author: J. H. Gillis, J.

text:
    BREDEMEIER v KENTWOOD BOARD OF EDUCATION
    Docket No. 43575.
    Submitted January 3, 1980, at Grand Rapids.
    Decided March 4, 1980.
    Wally Bredemeier, a member of the Kentwood Board of Education, brought an action against the board alleging noncompliance with his request for information pursuant to the Freedom . of Information Act (FOIA) and seeking an order compelling the defendant board to disclose the requested information and also for attorney fees, costs and punitive damages based upon defendant’s violation of the act. Plaintiffs request for information had been promptly honored by the board except for one item which was not disclosed, that being the purpose for which certain board meetings were held. No written denial of the request concerning the purpose of the meetings was given to plaintiff. The board had orally informed plaintiff that no record of the purpose of the meetings existed. Kent Circuit Court, John T. Letts, J., denied defendant’s motion for summary judgment, ruling that defendant had failed to give plaintiff written notice of its denial of his request for information in violation of FOIA. Plaintiffs motion for summary judgment was granted without explanation. The court also awarded attorney fees, costs and punitive damages to the plaintiff. Defendant appeals. Held:

    1. The FOIA does not require that information be recorded by a state agency, but if it is, it must be disclosed. There is no requirement that a public body generate records; therefore, plaintiffs argument that defendant violated the act by failing to record the purpose of the meetings in question is without merit.
    2. Denial of a request for disclosure of information must be in writing under the FOIA. Defendant violated the act by failing to notify plaintiff of its denial in writing. However, such violation does not alone entitle plaintiff to an award of attorney fees and costs. In an action commenced under FOIA the prevailing party is generally awarded fees and costs, but to prevail, a party must show at a minimum that the prosecution of the action could reasonably have been regarded as necessary and that the action had a substantial causative effect on the delivery of information. Plaintiff was orally advised that the requested information was not in record form. As a result of this lack of recordation, the lower court did not order disclosure. Therefore, it cannot be said that the action was necessary in order to compel disclosure nor, there being no disclosure, that the action had the required substantial causative effect.

      References for Points in Headnotes
    [1] 2 Am Jur 2d, Administrative Law § 233 et seq.

    [2, 3] 66 Am Jur 2d, Records and Recording Laws § 32 et seq.

    [4, 5] Construction and application of Freedom of Information Act provision (5 USCS § 552 (a)(4)(E)) concerning award of attorney’s fees and other litigation costs. 36 ALR Fed 530.

      3. The prerequisites to an award of punitive damages under the FOIA are a court-ordered disclosure and a finding that the defendant acted arbitrarily and capriciously in refusing to provide the requested information. The court did not order disclosure. Therefore, the award of punitive damages to the plaintiff must fail.
    Reversed and remanded.
    1. Administrative Law — Freedom of Information Act — Disclosure — Construction — Statutes.
    The close similarity between the Federal Freedom of Information Act (FOIA) and Michigan’s Freedom of Information Act makes construction of the FOIA by Federal courts persuasive in construction of Michigan’s disclosure requirements under its FOIA statutes (MCL 15.231[1] et seq.; MSA 4.1801[1] et seq.).

    2. Administrative Law — Freedom op Information Act — Recorded Information — Disclosure.
    The Freedom of Information Act does not require that information be recorded by a public body, but if it is, it must be disclosed.
    3. Administrative Law — Freedom of Information Act — Information Denied —• Notice Requirements •— Statutes.
    A public body’s failure to notify, in writing, a party requesting information that the request for disclosure of information has been denied, violates the Freedom of Information Act (MCL 15.235[2]; MSA 4.1801[5][2]).
    4. Administrative Law —■ Freedom of Information Act — Attorney Fees — Prevailing Party — Necessity of Information — Statutes.
    Reasonable attorney fees, costs, and disbursements are generally awarded to the prevailing party in an action commenced pursuant to the Freedom of Information Act; however, to prevail, a party must show at a minimum that the prosecution of the action could reasonably have been regarded as necessary and that the action had a substantial causative effect on the delivery of information (MCL 15.240[4]; MSA 4.1801[10][4]).'
    5. Administrative Law — Freedom op Information Act — Arbitrary Refusal — Compensatory and Punitive Damages — Statutes.
    The prerequisites to an award of punitive damages in an action brought pursuant to the Freedom of Information Act are a court-ordered disclosure and a finding that the defendant acted arbitrarily and capriciously in refusing to provide the requested information (MCL 15.235[3], 15.240[5]; MSA 4.1801[5][3], 4.1801[10][5]).

      George Weible, for plaintiff.

      Thrun, Maatsch & Nordberg (by Harry J. Zeliff), for defendant.
    Before: D. F. Walsh, P.J., and R. B. Burns and J. H. Gillis, JJ.
   J. H. Gillis, J.

This is an action brought pursuant to the Michigan Freedom of Information Act (FOIA), MCL 15.231 et seq.; MSA 4.1801(1) et seq.

On May 31, 1978, plaintiff, a member of the defendant board of education, filed a complaint alleging defendant’s noncompliance with a request for information filed pursuant to the FOIA. On February 13, 1978, plaintiff orally requested from the defendant a "breakdown of items included in a Master Charge statement”. The items related to expenses incurred by the defendant in connection with certain meetings. The information sought included the dates of the charges, the names of the participants, the locations of the meetings, whether the meetings were luncheons or dinners, the amount of expenses incurred at each meeting and the purpose of the meetings. All of the information was promptly disclosed as requested except for the purpose of the meetings.

No written denial of the request concerning the purpose of the meetings was given to the plaintiff. The defendant, however, orally informed the plaintiff that no record of the purpose of the meetings existed.

Plaintiff thereafter commenced the present action seeking an order compelling the defendant to disclose the requested information and further seeking reasonable attorney fees, costs and punitive damages for defendant’s violation of the act.

On June 13, 1978, defendant moved for summary judgment pursuant to GCR 1963, 117.2(1). The motion was denied, the lower court ruling that defendant had failed to give plaintiff the written notice of its denial of the request for the undisclosed information in violation of MCL 15.235(2)(b); MSA 4.1801(5)(2)(b). On November 17, 1978, defendant’s renewed motion for summary judgment was denied without a stated reason. The lower court, however, did state that the questions presented would need to be determined by a higher court. The court indicated that it would certify a controlling question of law for appeal purposes upon its submission by the parties.

During this time, plaintiff had also filed a motion for summary judgment pursuant to GCR 1963, 117.2(2) and (3). On November 22, 1978, the lower court granted the motion without explanation. On January 24, 1979, the lower court entered an order of summary judgment in favor of plaintiff. The order awarded to plaintiff attorney fees, costs and punitive damages. The defendant appeals from that order as of right pursuant to GCR 1963, 806.1.

We begin our analysis by addressing a point not decided by the lower court. At trial and on appeal, plaintiff argues that the defendant was required, under the FOIA, to record the sought-after information. We hold that the argument is without merit.

Due to the similarities between the Federal Freedom of Information Act, 5 USCA 552, and the Michigan Administrative Procedures Act, MCL 24.201 et seq.; MSA 3.560(101) et seq., the precursor to the Michigan Freedom of Information Act, this Court has looked to the Federal act for guidance in construction of the former act. Citizens for Better Care v Dep’t of Public Health, 51 Mich App 454, 463; 215 NW2d 576 (1974), lv den 392 Mich 758 (1974). For the same reason, we deem the Federal decisions persuasive in the construction of the current act.

The Federal FOIA only gives a right to access to records in existence. It does not confer a right to have the public body generate records. National Labor Relations Board v Sears, Roebuck & Co, 421 US 132; 95 S Ct 1504; 44 L Ed 2d 29 (1975), Forsham v Califano, 190 US App DC 231; 587 F2d 1128 (1978), cert gtd, 441 US 942; 99 S Ct 2159; 60 L Ed 2d 1044 (1979). Relying on these decisions, we hold that the Michigan FOIA does not require that information be recorded, only that if recorded, it must be disclosed. Accordingly, defendant’s failure to record the purpose of the meetings in question does not constitute a violation of the act.

We next address the question of whether the lower court erred in awarding plaintiff attorney fees and costs. It is undisputed that defendant’s failure to notify plaintiff in writing of its denial of his request for disclosure of records concerning the purpose of the meetings constitutes a violation of MCL 15.235(2); MSA 4.1801(5)(2). Such violation, however, does not alone entitle plaintiff to an award of attorney fees and costs.

MCL 15.240(4); MSA 4.1801(10)(4) provides in relevant part:

"If a person asserting the right to inspect or to receive a copy of a public record or a portion thereof prevails in an action commenced pursuant to this section, the court shall award reasonable attorneys’ fees, costs, and disbursements. If the person prevails in part, the court may in its discretion award reasonable attorneys’ fees, costs, and disbursements or an appropriate portion thereof.”

To support a determination that a plaintiff in a FOIA action "prevailed” he must show at a minimum that the prosecution of the action could reasonably have been regarded as necessary and that the action had a substantial causative effect on the delivery of information. Vermont Low Income Advocacy Council, Inc v Usery, 546 F2d 509, 514 (CA 2, 1976), Cox v United States Dep’t of Justice, 195 US App DC 189; 601 F2d 1, 6 (1979).

In the present case, plaintiff was orally advised that the requested information was not in recorded form. As a result of this lack of recordation, the lower court did not order disclosure. Therefore, it cannot be said that the action was necessary in order to compel disclosure nor, there being no disclosure, that the action had the required substantial causative effect. Accordingly, plaintiff was not entitled to an award of attorney fees and costs.

The last issue presented relates to the propriety of the award of punitive damages. MCL 15.235(3); MSA 4.1801(5X3) provides:

"If a circuit court, upon an action commenced pursuant to section 10, finds that a public body has failed to respond as provided in subsection (2), and if the court orders the public body to disclose or provide copies of the public record or a portion thereof, then the circuit court shall assess damages against the public body as provided in section 10(5).”

