausethereareotherplanningtechniquesthatmaybeusedtoaddresstheseconcerns.Giventhisnewlaw,ifyouownrealestateandintendtotransferittoyourchildren(eitherbeforeorafterdeath),itwouldbewisetotakeanotherlookatyourestateplan.


In the days since my last report in March, our state legislators have been busy completing their work on the next fiscal year’s budget, and having done so, they have left town to hit the campaign trail. They’ll be back for a day or two in July and August, but it is safe to predict that nothing of substance will be addressed until the Legislature recon-venes in September. There was the usual flurry of activity leading up to the sum-mer adjournment on June 12th. Important issues were addressed and agreement was reached on some, with others left for another day.

It is appropriate to give credit where credit is due, so it must be suggested that a round of applause is deserved for the bipartisan effort that yielded a signifi-cant state contribution to the “grand bargain” in the pending Detroit bank-ruptcy. The no-fault insurance reform legislation dropped from the radar while matters financial were being addressed, and our legislators tried without success to craft a “revenue neutral” solution to the state’s 1.5 billion dollar road repair problem. These and other issues will await further consideration in the fall.2014 Public Acts

As of this writing on June 18, 2014, there are 180 Public Acts of 2014. The

new acts which may be of interest include:

2014 PA 52 – Senate Bill 636 (Nofs – R), which has amended the Michigan Telecommunications Act to create new procedures to allow telephone service providers to discontinue tradi-tional land line telephone service in favor of voice over internet or wireless service, effective January 1, 2017.

2014 PA 138 – Senate Bill 934 (Richardville – R), which has created a new “Workforce Opportunity Wage Act” to repeal and replace the existing minimum wage law of 1964. Under the new law, the standard hourly minimum wage will be increased from $7.40 to $9.25 by January 1, 2018, in four steps, with subsequent annual increases tied to the rate of inflation if the rate of unem-ployment does not exceed 8.5%. The minimum hourly wage for tipped employees will be increased from $2.65 to 38% of the standard minimum wage, beginning September 1, 2014.

This legislation was introduced and quickly passed to scuttle an effort to provide a significantly higher increase by way of a voter-initiated amendment to the 1964 Act – an effort which has now been rendered moot by the repeal of the former act. It provides a good example of how a legislative log jam can be bro-ken by pressure brought to bear else-where. Many of those who stood outside on street corners to collect signatures for the ballot proposal were angered by the legislative nullification of their effort, and yet, it is fairly safe to assume that the Legislature would not have addressed this issue at all without their help.

2014 PA 159 – Senate Bill 714 (Schuitmaker – R), which has created a new “Uniform Collaborative Law Act”

providing new procedures for facilita-tion of family law and domestic rela-tions issues by lawyers representing par-ties as “collaborative lawyers” in the new-ly-defined “collaborative law process.”

2014 PA 101, 102, 103 and 105 – Senate Bills 547, 548 and 549 (Booher – R) and House Bill 5119 (VerHuelen – R), which have amended Articles 3, 4 and 4a of the Uniform Commercial Code and the Uniform Electronic Transactions Act to effect a number of amendments concerning commercial paper and electronic transactions. 2014 PA 104 – Senate Bill 551 (Booher – R) has amended Article 9 of the Uniform Commercial Code to impose limitations on recoveries by debtors and secondary obligors for default of obliga-tions under Article 9. Old Business and New Initiatives

There are a number of interesting issues in the pipeline. They include:

Senate Bill 743 (Meekhof – R), which proposes elimination of compul-sory membership in the State Bar of Michigan. As I mentioned in my last report, the Supreme Court convened a special Commission in response to this legislation to study objections to the State Bar’s political activities and consid-er whether membership in the State Bar should be a voluntary choice. Further consideration of Senate Bill 743 has been held in abeyance pending consider-ation of the Commission’s recommenda-tions, which were published on June 2nd.

House Bill 5511 (McCready – R), which proposes amendment of MCL 600.6458 to establish new provisions to facilitate the collection of support, amounts owed to the state or its subdi-visions, and amounts due under court orders for restitution, fines, reimburse-

MDTC Legislative Section

By:GrahamK.Crabtree,Fraser, Trebilcock, Davis & Dunlap, [email protected]

MDTC Legislative Report

Graham K. Crabtree isaShareholderandappellatespecialistintheLansingofficeofFraserTrebilcockDavis&Dunlap,P.C.BeforejoiningtheFraserfirm,heservedasMajorityCounselandPolicyAdvisortotheJudiciary

CommitteeoftheMichiganSenatefrom1991to1996,andasanAssistantProsecutingAttorneyintheAppellateDivisionoftheOaklandCountyProsecutor’sOfficefrom1980to1991.Hecanbereachedatgcrabtree@fraserlawfirm.comor(517)377-0895.


ments, penalties or assessments, from payments made in satisfaction of Court of Claims judgments against the state or its political subdivisions. This bill was reported by the House Committee on Families, Children and Seniors with a Substitute (H-1) on May 21st, and now awaits consideration by the full House on the Second Reading Calendar.

House Bill 5505 (Walsh – R), which would amend the Revised Judicature Act, MCL 600.308a, to allow local units of government to bring an action to enforce provisions of the Headlee Amendment (Const 1963, art 9, §§ 25 to 31), and to require that all such actions, and all actions brought by taxpayers under Const 1963, art 9, § 32, be filed as original actions in the Court of Appeals. The bill would also add six new sections establishing procedures for processing and adjudication of those actions. This bill was introduced on April 30, 2014, and referred to the House Committee on Financial Liability Reform.

House Bill 5558 (Leonard – R), which would amend the Michigan Consumer Protection Act, MCL 445.904, to specify that the act does not apply to create a cause of action for unfair, unconscionable or deceptive methods, acts or practices made unlaw-ful under Chapter 20 of the Insurance Code of 1956, if the method, act or practice in question occurred on or after March 28, 2001, or to such methods, acts or practices occurring before that date if an action based upon those methods, acts or practices is filed after June 5, 2014. The purpose of this legislation is to require a retroactive application of 2000 PA 432, the legisla-tion which originally excluded uncon-scionable or deceptive methods, acts or practices made unlawful under Chapter 20 of the Insurance Code from the pro-tections afforded by the Consumer Protection Act. The bill has been passed by both houses, and was ordered

enrolled, without immediate effect, on June 12th.

House Joint Resolution FF (McBroom – R), which proposes an amendment of Const 1963, art 4, § 27, to reform the constitutional process for granting immediate effect to legisla-tion. In its current form, this section provides that no act may take effect until the expiration of 90 days after the end of the session in which it was passed, unless the Legislature gives immediate effect to the act by a two-thirds vote of the mem-bers elected and serving in each house. In practice, this has meant that bills not given immediate effect by a separate two-thirds vote do not take effect until 90 days after the last adjournment of the year, which typically occurs during the week between Christmas and New Year’s Day. If the two-thirds approval can be obtained, the act may take effect imme-diately upon filing with the Secretary of State, or at any time specified therein.

The problem addressed by the pro-posed amendment has arisen from the longstanding practice in the House of declaring the existence of the constitu-tionally required two-thirds majority vote by fast action of the presiding offi-cer’s gavel on a voice vote, without any reliable proof of concurrence by two-thirds of the members. This practice has been utilized over the years by presiding officers of both parties, and has often been used by the party in control to declare immediate effect when the required supermajority vote cannot be legitimately obtained. The practice was recently employed last fall to grant immediate effect to Senate Bill 652, the controversial Court of Claims legislation, in spite of compelling evidence that the motion was not supported by the required two-thirds majority.

HJR FF would advance the default effective date by the addition of new language providing that legislation can-not take effect until 90 days after the date of filing with the Secretary of State

(instead of 90 days after the final adjournment of the session) unless given immediate effect by a two-thirds vote. As introduced, this joint resolution would end the abusive “fast gavel” prac-tice with a new requirement that the two-thirds approval be secured by a roll call vote.

This joint resolution was reported by the House Government Operations Committee without amendment on June 4th, but a Substitute (H-2) was adopted on second reading. The substitute elimi-nated the requirement of a roll call vote in favor of a less precise requirement that the vote tally be recorded in the journal. The substitute also included new lan-guage to ensure that the amendment would not be applied retroactively. On June 12th, in the flurry of activity lead-ing up to the summer adjournment, the amended resolution was defeated amid concerns that 90 days of lead time would be inadequate in many cases, and pro-tests that a roll call vote should be required, as originally proposed. A motion for reconsideration of the vote has been made and deferred for another dayOnline Resources

Our members are reminded that copies of legislative materials, including bills, resolutions, legislative analyses, the House and Senate Journals, and a detailed history of each bill and resolu-tion, may be found on the Legislature’s very excellent website. The website includes copies of all public acts and the official compilation of Michigan statuto-ry law. The available bills and resolutions include the versions as originally intro-duced and as passed by each house, and the site has recently been improved to include links to bill substitutes which have been reported from the House and Senate Committees or adopted in pro-ceedings before the full House or Senate.

Itisappropriatetogivecreditwherecreditisdue,soitmustbesuggestedthataroundofapplauseisdeservedforthebipartisaneffortthatyieldedasignificantstatecontributionto

the“grandbargain”inthependingDetroitbankruptcy.


