author: R. H. Campbell, J. Danhof, C.J.

text:
    GREEN v FEDERAL KEMPER INSURANCE COMPANY
    Docket No. 77-2623.
    Submitted June 7, 1978, at Grand Rapids.
    Decided February 5, 1979.
    Leave to appeal denied, 406 Mich 964.
    Eleanor Green, the mother and guardian of Tanis Green, brought an action against Federal Kemper Insurance Company seeking a declaratory judgment that 24-hour private-duty nursing services were reasonably necessary for the care of Tanis, who was injured in an automobile accident, and that the defendant was obligated to pay for those services under the terms of its automobile insurance policy. A judgment was entered in favor of plaintiff, Montcalm Circuit Court, Paul Nicolich, J. The defendant appeals, alleging error in the admission of testimony of registered nurses to the effect that private-duty nursing services were necessary. Held:

    The trial court did not abuse its discretion by allowing the testimony of the nurses. They were familiar with nursing care and each had spent considerable time caring for Tanis Green.
    Affirmed.
    Danhof, C.J., dissented. Although he would agree that admission of the nurses’ testimony was not an abuse of discretion, he would hold that this testimony was not sufficient to raise a jury question as to whether the nursing services were necessary in the face of testimony by two of the doctors in charge of the patient’s care that such nursing services were not necessary. The fact that the witnesses are nurses does not necessarily indicate that they are competent to give expert opinion on the necessity for nursing care. It is the physician who is responsible for making that decision and who bears the responsibility for his decision. Judge Danhof is in favor of a rule which would require physicians to give expert testimony on the necessity of a particular treatment, in order to more effectively resolve the issues involved and further the goal of the no-fault automobile insurance statute, which is to avoid litigation.

      References for Points in Headnotes

       31 Am Jur 2d, Expert and Opinion Evidence §§ 3, 16-18, 26, 27, 30, 31,105.

       4 Am Jur 2d, Appeal and Error § 399.

       75 Am Jur 2d, Trial §§ 336-343.

       31 Am Jur 2d, Expert and Opinion Evidence §§ 26, 27, 95, 103, 105.

      Opinion op the Court
    1. Witnesses — Expert Witnesses — Nurses — Necessity for Nursing Services.
    A trial court did not abuse its discretion in allowing testimony by registered nurses regarding the necessity for 24-hour private-duty nurses to properly care for a victim of an automobile accident, in an action to enforce payment for such services under an automobile insurance policy, where each of the nurses testifying was familiar with nursing care and had spent considerable time caring for the victim.
    2. Witnesses — Expert Witnesses — Nurses — Necessity for Nursing Services.
    A trial court did not abuse its discretion in allowing a private-duty nurse who had witnessed a patient’s breathing problems to testify as to whether the patient would have stopped breathing if a private-duty nurse had not been present.
    3. Appeal and Error — Prejudice — Testimony — Waiver.
    A party who has attempted to draw the Court of Appeal’s attention to an instance of allegedly prejudicial testimony but who has not stated who gave the testimony or supplied the Court with any transcript reference so that it could be easily located has thereby waived any prejudice which the testimony may have caused.
    Dissent by Danhof, C.J.
    4. Witnesses — Expert Witnesses — Evidence — Sufficiency — Jury Question — Nurses — Doctors — Need for Services.

      Testimony by three nurses that the services of private-duty nurses were necessary to properly care for an accident victim was not sufficient to raise a jury question as to whether the services were reasonably necessary in the face of testimony to the contrary by two qualiñed, unbiased physicians who had been caring for the patient.

      5. Witnesses — Expert Witnesses — Nurses — Need for Services.

      The practice of nursing does not include acts of medical diagnosis or the prescribing of a medical remedy, treatment or medication; therefore, the fact that a witness is a nurse does not necessarily indicate that the witness is competent to give

      expert testimony on the necessity for providing a patient with 24-hour private-duty nursing services.

    6. Witnesses — Expert Witnesses — Physicians and Surgeons — Nurses — Need for Services.

      Testimony regarding the necessity for providing a patient with private-duty nurses should come from physicians rather than nurses.

      Rensberry & Foster, P.C. (by Richard G. Ben-singer), for plaintiff.

      Cholette, Perkins & Buchanan (by Edward D. Wells, Kenneth L. Block and Don V. Souter), for defendant.
    Before: Danhof, C.J., and V. J. Brennan and R. H. Campbell, JJ.

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

   R. H. Campbell, J.

After plaintiff’s daughter, Tanis Green, had been hospitalized for injuries she had received in an automobile accident, plaintiff filed suit in Montcalm County Circuit Court claiming that private duty nurses were reasonably necessary for her daughter’s care and that under MCL 500.3107; MSA 24.13107 defendant was obligated to pay for their services. A jury found that such services were reasonably necessary and that defendant should bear their cost. Defendant now appeals.

Defendant first contends that reversible error was committed when the trial court allowed registered nurses to testify that in their opinion private duty nurses were reasonably necessary for the care of Tanis Green. It is this Court’s opinion that the trial judge did not abuse his discretion by allowing this testimony. Plaintiff’s expert witnesses did not prescribe medical treatment nor attempt any diagnosis of the patient. Each of these witnesses had a sound nursing education and considerable experience and each was familiar with the specialized treatment and care that a nurse had to provide a patient. Each witness had also spent a considerable amount of time acting as a private nurse for Tanis Green and thus each was aware of the amount of time and effort that was needed to provide her with the proper level of nursing care. Because these nurses were familiar with nursing care and knew from experience how much time had to be expended in properly caring for Tanis Green, this Court does not believe that the trial court abused its discretion by allowing them to testify that private nurses, who would be constantly on duty, were necessary to properly care for the patient. Although the defendant had doctors who testified that private nurses were not necessary in order to give reasonable care to Tanis Green, it was for the jury to weigh the evidence and render a verdict.

Defendant’s second contention of error is that John Vander Laan should not have been allowed to state that in his opinion Tanis Green would have stopped breathing if a private nurse had not been constantly on duty. It is this Court’s opinion that the trial court did not abuse its discretion by allowing such testimony. The witness was a qualified registered nurse who had cared for the patient. He testified that she occasionally suffered from severe spasms and that on one occasion he had actually seen her turn blue because she had had trouble breathing. Based on this actual experience with the patient’s breathing problems, this Court believes that the witness was qualified to give his opinion on whether the patient would have stopped breathing if a private duty nurse had not been present.

Defendant’s final contention of error is that it was prejudiced when plaintiffs witnesses testified about the deaths of several other patients in the hospital. Defendant has attempted to draw our attention to one such instance by noting that there was "testimony that one person died”. Defendant, however, has not stated who gave such testimony nor has it supplied this Court with any transcript reference so it could be easily located. As a result, it is this Court’s opinion that defendant has waived any prejudice which this remark may have caused. See Mitcham v Detroit, 355 Mich 182; 94 NW2d 388 (1959).

Defendant also argues that it was prejudiced when John Vander Laan testified about the death of one of his patients. Defendant did not object to this line of questioning and it is this Court’s opinion that this issue has not been preserved for appeal.

The jury’s verdict is affirmed.

V. J. Brennan, J., concurred.

Danhof, C.J.

(dissenting). On July 25, 1975, plaintiff’s daughter Tanis Rae Green received serious injuries when the automobile in which she was riding was involved in an accident. Since then, she has been and still is completely comatose. Plaintiff commenced this suit seeking a declaratory judgment to the effect that 24-hour private duty nursing care is a reasonably necessary medical service for the care of Tanis and requiring defendant to reimburse her for the costs of this service under the provisions of its no-fault automobile insurance contract, see also, MCL 500.3107(a); MSA 24.13107(a). The jury found that private duty nurses were reasonably necessary and defendant appeals claiming that reversal is required because the court erroneously admitted into evidence certain opinion testimony as to the necessity of these services.