The latter section provides:

"In an action commenced pursuant to this section, if the circuit court finds that the public body has arbitrarily and capriciously violated this act by refusal or delay in disclosing or providing copies of a public record, the court shall, in addition to any actual or compensatory damages, award punitive damages in the amount of $500.00 to the person seeking the right to inspect or receive a copy of a public record.” MCL 15.240(5); MSA 4.1801(10X5).

The prerequisites to an award of punitive damages are, thus, a court-ordered disclosure and a finding that the defendant acted arbitrarily and capriciously in refusing to provide the requested information. The award of punitive damages in the present case must necessarily fail as the result of the failure to satisfy the first requirement to such an award. The lack of a court-ordered disclosure precludes the award of punitive damages.

Thus, though it is undisputed that defendant’s failure to provide the plaintiff with written notice of the denial of his request constitutes a violation of the act, this violation alone does not entitle the plaintiff to attorney fees, costs or punitive damages. Accordingly, the lower court’s grant of summary judgment awarding same must be reversed.

Reversed and remanded for proceedings consistent with this opinion.

       We are unable to discern why the lower court heard and granted plaintiff’s motion for summary judgment subsequent to its ruling of November 17, 1978.

       That is, assuming the information does not fall within one of the exempt categories listed in MCL 15.243; MSA 4.1801(13).


source: Caselaw Access Project

author: T. M. Burns, P.J.

license: Public Domain

text:
    CONSUMERS POWER COMPANY v TELESYSTEMS, INC
    Docket No. 43750.
    Submitted November 14, 1979, at Lansing.
    Decided March 5, 1980.
    Leave to appeal denied, 409 Mich 893.
    Defendant, Telesystems, Inc., dba Owosso Cable TV Company (Telesystems), had a contract with plaintiff, Consumers Power Company (Consumers), permitting them to rent Consumers’ power transmission poles for its cable TV wires at a rate of $3.90 per pole per year. After operating under the contract for some time, Consumers notified Telesystems that the annual fee was being raised to $5.40 per pole. Defendant continued to use plaintiffs poles and make annual payments at the $3.90 per pole rate. Plaintiff commenced an action in the Shiawassee Circuit Court to collect the difference between the $5.40 rate charged and the $3.90 rate paid. The court, Peter J. Marutiak, J., granted accelerated judgment for defendant on the basis that the court had no jurisdiction to settle the dispute by virtue of the 1978 amendments to the Federal Communications Act which placed exclusive jurisdiction in the Federal Communications Commission or the Public Service Commission. Plaintiff appeals. Held:

    The circuit court has jurisdiction to settle a rate dispute between a regulated utility and an unregulated company over the rental fee to be paid for the use of the utility’s poles by the company for the time period from the date the controversy arose until the Public Service Commission exercises its jurisdiction to regulate that rate by making an order.
    Reversed and remanded.
    Courts — Jurisdiction — Public Utilities — Public Service Commission.
    The circuit court has jurisdiction to settle a rate dispute between a regulated utility and an unregulated company over the rental fee to be paid for the use of the utility’s poles by the company for the time period from the date the controversy arose until the Public Service Commission exercises its jurisdiction to regulate that rate by making an order.
    Reference for Points in Headnote
    [1] 64 Am Jur 2d, Public Utilities §§ 89,133, 134.

      James W. Dempsey, for plaintiff.

      Clark, Nantz, Wood, Hoffius, Rankin & Cooper (by Sheila A. Kinney), for defendant.
    Before: T. M. Burns, P.J., and Cynar and A. M. Bach, JJ.

       Former circuit judge, sitting on the Court of Appeals by assignment pursuant to Const 1963, art 6, § 23 as amended in 1968.

   T. M. Burns, P.J.

Plaintiff, Consumers Power Company, appeals of right a November 6, 1978, circuit court judgment granting defendant’s motion for accelerated judgment. We reverse.

Plaintiff’s November 22, 1976, complaint alleged that under a contract between Consumers and the defendant cable TV Company the latter had been permitted to rent Consumers’ power transmission poles for its cable TV wires. In compensation for use of the poles defendant was required to pay Consumers a yearly fee of $3.90 per pole. After operating under this contract for some time, Consumers notified defendant that effective September 1, 1974, the annual pole attachment fee would be increased to $5.40 per pole.

Defendant, together with several other cable television companies, formed a nonprofit corporation and filed a complaint in Kent County Circuit Court seeking, among other things, an injunction restraining Consumers from increasing the pole fee. On October 2, 1975, Consumers was granted summary judgment in the Kent County Circuit Court action. Nonetheless, defendant refused to sign a new contract providing for increased pole fees and continued to make yearly payments at the $3.90 per pole rate. Subsequently, Consumers filed the instant action seeking as damages the difference between the rental fee it would have received at $5.40 per pole and the fee that it did receive at $3.90 per pole.

On September 21, 1978, defendant filed a motion for accelerated judgment which alleged that the circuit court lacked subject matter jurisdiction over the pole rental dispute because it involved a rate issue that should be determined by the Public Service Commission and because 1978 amendments to the Federal Communications Act placed exclusive jurisdiction over pole attachment disputes in the FCC, unless a state certifies that it regulates pole attachment rates. Defendant’s motion for accelerated judgment was granted on October 23, 1978. Plaintiff now appeals and we reverse.

It is the contention of Consumers that although it is a regulated public utility, it also has private contract functions. The renting of pole space is such a private function and is not regulated by the Michigan Public Service Commission. Defendant responds that MCL 460.551 et seq.; MSA 22.151 et seq., gives the Public Service Commission general authority to regulate the rates, terms and conditions of electricity distribution and that, on the basis of that authority, the Public Service Commission has asserted jurisdiction over pole attachment rates.

While cable television companies are not regulated by the Public Service Commission, companies that generate electricity, such as Consumers Power, are. See, White v City of Ann Arbor, 406 Mich 554, 564; 281 NW2d 283 (1979). It also appears that the Public Service Commission has, or is about to take, jurisdiction over the rates charged for attachments to poles owned by a regulated utility. Thus, Consumers’ argument that the renting of pole space is a private activity over which the Public Service Commission has not asserted jurisdiction is untrue. However, the fact that primary jurisdiction over this suit is vested in the Public Service Commission is not sufficient justification for the circuit court’s dismissal of this case.

This action can be severed into two parts. The aspect of this case concerning the setting of pole attachment rates is one for the Public Service Commission. However, orders of the commission operate prospectively only. Muskegon Agency, Inc v General Telephone Co of Michigan, 350 Mich 41, 53; 85 NW2d 170 (1957). Therefore, that aspect of this case concerning the fee that should be paid to Consumers for the period of time between September 1, 1974, and the date of any final rate order by the Public Service Commission is one that the circuit court properly could decide. Further, the Public Service Commission’s primary jurisdiction over this controversy would not divest the circuit court of jurisdiction to rule on whether the defendant should be permitted to continue its use of Consumers’ utility poles against the wishes of Consumers. While it might make good sense for a circuit court to hold this case in abeyance until the ruling of the Public Service Commission so that it would have the benefit of the Commission’s expertise and findings, it need not do so.

With respect to defendant’s arguments that Federal Communications Act amendments of 1978 place exclusive jurisdiction over pole attachment disputes in the FCC, unless a state certifies that it regulates pole attachment rates, we find that the plain language of the amendments supports defendant’s interpretation of them. The amendments clearly intend to cover all situations and leave no area in pole attachment disputes unregulated. Thus, even if the Public Service Commission had not assumed jurisdiction over pole attachment fee disputes, the Federal Communications Act would divest Michigan circuit courts of jurisdiction over such disputes arising after the effective date of the amendments. However, we will not apply the FCC amendments retroactively so as to affect the jurisdiction of the circuit court to determine the amount of any pole rental fees that accrued before the amendments took effect.

We decline to consider issues raised by Consumers in its motion for summary judgment that were not decided by the lower court.

Remanded for further proceedings.

       In a case unrelated to the instant one the Public Service Commission asserted jurisdiction over certain questions related to pole attachments under its authority to control and regulate the transmission of electricity between Michigan counties. See, In the Matter of the Application of Consumers Power Company, No. U-5545 (PSC, July 31, 1978).

       In pertinent part, the amendments provide:
      "(4) The term 'pole attachment’ means any attachment by a cable television system to a pole, duct, conduit, or right-of-way owned or controlled by a utility.
      "(b)(1) Subject to the provisions of subsection (c) of this section, the Commission shall regulate the rates, terms, and conditions for pole attachments to provide that such rates, terms, and conditions are just and reasonable, and shall adopt procedures necessary and appropriate to hear and resolve complaints concerning such rates, terms and conditions. * * *
      "(2) Within 180 days from the date of enactment of this section the Commission shall prescribe by rule regulations to carry out the provisions of this section.
      "(c)(1) Nothing in this section shall be construed to apply to, or to give the Commission jurisdiction with respect to rates, terms, and conditions for pole attachments in any case where such matters are regulated by a State.
      "(2) Each State which regulates the rates, terms, and conditions for pole attachments shall certify to the Commission that—
      "(A) it regulates such rates, terms, and conditions; and
      "(B) in so regulating such rates, terms and conditions, the State has the authority to consider and does consider the interests of the subscribers of cable television services, as well as the interests of the consumers of the utility services.
      "(d)(1) For purposes of subsection (b) of this section, a rate is just and reasonable if it assures a utility the recovery of not less than the additional costs of providing pole attachments, nor more than an amount determined by multiplying the percentage of the total usable space, or the percentage of the total duct or conduit capacity, which is occupied by the pole attachment by the sum of the operating expenses and actual capital costs of the utility attributable to the entire pole, duct, conduit, or right-of-way.” 47 USC 224(a)(4)-(d)(1).


author: Beasley, J.

