The arena had a rule against slide tackles, which the defendant violated, causing the plaintiff’s injury. The Court of Appeals ruled that there was no basis for a lawsuit. A participant in a sporting event accepts the risk of injuries that are inherent in the activity. Violation of a rule of the sport does not by itself create liability.

A player is liable for injuring another player during a game only if the defendant engaged in “reckless misconduct.” The defendant’s conduct must “exceed the normal bounds of conduct associated with the activity,” and “demonstrate a willingness or indifference to the injury” of the other player.

This article was written by Mark S. Demorest, Managing Member of Demorest Law Firm.

In order to avoid situations similar to the one above, employers should do one of the following: (1) Allow the employee to work through the resignation date; (2) Continue to pay the employee through the resignation date, but tell them that they do not need to actively work during this period; or (3) Add provisions to employment contracts or the employee handbook stating that after receiving an employee’s notice of resignation with a future effective date, the employer may  accept that resignation effective immediately.

This article was written by Mark S. Demorest, Managing Member of Demorest Law Firm.

There are several exceptions to this general rule. Specifically, an insurance agent can form a “special relationship” with the insured when the agent does one or more of the following:

(1) the agent misrepresents the nature or extent of the coverage offered or provided;

(2) an ambiguous request is made that requires a clarification;

(3) an inquiry is made that may require advice and the agent, though he need not, gives advice that is inaccurate; or

(4) the agent assumes an additional duty by either express agreement or promise to the insured.

In the above-mentioned case, the insured claimed that the insurance premiums they were charged were too high and that the insurance agent did not seek enough competitive bids. The insured claimed that the insurance agent had “represented that it would work diligently to obtain the best appropriate insurance coverage for the best premium reasonably available in the market.” The Court of Appeals ruled that this was insufficient to warrant a legal action against the agent by the insured. The Court of Appeals affirmed a ruling on this issue in favor of the insurance agent without a trial.

This case shows the importance of researching insurance rates and premiums on your own, or seeking competitive bids from more than one insurance agent. The agent’s first goal is to sell the insurance and it is not necessarily a top priority to find the best or least expensive insurance coverage for the insured. Furthermore, the insured will have no recourse if it later decides that it got a bad deal on the insurance coverage.

This article was written by Mark S. Demorest, Managing Member of Demorest Law Firm.

When will a Court treat two separate written contracts as a single agreement? In

The buyer defaulted and failed to complete the purchase, and the seller then filed a lawsuit. The purchase agreement provided that the seller could retain the earnest money deposit as liquidated damages. In addition to keeping the deposit, the seller sought damages for the buyer’s failure to complete the purchase of the personal property. The Court of Appeals held that because the two contracts were really a single agreement, the seller was limited to keeping the deposit. The Court stated:

Because the two contract were intended to operate together to spell out a single transaction, the trial court did not err in concluding that the provision in the one for personal property tying its closing to the closing on the contract for real property indicated that there was requirements to close on the former if there was no closing of the latter.

The Court of Appeals looked at several factors to conclude that there really a single agreement between the seller and the buyer: (1) The contracts were drafted simultaneously. (2) The sale of the real estate and personal property were supposed to occur simultaneously. (3) Much of the personal property being sold consisted of fixtures or large equipment that was intended to remain with the house, such as kitchen appliances, a washer and dryer and a hot tub. Based on these factors, the Court of Appeals ruled that, “The structuring of the transaction into separate contracts for the sale of certain real property and related personal property resulted in a single agreement composed of two complementary components.”

It is common to have multiple related agreements as part of a business or real estate transaction. The lesson of this case is that the contracts must not only be read separately, but they must be read together as a whole. The contracts should specify how a default under one agreement affects the other agreements.

This article was written by Mark S. Demorest, Managing Member of Demorest Law Firm.

Traditionally, interest has been calculated on judgments by using the date of the filing of the Complaint as the starting date. Each January 1^st and July 1^st, the interest rate is recalculated by the State Court Administrator’s Office, and is raised or lowered at that time based on prevailing interest rates.

In Chelsea Investment Group, LLC v. City of Chelsea and Michael Steklac (Click here for a PDF copy), the Court of Appeals ruled that the traditional method of interest calculations was incorrect. The Court ruled that interest is still to be calculated starting at the date of filing of the Complaint, but the interest rate is to be adjusted every 6 months from the date of filing. In other words, every January 1^st and July 1^st the judgment interest rate will be recalculated, but the adjusted rate will not apply to a particular case until the next six-month anniversary of the filing of the Complaint. It may seem like a minor tweak, but in many cases this delay in the interest rate change will drastically affect the total amount of the Judgment. Who is benefited or harmed will depend on whether the Judgment interest rate goes up or goes down.

The Court of Appeals did not address whether this change is retroactive, and it is unclear how this ruling will apply to a case previously filed or a Judgment previously entered.

This article was written by Mark S. Demorest, Managing Member of Demorest Law Firm.

In order for a right of first refusal to be enforceable, those specific words should be used, and the requirements for the tenant to exercise the right of first refusal must be clearly spelled out.

In Gerstenberger Farms, Inc. v Grimes (April 22, 2010), the Michigan Court of Appeals considered the effect of a lease that contained a provision that “[i]f the lessor decides to sell the property, the lessee will be given an opportunity to purchase the property.”  The Court of Appeals ruled that this language was not sufficient to create a right of first refusal, because the lease did not contain those words or provide any more specific conditions for the tenant’s right to purchase the property.

The Court of Appeals ruled that the landlord did not breach the lease by selling the property to someone else.  The tenant had in fact been given the opportunity to purchase the property before the sale.  Several months before the sale, the landlord told the tenant of his plan to sell the property.  The tenant replied that he could not afford the landlord’s asking price.  Because the tenant had been given the opportunity to purchase the property, the tenant did not have a right of first refusal when the landlord received an offer to purchase the property from a third party.