Following the accident, Tanis was taken to Greenville Memorial Hospital and then to the emergency room at Blodgett Hospital. There she came under the care of her own physician, Dr. Grin. She had suffered a severe brain injury and surgery was performed to remove a small clot. A bone was also removed to allow the injured brain room to swell. Since Tanis was in a coma, she was provided with a nasal-gastric feeding tube, a tracheotomy tube and a catheter to assist her body functions.

On August 11, 1975, Tanis was transferred to Kent Community Hospital, an extended care facility. On August 13, 1975, she returned to Blodgett because she was suffering from pneumonia and other complications. On August 20, 1975, Dr. Grin ordered private duty nurses for Tanis. She was moved back to Kent Community on September 8, 1975, without any private duty nurses. On December 22, 1975, she again returned to Blodgett because a bulge had developed in the place where the bone had been removed during her earlier surgery. A shunt was put in to control any possible obstructions in the circulation of spinal fluid. On December 30, 1975, Tanis was transferred back to Kent Community where she has been since that time. She still requires the use of a nasal-gastric tube, a tracheotomy tube and a catheter.

At trial, Dr. Grin testified as follows:

"Basically private-duty nurses in my opinion, and this is solely my opinion, are really there for sort of comfort activities of the patient. Frequently the patients who have them are socially prominent people who want private-duty nurses.
"I frankly believe that medically in terms of delivering care that can’t be delivered by hospital nurses, that they’re less capable than a floor nurse.
"Hospitals have a variety of levels of care starting at the ICU and coronary care unit on down to some hospitals that have what’s called an ambulatory care unit, a unit in which there’s minimal nursing.
"In my opinion, if a patient needs private-duty nursing, then they need to be in the intensive care unit, where the nurses there are trained, continue to be trained, deal day in and day out with critically ill patients, as opposed to private-duty nurses who many times are people who have been out of floor nursing for several months or years, who really aren’t involved with critical patient care on a day in and day out basis.”

Dr. Martinus, who was the doctor in charge of Tanis at Kent Community, explained why he thought private duty nurses were not reasonably necessary. He testified that:

"Well, sir, we have—I personally, not only does the hsopital, but I personally care for other patients who are in a similar condition as Miss Green, and we care for these patients with ou[r] staff and provide them all the care that is reasonably necessary. And personally I feel that we do that very well.
"We specialize in that; that’s something that we feel we know how to do well. And patients come from other hospitals for us to give that kind of care.”
"Well, from my observation of this patient that there is no need for a nurse to be in attendance at 24 hours of the day. Nothing changes that much that requires that constant supervision. Periodic checkups that all patients that have a similar condition to hers would be adequate to check all the different systems that are present, and all the different tubes that are functioning, and the feedings would be given at regular intervals and so forth.”
"As a physician I never hired them, and physicians don’t hire private-duty nurses. Families, I understand, do. And so I did not hire them. So I do not write an order that they should be discharged. I think they are aware of my feelings however, that we could care for the patient without doubt, we could care, we’re doing it all the time with others. We have as many as 20 out of 40 on one- wing, will be tube feeders. So there’s no problem.”

Plaintiff countered this testimony by introducing testimony, over objection, from three nurses who testified that, in their opinion based on their experiences and observations, private duty nurses were reasonably necessary. Each of these witnesses had cared for the patient and observed her condition. Defendant made a motion for a directed verdict which was denied by the trial court.

While I agree with the majority that the trial court did not abuse its discretion in admitting these nurses’ testimony into evidence, I conclude that this testimony was not sufficient in the face of the physicians’ testimony to the contrary to raise a jury question as to whether these services were reasonably necessary. Accordingly, the trial court should have granted defendant’s motion for a directed verdict. Dr. Grin was the patient’s own doctor. There was no assertion that he was biased or unconcerned. Dr. Martinus was in charge of Tanis’s care at Kent Community. These doctors were not employed or chosen by the insurance company. There is no question as to their ability or competence. Considering these facts, the testimony given by the nurses was not sufficient to raise a jury question as to whether these services were reasonably necessary in the face of contrary testimony by qualified, unbiased physicians. I reach this conclusion for three reasons.

First, the decision as to whether to prescribe private duty nurses is not normally entrusted to nurses. By statutory definition, the practice of nursing does not include acts of medical diagnosis or the prescribing of a medical remedy, treatment or medication. MCL 338.1152(b); MSA 14.694(2)(b). Therefore, the fact that these witnesses are nurses does not necessarily indicate that they are competent to give expert testimony on this issue. Furthermore, plaintiff has not shown that any of these nurses had any experience in deciding, in similar cases, whether a given level of care was sufficient or whether private duty nurses should be provided.

The second reason I conclude that this testimony should come from physicians is that it is the physician who is responsible for making this decision. The practice of medicine "means to diagnose, treat, prevent, cure * * * a human disease * * * by attendance or advice”, MCL 338.1802(g); MSA 14.542(2)(g). Physicians are trained and experienced in making these decisions. Their job and responsibilities require that they be aware of the various care facilities and possibilities that are available. They are trained to assess the needs of the patient and the capacity of various facilities to meet these needs. They should be familiar with the options or combinations of them which could be provided to the patient. After evaluating all these options in this case, the physician determined that the care given at the extended care facility was sufficient and that private duty nurses were not reasonably necessary at this time.

Also, it is the physician who bears the burden of responsibility for his decision on these questions of treatment. It is the physician, if he fails to satisfy the appropriate standard of due care, who will be liable for his malpractice. Providing that the nurses do not fail to meet their standard of care in treating the patient, they are not responsible for the physician’s error in deciding whether to prescribe private duty nurses, see, Butler v Cadwell Memorial Hospital, 90 Idaho 434; 412 P2d 593 (1966). Since it is the physicians who shoulder this responsibility, they should be the ones who testify as to the necessity of a medical treatment.

In this case, there is no evidence that the treatments and procedures prescribed by the physicians were inadequate or different from the ordinary methods and standards of practice observed by physicians. The evidence introduced in this case indicated that Tanis received very good care. She was originally cared for at an acute care facility where surgery was performed. After surgery, Tanis was transferred to an extended care facility. When complications developed, she was moved back to the acute care facility. These transfers demonstrate that the doctor would order additional care for her when the situation warranted it. The doctor even ordered private duty nurses for Tanis when she had pneumonia at Blodgett.

Except for their differences in opinion as to the current necessity of private duty nurses, all the parties appear to agree that Dr. Grin is an excellent doctor. He has undertaken many complicated medical procedures in an effort to save Tanis’s life. He has had her transferred to an acute care facility when he concluded that it was necessary. The doctor concluded that the care provided at Kent Community was adequate to meet the patient’s needs at this time. Kent Community is one of the few extended care facilities in this state and it was undisputed that it was one of the best facilities in the state for providing extended care. Tanis was placed in a single room. The room is the closest room to one of the nursing stations on the floor.

Finally, while I certainly understand and sympathize with the position of the plaintiff, mother of this unfortunate accident victim, I think'the better result in these cases is to require the expert testimony of a physician on these complex issues concerning the necessity of medical treatment. Plaintiff is seeking to have the insurer pay for these services pursuant to a no-fault automobile insurance policy. One of the goals of the new accident victim reparation system is to provide a prompt, less expensive method of reparation, see, Shavers v Attorney General, 402 Mich 554, 579; 267 NW2d 72 (1978). One of the methods for achieving this goal was to eliminate the necessity of going through a trial in almost every case to resolve who was at fault and the extent of damages.

Requiring physicians to give expert medical testimony on the complex issues of the necessity of one form of treatment as compared with others can further the goal of avoiding litigation in many cases. If the physician’s expert opinion is competent to establish what is reasonably necessary in complex settings, this may effectively resolve many of these issues. Unless possibly the physician is biased, incompetent, or unless there is a conflict among the physicians, the insured and insurer might no longer consume precious amounts of time and energy disputing these issues. Rather, they would follow the physician’s advice and begin whatever treatments were reasonably necessary to care for the injured person.

