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Detroit V Adams Realty Services
Detroit V Adams Realty Services
Plaintiff/Appellee,
Wayne Circuit Court No. 17-012432-CH
v. Hon. Robert J. Colombo, Jr. (P25806)
Defendants/Appellants.
_____________________________________________________________________________/
ROOSEN, VARCHETTI & OLIVIER, PLLC LAW OFFICES OF AARON D. COX PLLC
Richard G. Roosen (P35222) Aaron Cox (P69346)
James Varchetti (P79606) Josie Lewis (P69317)
Attorneys for Plaintiff/Appellee Attorneys for Defendants/Appellants
P.O. Box 2305 23380 Goddard Rd
Mount Clemens, MI 48046 Taylor, MI 48180
(586) 868-2737 734/287-3664
(586) 868-0259 (Fax) 734/287-1277 (Fax)
_____________________________________________________________________________/
1
Defendants/Appellants requested oral argument on the cover of their Application for Leave to
Appeal. Oral argument is not permitted on applications for leave to appeal. MCR 7.205(E)(1).
TABLE OF CONTENTS
COUNTERSTATEMENT OF FACTS...........................................................................................1
ARGUMENT
I. This Court should not grant leave to appeal because of the length and reason for
defendants’ delayed application for leave to appeal: defendants’ own non-excusable
neglect in properly securing an appeal of right. In any event, the trial court did not
err when it determined that it had jurisdiction. …………………………………….....3
B. The Court should deny leave to appeal because of the length and reason of
Defendants’ delay: Defendants’ own non-excusable neglect in timely and properly
pursuing an appeal of right.….……………………………………………………………3
C. The trial court did not err when it determined that it had jurisdiction over the
defendants because the amount in controversy satisfied the circuit court’s jurisdictional
threshold.………………………………………………………………………………….6
i
INDEX OF AUTHORITIES
CASELAW
Boyd v Nelson Credit Centers, Inc, 132 Mich App 774, 780-781; 348 NW2d 25 (1984) . . . . . . . 8
Clohset v No Name Corp, 302 Mich App 550; 840 NW2d 375 (2013). . . . . . . . . . . . . . . . . . . . . .6
Hines v Volkswagen of America, Inc, 265 Mich App 432; 695 NW2d 84 (2005) . . . . . . . . . . . . . 3
Hodge v State Farm Mut Auto Ins Co, 499 Mich 211; 884 NW2d 238 (2016) . . . . . . . . . . . . .6, 9
Kar v Nanda, 291 Mich App 284; 805 NW2d 609 (2011) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Luscombe v Shedd’s Food Products Corp, 212 Mich App 537; 539 NW2d 210 (1995) ………...6
STATUTES
COURT RULES
MCR 7.205(G)……………………………………………………………………….…………3, 5
ii
STATEMENT OF APPELLATE JURISDICTION
The Court of Appeals has jurisdiction to entertain an application for leave to appeal under
MCR 7.203(B)(5) for any judgment or order when an appeal of right was available but was not
timely filed. This situation encompasses the present application for leave to appeal, which is
iii
COUNTER-STATEMENT OF THE QUESTION INVOLVED
I. Did the trial court err when it determined that it had jurisdiction over the
defendants now seeking leave to appeal?
iv
COUNTERSTATEMENT OF FACTS
On August 1, 2017, Plaintiff, the City of Detroit, filed a complaint in the Wayne County
Circuit Court against Adams Realty Services, LLC, seeking to recover $50,725.53 in unpaid
property taxes on multiple properties located within the City of Detroit. See generally
Complaint, 08/01/17. Plaintiff later filed its First Amended Complaint, which included
additional defendants, Sharon Adams, William Adams, and West Dakota Homes, LLC, jointly
and severally. First Amended Complaint, 12/13/17, p 1. Later, when plaintiff identified
additional parties associated with the properties at issue, it filed its Second Amended Complaint,
which listed as defendants Adams Realty Services, LLC, West Dakota Homes, LLC, Milre
Homes, LLC, Adamitis Homes, LLC, and Hildale Homes, LLC, jointly and severally. 2 Second
Amended Complaint, 04/25/18, p 1, attached hereto as Exhibit 1.3 The Second Amended
That this Court enter an order of judgment in favor of Plaintiff for the tax years an
amount identified in paragraph 14 of this complaint ($50,725.53) with interest,
penalty and administrative fees to accrue as allowed under the State of Michigan
Statutes and City of Detroit Charter provisions as attributable to each owner for
the following amounts:
2
The words jointly and severally are contained in the caption of the Second Amended
Complaint. Additionally, Plaintiff’s Complaint, First Amended Complaint, and Second Amended
Complaint are attached as Exhibits F, G, and H to the Defendants/Appellants’ Application for
Leave to Appeal.
