Jury Selection – Judge’s Attempt to Ensure Racially Proportionate Jury Found Invalid

A $14.9 Million verdict was recently overturned by the Michigan Supreme Court.  The Supreme Court determined that there was error on part of the trial judge in the jury selection process.  The Michigan Supreme Court also inferred in its opinion that the trial judge overseeing the case could be in hot water with the Michigan Judicial Tenure Commission as a result of his conduct.

This case arose out of an auto accident on an icy road while Anthony and Shirley Pellegrino were riding as passengers in an airport shuttle.  Anthony suffered severe injuries, while his wife Shirley died.  The only issue at trial was the amount of damages, because the defendant had admitted liability.

Prior to voir dire (the selection and empanelling of the jury) the judge directed the parties that he sought to have a “jury that represented the racial composition of [Wayne] [C]ounty.”  It was a goal of the trial court to use race as a factor in determining which members of the jury pool would be permitted to serve on the jury.

During voir dire, Defendant sought to dismiss an African American female by using a peremptory challenge. In this case, Plaintiff’s counsel objected under the grounds that a peremptory challenge may not be exercised on the basis of race.  Defense counsel argued that his challenge was not racially motivated, and instead was based on the fact that the prospective juror “wanted to excuse Greene because she had been widowed two times and was in the process of grieving over her dead mother.”  The trial court denied Defendant’s right to use the peremptory challenge without making any findings about the Defendant’s motivation.  The trial judge used the prospective juror’s race as his sole basis in determining whether to uphold Plaintiff’s objection.  The judge denied the peremptory challenge in order to maintain his desired racial composition of the jury.

Michigan law is clear that race may not be used as a factor in peremptory challenges, even by the trial court.  The Michigan Supreme Court held that a judge “may not deny a party the use of a peremptory challenge on the basis of the court’s desire to attain a racially proportionate jury.”

The Michigan Supreme Court also discussed the various violations of the trial judge.  Particularly disturbing to the Supreme Court was the fact that the trial judge indicated that “he would continue to apply his own personal view of the law, rather than the law of this state, until ‘either removed from the bench by the disciplinary committee or ordered to have a new trial.’”

The Michigan Supreme Court determined that on retrial, another judge would hear the case.

This article was written by Matthew Ehrlich, Legal Clerk at Demorest Law Firm.

Employers – Save Future Headaches: Address Social-Media Networking in Non-Competes Now!

Non-compete agreements offer protection to employers after the separation of an employer and employee.  This protection is limited, as courts strictly construe the terms of non-compete agreements.  In Michigan, non-compete agreements must not be overly broad.  To be enforceable, a non-compete agreement must be reasonable in limiting the time a former employee may not compete with the employer. It must also provide a reasonably limited geographic area in which the former employee may not compete. Finally, the type of business activity limited by the non-compete must be reasonable.

A modern variation of a non-compete dispute is currently being litigated in federal court in Minnesota. In TEKsystems, Inc. v. Hammernick et al., No 0:10-cv-00819, the plaintiff (an employer) sought to enforce a non-compete agreement with defendants (its former employees). The plaintiff alleged that the defendants impermissibly used social-networking websites to solicit contacts.  One defendant allegedly “connected” with, and communicated with, certain contract employees on the popular social networking website LinkedIn.

Although the outcome of this pending case is uncertain, employers should consider whether to specifically discuss the use of social media in non-compete agreements. This is an issue which is likely to be the subject of future litigation. We will monitor the TEKsystems case and let you know the results.

This article was written by Matthew Ehrlich, Legal Clerk at Demorest Law Firm.

Michigan Court of Appeals Extends Apex Deposition Rule to High-Ranking Corporate Officials

A recent Michigan Court of Appeals decision, Alberto v. Toyota Motor Corp., held that two high-level executives at Toyota Motor Corporation were not required to give depositions.  The dispute in this case arose out of an incident where plaintiff’s decedent died while driving a Toyota vehicle, which suddenly accelerated.

