author:
Per Curiam.
      J. X. Theiler, J.

text:
    CLAYTON v ANN ARBOR MOTOR INN, INC
    Docket No. 78-2755.
    Submitted June 19, 1979, at Detroit.
    Decided December 18, 1979.
    Leave to appeal applied for.
    Plaintiff Robert Clayton, Jr., was a paying guest of defendant Ann Arbor Motor Inn, Inc., when he was burned by steam and hot water as he was trying to adjust the water temperature of the bathtub in his room. Prior to the accident defendant had filed for reorganization under Chapter 11 of the Bankruptcy Act. Shortly after the accident defendant was adjudged a bankrupt. Robert Clayton, Jr., and Frank A. McCourt, II, administrator of the estate of Robert Clayton, Sr., filed suit against defendant in the Washtenaw Circuit Court almost three years after the adjudication. Plaintiffs first tried to personally serve the resident agent for the defendant at the address filed with the state but were unsuccessful because the agent had no office at that address. Plaintiffs then personally served the summons and complaint upon the trustee in bankruptcy and sent a copy of each by certified mail to the bankrupt defendant’s attorney. Plaintiffs obtained a default judgment against defendant and commenced a garnishment proceeding against the St. Paul Fire & Marine Insurance Company. Defendant moved to set aside the judgment for improper service. The court, Ross W. Campbell, J., denied the motion. Defendant appeals. Held:

    1. Service of process may be effected upon a corporation by adherence to any one of the four alternatives set out in the court rule. The rule’s registered mail requirement merely sets the minimum requirement as to method of service. The more expensive and reliable method of service, attempted personal service, is a permissible substitute for service by registered mail.
    2. Service of process upon a trustee in bankruptcy of a corporation satisfies the court rule requirement of service upon a "trustee”.

      References for Points in Headnotes
    [1-3, 5, 7, 8] 19 Am Jur 2d, Corporations §§ 1462-1466.
    [1-3, 8] 62 Am Jur 2d, Process § 27.
    [3, 4, 8] 19 Am Jur 2d, Corporations § 1471.
    62 Am Jur 2d, Process §§ 69, 70, 73.

       9 Am Jur 2d, Bankruptcy §§ 288 et seq., 317.

      3. The Federal statute and bankruptcy rule which operate to stay suits provable in bankruptcy do not defeat a state court from obtaining subject matter jurisdiction in a suit filed against a defendant after an adjudication of bankruptcy because such a suit is not provable in bankruptcy.
    Affirmed.
    J. X. Theiler, J., dissented. He would hold that a trustee in bankruptcy is not a “trustee” contemplated by the court rule and that the court rule permitting service of process on a corporation by registered mail to its principal office should be strictly construed to require a mailing, and attempted personal service on the corporation at its principal office should not be construed as compliance.
    Opinion of the Court
    1. Process — Statutes — Court Rules — Construction.
    The statute and court rule providing methods for service of process upon corporations are remedial in nature and should be liberally construed (MCL 600.1920; MSA 27A.1920, GCR 1963, 105.4).
    2. Process — Court Rules — Corporations.
    Service of process may be effected upon a corporation by adherence to any one of the four alternatives set out in the court rule (GCR 1963, 105.4).
    3. Process ■— Court Rules — Method of Service.
    A court rule providing for service of process upon a corporation by registered mail to its principal office provides a minimum requirement with regard to the method of service and does not preclude a more reliable and expensive method; attempted personal service of a corporation at its principal office is sufficient to satisfy the requirement that process be served by registered mail addressed to that office (GCR 1963, 105.4[2]).
    4. Process — Court Rules — Receipt of Process.
    The court rule requiring that process be served upon a corporation by registered mail addressed to its principal office does not contemplate receipt by the corporation for valid service (GCR 1963, 105.4[2]).
    5. Process — Court Rules — "Trustee” — Trustee in Bankruptcy.
    Service of process upon a trustee in bankruptcy of a corporation satisfies the court rule requirement of service upon a "trustee” (GCR 1963, 105.4[2]).
    6. Courts — Jurisdiction — Bankruptcy — Statutes.
    The Federal statute and bankruptcy rule which operate to stay suits provable in bankruptcy do not defeat the state courts from obtaining subject matter jurisdiction in a suit filed against a defendant after an adjudication of bankruptcy (11 USC 29[a], Federal Rules of Bankruptcy 401[a]).
    Dissent by J. X. Theiler, J.
    7. Process — Court Rules — "Trustee” — Trustee in Bankruptcy.

      A trustee in bankruptcy is not a "trustee” within the court rule allowing service of process upon a corporation to be made upon a "trustee” (GCR 1963, 10B.4[2]).

    8. Process — Court Rules — Construction — Registered Mail Requirement.

      The court rule permitting service of process on a corporation by registered mail to its principal office should be strictly construed to require a mailing, and attempted personal service on the corporation at its principal office should not be construed as compliance (GCR 1963, 10S.4[2]).

      Davis & Fajen, for plaintiffs.

      Plunkett, Cooney, Rutt, Watters, Stanczyk & Pedersen (by D. J. Watters and Jeannette A. Pas-kin), for defendant.
    Before: N. J. Kaufman, P.J., and D. C. Riley and J. X. Theiler, JJ.

       Circuit judge, sitting on the Court of Appeals by assignment.

   Per Curiam.

For the purpose of this appeal, the germane facts are not in dispute. On March 20, 1970, plaintiff, Robert Clayton, Jr., a paying guest at the Ann Arbor Motor Inn, allegedly sustained serious injuries when he entered the bathtub in his rented room and while trying to adjust the water temperature was severely burned.

Some nine months prior to the alleged incident, the defendant Ann Arbor Motor Inn, Inc., a Michigan corporation, filed a petition for arrangement under Chapter 11 of the Bankruptcy Act. The purpose of Chapter 11 is to continue the business and try to settle its financial problems. However, it was not until June 30, 1970, approximately 100 days after this alleged incident, that an order for adjudication of bankruptcy was entered and a trustee in bankruptcy was later appointed.

Plaintiff commenced the present suit on March 1, 1973. In February of 1975, a default judgment was entered against the defendant hotel in the amount of $200,000. Defendant appeals, as of right, the order denying its motion to have the default judgment set aside. Both questions raised by the defendant in this appeal are jurisdictional.

Defendant argues that service of process on the trustee in bankruptcy for the defendant hotel and attempted personal service on defendant’s principal office are not sufficient under GCR 1963, 105.4 to obtain personal jurisdiction over the defendant. This Court disagrees. Plaintiffs served defendant’s trustee in bankruptcy in this case after their attempt to personally serve defendant at its principal office and defendant’s resident agent revealed that neither retained an office at the address listed in defendant’s annual report. Subsequent attempts to mail documents to the principal office also proved unsuccessful. Under the circumstances, the trial court was correct in finding that service of process was effected pursuant to GCR 1963, 105.4(2) by serving the trustee and by attempting to personally serve the principal office.

GCR 1963, 105.4 and the corresponding statute, MCL 600.1920; MSA 27A.1920, outline the methods for obtaining service of process on a corporation:

"Service of process upon a corporation, whether domestic or foreign, may be made by
"(1) leaving a summons and a copy of the complaint with any officer or the resident agent, or
"(2) leaving a summons and a copy of the complaint with any director, trustee, or person in charge of any office or business establishment and sending a summons and a copy of the complaint by registered mail, addressed to the principal office of the corporation, or "(3) leaving a summons and a copy of the complaint with any of the persons who may have been the last presiding officer, president, cashier, secretary, or treasurer, in the case of any corporation which may have ceased to do business by failing to keep up its organization by the appointment of officers or otherwise, or whose term of existence may have expired by limitation, or
"(4) mailing a summons and a copy of the complaint by registered mail to the corporation or an appropriate corporation officer and to the Michigan Corporation and Securities Commission if:
"(a) the corporation has failed to appoint and maintain a resident agent or to file a certificate of such appointment as by law required; or
"(b) the corporation has failed to keep up its organization by the appointment of officers or otherwise or the term of whose existence has expired by limitation.”

This Court rejects the argument that defendant’s failure to appoint and maintain a resident agent made GCR 1963, 105.4(4) the only method of effecting valid service of process. The court rule and statute are remedial in nature and should be liberally construed. Woods v Edgewater Amusement Park, 381 Mich 559, 570; 165 NW2d 12 (1969). This Court has previously ruled that service of process may be effected by adherence to any one of the four alternatives in the court rule. Fulton v Citizens Mutual Ins Co, 62 Mich App 600, 606; 233 NW2d 820 (1975). Further, defendant has failed to persuasively argue how service of process made pursuant to 105.4(4) would have been more likely to afford defendant notice of the action than service made pursuant to 105.4(2). Therefore, service of process on the defendant, effected in accordance with GCR 1963, 105.4(2) is considered sufficient under these circumstances, plaintiffs did not comply with that section because they did not send a copy of the summons and complaint by registered mail, as required. It is the opinion of this Court that the more expensive and reliable method of attempted personal service at defendant’s corporate offices was sufficient to satisfy the requirement that the documents be mailed by registered mail to those offices. The court rule provides a minimum requirement with regard to service of process and does not preclude more reliable and expensive methods of service. See Sproul v Anderson, 56 Mich App 468; 224 NW2d 112 (1974). Defendant did not dispute plaintiffs’ contention that there was no corporate office at the address in question and did not argue that service by registered mail would have provided it with more effective notice.

This Court also rejects the defendant’s contention that a mailing to defendant’s principal office must be received for service of process to be effected under GCR 1963, 105.4(2). The plain language of the rule makes it sufficient to send a copy of the summons and complaint by registered mail to the principal office. Unlike the cases cited by defendant, proof of receipt of the complaint was not contemplated by this rule.