Notices of Intent and the 182-Day Waiting Period

Furr v McLeod,___MichApp___;___NW2d___(2014).ApplicationforleavetoappealtotheSupremeCourtpending.ThisopinionwasissuedbyaspecialpaneloftheCourtofAppealsconvenedafterthecourtdeclaredaconflictwithTyra v OrganProcurement Agency of Michigan,302MichApp208;840NW2d730(2013)inFurr v McLeod,303MichApp801(2013)vacated,conflictpanelconvened303MichApp801(2013).The Facts:Theplaintiffsfiledtheir

complaint181daysafterservinganoticeofintent(“NOI”),insteadofthe182daysrequiredunderMCL600.2912b.Thetrialcourtdenieddefendants’motionforsummarydisposition,relyingonZwiers v Growney,286MichApp38;778NW2d81(2009)(invokingMCL600.2301toexcuseacomplaintfiled1daytoosoon).AfterthatrulingthedefendantsfiledanapplicationforleavetoappealtotheCourtofAppeals.Intheinterim,theSupremeCourtdecidedDriver v Naini,490Mich239;802NW2d311(2011),whichreaffirmedthatBurton v ReedCity Hosp Corp,471Mich745;691

NW2d424(2005)stillapplieddespitetheSupremeCourt’sdecisioninBush v Shabahang,484Mich156;772NW2d272(2009)(permittingacourttoeitherignoreorallowaplaintifftoremedydefectsinthesubstanceofNOIs).Inlieuofgrantingleave,theCourtofAppealsremandedtothetrialcourtforreconsiderationofthesummarydispositionmotionunderDriverandBurton.Afterthetrialcourtagaindeniedsummarydisposition,theCourtofAppealsgrantedleavetoappeal.The Ruling: TheCourtofAppeals,

inanopinionauthoredbyJudgeWilliamWhitbeckandjoinedbyJudgeMichaelJ.Kelly,concludedthatDriverandBurtoncompelledthedismissaloftheplaintiff’scomplaint,andessentiallyinvalidatedZwiersandthepropositionthatMCL600.2301couldsomehowbeusedtochangethedateofserviceofanNOIorthefilingofacomplaint.Thepanelnoted,however,thatTyra,supra,whichcompelledtheoppositeconclusion,wasbindingunderthe“first-out”ruleofMCR7.215(J).Accordingly,itheldthatthoughitwouldhavereversedthedenialofsummarydisposition,itwasconstrainedbyTyratoaffirminstead.TheCourtofAppealsinvokedtheconflict-resolutionprocedureandenteredanordervacating FurrunderMCR7.215(J)(5),andconvenedaspecialpaneltoresolvetheconflictbetweentheTyra and Furr decisions.Theseven-memberconflictpanel

ruled4-3infavorofaffirmingthetrialcourt’sdenialofsummarydisposition(andthusresolvingtheconflictinfavorofTyra).Themajorityopinion,

authoredbyChiefJudgeWilliamMurphy,andjoinedbyJudgesJaneMarkey,StephenBorrello,andJaneBeckering,heldthatthemajoritycouldnot“discernwithanycertitudewhethertheDriver CourteffectivelyoverruledZwiers.”ThemajorityreasonedthattheSupremeCourthadnotmadeclearthatitmeantto“precludetheapplicationofMCL600.2301underanycircumstancesentailingaBurton-typesituationinwhichacomplaintisprematurelyfiled”beforethetimepermittedunderMCL600.2912b.ThemajoritydistinguishedDriver

bypointingoutthatinDriver,theplaintiffsoughttosuepartiesagainstwhomthestatuteoflimitationshadalreadyrunbyusingMCL600.2301to“amend”theNOIandaddthepartyin.TheFurr majorityfocusedheavilyontheDriver Court’sanalysisofwhethertheplaintiffcouldrelyonMCL600.2301throughconsiderationofthestatutorylanguage.TheFurr majorityinferredthatthistacitlyimpliedthatthecourtwascontemplatingthatinadifferentsituation,wheretheplaintifftimelyservedanNOI,MCL600.2301mightbeusedtoexcusenoncompliancewiththenoticewaitingperiodsetforthinMCL600.2912b.Curiously,however,theFurr

majoritydiscussed—andindeedwentasfarasblock-quoting—theportionoftheDrivercaseinwhichtheCourtstressedthatBushexplicitlyconfirmedthatBurtonwasgoodlawandthatallplaintiffswererequiredtostrictlycomplywiththenoticewaitingperiod.Thatnotwithstanding,theFurr

MDTC Professional Liability Section

By:GeoffreyM.Brown,Collins Einhorn Farrell, [email protected]

Medical Malpractice Report

Geoffrey M. BrownisanassociateintheappellatedepartmentatCollinseinhornFarrell,P.C.,inSouthfield.Hisfocusisprimarilyontheappellatedefenseofmedical-malpracticeclaims,andhehassubstantialexperiencein

defendingappealsinlegal-malpracticeandotherprofessional-liabilityclaims.HisemailaddressisGeoffrey.Brown@ceflawyers.com.


majorityconcludedthattheDriverCourtsomehowleftthedooropentoallowingnoncompliancewiththenoticewaitingperiodtobeexcusedunderMCL600.2301.Accordingly,theFurrmajoritydidexactlythat:heldthatMCL600.2301excusednoncompliancewiththewaitingperiod.JudgePeterO’Connellissueda

dissentingopinionjoinedbyJudgeMichaelTalbot.ThedissentconcludedthatitwouldhavereversedthedenialofsummarydispositionforthereasonsstatedinJudgeWhitbeck’sopinionintheearlierFurrcaseaswellasthosesetforthinthedissentingopinioninTyra.JudgePatrickMeterissuedaseparatedissentingopinioninwhichhejoinedJudgeO’Connell’sdissent.ButJudgeMeter,amemberofthepanelthatissuedtheZwiersopinion,disagreed

withtheFurrmajorityandfeltthatDriverhadimplicitlyoverruledZwiers.Practice Tip:Fiveyearsafterthe

SupremeCourt’sdecisioninBush,thereisstillquiteabitofuncertaintyabouthowmuchcompliance—ifanyatall—withtheNOIwaitingperiodisrequired.eveninBush,theCourtseemstobeclearthataplaintiffmuststrictlycomplywiththatperiod.TheresultsinZwiers,Tyra,andFurr,andsimilarcases,however,wouldsuggestotherwise.TheFurrmajority,inclosingitsopinion,supporteditsdecisiontoholdthatDriverdidnotoverruleZwiersbyexplainingitsviewthat“thesoundlegalcourseforthisCourtistoleavetheissueforafuturedefinitivedecisionbytheMichiganSupremeCourt,shouldtheCourthavetheopportunityandinclinationtoaddressthematter.”

ApplicationsforleavetoappealfromtheCourtofAppeals’opinionsinbothTyraandFurrarepending,sotheSupremeCourtwillhavetheopportunitytoresolvetheissueifithastheinclinationtodoso.GiventheobviousconflictamongtheCourtofAppealsjudgesonwhetherZwierscontinuestobegoodlaw,itwouldnotbesurprisingtoseetheSupremeCourtgrantleavetoappeal.WhileBushhasturnedacontent-basedNOIchallengeintoallbutafool’serrand,itisprobablynotyettimetothrowinthetowelonBurton-relatedchallengestocomplaintsfiledprematurely,beforetheexpirationoftheNOIwaitingperiod.

SeeMichiganDefenseQuarterly,Vol.30,No.3,p.38,formoredis-cussionoftheearlieropinioninFurr,andtheopinioninTyra.

TheCourtofAppealsinvokedtheconflict-resolutionprocedureandenteredanordervacatingFurrunderMCR7.215(J)(5),andconvenedaspecialpaneltoresolvethe

conflictbetweenthe TyraandFurrdecisions.


Does a Decision that Has Been “Vacated,” even if on “Other Grounds,” Have Precedential Effect?Whenwritingabrief,manypractitionersfindthemselvescitingadecisionthatwaseitherreversedorvacated“onothergrounds.”Whenitcomestoadecision’sprecedentialvalue,doesitmatterwhetheradecisionwas“reversed”or“vacated”?Itappearsthattheanswerisyes.Asageneralmatter,decisionsthathavebeen“vacated,”evenifonothergroundsorwith-outaddressingthemeritsofthedecisionbeingvacated,arenotpreceden-tiallybinding.Suchdecisionsare,however,commonlycited,includinginjudicialopinions.Itiscommonlyrecognizedthat“[a]decisionmaybereversedonother

grounds,butadecisionthathasbeenvacatedhasnoprecedentialauthoritywhatsoever.”Durning v Citibank, N A,950F2d1419,1424n2(CA9,1991),citingO’Connor v Donaldson,422US563,578n12(1975)(“OfnecessityourdecisionvacatingthejudgmentoftheCourtofAppealsdeprivesthatcourt’sopinionofprecedentialeffect,leavingthisCourt’sopin-ionandjudgmentasthesolelawofthecase.”).Seealso5AmJur2dAppellateReview§791(“Thevacationofthejudgmentororderofthecourtbelowgenerallydeprivessuchjudgmentororderofanyeffect,includingprecedentialeffect.”).ThisisthegeneralrulebothinMichiganandinthefederalcourts.Asthe

MichiganCourtofAppealshasexplained:“[A]CourtofAppealsopinionthathasbeenvacatedbythemajorityoftheSupremeCourtwithoutanexpressionofapprovalordisapprovalofthisCourt’sreasoningisnotprece-dentiallybinding.”People v Mungo,295MichApp537,554;813NW2d792(2012).Federalcourtshavelikewiseobservedthat“[w]henimposedbytheSupremeCourt,vacatureliminatesanappellateprecedentthatwouldotherwisecontroldecisiononacontestedquestionthroughoutthecircuit.”Russman v Bd of Educ,260F3d114,121n2(CA2,2001).Ofcourse,thisisnottosaythatsuchdecisionsarenevercited.The

MichiganSupremeCourtandCourtofAppealshaveregularlyciteddeci-sionsthathavebeen“vacatedonothergrounds.”See,e.g.,People v Hendrickson,459Mich229,237;586NW2d906(1998)(citingUnited States v Hawkins,59F3d723,730(CA8,1995),vacatedonothergrounds516US1168(1996));Bennett v Mackinac Bridge Auth,289MichApp616,630;808NW2d471(2010)(citingJuncaj v C & H Industries,161MichApp724,734;411NW2d839(1987),vacatedonothergrounds432Mich1219;434NW2d644(1989)).ThesameistruefortheSixthCircuitCourtofAppeals.See,e.g.,Talley v Family Dollar Stores of Ohio, Inc,542F3d1099,1110(CA6,2008)(relyingonadecisionthathadbeen“vacatedonothergrounds”);U S ex rel Snapp, Inc v Ford Motor Co,532F3d496,499n2(CA6,2008)(same).