text:
    THIEL v CRUIKSHANK
    Docket No. 43851.
    Submitted November 8, 1979, at Grand Rapids.
    Decided March 5, 1980.
    Richard Thiel and Donna Reitz, interested parties in the estate of Homer H. Thiel, deceased, brought an action against Ray Cruikshank, individually and as executor of the estate of Homer H. Thiel, deceased, seeking damages for the defendant’s breach of his fiduciary duties as executor of the estate. The Osceola Circuit Court, Lawrence C. Root, J., awarded damages to the plaintiffs based on a finding of the defendant’s self-dealing in the sale of estate property, a one-half interest in a parcel of real property, to the defendant’s son. The defendant appeals, alleging that 1) he did not act improperly because he did not purchase or even obtain an interest in the estate’s interest in the subject real property and, consequently, was not guilty of self-dealing, and 2) the selling price to his son was fair because it exceeded the land’s appraisal value by $5,500 and that he sold to his son in good faith. Held:

    1. The trial court’s finding that the defendant’s son was merely a vehicle through which the defendant benefitted from the estate’s one-half interest in the land in question is fully supported by the evidence. The defendant simultaneously purchased the other one-half interest from the decéased’s sister and some 48 days later the entire interest in the land was resold for a tidy profit. Also, the length of time following the defendant’s alleged offering of the estate’s interest in the real property for sale and ultimately selling it to his own son was very brief.
    2. The defendant was obligated to seek the highest price obtainable in selling the estate’s interest in the real property. The defendant’s argument that the $12,500 figure for the property in the inventory of the estate’s assets represents the fair market value and that the $18,000 figure charged his son was a profit for the estate are belied by the subsequent resale to a third party for $25,000. There was no error in the trial judge’s refusal to find that the sale to the defendant’s son was for the best price obtainable. The defendant is not excused from the statutory consequences of his self-dealing.

      References for Points in Headnotes
    [1] 31 Am Jur 2d, Executors and Administrators § 396.
    [2] 31 Am Jur 2d, Executors and Administrators § 386.

      Affirmed.
    1. Executors and Administrators — Sale of Real Property — Statutes.
    The executor of an estate is obligated to seek the highest price obtainable when selling the estate’s interest in real property (MCL 709.20; MSA 27.3178[480]).
    2. Executors and Administrators — Sale of Real Property — Fiduciary Self-Dealing — Statutes.
    Any sale of real property which is in probate and made contrary to a statute prohibiting the fiduciary making the sale from having any direct or indirect interest in the purchase renders the sale and resulting deeds voidable only, notwithstanding the contrary statutory language (MCL 709.27; MSA 29.3178[487]).

      Thompson & Weger (by David L. Porteous), for plaintiffs.

      Talhelm & Smith, for defendant.
    Before: V. J. Brennan, P.J., and Beasley and G. E. Bowles, JJ.

       Former circuit judge, sitting on the Court of Appeals by assignment pursuant to Const 1963, art 6, § 23 as amended in 1968.

   Beasley, J.

In a nonjury trial, the trial court awarded plaintiffs damages in the sum of $7,000 based on defendant’s breach of his fiduciary duties as executor of the estate of Homer . H. Thiel, deceased. The case was heard upon a settled record without the taking of testimony, both parties stipulating that the trial judge should decide the case by reviewing depositions, exhibits, briefs and the probate court file. Defendant appeals as of right.

The record indicates that on August 30, 1974, defendant executor filed an inventory listing the estate’s undivided one-half interest as tenant in common in an 80-acre parcel of real property located in Hersey Township in Osceola County as having an appraised value of $12,500.

On September 20, 1974, pursuant to a power of sale contained in the will, defendant, as executor, sold the estate’s interest to his son, at private sale, for $18,000. On the same day that defendant’s son bought the land, defendant, acting individually and not as executor, purchased the other undivided one-half interest in the land from decedent’s sister, Huida Thiel, for $18,000. The money for the two purchases was obtained from a bank to whom defendant and his son gave a joint note for $36,-000. On November 7, 1974, some 48 days after these transactions, defendant and his son sold the entire parcel to another party for $50,000 but none of this profit went to the estate.

This sale was on a land contract with a down payment of $14,500, the balance, with interest at the rate of 8% per annum, payable in monthly installments of $250 or more. Defendant’s deposition indicates the land contract payments are split equally between defendant and his son.

Plaintiffs, who are interested parties in the estate, claimed that defendant breached his fiduciary duty to the estate when he sold the estate’s undivided one-half interest in the subject real property to his son. Plaintiffs claim that the purchase price paid by the son was substantially lower than what the land would have brought if actively offered on the open market and that, therefore, defendant must account to the estate for what the estate would have received but for defendant’s self-dealing, i.e., the highest price obtainable, namely, $25,000, less the amount actually paid to the estate, namely, $18,000.

On appeal, defendant claims that he did not act improperly because he did not purchase or even obtain an interest in the estate’s interest in the subject real property and, consequently, was not guilty of self-dealing. He also claims the selling price to his son was fair because it exceeded the appraised price by $5,500 ($18,000 was the sale price to his son and $12,500 was the appraised price), and that he sold to his son in good faith.

The trial judge filed a thorough written opinion making findings of fact and conclusions of law upon which the judgment for plaintiffs was based. After careful review, we affirm the trial court’s judgment in favor of plaintiffs.

First, we find defendant’s claim that the trial court erred when it found self-dealing, as only defendant’s son derived benefit, to be without merit.

The relevant statutes provide:

"The fiduciary making the sale shall not directly or indirectly purchase, or be interested in the purchase of any part of the property so sold, and all sales made contrary to the provisions of this section shall be void * * *."

The trial court found:

"* * * [T]he facts present a fairly clear case of an Executor dealing in a property of an estate in such a way that he has received the benefit. It is the holding of this Court that such is the case here even though the actual sale of the Estate property was by the Defendant to Rex Cruikshank, his son. The totality of the circumstances surrounding this transaction are such that it can lead only to the conclusion that these cross-transactions, whereby the Defendant acquired Huida Thiel’s interest in the property and his son acquired the Estate’s interest in the property, is such that it must be held that the Defendant indirectly purchased Estate property. As noted above, the two purchases occurred on the same day and the money for the purchases came from a single loan of $36,000.00. Furthermore, upon the sale of the property the down payment on the land contract, which apparently covered both interests, was used to pay off a portion of the note. Additionally, the payments under the contract are being split between the Defendant and his son on a 50/50 basis. Finally, in his deposition, the Defendant stated that he didn’t plan to lose any money on the deal and that he would either sell the property or farm it himself. It is therefore apparent that the transaction was, from the start, one calculated to derive a benefit for the Defendant. The fact that the Defendant’s son was the vehicle through which the defendant benefitted from the Estate’s interest in the land is irrelevant given the circumstances here.”

Defendant did not advertise the real property for sale, did not list the property with a real estate broker and did not even put a "For Sale” sign on the property. If, as defendant appears to say, he did not seek an outside sale because decedent’s sister-in-law, Huida Thiel, did not wish him to, then he violated his fiduciary duty to act in the best interest of the estate. In any event, her wishes would be no excuse for his self-dealing.

We find that the trial court’s finding that defendant’s son was merely a vehicle through which defendant benefitted from the estate’s interest in the land is fully supported by the evidence. By selling the estate’s one-half interest in the land to his son and combining it with defendant’s own almost simultaneously acquired other one-half interest in the land, a tidy profit was made upon resale. The length of time following the defendant’s alleged offering of the estate’s interest in the real property for sale and ultimately selling it to his own son was very brief. At the very least, serious question would arise as to whether defendant did, in fact, seek the highest price obtainable for the subject real property.

We further find that the trial court correctly pierced the transaction when it found that defendant personally benefitted from the sale of the land to his son, when the transaction is viewed together with the ultimate sale to the third party.

Next, defendant argues that since the price paid to the estate by defendant’s son was above the probate appraisal, plaintiffs had the burden of proof to show that the price paid by the son was inadequate. Defendant further claims that he acted in good faith and that, under case law, good faith, fair dealing on the part of a fiduciary can be a defense to an alleged violation of MCL 709.27; MSA 27.3178(487).

In selling the estate’s interest in the real property, defendant executor was obligated to seek the highest price obtainable. His argument that the $12,500 figure in his inventory represents the fair market value and that the $18,000 figure charged his son was a "profit for the estate” are belied by his sale to a third party for $25,000 (one-half of the $50,000) within the same time span. It strains credulity for defendant to claim within the circumstances of this case that his sale to his son was for the best price obtainable. We find no error in the trial judge’s refusal to so find.

In re Tolfree Estate is instructive in this connection. In Tolfree, the three executors deposited estate funds in a bank owned and controlled by one executor. The bank failed and went into bankruptcy. The Court held that had the estate been closed within the time limited by the statute, the loss resulting from the failure of the bank in which the estate money was kept would not have occurred. On this basis, the Court held each executor liable, saying they were charged equally with performance of duties imposed by law and that none may escape liability on the grounds that he left it to his coexecutors to take action.

Citing an earlier case, the Court said:

"Good faith is a defense, where a trustee, acting within the limits of his powers with proper prudence and diligence, commits mere mistakes or errors of judgment, but is not a defense where a trustee disregards the limits placed upon his power by law or by the trust instrument.”

This is not a case where an executor commits a mere mistake of judgment. On the contrary, as indicated, defendant was guilty of self-dealing in violation of the statute.

In this connection, the trial court concluded:

"Taking this transaction as a whole, looking at the unreasonableness of the Defendant’s efforts to sell the property, the chronology of the transactions and the apparent inadequacy of the consideration paid,[] this Court is not in a position to say that the Defendant has met his burden of proof in establishing a defense to the Plaintiffs’ prima facie case. It is therefore the holding of this Court that the Defendant committed an act of self-dealing and that he must account to the Estate for any benefit he received as a result of that conduct.”

It should be noted that this is not a case where attack is made upon the validity of the conveyances. Plaintiffs here seek only to recover the amount rightfully accruing to the estate, but for defendant’s self-dealing.