The rule may not only help assure prompt resolution of these issues and the starting of treatment, but it might also provide a greater amount of certainty and predictability in this area. Such a rule might permit insurers to more accurately calculate the extent of the risk they are undertaking. Also, the implementation of this rule does not necessarily mean that less coverage will be provided for the injured insured. Although this appears to be the immediate result in this case, the result would change if Tanis’s condition changed so that, in the opinion of her physician, she either needed to be transferred to an acute care facility or needed private duty nurses. Dr. Grin had ordered these procedures before when they were needed and presumably he would do so in the future. Also, in other cases, this rule could benefit the injured insured. There are cases in which the physician would say that a treatment is reasonably necessary even though the insurer would dispute that conclusion with other opinion evidence. However, it must be recognized that this rule will not resolve all possible disputes. In these complex cases, there are many instances in which the physicians might disagree on whether a treatment was reasonably necessary. In such cases, no one physician’s opinion would be controlling. If no compromise or concensus was reached, the case would go to the jury on the basis of the physicians’ expert testimony. The no-fault act itself appears to contemplate that the opinions of physicians should be sought out and received in court by providing for discovery of these opinions, see, MCL 500.3151; MSA 24.13151. Although the statute does not expressly require a physician to give expert testimony on these issues, compare Del Code, Tit 21, § 2118(a)(2)a3, I conclude that the more just result would be to read such a requirement into the statute and insurance policy in the absence of any indication that another standard was intended to be applied.


source: Caselaw Access Project

author: J. H. Gillis, J.

license: Public Domain

text:
    SAFRAN PRINTING COMPANY v CITY OF DETROIT
    Docket Nos. 77-2799, 77-2800, 77-2801.
    Submitted November 2, 1978, at Lansing.
    Decided February 5, 1979.
    Leave to appeal applied for.
    Safran Printing Company appealed to the Tax Tribunal the valuations placed upon its printing plant, office and warehouse by the City of Detroit for purposes of assessing property taxes. The Tax Tribunal made a determination of true cash value of the property and Safran appeals, alleging that the tribunal applied an improper standard in calculating the property’s value for taxation purposes. Held:

    1. True cash value for taxation purposes is synonymous with fair market value, and is the usual selling price which could be obtained for the property at a private sale. The tribunal improperly considered the market value as only a guideline for determining valuation; fair market value is the standard to be used, not merely a guideline.
    2. The tribunal also apparently gave much weight to the use which was being made of the property. While existing use may normally be indicative of the use to which a buyer would put the property, in this case the property was ill-suited to its use as a printing plant. Both parties agreed that if it were to be sold, the property would most likely be sold as a warehouse. Therefore, the existing use bore no relationship to the price a likely buyer would pay for the property.
    3. The tribunal improperly characterized the property as unique. Merely because property is put to an unusual use does not render it unique for purposes of property taxes.
    Remanded.
    1. Appeal and Error — Taxation — Appeal from Tax Tribunal — Constitutional Law.
    Appellate review of decisions of the Tax Tribunal is limited by the constitution to cases involving fraud, error of law, or the adoption of wrong principles (Const 1963, art 6, § 28).

      References for Points in Headnotes

       5 Am Jur 2d, Appeal and Error §§ 702, 820.
    72 Am Jur 2d, State and Local Taxation § 787.

       72 Am Jur 2d, State and Local Taxation §§ 753, 754, 759.

       72 Am Jur 2d, State and Local Taxation §§ 753-756.

       72 Am Jur 2d, State and Local Taxation § 759.

      2. Taxation — Property Taxes — True Cash Value — Fair Market Value — Statutes.
    Property is to be assessed according to its true cash value, which is defined by statute as the usual selling price at the place where the property is located, the price which could be obtained for the property at private sale, and not at forced or auction sale; the concept of true cash value is synonymous with fair market value (MCL 211.27; MSA 7.27).
    3. Taxation — Property Taxes — Fair Market Value — True Cash Value — Method of Calculation.
    Any method of calculating true cash value of property that is recognized as accurate and is reasonably related to fair market value is an acceptable indicator of true cash value.
    4. Taxation — Property Taxes — Tax Tribunal — Standard for Determination — Fair Market Value.
    The Tax Tribunal applied an improper standard to determine the value of a printing plant where the tribunal stated that the market value of the property was merely a guideline for determination of value; fair market value is the standard for determination, not merely a guideline.
    5. Taxation — Property Taxes — Fair Market Value — Guidelines — Statutes.
    The factors that are to be used as guidelines in an attempt to determine the fair market value of property for taxation purposes are those set forth by statute (MCL 211.27; MSA 7.27).
    6. Taxation — Property Taxes — Use — Fair Market Value.
    The existing use of property normally may be indicative of the use to which a potential buyer would put the property and is, therefore, relevant to the property’s fair market value; however, where the property is so ill-suited to its use that that use bears no relationship to what a likely buyer would pay for the property, reliance by the Tax Tribunal on the existing use in determining the property’s valuation is erroneous.
    7. Taxation — Property Taxes — Unique Property — Use.
    Merely because property is put to an unusual use does not render it unique for purposes of property taxes; attributing value to the property over what it could command in the market place due to its use by the owner imposes a "use tax”, not an ad valorem property tax.

      Honigman, Miller, Schwartz & Cohn (by Charles H. Tobias and Michael B. Shapiro), for plaintiff.

      Roger E. Craig, Corporation Counsel, George G. Matish, Deputy Corporation Counsel, and Carl Rashid, Jr., Assistant Corporation Counsel, for defendant.
    Before: M. J. Kelly, P.J., and J. H. Gillis and M. F. Cavanagh, JJ.
   J. H. Gillis, J.

Plaintiff, Safran Printing Company, appeals from a split decision of the Michigan Tax Tribunal fixing the valuation and assessment of two pieces of property in the City of Detroit, hereinafter referred to as the "main plant” and the "associated property”.

The main plant consists of a 7.41-acre parcel of land with a 191,000-square-foot structure owned by Safran and used by it as a printing plant. The valuation and assessment of this property is in dispute for the years 1971 through 1976. The tribunal majority found the true cash value of this property to be $767,770. Appellant contends it should be $368,000.

The associated property consists of a warehouse and two-story office building on 1.95 acres. This was purchased by Safran in 1973 for $130,000. The valuation and assessment of this property is in dispute for the years 1973 through 1976. The majority found the true cash value to be $208,000. Appellant contends it should be $135,000.

In a well written dissent, tribunal member McDonald concluded that appellant’s figures correctly reflected the true cash value of the parcels in question. We find the dissenting opinion accurately states the law on this subject and adopt its reasoning.

Appellate review of decisions of the Tax Tribunal is limited by Const 1963, art 6, § 28, which provides:

"In the absence of fraud, error of law or the adoption of wrong principles, no appeal may be taken to any court from any final agency provided for the administration of property tax laws from any decision relating to valuation or allocation.”

Safran contends the tribunal majority used an improper standard to determine the true cash value of the property. For purposes of taxation, property is to be assessed according to its true cash value. Const 1963, art 9, § 3. Ramblewood Associates v Wyoming, 82 Mich App 342; 266 NW2d 817 (1978). The Legislature has defined "cash value” as:

"[T]he usual selling price at the place where the property to which the term is applied shall be at the time of assessment, being the price which could be obtained for the property at private sale, and not at forced or auction sale. * * * In determining the value the assessor shall also consider the advantages and disadvantages of location, quality of soil, zoning, existing use, present economic income of structures, including farm structures and present economic income of land when the land is being farmed or otherwise put to income producing use, quantity and value of standing timber, water power and privileges, mines, minerals, quarries, or other valuable deposits known to be available therein and their value.” MCL 211.27; MSA 7.27. (Emphasis supplied.)

The Supreme Court has recognized that under this definition the concept of "true cash value” is synonymous with "fair market value”. CAF Investment Co v State Tax Comm, 392 Mich 442, 450; 221 NW2d 588 (1974).

There are a number of methods generally accepted for calculating true cash value. Any method which is recognized as accurate and is reasonably related to fair market valuation is an acceptable indicator of true cash value. Consumers Power Co v Big Prairie Twp, 81 Mich App 120, 130; 265 NW2d 182 (1978), Ramblewood Associates v Wyoming, supra.