MDTC Appellate Practice Section

By:PhillipJ.DeRosier,Dickinson Wright,andTrentB.Collier,Collins Einhorn Farrell, [email protected];[email protected]

Appellate Practice Report

Phillip J. DeRosier isamemberintheDetroitofficeofDickinsonWrightPLLC,andspecializesintheareaofappellatelitigation.PriortojoiningDickinsonWright,heservedasalawclerkforMichiganSupremeCourt

JusticeRobertP.Young,Jr.HeservesasSecretaryfortheStateBarofMichigan’sAppellatePracticeSectionCouncil,andisthechairoftheAppellatePracticeSectionoftheDetroitMetropolitanBarAssociation.Hecanbereachedatpderosier@dick-insonwright.comor(313)223-3866.

Trent CollierisamemberoftheappellatedepartmentatCollinseinhornFarrell,P.C.,inSouthfield.Hispracticefocusesonthedefenseoflegalmalprac-tice,insurance,andgenerallia-bilityclaimsattheappellatelevel.HisemailaddressisTrent.

[email protected].


Sowhatdoesthismeanforpractitioners?Practitionersshouldcertainlyusecautionwhencitinganydecisionthathasbeenvacated,recognizingthatevenifthehighercourtdidnotpassonthemeritsofthedecision,ittechnicallydoesnothaveprecedentialvalue(unlikeadecisionthathasmerelybeen“reversed”onothergrounds).Atthesametime,suchdecisionsmaystillhavepersuasivevalue.See,e.g.,Jackson v Georgia Dep’t of Transp,16F3d1573,1578n7(CA11,1994)(notingthatalthoughanopin-ionfromanothercircuithadbeen“vacatedonunrelatedgrounds...itsreasoningdoeshavepersuasivevalue”).

Taking Judicial Notice of Facts on Appeal BoththefederalandMichigan

rulesofevidenceprovidefortakingjudicialnoticeoffactsthatarenotreasonablyindisputeandwhoseaccuracycanreadilybedetermined.SeeFedRevid201;MRe201.Althoughjudicialnoticeisprobablytakenmostoftenatthetrialcourtlevel,itiswellrecognizedthatappellatecourtsarelikewiseempow-eredtodoso.See,e.g.,People v Goecke,457Mich442,448n2;579NW2d868(1998)(“Acourtmaytakejudicialnoticeoffactsnotnoticedbelow,whetherrequestedornot,atanystageoftheproceeding.”);United States v Ferguson,681F3d826,834(CA6,2012)(observingthatthestandardunderRule201fortakingjudicialnoticeoffacts“appliestoappellatecourtstaking

judicialnoticeoffactssupportedbydocumentsnotincludedintherecordonappeal”).

examplesofmattersofwhichappel-latecourtsinMichiganandotherjurisdictionshavetakenjudicialnoticeonappealinclude(butarecertainlynotlimitedto): • Recordsofjudicialproceedings inothercourts.See ChilingirianvMiro,Wiener& Kramer,PC,No.247798;2004 MichAppLeXIS3156,*1n1 (MichApp,Nov18,2004); Ferguson,681F3dat834; • Mattersofpublicrecord.See WolverineGolfClubvSecof State,24MichApp711,715n 2;180NW2d820(1970) (SecretaryofStatefiling);Inre Watson,517F2d465,474 (CCPA,1975)(FDAorder); • Marketdata.SeeThomasv Thomas,176MichApp90,93; 439NW2d270(1989) (ConsumerPriceIndex);Boston PropexchTransferCov Iantosca,720F3d1,1n9(CA 1,2013)(stockmarket movements); • Geographicalinformation.See McCroskeyvGeneDemings MotorSales,94MichApp309, 311;288NW2d418(1979) (distancebetweentwocities); UnitedStatesvLeveto,540F3d 200,206n2(CA3,2008) (same); • Censusfigures.SeeUnited StatesvPhillips,287F3d1053, 1055n1(CA11,2002); AFSCMeCouncil25vCounty ofWayne,292MichApp68,

92;811NW2d4(2011)(“We takejudicialnoticeunderMRe 201thatWayneCountyhasa populationthatexceeds 1,000,000....”); • Historicalevents.SeeSchnitzv GrandRiverAveDevelopment Co,271Mich253,258;259 NW900(1935)(theGreat Depression);McDonnell DouglasCorpvIslamic RepublicofIran,758F2d341, 346(CA8,1985)(“[W]etake judicialnoticeoftherecent escalationofthewarbetween IranandIraq,thebombingof TehranbytheIraqiAirForce, Iraq’sthreattoshootdownall commercialplanesoverIran, andthesuspensionofflightsto Iran,byseveralcommercialair lines....”); • Statementsonawebsite.See InreApplicationofIndiana MichiganPowerCo,275Mich App369,371n2;738NW2d 289(2007)(takingjudicial noticeofstatementscontained ontheU.S.Departmentof energy’swebsite);GentvCuna MutInsSoc’y,611F3d79,(CA 1,2010)(CDC’swebsite); • Otherwell-acceptedoreasily verifiablefacts.Seeelizabeth LakeestatesvWaterfordTwp, 317Mich359,365;26NW2d 788(1947)(risingcostofcon structionduringWorldWarII); PeoplevBurt,89MichApp 293,297-298;279NW2d299 (1979)(“Wetakejudicialnotice that,infact,nofootballgame betweenWashingtonand

Asageneralmatter,decisionsthathavebeen“vacated,”evenifonothergroundsorwithoutaddressingthemeritsofthedecisionbeingvacated,arenotprecedentiallybinding.


Dallas,orbetweenanyother professionalfootballteams,was televisedonthedateinques tion,namely,December24, 1976”);UnitedStatesvArney, 248F3d984,989(CA10, 2001)(“Wetakejudicialnotice ofthefactthatdaysareshorter anddarknesscomesearlierin Decemberthaninother months.”);UnitedStatesv Anderson,584F2d369,374 (CA10,1978)(“[W]etakejudi cialnoticeofthefactthatfed eralreservenotesarevaluedin dollars.”).

No Brief Is an Island: An Introduction to Hyperlinking Appellate BriefsJohnDonneoncewrotethatno

manisanisland.Thesameisincreasinglytrueofdocuments.Booksandarticleswereonceislandsuntothemselves.Theymayhaveref-erencedothersourcesbuttheywerenotconnectedtothosesourcesinanymeaningfulway.Ifareaderwantedtoreviewcontentcitedinabook,heorshehadtoclosethebook,getup,andlocatetherefer-encedvolume.Thesamehasbeentrueforlegal

briefsforaboutaslongaslegalbriefshavebeenwritten.Butitmaynotbethecasemuchlonger.Itisnosecretthatjudges(like

attorneys)areincreasinglyreadingbriefsonscreen,bothoncomputersoriPads.Thischangeinourreadinghabitscallsforchangesinourwrit-

inghabits.Attorneysnolongerhavetogivedirectionsforreaderstotrackdownreferencesontheirown.Withhyperlinks,attorneyscanplacekeydocumentsdirectlyinfrontofjudgesandtheirclerks.Ifyoudoanyreadingonthe

Internet,you’venodoubtseenhyper-links.Theyareportalstoothercon-tent—text,usuallyinanothercolororunderlined,thatthereadercanclicktobetakendirectlytotherefer-encedsource.IftheNewYorkTimescitesareportfromReuters,forexam-ple,itcanprovideahyperlinktogivethereaderaneasypathtosourcematerial:Almostallofthesourcesthatattor-

neysuseareavailableonlinenow.Andjustaboutanyexhibittoanappellatebriefcantaketheformofanelectronicdocument.Consequently,anadvocatecanputallthematerialsthatsupporthisorherargumentsjustoneclickawayforthejudgeorlawclerkreadingabrief.Thisshouldn’tbenewsformost

appellatelawyers;leadinglegalresearchserviceslikeLexisandWestlawalreadyhyperlinklegalauthoritiescitedinlegalopinions.We’veseenfirsthandhowhyperlinksfacilitateanalysis.Wesimplyhavetoprovideforjudgesthesamelevelofconvenienceweexpectforourselves.Ifyou’vefollowedthisfar,you

probablyhavethreemainquestions:(1)howdoIhyperlink,(2)inwhichcourtscanIusehyperlinking,and(3)whatarethepitfallsformyclients?Althoughcompleteanswersarebeyondthescopeofthisarticle,this

articlewillprovideenoughinforma-tiontogetyoustarted–andperhapsencourageyoutoseekmoreresourc-esonhowtousehyperlinksasanadvocacytool.