The defendant’s final argument with regard to service of process, that the trustee in bankruptcy was not a trustee within the meaning of GCR 1963, 105.4(2), is also rejected by this Court. GCR 1963, 105.4(2) specifically allows service to be made upon a trustee. In a case such as this one a plaintiff is attempting to obtain damages from the assets and insurance policies which remain in a corporation which has filed a petition in bankruptcy. The trustee in bankruptcy for such a corporation has a very great interest in protecting the remaining assets of the bankrupt corporation. The trustee’s responsibility in that regard gives him as great an incentive as anyone, at that point in the life of a corporation, to see that the suit is defended and the assets preserved. The defendant has failed to demonstrate, both as a general rule and in this specific case, that a trustee in bankruptcy has an insufficient interest in protecting the corporate assets to be included in the category of trustee under GCR 1963, 105.4(2). Therefore, in keeping with the requirement that this court rule be liberally construed, we hold that a trustee in bankruptcy is a trustee within the meaning of GCR 1963, 105.4(2).

In addition to attacking the sufficiency of service of process in this case, the defendant argues that 11 USC 29(a) and Federal Rule of Bankruptcy 401(a) preclude the state from obtaining subject matter jurisdiction because defendant was adjudicated a bankrupt prior to the commencement of this suit. This contention is without merit. Both 11 USC 29(a) and Federal Rule of Bankruptcy 401(a) only operate to stay suits which are provable in bankruptcy. A suit filed subsequent to an adjudication in bankruptcy, as in this case, is not provable in bankruptcy. See In re Fuller, 359 F Supp 477, 477-478 (ND Ga, 1973); 11 USC 103(a)(7).

In accordance with the foregoing analysis, the order denying defendant’s motion to have the default judgment set aside is affirmed.

J. X. Theiler, J.

(dissenting). I respectfully dissent. The majority determines that the rule and statute in referring to "trustee” means also "trustee in bankruptcy”. The modifying phrase, "in bankruptcy”, like the traditional modifier to "yankee”, is such that the one should not be found without the other. Had the drafters of the rule and statute intended such a person to be the proper one to be served, they should have said so, specifically.

A trustee in bankruptcy is an arm of the court, not the bankrupt. Being a creation of Federal law, duties cannot be imposed on him by state action.

The statue and rule seek means of service that are "reasonably calculated to give him actual notice of the proceedings and an opportunity to be heard * * *”. This is the standard used in GCR 1963, 105.8, whereby a court may authorize another form of service than that specified by other rules.

The result of service on a trustee in bankruptcy can easily be predicted. Having no obligation to give notice, having no personal interest in the bankrupt and the administration of the estate not being involved, it is no small wonder that nothing is done and notice dies aborning. As the majority recognizes, "[a] suit filed subsequent to an adjudication in bankruptcy, as in this case, is not provable in bankruptcy”. Since the assets being administered are not affected, why is there any reasonable expectation that the trustee in bankruptcy would bother to forward notice to the. real party in interest?

The majority further rule that noncompliance with the mailing requirement of GCR 1963, 105.4(2) is excused and hold the requirement to provide notice by mail may be met by something "more expensive and reliable”. It should be noted that the attempt to give such notice was totally ineffective; so in what way such attempt was better, I am at a loss to understand. A letter in hand may have been passed on, or so the rule and statute contemplated. Where jurisdiction and procedural due process are involved, compliance with the rule should be required. If liberality be indicated, it should not be in the ad hoc rewriting of the rule, but in the exercise of discretion as provided in GCR 1963, 105.8.

       GCR 1963, 105.4(2).

       MCL 600.1920(2); MSA 27A.1920(2).


source: Caselaw Access Project

author: Per Curiam.

license: Public Domain

text:
    CORMACK v AMERICAN UNDERWRITERS CORPORATION
    Docket No. 78-2768.
    Submitted October 3, 1979, at Detroit.
    Decided December 18, 1979.
    D. H. Cormack, a resident of London, England, purchased an automobile in Detroit and requested the salesman to arrange for insurance coverage on the automobile through Cormack’s insurer, Lloyds of London. The salesman telephoned a representative of American Underwriters Corporation, who later the same day informed the salesman that he had "taken care of it”. This information was conveyed to Cormack, who then drove the automobile to Chicago where it was promptly stolen and stripped. Two days after the sale of the car, the American Underwriters representative contacted the salesman and informed him that the London insurer had refused to extend coverage and that the car was uninsured. Cormack thus received no payment for the loss of the vehicle. Cormack brought an action in Common Pleas Court of Detroit against American Underwriters. Lloyds of London was added as a party defendant, but was granted a directed verdict at the close of plaintiffs proofs. The jury returned a verdict in favor of the plaintiff, but the court, Harold Hood, J., granted American Underwriters’ motion for a judgment notwithstanding the verdict. Cormack appealed to Wayne Circuit Court, which affirmed, Horace W. Gilmore, J. Cormack appeals by leave granted, alleging that the trial court erred in finding that there was insufficient evidence to support the jury’s determination that an oral binder of insurance was in existence, in finding that there was no evidence to support a jury verdict of misrepresentation, and in granting defendant’s motion for a directed verdict on plaintiffs allegation of fraud. Held:

    1. Under the circumstances here there was an oral binder of insurance on the automobile at the time it was stolen. THerefore, the trial court erred in granting the motion for a judgment notwithstanding the verdict and the jury verdict is reinstated.

      References for Points in Headnotes
    [1, 5] 5 Am Jur 2d, Appeal and Error §§ 608, 886.

       43 Am Jur 2d, Insurance § 216 et seq.

       48 Am Jur 2d, Insurance § 200 et seq.

       37 Am Jur 2d, Fraud and Deceit § 12.

       37 Am Jur 2d, Fraud and Deceit § 332.

      2. There was sufficient evidence presented to have supported a jury finding of fraud. Therefore, the trial court erred in directing a verdict for the defendant on that issue.
    Reversed, and the jury verdict is reinstated.
    1. Appeal and Error — Motions — Judgment Notwithstanding the Verdict.
    The Court of Appeals, when reviewing the grant of a motion for a judgment notwithstanding the verdict, must give the nonmoving party the benefit of every reasonable inference that could be drawn from the evidence; the grant of a defendant’s motion for a judgment notwithstanding the verdict is improper if reasonable minds could honestly disagree as to whether the plaintiff has satisfied his burden of proof on the necessary elements of his cause of action.
    2. Insurance — Binders.
    An insurance binder is a contract for temporary insurance pending issuance of an insurance policy unless proper notice is given of election to terminate by the insurer.
    3. Insurance — Contracts — Oral Contract — Elements.
    The elements necessary to effectuate an oral contract of insurance are: 1) subject matter; 2) the risk; 3) premium; 4) duration of the risk; and 5) the amount of insurance; the absence of an express agreement upon each of those essential terms is not fatal to an oral contract of insurance if the intention of the parties as to those particulars can be gathered from the circumstances of the case.
    4. Fraud — Fraudulent Misrepresentations — Elements.
    The elements of fraudulent misrepresentation are 1) a false representation by the defendant, 2) knowledge or belief on the part of the defendant that the representation is false, 3) an intention to induce the plaintiff to act or to refrain from acting in reliance upon the misrepresentation, 4) justifiable reliance upon the misrepresentation on the part of the plaintiff, and 5) damage to the plaintiff resulting from such reliance.
    5. Appeal and Error — Motions — Directed Verdicts.
    The Court of Appeals views the evidence in the light most favorable to the nonmoving party when reviewing a motion for a directed verdict; if the evidence, when so viewed, establishes a prima facie case a directed verdict is improper.
    6. Fraud — False Representations — Third Parties.
    A third party can maintain a tort action, for damages resulting from a fraud, against a party who made false statements where a party makes false representations to another with the intent or knowledge that they be exhibited or repeated to the third party for the purpose of deceiving that third party.

      Marvin D. Sharon, for plaintiff.

      Stewart, O’Reilly, Cornell, Lascoe & Rancilio, P.C., for defendant.
    Before: T. M. Burns, P.J., and Bronson and R. M. Maher, JJ.
   Per Curiam.

The plaintiff, D. H. Cormack, is a resident of London, England. He arrived in Detroit on April 1, 1974. The next day, he purchased a new Lincoln automobile at the Downtown Ford dealership for $6,900. He asked the salesman, Richard Warner, to arrange with Lloyds of London to extend insurance coverage to this automobile.

On the same day, April 2, 1974, Warner spoke on the telephone with William Shilson, a representative of American Underwriters, the defendant herein. Warner testified that at the time of this conversation, he had a copy of Mr. Cormack’s insurance certificate covering plaintiffs other vehicle in England. Warner gave Shilson the information on this insurance slip, together with the motor number of the new car. The terms of plaintiffs existing insurance were to be extended to cover the newly purchased automobile, which was to be driven in the United States for 90 days and then shipped to England.

In a subsequent conversation between Warner and Shilson on April 2, 1974, Shilson stated to Warner that he had "taken care of it”. The plaintiff himself never had direct contact with the defendant.

On April 4, 1974, the defendant by its agent Shilson called Richard Warner and stated that the car was not insured. In the meanwhile, the plaintiff had driven his new car to Chicago, where it was stolen while parked outside a friend’s flat. The car was later recovered stripped, and the plaintiff received no salvage value.

A jury trial was held in Common Pleas Court in November of 1976 with Lloyds of London as an added party. At the close of plaintiff’s proofs, the trial court granted a motion for a directed verdict in favor of Lloyds of London. A similar motion by defendant was denied. The jury returned a verdict in favor of the plaintiff in the amount of $6,200.

In an opinion dated December 29, 1976, the trial júdge granted the defendant’s motion for judgment notwithstanding the verdict. The judgment n.o.v. was appealed by the plaintiff to the Wayne County Circuit Court, which affirmed on May 17, 1978. The plaintiff appeals to this Court by leave granted.

The plaintiff first alleges that the trial court erred in finding that there was insufficient evidence to Support the jury’s determination that an oral binder of insurance was in existence. We agree.