During the discovery phase, Plaintiff gave notice to take the depositions of two high-ranking executives at Toyota.  Plaintiff alleged that the testimony was necessary because one executive had given testimony to Congress regarding the defective acceleration models while the other executive was involved in quality control.

Defendant moved to prevent the depositions arguing that the Toyota executives had not “engaged in or participated in the design, testing, manufacture, warnings, sale or distribution” of the automobile at issue.  Defendant sought a protective order to prevent the depositions.

Prior to the decision in this case, Michigan applied the “apex deposition” rule solely to high-ranking government officials.  The apex rule provides that before a party may take the deposition of a high-ranking government official, the party must show that the government official had superior or unique knowledge and information relevant to the issues being litigated.  The rule also requires that the information sought cannot be obtained by a less intrusive method, such as by deposing lower ranking employees.

The Court of Appeals decision extends the apex deposition rule to high-ranking corporate officials.  Citing public policy, the Michigan Court of Appeals determined that the rule will promote efficiency because frequent appearances in depositions will limit the ability of high-ranking officers to perform their job duties.  Further, the Court of Appeals found that applying the apex rule to corporate officials would “prevent the use of depositions to annoy, harass, or unduly burden the parties.”

The Court of Appeals explained that this rule would not shift the burden for litigants seeking to depose a high-ranking corporate officer.  The burden only shifts to the proponent of the deposition only “after the party opposing discovery has moved for a protective order and has made a showing regarding the lack of the proposed deponent’s personal knowledge and that other discovery methods could produce the required information.”

This article was written by Matthew Ehrlich, Legal Clerk at Demorest Law Firm.

So you Win an Arbitration Award and the Defendant Refuses to Pay, Now What?

The Michigan Arbitration Act (MAA) often provides an efficient alternative to traditional civil litigation.  Parties arbitrate their claims before either a single arbitrator or a panel of arbitrators.  Once a decision is rendered, the parties are bound by the arbitrator’s decision.  The tricky part comes in enforcing the decision.  If the defendant is unwilling to comply with the arbitrators’ decision, the plaintiff must seek confirmation of the award by a court under MCR 3.602(I).  Once a judgment is entered by the Court based on an arbitration award, the judgment can be enforced in the same manner as any other judgment.

A recent ruling by the Michigan Court of Appeals, Jaguar Trading Limited Partnership v. Presler (Aug. 3, 2010), clarified the steps a plaintiff must take in order to enforce or confirm an arbitration award.  The plaintiff simply filed the Michigan Court Form 284, (Binding Arbitration Award), provided by the State Court Administrator’s Office.  The plaintiff did not file a complaint with the Court.  The Court of Appeals held that the plaintiff was in error by failing to file a Complaint.  The Court of Appeals held that a plaintiff must timely file a complaint pursuant to MCL 600.1901 and MCR 2.101(B) in order to invoke the trial court’s jurisdiction.

Future plaintiffs must be aware that simply filing a Form 284 with the trial court is not sufficient.  In order to effectively preserve the rights associated with enforcing an arbitration agreement, plaintiffs must file a complaint with the trial court.  This must be done within one year after the arbitration award in order to avoid any argument that the effort to enforce the arbitration award is untimely.

This article was written by Matthew Ehrlich, Legal Clerk at Demorest Law Firm.

Unmarried and Living Together? Expect Nothing Unless you Contract!

Unmarried cohabitants living together need to use caution when spending time or money on improving “shared” property.  A recent opinion by the Michigan Court of Appeals, Williams v. Hartley, left one unmarried cohabitant with nothing to show for his efforts to improve the “shared” property of the couple after they separated.

Williams and Hartley became romantically involved and began to live together, under the assumption that they would marry in the future.  That assumption proved costly for Williams.   During their cohabitation, Williams and Hartley significantly improved the value of the property in which they lived, which was solely owned by Hartley and her father.  However, when things went sour they separated and Williams sued Hartley to recover the value of his labor and the amount he spent on resources improving the property.