1. How do I hyperlink?There’snoone-size-fits-allanswer,

sinceweallusedifferentsoftwaretodraftbriefs.ButMicrosoftWordpro-videsausefulstartingpoint.essentially,hyperlinkingrequires

twoskills:(1)copyingURLsforthesourcesyouwanttolinktoand(2)insertingareferenceintoaWorddocument.SupposeyouwanttolinktoCntyofWaynevHathcock,471Mich445(2004).Ifyou’reconfidentthatthecourtwhereyou’llbefilingusesWestlaw,youcansimplysearchfor“471Mich445”inWestlawandthencopytheURLfortheresultingpage:Ifyouwanttoreferyourreaderto

aspecificpageinHathcock,substi-tuteyourpinciteforthecase’sinitialpage.So,forexample,ifyouwanttocitepage468fromtheMichiganReporter’sprintingofHathcock,searchWestlawfor471Mich468.ThencopytheURLforthatpage:OncetheURLiscopied,returnto

Word,selectthetextyouwanttohyperlink,andright-click.“Hyperlink”willbeoneoftheoptionsthatappearsinthedialogbox.Makesure“existingfileorweb-page”isselectedintheleft-hand“linkto”column,andpastetheURLintotheboxthatfollows“address.”Alternatively,youcanusethe

“hyperlink”tabunder“insert”inMicrosoftWord:

Althoughjudicialnoticeisprobablytakenmostoftenatthetrialcourtlevel,itiswellrecognizedthatappellatecourtsarelikewiseempoweredtodoso.


Youcanalsohyperlinktootherpartsofyourbrief.Forexample,youmightallowyourreadertoclickonaportionofyourintroductiontojumpdirectlytothereferencedargument.First,you’llneedatargetforyourinternalhyperlink.InsteadofusingtheURLtoanexternalwebsite,youwilluseeitheraheader(ifyourtextisformattedinWord)orabookmarkcreatedspecificallyforthispurpose.TakingChiefJusticeYoung’sopin-

ioninHathcockasatext,supposewewantedtoaddalinkintheintro-ductiontotheconstitutionalanalysisthatfollowstheCourt’sstatutoryanalysis.Westartbyaddingabook-marktothebeginningoftheconsti-tutionalanalysis.Selectthe“target”text,clickthe

“insert”tabonattop,andchoose“bookmark.”Typeashortnameforthebook-

mark–ithastobeoneword—andclick“add.”Nowreturntothetextthatyou

wereusingasajumping-offpoint.Highlightthetextyouwanttocon-verttoahyperlink,right-clickorselect“hyperlink”underthe“insert”tab,andchoose“placeinthisdocu-ment”inthe“linkto”tab.Thenselectthenameofthebookmarkyoujustcreated.Notethatyoucanhyperlinkin

PDFsaswell.ButPDFsoftwareisvariableenoughthatyou’llhavetoconsultanonlineusermanual(oryourITdepartment)tolearnhowtodothisafteraWorddocumentbecomesaPDF.

2. Where can I file hyperlinked briefs?Manyfederalcourtsallowhyper-

linkingandhaveadoptedspecificlocalrulestoaddressthispractice.TheUnitedStatesDistrictCourtfortheDistrictofKansashasputtogeth-erahelpfulguidetofederalcourts’localrulesonthisissue.1TheMichiganCourtofAppeals

currentlydoesnotallowexternalhyperlinks.Butpartiescanuse internalhyperlinks—linksthatleadtodifferentsectionsofabriefortokeyexhibits—togreatadvantage.GiventhenumberofCourtofAppealsjudgeswhouseiPadstoreadcasesandprepareforargument,aproperlybookmarkedandhyper-linkedbriefmaybeapowerfuladvo-cacytool.Noteverycourtisreadyandwill-

ingtoaccepthyperlinkedbriefsatthispoint.Infact,manystatecourtsdonotacceptelectronicallyfiledbriefsat all.There’snosubstituteforknowingthecourtatissueandtakingthetimetocalltheclerk’sofficetofindoutwhetherahyperlinkedbriefisacceptable.Ajudge(orajudge’sclerk)mightbemorethanhappytoacceptahyperlinkedandbook-markedcopyofabrief.

3. What pitfalls should I watch for?Observingafewguidelineswill

helpensurethattheuseofhyperlinkshelpsratherthanhindersyourcase.Don’t jettison traditional citations.

evenifyouusehyperlinks,you’llbeexpected—atleastfornow—tocontinueusingtraditionalcitation

methodsaswell.Infact,theUnitedStatesDistrictCourtfortheeasternDistrictofMichiganhasthelocalrulespecificallyremindingpractitio-nerstousetraditionalcitationmeth-odswithhyperlinks.Check every single link — and

make sure your links stay active after your brief is converted to PDF. Obviously,ahyperlinkwon’tbeveryhelpfulifittakesthereadertothewrongsite.AndbecausesomePDFprogramsaresetbydefaulttodeacti-vatelinkswhenadocumentiscon-vertedfromWordtoPDF,you’llneedtomakesureyourlinksremainliveafteradocumentisconverted.Check with chambers and consult

local rules.Hyperlinkscanbeextremelyhelpful—butcourtsarenotequallyopentotheuseofnewtechnology.Checkthelocalrulesforanyguidelinesabouttheuseofhyperlinksandconsidercallingchamberstoseewhetherajudgewillbeopentoreceivingahyperlinkedbrief.

Sometimes less is more.Hyperlinksarejustamethodforget-tingthereaderfromoneplacetoanother.Usedwell,theycanhigh-lightkeyargumentsandattractthereader’sattention.Thisisespeciallythecasewhenyouarelimitedtotheuseofinternalhyperlinks,suchasattheMichiganCourtofAppeals.Attachingjustthekeycasesandkeyexhibitsandlinkingtothemfromstrategicpointswithinabriefcanbeapowerfulwaytoenhanceyourlegalarguments.Afterall,hyperlink-ingallowsyoutoputthematerialthatsupportsyourclient’scausejust

Itisnosecretthatjudges(likeattorneys)areincreasinglyreadingbriefsonscreen,bothoncomputersoriPads.Thischangeinourreadinghabitscallsforchangesinourwritinghabits.


oneclickaway.Thejudgemaybegratefulfortheeasyaccesstokeydocuments.Itisunlikelythattheuseofcom-

putersandtabletswilldecrease.Ifthelastdecadeisaguide,lawyerswillseelessandlesspaperandwillperformmoreoftheirreadingoncomputerscreens.Thishasitsdraw-backs,tobesure.Buttheabilitytoputkeymaterialrightinfrontofajudge—tohavecriticalexhibitsandcasesjustoneclickaway—isapowerfuladvocacytool.Mostlikely,theuseofhyperlinkswillincreaseuntilitbecomesastandardpartoflegalbriefing.

Ten Questions about Post-Arbitration Motions and Appeals under Michigan’s Uniform Arbitration ActMichigan’sUniformArbitration

Act,MCL691.1683,et seq.,hasbeenineffectsince2013.Althoughappealsfromanarbitrationawardaresimilartoappealsfromordinaryciviljudgmentsinsomeways,therearesomeimportantdifferences.ItisimportantforappellatepractitionerstobeawareofboththeuniqueopportunitiesforadvocacyandtheuniquepitfallscreatedbythisAct.Thefollowingdiscussionaddressestencommonpost-arbitrationques-tions.

1. Can the arbitrator rule on post-arbitration motions?Yes—toapoint.Thearbitrator

retainslimitedauthorityafterrender-inganaward.Heorshecanmodifythisawardoncertaingrounds,suchas(a)tocorrectamathematicalerrororan“evidentmistake”inadescrip-

tionofapersonorthing,(b)iftheaward“isimperfectinamatterofformnotaffectingthemeritsofthedecision,”(c)iftheawardisnotyetfinal,or(d)iftheawardneedsclarifi-cation.MCL691.1700.Onceapartyfilesamotionforacircuitcourttoconfirm,vacate,ormodifyanarbitra-tor’saward,however,thearbitratorcanmodifyanawardonlyifthecourtdirectshimorhertoconsiderdoingso.Id.

2. Can I enforce the arbitrator’s judgment itself, or does it become effective only once it is confirmed by a court?Arbitrationawardsaremuchlike

otherprivateagreements.Theycanbehonoredwithoutanyjudicialintervention.Butwhenapartyrefus-estoabidebyanarbitrationaward,theaggrievedpartycaninvokestatemachinerytoenforcethearbitrationawardonlyonceacourtconfirmsit.MCL691.1702.

3. Can a court vacate an arbitration award and send the parties back for further arbitration?Yes.Courtsmayvacatearbitration

awardsongroundssuchascorrup-tion,fraud,“evidentpartiality,”ormisconductbythearbitrator.Acourtmayalsovacateanawardifthearbi-tratorexceedshisorherpowers.MCL691.1703(1).Unlessthecourtfindsthattherewasnovalidagree-menttoarbitrateinthefirstplace,acourtvacatinganarbitrationawardmayorderfurtherarbitration.MCL691.1703(2).