In assessing the property under consideration the majority stated the following:

"The Tribunal in making its analysis of the proper true cash value of the main parcel, disagrees with the Petitioner’s approach to valuation in that the Petitioner relies on a market value for the property based on a future or alternative use while ignoring its present existing use as an industrial printing plant which we believe to be the highest and best use.
"The legislative definition of true cash value is not exclusive or inclusive. The tax laws must be read as a whole. 'The usual selling price’ or market value of property is merely a guide for the determination of property valuations. Moran v Grosse Pointe Twp, 317 Mich 248; 26 NW2d 763 (1947). As stated, in MCL 211.27; MSA 7.27, when determining value the assessor shall also consider the existing use of the property in question. However, no single factor is intended to be inclusive as to value. Basically, all related factors are to be considered. While it may seem that a sale definitely fixes market price so as to almost indisputably determine true cash value, this is not necessarily the case, particularly if the property is unique, as the subject is, and if there have been few sales in like property. Fisher New Center v State Tax Comm, 381 Mich 713; 167 NW2d 263 (1969).” (Emphasis supplied.)

The foregoing excerpt indicates the tribunal applied an improper standard to determine the value of the property in question. "Fair market value” is the standard and not merely a guideline.

In holding otherwise, the tribunal misconstrued the Supreme Court’s opinion in Moran v Grosse Pointe Twp, supra. That case indicates that a single sale is not conclusive of true cash value. The entire paragraph, from which the tribunal took a single clause, reads as follows:

"The words 'cash value’ as defined by 1 Comp Laws 1929, § 3415 (Stat Ann § 7.27) is the usual selling price that could be obtained for it at the time of assessment, but not the price obtainable at a forced or auction sale. As stated in Twenty-Two Charlotte, Inc v Detroit, 294 Mich 275, 283 [293 NW 647 (1940)]:
" 'Where property is singular in character and sales are separated by many years, there is no usual selling price in the sense the expression is used to describe the focus of buyers and sellers of commodities actively exchanged in an open market. Nor did the Legislature intend that a single event be conclusive. In the valuation problem the assessing officers had to resolve in the instant case, the test of the "usual selling price” is merely a guide for determination; under the circumstances before us the definition provides a standard for a hypothetical or fictitious market. It was the duty of the assessors to consider the factors which motivate buyers and sellers to exchange their interests (Olson v United States, 292 US 246 [54 S Ct 704; 78 L Ed 1236]), and to exercise their judgment in an honest effort to determine at what point the inertia to trade is overcome.’ ” (Emphasis supplied.) Moran v Grosse Pointe Twp, supra, at 254-255.

It is evident from the context that by "usual selling price” the Court was referring to a single sale that had occurred in that case. The last sentence of the paragraph indicates that the goal of the assessors is to determine "at what point the inertia to trade is overcome”, or, in other words, the "fair market value”.

The fair market value of real property, unlike stocks traded on a national exchange, is often difficult to determine. It is for this reason the Legislature set forth a list of factors to be considered, such as location, zoning, existing use, etc. MCL 211.27; MSA 7.27. It is these factors that are to be used as guidelines in an attempt to determine the fair market value of a piece of property.

In the instant case the tribunal apparently attributed great weight to the fact that the subject property was being used as a printing plant, stating that this was the highest and best use of the property. Normally, existing use may be indicative of the use to which a potential buyer would put the property and is, therefore, relevant to the fair market value of the property. However, in this case it is undisputed that the property is obsolete, inefficient, and could not be sold as a printing plant. Only the prohibitive cost prevents Safran from relocating. It is evident, therefore, that under the facts of this case the existing use of the property bears no relationship to what a likely buyer would be willing to pay for it.

Experts for both parties agreed that if sold, the property would most likely be sold as a warehouse. The fact that Safran does not intend to sell is of no relevance for it is the duty of the tribunal to hypothesize the highest probable price at which a sale would take place.

By expressly rejecting the usual selling price or fair market value standard and attributing a significant amount of value to the existing use of the property where such use bears no relationship to what a likely buyer would pay for the property, the tribunal used a wrong principle of evaluation.

The majority defends its position by characterizing the property as unique. It appears that the only thing particularly unique about the property is the fact that it is used as a printing plant despite being ill-suited for that purpose. In Moran v Grosse Pointe Twp, supra, the property in question consisted of an elaborate home on Windmill Pointe abutting Lake St. Clair. Fisher New Center Co v State Tax Comm (On Rehearing), 381 Mich 713; 167 NW2d 263 (1969), was concerned with a major office complex in the City of Detroit. In both of these cases it was the physical attributes of these properties which made them unique.

Merely because property is put to an unusual use does not render it unique for purposes of property taxes. While the main plant in the instant case has some unusual features, the majority tribunal opinion fails to specify any physical factors which distinguish it from numerous other buildings, in the area used as warehouses.

As the dissenting tribunal opinion points out, attributing value to the property over what it could command in the market place due to its use by the owner imposes a "use tax”, not an ad valorem property tax.

The case is remanded for a determination of the price the property would most likely bring if it were put upon the market. This is the "true cash value”. No costs, a public question being involved.


author: V. J. Brennan, J.

text:
    GARCHOW v DEPARTMENT OF CIVIL SERVICE
    Docket No. 77-2967.
    Submitted April 4, 1978, at Lansing.
    Decided February 5, 1979.
    Plaintiff, Frederick G. Garchow, an officer and polygraph examiner for the Michigan State Police, submitted a request to his superiors for permission to engage in part-time employment as a polygraph examiner for private individuals. This request for supplemental employment was originally approved by his immediate superiors. However, this request was ultimately denied by plaintiffs appointing authority because of a possible conflict of interest.
    Plaintiff pursued his civil service grievance procedure. A hearing was conducted and the civil service hearing officer rendered an opinion denying the plaintiffs request on grounds that a "reasonable foreseeability of conflict of interest” existed and that existing rules could properly be used to support the denial of the plaintiffs request. The plaintiffs application for leave to appeal to the Michigan Civil Service Commission was denied.
    The plaintiff subsequently filed a petition in Ingham Circuit Court for review of the hearing officer’s decision. Thomas L. Brown, J., held that the denial of the plaintiffs request to engage in supplementary employment was not supported by competent, material and substantial evidence on the whole record and thus that no factual foundation for the denial existed. Consequently, he reversed the ruling of the hearing officer. The Michigan Department of Civil Service and the Department of State Police appeal, contending that the hearing officer’s ruling was supported by competent, material and substantial evidence that the plaintiffs' application correctly was denied due to the potential for conflict of interest. Held:

    The department rules of the civil service and the state police in such cases focus upon the presence of conflict of interest with existing state employment. Therefore, the Court of Appeals is limited on appeal in this case to determining whether the hearing record discloses "competent, material and substantial evidence” for the denial of plaintiffs request. The only evidence on the hearing record which supported the denial of the request was the conclusions and opinion testimony of an officer of the state police, which were not based on substantial empirical data or practical experience. There was no “competent, material and substantial evidence” in the record to justify the finding of the hearing officer.

      References for Points in Headnotes
    [1, 4]63 Am Jur 2d, Public Officers and Employees g 280.

       2 Am Jur 2d, Administrative Law §§ 550, 617, 678-691.

      The circuit court decision is affirmed.
    1. Administrative Law — State Employees — Supplemental Employment — Conflict of Interest — Statutes.
    The test to be used to determine the propriety of requests by public officers or employees for supplemental employment is the potential for conflict of interest between the supplemental employment and existing state employment (MCL 15.342; MSA 4.1700[72], since repealed).
    2. Appeal and Error — Administrative Law — Constitutional Law — Evidence.
    All final decisions, findings, rulings and orders of any administrative officer or agency existing under the constitution or by law, which are judicial or quasi-judicial and affect private rights or licenses, are subject to direct review by the courts as provided by law; this review shall include, as a minimum, a determination whether such final decisions, findings, rulings and orders are authorized by law, and in cases where a hearing is required, whether the same are supported by competent, material and substantial evidence on the whole record (Const 1963, art 6, §28).
    3. Appeal and Error — Administrative Law — Review — Evidence.
    A judicial review of an administrative decision to determine whether it is supported by competent, material and substantial evidence on the whole record considers the whole record, not just those portions supporting the findings of the administrative agency; such a review does not attain the status of de novo review, but necessarily entails a degree of qualitative and quantitative evaluation of evidence considered by the agency.
    4. Administrative Law — State Employees — Supplemental Employment — Conflict of Interest — Evidence.
    The mere logical possibility for conflict of interest between a state employee’s proposed supplemental employment and his state employment will not serve on appeal as a proper evidentiary basis for upholding the denial of the employee’s request for supplemental employment.

