STATE OF MICHIGAN

IN THE CIRCUIT COURT FOR THE COUNTY OF MACOMB

In re CITY OF STERLING HEIGHTS Case. No. 17-000052-AS

/ Hon. Jennifer M. Faunce

CITY OF STERLING HEIGHTS,

Plaintiff,

vs.

MACOMB INTERCEPTOR DRAIN DRAINAGE

DISTRICT; COUNTY OF MACOMB; MACOMB
COUNTY WASTEWATER DISPOSAL DISTRICT;
CANDICE S. MILLER; BRYAN SANTO; ROB
MIJAC; ANTHONY MARROCCO; and WILLIAM
MISTEROVICH,

Defendants
/
I. W. Winsten (P30528) Joseph E. Viviano (P60378)
Matthew G. Mrkonic (P79406) Joseph C. Pagano (P57017)
Olivia K. Vizachero (P81699) Viviano, Pagano & Howlett PLLC
Honigman Miller Schwartz and Cohn LLP 48 S. Main St., Suite 2
2290 First National Building Mt. Clemens, MI 48043
660 Woodward Avenue (586) 469-1580
Detroit, MI 48226-3506 joe@vivianolaw.com
(313) 465-7000 jpagano@vivianolaw.com
iww@honigman.com Attorneys for MIDD Defendants
mmrkonic@honigman.com

Received on 11/9/2017 at 11:37 AM

ovizachero@honigman.com Benjamin J. Aloia
Attorneys for City of Sterling Heights Aloia & Associates, P.C.
48 S. Main Street, Suite 3
Frank Krycia (P35383) Mt. Clemens, MI 48043
Peter C. Jensen (P25001) (586) 783-3300
Macomb County Corporate Counsel aloia@aloiaandassociates.com
One S. Main, 8th Floor Attorney for MIDD Defendants
Mt. Clemens, MI 48043
(586) 469-6346
Attorneys for Macomb Defendants
/
STERLING HEIGHTS BRIEF IN OPPOSITION TO
THE MACOMB DEFENDANTS MOTION FOR SUMMARY DISPOSITION
 TABLE OF CONTENTS

I. INTRODUCTION..............................................................................................................1

II. STATEMENT OF FACTS ................................................................................................2

III. ARGUMENT ......................................................................................................................2

A. The Applicable Standards under MCR 2.116(C).....................................................2

B. There Is Substantial Evidence that the Macomb Defendants Engaged in an

Egregious Breach of the 2010 Agreements (Count III) ...........................................3

1. The Macomb Defendants Knew the Repairs Identified in the 2006

Report Were Not Made and that More Were Needed..................................3

2. The Macomb Defendants Did Nothing in the Face of Dire

Warnings ......................................................................................................4

a. The Macomb Defendants Ignored Warnings of a

Catastrophic Collapse and Hundreds of Millions in
Damages ...........................................................................................4

b. The Macomb Defendants Did Nothing after Being Warned ...........5

c. The Macomb Defendants Have No Excuse for Their

Breach ..............................................................................................5

C. Sterling Heights Has Standing to Bring Derivative Claims Against the

Macomb Defendants (Counts III, IV, VII) ..............................................................6

1. Sterling Heights Has The Right to Bring a Derivative Action on

Behalf of the MIDD Against the Macomb Defendants ...............................6

2. The Macomb Defendants Qui Tam Argument Is Just Wrong ................6

3. In the Alternative, Sterling Heights Can Sue Directly for Breach of

the 2010 Agreements as a Third-Party Beneficiary .....................................7

D. Sterling Heights Has Stated Valid Fiduciary Duty Claims Against the
Individual Macomb Defendants (Counts IV, VII) ...................................................8

1. Marrocco and Misterovich Owed Fiduciary Duties to the MIDD

and Others ....................................................................................................8

2. To Try To Avoid Their Fiduciary Duties, the Individual Macomb

Defendants Rely on Cases that Plainly Do Not Apply ................................8

i
 3. Marrocco and Misterovich Breached Their Fiduciary Duties,
Including the Duties They Owed to the MIDD ...........................................9

4. Marrocco and Misterovichs Fiduciary Duties Are Independent of

any Contractual Duty under the 2010 Agreements ....................................10

E. Sterling Heights Also Has Direct Claims against the Macomb Defendants
for Refund and Unjust Enrichment (Counts V, VI) ...............................................10

1. Refund Claim (Count V)............................................................................11

2. Unjust Enrichment Claim (Count VI) ........................................................12

F. Sterling Heights Contract and Fiduciary Duty Claims Are Not Barred By
the Statute of Limitations .......................................................................................12