Thus, this is not a case like Carpenter v Mumby where the result hinges upon interpretation of the word "void” in the prohibition against self-dealing statute. For purposes of decision here, we will adopt the Carpenter rule, which is most favorable to defendant, namely, that transactions in violation of MCL 709.27; MSA 27.3178(487) are merely voidable, not void. Further assuming that the burden of proof is on plaintiffs, we would nevertheless believe the evidence here compels the conclusion that defendant did not obtain the highest price obtainable and, thus, is not excused from the statutory consequence of his self-dealing.

In summary, we find that defendant engaged in self-dealing in violation of the statute, that defendant failed to obtain the highest price obtainable for the subject real property, that by defendant’s self-dealing, the estate was deprived of $7,000 which it would otherwise have received, and that defendant has not demonstrated such good faith and fair dealing as would excuse defendant’s self-dealing.

Affirmed, with costs.

       MCL 709.27; MSA 27.3178(487). See also:
      MCL 704.35; MSA 27.3178(286): "Every fiduciary shall be liable to any interested party for any loss to the estate * * * through self-dealing * *
      MCL 704.37; MSA 27.3178(288): "* * * Except with the written approval of the probate court, a fiduciary in his personal capacity shall not engage in any transaction whatsoever with the estate which he represents, * * *. A fiduciary in his personal capacity shall not personally derive any profit from the purchase, sale or transfer of any property of said estate.

       MCL 709.20; MSA 27.3178(480).

       347 Mich 272, 282-283; 79 NW2d 629 (1956).

         Id., 287.

        MacKenzie v Union Guardian Trust Co, 262 Mich 563, 588; 247 NW 914 (1933).

       MCL 709.27; MSA 27.3178(487).

       Earlier, the court had taken judicial notice that valuations for purposes of probate are generally low.

       86 Mich App 739; 273 NW2d 605 (1978). Other cases where the void, voidable issue seems present are Newton v Old-Merchants National Bank & Trust Co, 299 Mich 499; 300 NW 859 (1941), Wright v First National Bank of Monroe, 297 Mich 315; 297 NW 505 (1941), and Ketchum v Ketchum, 177 Mich 100; 143 NW 25 (1913).

       We do not believe such rule is, in fact, applicable here.


author: D. F. Walsh, P.J.

text:
    CITY OF GRAND RAPIDS v KENT COUNTY
    Docket No. 43942.
    Submitted January 2, 1980, at Grand Rapids.—
    Decided March 5, 1980.
    Leave to appeal applied for.
    Plaintiffs, Cities of Grand Rapids, Wyoming, Kentwood, Grand-ville and Walker, filed a complaint in the Kent Circuit Court alleging that the County of Kent was illegally charging them a per diem maintenance fee for housing in its jail persons accused or convicted of city ordinance violations. Plaintiffs moved to amend their complaint to add one taxpayer from each city as a plaintiff. Defendant moved for summary judgment. The court, George V. Boucher, J., denied plaintiffs’ motion to amend and granted summary judgment for defendant. Plaintiffs appeal. Held:

    1. At the commencement of litigation, each of the plaintiff cities was a district control unit for a district court of the third class or bore an analogous relation to a retained municipal court. Since that time, each of the cities which had retained municipal courts has voted to become a part of the district court system and has or will become a district court unit for a district of the third class. A county is authorized by law to charge cities which constitute district control units of district courts of the third class a per diem charge for expenses including capital expenditures incurred in the safekeeping and maintaining in the county jail of persons charged with or convicted of violations of the ordinances enacted by those cities.
    2. A prerequisite to a taxpayer’s suit against a unit of government is a threat that the taxpayer will sustain substantial injury or suffer loss or damage as a taxpayer through increased taxation and the consequences thereof. Some special grievance must be shown. The trial court found that, at most, the interests of the proposed taxpayer-plaintiffs were indirect, remote and conjectural. The denial of the motion to amend did not constitute an abuse of discretion.
    Affirmed.
    References for Points in Headnotes
    [1] 60 Am Jur 2d, Penal and Correctional Institutions § 15.
    [2] 74 Am Jur 2d, Taxpayers’ Actions §§ 5, 6.

      1. Counties — Cities — Jails — Charging for Use of Jail.
    A county is authorized by law to charge cities which constitute district control units of district courts of the third class a per diem charge for expenses, including capital expenditures, incurred in the safekeeping and maintaining in the county jail of persons charged with or convicted of violations of the ordinances enacted by those cities.
    2. Actions — Taxpayer’s Suit.
    A prerequisite to a taxpayer’s suit against a unit of government is a threat that the taxpayer will sustain substantial injury or suffer loss or damage as a taxpayer through increased taxation and the consequences thereof; some special grievance must be shown.

      Michael D. McGuire, Assistant City Attorney, for the City of Grand Rapids.

      Law, Weathers, Richardson & Dutcher (by Robert W. Richardson and James E. Christenson), for defendant.
    Before: D. F. Walsh, P.J., and R. B. Burns and J. H. Gillis, JJ.
   D. F. Walsh, P.J.

Plaintiffs, the home rule cities of Grand Rapids, Wyoming, Kentwood, Grandville, and Walker, appeal the February 6, 1979, entry of summary judgment for defendant County of Kent. Plaintiffs also appeal denial of their motion to amend their December 1, 1977, complaint.

The parties’ controversy concerns the responsibility for expenses incurred in the safekeeping and maintaining in the Kent County jail of persons who are charged with and convicted of violations of the ordinances enacted by plaintiff cities. Until 1976, defendant county and plaintiff cities discussed and agreed upon an amount to be charged plaintiffs by defendant for the lodging of city prisoners in the county jail. Since July 1, 1976, the parties have not been able to agree on the "per diem” fee to be paid by plaintiffs to cover the confinement expenses of city prisoners in the county jail.

On December 1, 1977, plaintiffs filed a complaint seeking a declaratory judgment that the county had no legal authority, without plaintiffs’ consent, to assess any charges for the maintenance, safekeeping and lodging in the county jail of persons accused or convicted of city ordinance violations. It was plaintiffs’ position that any expenses so incurred were county expenses. Plaintiffs further alleged that defendant’s practice of charging per diem fees to plaintiffs, while not likewise charging all other cities within the county, violated due process and equal protection principles and that the practice was unfair.

On November 3, 1978, plaintiffs moved to amend their complaint to add parties plaintiff. They sought to add as plaintiffs the mayors of each of the plaintiff cities.

The parties stipulated to the relevant facts. On February 6, 1979, the circuit court granted summary judgment to defendant, ruling that defendant was legally authorized to charge the challenged fees. In its January 11, 1979, written opinion, the circuit court based its summary judgment determination primarily on the Supreme Court’s decision in People ex rel Mixer v The Board of Supervisors of Manistee County, 26 Mich 422 (1873).

In Mixer, the Supreme Court was asked to determine if Manistee County was required to pay for the confinement of persons brought to the county jail by city police officers for violation of city ordinances and of persons convicted of violating city ordinances. The Supreme Court responded as follows:

"The first class of charges, for services under the city ordinances, we think cannot be reckoned as county charges. They are in no sense services rendered to the county, and there is no statute which requires the county to pay for them. City by-laws and ordinances are entirely of local application, and are intended for local benefit. They are passed by a body independent of the county, and in whose action the county has no voice. The suppression of crime and disorder is made chargeable on the county in many cases, not so much because the county, as such, is concerned, as because the county is the division of country set apart for all ordinary jurisdiction in criminal matters, and the expenses have been usually apportioned over the region in which such courts and their juries act. But the municipal expenses of city police matters have been quite as uniformly made chargeable to the city itself, and in the absence of any statute to the contrary, such must be the rule of law.” Id., 424.

Plaintiffs cite MCL 801.4; MSA 28.1724 and MCL 801.8; MSA 28.1728 in support of their contention that the cost of detaining ordinance violators is a county expense. These statutes provide:

"All charges and expenses of safe-keeping and maintaining convicts, and of persons charged with offenses and committed for examination or trial, to the county jail, shall be paid from the county treasury; the accounts therefore being first settled and allowed by the board of supervisors.” MCL 801.4.

"Prisoners detained for trial, and those under sentence, shall be provided with ,a sufficient quantity of wholesome food, at the expense of the county; and prisoners detained for trial, may, at their own expense, and under the direction of the keeper, be supplied with any other proper articles of food.” MCL 801.8.

These statutes, however, also existed when the Supreme Court decided Mixer, 1871 CL 8021, and 1871 CL 8025. But plaintiffs argue that Mixer is distinguishable because it was based on a theory, no longer valid, that ordinance violations were not crimes. Although the Mixer Court discussed the distinction between criminal cases and ordinance violations, we are persuaded that its ultimate ruling was based upon its firm conclusion that the statutes imposed liability upon the county only for the expenses of enforcing state laws.

"But where the prosecutions are entirely under city ordinances and by tribunals not acting under the criminal laws of the state, the question of expenses, whether the acts might or might not have been subject to prosecution under state laws, must depend on the jurisdiction under which they are incurred. The state has not seen fit to charge to the county any portion of such expenses, and they cannot be so charged without some authority of law. They must be considered as a part of the expenses attendant upon the police system of the city. The law permitting the use of the jail has no provision to the contrary.” Mixer, supra, 425.

Further support for the defendant’s position is found in the 1969 enactment of MCL 801.4a; MSA 28.1724(1), which provides:

"All charges and expenses of safekeeping and maintaining persons in the county jail charged with violations of city, village or township ordinances shall be paid from the county treasury if a district court of the first or second class has jurisdiction of the offense.”

Certainly it would not have been necessary to enact this statute if the counties were already responsible for the expenses of confinement of persons convicted of violations of city, village or township ordinances in districts of every class.