      Fleming & Treciak, for plaintiff.

      Frank J. Kelley, Attorney General, Robert A. Derengoski, Solicitor General, and Michael J. Hodge, Assistant Attorney General, State Affairs Division, for defendants.
    Before: Allen, P.J., and V. J. Brennan and M. F. Cavanagh, JJ.
   V. J. Brennan, J.

Defendants Michigan Department of Civil Service and Department of State Police appeal the decision of Ingham County Circuit Court Judge Thomas L. Brown reversing the ruling of hearing officer Susan Schoettler upholding defendants’ denial of plaintiff’s request for supplemental employment. Plaintiff, a polygraph examiner employed with the State Police, was denied his request on the grounds that conflict of interest potentially existed between his duties as a State Police officer and any supplemental employment he might take. Defendants appeal as of right pursuant to GCR 1963, 806.1.

The facts of this case bear repetition. Plaintiff has been a Michigan State Police Officer for more than 20 years and has been employed as a polygraph examiner for approximately 7 years. On March 10, 1975, plaintiff sought permission from his superiors to engage in part-time employment as a polygraph examiner for private individuals. Though originally approved by his immediate superiors, plaintiff’s request was ultimately denied by his appointing authority for the reason that "a polygraph examiner employed to run tests on a civil case could have disclosers [sic] made to him of a criminal nature thereby obligating him to act in his capacity as a police officer and violating his trust to the employer”.

Plaintiff pursued his civil service grievance procedure and on August 15, 1975, a hearing on the matter was conducted before hearing officer Susan Schoettler. At that hearing, plaintiff testified that the employment he sought would occupy no more than approximately 10 hours per month and that he would scrupulously avoid any matters which might raise the prospect of a conflict of interest. He would do so by strictly avoiding criminal matters.

Kent County Sheriff Philip Heffron testified that he had been a polygraph expert for the Kent County Sheriff’s Office from 1969 until he became sheriff, several months before the hearing. Sheriff Heffron is a licensed polygraph examiner. During the time he performed duties as a polygraph examiner for the Kent County Sheriff’s Office, he also engaged in part-time employment as a polygraph examiner for private individuals. He testified that by exercising care and being selective, conflicts of interest could easily be avoided. He testified at length regarding the nature of the part-time employment and its relation to his official duties. He testified that such part-time employment in no way conflicted with the performance of his official duties.

Major William Hassinger testified that he recommended the denial of plaintiff’s request for supplemental employment. Major Hassinger testified that he is not a polygraph examiner. He testified that he denied plaintiff’s request for supplemental employment because he felt that such employment conflicted with the rules of the department and the Civil Service Commission. He testified that he felt such employment would place plaintiff in a compromising position in his capacity as a police officer.

On October 16, 1975, Civil Service Hearing Officer Schoettler rendered an opinion denying plaintiffs grievance on grounds that a "reasonable foreseeability of conflict of interest” existed and that existing rules could properly be used to support the denial of plaintiff’s request. Plaintiffs application for leave to appeal to the Michigan Civil Service Commission was denied.

On July 26, 1976, plaintiff filed a petition in Ingham County Circuit Court for review of the hearing officer’s decision. In an opinion filed July 13, 1977, Ingham County Circuit Judge Thomas L. Brown held that the denial of plaintiffs request to engage in supplementary employment was not supported by competent, material and substantial evidence on the whole record and thus that no factual foundation for the denial existed. Consequently, he reversed hearing officer Schoettler’s ruling.

On appeal, defendants contend that the finding of the Civil Service Hearing Officer was supported by competent, material and substantial evidence and that plaintiffs application was correctly denied because of the potential for a conflict of interest.

Plaintiff Garchow sought supplementary employment in his expert capacity as a polygraph examiner. He projected that the time involved would amount to approximately 10 hours per month. The denial of such supplementary employment by his superior officiers and the hearing examiner was based on Civil Service Commission Rule 8.5a, Department of State Police Official Order No. 61 of August 18, 1971, and 1973 PA 196 regarding standards of conduct and ethics of public employees. Civil Service Commission Rule 8.5a states:

"8.5 Supplementary Employment. No employee shall hold a full-time job, or its equivalent, in addition to. his regular full-time state employment. Supplementary employment is not encouraged but is permitted under the following conditions:
"8.5a. That the additional employment must in no way conflict with the employee’s hours of state employment, or in quantity or interest conflict in any way with satisfactory and impartial performance of his state duties.”

Department of State Police Official Order No. 61 states, in relevant part, as follows:

"B. Supplementary Employment.
"Supplementary employment is not encouraged but is permitted under proper conditions.
"State and other governmental employment, much more than private employment, is open to public view and critical scrutiny. State employees therefore must consider that what they do as individuals will reflect on the state service either to its credit or discredit. For this reason, a state employee should not engage in any employment supplementary to his state work without carefully considering its possible effect on himself, his state job, and on the state service as a whole.
"(1) An employee, if he desires may hold a part-time job in addition to his regular full-time employment. This additional employment must in no way conflict with the employee’s hours of work, or interfere in any way with the satisfactory and impartial performance of his duties.
"(2) Part-time employees shall not perform work for another employer which in quantity or nature interferes in any way with the rendering of satisfactory and impartial service.
"(3) Any supplementary part-time employment of full-time or part-time employees shall be in work sitúations which are in no way related to the employee’s official duties; which would not in any way interfere with the rendering of completely impartial service and employment loyalty to the state; or which would in any way prevent the satisfactory fulfillment of duties as a state employee.”

The standards of conduct and ethics of public employees, passed as 1973 PA 196 (MCL 15.342; MSA 4.1700[72], since repealed) specifies further standards of behavior:

"(5) A public officer or employee shall not engage in a business transaction in which he may profit from his official position or authority or benefit financially from confidential information which he has obtained or may obtain by reason of such position or authority.
"(6) A public officer or employee shall not engage in or accept employment or render services for any private or public interest when that employment or service is incompatible or in conflict with the discharge of his official duties or when that employment may tend to impair his independence of judgment or action in the performance of his official duties.”

Consequently, the rules of departmental procedure and state standards of ethics indicate that the test to be used to determine the propriety of requests for supplemental employment would be the potential for conflict of interest with existing state employment. Hearing officer Schoettler found such potential conflict of interest and upheld the departmental denial of plaintiffs request. However, on review of the hearing provided plaintiff by officer Schoettler, we review that decision according to the specific standard recently noted by this Court:

"The Michigan Supreme Court noted the following scope of review for administrative decisions in University of Michigan Regents v Employment Relations Commission, 389 Mich 96, 101; 204 NW2d 218 (1973):
" 'The proper scope of review of an opinion of an administrative agency is controlled both by constitution and statutory provision. Article 6, § 28 of the 1963 Constitution provides:
' " 'All final decisions, findings, ruling and orders of any administrative officer or agency existing under the constitution or by law, which are judicial or quasi-judicial and affect private rights or licenses, shall be subject to direct review by the courts as provided by law. This review shall include, as a minimum, the determination whether such final decisions, findings, rulings and orders are authorized by law; and, in cases in which a hearing is required, whether the same are supported by competent, material and substantial evidence on the whole record.’ ”
"What the Supreme Court means by 'competent, material and substantial evidence on the whole record’ was determined in Michigan Employment Relations Commission v Detroit Symphony Orchestra, Inc, 393 Mich 117, 124; 223 NW2d 283 (1974):
" 'The cross-fire of debate at the Constitutional Convention imports meaning to the 'substantial evidence’ standard in Michigan jurisprudence. What the drafters of the Constitution intended was a thorough judicial review of administrative decision, a review which considers the whole record—that is, both sides of the record—not just those portions of the record supporting the findings of the administrative agency. Although such review does not attain the status of de novo review, it necessarily entails a degree of qualitative and quantitative evaluation of evidence considered by an agency.’ ” Masters v Highland Park, 79 Mich App 77, 82-83; 261 NW2d 215 (1977).