We first note that a judgment n.o.v. on defendant’s motion is appropriate only if the evidence is insufficient as a matter of law to support a judgment for the plaintiff. In reviewing a motion for judgment n.o.v., the Court must give the nonmoving party the benefit of every reasonable inference that could be drawn from the evidence. If reasonable minds could honestly disagree as to whether the plaintiff has satisfied his burden of proof on the necessary elements of his cause of action, judgment n.o.v. for the defendant is improper. Sabraw v Michigan Millers Mutual Ins Co, 87 Mich App 568, 571; 274 NW2d 838 (1978), Fitzpatrick v Ritzenhein, 367 Mich 326; 116 NW2d 894 (1962).

The seminal Michigan case on oral insurance binders is State Automobile Mutual Ins Co v Babcock, 54 Mich App 194; 220 NW2d 717 (1974), which described a binder as a contract for temporary insurance pending issuance of an insurance policy unless proper notice is given of election to terminate by the insurance company. The Court quoted Bankers Indemnity Insurance Co v Pinkerton, 89 F2d 194, 197 (CA 9, 1937), which described the necessary elements to effectuate an oral contract of insurance as follows: (a) subject-matter; (b) the risk; (c) premium; (d) duration of the risk; (e) the amount of insurance. The Court noted that some sources also require as an additional element the identity of the parties.

In GRP, Ltd v United States Aviation Underwriters, Inc, 402 Mich 107, 113; 261 NW2d 707 (1978), the Supreme Court noted that the absence of an express agreement upon each of these essential terms was not fatal. The proper test was contained in Martin v Lincoln Mutual Casualty Co, 285 Mich 646, 650; 281 NW 390 (1938), where the Court referred to the following statement contained in 1 Cooley’s Briefs on Insurance (2d ed), p 535:

"Though it is regarded [as] essential that all the elements of the contract be agreed upon, it is not necessary that this be done expressly. In Concordia Fire Ins Co v Heffron, 84 Ill App 610 [1899], it was held that an oral contract of insurance will sustain an action, though no express agreement is made as to the amount of premium to be paid or the duration of the policy, if the intention of the parties to the contract in these particulars can be gathered from the circumstances of the case.”

At trial, the defendant introduced two Tel-Ex messages, exhibit A being from Shilson to the defendant’s agent in London, and exhibit B being the agent’s response. These Tel-Ex’s contained the following information:

Defendant’s Exhibit "A”.
"D. H. Cormack has Lloyds Auto Policy #FP3034488 through Blick Paul & Company Limited, 101 Great Russell Street, London, in Detroit has purchased '73 Lincoln 4-Door, Serial No. 3Y8LA928840, which will drive around U.S. for 90 days and then ship to England. Would appreciate it if you would ask Blick Paul to extend present policy to cover car for same coverage as presently carried.”
Defendant’s Exhibit ’B”,
"Cormack, your Tel-Ex 4/2, Blick not prepared and unable to extend. We can quote premium, $200 for period with $250 deductible comp., $500 deductible collision, subject to record and value.”

The message sent by Shilson indicates that the subject-matter, risk, duration of the risk and the amount of insurance were agreed upon, since it implies that coverage for the new car would be on the same terms as plaintiffs existing policy in England. The only missing element is the premium, but we can infer an implied promise to pay the ordinary amount charged by the defendant for such added coverage. Therefore, under Babcock and GRP, supra, a valid oral binder for insurance on plaintiffs Lincoln existed at the time the vehicle was stolen. It is irrelevant that defendant and plaintiff had no direct dealings, since Warner was clearly acting as plaintiffs agent in this matter.

We therefore find that the trial court erred in granting the defendant’s motion for judgment n.o.v., and therefore reinstate the jury verdict for $6,200 in favor of the plaintiff.

The plaintiffs second allegation is that the trial court erred in finding that there was no evidence which could support a jury verdict of actionable misrepresentation. At trial, the judge granted defendant’s motion for a directed verdict on plaintiffs allegation of fraud.

The elements of fraudulent misrepresentation are enumerated in Prosser, Torts (4th ed), § 105, pp 685-686 as follows:

"1. A false representation made by the defendant. In the ordinary case, this representation must be one of fact.
"2. Knowledge or belief on the part of the defendant that the representation is false — or, what is regarded as equivalent, that he has not a sufficient basis of information to make it. This element often is given the technical name of 'scienter.’
"3. An intention to induce the plaintiff to act or to refrain from action in reliance upon the misrepresentation.
"4. Justifiable reliance upon the representation on the part of the plaintiff, in taking action or refraining from it.
"5. Damage to the plaintiff, resulting from such reliance.” (Footnotes omitted).

This definition is supported by Michigan case law. See, Graham v Myers, 333 Mich 111; 52 NW2d 621 (1952), Michael v Jones, 333 Mich 476; 53 NW2d 342 (1952), Kwasny v Driessen, 42 Mich App 442; 202 NW2d 443 (1972), Rose v Wertheimer, 11 Mich App 401; 161 NW2d 406 (1968).

In reviewing a motion for a directed verdict, this Court views the evidence in the light most favorable to the nonmoving party. If the evidence, when viewed in this manner, establishes a prima facie case, then a directed verdict is improper. Wynn v Cole, 91 Mich App 517, 524; 284 NW2d 144 (1979). We will therefore proceed to examine each of the elements of fraudulent misrepresentation according to this standard.

In the instant case, Shilson made the representation that "it is taken care of’, knowing that Warner was seeking insurance coverage for a third party. According to Oppenhuizen v Wennersten, 2 Mich App 288, 294; 139 NW2d 765 (1966), where a party makes false representations to another with the intent or knowledge that they be exhibited or repeated to a third party for the purpose of deceiving him, that third party can maintain á tort action against the party making the false statements for the damages resulting from the fraud.

While Shilson may not have intentionally misled Warner into believing that the insurance coverage had been extended to Mr. Cormack, a jury could find that Shilson had intended his statement to be interpreted in that manner. It is within the jury’s province to determine the credibility of witnesses. Thus, there was sufficient evidence to establish the first element, being the making of a false representation.

As to the second element of "scienter” the jury could conclude from the testimony that Shilson had intended his statement to be so interpreted as to imply that the requisite coverage had been arranged and that he knew the statement to be false.

With respect to the third element, being an intention to induce plaintiff to act in reliance on the misrepresentation, the testimony clearly indicates that Shilson intended for Mr. Cormack, through Warner, to rely on his representations. If these representations were in fact false, an intention to induce the plaintiff to rely on them could be found.

As to the fourth element, a justifiable reliance on the part of the plaintiff, a jury could find justifiable reliance on the plaintiff’s part based upon a mere oral representation that his English automobile policy with Lloyds of London had been extended to the newly-purchased vehicle.

Finally, it is undisputed that plaintiff acted in reliance on defendant’s representatipn that he was insured, with subsequent damage to him as a result thereof. Thus, we conclude that all of the elements necessary to sustain an action for fraud could have been found by the jury and that the trial court’s grant of a directed verdict constituted reversible error.

Reversed, and the jury verdict is reinstated.


text:
    PEOPLE v RICHARD JOHNSON
    Docket No. 78-3007.
    Submitted November 14, 1979, at Lansing.—
    Decided December 18, 1979.
    Richard J. Johnson was convicted, on his plea of guilty, of armed robbery and, in a bench trial, of felonious assault, Wayne Circuit Court, Victor J. Baum, J. The defendant appeals, alleging that both convictions arose out of the same incident and that, therefore, his constitutional protection against double jeopardy was violated. Held:

    1. The defendant did not raise the issue before or during trial. Normally this would waive the defendant’s claim that his protection against double jeopardy was violated. However, since the record contains no evidence of an intentional abandonment of the double jeopardy claim and since there is a need for clarification of this issue, the defendant’s claim will be examined.
    2. The guarantee against double jeopardy ensures that a defendant will not be tried twice for the same offense or be tried twice for different offenses arising from one incident. However, this guarantee does not operate to bar the prosecution of two dissimilar offenses that occur at separate times. In the case at bar, the defendant committed an armed robbery with a butcher knife and a few minutes later the defendant committed a felonious assault by striking the complainant. Each offense was a distinct offense merely arising out of the same transaction. Because of the chronology of events and the factual distinctions the defendant was not twice placed in jeopardy for the same offense.
    3. There was no violation of the rule which requires the prosecution to join in one prosecution all charges arising out of one episode. The fact that the defendant chose to plead guilty to the armed robbery count before proceeding to trial on the assault charge does not undermine the prosecutor’s satisfaction of consolidation standards.

      References for Points in Headnotes

       21 Am Jur 2d, Criminal Law § 475.

       21 Am Jur 2d, Criminal Law §§ 166, 185.
    Limitations under double jeopardy clause of Fifth Amendment upon state criminal prosecutions — Supreme Court cases. 25 L Ed 2d 968.

       21 Am Jur 2d, Criminal Law §§ 182, 183.

      Affirmed.
    1. Constitutional Law — Double Jeopardy — Preserving Question — Abandonment of Issue — Appeal and Error.
    A claim of a violation of the protection against double jeopardy is waived if the issue is not raised before or during trial; however, where the record contains no evidence of a defendant’s intentional abandonment of the constitutional guarantee against double jeopardy, the claim may be heard on appeal.
    2. Constitutional Law — Double Jeopardy — Multiple Prosecutions — Single Incident.
    The Fifth Amendment protection against double jeopardy, which functions as a check on the Federal system, also extends to the states through the Fourteenth Amendment; this guarantee ensures that a defendant will not be tried twice for the same offense or be tried twice for different offenses arising from one incident.
    3. Constitutional Law — Double Jeopardy — Dissimilar Offenses.
    The constitutional prohibition against double jeopardy does not operate to bar prosecution of two dissimilar offenses that occur at separate times; even if the offenses share common elements or one constitutes a lesser offense of the other, there is no violation based on double prosecution if one crime is complete before the other takes place.

      Frank J. Kelley, Attorney General, Robert A. Derengoski, Solicitor General, William L. Cahalan, Prosecuting Attorney, Edward R. Wilson, Principal Attorney, Appeals, and Michael D. Lehto, Assistant Prosecuting Attorney, for the people.