3
Notably, in the Second Amended Complaint, plaintiff no longer included Sharon and William
Adams as defendants, though plaintiff neglected to dismiss them from the suit at that point.
1
Pertinent to this application for leave to appeal, on or about December 13, 2018, Plaintiff
filed a motion for summary disposition under MCR 2.116(C)(4), (7), (9), and (10) asserting that
defendants were liable for unpaid taxes on the property and that summary disposition was
summary disposition alleging that the Circuit Court lacked subject-matter jurisdiction because
the Second Amended Complaint individually requested damages against West Dakota Homes,
Milre Homes, Adamitis Homes, and Hildale Homes (henceforward “the defendants/appellants”)
that were each less than $25,000.00 (Defendant’s MSD, 12/13/18, ¶¶ 3, 4). The motion further
asserted that plaintiff failed to state a claim with respect to defendants Adams Realty Services,
LLC, William Adams, and Sharon Adams, because those parties did not own the properties at
issue. Id. at ¶ 5.
At the motion hearing the Court rejected the contention that it lacked jurisdiction because
the complaint alleged joint and several liability and the amount in controversy exceeded the
circuit court’s jurisdictional threshold. (Motion Transcript, 12/21/18, p 16).4 The circuit court
held that Adams Realty Services, LLC, William Adams, and Sharon Adams were not liable
because they did not own the properties at issue. Id. at 12, 19. But the Court held that the
remaining corporate defendants (i.e. the instant defendants/appellants) were liable, and the Court
rejected their various other arguments.5 Id. at 19. The Court entered an order on January 3, 2019
that granted Plaintiff’s motion for summary disposition in part and granted Defendant’s counter
4
The transcript of the motion hearing is attached as Exhibit L to the Defendants/Appellants’
Application for Leave to Appeal.
5
The defendant’s response and counter motion for summary disposition raised several other
issues that are not pertinent to the issue that is the crux of the instant application for leave to
appeal. Consequently, those miscellaneous issues are not addressed or discussed in this brief.
2
motion for summary disposition in part (Order, 1/3/19). The order held the instant
defendants/appellants liable in the amounts listed on Plaintiff’s Second Amended Complaint. Id.
Thereafter, counsel for defendants filed a claim of appeal by right, which was later
dismissed for lack of jurisdiction as will be discussed in further detail infra. When that effort to
obtain appellate review failed, defendants/appellants filed a late application for leave to appeal,
ARGUMENT
I. This Court should not grant leave to appeal because of the length and reason for
defendants’ delayed application for leave to appeal: defendants’ own non-excusable neglect
in properly securing an appeal of right. In any event, the trial court did not err when it
determined that it had jurisdiction.
Generally, an issue must be raised, addressed, and decided by the trial court to be
preserved for appellate review. Hines v Volkswagen of America, Inc, 265 Mich App 432, 443;
695 NW2d 84 (2005). The issue of jurisdiction was raised and addressed below (See Motion
Transcript, 12/21/18, p 16), so the issue would be preserved if the Court exercised its
Whether the trial court had subject-matter jurisdiction is question of law reviewed de
novo. Kar v Nanda, 291 Mich App 284, 286; 805 NW2d 609 (2011).
B. The Court should deny delayed leave to appeal because of the length and
reason of the delay: defendants’ own non-excusable neglect in timely and
properly pursuing an appeal of right in accordance with the court rules.