Therefore, because the clear language and import of defendants’ departmental rules focus upon the presence of conflict of interest with existing state employment, we are limited on appeal in this case to determining whether the hearing record discloses "competent, material and substantial evidence” for defendants’ denial of plaintiff’s request. Despite the careful record provided by officer Schoeitler, we do not believe competent, material and substantial evidence appears to justify her decision.

The only evidence in support of the finding against the plaintiff was the opinion testimony of Major Hassinger. However, we find his testimony was not the product of any substantial empirical data or practical experience. Rather his statements were fundamentally conclusory:

"Number two, I feel that conflicts with our department rules. I feel it’s a conflict of the Department of Civil Service Rules. And I feel that it conflicts with the Board of Ethics Rules as they govern the conduct of state employees.
"I also feel that outside employment of that described or requested by Sergeant Garchow, would often put him in a compromising position in his capacity as a police officer, as opposed to that of an employee of a private agency. Those are some of the reasons that I denied it.”

In fact, the thrust of Major Hassinger’s testimony reflects more the desire to establish general departmental policy than to address and fairly weigh plaintiff’s specific request. The advisability of establishing such a policy is not at issue in this case. However, to the extent Major Hassinger’s testimony does address plaintiff’s request we can see no substantial evidence to support his conclusion that supplemental employment would compromise plaintiff’s existing position with the state. The mere logical possibility for conflict of interest, however reasonably conceived, will not serve on appeal as a proper evidentiary basis for upholding the denial of plaintiff’s request. Without more on the record than simple conclusions, no "competent, material and substantial” evidence appears to justify the finding of hearing officer Schoettler.

Balanced against the absence of testimony supporting defendants’ position is substantial evidence presented in plaintiff’s behalf. Though recognizing that "historically sheriff’s departments are more lenient in their rules and regulations than are state or even city law enforcement agencies” and so recognizing further that sheriff agencies are "not governed by Civil Service rules and regulations”, still we find very persuasive Sheriff Heffron’s testimony that his experience demonstrated potential conflicts of interest between public and private supplementary employment could be easily resolved. We would also note that plaintiff did originally obtain the permission for supplemental employment from his post commander and from Detective Lieutenant Earl James, Commanding Officer of the Michigan State Police Polygraph Unit, Michigan State Crime Laboratory, whose capacity to recognize any inherent conflict of interest in plaintiff’s request would be considerable. Consequently, we find solid evidence on the record in support of plaintiff’s position.

Further, we find no conflict between plaintiff’s request and the standards of conduct and ethics provided in 1973 PA 196. Though we recognize that plaintiff’s training in polygraph examination was provided by the State of Michigan principally for the benefit of the Michigan State Police, we do not find this fact impels the conclusion that plaintiff would exploit his official position unethically were he to assume supplemental employment. There are sufficient safeguards against abusive use of this privilege. Utilization for private gain of a skill obtained incident to public employment is not prohibited so long as such use does not compromise plaintiffs primary responsibility as a police officer. We see no evidence of compromise on this record. Further, no evidence appears on the record that polygraph examination has no possible use independent of its law enforcement function. We will not impute an improper motive to plaintiff’s use of his skills in the private sector without any evidence on the record. We thus find no conflict regarding plaintiffs potential supplemental employment with the guidelines established by 1973 PA 196.

Our holding in this matter should not be construed to preclude reasonable restrictions by defendants, so long as they do not constitute a denial but rather address conflicts of interest arising in fact between defendants’ departmental requirements and plaintiff’s supplemental employment. Having considered this matter and finding defendants’ claim concerning the circuit court’s decision without merit, we affirm the court below.

Affirmed.


author: D. E. Holbrook, P.J. M. J. Kelly, J. P. J. Marutiak, J.

text:
    HUGHES v MEDICAL ANCILLARY SERVICES, INC.
    Docket No. 77-3319.
    Submitted June 16, 1978, at Lansing.
    Decided February 5, 1979.
    Leave to appeal denied, 406 Mich 962.
    Plaintiff, Donald T. Hughes, Jr., was dismissed from his employment by defendant, Medical Ancillary Services, Inc. He filed suit against his former employer alleging accrued but unpaid vacation to which he was entitled. A judgment of no cause of action was entered in that case. Plaintiff then filed a new action against defendant alleging an oral employment contract and wrongful discharge. The Oakland Circuit Court, William J. Beer, J., granted defendant’s motion for summary judgment, holding that the cause of action should have been brought in the former suit. Plaintiff appeals. Held:

    By virtue of the waiver provision in the court rule defendant waived its objection to nonjoinder by failing to object in the first suit to the failure of defendant to join all his claims.
    This holding was arrived at by D. E. Holbrook, P.J., with M. J. Kelly, J., concurring in the disposition and reasoning that a defendant has an obligation to object to nonjoinder of claims of which he has actual or constructive knowledge and finding that this defendant had constructive knowledge of this claim at the time of the first lawsuit.
    Reversed and remanded.
    P. J. Marutiak, J., dissented. He found that defendant would have had knowledge of this claim only by pure speculation and guesswork and would hold that, under such circumstances, defendant did not waive its objection to nonjoinder.
    Opinion of D. E. Holbrook, P.J.
    1. Action — Defenses — Compulsory Joinder — Waiver — Court Rules.
    A defendant waived his objections to a plaintiffs failure to join all causes of action in his original litigation where plaintiff, without benefit of counsel, first brought an action for recovery of vacation benefits allegedly owed him by defendant and not paid upon termination of his employment and later, after judgment on the merits for defendant, brought an action for improper termination of employment under an alleged oral contract (GCR 1963, 203.1).

      References for Points in Headnotes

       1 Am Jur 2d, Actions §§ 131, 132.
    Waiver of, by failure to promptly raise, objection to splitting cause of action. 40 ALR3d 108.

       1 Am Jur 2d, Actions § 127.

      Opinion of M. J. Kelly, J.
    2. Action — Defenses — Compulsory Joinder — Waiver — Knowledge of Claims.
    A defendant who has actual or constructive knowledge of the existence of other claims against him and who fails to object to their joinder in litigation against him waives his objection to a subsequent suit upon them.
    Dissent by P. J. Marutiak, J.
    3. Action — Defenses — Compulsory Joinder — Waiver — Court Rules — Knowledge of Claims.

      A plaintiff has a duty under the court rules to join in his complaint every claim that arises out of the transaction or occurrence that is the subject-matter of the action; a defendant who fails to object to plaintiff’s failure to join claims required by the rule to be joined does not waive his objection where the claims could only be known to defendant by pure speculation and guess; a defendant can only be expected to object to a failure to join claims where the defendant has knowledge that another claim exists (GCR 1963, 203.1).

      Berkey, Erickson, Rentrop & Martin (by David P. Trahan), for plaintiff.

      Keywell & Rosenfeld (by Stephen A. Blaske), for defendant.
    Before: D. E. Holbrook, P.J., and M. J. Kelly and P. J. Marutiak JJ.

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

   D. E. Holbrook, P.J.

The facts of the instant case are set out in detail in our Brother Judge Marutiak’s dissent. Briefly, plaintiff filed suit in municipal court for the City of Troy on June 1, 1976, alleging that he was entitled to compensation for accrued vacation time unused at the time of his involuntary termination by defendant. Plaintiff appeared in propria persona in the municipal court action; defendant was represented by counsel. On September 7, 1976, a judgment of no cause of action was rendered against plaintiff. The reasons underlying the municipal court’s action in ruling against plaintiff do not appear of record although apparently the decision was made upon the merits of plaintiff’s claim.