      Ronald J. Bretz, Assistant State Appellate Defender, for defendant on appeal.
    Before: Bronson, P.J., and D. C. Riley and E. A. Quinnell, JJ.

       Circuit judge, sitting on the Court of Appeals by assignment.

   Per Curiam.

Defendant was plea-convicted of armed robbery, contrary to MCL 750.529; MSA 28.797, and convicted subsequently, at a bench trial, of felonious assault, contrary to MCL 750.82; MSA 28.277. He was sentenced to 15 to 30 years on the first charge and 40 to 60 months on the second one. Defendant now appeals as of right.

Defendant’s sole contention on appeal is that his convictions for two offenses arising out of the same transaction violate the prohibition against double jeopardy. He claims that he is being punished twice for the same offense, essentially the assault inherent in both armed robbery and felonious assault.

We note initially that defendant’s objection was not raised before or during trial. Under such circumstances, a double jeopardy claim may be waived. People v McDonald, 306 Mich 65, 67-68; 10 NW2d 309 (1943), People v Charles Johnson, 62 Mich App 240, 243; 233 NW2d 246 (1975). However, since the record contains no evidence of an intentional abandonment of the double jeopardy protection and since there is a need for clarification of this issue, we will examine defendant’s claim. People v Jones, 75 Mich App 261, 270-271; 254 NW2d 863 (1977). See also, People v Cooper, 398 Mich 450; 247 NW2d 866 (1976).

The Fifth Amendment protection against double jeopardy, which functions as a check on the Federal system, also extends to the states through the Fourteenth Amendment. Benton v Maryland, 395 US 784; 89 S Ct 2056; 23 L Ed 2d 707 (1969). This guarantee ensures that a defendant will not be tried twice for the same offense or be tried twice for different offenses arising from one incident. See North Carolina v Pearce, 395 US 711, 717; 89 S Ct 2072; 23 L Ed 2d 656 (1969), People v White, 390 Mich 245, 254; 212 NW2d 222 (1973).

The double jeopardy prohibition does not operate to bar prosecution of two dissimilar offenses that occur at separate times. In People v Noth, 33 Mich App 18; 189 NW2d 779 (1971), the defendant was convicted of rape and manslaughter. After noting that the latter offense was completed before the former ever took place, the Court commented:

"In logic and in law, it matters not that the interval between the two offenses was five or ten minutes, five or ten days, or five or ten weeks. The Fifth Amendment is not, in our view, a carte blanche to commit a separate offense in immediate proximity in point of time and place to another separate offense. Defendant cannot escape prosecution for the later separate offense.” Noth, supra, at 29.

Even if the offenses share common elements or one constitutes a lesser offense of the other, there is no violation based on double prosecution if one crime is complete before the other takes place. See People v Jones, supra.

In the instant case, defendant committed an armed robbery with a butcher knife, to which he pled guilty prior to trial. A few minutes later, the defendant committed a felonious assault by striking the complainant on the shoulder, an offense which he was found guilty of at a bench trial. The latter assault did not form the basis for the prior robbery charge; each was a distinct offense merely arising out of the same transaction. In light of this chronology and the factual distinctions, we conclude that defendant was not twice placed in jeopardy for the same offense.

Further, there has been no violation of the "same transaction” rule as enunciated in White, supra. Under this test, all offenses arising out of one episode must be joined in one prosecution. This requirement was fully complied with in the case sub judice. The fact that defendant chose to plead guilty to the armed robbery count before proceeding on the assault charge does not undermine the prosecutor’s satisfaction of consolidation standards.

Affirmed.

       Defendant was originally charged with assault with intent to murder, contrary to MCL 750.83; MSA 28.278.


author: Per Curiam:.

text:
    PEOPLE v SAWYER
    Docket No. 78-4014.
    Submitted November 8, 1979, at Detroit.
    Decided December 18, 1979.
    Ralph E. Sawyer was convicted, on his plea of guilty, of two separate charges of armed robbery and of two separate charges of possession of a firearm in the commission of a felony, Recorder’s Court of Detroit, Benjamin C. Stanczyk, J. The two terms of imprisonment imposed for the two felony-firearm convictions were to be served prior to and consecutive with the two terms of imprisonment imposed for the two armed robbery convictions. In addition, the two terms for the two felony-firearm convictions were to run consecutive to each other. The defendant appeals by leave granted, alleging that the trial court lacked authority to make the sentences for the two felony-firearm convictions consecutive to one another. Held:

    The trial judge not only had the authority but was mandated by the felony-firearm statute to make the two sentences imposed for the two felony-firearm convictions run consecutive to one another.
    Affirmed.
    1. Criminal Law — Felony Firearm — Statutes.
    The felony-firearm statute is constitutional in its entirety (MCL 750.227b; MSA 28.424[2]).
    2. Criminal Law — Felony Firearm — Consecutive Sentences — Multiple Felony-Firearm Convictions — Statutes.
    The felony-firearm statute mandates that the supplemental sentences imposed for felony-firearm convictions are to be served consecutively with and preceding any term of imprisonment; where a defendant has more than one felony-firearm conviction, the statute mandates that the supplemental sentences imposed for the felony-firearm convictions be served consecutive to each other as well as consecutive to any term or terms of imprisonment imposed for the convictions on the underlying felonies (MCL 750.227b; MSA 28.424[2]).

      References for Points in Headnotes

       16 Am Jur 2d, Constitutional Law § 219.

       21 Am Jur 2d, Criminal Law §§ 547, 549.

      Frank J. Kelley, Attorney General, Robert A. Derengoski, Solicitor General, William L. Cahalan, Prosecuting Attorney, Edward R. Wilson, Principal Attorney, Appeals, and Don W. Atkins, Assistant Prosecuting Attorney, for the people.

      Raymond L. Miller, for defendant on appeal.
    Before: Bashara, P.J., and J. H. Gillis and W. Van Valkenberg, JJ.

       Former circuit judge, sitting on the Court of Appeals by assignment pursuant to Const Í963, art 6, § 23 as amended in 1968.

   Per Curiam:.

Defendant was convicted of two separate crimes of armed robbery, MCL 750.529; MSA 28.797. He was also convicted of two separate charges of possession of a firearm in the commission of a felony, MCL 750.227b; MSA 28.424(2). In addition to the armed robbery sentences, the defendant received two consecutive sentences of two years and five years for the felony-firearm convictions.

Defendant filed a delayed application for leave to appeal, contesting only the felony-firearm convictions. He argued that the statute was unconstitutional and that the trial court erred in failing to explain that the two felony-firearm convictions could not run concurrently.

This Court granted the delayed application for leave to appeal and ordered that the parties brief the following issue:

"Did the trial court lack authority to make the two felony firearm sentences consecutive to one another?”

Since the delayed application for leave to appeal was granted, our Supreme Court has definitively ruled that the felony-firearm statute is constitutional in its entirety. Wayne County Prosecutor v Recorder’s Court Judge, 406 Mich 374; 280 NW2d 793 (1979).

Our review of the record indicates that the trial court, the prosecutor and defense counsel clearly stated that the armed robbery sentences would run consecutively. The trial judge also explained that the felony-firearm convictions would be a mandatory two years and five years. The guilty plea form signed by defendant reveals that he understood that the sentences resulting from one armed robbery conviction would run consecutively with the sentences from the other.

Did the trial judge have the authority to make the two felony-firearm sentences consecutive? The felony-firearm statute makes it clear that upon a first conviction, a mandatory two-year imprisonment shall be exacted. A second conviction shall result in five years imprisonment, and ten years for a third conviction. The penalties are to be served consecutively with and preceding any term of imprisonment for the related felony.

The convictions imposed in the instant cases were for two separate acts of armed robbery. One occurred on December 14, 1977, and the other on December 22, 1977. The fact that they were combined for a guilty plea proceeding makes the crimes no less distinct and severable. The trial judge not only had clear authority but in our opinion was mandated to impose consecutive sentences as he did.

Affirmed.


text:
    PEOPLE v BAGERIS PEOPLE v LOCRICCHIO PEOPLE v MITTLEMAN PEOPLE v SINGER
    Docket Nos. 78-4063, 78-4064, 78-4065, 78-4066.
    Submitted November 7, 1979, at Lansing.
    Decided December 18, 1979.
    Robert P. Bageris, Matthew Locricchio, Robert Mittleman and David Singer were charged with conspiracy to violate the state gambling act. The district court dismissed the complaint on the basis that the gambling act did not apply to the situation involved. The Oakland Circuit Court, Arthur E. Moore, J., reviewed the action of the district court and remanded the cause, deciding that the district judge erred in construing the applicable law. The Court of Appeals affirmed the circuit court’s remand to the district court for further appropriate action, Oakland County Prosecutor v 46th District Judge, 76 Mich App 318 (1977). Upon remand, the district court judge, acting as a preliminary examination magistrate, ordered the defendants bound over to the Oakland Circuit Court for trial. Thereafter, the defendants moved in Oakland Circuit Court to quash the information. Robert B. Webster, J., granted the motion and dismissed the charges against the defendants on the grounds that the corpus delicti of the conspiracy had not been sufficiently established, and that the magistrate had abused his discretion in binding defendants over. The people appeal. Held:

    There was testimony presented at the preliminary examination that the defendants had engaged in a high stakes card game on one evening and that they discussed playing again the next evening. Further testimony indicated that the defendants did, in fact, play on the following evening. Even if this testimony is discounted, an implicit conspiratorial agreement may be inferred from the participation of the defendants in a card game played for stakes, as gambling requires the concerted activity of the participants. The evidence adduced at the preliminary examination was sufficient to establish the corpus delicti of the offense charged. The examining magistrate did not abuse his discretion in binding the defendants over for trial on the charge of conspiracy to gamble. The circuit court’s determination to the contrary was erroneous.