At the commencement of this litigation, each of the plaintiff cities was a district control unit (MCL 600.8104; MSA 27A.8104) for a district court of the third class (MCL 600.8103[3]; MSA 27A.8103[3]) or bore an analogous relation to a retained municipal court. Since that time, each of the four plaintiff cities which had retained municipal courts has voted to become a part of the district court system and each has or will become a district control unit for a district of the third class. We are in full accord with the Attorney General, who has expressed his opinion that:

"Having in mind the above statutory language [MCL 801.4a] and my previous Opinion in this regard [see footnote 3], I conclude that the expenses, including medical expenses, of confining in the county jails those persons held for violations of city, village, or township ordinances, should be paid by the city, village or township if a district court of the third class has jurisdiction of the offense, and by the county if the offense is within the jurisdiction of a district court of the first or second class.” OAG 1975-1976, No. 4957, p 322 (February 25, 1976).

On the authority of the Supreme Court’s holding in Mixer and in light of the absence of a statute to the contrary, we affirm the circuit court’s determination that defendant County of Kent is legally authorized to charge per diem fees to plaintiff cities for the confinement in the county jail of persons charged with or convicted of city ordinance violations.

We also agree with the circuit court that the practice of charging only certain cities within the county the per diem jail fees is entirely reasonable. As noted, supra, the plaintiff cities are district countrol units of district courts of the third class. The remaining cities, villages and townships in Kent County comprise the 63rd Judicial District, a district of the second class. MCL 600.8130(4); MSA 27A.8130(4).

In first and second class judicial districts, the county is responsible for the maintenance of the district court and two-thirds of all fines and costs resulting from the prosecution of ordinance violations must be paid to the county. Cities constituting third class judicial districts, however, maintain their own district courts and keep all fines and costs resulting from the prosecution of ordinance violations.

Moreover, plaintiff cities are not required to use the jail services provided by Kent County. As home rule cities they are authorized to provide separate city prisons. MCL 117.4e(1); MSA 5.2078(1). Furthermore, plaintiff cities voluntarily chose to set up their own separate penal systems. MCL 117.4i(10); MSA 5.2082(10). It is clear, therefore, that, though lodged in the county jail, these prisoners are in reality city prisoners. As the Supreme Court has determined, the expenses of their lodging must be considered part of the expenses of the city police systems.

In addition to challenging defendant’s legal authority to charge them the jail fees, plaintiff cities argue that, if such legal authority exists, defendant should not be allowed to include in the fees any amounts representing capital expenditures. Plaintiffs rely primarily on MCL 45.16; MSA 5.291, which provides that each county "shall, at its own cost and expense, provide at the county seat thereof * * * a suitable and sufficient jail”. Plaintiffs concede that, if the county is legally authorized to charge jail fees, it may include items which represent "current operating expenses”, including jail repair costs. MCL 46.7; MSA 5.327.

We are not persuaded that an amount representing a city’s fair share of capital expenditures cannot be included in the legally authorized per diem jail fees charged by the county. The reasoning advanced by the Supreme Court in Mixer is fully applicable. The sole reason for the lodging of city prisoners in the county jail is the city’s voluntary choice not to build its own jail despite adoption of its own penal code. To the extent that the requirements of these non-county prisoners necessítate capital expenditure, therefore, the county is not prohibited from recouping such expenditures from the cities.

Plaintiff cities also argue on appeal that the court erred in denying their motion to amend their complaint. In November, 1978, plaintiffs moved to. amend their December 1977 complaint, seeking to add, as parties plaintiff, one resident/ taxpayer of each of the five plaintiff cities. These proposed plaintiffs were the mayors of plaintiff cities. The circuit court denied the motion, finding, inter alia, that the interests of the proposed plaintiffs were "at most, indirect, remote, and conjectural”.

A prerequisite to a taxpayer’s suit against a unit of government is the threat that the taxpayer will sustain substantial injury or suffer loss or damage as a taxpayer through increased taxation and the consequences thereof. Some special grievance must be shown. Menendez v Detroit, 337 Mich 476, 482; 60 NW2d 319 (1953).

The circuit court’s denial of plaintiffs’ motion to amend was not an abuse of discretion. Matson v Soronen, 57 Mich App 190, 193; 226 NW2d 52 (1974), lv den 394 Mich 762 (1975). The supposed loss of the proposed plaintiffs was highly speculative. It did not clearly appear from the allegations of the amended complaint that each of these taxpayers had been or would be subjected to increased taxation as a result of the county’s per diem jail fees. It was incumbent on plaintiffs to set forth clearly, concisely and directly (GCR 1963, 111.9[1]) the present or prospective damages of the proposed individual plaintiffs. Andrews v South Haven, 187 Mich 294, 304; 153 NW 827 (1915). Having failed to do so, plaintiffs cannot complain of the denial of leave to file their legally insufficient pleading. Ben P Fyke & Sons v Gunter Co, 390 Mich 649, 660; 213 NW2d 134 (1973).

Affirmed. No costs, a public question.

       Plaintiffs argue that the only purpose for the enactment of MCL 801.4a; MSA 28.1724(1) was to remove from the Board of Commissioners the function of settling and allowing accounts for the expenses incurred in confining ordinance violators in first and second class districts. We find that argument utterly unpersuasive.

       The City of Grand Rapids was the only plaintiff city with a district court when plaintiffs’ complaint was filed. MCL 600.8130(1); MSA 27A.8130(1). The City of Kentwood is the district control unit of the 62nd B district. MCL 600.8130(3); MSA 27A.8130(3). The City of Grandville and the City of Walker are the district control unit of the 59th district. MCL 600.8128a; MSA 27A.8128G). Each of these districts is a third class district.

       In OAG, 1965-1966, No. 4509, p 391 (December 27, 1966), the Attorney General was asked whether cities and villages were liable for the expense of confining in the county jail persons charged with or convicted of violating city and village ordinances. In responding in the aifirmative, the Attorney General stated:

        "Mixer has not been overruled. Thus, in the absence of a statute to the contrary, the expense about which you inquire must be charged to the city or village. The rule of the Mixer case as to a fourth class city would be equally applicable to a home rule city. The rule would also apply to villages incorporated under the home rule act for villages.” Id., 392.

       "(1) A district of the first class is a district consisting of 1 or more counties and in which each county comprising the district is responsible for maintaining, financing and operating the district court within its respective county except as otherwise provided in this act.
      "(2) A district of the second class is a district consisting of a group of political subdivisions within a county and in which the county where such political subdivisions are situated is responsible for maintaining, financing and operating the district court except as otherwise provided in this act.
      "(3) A district of the third class is a district consisting of 1 or more political subdivisions within a county and in which each political subdivision comprising the district is responsible for maintaining, financing and operating the district court within its respective political subdivision except as otherwise provided in this act.” MCL 600.8103; MSA 27A.8103.

       "Fines and costs assessed in the district court shall be paid to the clerk of the court who shall appropriate them as follows:
      “(a) A fine imposed for the violation of a penal law of this state and a civil fine ordered in a civil infraction action for violation of a law of this state shall be paid to the county treasurer and applied for library purposes as provided by law.
      “(b) In districts of the first and second class, costs imposed for the violation of a penal law of this state or ordered in a civil infraction action for the violation of a law of this state shall be paid to the treasurer of the county in which the action was commenced. In districts of the third class, costs imposed for the violation of a penal law of this state or ordered in a civil infraction action for the violation of a law of this state shall be paid to the treasurer of the political subdivision where the guilty plea or civil infraction admission was entered or where the trial or civil infraction action hearing took place.
      "(c) In districts of the first and second class, 1/3 of all fines and costs, other than those imposed for the violation of a penal law of this state or ordered in a civil infraction action for the violation of a law of this state, shall be paid to the political subdivision whose law was violated and 2/3 shall be paid to the county in which the political subdivision is located. In districts of the third class, all fines and costs, other than those imposed for the violation of a penal law of this state or ordered in a civil infraction action for the violation of a law of this state, shall be paid to the political subdivision whose law was violated, except that where fines and costs are assessed in a political subdivision other than the political subdivision whose law was violated, 2/3 shall be paid to the political subdivision where the guilty plea or civil infraction admission was entered or where the trial or civil infraction action hearing took place and the balance shall be paid to the political subdivision whose law was violated.
      "(d) In a district of the third class, if each political subdivision within the district, by resolution of its governing body, agrees to a distribution of fines and costs, other than fines imposed for the violation of a penal law of this state or ordered in a civil infraction action for the violation of a law of this state, differently than as provided by this section, the distribution of those fines and costs among the political subdivisions of that district shall be as agreed to. An existing agreement applicable to the distribution of fines and costs shall apply with the same effect to the distribution of civil fines and costs ordered in civil infraction actions.” MCL 600.8379; MSA 27A.8379 (as amended by 1979 PA 67, effective August 1, 1979).

        Cf. OAG 1975-1976, No. 4,957, supra, 321, where the Attorney General expressed his opinion that the cost of care and maintenance of prisoners of one county held in the jail of another county, MCL 801.107; MSA 28.1757, should be paid by the county which has committed such prisoners, and not by the county where the jail is physically located.

       But see MCL 45.16a; MSA 5.291(1).


text:
    PEOPLE v PRINGLE PEOPLE v TROMP
    Docket Nos. 44316, 44317.
    Submitted November 9, 1979, at Grand Rapids.
    Decided March 5, 1980.
    Leave to appeal applied for.
    William C. Pringle and Daniel L. Tromp, Muskegon residents, were arrested in Oakland County by Farmington Hills police and charged with carrying concealed weapons, receiving and concealing stolen property over $100 and delivery of marijuana. The officers searched the automobile in which the two men were arrested and found marijuana, books and records detailing narcotics transactions and $6,905 in cash. The Michigan Department of Treasury determined that defendants had failed to pay sales tax and single business tax on their narcotics operations. The funds in possession of the police were seized by the department to satisfy the tax assessment. Defendants filed a motion in their circuit court criminal case to compel return of the cash. Oakland Circuit Court, James S. Thorburn, J., granted the motion. The State of Michigan appeals. The question presented is whether the circuit court judge erred when he ordered cash returned to the defendants in the criminal felony case upon determining that the property had been illegally seized where the Michigan Department of Treasury had, previous to the suppression of evidence order, issued a jeopardy tax assessment on the property. Held:

    1. Taxpayers should have an opportunity to challenge the treasury department’s exercise of summary procedures in obtaining funds under the jeopardy tax assessment law. A circuit court, either in the residence of the taxpayer or in the county which has scrutinized seizure of funds by the treasury department, is the proper forum for judicial review of jeopardy tax assessments. The Oakland County Circuit Court, which held that the funds were unconstitutionally seized, was a proper forum and had jurisdiction to hear and decide defendants’ motion for return of the money.
    2. The trial court’s order directing return of the money to defendants was proper. Unconstitutional searches and seizures in a criminal case should not be used to trigger a jeopardy tax assessment and seizure of money from a taxpayer by the treasury department. Recovery of taxes is a civil matter and the treasury department should operate outside of the context of a criminal case in attempting to enforce its statutory remedies for the collection of taxes.