4. Can the court simply correct an award?Yes.Inadditiontoaskingthecourt

tovacateanarbitrationaward,par-tiesmayaskthecourttomodifyorcorrectanaward.Acourtmaymodi-fyorcorrectanawardif(a)thereisa“mathematicalmiscalculation”or“evidentmistakeinadescription,”(b)thearbitratormadeanawardonaclaimthatwasn’tsubjecttoarbitra-tionandtheerrorcanbecorrectedwithoutaffectingthemeritsoftheclaimsthatweresubmitted,or(c)theawardis“imperfectinamatterofform”notaffectingthemerits.MCL691.1704.Partiesmayjoinamotiontomodifyorcorrectanawardwitharequesttovacatetheaward.MCL691.1704(3).

5. When do I need to file a motion to vacate, correct, or modify an award?Motionsforthecourttomodifyor

correctanawardmustbefiledwithin90daysafterthemovantreceivesnoticeoftheaward,or90daysafternoticeofacorrectedormodifiedaward.MCL691.1704(1).Motionsforacourttovacatean

awardaresubjecttothesamelimita-tions,withoneexception.Ifapartyallegesthatanarbitrationawardistheproductofcorruption,fraud,orotherunduemeans,amotionmustbemadewithin90days“afterthegroundisknownorbytheexerciseofreasonablecarewouldhavebeenknownbythemovingparty.”MCL691.1703.

TheMichiganCourtofAppealscurrentlydoesnotallowexternalhyperlinks.Butpartiescanuseinternalhyperlinks—linksthatleadtodifferentsectionsofabriefortokeyexhibits—togreatadvantage.


6. Can a party appeal an arbitration award to the Court of Appeals?Yes—butonlyafterthecircuit

courtweighsin.PursuanttoMCL691.1708,apartycanfileanappealfrom:

(a)Anorderdenyingamotionto compelarbitration.(b)Anordergrantingamotionto

stayarbitration.(c)Anorderconfirmingordenying

confirmationofanaward.(d)Anordermodifyingor

correctinganaward.(e)Anordervacatinganaward

withoutdirectingarehearing.(f)Afinaljudgmententeredunder

thisact.

7. Can parties to an arbitration agreement modify appeal rights by agreement?Partieshavealimitedabilityto

waivetherighttoappealundertheUniformArbitrationAct.TheActitselfstatesthatcertainsectionscan-notbewaived,includingthetrialcourt’sabilitytoconfirm,vacate,ormodifyanarbitrationaward.MCL600.1684.Partiescan,however,waivereviewbytheCourtofAppeals.Id.

8. What relief is available if an arbitrator unreasonably delays issuing a ruling?Unlikecourts,arbitratorscanbe

requiredtorenderawrittenopinionbyacertaintime,eitherthroughagreementorbycourtorder.Anorderfromthecourtorastipulation

fromthepartiescanextendthistime.Ifapartybelievesthatanarbitrationawardwasuntimely,itmustraisethatobjectionbeforereceivingnoticeoftheaward.

9. Can a party obtain the equivalent of summary judgment from an arbitrator — and, if so, what appellate rights will the aggrieved party hold?Partiesmayrequestthatanarbitra-

torincorporatea“preawardruling”intoafinaldecision,andmayalsofileamotionforexpeditedconfirma-tionofthisaward.MCL691.1698.Inessence,theserulesallowpartiestoshortcuttheusualarbitrationprocess.Onceacourtentersanordercon-firminganawardonanexpeditedbasis,anaggrievedpartymayseekreviewfromtheCourtofAppealsunderMCL691.1708.

10. Do the ordinary rules about attorney fees apply to post- arbitration proceedings before a circuit court?Maybenot.TheUniform

ArbitrationActprovidesthat,ifapre-vailingpartyrequeststhem,acourt“mayaddreasonableattorneyfeesandotherreasonableexpensesofliti-gationincurredinajudicialproceed-ingaftertheawardismadetoajudgmentconfirming,vacatingwith-outdirectingarehearing,modifying,orcorrectinganaward.”MCL691.1705.Consequently,partieswhorefusetocomplywithanarbitrationawardwithoutcourtinterventionruntheriskofincreasingtheirliability.

Readtogether,theseprovisionspointtoageneralthemeunderlyingtheUniformArbitrationAct.Thefac-tualandlegalmeritsofadisputearelargelymattersforarbitrators.Circuitcourts—and,therefore,highercourtsreviewingcircuitcourts’judg-ments—arelargelylimitedtoensur-ingtheintegrityofarbitrationpro-ceedings.

1 Availableat:http://federalcourthyperlink ing.org/wp-content/uploads/2013/05/6- 10-13-Hyperlinking-electronic- Submissions-in-the-Federal-Courts.pdf(last visitedJune14,2014).

Checkthelocalrulesforanyguidelinesabouttheuseofhyperlinksandconsidercallingchamberstoseewhetherajudgewillbeopentoreceivingahyperlinkedbrief.


By:MichaelJ.SullivanandDavidC.Anderson,Collins Einhorn Farrell, P.C. [email protected];[email protected]

Legal Malpractice Update

MDTC Professional Liability Section

Joint enterprise theory of liability not viable where each attorney does not have an equal right to control the client’s legal represen-tation and joint responsibility for decision-making

Souden v Attorney Defendant, unpublishedopinionpercuriamoftheCourtofAppeals,issuedApril17,2014(DocketNo.314143)

The Facts: PlaintiffsuedtodivorcehiswifeinBerrienCounty.Plaintiffretainedtheattorneydefendantand,againsttheattorneydefendant’sadvice,plaintiffvoluntarilydismissedhiscomplaint.Shortlyafter,plaintiff’sthen-wifesuedfordivorceinOaklandCounty,seekingajudgmentofdivorce.Theattorneydefendantfiledaspecialappearance,limitedtocon-testingtheissuesofvenueandjuris-dictioninOaklandCounty,andfiledananswertothecomplaintaswellasamotioncontestingvenueandjuris-diction.

TheattorneydefendantcontactedanattorneylocatedinOaklandCounty(“successorcounsel”).Theattorneydefendantaskedsuccessorcounselto“enter[an]appearanceasco-counselandhandlethemotionandthecaseifit’sinOaklandCounty.”Theattorneydefendantalsoforwardedsuccessorcounselacheckintheamountof$500,whichrepre-sentedanunusedportionofaretainerfeethatplaintiffpreviouslypaidtotheattorneydefendant.Plaintiffcontactedsuccessorcounsel,discussedthecase,andagreedthatsuccessorcounselwouldarguethemotionregardingvenueandjurisdiction.Theattorneydefendantsubsequent-

lysentplaintiffaletter,advisingthatsuccessorcounselhandlethecaseifitremainedinOaklandCounty.Plaintiffandsuccessorcounseldiscussedmediationorarbitrationtosettlethedivorce.Plaintiffalsocontactedtheattorneydefendantviatelephone,andaskedhisopinionregardingmediationandarbitration.Accordingtoplaintiff,theattorneydefendantrespondedbystatingthat“there’snodownsideatthispoint”tomediation.Plaintiffdis-cussedpossiblemediatorswithsuc-cessorcounsel.Plaintiffneverdis-cussedtheselectionofamediatorwiththeattorneydefendant.eventually,aretiredjudgewas

selectedtomediatethedispute.Plaintiffandsuccessorcounselpre-paredforthemediation,andwhenthemediationoccurred,onlysucces-sorcounselattended,asplaintiffexpected.Aftermediationwasunsuc-cessful,successorcounseladvisedplaintifftoagreetobindingarbitra-

tion.Plaintiffdidnotconsultwiththeattorneydefendantregardingthisdecision,andagreedtogoforwardwitharbitration.Plaintiffcontactedtheattorneydefendantafterthearbi-trationconcludedandadvisedhimofwhathadtakenplace.Thearbitrationjudgmentwasunfa-

vorabletoplaintiff.Plaintifffirstcon-sultedwithsuccessorcounselaboutwhatactioncouldbetaken.Plaintiffalsometwiththeattorneydefendantandshowedhimthearbitrationaward.Theattorneydefendantindi-catedhisdisagreementwiththeawardandpointedoutlanguageinthearbitrationagreementprovidingforatimelimitonamotionforrecon-siderationofthejudgment.Accordingtoplaintiff,“[theattorneydefendant]toldme[successorcounsel]knewaboutthis,andhehandeditbacktome.”Itwasplaintiff’sunderstandingthattheattorneydefendanthaddirect-edsuccessorcounseltohandleanysubsequentactionregardingthearbi-trationaward.Successorcounselneverfileda

motiontoreconsidertheaward.Ajudgmentofdivorceincorporatingtheawardwasentered.Plaintiffandsuc-cessorcounsellaterselectedanappellateattorneywhosuccessfullyappealedaportionofthearbitrationagreement.Plaintifffiledsuitagainsttheattor-

neydefendantandsuccessorcounsel.Plaintiff’scomplaintallegedthatsuc-cessorcounsel’sconductduringthemediationandarbitrationproceed-ings,aswellashisfailuretotimelyfileamotionforreconsiderationofthearbitrationaward,causedplaintiff

Michael J. SullivanandDavid C. Anderson arepartnersatCollinseinhornFarrell,P.C.inSouthfield.Theyspecializeinthedefenseofprofessionallia-bilityclaimsagainstlawyers,insurancebrokers,realestateprofessionals,accountants,architectsandotherprofes-sionals.Theyalsohavesub-stantialexperienceinproductandpremisesliabilitylitiga-tion.TheiremailaddressesareMichael.Sullivan@[email protected].


significantfinancialandemotionalinjuries.Plaintiffallegedthattheattor-neydefendantwasliableforsucces-sorcounsel’sactsandomissionsunderatheoryofostensibleagency.Theattorneydefendantmovedfor

summarydisposition.Plaintiffarguedthatdefendantcouldbeliableforsuc-cessorcounsel’sconductunderajointenterprisetheory.Thetrialcourtgrant-edtheattorneydefendant’ssummarydispositionmotioninregardtoplain-tiff’sostensibleagencyclaim,butdeniedsummarydispositionregardingplaintiff’sjointenterprisetheory,find-ingthat“[p]laintiffhascomeforwardwithsufficientevidencetocreateanissueoffactregardingwhether[theattorneydefendant]andsuccessorcounselwereengagedinajointenterprisesuchthatbothcanbeliablefortheallegedmalpractice.”Theattorneydefendantfiledanapplica-tionforleavetoappealanditwasgranted.