      References for Points in Headnotes

       4 Am Jur 2d, Appeal and Error §§ 164, 267.
    5 Am Jur 2d, Appeal and Error §§ 772-774.

       21 Am Jur 2d, Criminal Law §§ 449, 450.

       16 Am Jur 2d, Conspiracy § 2.

       16 Am Jur 2d, Conspiracy § 42.

      Reversed and remanded for trial.
    1. Appeal and Error — Criminal Law — Quashing op Information — Magistrates — Discretion.
    The Court of Appeals, when it reviews the action of a circuit court in quashing an information, must examine the record to determine if the circuit court is correct in determining that the examining magistrate committed an abuse of discretion; in examining the record to assess the propriety of the circuit court’s ruling, the Court of Appeals must be mindful of the responsibilities of the magistrate.
    2. Criminal Law — Preliminary Examinations — Magistrates — Probable Cause — Statutes.
    The statutory duty of a magistrate at a preliminary examination is to bind a defendant over for trial if it appears at the conclusion of the preliminary examination that a felony has been committed and that there is probable cause to believe that the defendant committed it; the magistrate is not required to find the guilt of the defendant established beyond a reasonable doubt, but there must be evidence on each element of the crime charged or evidence from which those elements may be inferred (MCL 766.13; MSA 28.931).
    3. Conspiracy — Mutual Understanding — Unlawful Act — Unlawful Means.
    Criminal conspiracy is a mutual understanding or agreement between two or more persons, express or implied, to do or accomplish some criminal or unlawful act or to accomplish some lawful act or purpose not in itself criminal but by criminal or unlawful means.
    4. Evidence — Conspiracy — Criminal Law — Circumstantial • Evidence — Inference.
    A criminal conspiracy may be established by circumstantial evidence and may be based on inference.

      Frank J. Kelley, Attorney General, Robert A. Derengoski, Solicitor General, L. Brooks Patterson, Prosecuting Attorney, Robert C. Williams, Chief Appellate Counsel, and Michael J. Modelski, Assistant Prosecuting Attorney, for the people.

      Ivan E. Barris and Michael H. Golob, for defendant Bageris.

      Lawrence B. MacDonald, P.C., for defendant Locricchio.

      Rader, Eisenberg & Feldman, P.C., for defendant Mittleman.

      Isaacson & Isaacson, for defendant Singer.
    Before: R. M. Maher, P.J., and Mackenzie and J. H. Piercey, JJ.

       Circuit judge, sitting on the Court of Appeals by assignment.

   Per Curiam.

Defendants were charged with conspiracy to violate the state gambling act, MCL 750.301 et seq.; MSA 28.533 et seq.; MCL 750.157a; MSA 28.354(1). The district court judge dismissed the complaint on the basis that the gambling act did not apply to this factual situation. The circuit court reviewed the action of the district judge and remanded the cause, deciding that the district judge erred in construing the applicable law. This Court affirmed the circuit court’s remand to the district court for further appropriate action, Oakland County Prosecutor v 46th District Judge, 76 Mich App 318; 256 NW2d 776 (1977).

Upon remand, the district judge, acting as a preliminary examination magistrate, ordered defendants bound over for trial to the Oakland County Circuit Court. Thereafter, the defendants moved the circuit court judge to quash the information. The circuit judge granted defendants’ motion, dismissing the charges against them on the grounds that the corpus delicti of the conspiracy had not been sufficiently established, and that the preliminary examination magistrate abused his discretion in ruling to the contrary. From this determination, plaintiff appeals as of right.

When this Court reviews the action of a circuit court judge in quashing an information, it must examine the record to determine if the circuit court judge is correct in determining that the magistrate committed an abuse of discretion, People v Karcher, 322 Mich 158, 162-163; 33 NW2d 744 (1948), Genesee Prosecutor v Genesee Circuit Judge, 391 Mich 115; 215 NW2d 145 (1974). In examining the record to assess the propriety of the circuit court’s ruling, then, we must be mindful of the responsibilities of the magistrate.

The statutory duty of the magistrate at a preliminary examination is to bind the defendant over for trial if it appears at the conclusion of the preliminary examination that a felony has been committed and there is probable cause to believe that the defendant committed it. The magistrate is not required to find the guilt of the defendant established beyond a reasonable doubt, but there must be evidence on each element of the crime charged or evidence from which those elements may be inferred. MCL 766.13; MSA 28.931, People v Doss, 406 Mich 90; 276 NW2d 9 (1979), People v Wirth, 87 Mich App 41; 273 NW2d 104 (1978).

Plaintiff argues in support of the preliminary examination evidence which was offered to establish the corpus delicti of the conspiracy. The circuit judge ruled this evidence insufficient as a matter of law.

Criminal conspiracy is a mutual understanding or agreement between two or more persons, express or implied, to do or accomplish some criminal or unlawful act or to accomplish some lawful act or purpose not in itself criminal but by criminal or unlawful means. People v O’Connor, 48 Mich App 524, 525; 210 NW2d 805 (1973), People v Atley, 392 Mich 298; 220 NW2d 465 (1974), People v Hintz, 69 Mich App 207, 217; 244 NW2d 414 (1976). A conspiracy may be established by circumstantial evidence and may be based on inference, People v Atley, supra, at 311.

The element of the crime of conspiracy at issue is the agreement. There was testimony presented at the preliminary examination that the defendants had engaged in a high stakes card game on one evening and that they discussed playing again the next evening. This testimony further provided that the defendants did, in fact, play on the following evening. Based on this direct evidence of a conspiratorial agreement, we are not prepared to hold that the preliminary examination magistrate abused his discretion.

Moreover, even if this testimony is discounted, a conspiratorial agreement may be inferred from the participation of the defendants in a card game played for stakes, as gambling requires the concerted activity of the participants. See Oakland County Prosecutor v 46th District Court, supra. It is difficult to see how the defendants could gamble together without the existence of at least an implicit agreement to gamble.

In view of the foregoing, we find that the preliminary examination magistrate did not abuse his discretion in binding the defendants over on the conspiracy to gamble charge. The evidence adduced at the preliminary examination was sufficient to establish the corpus delicti of this offense. The circuit court’s determination to the contrary was erroneous.

Reversed and remanded for trial.


text:
    PRIGGETT v CITY OF DETROIT
    Docket No. 78-4748.
    Submitted October 15, 1979, at Detroit.
    Decided December 18, 1979.
    Delrita Priggett, a minor, suffered the loss of her right eye during the course of her employment with the Detroit transportation department. She applied for worker’s compensation. The Worker’s Compensation Appeal Board affirmed the decision of a hearing referee granting compensation to Delrita at the rate of $64 per week for 162 weeks for a specific loss injury but rejected the argument that as an illegally employed minor she was entitled to double benefits. Delrita’s application for leave to appeal was granted by the Court of Appeals. She appeals and claims that a statute provides that any minor, in the absence of fraudulent use of permits or certificates of age, who is illegally employed at the time of an injury shall receive double compensation. The question presented is whether plaintiff, who was never issued a valid work permit, was illegally employed and thus entitled to double compensation. Held:

    The Hittle Juvenile Employment Act requires that work permits be issued to minors before they may be employed. To be valid, the permits need to be signed by a representative of the issuing authority. Plaintiffs employer did have a form designated "work permit” in plaintiff’s name in its files but that permit was not signed by an authorized issuing officer. Therefore it was invalid and plaintiff’s employment was illegal. Plaintiff’s employer was apparently aware that the permit was defective since its personnel clerk failed to return the work permit to the issuing authority upon termination of plaintiff’s employment as required by statute. The grant of compensation at $64 per week for 162 weeks is affirmed. Plaintiff, having shown she was illegally employed at the time of injury, is entitled to double that compensation.
    Affirmed in part and reversed in part.
    References for Points in Headnotes

       82 Am Jur 2d, Workmen’s Compensation §§ 164, 165.

       42 Am Jur 2d, Infants § 8.

       48A Am Jur 2d, Labor and Labor Relations § 2452.

      1. Workmen’s Compensation — Infants — Illegal Employment — Injury — Double Compensation — Statutes.
    Any minor, in the absence of fraudulent use of permits or certificates of age, who is illegally employed at the time of an injury shall receive compensation double that provided in the Worker’s Disability Compensation Act (MCL 418.161[l][b]; MSA 17.237[161][l][b]).
    2. Infants — Master and Servant — Work Permits — Invalid Permits — Illegal Employment — Hittle Juvenile Employment Act — Statutes.
    Work permits issued to minors under the Hittle Juvenile Employment Act were not valid unless signed by an authorized representative of the permit-issuing authority and where a work permit was not signed by the issuing officer the permit was invalid and the employment of the minor was illegal (MCL 409.24; MSA 17.724).
    3. Infants — Master and Servant — Work Permits — Termina-
    tion of Employment — Return of Work Permit — Statutes. An employer was required under the Hittle Juvenile Employment Act to return a work permit issued to a minor employee to the issuing officer immediately after the termination of the minor’s employment (MCL 409.11; MSA 17.711).

      Goodman, Eden, Millender & Bedrosian (by Morton A. Eden and Joan Lovell), for plaintiff.

      George Matish, Acting Corporation Counsel, and Thomas L. Walters, Assistant Corporation Counsel, for defendant.
    Before: M. F. Cavanagh, P.J., and M. J. Kelly and D. S. DeWitt, JJ.

       Circuit judge, sitting on the Court of Appeals by assignment.

   Per Curiam.

Plaintiff, Delrita Priggett, appeals from an October 18, 1978, opinion and order of the Worker’s Compensation Appeal Board. The WCAB affirmed the decision of a hearing referee granting compensation to plaintiff at the rate of $64 per week for 162 weeks for a specific loss injury, blindness in one eye, but rejected plaintiffs argument that as an illegally employed minor she was entitled to double benefits under MCL 418.161(l)(b); MSA 17.237(161)(l)(b), which provides in pertinent part:

"Any minor under 18 years of age whose employment at the time of injury shall be shown to be illegal, in the absence of fraudulent use of permits or certificates of age in which case only single compensation shall be paid, shall receive compensation double that provided in this act.”