The Court of Appeals determined that Williams was entitled to receive nothing for his efforts.   The law in Michigan provides that services rendered during a non-marital cohabitation relationship are presumed to be gratuitous.  Unless the plaintiff can show that he expected payment from the defendant at the time he rendered the services and, also that the defendant expected to pay for the services, the plaintiff will not be able to overcome this presumption.

Arguments made by Williams such as unjust enrichment, gifts made in contemplation of marriage and quantum meriut were all rejected by the Court of Appeals.  Courts will only enforce non-marital cohabitation agreements made with adequate and independent consideration.  The Court of Appeals held to hold otherwise would be to “resurrect common-law marriage.”  Unmarried co-habitants have no rights to property division in the absence of a specific contract.

This article was written by Matthew Ehrlich, Legal Clerk at Demorest Law Firm.

Michigan Supreme Court Fundamentally Changes Law On Extraction Of Natural Resources

For many years, the Michigan Supreme Court protected the rights of property owners to extract natural resources from their property.  In Michigan, this often involves sand or gravel pits, timber, and oil and natural gas wells.   Based on prior court decisions, local governments could not prohibit mining these resources as long as “no very serious consequences” would result. This was a very difficult standard for a city or township to meet.  Based on this case law, property owners were successful in a number of cases in challenging local zoning ordinances that attempted to prohibit or limit mineral extraction.

In Kyser v Kasson Township, the Michigan Supreme Court decided that the “no very serious consequences rule” was not required by the Michigan Constitution.  See a complete copy of the Court’s July 15, 2010 decision by clicking here.

From this point forward, local government regulation of mineral resources will be governed by the Zoning Enabling Act.  The practical effect of the Supreme Court’s decision is to give more authority to local governments to regulate the manner in which mineral extraction is conducted.  While a zoning ordinance must be reasonable, “an ordinance is presumed to be reasonable, and the burden is upon the party challenging the ordinance to overcome this presumption by demonstrating that there is no reasonable governmental interest being advanced.”

It will still be difficult for a city or township to completely prohibit mineral extraction Under the Zoning Enabling Act, a zoning ordinance may not have the effect of totally prohibiting a land use “in the presence of a demonstrated need for that land use within either that local unit of government area within the state, unless a location within the local unit of government does not exist where the use may be appropriately located or the use is unlawful.”

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

Liability For Sports Injuries

In a recent decision the Michigan Court of Appeals considered the liability of an arena and an opposing player for an injury in a soccer game. (Click here to view the decision). The plaintiff was injured when an opposing player made a slide tackle and took the plaintiff’s legs out from under her.

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.

Obama Care Provisions Effective 2011

Here are some of the major provisions that will affect most taxpayers starting in 2011:

Employers will be required to report the value of your health insurance coverage on your W-2.

What does this mean to you?

Well technically nothing since insurance coverage won’t be subject to an excise tax until 2018. Furthermore the excise tax of 40% would only apply to the employer-sponsored health insurance coverage amount that exceeds $10,200 for individuals and $27,500 for family coverage.

However once politicians start to see how much revenue could be generated from employer sponsored health insurance coverage, they may decide to apply the excise tax sooner rather than later to help pay for the deficit.

Effective January 1, 2011 only doctor prescribed medicines and insulin will be eligible for tax free reimbursement from one of the following plans.

Under current law insulin, prescribed and over the counter medicinal expenses qualify for tax free reimbursement from Flexible Spending Accounts (FSA), Health Reimbursement Accounts (HRA), Health Savings Accounts (HSA) and Archer Medical Savings Accounts (MSA)

If you are enrolled in one of the preceding plans you may want to consider stocking up on over the counter medicines this year.

This article was written by Jay Kossen, CPA at Numerico, PC. Click here to view Numerico’s website.