Plaintiff filed a second suit in Oakland County Circuit Court on February 9, 1977, alleging an oral contract of employment with defendant and violation of that contract by the defendant’s discharge of plaintiff from his position as accountant. Defendant moved for accelerated judgment under GCR 1963, 116.1(5), alleging merger under Michigan’s compulsory joinder rule as set forth in GCR 1963, 203.1.

At a July 27, 1977, hearing, the trial court granted defendant’s motion and held:

"It’s an old principle of law that to avoid multiplicity of law suits that if there is a law suit growing out of a situation it may not be parceled out and if a person decides they are going to appear in pro per to handle a case they are governed by the same rules of law. * * * I think this motion is well taken and it should be granted and it is granted.”

As the dissent notes, determination of this case depends entirely upon interpretation of GCR 1963, 203.1. That rule provides as follows:

"A complaint shall state as a claim every claim either legal or equitable which at the time of serving the pleading the pleader has against any opposing party, if it arises out of the transaction or occurrence that is the subject-matter of the action and does not require for its adjudication the presence of third parties of whom the court cannot acquire jurisdiction. Failure by motion or at the pretrial conference to object to improper joinder of claims or to a failure to join claims required to be joined constitutes a waiver of the required joinder rules and the judgment shall not merge more than the claims actually litigated.” (Emphasis supplied.)

The first sentence of the above-quoted paragraph is a strict requirement of compulsory joinder of all related claims. The final sentence, however, substantially abrogates this compulsory joinder rule by providing for waiver in those instances where failure to join is not objected to in the first action.

According to 1 Honigman & Hawkins, Michigan Court Rules Annotated (2d ed), Committee Notes, pp 472-473:

"The strictness of the compulsory joinder provision of sub-rule 203.1 and its all inclusive character is mitigated in a sensible way by its last sentence * * *. The harshness of the present practice as it relates to the enforcement of compulsory joinder provisions (this is sometimes referred to as the rule against splitting causes of actions) is the fact it almost always is enforced after the fact, through the doctrine of merger or res judicata. In other words, at the present time the question of whether or not all of a cause of action has been sued upon is seldom, if ever, challenged in the original suit when the defect might have been corrected. Normally, the challenge comes in a response to another suit alleging splitting or merger. At this late stage of the proceedings, no matter how innocent the parties were, there is no way to correct the matter and the party loses his chance to litigate the rest of his claim.
"This is a broad rule of required joinder and it is predicated on the theory of requiring the parties to settle all matters arising out of the transaction or occurrence in one lawsuit. It also provides, however, a sensible method of deciding what matters do arise out of the transaction or occurrence in the first litigation and if the parties (the plaintiff by suing on less than all; the defendant by not raising the question) desire to litigate their claims in two pieces, the harshness of the merger doctrine should not prejudice them. In other words, the scope of the action that will be merged will be determined in the ñrst litigation when it can be corrected rather than in the second litigation when it cannot be corrected. Nothing in this rule changes the application of the doctrine of collateral estoppel.” (Emphasis supplied.)

Plaintiff claims on appeal that his first action in municipal court merely alleged improper denial of vacation benefits. Although no record was maintained in that proceeding, plaintiff’s counsel offers to file affidavits to that effect. From plaintiff’s complaint in the municipal court proceeding it does not appear that allegations of improper termination or violation of the parties’ oral contract were raised or litigated. For this reason plaintiff contends that the instant matter is not barred by GCR 1963, 203.1 and that defendant is precluded from objecting to plaintiff’s failure to join his two separate claims in the original action.

Two panels of this Court have interpreted GCR 1963, 203.1 on previous occasions. In Purification Systems, Inc v The Mastan Co, Inc, 40 Mich App 308; 198 NW2d 807 (1972), lv den 388 Mich 751 (1972), the appellate Court determined that theirs was a question of public policy and that the court was required to weigh the prevention of "vexatious” and "costly” litigation against the "harshness” of the traditional compulsory joinder rule. In the instant case, the trial court relied upon similar reasoning in support of its decision.

The Mastan Court, applying this policy approach, held that where a contract claim asserted by the plaintiff arises out of one transaction or occurrence and the cause proceeds to final adjudication against the party, his later assertion of a claim under implied contract or quantum meruit is barred by the rule of res judicata. It should be noted, however, that in Mastan the party was seeking to recover the same loss under two separate theories of recovery.

An earlier panel of the Court of Appeals, with Judge V. J. Brennan, who sat on Mastan also, writing for the majority, considered this court rule in Mango v Plymouth Twp Board of Trustees, 33 Mich App 715; 190 NW2d 285 (1971). In Mango, plaintiffs were challenging a zoning ordinance. Plaintiffs’ first suit raised two counts: that the ordinance was arbitrary and unreasonable as applied and therefore unconstitutional; and second, that, in the event the ordinance was found to be constitutional, a writ of mandamus should issue to compel the defendant to allow plaintiffs to make substantial repairs to their property while continuing their nonconforming use. The plaintiffs abandoned the second count, however, at the pretrial conference. After their challenge on the basis of count I was denied, plaintiffs brought a second action, raising the claim formerly dropped as count II. The trial court granted defendant’s motion for accelerated judgment in this second action on the basis of res judicata. The appellate Court reversed.

The appellate Court noted that facts and circumstances were not identical in the two actions, and, therefore, res judicata could not bar the subsequent action. Furthermore, the Court felt that since they had failed to object to the abandonment of the second count in the first action, the defendants had waived any right they may have had to invoke the compulsory joinder rule bar to the second action. Judge Brennan did not find these two opinions to be inconsistent, and we believe the Mango decision to be more clearly on point.

We find the interpretation of GCR 1963, 203.1 adopted by the dissent in the instant case to be unnecessarily harsh; the plaintiff is not claiming identical damages under two separate theories of recovery as in Mastan, supra. Clearly, if the first sentence of rule 203.1 stood alone, the dissent’s interpretation would be correct. Nevertheless, we hold that the second sentence of court rule 203.1 was intended to eliminate this harshness in cases such as the present. To require joinder of all employment-related claims is an expansive measure; to require this joinder without allowing the parties, through silence, to waive its compulsory effect, as provided in the latter sentence of rule 203.1, is also productive of cumbersome and unwieldly litigation. The interpretation of this court rule as adopted by the Mango Court is preferable and more clearly reflects the intent of the rule.

Both of the plaintiff’s actions arose out of the same subject-matter, only if we consider "subject-matter” very broadly; it is not clear that the separate actions are so inherently closely related that the latter claim should be waived if not joined in the original action. From the fact of plaintiff’s original complaint in municipal court, wrongful termination does not arise as an issue. The second action, on the other hand, alleges as its primary and pivotal factual consideration the improper termination of an oral employment agreement. To require compulsory joinder in a case such as the instant case would completely read the second section of GCR 1963, 203.1 out of that court rule.

Defendant should not be made to suffer for plaintiff’s decision to proceed in municipal court without counsel, nevertheless, having enjoyed the assistance of counsel in the original proceeding, defendant is the more likely party to have knowingly waived his rights and duties under GCR 1963, 203.1. We hold that plaintiff must have an opportunity to reach the merits of his claim of improper termination of employment in accord with the second sentence of rule 203.1. Defendant’s motion for accelerated judgment in the trial court should have been denied and we find under court rule 203.1 and the Mango decision that the defendant had waived its objections to plaintiff’s failure to join all causes of action in the original litigation.

The decision of the trial court is reversed and remanded for trial. Costs to plaintiff.

M. J. Kelly, J.

I concur in the result reached by Judge Holbrook but both of my colleagues have made points which are compelling. If I found, as did Judge Marutiak, that defendant could only have known of the second wrongful termination of oral contract claimed by "pure speculation and guess”, I believe I would have agreed with his opinion. At least I would like to endorse the proposition that is contained in the dissent that "[a] defendant has no duty to write a plaintiff’s complaint and can be expected to object to a failure to join claims only where that defendant has knowledge that another claim exists”. I would further qualify the knowledge requirement to include actual and constructive knowledge.