Contrary to the board’s opinion, we find that plaintiff was illegally employed due to noncompliance with the Hittle Juvenile Employment Act, MCL 409.24; MSA 17.724, in effect at the date of employment and injury, which required that work permits be issued to minors. Harry Speelman, a representative of the work permit issuing authority, testified at trial that there was no record of a permit having ever been issued to plaintiff. He testified that such a permit would not be valid unless signed by an authorized representative of his office. Plaintiffs employer did have a form designated "work permit” in plaintiffs name, but without the signature of an authorized issuing officer the permit was invalid, thereby rendering plaintiffs employment illegal. Apparently, plaintiffs employer was aware that the permit was defective since its personnel clerk failed to return the work permit to the issuing authority upon termination of plaintiffs employment as required by MCL 409.104; MSA 17.731(4) (formerly MCL 409.11; MSA 17.711) which provides in pertinent part:

"(2) Immediately after the termination of the minor’s employment, the employer shall return the permit to the issuing officer.”

Plaintiff, having shown she was illegally employed at the time of injury, is entitled to double compensation. The holding of the WCAB is hereby reversed in part and defendant is ordered to pay double compensation under the Worker’s Disability Compensation Act.

Affirmed in part and reversed in part.

       MCL 409.24; MSA 17.724, in effect at the date of injury, provided:
      "Any minor engaged in an occupation specified in a work permit issued for the employment of such minor therein in accordance with provisions of this act shall be considered to be legally employed: Provided, That the employer has on file such work permit and the same has not expired or been revoked.”
      MCL 409.1-409.30; MSA 17.701-17.730 were repealed by 1978 PA 90, effective June 1, 1978. Criteria for the issuance of work permits are now found at MCL 409.104-409.106; MSA 17.731(4)-17.731(6).


author: L. W. Corkin, J.

text:
    PEOPLE v WILLIAMS
    Docket No. 78-2853.
    Submitted June 20, 1979, at Lansing.
    Decided December 19, 1979.
    John S. Williams was charged with and found guilty of breaking and entering an occupied dwelling with intent to commit a larceny therein. At defendant’s nonjury trial in Ingham Circuit Court, James T. Kallman, J., co-participant Jeffrey Robinson repudiated his preliminary examination testimony that the defendant had been involved in the breaking and entering which was the subject of this prosecution. At trial, Robinson testified that, while the defendant and he had engaged in another breaking and entering on the day in question, the defendant had not participated in the breaking and entering which was the subject of this prosecution. Robinson’s preliminary examination testimony was admitted for impeachment purposes. Further testimony showed that at the time of the defendant’s and Robinson’s arrest they were occupying an automobile in which an item taken in the subject breaking and entering was found and that a checkbook taken in the subject crime was found in the patrol car which had been used to transport defendant and Robinson to jail in a spot under the front seat directly in front of the rear seat occupied by defendant. This testimony was at variance with Robinson’s trial testimony that he had placed that checkbook in the crease in the back seat of the patrol car. The trial judge, after indicating that he was not considering Robinson’s prior inconsistent testimony as substantive evidence, found that the inferences flowing from the undisputed evidence convinced the court beyond a reasonable doubt of defendant’s participation in the subject crime. Defendant appeals. On appeal the prosecution argues that Robinson’s preliminary examination testimony should be considered as substantive evidence and, in any event, that the evidence was sufficient to support a finding of defendant’s guilt beyond a reasonable doubt. Held:

    1. The Michigan Supreme Court has held that prior statements by a witness which are inconsistent with the witness’s trial testimony may be admitted for impeachment purposes, but such prior inconsistent statements may not be considered as substantive evidence at trial. Since an intermediate appellate court generally is not free to disregard the precedent of the highest court, the Court of Appeals will decline to disregard, override or re-examine a holding of the Supreme Court in the absence of Michigan authority to justify such reevaluation by the Court of Appeals. Accordingly, the prosecution’s suggestion that Robinson’s preliminary examination testimony be considered as substantive evidence at trial is rejected.

      References for Points in Headnotes

       81 Am Jur 2d, Witnesses §§ 596, 599, 631.

       20 Am Jur 2d, Courts § 183 et seq.

       29 Am Jur 2d, Evidence §§ 266, 1170 et seq.

      2. The evidence considered by the trial court, even disregarding Robinson’s disputed preliminary examination as substantive evidence, was sufficient to support the trial court’s conclusion that defendant’s participation in the crime had been proven beyond a reasonable doubt. While some of the inferences necessary to support that conclusion may have been built upon other inferences, the use of an inference on an inference does not negate the validity of the ultimate inference if, on the totality of the evidence, both the primary and secondary inferences are of a compelling nature. Likewise, the failure to specifically negate a hypothesis of innocence presented by a defendant does not negate a finding of guilt unless the hypothesis presented is of such a compelling nature that it creates a reasonable doubt on the part of the trier of fact.
    Affirmed.
    1. Witnesses — Prior Inconsistent Statements — Admissibility — Substantive Evidence — Impeachment.
    Prior statements by a witness which are inconsistent with the witness’s trial testimony may be admitted at trial for impeachment purposes; however, such prior inconsistent statements may not be considered as substantive evidence at trial.
    2. Courts — Intermediate Appellate Court — Precedent.
    An intermediate appellate court generally is not free, where tlie highest court has spoken, to disregard the precedent of the highest court; accordingly, where there is no Michigan authority which justifies the Court of Appeals disregarding, overriding or re-examining a holding of the Supreme Court, the Court of Appeals will follow the precedent of the Supreme Court.
    3. Criminal Law — Evidence — Sufficiency of Evidence — Inferences.
    There is sufficient evidence to support a finding of guilt in a criminal trial where the totality of the circumstantial evidence presented at trial gives rise to inferences of such a compelling nature with respect to the defendant’s participation in the criminal act that the trier of fact is convinced that the defendant is guilty beyond a reasonable doubt, notwithstanding the fact that some of the inferences may have been built upon other compelling inferences and that each of the defendant’s hypotheses of innocence may not have been specifically rebutted.

      Frank J. Kelley, Attorney General, Robert A. Derengoski, Solicitor General, Peter D. Houk, Prosecuting Attorney, Michael G. Woodworth, Chief Appellate Attorney, Charles M. Sibert, Assistant Prosecuting Attorney, for the people.

      Hankins, Kluck, Robillard & Carlson, P.C., for defendant on appeal.
    Before: Cynar, P.J., and Mackenzie and L. W. Corkin, JJ.

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

   L. W. Corkin, J.

On July 27, 1977, defendant was charged with breaking and entering an occupied dwelling with intent to commit larceny therein, MCL 750.110; MSA 28.305. Defendant having waived his right to a jury trial, a bench trial was held before the Honorable James T. Kallman of the Ingham County Circuit Court on February 14, 1978. By written opinion dated March 9, 1978, defendant was found guilty as charged and was, shortly thereafter, sentenced to a term of 4 to 15 years in prison. He appeals as of right from his conviction.

The breaking and entering in question occurred at the residence of Mr. Barry Thompson and wife, located at 6301 Daft Street, Lansing, Michigan. Mr. Thompson testified that he left home for work about 5:45 a.m., July 25, 1977. Having secured the doors and windows at bedtime the night before, he didn’t check them again before leaving. His wife was still home when he left, but she apparently left home later.

Mr. Thompson further testified that, on returning home at about 3:20 p.m., he discovered the back door open, the back screen cut and glass on the floor. He immediately called the police, who arrived and inspected the house at about 4 p.m. During the inspection it was found that the bathroom window had been forced open and jammed in that position. The house had been burglarized and several items of personal property were found to be missing, including a unique ceramic buzzard and Thompson’s checkbook.

Officer Kuerbitz of the Lansing Police Department testified that he was dispatched in the afternoon of July 25, 1977, to 910 Jerome Street in Lansing to assist officers of the Clinton County Sheriffs Department in a breaking and entering that occurred in their county. After his arrival, he observed a 1972 Chevrolet vehicle fitting the description that he had been given drive into the parking lot at that address. He thereupon arrested the two occupants of the vehicle, one of whom was the defendant and the other being a Jeffrey Robinson. Officer Teszlewicz, another Lansing Police Officer, then arrived to give assistance. The defendant and Robinson were patted down and placed in the backseat of the patrol car about 3:22 p.m. The defendant was seated directly behind the driver and Robinson was seated to his right. The subjects were then taken to the DeWitt Township, Clinton County, police station and left there.

Some two hours later, Officer Teszlewicz was instructed by Officer Kuerbitz to check the backseat of the patrol car and, on doing so, found the Thompson checkbook directly under the driver’s seat.

Officer Woolfe of the Clinton County Investigation Squad, who was present when the defendant and Robinson were arrested, testified that he had searched the 1972 Chevrolet, which had been transported to the DeWitt Township police station, and found Mr. Thompson’s ceramic buzzard in the trunk. This search was made about 4:30 p.m. on the date of the arrest.

The key prosecution witness was Jeffrey Robinson, an unindicted co-participant in the offense of which defendant was convicted. Robinson testified that defendant and he were staying at Robinson’s cousin’s house at 910 Jerome Street and that the two of them left the house together before 8 a.m. on the morning of July 25, 1977. Robinson was driving his cousin’s navy blue 1972 Chevy. They drove to Clinton County, intending to break and enter a home on Chandler Road. Enroute they discussed their mutual need for money.

Robinson further testified that they both entered the house on Chandler Road, but that no property was removed. They departed from the premises because defendant said he had become nervous because of the Chandler Road break-in. Defendant was dropped off at the house of another cousin of Robinson. It so happened that this cousin was a girlfriend of the defendant.

Robinson theri proceeded alone to the Thompson home, where he broke into and entered the house and removed the property described as missing from the house. He took all the property, except the buzzard and checkbook, to one Willie Cole’s house on Roselawn Street and then picked defendant up at his cousin’s house sometime before noon. They then drove to the Jerome Street address where they were arrested.