The Court should deny the delayed leave to appeal because defendants/appellants failed
3
Defendants’ late Application for Leave to Appeal is necessarily being brought pursuant to
MCR 7.205(G) (Late Appeal) because a previous appeal of right was dismissed for lack of
jurisdiction and defendants/appellants’ instant application for leave was not timely filed. Under
MCR 7.205(G)(1), “The answer may challenge the claimed reasons for delay” and “[t]he court
may consider the length of and reason for the delay in deciding whether to grant the application.”
In this instance, the length and reason for the delay weigh decidedly against this Court exercising
its discretionary power to grant the late application for leave to appeal.
Indeed, the reason for defendants/appellants’ late application for leave is their own non-
excusable neglect in timely and properly pursuing an appeal of right in conformance with the
court rules. When claiming an appeal of right, counsel for the defendants filed a claim of appeal
stating that Adams Realty Services, LLC, was claiming an appeal from the underlying judgment.
See Exhibit 2. This Court observed that Adams Realty Services was not an aggrieved party and
sent counsel a defect correction letter asking counsel to explain how Adams Realty Services was
aggrieved when the underlying order stated that it was not liable to plaintiff. See Exhibit 3. The
defect correction letter provided 21 days to correct defects and ensure conformity with the court
rules. Id. The law firm representing Adams Realty Services responded with a letter stating that
it represented all defendants in the case and that defendants other than Adams Realty Services
were the appellants and were appealing the portion of the judgment that pertained to them. See
Exhibit 4. Yet, counsel for defendants neglected to timely move to amend the claim of appeal or
to file a new claim of appeal that properly named the four aggrieved parties as appellants.
Accordingly, the claim of appeal remained fatally defective 21 days after this Court
issued its defect correction letter. This Court properly dismissed the claim of appeal for lack of
jurisdiction because the appeal was not pursued by an aggrieved party. See Exhibit 5, City of
4
Detroit v Adams Realty Servs, LLC, unpublished order of the Court of Appeals, entered February
Thereafter, counsel for defendants filed a Motion to Reinstate the Appeal, and later, filed
a combination Motion for Reconsideration and Motion for Relief pursuant to MCR 7.216(A)(2).
The crux of these motions was a request that the Court reinstate the appeal because of excusable
neglect and then exercise its discretionary powers under MCR 7.216(A)(2) to amend the claim of
appeal by adding the aggrieved parties that defendants’ counsel previously neglected to add.6
Plaintiff answered both of defendants’ motions asserting that counsel’s initial failure to
name an aggrieved party on the claim of appeal may have been due to excusable neglect. But
plaintiff argued that it was not excusable neglect when defendants’ counsel failed to move to
amend the claim of appeal or to file a new, timely claim of appeal in the name of the aggrieved
parties. This Court apparently agreed with plaintiff’s position and denied the motion to reinstate
the appeal, denied the motion for reconsideration, and denied the motion for relief pursuant to
MCR 7.216(A)(2). See Exhibit 6, City of Detroit v Adams Realty Servs, LLC, unpublished order
of the Court of Appeals, entered April 2, 2019 (Docket No. 347321).7 Thus, the appeal remained
dismissed. Four weeks after entry of the order denying the three motions, defendants/appellants
filed the instant late application for leave to appeal under MCR 7.205(G).
This Court should deny leave to appeal because defendants/appellants waited several
weeks to file this application after their motions for reinstatement and reconsideration were
denied, not to mention that several months have elapsed since the circuit court’s January 4, 2019
order that defendants/appellants are seeking leave to appeal. Further, as explained above, the
6
These motions—and plaintiff’s answers thereto—are presumably available internally to the
Court of Appeals; the COA docket number of the pertinent matter is 347321.
7
The order was originally entered on March 20, but it was apparently re-issued on April 2, 2019
because the original mailing of the order to defendants’ counsel was apparently returned.
5
reason for the late application is the defendants/appellants’ own non-excusable neglect8 in timely
and properly pursuing the available appeal of right in conformance with the court rules. These
are appropriate factors for this Court to consider when deciding whether to grant leave, MCR
7.205(G)(1), and these considerations preponderate heavily against granting leave in this
instance.
C. The trial court did not err when it determined that it had jurisdiction over
the defendants because the amount in controversy satisfied the circuit court’s
jurisdictional threshold.