The Ruling: TheCourtofAppealsreversedthetrialcourtandremandedthecaseforentryofanordergrantingsummarydispositionintheattorneydefendant’sfavor.Thecourtnotedthattheterms

“jointenterprise”and“jointventure”aresometimesusedinterchangeablybutaredistinctconceptsinthelaw.Ajointventureis“anassociationtocarryoutasinglebusinessenterpriseforaprofit”andhassixelements:(1)anagreementindicatinganintentiontoundertakeajointventure;(2)ajointundertakingof;(3)asingleproj-ectforprofit;(4)asharingofprofitsaswellaslosses;(5)contributionof

skillsorpropertybytheparties;and(6)communityinterestandcontroloverthesubjectmatteroftheenter-prise.Ajointenterprise,ontheother

hand,isbasedonprincipalandagentlaws,and“requiresthateverymem-berhavemanagementandcontroloftheenterprise,arighttobeheard,andanequalrightofcontrolandjointresponsibilityfordecisionmakingandexpenses.”Thereisnorequirementthatthepartiesshareinprofitsandlossesunderajointenterprisetheory.Thecourtconcludedthattheattor-

neydefendantcouldnotbeheldvicariouslyliableforsuccessorcoun-sel’sconductunderajointenterprisetheory.Oncesuccessorcounselwasinvolved,theattorneydefendantnolongerhadanequalrighttocontrolplaintiff’slegalrepresentation,nordidheshareresponsibilityforanydeci-sionmaking.Itwassuccessorcounselwhosuggestedmediationtoplaintiff.Whileplaintiffsoughttheattorneydefendant’sopiniononutilizingthisoption,plaintiffonlyconsultedwithsuccessorcounselregardingtheselec-tionofamediator,andtoprepareforthemediation,plaintiffconsultedonlywithsuccessorcounsel.Additionally,onlysuccessorcounselattendedthemediation,onlysuccessorcounselwasconsultedaboutwhethertopro-ceedtoarbitration,andplaintifffirstdiscussedtheawardandwhatoptionswereavailablewithsuccessorcoun-sel.Therewasnoevidencethattheattorneydefendantcontrolledthepro-ceedingsoncesuccessorcounselgotinvolvedand,accordingly,liabilityforsuccessorcounsel’sconductcouldnot

beimputedtotheattorneydefendantunderajointenterprisetheory.

Practice Note: WhileMichiganhasnotrecognizedacauseofactionfornegligentreferral,itisimportantforanattorneyreferringamattertoanotherattorneytobecognizantofpotentialliabilityunderajointenter-priseorjointventuretheory,especial-lyifheorshecontinuesprovidingadvicetotheclient.explainingeachattorney’srolesandresponsibilitiesandclearlysettingforththescopeoftherepresentationisnotonlyhelpfultowardestablishingclientexpecta-tionsbutalsotowardavoidingliabilityforanotherattorney’sactsoromis-sions.

WhileMichiganhasnotrecognizedacauseofactionfornegligentreferral,itisimportantforanattorneyreferringamattertoanotherattorneytobecognizantofpotentialliabilityunderajointenterpriseor

jointventuretheory,especiallyifheorshecontinuesprovidingadvicetotheclient.

Publication Date Copy DeadlineJanuary December1April March1July June1October September1

Forinformationonarticlerequirements,pleasecontact:

LeeKhachaturian,[email protected],or

JennyZavadil,[email protected]

MDTC Quarterly Publication Schedule


Supreme Court

By:JoshuaK.Richardson,Foster, Swift, Collins & Smith, [email protected]

Supreme Court UpdateAn Employer’s Decision Regarding the Renewal of Fixed-Term Employment Contracts is not Actionable Under the Whistleblowers’ Protection Act

On April 25, 2014, the Michigan Supreme Court held that the Whistleblowers’ Protection Act ("WPA"), MCL 15.361, et seq., does not apply to prospective employees or fixed-term contract employees whose employment contracts are not renewed. Wurtz v Beecher Metro Dist, 495 Mich 242 (2014).

Facts: The plaintiff was the district administrator for the Beecher Metropolitan District, which manages water and sewage for a portion of Genesee County. He was subject to a 10-year employment contract with the District, which expired on February 1, 2010.

During his employment, the plaintiff reported to the Genesee County Prosecutor an alleged violation of the Open Meetings Act by three of the District’s five board members. The prosecutor declined to prosecute. Several months later, the plaintiff also reported to the prosecutor travel reimbursements for board members that he felt were inappropriate. Criminal charges were brought, but all board members were either acquitted or otherwise had the charges against them dropped.

Notwithstanding the tumultuous relationship with the board, the plaintiff served out the remainder of his ten-year employment contract, for which he was paid all wages and benefits earned. The board, however, declined the plaintiff ’s request to have his employment contract renewed or extended. As a result, the plaintiff filed a WPA claim against the District and three individual board members, alleging that the District’s decision to not renew his employment contract constituted unlawful retaliation for his prior reports of allegedly unlawful behavior by the District’s board members.

The trial court granted the defendants’ motion for summary disposition, holding that the plaintiff could not meet the necessary elements of the WPA because he was not discharged prior to the expiration of his employment contract.

The Court of Appeals reversed and held that the failure to renew a fixed-term employment contract constituted an adverse employment action for which relief may be sought under the WPA.

Holding: The Supreme Court reversed the decision of the Court of Appeals and held that, unlike other state and federal discrimination statutes, the WPA applies only to those individuals who are current employees at the time of the alleged retalia-tion. By its express language, the WPA does not apply to prospective employees or job applicants.

The court explained that a fixed-term employee who seeks new employment after the expiration of his or her employment contract is, in material respect, no different than a new job applicant for which the WPA does not apply. This is particularly true because, absent some express obligation otherwise, “a contract employee has absolute-ly no claim to continued employment after his or her contract expires.”

Because the plaintiff had completed the term of his employment contract and was

Joshua K. Richardson isashareholderintheLansingofficeofFoster,Swift,Collins&Smith,PC.Hespecializesinemploymentlitigation,munici-pallaw,premisesliabilityandcommerciallitigation.Hecanbereachedatjrichardson@fos-terswift.comor(517)371-8303.


claiming retaliation only in relation to his request for renewal of his employ-ment contract, he, like a new job appli-cant seeking to be hired for the first time, was not entitled to recover under the WPA.

Significance: The court limited its holding to cases in which an individual is no longer an employee. An individual subject to a fixed-term contract is still protected from retaliation under the WPA during the individual’s term of employment. The court also emphasized that, although at-will employees general-ly have no interest in future employment, they, too, are protected by the WPA dur-ing the term of their employment.

A City Ordinance Imposing a Rebuttable Presumption that Unsafe Structures be Demolished if the Cost of Repairs Would Exceed the Structures’ Prior True Cash Value is Constitutionally Valid

The Michigan Supreme Court held on April 24, 2014, that a City of Brighton Ordinance, which creates a rebuttable presumption that an "unsafe structure" may be demolished if it is deemed a public nuisance and the cost to repair the structure would exceed its true cash value prior to it becoming unsafe, did not violate the plaintiffs’ substantive or procedural due process rights. Bonner v City of Brighton, 495 Mich 209 (2014).

Facts: The plaintiffs own two resi-dential properties in downtown Brighton, containing three structures which have been largely unoccupied and neglected for 30 years. The City’s build-ing and code enforcement official

informed the plaintiffs by letter that the structures were unsafe under the City’s ordinance regarding unsafe structures. The building official listed various defects and code violations and informed the plaintiffs that, under the ordinance, it would be unreasonable to repair the structures because the cost of repairs would exceed the structures’ true cash value. The plaintiffs were ordered to demolish the structures with no option for repair within 60 days.

The plaintiffs appealed to the City Council and presented evidence from structural engineers and contractors that the structures were readily repairable. The City ultimately denied the plaintiffs’ requests for building permits needed to perform the repairs, and determined that, because the cost to repair the struc-tures exceeded the true cash value of the structures, demolition was warranted under the ordinance.

The plaintiffs then filed the instant action, alleging violations of procedural and substantive due process, equal pro-tection, and inverse condemnation. The plaintiffs filed a motion for partial sum-mary disposition on their due process and takings claims, which the trial court granted in part and denied in part.