Robinson also testified that he stuffed the stolen checkbook in the crease in the back seat of the patrol car after he and defendant had been placed there.

The prosecutor called Robinson’s attention to the fact that at the preliminary examination of defendant he had testified that defendant was with him when the breaking and entering of the Thompson house took place. Robinson acknowledged this, but stated that he believed he would be able to go home (as a juvenile), not be charged and get a better deal if he implicated defendant. He also testified that defendant never threatened him in order to force him to change his story and that he had not had any contact with defendant since the preliminary examination.

The record reflects that Robinson was testifying pursuant to a plea bargain agreement whereby he was not charged with the Thompson breaking and entering in return for his preliminary examination and trial testimony.

Officer Kuerbitz testified that he told Robinson he would not be charged with the Thompson breaking and entering, or any other breaking and entering except for the Chandler Road one, if he gave information that would clear up any of them. Robinson had pled guilty to the Chandler Road breaking and entering sometime prior to the instant trial.

Further, the prosecutor, in lieu of calling a witness who lived on Roselawn, a Rose Fleak, stipulated that her testimony, if called, would have been that Robinson brought the stolen property (which was subsequently recovered there) to that residence on July 25, 1977, and that defendant was not with Robinson when he came.

At the close of the people’s proofs, defendant moved for a directed verdict of acquittal, based upon a lack of proof connecting him with the crime. The motion was denied. Defendant then rested without submitting any further proof, and the trial judge took the matter under advisement.

The trial judge found the defendant guilty as charged. The trial court, in its written, opinion made the following findings of fact:

"But, even without this testimony [Robinson’s preliminary examination testimony] there is clear and unrebutted evidence that ties this defendant into the crime charged here:
"1. Both intended to commit B & E’s to get money.
"2. Both committed one B&E around 9 a.m.
"3. Robinson states he committed the B & E in this case.
"4. Both rode in the same car used to commit the first B&E.
"5. Both needed money.
"6. Both were arrested in the same car later in the day.
"7. Stolen property from Thompson’s B&E was found in that car’s trunk.
"8. Robinson said while in the patrol car he stuffed the check book into the crease behind him. The stolen check book was found under the front seat in front of the defendant indicating constructive possession in the defendant of the check book.
"9. Both entered into a system or scheme to accomplish satisfying their needs.
"Putting this puzzle together (leaving out and not relying on Robinson’s disputed testimony) clearly and logically dictates the defendant’s participation in the crime of B & E at the Thompson’s. The inference is so strong that defendant participated, this Court is satisfied beyond a reasonable doubt of defendant’s guilt.”

Two issues are presented for this Court’s determination: one concerns the use of Robinson’s testimony at the preliminary examination, not only for impeachment purposes, but also as substantive evidence; and the other concerns the sufficiency of the evidence.

The prosecution urges this Court to consider the preliminary examination testimony as substantive evidence, and, thus, find that there was clearly sufficient evidence to support the finding of guilt by the trial court. Strong reasons can be advanced and found in support of the prosecution’s argument. The testimony was given under oath. Hearsay problems sometimes attendant with admitting prior statements are not present, because the declarant is available for cross-examination. Since the witness is available for examination, his demeanor and credibility can be assessed by the trier of fact. Prior testimony can be used as substantive evidence if the declarant is found to be unavailable to testify at trial; and the Michigan Rules of Evidence do not expressly prohibit the use of such testimony as substantive evidence. Finally, Federal courts, numerous state courts and respected legal scholars support plaintiffs position. See the notes and annotations following MRE 613 in Michigan Court Rules Annotated, Evidence Rules (West Publishing Co, 1979), pp 445-483.

The issue presented is, however, one to which the Michigan Supreme Court has clearly spoken. In Ruhala v Roby, 379 Mich 102; 150 NW2d 146 (1967), it was held that prior statements of a witness which are in conflict with his testimony at trial may be used for impeachment purposes, but such statements are not to be considered as substantive evidence in the case. See also Smith v Woronoff, 75 Mich App 24, 31; 254 NW2d 637 (1977), Rosenberg v Mageda, 251 Mich 696, 699; 232 NW 397 (1930), and cases cited therein. It should be noted that the rule stated in Ruhala, supra, was in an opinion which was signed by a plurality, but not a majority, of the Court; therefore, the present precedential value may be somewhat suspect. That case does not, however, constitute the leading explanation of why Michigan adheres to a rule excluding such prior inconsistent testimony from being considered as substantive evidence.

As a general rule, where the Michigan Supreme Court has spoken, this Court is not free to disregard its precedent. People v Haggerty, 27 Mich App 594, 596-597; 183 NW2d 862 (1970), Peterson v Schuitema, 56 Mich App 255; 224 NW2d 55 (1974). As no Michigan authority has been cited to justify this Court in disregarding, overriding or reexamining the holding in Ruhala, we decline to do so. In any event, the trial judge stated that he did not consider the prior inconsistent testimony as substantive evidence in arriving at his verdict. We, too, will disregard it in this context.

Turning now to the second issue involved, it is recognized at the outset that the case against defendant was entirely circumstantial. This being so, two problems are presented for resolution. In such cases, is it necessary that the prosecution disprove every reasonable hypothesis consistent with defendant’s innocence, and if so, can a conviction be predicated solely upon an inference drawn from an inference? There is a disagreement among panels of this Court in the resolution of these issues.

Those panels expressing adherence to the rule that the prosecution must negate every reasonable hypothesis consistent with defendant’s innocence when the evidence is entirely circumstantial have usually set aside convictions that were based upon an inference drawn from a prior inference originally drawn from the evidence.

See, People v Davenport, 39 Mich App 252, 255-258; 197 NW2d 521 (1972), People v Wingfíeld, 62 Mich App 161, 163; 233 NW2d 220 (1975), People v Jablonski, 70 Mich App 218, 225; 245 NW2d 571 (1976), People v Ridgeway, 74 Mich App 306; 253 NW2d 743 (1977), People v Samuel Smith, 85 Mich App 404, 410-411; 271 NW2d 252 (1978), People v McGregor, 45 Mich App 397, 398-399; 206 NW2d 218 (1973), People v Gordon, 60 Mich App 412, 417-418; 231 NW2d 409 (1975), People v Fuller, 395 Mich 451, 459-460; 236 NW2d 58 (1975) (T. G. Kavanagh, C.J., dissenting), People v Atley, 392 Mich 298, 314-315; 220 NW2d 465 (1974), People v Orsie, 83 Mich App 42, 54-56; 268 NW2d 278 (1978) (R. M. Maher, J., dissenting in part).

Those panels not requiring the prosecution to disprove every reasonable hypothesis consistent with defendant’s innocence have subscribed to the view that circumstantial evidence is no less trustworthy and probative of guilt than direct evidence, and that the totality of the circumstances should be looked at in reviewing the evidence. The probative value of the circumstantial evidence is to be determined by the trier of fact. This line of cases allows logical inferences to support a conviction where the antecedent inference, drawn from the evidence introduced, is fair and reasonable and is not based on evidence that is uncertain, speculative, or raises merely a conjecture or possibility.

See, People v Edgar, 75 Mich App 467, 469-474; 255 NW2d 648 (1977), People v Helcher, 14 Mich App 386, 389-391; 165 NW2d 669 (1968), People v Sherman Hall, 77 Mich App 456, 463; 258 NW2d 517 (1977), People v Ross, 69 Mich App 705, 707-708; 245 NW2d 335 (1976), People v Orsie, 83 Mich App 42, 45-54; 268 NW2d 278 (1978), People v Johnson, 83 Mich App 1, 17-18; 268 NW2d 259 (1978), People v Little, 87 Mich App 50, 53-54; 273 NW2d 583 (1978), People v Davidson, 88 Mich App 276; 276 NW2d 580 (1979).

The apparent differences in approach may very well be a matter of semantics. In a criminal trial, a guilty verdict is returnable if there is evidence, credible and believed, that would justify a reasonable man in concluding that all elements of the crime were established beyond a reasonable doubt. If the satisfying beyond a reasonable doubt criteria is met, should a verdict of guilty be set aside because it was necessary to base an inference on an inference, even though both were of great probative value? It is submitted that a general distrust of circumstantial evidence is not justified, and that, when courts engage in discussions of "direct” and "circumstantial” evidence and the permissible inferences to be drawn therefrom, the courts are really concerned with how compelling the inference is. If inferences drawn from circumstantial evidence are so compelling that the trier of fact has no reasonable doubt of defendant’s guilt, that should be sufficient basis for a guilty verdict. If circumstantial evidence does not give rise to inferences of such a compelling nature as to overcome the reasonable doubt standard, then a guilty verdict could not be justified, not because the evidence was circumstantial or because of basing inferences on inferences, but rather, because of the prosecution’s failure to meet its burden of proof. If so, it would seem to follow that if the evidence persuaded the trier of fact of a defendant’s guilt beyond a reasonable doubt the prosecution’s failure to specifically disprove an innocent hypothesis advanced by defendant would not result in the setting aside of a guilty verdict. It should be recognized that there can be hypotheses of innocence advanced by defendants that would be impossible to disprove by either direct or circumstantial evidence. To require the prosecution to do the impossible would be neither sound logic nor good law. It would appear that in order for a hypothesis of innocence to negate an otherwise supported finding of guilt the hypothesis must be of such a compelling nature that it creates a reasonable doubt on the part of the fact trier.

In this case, defendant did not testify or introduce any evidence in his own behalf. It should also be noted that it was Robinson’s impeached testimony that placed defendant in another location at the time of the offense. It is clear that the trial court had the right to, and elected to, disbelieve that testimony. Thus, it can be argued that there was no credible testimony establishing the fact that defendant was not present and did not participate in the breaking and entering. It would appear that in this case we are not dealing with a hypothesis of innocence, but rather, with a presumption of innocence.