1. The Contract and Quasi-Contract Claims Are Not Time Barred ...............13

a. Sterling Heights Claims Accrued Less Than Six Years

Before This Lawsuit Was Filed .....................................................13

b. Sterling Heights Can Recover Damages for All Breaches

within the Limitations Periods .......................................................14

2. The Fiduciary Duty Claim Is Not Barred by the Statute of

Limitations .................................................................................................15

G. Marrocco and Misterovich Do Not Have Absolute or Qualified Immunity ..........15

1. Marrocco and Misterovich Do Not Have Absolute Immunity ..................16

2. Misterovich and Misterovich Do Not Have Qualified Immunity ..............16

H. In Any Event, Summary Disposition Is Premature and Improper at this

Early Stage of the Case When Discovery Has Just Begun and is
Incomplete..............................................................................................................17

IV. CONCLUSION ................................................................................................................17

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I. INTRODUCTION

Sterling Heights incorporates by reference its Brief in Opposition to the MIDD

Defendants Motion for Summary Disposition (the SH MIDD Brief) and requests that the

Court read that first. This Brief relies on the SH MIDD Brief and its exhibits and abbreviations.

Upon the MIDDs purchase of the Sewer Interceptor from Detroit in 2009, Macomb

County assumed responsibility, as the MIDDs agent, for inspecting, maintaining, and repairing

the Sewer Interceptor under its 2010 Agreements with the MIDD. The Macomb Defendants

(i.e., Macomb County, Macomb Wastewater Disposal District, Anthony Marrocco and William

Misterovich) are responsible for the December 24, 2016 catastrophic collapse and sinkhole

because they utterly failed to carry out their duties.

In February 2013, the Macomb Defendants outside engineering experts warned them in

writing of the risk of a catastrophic collapse of the Sewer Interceptor and hundreds of

millions of dollars in damages unless critical inspections and repairs were made. The Macomb

Defendants did nothing in the face of these dire warnings. With no action having been taken, the

catastrophic collapse occurred on December 24, 2016, just as the Countys experts predicted.

Sterling Heights filed this lawsuit to require the Macomb Defendants to reimburse the

MIDD for the $70 million in repair costs it has been charged. In response, the Macomb

Defendants seek summary disposition, principally under MCR 2.116(C)(10), in a Motion that

superficially raises numerous arguments on a scattershot basis, including, quite incredibly, the

contention that Macomb County did not breach the 2010 Agreements. As explained below, the

Macomb Defendants Motion should be denied, including for the following reasons:

A. The facts already discovered establish that Macomb County committed an

egregious breach of the 2010 Agreements.

B. Sterling Heights has the right to sue derivatively on the MIDDs behalf which
eliminates the Macomb Defendants standing and real party in interest defenses.
 C. Macomb County directly invoiced Sterling Heights and, as a result, Sterling
Heights has the right to assert direct claims against Macomb County for refund
and unjust enrichment based on its overcharges.

D. Marrocco and Misterovich, as MIDD Board members and agents, owed fiduciary
duties that they breached by failing to cause the inspection and repair of the Sewer
Interceptor and preferring Macomb Countys interests over the MIDDs.

E. Sterling Heights claims are not barred by the statute of limitations under well-
settled Michigan law because the Macomb Defendants repeatedly breached their
contractual and fiduciary duties during the applicable limitations period.

F. Governmental immunity does not apply to the claims against Marrocco and
Misterovich because (i) the MIDD does not have appointed or elected officials
and thus Marrocco cannot be the highest elected official of the MIDD, and (ii)
both of them acted with gross negligence.

G. There are questions of fact on all material issues which preclude the grant of
summary disposition on any claim.

H. At this early stage of the case, it is clear error to grant summary disposition
because the facts are contested and before discovery just began.

II. STATEMENT OF FACTS

The facts are set forth in the SH MIDD Brief.

III. ARGUMENT

A. The Applicable Standards under MCR 2.116(C)

The SH MIDD Brief sets out the standards under MCR 2.116(C)(5) and (C)(8).

As to MCR 2.116(C)(7), summary disposition is not appropriate unless the undisputed

facts show plaintiffs claims are barred by governmental immunity or the statute of limitations.

Summary disposition is not appropriate under MCR 2.116(C)(10) unless there are no

genuine issues of material fact. Maiden v Rozwood, 461 Mich 109, 120, 597 NW2d 817 (1999).