      References for Points in Headnotes
    [1] 72 Am Jur 2d, State and Local Taxation § 787.
    [2] 72 Am Jur 2d, State and Local Taxation §§ 1063, 1064.

      Affirmed.
    1. Taxation — Jeopardy Tax Assessments — Validity of Assessment — Illegal Seizures — Courts — Jurisdiction.
    A taxpayer who wishes to retrieve illegally seized funds that are subject to jeopardy tax assessments and are in the hands of the treasury department should have ample opportunity to challenge the treasury department’s exercise of summary procedures to obtain the funds under the jeopardy assessment law; a circuit court is the proper forum for judicial review of the jeopardy tax assessment and this circuit court may be in the residence of the taxpayer or the forum which has scrutinized the treasury department’s seizure of funds, if that court possesses civil jurisdiction.
    2. Taxation — Jeopardy Tax Assessments — Criminal Law — Searches and Seizures — Treasury Department — Courts — Jurisdiction.
    An unconstitutional search and seizure in a criminal case should not be the triggering event and the basis upon which a jeopardy tax assessment and seizure of money from a taxpayer by the treasury department is based; recovery of taxes is a civil matter and the treasury department should operate outside of the context of a criminal case in attempting to enforce its statutory remedies for the collection of taxes allegedly due or to become due.

      Frank J. Kelley, Attorney General, Robert A. Derengoski, Solicitor General, and E. David Brock-man, Ramon M. Alvarez and Thomas L. Casey, Assistants Attorney General, for plaintiff.

      Lustig & Friedman, P.C., for defendants.

      „ Before: V. J. Brennan, P.J., and Beasley and Bowles, JJ.

       Former circuit judge, sitting on the Court of Appeals by assignment pursuant to Const 1963, art 6, § 23 as amended in 1968.

   Beasley, J.

Defendants, William C. Pringle and Daniel L. Tromp, residents of Muskegon, were arrested by the Farmington Hills police and charged with carrying concealed weapons, contrary to MCL 750.227; MSA 28.424, receiving and concealing stolen property over $100, contrary to MCL 750.535; MSA 28.803, and delivery of 13 pounds of marijuana, contrary to MCL 335.341(1)(c); MSA 18.1070(41)(1)(c). The officers searched the automobile in which the two men were arrested and found marijuana, books and records detailing narcotics transactions and $6,905 in cash.

The Michigan Department of Treasury then conducted an audit of the possible tax liability of defendants and concluded that defendants had failed to pay sales tax and single business tax on their narcotics operations. After issuing warrants and notice of levy, the Michigan Department of Treasury seized $6,907.14 which was in possession of the Farmington Hills Police Department to satisfy the tax assessment.

Several months later, defendants moved to suppress the evidence seized by the Farmington Hills police. The circuit judge entered an order suppressing all marijuana, but denied defendants’ motion in other respects. Subsequently, defendants pled guilty to the concealed weapons charge. Then, defendants filed a motion in the circuit court criminal case to compel return of the cash. The trial court granted the motion, and the Michigan Department of Treasury brings this appeal.

The question we are asked to determine is whether the circuit court judge erred when he ordered cash returned to a defendant in a criminal felony case upon determining that the property had been illegally seized where the Michigan Department of Treasury had, previous to the suppression of evidence order, issued a jeopardy assessment on the property.

At the outset, we review some cases bearing Upon the issue here involved. In doing so, we recognize that a circuit court is a court of general jurisdiction and, thus, the issue of the role Detroit Recorder’s Court, whose jurisdiction does not include civil cases, plays in disputes over who has title to property that is illegally seized differs from that presented here.

In People v Rosa, defendants had brought a motion in Detroit Recorder’s Court for the return of funds which the court had found were illegally seized. The trial judge declined to hear the motion, holding that Recorder’s Court lacked jurisdiction. In remanding to Recorder’s Court for a determination of who had a right to the property, the Supreme Court found that it was appropriate for defendants to seek the return of their property within the context of the criminal case and it was not necessary for them to file a separate civil action. However, in Rosa, the funds were not subject to a jeopardy tax assessment, as in the instant case.

In People v Hernandez, the Internal Revenue Service assessed a tax deficiency against cash that was subsequently determined to have been illegaily seized from defendant. This Court found that a district court’s order to return the cash was void because it went "beyond that court’s jurisdiction”. As the cash was being detained by the IRS, pursuant to a revenue act of the United States (26 USCA 6331, 6332), the property was "subject only to the orders and decrees of the courts of the United States, 28 USCA 2463, and the Secretary of the Treasury, 26 USCA 6343.”

Craig v Detroit Police Dep’t dealt with the proper forum for commencing an action for the return of funds illegally seized but subject to a jeopardy tax assessment. Plaintiff initiated a civil action in the circuit court of his residence to recover monies that had been seized pursuant to a search warrant. The Court found the circuit court of the residence of the taxpayer "provides a logical forum” for the hearing. The Court went on to state:

"As will be discussed, infra, the only issues before the circuit court are whether irreparable injury exists and whether the assessment has a basis in fact.”

The Craig Court was not concerned with a jeopardy assessment in the context of suit by a party whose Fourth Amendment rights had been violated.

In Dep’t of Treasury v Recorder’s Court Judge, this Court held that a defendant requesting return of monies seized illegally was raising a "separate question of title which must be addressed in a court of civil jurisdiction”. In that case, this Court held that Recorder’s Court lacked such jurisdiction, as the issues raised were not directly related to the on-going criminal proceeding.

In Campbell v Dep’t of Treasury, plaintiff instituted a civil suit in the Court of Claims for recovery of money seized by Detroit police officers pursuant to a search warrant, subsequently found illegal by Detroit Recorder’s Court. The Court of Claims judge declined to return the money, holding that return of the money should await the final determination of the validity of the assessment. In response to Campbell’s request for a writ of mandamus requiring the return of the illegally seized funds, this Court stated:

"We decline to order the money returned for two reasons. First, a return of the money would not eliminate the ultimate question of the validity of the jeopardy assessment since the assessment could be immediately reinstated subsequent to the return. The return would thus be a fruitless gesture that would only delay decision on the other issues.

"Second, this Court has refused to order return of funds to the taxpayer under a factually identical situation.”

Sears v Dep’t of Treasury, which is the case referred to in Campbell as having similar facts, employs similar reasoning and reaches the same result as Campbell.

Recognizing that alternative methods may be taken by a plaintiff who wishes to retrieve illegally seized funds that are subject to jeopardy tax assessments, the holding in Craig, supra, seems to indicate that the circuit court is a proper forum if suit is commenced in the circuit court in the residence of the taxpayer. Although defendants, Muskegon residents, are not in the circuit court of their residence, the strong implication of the holding in Craig is that the taxpayer should have an ample opportunity to challenge the treasury department’s exercise of the summary procedures of the jeopardy assessment law. Furthermore, in this case, defendants Pringle and Tromp chose Oakland County rather than the county of their residence to seek to enforce their claim for return of the money. We see no error in permitting them to do so. We find that, consistent with the Craig rationale where search and seizure violations found unconstitutional under the Fourth Amendment are present, one "logical forum” for judicial review of the jeopardy tax assessment is the forum which has scrutinized the seizure, if that court possesses civil jurisdiction. The instant suit was, therefore, in a correct forum.

Consequently, we hold that, under the facts of this case, the Oakland County Circuit Court' had jurisdiction to hear and decide defendants’ motion for return of money that the court held was unconstitutionally seized.

The trial court held for defendants and ordered return of the money. The effect of the trial court’s ruling was to set aside and hold invalid the warrant, notice of levy and seizure of money by the Department of Treasury. As indicated, we hold that Craig is authority supporting the assumption of jurisdiction by the Oakland County Circuit Court on request of defendants.

In Craig, the Court also held:

"Plaintiffs have the burden of pleading and ultimately proving that a refund suit is an inadequate remedy. So also is it their burden of proving that the assessment lacked a factual basis — -judged according to the information available to Treasury at the time of suit.”

But Craig was not a case where a purported property owner successfully invoked the search and seizure provisions of the Fourth Amendment to the United States Constitution and/or the Michigan Constitution of 1963, Article 1, § 11, and sought return of his property on the ground that its seizure from his possession was judicially determined unconstitutional. We, therefore, do not believe Craig is controlling precedent here and decline to find error in the finding that the assessment, levy and seizure by the Department of Treasury was invalid and should be set aside. We do not believe that where the jeopardy assessment is based and made in reliance upon and after a judicially determined unconstitutional search and seizure, the potential taxpayer has the Craig burden of showing that a lengthy refund suit is an inadequate remedy’ and that the assessment lacks a factual basis. On the contrary, we are not inclined to permit an unconstitutional search and seizure to be the triggering event and the basis upon which a jeopardy tax assessment and seizure of money is based. It may be argued that to so hold is contrary to Campbell and Sears, supra.