In any event, this Court should deny the delayed application for leave to appeal because
the circuit court correctly determined that it had subject-matter jurisdiction over this case.
Circuit courts have original jurisdiction over all civil claims unless exclusive jurisdiction
is given by law to another court. MCL 600.605. In turn, district courts have exclusive
jurisdiction over civil actions when the amount in controversy does not exceed $25,000.00.
MCL 600.8301(1). Thus, the circuit court has jurisdiction if the amount in controversy exceeds
$25,000.00. Courts determine the amount in controversy by examining the prayer for relief set
forth in the plaintiff’s pleadings. Hodge v State Farm Mut Auto Ins Co, 499 Mich 211, 223-224;
884 NW2d 238 (2016). A court’s “subject-matter jurisdiction is established by the pleadings and
exists when the proceeding is of a class the court is authorized to adjudicate and the claim stated
in the complaint is not clearly frivolous.” Clohset v No Name Corp, 302 Mich App 550, 561; 840
NW2d 375 (2013) (internal quotations and citations omitted); see also Luscombe v Shedd’s Food
Products Corp, 212 Mich App 537, 541; 539 NW2d 210 (1995) (Stating that a court’s subject-
8
Again, this Court presumably agreed that the neglect was not excusable otherwise it would
have granted the motion to reinstate the appeal.
6
In this case, the four defendants/appellants requesting delayed leave to appeal make much
of the fact that the Second Amended Complaint listed damage amounts that are less than the
defendants/appellants believe that the circuit lacked jurisdiction. But this argument ignores
In the instant case, plaintiff’s theory was that defendant Adams Realty Services, LLC,
manager or administrator for the other four corporate defendants/appellants that now seek leave
to appeal: West Dakota Homes, LLC, Milre Homes, LLC, Adamitis Homes, LLC, and Hildale
Homes, LLC. Plaintiff issued notices of tax assessments to defendant Adams Realty Services,
and it was proper for Plaintiff to do so under MCL 211.3, which states in pertinent part:
Real property shall be assessed in the township or place where situated, to the
owner if known, and also to the occupant, if any; if the owner be not known, and
there be an occupant, then to such occupant, and either or both shall be liable for
the taxes on said property, and if there be no owner or occupant known, then as
unknown. A trustee, guardian, executor, administrator, assignee or agent, having
control or possession of real property, may be treated as the owner. [MCL 211.3
(emphasis added).]
As such, plaintiff properly issued the assessments to Adams Realty Services—the property
liability for the properties exceeded $25,000.00, which satisfies the jurisdictional threshold of the
circuit court. Indeed, the Second Amended Complaint alleged that Adams Realty Services was
liable in the amount of $50,725.53, which is well above the circuit court’s $25,000.00
jurisdictional threshold. Second Amended Complaint, 4/25/18, pp 4-5, ¶ a. Thus, the amount in
7
Further, as reflected in the caption of plaintiff’s Second Amended Complaint, plaintiff
alleged joint & several liability existed. Second Amended Complaint, 4/25/18, p 1. Adams
Realty Services was liable as the administrator/manager/controller of the properties, and each of
the remaining four corporate defendants/appellants were liable for taxes on the individual
properties they owned but that were controlled or managed by Adams Realty Services. See
Second Amended Complaint, 4/25/18, ¶¶ 6, 8. Stated another way, joint and several liability
existed between Adams Realty Services as the property manager/administrator of the subject
properties and each of the remaining corporate defendants/appellants to the extent that they were
the actual owners of the properties.9 Thus, plaintiff was not improperly attempting to aggregate
claims to reach the jurisdictional threshold as defendants/appellants claim; the threshold was
already satisfied by the claim against Adams Realty Services.10 The fact that each remaining
defendant/appellant was jointly and severally liable with Adams Realty Services in an amount
less than $25,000.00 simply does not defeat the circuit court’s jurisdiction. And the fact that the
court ultimately determined that Adams Realty Services was not liable also did not divest the
9
To be clear, plaintiff was not alleging that joint and several liability existed among the four
defendants/appellants themselves. Joint and several liability existed between Adams Realty
Services and the individual corporate defendants/appellants to the extent that they were liable for
the same unpaid taxes based upon their ownership of the properties that Adams Realty Services
was managing on their behalf. By way of example, if property commonly known as 20207
Coventry was owned by West Dakota Homes LLC but administrated/managed by Adams Realty
Services, both entities could be liable for unpaid taxes on that property. See MCL 211.3.