Since presence in, or control over, a vehicle in which the fruits of a crime are found is evidence of, and justifies an inference of, possession, Ridgeway, supra, 316, Gordon, supra, 418, the court could properly find constructive possession by defendant of the stolen checkbook and buzzard. The key issue is whether there is sufficient evidence, in addition to constructive possession, to establish an inference that defendant perpetrated a breaking and entering.

Of significance is the testimony and evidence relating to the checkbook that was, without question, stolen from the Thompson residence. It is first noted that the checkbook was not found where Robinson testified he had placed it, but rather, it was found under the driver’s seat of the patrol car, a location directly in front of where defendant was sitting, a location easily accessible to defendant but not to Robinson. It would certainly be logical to infer that, under the circumstances, it was placed there by the defendant because he in fact had possession of the checkbook following the breaking and entering or because of his guilty knowledge of the crime by reason of his involvement and participation therein. It is certain that either Robinson or the defendant secreted the checkbook where it was found. However, neither the testimony nor the evidence concerning the finding of the checkbook give rise to, or would substantiate, a reasonable inference that Robinson secreted the checkbook where it was found.

We find that the totality of the evidence, as enumerated and considered by the trial judge affords a sufficient basis for a finding of defendant’s guilt beyond a reasonable doubt.

Affirmed.


author: T. M. Burns, J.

text:
    JOOS v AUTO-OWNERS INSURANCE COMPANY
    Docket No. 78-3455.
    Submitted June 11, 1979, at Lansing.
    Decided December 19, 1979.
    Leave to appeal applied for.
    Gail A. Joos was one of six persons injured in an automobile collision, all of whom brought suit against the driver of the other car, Linda K. Avery, and Avery’s insurer, Auto-Owners Insurance Company. Auto-Owners retained attorney William J. Drillock to represent itself and Avery. All of the plaintiffs except Joos settled prior to trial. Joos offered to settle within the remaining liability limits of Avery’s insurance policy, but no settlement was made and the case proceeded to trial at which Joos received a judgment far in excess of the remaining policy limits. Joos and Avery subsequently brought an action against Auto-Owners and Drillock, alleging legal malpractice on the part of Drillock. Avery claimed that she had not learned of Joos’s offer to settle until the first day of the prior trial and that on the second day of that trial, when Drillock informed her he had authority to settle and she indicated her desire to settle, Drillock refused to do so. Drillock made a motion to dismiss, on the basis that the plaintiffs had failed to offer expert testimony to establish the standard of care owed by an attorney to a client or a breach of that standard. The motion was granted and a judgment of dismissal as to Drillock was entered by the Ingham Circuit Court, Michael G. Harrison, J. Plaintiffs appeal. Held:

    In circumstances such as those in this case an attorney has, as a matter of law, a duty to disclose and discuss with his client good faith offers to settle. The plaintiffs’ allegation that Drillock breached the applicable standard of care does not require expert testimony to establish the standard of care or the breach thereof. The trial court erred by granting the motion for dismissal.
    Reversed and remanded.
    References for Points in Headnotes
    [1, 2] 7 Am Jur 2d, Attorneys at Law § 168.
    Preparing or conducting litigation, attorney’s liability for negligence in. 45 ALR 2d 5.

       7 Am Jur 2d, Attorneys at Law § 93.

      1. Attorney and Client — Legal Malpractice — Standard op Care.
    An attorney must bring to bear the skill, learning, and ability of the average practitioner of law when conducting legal business for a client; he or she must exercise ordinary care or diligence in the prosecution of the client’s interests.
    2. Attorney and Client — Offers to Settle — Legal Malpractice — Failure to Disclose — Breach of Standard of Care.
    An attorney has, as a matter of law, a duty to disclose and discuss with his or her client good faith offers to settle; the failure of an attorney to disclose such information is a breach of the professional standard of care, proof of which does not require expert testimony.

      Starr & Cornell, for plaintiffs.

      Foster, Swift, Collins & Coey, P.C. (by John L. Collins and Jonathan E. Raven), for defendant Drillock.
    Before: Allen, P.J., and T. M. Burns and D. E. Holbrook, JJ.

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

   T. M. Burns, J.

Plaintiffs appeal of right a November 28, 1977, lower court order dismissing their legal malpractice action against defendant William J. Drillock on the ground that they had failed to establish through expert testimony the standard of care common to members of the legal profession. We reverse.

On January 1, 1972, plaintiff Joos was one of several passengers in an automobile that was involved in an accident with a vehicle driven by plaintiff Avery. Joos and five other passengers of the car in which she had been riding filed suit against Avery and her insurer, Auto-Owners Insurance Company. Defendant Drillock subsequently was retained by Auto-Owners to represent itself and Avery in that litigation.

Under her policy with Auto-Owners, Avery was insured to a maximum of $40,000 per accident and $20,000 per person. All plaintiffs except Joos settled with Avery prior to trial for sums that totalled $23,000. Although Joos offered to settle her claim within Auto-Owners’ remaining liability under the policy, no settlement occurred and she proceeded to trial where she received a jury award of $65,000, exclusive of interest and costs.

Some time in April of 1977, Avery and Joos, to whom Avery had assigned a portion of her purported claim, filed the instant legal malpractice suit. At the November, 1977, trial of this cause, plaintiff Avery testified that defendant Drillock never informed her, prior to the beginning of the automobile negligence trial, that Joos had made several offers to settle within the limits of the policy. It was only on the first day of that trial that she became aware that Joos was willing to settle within the available insurance coverage.

Although she attempted to persuade defendant to settle he advised her that he could not do so because he did not have authority to settle for the amount proposed by Joos. Defendant further told her that she should put a statement on the record as to her desire to settle within the limits of the policy. Plaintiff Avery did so. Finally, Avery testified that on the second day of the prior trial, defendant advised her that he had received authority to settle. When she responded that she would like to have the case settled, defendant refused to do so because he thought he could "beat the case”.

Following the completion of plaintiff Avery’s testimony, plaintiffs rested their case. Defendant moved to have plaintiffs’ case dismissed on the ground that plaintiffs had failed to offer expert testimony to establish the standard of care owed by an attorney or a breach of that standard. The lower court agreed and dismissed plaintiffs’ action. Plaintiffs now appeal and we reverse.

The issue presented, as to whether a plaintiff in a legal malpractice action must offer expert testimony as to the standard of care to which an attorney will be held and as to a violation of that standard, has not been addressed previously by any published Michigan authority. As a general principle, an attorney must bring to bear the skill, learning, and ability of the average practitioner of law when conducting legal business for a client. He or she must exercise ordinary care or diligence in the prosecution of the client’s interests. Babbitt v Bumpus, 73 Mich 331; 41 NW 417; 16 Am St Rep 585 (1889), 7 Am Jur 2d, Attorneys at Law, § 168, pp 146-147.

In our attempt to resolve the issue before us, we have been guided somewhat by Michigan case law authority in the area of medical malpractice. The commonly held rule in medical malpractice cases is that expert testimony is a prerequisite to a plaintiff-patient’s right to recover from either a physician or a hospital. Bivens v Detroit Osteopathic Hospital, 77 Mich App 478, 488; 258 NW2d 527 (1977), rev’d on other grounds 403 Mich 820 (1978). However, this is not an absolute principle of law devoid of exceptions.

In Lince v Monson, 363 Mich 135; 108 NW2d 845 (1961), the Michigan Supreme Court held that where the absence of professional medical care was so manifest that within the common knowledge and experience of ordinary laymen it could be said that the conduct was careless, a plaintiff could maintain a medical malpractice action without the necessity of offering expert medical testimony as to the standard of care in the medical community. See also, Haase v DePree, 3 Mich App 337; 142 NW2d 486 (1966).

Although there is no uniformity of decision in the cases of other states that have addressed and resolved the present issue, we note that certain jurisdictions have applied a rule in legal malpractice actions similar to the rule used in Michigan for medical malpractice actions.

In Wright v Williams, 47 Cal App 3d 802, 810; 121 Cal Rptr 194 (1975), the California Court of Appeals held:

"While California law holds that expert testimony is admissible to establish the standard of care applicable to a lawyer in the performance of an engagement and whether he has performed to that standard * * *, it by no means clearly establishes the parameters of the necessity of expert testimony to the plaintiffs burden of proof. In some situations, at least, expert testimony is not required. * * * In some circumstances, the failure of attorney performance may be so clear that a trier of fact may ñnd professional negligence unaided by the testimony of experts. ” (Emphasis supplied.)

Similarly, in Baker v Beal, 225 NW2d 106 (Iowa, 1975), the Iowa Supreme Court recognized that some malpractice cases may present situations in which proof of negligence is so clear and obvious that a trial judge could rule as a matter of law that an attorney had not met the applicable standard of care. The Iowa court cited as an example of such obvious negligence the failure of an attorney to prosecute a case within the applicable statute of limitations. See also, Central Cab Co v Clarke, 259 Md 542; 270 A2d 662 (1970), and Hill v Okay Construction Co, Inc, 312 Minn 324; 252 NW2d 107 (1977).

Although proof of purported negligence arising from pretrial or trial strategy may or may not require expert testimony, plaintiffs’ allegation that defendant breached the applicable standard of care when he failed to inform Avery of the offers by Joos to settle prior to trial and their allegation that he refused to settle on the second day of trial when he received authority to do so does not. We do not hesitate to hold that under the allegations of facts before us, an attorney has, as a matter of law, a duty to disclose and discuss with his or her client good faith offers to settle. It is well within the ordinary knowledge and experience of a layman jury to recognize that, under facts such as those alleged in the instant case, the failure of an attorney to disclose such information is a breach of the professional standard of care.

Reversed and remanded for further proceedings consistent with this opinion. Costs to abide final outcome of this litigation.

       See Anno: Admissibility and Necessity of Expert Evidence as to Standards of Practice and Negligence in Malpractice Action Against Attorney, 17 ALR3d 1442, collecting and discussing cases on this point from various jurisdictions.

       We express no opinion as to whether plaintiffs can prove their allegations by a preponderance of the evidence. We merely state that if they can, then they are entitled to a judgment.