The trial court concluded that ques-tions of fact existed with respect to the plaintiffs’ takings claim, but determined that the ordinance violated substantive and procedural due process because it precluded property owners from having the opportunity to repair their property. The trial court explained that, while the demolition of unsafe properties promot-ed the legitimate interest of public health, that interest is equally advanced by allowing an owner to repair a proper-

ty to bring it up to code. The Court of Appeals affirmed and

concluded that the ordinance was arbi-trary and unreasonable because it allows for the option to repair property only when the owner “overcomes or rebuts the presumption of economic unreason-ableness, regardless of whether the prop-erty owner is otherwise willing and able to timely make the necessary repairs.” The court also held that the ordinance lacked procedural safeguards to protect against deprivations of property where the owner is willing to repair his or her property.

Holding: The Supreme Court reversed, holding that the plaintiffs’ sub-stantive and procedural due process claims were distinct and should be treat-ed as such. In analyzing the claims together, the Court of Appeals conflated the issues and ultimately erred in its decision.

As to the substantive due process claim, the Supreme Court held that the ordinance was not unconstitutional because it was reasonably related to the legitimate government interest of pro-tecting the health and welfare of its citi-zens. The court held that the right to repair one’s property is not a fundamen-tal right and thus the ordinance need only bear a reasonable relationship to the governmental interest. The court also held that the unreasonable-to-repair pre-sumption was not arbitrary, as it could be overcome and did not serve as an abso-lute prohibition on a property owner’s ability to repair an unsafe structure.

The Supreme Court further held that the ordinance did not violate the plain-tiffs’ procedural due process rights

TheSupremeCourtreversedthedecisionoftheCourtofAppealsandheldthat,unlikeotherstateandfederaldiscriminationstatutes,theWPAappliesonlytothoseindividualswhoarecurrent

employeesatthetimeoftheallegedretaliation.


because it provided plaintiffs with notice of demolition, as well as an opportunity to appeal the decision. The court found that the appeal process provided plain-tiffs with an adequate opportunity to be heard.

Significance: The court emphasized that the case involved a facial challenge to the ordinance and, as such, the plain-tiffs confronted “an extremely rigorous standard” that was not dependent on the particular facts of the case, but rather on the ordinance alone.

The Sport Shooting Range Act Precludes Enforcement of Local Zoning Ordinances with Respect to Certain Shooting Ranges that Existed as of the Effective Date of the Act

On April 1, 2014, the Michigan Supreme Court held that a sport shoot-ing range is entitled to the protection of the Sport Shooting Range Act ("SSRA") MCL 691.1541 et seq., so long as it was in existence as of July 5, 1994, and it operates in accordance with generally accepted operation practices, regardless of whether the shooting range is used for commercial purposes. Addison Twp v Barnhart, 495 Mich 90; 845 NW2d 88 (2014).

Facts: In 1993, Addison Township granted the defendant permission to build a shooting range on his property based on an agreement that the shooting range would be used solely by the defen-dant and his family. The defendant later expanded his shooting range for com-mercial uses. Eventually, the Township issued a citation to the defendant for operating a commercial shooting range without a zoning compliance permit.

The defendant claimed that he was within his rights to use the shooting range for commercial purposes under the SSRA, MCL 691.1542a, which expressly grants to existing shooting ranges that meet generally accepted operation stan-dards the right to expand opportunities for public participation.

At the initial trial, the district court granted the defendant’s motion for a directed verdict, concluding that the defendant’s commercial use of the shoot-ing range was protected by the SSRA.

After a series of appeals, the Court of Appeals concluded that even though defendant’s shooting range was in exis-tence on the effective date of the SSRA, it was not entitled to protection due to the commercial nature of the range, which the court concluded fell outside the intended definition of "sport shoot-ing range."

Holding: The Supreme Court reversed and held that the defendant’s shooting range is entitled to protection under the SSRA, even though it was used for commercial purposes and might otherwise violate the Township’s ordi-nance. The court explained that the Court of Appeals erred in considering the commercial nature of the sport shooting range, and clarified that the rel-evant inquiry is simply whether the shooting range was designed and operat-ed for sport shooting purposes.

The court further explained that to qualify as a sport shooting range for which the SSRA was meant to apply, it must have qualified as a sport shooting range at the time the SSRA became effective ( July 5, 1994), and must oper-ate in accordance with generally accepted operation practices for such ranges, as

established by the Natural Resources Commission. The Supreme Court con-cluded that the defendant’s shooting range met those requirements and was, thus, entitled under the SSRA to expand for commercial uses, even if that meant it would not comply with the Township’s ordinance.

Significance: The court clarified that the standards set forth in the National Rifle Association’s Manual, which is in some form relied upon by the Natural Resources Commission, were guidelines and not absolute requirements. As such, an admission that a shooting range fails to meet one or more of those standards does not automatically preclude a find-ing that the shooting range otherwise complies with generally accepted opera-tion practices as required by the SSRA.

TheSupremeCourtreversed,holdingthattheplaintiffs’substantiveandproceduraldueprocessclaimsweredistinctandshouldbetreatedassuch.Inanalyzingtheclaimstogether,theCourtofAppeals

conflatedtheissuesandultimatelyerredinitsdecision.

Publication Date Copy DeadlineDecember November1March February1June May1September August1

Forinformationonarticlerequirements,pleasecontact:

[email protected],or

[email protected]

MDTC E-Newsletter Publication Schedule



Court Rules Update

By:M.SeanFosmire,Garan Lucow Miller, [email protected]

Proposed Amendments to Federal and State Rules

Federal Rules of Civil ProcedureAseriesofproposedamendmentshasbeenapprovedbythe“StandingCommittee”oftheJudicialConferenceinaMay2report.TheamendmentswillnowbesenttoCongressforitsapproval.Anoverviewofsomeofthechangesisasfollows:

• ChangestoRule1,relatingtothedeclarationofthepurposeofthe Rules; • ArevisionofRule26(b)(1),thegeneralstatementofwhatisdiscover able,includingimportingtheconceptofproportionalityintothepri marydefinition;and • AnewformofRule37(e),toauthorizecourtstotakeactionifaparty failstoproperlypreserveelectronicevidenceandifthecourtfinds thatthatfailurehasresultedinprejudicetotheopponent’s legalposition.

Formoreinformation,seethearticleatLawTechnologyNewshttp://www.lawtechnologynews.com/id=1202657565227/Standing+Committee+OKs+Federal+Discovery+Amendments%3Fmcode=0&curindex=0&curpage=ALL

Michigan Court Rules2012-02 - Discovery-only depositions of expert witnesses

CourtRule: MCR2.302Issued: March1,2014(reissue)Commentsto: July1,2014

Thisisarevisionofapreviousproposal,withtwoalternatives.AlternativeAwouldstatethatadepositionofanexpertwitnessmaybeusedforanypur-poseunlesstherehadbeenapreviousstipulationororderlimitingittodis-covery,andallocatingthecostsandfees.AlternativeBwouldpermitthedepositiontobenoticedfordiscoverypurposesonly,withouttheneedforastipulationororder.

MDTCmemberBrianWhitelawofGrandRapidsledagroupofdefenseattorneysinwritingtwoletterstotheSupremeCourtinresponsetotheinitialproposal,anditappearsthattheircommentsledtotheadditionofAlternativeBasalesscostlyalternative.

Sean Fosmireisa1976graduateofMichiganStateUniversity’sJamesMadisonCollegeandreceivedhisJ.D.fromAmericanUniversity,WashingtonCollegeofLawin1980.HeisapartnerwithGaranLucowMiller,P.C.,

manningitsUpperPeninsulaoffice.

For additional information on these and other amendments, visit the Court’s official site at:

http://courts.mi.gov/Courts/MichiganSupremeCourt/rules/court-rules-admin-matters/Pages/default.aspx


2013-27 - New parties to counter-claims and cross-claims

CourtRule: MCR2.203

Issued: May21, 2014

Commentsto: September1, 2014Thiswouldpermittheadditionofnewpartiestocounterclaimsandcross-claimsandauthorizetheissuanceofasummonsinthatcase.

Proposed Amendments to Federal and State Rules

MDTCmemberBrianWhitelawofGrandRapidsledagroupofdefenseattorneysinwritingtwo

letterstotheSupremeCourtinresponsetotheinitial

proposal,anditappearsthattheircommentsledtothe

additionofAlternativeBasalesscostlyalternative.

Member News – Work, Life, and All that Matters

MemberNewsisamember-to-memberexchangeofnewsofwork(agoodverdict,apromotion,oramovetoanewfirm),life(anewmemberofthefamily,anengagement,oradeath)andallthatmatters(askitriptoColorado,aholeinone,orexcellentfoodatalocalrestaurant).SendyourmembernewsitemtoLeeKhachaturian([email protected])orJennyZavadil([email protected]).

Sarah E BlalockCollins, Einhorn, Farrell P.C.4000TownCenter,Suite909Southfield,MI48075(248)[email protected]

Matthew L CooperJames Dark & Brill151S.RoseStreet,Suite850Kalamazoo,MI49007(269)[email protected]

Michael D. WieseSmith Haughey Rice & Roegge100MonroeCenterNWGrandRapids,MI49503(616)[email protected]

MDTC Welcomes New Members!