In Campbell, it is interesting that this Court said:

"The Michigan Supreme Court in Craig v Detroit Police Department, 397 Mich 185; 243 NW2d 236 (1976), while reversing the Court of Appeals’ decision, broadened the third remedy mentioned in the earlier Craig decision by allowing for immediate circuit court challenge to a jeopardy assessment, without a requirement of exhaustion of administrative remedies. The strong implication of the Supreme Court’s opinion in Craig, supra, is that a taxpayer should have ample opportunity to challenge the department’s exercise of the summary procedures of the jeopardy assessment law.”

Another reason that Campbell does not control here is that the order for return of the money was made by a Detroit Recorder’s Court judge which court, as indicated, lacks civil jurisdiction. Thus, while Detroit Recorder’s Court has jurisdiction over disposition of property seized within the context of a criminal case, Detroit Recorder’s Court lacks the civil jurisdiction necessary to adjudicate the validity of a jeopardy assessment or levy by a taxing authority.

Sears, supra, was decided prior to Craig, supra, and for that reason is of limited assistance here. We conclude that Campbell and Sears may be distinguished from the within case and do not control decision here.

We recognize the fact that our disposition here leaves open the question of whether there is adequate basis for a future levy and seizure. Nothing we do here prevents the Department of Treasury from further steps outside of the context of this criminal case to attempt to enforce its statutory remedies for collection of the tax allegedly due or to become due. We are also aware that the effects of the delay in perfecting and obtaining disposition of this appeal leaves this case in an uncertain posture. But we can only decide what we have before us. In view of our disposition of this case that is before us, it would be unwise to attempt to speculate about whether, on some future date, there was a sufficient factual basis for application of the summary collection remedies available to the Department of Treasury.

However, as indicated, we affirm the trial court’s order directing return of the money to defendants.

Affirmed, with costs.

       Previously, Detroit Recorder’s Court has exercised- some civil jurisdiction in condemnation cases, but see, Detroit v Rabaut, 389 Mich 329; 206 NW2d 625 (1973).

       382 Mich 163; 169 NW2d 297 (1969).

       52 Mich App 56; 216 NW2d 438 (1974).

         Id., 58.

       397 Mich 185; 243 NW2d 236 (1976).

         Id., 190.

        Id., 190-191.

       89 Mich App 650; 281 NW2d 134 (1979).

         Id., 655.

        Campbell v Dep’t of Treasury, 77 Mich App 435; 258 NW2d 508 (1977).

        Id., 438.

       57 Mich App 218; 226 NW2d 63 (1974).

       Defendants could pursue a refund through the tax courts.

        Campbell, supra, 442-443.

        Craig, supra, 195.

        Campbell, supra, 442-443.


text:
    DeJONG v B F GOODRICH, INCORPORATED
    Docket No. 44444.
    Submitted January 4, 1980, at Grand Rapids.
    Decided March 5, 1980.
    Maynard D. DeJong was killed when, in the course of his employment, he was driving a truck which was hit head-on by a garbage truck owned by Acme Disposal Company (Acme). Plaintiff, Marjorie DeJong as personal representative of Maynard DeJong, commenced an action against B. F. Goodrich, Incorporated, a Netherlands corporation, B. F. Goodrich, Incorporated, a New York corporation (collectively referred to as B. F. Goodrich), and Gans Tire Company, Incorporated (Gans), for damages for wrongful death, alleging that the accident occurred as a result of the rupture of a tire on the garbage truck. The tire was manufactured by B. F. Goodrich and sold to Acme by Gans. Gans filed a third party complaint against Acme, alleging possible contribution liability. Acme moved the Oceana Circuit Court for accelerated judgment based on a "Release and Assignment” from plaintiff which released Acme from all claims arising out of the accident, assigned to Acme’s insurer the right to prosecute any action against any potential products liability defendant in her name and provided that any recovery would be split 50-50 between herself and the insurer. B. F. Goodrich and Gans moved for accelerated judgment, claiming the cause of action was barred by the assignment. The court, Terrence R. Thomas, J., granted Acme’s motion and dismissed the claims against B. F. Goodrich and Gans. Plaintiff appeals the dismissals. Held:

    Public policy prohibits the maintenance of a suit under such circumstances. Further, the suit is not being brought in the name of a real party in interest, contrary to the court rules.
    Affirmed.
    1. Death — Wrongful Death Action — Assignment of Right to Sue — Public Policy.
    The insurer of a potential defendant in a wrongful death action may not recover from other tortfeasors in an action brought in the name of the personal representative of the decedent pursuant to an assignment by the representative of the right to prosecute the wrongful death action against certain products liability defendants but retaining to the representative a 50% interest in any recovery, since the maintenance of the suit constitutes an attempt by the assignee to improve its position from that of a potentially liable defendant’s insurer to that of a potential profit-making plaintiff, contrary to the public policy of the state.

      References for Points in Headnotes
    [1] 44 Am Jur 2d, Insurance § 1820 et seq.

    [2] 44 Am Jur 2d, Insurance § 1849.

      2. Death — Wrongful Death — Assignment of Right to Sue — Statutes — Court Rules.
    An assignee of a right to prosecute a wrongful death action is a real party in interest and the assignor is divested of that status, despite the fact that he reserved a 50% interest in the amount recovered; the assignee may not maintain a wrongful death action since he is: 1) required by the court rule to bring suit in his own name as the real party in interest, and 2) prohibited from suing in his own name by the wrongful death statutory requirement that suit be brought by and in the name of the personal representative of the decedent (GCR 1963, 201.2, MCL 600.2922[2]; MSA 27A.2922[2]).

      Tolley, Fisher & Verwys, for plaintiff.

      Cholette, Perkins & Buchanan (by Robert A. Benson), for defendant B. F. Goodrich, Incorporated.
    Before: D. F. Walsh, P.J., and R. B. Burns and J. H. Gillis, JJ.
   D. F. Walsh, P.J.

Plaintiff, Marjorie DeJong, appeals the order of dismissal entered on March 8, 1979, by the Oceana Circuit Court.

On August 11, 1978, plaintiff commenced a wrongful death action against defendants B. F. Goodrich, Incorporated, a Netherlands corporation, and B. F. Goodrich, Incorporated, a New York corporation (hereinafter referred to collectively as B. F. Goodrich) and defendant Gans Tire Company, Inc. MCL 600.2922; MSA 27A.2922. Plaintiffs decedent was killed on March 22, 1976, when, in the course of his employment, he was driving a truck which was hit head-on by a garbage truck owned by Acme Disposal Company, Inc. According to the allegations in plaintiffs complaint, the accident occurred as a result of the rupture of one of the tires of the garbage truck. B. F. Goodrich manufactured the tire. Defendant Gans had sold the tire to Acme Disposal. Plaintiff advanced three theories of liability: products liability, negligence and breach of implied warranty.

Defendant Gans successfully moved to bring in Acme Disposal as a third party defendant, alleging the possible contribution liability of Acme.

On November 24, 1978, Acme moved for accelerated judgment. The motion was based on plaintiffs releasing of Acme from all liability in connection with Maynard DeJong’s fatal accident. GCR 1963, 116.1(5), MCL 600.2925d(c); MSA 27A.2925(4)(c). The May 12, 1978, "Release and Assignment” upon which Acme based its motion provided, in pertinent part, as follows:

"FOR AND IN CONSIDERATION of the payment of the sum of Two Hundred Thousand and 00/100 Dollars ($200,000.00), to Marjorie DeJong for herself and in her representative capacities for the estate of Maynard DeJong, deceased, and the estate of Matthew DeJong, a minor, the receipt whereof by Marjorie DeJong for herself and in her representative capacities is hereby acknowledged, and in consideration of the assignment of claims hereinafter enumerated, does hereby for herself and the estates of Maynard DeJong and Matthew DeJong, her and their successors and assigns, release, acquit, and forever discharge Acme Disposal Company, its insurer, Sentry Insurance A Mutual Company, their officers, employees, agent, heirs, representatives, assigns and successors in interest ('Releasees’), from any and all claims, actions and causes of action, on account of any and all damages resulting from or in any way connected with the accident or event that occurred on or about the 22nd day of March, 1976, which resulted in the death of Maynard DeJong.

"Marjorie DeJong further assigns for herself and in her representative capacities to Sentry Insurance A Mutual Company the right to prosecute any and all actions in her name and in the name of the estate of Maynard DeJong, deceased, against any potential products liability defendant stemming from the accident which resulted in Maynard De Jong’s death, with any recovery in such action, not including taxable costs and attorneys fees, to be divided 50 percent to the assignors herein and 50 percent to Sentry Insurance A Mutual Company, the assignee of these claims. As to any and all claims, Marjorie DeJong agrees to cooperate fully and completely in their prosecution' by Sentry Insurance A Mutual Company.

"Marjorie DeJong further signifies and acknowledges, for herself and in her representative capacities, the assignee herein, and its agents, employees, and attorneys make no representations, warranties, or promises that any sum whatsoever will be recovered from any claims assigned to assignee herein, and that the decision to prosecute and/or settle any such claims shall be solely the right of assignee herein.”

Upon learning of the release and assignment, defendants moved for accelerated judgment. They claimed that plaintiffs claim was barred by the release and that plaintiff had disposed of the claim by assignment before the commencement of the action. GCR 1963, 116.1(5).

On March 8, 1979, Acme’s motion for accelerated judgment was granted. On appeal, plaintiff does not challenge that ruling. In addition, however, the circuit court dismissed the complaint filed against defendants B. F. Goodrich and Gans. That dismissal is the subject of plaintiff’s appeal. We affirm.