10
Defendants/appellants cite Boyd v Nelson Credit Centers, Inc, 132 Mich App 774, 780-781;
348 NW2d 25 (1984) for the proposition that claims from multiple plaintiffs cannot be
aggregated to reach the circuit court’s jurisdictional threshold. This is an accurate statement of
the law, but Boyd is not on-point or is otherwise distinguishable for two reasons. First, there is
only one plaintiff, the City of Detroit, and Boyd noted that claims of a single plaintiff may be
aggregated. Id. at 781. Second, the instant case is distinguishable because the circuit court’s
subject-matter jurisdiction was already satisfied with the claim against Adams Realty Services
for an amount more than $50,000.00. The fact that the defendants/appellants were jointly and
severally liable with Adams Realty Services for amounts less than $25,000.00 does not divest the
circuit court of subject-matter jurisdiction.
8
court of jurisdiction. See Zimmerman v Miller, 206 Mich 599, 604-605, 173 NW 364 (1919)
(stating that the jurisdiction of the court is determined by the amount in the plaintiff’s pleadings,
The defendants/appellants point out that under MCL 211.47(4), a person cannot be liable
for unpaid property taxes unless the person owned the real property for the year in which the tax
was levied. At first blush, this statutory subsection seems to defeat plaintiff’s claim against
Adams Realty Services because that defendant allegedly managed, but did not own, the
properties at issue. But MCL 211.47(4) was an amendment to the General Property Tax Act that
was enacted in November of 2017,11 which is after plaintiff filed suit in August of 2017. The
application and operation of this new amendment was an unsettled question of law. And to the
extent that this amendment operated to defeat plaintiff’s claims against Adams Realty Services, it
did not divest the circuit court of subject-matter jurisdiction because that is determined based
upon the complaint, not the amount recovered. Hodge, 499 Mich at 223-224; see also
Zimmerman, 206 Mich at 604-605. Stated another way, MCL 211.47(4) merely provided Adams
Realty Services with a new defense, but it did not divest the circuit court of jurisdiction.
Further, joinder of the corporate defendants other than Adams Realty Services (i.e. the
instant defendants/appellants) was proper under MCR 2.206 even if the amounts they were
individually alleged to owe did not exceed $25,000.00. Again, plaintiff’s theory was that
defendants/appellants were jointly and severally liable with Adams Realty Services to the extent
the tax liability was for properties owned by defendants/appellants but managed/controlled by
Adams Realty Services. And Adams Realty Services was alleged to be liable in an amount well
over $25,000.00, which clearly satisfied the circuit court’s jurisdictional threshold. The question
11
2017 PA 189 amended MCL 211.47 by adding the language contained in MCL 211.47(4).
9
of liability for unpaid taxes on the properties at issue was a common question of law amongst
Adams Realty Services and the instant defendants/appellants. And upon plaintiff’s information
and belief, Adams Realty Services and the instant defendants/appellants—while all separate
corporate entities—shared common ownership, common legal counsel, and were reasonably
expected to present similar defenses such that their presence together in one action greatly
promoted the efficient administration of justice and preserved judicial economy. Thus, their
joinder and presence in one case was proper under MCR 2.206(A)(2)(b) or MCR 2.205(A), and
the circuit court properly determined that it had subject matter jurisdiction because the amount in
WHEREFORE, for the foregoing reasons, plaintiff requests that this Court DENY the
delayed application for leave to appeal because of the length and reason for the delay, MCR
Respectfully Submitted,
12
In any event, even if the circuit court lacked jurisdiction—and it did not lack jurisdiction for
the reasons stated in this brief—the circuit court need not dismiss the case. A court that
determines that it lacks subject-matter jurisdiction may transfer the case to a court that would
have subject-matter jurisdiction. MCR 2.227.
10