Update on the Asian Carp Dispute

Over the past several months, we have posted updates about the Lake Michigan Asian carp dispute.  This week, five states – Michigan, Minnesota, Ohio, Pennsylvania, and Wisconsin – filed a federal lawsuit in Chicago against the U.S. Army Corps of Engineers and the Metropolitan Water Reclamation District of Greater Chicago.  The lawsuit alleges that the defendants have created a public nuisance by operating infrastructure through which the Asian carp could enter the Great Lakes, and also requests that the court order the closing of the locks between the Chicago-area waterways and Lake Michigan.

In addition to the lawsuit, various members of Congress from the affected states have been working to find a solution.  Michigan and Illinois lawmakers agree that it is necessary to permanently separate the Mississippi River watershed from the Great Lakes watershed, but have not yet reached an agreement on the specific methodology, or even on short-term solutions to be implemented before the permanent solution is put in place.  Illinois lawmakers seem to be more concerned about protecting the shipping industry in Chicago than in protecting Lake Michigan from ecological destruction.

Even this action could be too late to fully protect Lake Michigan, as a 20-pound Asian carp was found in Lake Calumet, south of Chicago, in June.  Lake Calumet is 6 miles beyond an electronic barrier that was set up in Chicago waterways to prevent Asian carp from getting to Lake Michigan.

Besides the threat to Lake Michigan, there is now a concern that Asian carp could also enter Lake Erie, through rivers in Indiana and Ohio.  Asian carp are already present in the Wabash River in Indiana, which connects via marshlands and floodwaters with the Maumee River in Ohio.  The Maumee River connects to Lake Erie.   Earlier this month, Indiana placed mesh fences in marshes between the two rivers to attempt to keep Asian carp out of the Maumee River.

Stay tuned for further updates.  Also, see these articles in The Detroit News for more information: http://bit.ly/bPaiaA, http://bit.ly/bqt8dU, http://bit.ly/brspfu, http://bit.ly/amEzQb, and http://bit.ly/bVObfQ.

Click on the following for links to the first article on the dispute, the second article, and the third article.

This article was written by Melissa L. Demorest, Associate at Demorest Law Firm.

Parent’s Waiver of Minor’s Personal Injury Claim is Unenforceable.

On June 18, 2010 the Michigan Supreme Court decided, in Woodman v. Kera, LLC, that pre-injury waivers signed by parents on behalf of their minor children are unenforceable. Generally, a minor is not capable of contracting with another party (Read the Court’s opinion by clicking here). Moreover, neither a parent nor a legal guardian may contractually bind a minor. As a result, when a parent signs a pre-injury waiver on behalf of his or her minor child, that waiver is unenforceable.

This ruling does not mean that a business will automatically be found negligent in a court of law when a child is injured. Rather, it means that when a lawsuit is filed on behalf of an injured minor, the case will not be summarily dismissed based on a pre-injury waiver. A parent does not have the authority to waive his or her child’s right to sue in court.

A parent may not personally sue a business in his or her own name for injuries sustained by their child. Michigan requires that a parent or guardian be named “next friend” or “guardian” by the Probate Court in order to sue for damages on behalf of the child. Because a child may not bring a lawsuit, the parent or guardian steps into the shoes of the child in bringing the action. The added supervision ensures that the best interests of the child are protected.

Despite the unenforceability of the pre-injury waiver as to the child, waivers are still important. The ruling does not affect the use of waivers that foreclose a parent’s ability to bring a suit for the parent’s own damages as result of the defendant’s negligence towards a child. In the absence of an enforceable waiver, a parent or guardian might sue the negligent party for damages that the parent or guardian suffered as a result of seeing the injury.

Because pre-injury waivers for children are unenforceable, it is important that businesses be very careful in preventing negligent injuries from occurring. Risk assessments should be completed in order to determine if there are areas or equipment that are not properly maintained that may lead to an injury. It would also be prudent to update and revise your release language.  Insurance should also be purchased, both to provide a defense against a lawsuit, and to protect against a judgment.

This article was written by Michael K. Hayes, Legal Clerk at Demorest Law Firm.