This article was written by Mark S. Demorest, Managing Member of Demorest Law Firm.

In September 1993, voters in Detroit approved a 32.25 mill school operating property tax.  As a result, DPS was authorized to levy and collect property taxes from Detroit property owners until the millage expired on June 30, 2002.  After the expiration of the millage in 2002, DPS continued to levy the tax through 2004.  Taxpayers continued to pay the tax without objection.

In 2005, Briggs Tax Service filed a claim against DPS in the Michigan Tax Tribunal seeking a refund of the unauthorized taxes levied and collected by DPS.

The underlying issue in this case was whether the claim must be dismissed due to lack of jurisdiction (failure to timely file).  Ordinarily, the time limit to file a claim for a refund in Michigan is 35 days after a final decision. MCL 205.735(3).  Briggs did not meet this deadline and the Tax Tribunal initially dismissed Plaintiff’s claim.  The Tax Tribunal then allowed Briggs to amend its petition in order to assert a claim under MCL 211.53a, which has a three year statute of limitations.  Under MCL 211.53a, in order to assert a successful claim, the taxpayer must have been assessed and paid taxes in excess of the correct amount due to either (1) a clerical error or (2) a mutual mistake of fact by the assessing officer and the taxpayer.

There was no clerical error.  The DPS intended to levy the taxes.  Thus, in order for Briggs to successfully assert a claim under MCL 211.53a, Briggs had to prove that there was a mutual mistake of fact by both the assessing officer and the taxpayer.

The Michigan Supreme Court held that although a DPS employee certified the tax levy, a DPS employee is not the same as a tax assessor. Thus, there was no mistake by the assessing officer, because the “assessor” never certified the tax.

The Michigan Supreme Court also held that any mistake was a mistake of law, rather than a mistake of fact. The validity of a tax is a legal issue, rather than a factual issue.

While we find the result of the case somewhat surprising, the Michigan Supreme Court’s decision points out the importance of reviewing tax bills carefully, and promptly objecting to any item on the tax bill that you question.

Click here to download a PDF of the Michigan Supreme Court Opinion in Briggs Tax Service, LLC v Detroit Public Schools.

This article was written by Mark S. Demorest, Managing Member of Demorest Law Firm.

In the recent case of Edwards v Cape to Cairo, LLC, the Court of Appeals decided that the key is not who entered into the transaction, but rather the true nature of the transaction.  In the Edwards case, the plaintiff was planning a trip for himself and several members of his church to Africa.  The trip was going to involve both leisure activities and charitable mission work. The plaintiff paid the deposits for the trip through his corporation, and used also the staff of his corporation to make arrangements for the trip.  The defendant argued that the case should be dismissed because it had dealt with a corporation.  The Court of Appeals disagreed, ruling that the true purpose of the planned trip to Africa was personal in nature.  The trip had nothing to do with the business of the plaintiff’s corporation.  Furthermore, the plaintiff’s corporation was reimbursed for the deposits.  The Court of Appeals ruled that the corporation’s role in planning the trip “was done merely for convenience, not for any purpose related to [the corporation], which is an automotive supplier with no ties to Africa. … [T]he trip was planned for members of plaintiff’s family and church, not employees of [the corporation].”

Click here to download a PDF copy of the Court of Appeals Opinion in Edwards v Cape to Cairo, LLC.

This article was written by Mark S. Demorest, Managing Member of Demorest Law Firm.

A recent decision of the Michigan Court of Appeals suggests that employers need to check their arbitration agreements to make sure that they will not have to simultaneously deal with both court litigation and arbitration.  In Riley v Ennis, a former employee sued her supervisor for personal liability for discrimination.  Her former employer was not a party to the lawsuit.  The Court of Appeals ruled that the arbitration agreement only applied to claims against the employer, because only the employer and the employee were parties to the arbitration agreement.

The Court of Appeals stated, “a party cannot be required to arbitrate an issue that the party did not agree to submit to arbitration. …  Although plaintiff’s claims against [her supervisor] might be interwoven with her claims against [her employer], because plaintiff and [her employer] did not agree to give [the employer’s] agents the protection of the arbitration provision in the employment contract with respect to their own potential individual liability, we conclude that defendant [the individual supervisor] cannot compel arbitration.”

The agreement could have required the arbitration of claims against individuals, as well as the company.  This arbitration agreement did not state that it covered claims against individual supervisors or corporate officers.   The arbitration agreement also did not state it applied to any dispute arising out of the employment relationship.

In light of the Court of Appeals’ decision in Riley v Ennis, you should check your arbitration agreement to make sure whether it would require the arbitration of claims against individual corporate officers, agents or supervisors.  Otherwise, the company might have to deal with both a lawsuit in court and an arbitration proceeding.

To download a PDF of the Court of Appeals’ decision click here.

This article was written by Mark S. Demorest, Managing Member of Demorest Law Firm.

In Kennedy v Hayduk, the plaintiff’s attorney claimed that a settlement had not been reached.  The Michigan Court of Appeals disagreed.  The defense attorney sent a letter summarizing the terms of a proposed settlement.  There were more detailed settlement documents still to be prepared.  The plaintiff’s attorney then signed and returned to the defense attorney a stipulation and order to dismiss the case.  The plaintiff later argued that there were terms of the settlement that had not been agreed upon, so there was no binding settlement.    The Court of Appeals ruled that: “The signed stipulation was unconditional acceptance of defendants’ offer. … The objective evidence shows that an agreement was reached.”

A lesson from this case:  Don’t sign a settlement until all terms have been agreed upon.

Download a PDF of the decision by clicking here.

This article was written by Mark S. Demorest, Managing Member of Demorest Law Firm.