As observed by the circuit court, important public policy considerations are raised by the facts of this case. These considerations were identified long ago by the Supreme Court in a case which we perceive to be indistinguishable and dispositive. In Upham v Dickinson, 38 Mich 338 (1878), one joint wrongdoer took an assignment from the wronged parties of the right of action against his fellow wrongdoers. The assignee then brought suit for his own benefit but in the name of his assignors to recover from his associates the amount of injury suffered by the assignors. In affirming the circuit court’s determination that the action could not be maintained, the Supreme Court, speaking through Justice Cooley, stated:

"Had this suit been brought in the name of Rogers [the assignee] himself, as it might have been under our statute (Final v Backus, 18 Mich 218; Grant v Smith, 26 Mich 201), the questions made would have been more directly presented, but they would in substance have been the same as now. The real plaintiff seeks to place himself in the shoes of his assignors, and to recover in their right, and not otherwise. It is admitted that it is a general rule of law, based upon considerations of public policy, that the law will refuse its remedies to joint wrong-doers to enable them to adjust equities between themselves, or to alleviate hardships growing out of their trespasses upon the rights of others. Merryweather v Nixan, 8 T. R. 186; Lingard v Bromley, 1 Ves. & B. 117; Thweatt’s Admr v Jones, 1 Rand. 328, 332; Peck v Ellis, 2 Johns. Ch. 131; Acheson v Miller, 18 Ohio 1. The rule is supposed to have an important purpose in keeping parties within the limits of caution and prudence, and making them careful to observe the obligations the law imposes upon them. It is not perceived that there can be any ground for giving such aid indirectly when it would be refused if the demand were presented directly and in the name of the party himself.” Id., 339-340.

We perceive no meaningful distinction between the facts in Upham and those presented to us in the instant case. The release and assignment unequivocably assigns to Sentry Insurance Company the right of action for wrongful death. It is clear, therefore, that the named plaintiff is only that— the nominal plaintiff. The assignee insurance company is liable for damage for which its insured, Acme Disposal, is liable. In our view, the public policy identified by Justice Cooley is equally applicable to insurance companies which stand in the shoes of their wrongdoer insureds. Nor do we perceive any basis for limiting application of that public policy to those who are technically "joint tortfeasors”. See Moyses v Spartan Asphalt Paving Co, 383 Mich 314, 331; 174 NW2d 797 (1970). As in Upham, maintenance of this suit by the assignee (albeit in the name of the estate’s personal representative) represents an attempt by the assignee to improve its position from that of a potentially liable defendant’s insurer to that of a potentially profit-making plaintiff.

Sentry Insurance Company’s maintenance of this wrongful death action in the name of the estate’s personal representative is merely a disguised attempt to seek contribution, indemnity or profit. Having failed to satisfy the legislatively mandated prerequisites to a suit for contribution from other tortfeasors, Sentry’s attempt to seek contribution must fail. MCL 600.2925a(3), MSA 27A.2925(1)(3). As representative of an active wrongdoer, Sentry has no right of indemnification. Hill v Sullivan Equipment Co, 86 Mich App 693, 698-699; 273 NW2d 527 (1978) (Walsh, J., dissenting), lv den 406 Mich 880 (1979). A fortiori, the law must deny its remedies to one seeking a profit under these circumstances.

Another basis for dismissal can be found in the interplay of the real party in interest provision, GCR 1963, 201.2, MCL 600.2041; MSA 27A.2041, and the wrongful death statute. MCL 600.2922(2); MSA 27A.2922(2). As unequivocal assignee of the cause of action, Sentry Insurance Company is the real party in interest and suit must be brought in its name. GCR 1963, 201.2; 1 Honigman & Hawkins, Michigan Court Rules Annotated, Rule 201, Committee Notes, page 444; 3A Moore’s Federal Practice (2d ed), § 17.09, pp 17-82 et seq., Sharrar v Wayne Savings Ass’n, 254 Mich 456, 459; 236 NW 833 (1931), Nierman v White’s Motor Parts, Inc, 269 Mich 608; 257 NW 751 (1934). The fact that the nominal plaintiff reserved for herself 50% of the proceeds to be recovered, if any, in the wrongful death action did not also reserve for her the status of real party in interest. James, Civil Procedure (1965), § 9.2, pp 384-385, Joseph Miele Construction Co, Inc v City of Niagara Falls, 21 F Supp 442 (WD NY, 1937). Under the wrongful death statute, however, actions for wrongful death must be brought by and in the name of the personal representatives of the deceased. MCL 600.2922(2). It is clear, therefore, that the circuit court did not err in determining that the complaint should be dismissed.

We affirm the circuit court’s dismissal of the complaint filed against defendants B. F. Goodrich and Gans Tire Company. Costs to appellees.


author: M. F. Cavanagh, J.

text:
    DEPARTMENT OF CIVIL RIGHTS v TAYLOR SCHOOL DISTRICT
    Docket No. 44640.
    Submitted December 13, 1979, at Detroit.
    Decided March 5, 1980.
    Opal L. Swinney, Dolores Loturco, nee Dolores Beaton, and Shirley Koths filed complaints with the Michigan Department of Civil Rights alleging that the Taylor School District and Local No. 26, Service Employees’ International Union, AFL-CIO, Bus Garage, had denied the claimants positions as bus driver-custodians on the basis of sex. The Civil Rights Commission conducted a hearing and the hearing referee found that both the school district and the union had unlawfully discriminated against the claimants on account of their sex. The school district and the union filed claims of appeal with the Wayne Circuit Court. Horace W. Gilmore, J., dismissed the claim against the union but found that the Taylor School District had discriminated against the claimants on account of unlawful considerations of sex. The Taylor School District appeals. Held:

    1. The Civil Rights Commission does have jurisdiction to hear sex discrimination cases.
    2. The school district’s claim that the ability of the applicants to lift heavy weights was a bona fide occupational qualification which provided a defense to the claims was not supported by the record. No evidence was presented that the women in question were unable to lift heavy weights. If they did not have the necessary strength to perform the job, they need not have been hired. However, the same argument would hold true for any man lacking the necessary strength.
    Affirmed.
    1. Civil Rights — Sex Discrimination — Jurisdiction. The Civil Rights Commission has jurisdiction to prosecute sex discrimination cases.
    2. Civil Rights — Sex Discrimination — Occupational Qualifications — Lifting Ability.
    The questions to be determined in all instances of alleged sex discrimination where lifting ability is a qualification are 1) what are the requirements for the job, and 2) how will the employer hire individuals who can fulfill those requirements.

      References for Points in Headnotes
    [1] 15 Am Jur 2d (Rev), Civil Rights § 158.
    [2] 15 Am Jur 2d (Rev), Civil Rights §§ 128, 161, 185.

      Frank J. Kelley, Attorney General, Robert A. Derengoski, Solicitor General, and Michael A. Lockman and Howard E. Goldberg, Assistants Attorney General, for plaintiffs.

      James E. Wells, for defendants.
    Before: M. J. Kelly, P.J., and M. F. Cavanagh and P. C. Elliott, JJ.

       Former circuit judge, sitting on the Court of Appeals by assignment pursuant to Const 1963, art 6, § 23 as amended in 1968.

   M. F. Cavanagh, J.

Defendant school district appeals from the trial court’s finding that defendant had engaged in employment discrimination on the basis of sex. The case was before the circuit court on appeal from a finding of discrimination made by the Michigan Civil Rights Commission (CRC).

The first issue raised on appeal is whether the Michigan Civil Rights Commission has the jurisdiction to prosecute sex discrimination cases. We answer that question in the affirmative on the authority of City of Ypsilanti v Civil Rights Comm, 55 Mich App 103; 221 NW2d 923 (1974), aff'd 393 Mich 254; 224 NW2d 281 (1974).

Defendant next asserts that MCL 750.556; MSA 28.824 is a perfect defense to the sex discrimination statute in an employment case. That statute provides:

"Any employer of labor in this state, employing both males and females, who shall discriminate in any way in the payment of wages as between sexes who are similarly employed, shall be guilty of a misdemeanor. No female shall be assigned any task disproportionate to her strength, nor shall she be employed in any place detrimental to her morals, her health or her potential capacity for motherhood. Any difference in wage rates based upon a factor other than sex shall not violate this section.”

Defendant asserts that the job in question involved heavy lifting and that to have assigned that task to a woman would have forced the defendant to violate the above statute. The defendant appears to be arguing that failure to hire a woman on the assumption that she would not be able to lift heavy weights is a bona fide occupational qualification (BFOQ) exception to the discrimination statute.

A BFOQ was considered an exception to an unfair employment practice under MCL 423.303(a); MSA 17.458(3)(a), now MCL 37.2202; MSA 3.548(202). For a recent consideration of sex discrimination under MCL 423.303(a), see C Thorrez Industries, Inc v Civil Rights Comm, 88 Mich App 704; 278 NW2d 725 (1979).

There is a dearth of Michigan case law interpreting BFOQ. However, that language appears in Federal statutes and has been interpreted by Federal courts.

Defendant cites Dothard v Rawlinson, 433 US 321; 97 S Ct 2720; 53 L Ed 2d 786 (1977), for holding that a gender-based criterion was valid. We disagree. The Court in Dothard stated:

"[T]he federal courts have agreed that it is impermissible under Title VII to refuse to hire an individual woman or man on the basis of stereotyped characterizations.” 433 US 34, 333.

In dealing with the issue of lifting ability as a qualification, we find the language found in Weeks v Southern Bell Telephone & Telegraph Co, 408 F2d 228, 236 (CA 5, 1969), most apposite:

"While one might accept, arguendo, that men are stronger on the average than women, it is not clear that any conclusions about relative lifting ability would follow. This is because it can be argued tenably that technique is as important as strength in determining lifting ability. Technique is hardly a function of sex. What does seem clear is that using these class stereotypes denies desirable positions to a great many women perfectly capable of performing the duties involved.”

We reject, therefore, defendant’s assertion that compliance with the mandates of MCL 750.556; MSA 28.824 automatically results in sex discrimination. Defendant presented no evidence that the women in question were unable to lift heavy weights. If they did not have the necessary strength to perform the job, they need not have been hired. However, the same argument would hold true for any man lacking the necessary stength. The questions to be determined in all instances are what are the requirements for the job and how will the employer hire individuals who can fulfill those requirements.

For the reasons set forth above, we affirm the decision below. No costs.