However, it seems to me that the district court complaint satisfies the knowledge element and I quote the entire complaint for the reader:

"The plaintiff says:
"1. That having been an employee of Medical Ancillary Services, Inc. for five (5) years as of March 8, 1976 entitled him to three (3) weeks vacation as of March 8, 1976, and that his employment was abruptly and involuntarily ended on March 24, 1976 whereupon he had taken no time off for vacation between March 8 and March 24, 1976, but that Medical Ancillary Services, Inc has subsequently refused to compensate his [sic] for the unused vacation time of three (3) weeks pay, or $1,280.79 (One Thousand and Two Hundred Eighty Dollars and Seventy Nine Cents).
"To his damage in the sum of $1,280.79 Dollars and therefore he brings this suit.”

It looks to me like the source of the plaintiff’s original impetus to action was a perceived loss of $1,280.79 vacation pay but with a broadly waving red flag underlining a wrongful-termination cause of action.

I concur in the result reached by Judge Holbrook.

P. J. Marutiak, J.

(dissenting). On June 1, 1976, plaintiff filed suit in the Municipal Court for the City of Troy alleging that he had accrued some three weeks of vacation time while in the employment of defendant. Plaintiff claimed that he had not taken this vacation time before defendant wrongfully terminated his employment, and, therefore, that he was entitled to its value which plaintiff computed at $1,280.70. On September 7, 1976, a judgment' of no cause of action was rendered against plaintiff in that suit.

Subsequently, on February 9, 1977, plaintiff began suit in Oakland County Circuit Court alleging that he had an oral contract of employment with defendant and that defendant had wrongfully discharged him. Defendant moved for accelerated judgment in this second suit on the ground that it arose out of the same transaction as the earlier one and that, therefore, plaintiffs second claim merged with his first one and was now barred. The trial court agreed with defendant and granted its motion for accelerated judgment on July 27, 1977. Plaintiff now appeals and asks us to consider whether his claim for wrongful termination of employment was barred by his failure to assert this claim in his initial suit for vacation pay. Contrary to the result reached by the majority, I would hold that plaintiff’s second suit was barred.

Under GCR 1963, 203.1:

"A complaint shall state as a claim every claim either legal or equitable which at the time of serving the pleading the pleader has against any opposing party, if it arises out of the transaction or occurrence that is the subject-matter of the action and does not require for its adjudication the presence of third parties of whom the court cannot acquire jurisdiction. Failure by motion or at the pretrial conference to object to improper joinder of claims or to a failure to join claims required to be joined constitutes a waiver of the required joinder rules and the judgment shall not merge more than the claims actually litigated.”

Plaintiff argues that his failure to bring the wrongful termination of employment claim in his initial suit for vacation pay did not preclude him from bringing it later because these two claims arose out of different transactions and do not pertain to the same subject matter. In the alternative, plaintiff argues that defendant’s failue to object to nonjoinder of these claims in the initial suit has waived this objection. I disagree with plaintiff on both points.

A plaintiff’s duty under GCR 1963, 203.1 is to join in his complaint every claim that arises out of the transaction or occurrence that is the subject-matter of the action. A plaintiff is not required to join claims which arise out of separate, independent transactions or occurrences. Michigan National Bank v Martin, 19 Mich App 458; 172 NW2d 920 (1969).

The subject matter of plaintiff’s original suit was his employer-employee relationship with defendant and the breach of an oral employment contract that arose by virtue of this relationship. Although plaintiff’s subsequent suit for wrongful termination of employment technically was a different "claim” it, nevertheless, arose out of the same subject matter, i.e., the parties’ employment relationship and the alleged oral employment contract. Therefore, plaintiff should have consolidated his separate claims against defendant in a single suit.

Although GCR 1963, 203.1 required plaintiff to bring both of his claims against defendant in a single proceeding, it also states that a defendant’s failure to object to a plaintiff’s nonjoinder of claims in the first proceeding constitutes a waiver of this objection. Therefore, it must be decided whether defendant has waived the objection that gave rise to the instant appeal. I would hold that it did not.

In Purification Systems, Inc v The Mastan Co, Inc, 40 Mich App 308; 198 NW2d 807 (1972), lv den 388 Mich 751 (1972), another panel of this Court was called upon to determine the relative responsibilities of parties under this court rule in a situation similar to that of the case at bar. There, as here, a plaintiff either inadvertently or intentionally violated the first sentence of GCR 1963, 203.1; a defendant, the second. The Mastan Court, in its attempt to reconcile these two parts of the court rule, concluded:

"We have weighed the 'traditional’ view, and its 'harshness’ on plaintiffs, as against the 'vexatious’ and 'costly’ effect of piecemeal adjudication on defendants. We must make a choice.
"We hold that where as here the claim asserted by plaintiff arises out of one transaction or occurence and recovery can be claimed under express or implied contract, and plaintiff chooses to proceed on express contract only, and the cause proceeds to final adjudication against him, his later assertion of a claim under implied contract or quantum meruit recovery is barred by the rule of res judicata.” 40 Mich App 308, 314.

Mastan concerned the circumstance where a plaintiff attempted to recover the same loss under two theories of recovery in two suits. In the case at bar, plaintiff has attempted to recover two losses under the same theory of recovery in separate suits. Nonetheless, both suits by the instant plaintiff arose out of the same "transaction or occurrence”, as that term is used in GCR 1963, 203.1. Therefore, because we are required to make the same choice as was required in Mastan, i.e., to weigh the respective responsibilities of each party under this court rule, I vote that we follow Mas-tan.

I do not believe that the result reached in this dissent would violate either the spirit of the court rule or the spirit of fairness in this case. I would hold only that plaintiff was required to join in a single suit such claims against defendant that arose out of their oral contract of employment. Here, both the claim for unpaid vacation benefits and the claim of wrongful termination must be decided by reference to this employment contract. Thus, both claims unquestionably arose out of the same transaction or occurrence. It makes no difference that the separate proceedings initiated below by plaintiff sought different elements of damage. The court rule states that all claims must be brought in one proceeding if they arise out of the "transaction or occurrence that is the subject-matter of the action”. The employer-employee relationship as defined by the oral contract of employment between the parties is the subject matter of both of the actions brought by plaintiff.

I believe, to the extent the majority opinion holds that defendant could have knowingly waived compulsory joinder of these claims in the first proceeding by its failure to object to a claim of plaintiff which defendant could have known only by pure speculation and guess, that the opinion is wrongly decided. A defendant has no duty to write a plaintiffs complaint and can be expected to object to a failure to join claims only where that defendant has knowledge that another claim exists. This is the import of the Court’s decision in Mango v Plymouth Twp Board of Trustees, 33 Mich App 715; 190 NW2d 285 (1971). In Mango, which is cited in the opinion of Judge Holbrook, the plaintiffs’ first suit raised two counts. At a pretrial conference plaintiffs abandoned the second count of their complaint. Defendant did not object to this abandonment. After they lost their first suit plaintiffs brought a second action raising a claim that was similar to the count they had abandoned in the original proceeding. The trial court granted the township’s motion for accelerated judgment in the second proceeding. On appeal, this Court properly reversed the action of the trial court because the township clearly had knowledge of the second count in plaintiffs’ original suit and had failed to object to the failure of plaintiffs to pursue this count in the first suit. The failure of the township to object to a claim that it knew existed then was construed correctly by the Court to be a waiver of the requirements of compulsory joinder of claims.

One final comment should be made on this case. The committee appointed to review and consolidate the Michigan court rules has recommended that the second sentence of GCR 1963, 203.1, the waiver sentence, be deleted from this court rule. The committee pointed out that it supported this Court’s position in Mastan, the position adopted in this dissent. See proposed MCR 2.203(A) and Committee Comment thereto.

I respectively dissent from the opinion of the majority. The decision of the trial court should be affirmed.