2014September12 GolfOuting—MysticCreek

September17 RespectedAdvocateAwardPresentation—

GrandRapids

September17–19 SBMAnnualMeeting—GrandRapids

September25 BoardMeeting—Okemos

Special Guest — John Hohman, State Court

Administrator

October2 MeettheJudges—HotelBaronette,Novi

October22–26 DRIAnnualmeeting—SanFrancisco,CA

November6 PastPresidentsDinner–Marriott,Troy

November7 WinterMeeting–Marriott,Troy

2015March26 BoardMeeting–Okemos

May14–15 AnnualMeeting–TheHHotel,Midland

September11 GolfOuting–MysticCreek

October7 RespectedAdvocateAwardPresentation–Novi

October7–11 DRIAnnualMeeting–Washington,D.C.

October7–9 SBMAnnualMeeting–NoviexpoCenter

November12 PastPresidentsDinner–Sheraton,Novi

November13 WinterMeeting–Sheraton,Novi

MDTC Schedule of Events 2014


MDTC LeaDer ConTaCT InforMaTIonBoardOfficers

Angela Emmerling Boufford [email protected] 41000WoodwardAve.248-258-2504•248-258-1439 Bloomfield,MI48304

Barbara Eckert Buchanan [email protected] 39500HighPointeBlvd.,Ste350248-567-7816•248-567-7423 Novi,MI48375

Michael I Conlon Running,Wise&Ford,[email protected] 326eStateSt,POBox686231-946-2700•231-946-0857 TraverseCity,MI49684

Conor B. Dugan [email protected] 333BridgeStreetNW,P.O.Box352616-336-6892•616-336-7000 GrandRapids,MI49501

Terence P. Durkin KitchDrutchasWagnerValitutti&Sherbrook,[email protected] 1WoodwardAve.,Ste.2400313-965-6971•313-965-7403 Detroit,MI48226

Scott S. Holmes Foley&[email protected] 130eastNineMileRoad248-721-8155•248-721-4201 Ferndale,MI48220

Richard J. Joppich KitchDrutchasWagnerValitutti&Sherbrook,[email protected] 2379WoodlakeDr.,Suite400517-381-7182•517-381-4427 Okemos,MI48864-6032

John Mucha III Dawda,Mann,Mulcahy&Sadler,[email protected] 39533WoodwardAve.,Suite200248-642-3700•248-642-7791 BloomfieldHills,MI48304

Matthew T. Nelson WarnerNorcross&[email protected] 900FifthThirdCenter,111LyonStreetNW616-752-2539•616-222-2539 GrandRapids,MI49503

Joshua Richardson FosterSwiftCollins&[email protected] 313SouthWashingtonSquare517-371-8303•517-371-8200 Lansing,MI48933

Carson J. Tucker Lacey&Jones,[email protected] 606S.AdamsRd.,Suite300248-433-1414•248-433-1241 Birmingham,MI48009

Robert Paul Vance Cline,Cline&Griffin,[email protected] 503S.SaginawSt.,Ste.1000810-232-3141•810-232-1079 Flint,MI48503

Mark A. Gilchrist President SmithHaugheyRice&Roegge100MonroeCenterNWGrandRapids,MI49503616-774-8000•[email protected]

D. Lee Khachaturian Vice President DickinsonWright,PLLC500WoodwardAveSte4000Detroit,MI48226313-223-3128•[email protected]

Hilary A. Ballentine Treasurer PlunkettCooney38505WoodwardAveBloomfieldHills,MI48304313-983-4419•[email protected]

Richard W. Paul Secretary DickinsonWrightPLLC2600W.BigBeaverRd.Suite300Troy,MI48084248-433-7532•[email protected]

Raymond Morganti Immediate Past President SiemionHuckabay,P.COneTowneSquareSte1400P.O.Box5068Southfield,MI48076248-357-1400•[email protected]


MDTC LeaDer ConTaCT InforMaTIonMDTC 2014–2015 Committees Section Chairs

Appellate Practice: BethA.Wittmann,Co-Chair KitchDrutchasWagnerValitutti&Sherbrook,[email protected] OneWoodwardAve,Ste.2400313-965-7405•313-965-7403 Detroit,MI48226

Commercial Litigation: MatthewAllen [email protected] 840W.LongLakeRdSte200248-267-3290•248-879-2001 Troy,MI48098

General Liability: TomAycock Smith,Haughey,Rice&[email protected] 100MonroeCenterNW616-458-8391•616-774-2461 GrandRapids,MI49503

Insurance: DarwinL.Burke,Jr. RuggirelloVelardoNovara&VerBeek,[email protected] 65SouthboundGratiotAvenue586-469-8660•586-463-6997 MountClemens,MI48043

Labor & Employment: GouriG.Sashital [email protected] 440eastCongress,5thFloor313-965-8924•313-965-1531 Detroit,MI48226

Law Practice Management: Thaddeuse.Morgan Fraser,Trebilcock,Davis&[email protected] 124W.Allegan,Ste1000517-482-5800•517-482-0887 Lansing,MI48933

Municipal & Governmental Liability: RidleyS.Nimmo [email protected] 111e.CourtSt.Ste1B810-342-7010•810-232-3159 Flint,MI48502

Professional Liability & Health Care: MichaelR.Janes Martin,Bacon&Martin,[email protected] 44FirstStreet586-979-6500•586-468-7016 MountClemens,MI48043

Trial Practice: DavidM.Ottenwess OttenwessAllman&[email protected] 535GriswoldSt.,Ste850313-965-2121x211•313-965-7680 Detroit,MI48226

Young Lawyers: Roberte.Murkowski [email protected] 150WestJefferson,Suite2500313-496-8423•313-496-8451 Detroit,MI48226

Golf Outing Committee JimGross,MattNelson,PaulVance&BennetBush

Awards Committee Thaddeuse.Morgan,ChairJohnMucha&DavidM.Ottenwess

Winter Meeting Committee JohnMucha,MichaelConlon&ConnorDugan

Annual Meeting Committee AngelaBoufford,MattAllen&DavidCarbajal

Michigan Defense Quarterly D.LeeKhachaturian,JennyZavadilBethWittmann,KimberleeHillock

Nominating Committee RaymondMorganti

Young Lawyer Breakfast RobertMurkowski

Supreme Court Updates JoshuaRichardson

Section Chair Liaison RichardPaul

Regional Chair Liaison HilaryBallentine

Government Relations GrahamCrabtree

Membership Committee BarbaraeckertBuchanan & RichardJoppich

DRI RepresentativeTimDiemer

Future Planning Committee Chair D.LeeKhachaturian

MAJ Liaison Chair TerryMiglio

Past Presidents Committee JohnP.Jacobs

Judicial Relations Committee LarryCampbell

Amicus Committee CarsonTucker&JamesBrenner

Sponsorship Committee MattNelson&RobertPaulVance

Political Advisory Committee MarkGilchrist,GrahamK.Crabtree&RaymondMorganti

ENewsletter CommitteeScottHolmes,JeremyPickens&BennetBush

Meet The Judges Event LarryCampbell,RobertPaulVance&TerrenceDurkin

Relationships Committee JoshuaRichardson,ChairD.LeeKhachaturian,RichardJoppich,JeremyPickens&BennetBush

Regional ChairsFlint: BennetBushGaranLucowMillerPC8332OfficeParkDriveGrandBlanc,MI48439810-695-3700•[email protected]

Grand Rapids: ConorB.DuganVarnumLLP333BridgeSt.,POBox352GrandRapids,MI49501616-336-6892•[email protected]

Kalamazoo: TyrenR.Cudney Lennon,Miller,O’Connor&BartosiewiczPLC900ComericaBldg.Kalamazoo,MI49007269-381-8844•[email protected]

Lansing: PaulTowerGaranLucowMillerPC504S.CreytsRd.,Ste.ALansing,[email protected]

Marquette: JeremyS.PIckensO’DeaNordeenandBurink,PC122W.SpringStreetMarquette,MI48955906-255-1770•[email protected]

Saginaw / Bay City: DavidCarbajal O’NeillWallace&DoylePC300SaintAndrewsRdSte302,POBox1966Saginaw,MI48605989-790-0960•[email protected]

Southeast Michigan: Josephe.RichotteButzelLongPC41000WoodwardAve.BloomfieldHills,MI48304248-258-1407•[email protected]

Traverse City / Petoskey: JohnPatrickDeegan PlunkettCooney303HowardStreet,Petosky,MI49770231-348-6435•[email protected]

MDTC LeaDer ConTaCT InforMaTIon

PRSRT STDUS POSTAGE

PAIDLANSING, MI

PERMIT NO. 75

MDTCP.O.Box66GrandLedge,MI48837

MDTC is an association of the leading lawyers in the State of Michigan dedicated to representing individuals and corporations in civil litigation. As the

State’s premier organization of civil litigators, the impact of MDTC Members is felt through its Amicus Briefs, often filed by express invitation of the

Supreme Court, through its far reaching and well respected Quarterly publication and through its timely and well received seminars. Membership in

MDTC not only provides exceptional opportunities for networking with fellow lawyers, but also with potential clients and members of the judiciary.

Toll Free 888.989.2800

Contact: [email protected]

“Our team is dedicated to providing true investigative excellence here in Michigan. I encourage you to give us a call or stop in, meet with our team and get to know us. We’d love to show you around.”Paul Dank, PCIPrincipal ~ Sherlock InvestigationsPresident ~ Michigan Council of Professional Investigators

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