All reasonable inferences must be drawn in favor of the non-moving party. Id. A summary

disposition motion is premature when discovery on a disputed issue has not been completed.

Colista v Thomas, 241 Mich App 529, 629 NW2d 249 (2000).

2
 B. There Is Substantial Evidence that the Macomb Defendants
Engaged in an Egregious Breach of the 2010 Agreements (Count III)

The Macomb Defendants claim they did not breach the 2010 Agreements because: the

2010 Report purportedly proves that all the urgent repairs detailed in the 2006 Report were

made; and they conducted substantial work on the MID from 2010 through 2016. Mot. at 3-4.

However, indisputable facts prove these factual assertions are wrong. The Macomb Defendants

egregiously breached their obligations to inspect and repair under the 2010 Agreements.

1. The Macomb Defendants Knew the Repairs Identified in the

2006 Report Were Not Made and that More Were Needed

Macomb County, as the MIDDs agent, engaged engineering experts, Giffels Webster, to

advise it regarding the Sewer Interceptor. In a February 20, 2013 report to all the Macomb

Defendants, Giffels Webster stated the repairs required by the 2006 Report were not made:

Due to the age of the pipe and the known high levels of corrosion
from a 2006 investigation study by NTH Consultants, it was
determined that the MIDDD sewer infrastructure was in need of
repair, however based on a review of all available information, it is
not evident that many of the necessary rehabilitations were taken
since this investigation. (Ex. H at 1.)

Giffels Webster then admitted in a December 2, 2013 submission to the State of

Michigan on behalf of the Macomb Defendants that:

a. The conditions of major sanitary sewer interceptors within the MIDD are
currently unknown.

b. Old studies performed by [Detroit] are outdated and . . . cannot be relied upon.

c. Incomplete records exist as to which repairs were conducted and the MIDDD
has an obligation to understand the system it owns . . . . (Ex. I at 1, 43, 44.)

The facts thus show that the repairs identified in the 2006 Report were not made or, at a

minimum, there is a question of fact as to whether they were. The 2010 Report also uncovered

required additional repairs, including in the area where the collapse later occurred in 2016. (See

3
SH MIDD Br. at 6.) The Macomb Defendants do not claim they made these repairs.

2. The Macomb Defendants Did Nothing in the Face of Dire Warnings

Candice Miller admits the Sewer Interceptor was never inspected after 2010. As she

admitted in a January 13, 2017 public meeting, there hasnt been another one done since. (Ex

A 48.) And the MIDD admits in its discovery responses that no repairs were ever made in the

area where the Sewer Interceptor collapsed in 2016. (Ex. M at No. 12.) The Macomb Defendants

did nothing even though they were warned in 2013 of the real risk of catastrophic collapse.

a. The Macomb Defendants Ignored Warnings of a Catastrophic

Collapse and Hundreds of Millions in Damages

In its February 20, 2013 letter to all the Macomb Defendants, Giffels Webster warned

that: the Sewer Interceptor has a serious corrosion problem; the necessary repairs have not been

made; the corrosion problem was eroding a quarter inch of sewer wall every year; and unless

inspections and repairs were made, this continued corrosion risked a catastrophic collapse and

hundreds of millions of dollars in damage. As Giffels Webster declared:

1. [I]t was estimated that 0.18 to 0.29 inches of sewer wall was being eaten away
per year. Unaddressed, this ongoing corrosion could result in hundreds of
millions of dollars in costly repairs to the sewer infrastructure as well as
potentially leading to catastrophic collapse. (Ex. H at 60.)

2. [S]imply ignoring what problems that may have developed over the previous
five to seven years is not beneficial or advisable. (Id.)

On December 2, 2013, Giffels Webster submitted a grant application for the $2 million

cost of the inspections for the entire Sewer Interceptor which acknowledged that: the Sewer

Interceptors current condition was unknown; detailed inspections of the 40-year old pipes had

not been conducted; and the Sewer Interceptor was at real risk of catastrophic collapse:

1. Macomb County has not yet performed detailed inspections of the entire
[MIDD] system, many of which are forty years old and experience high levels of
corrosion. (Ex. I at 1.)

4
 2. Based on the level of corrosion and degradation that was found in the system in
recent studies, [Macomb County] needs an accurate assessment of the remaining
sewers that are an integral part of the MIDDD system and [to] repair severe
defects prior to further degradation and possible catastrophic collapse. (Id.) 1

The grant application specifically noted that with respect to PCI-12A, the exact location where

the 2016 collapse later occurred, that the inspections will determine the remediation measures

[that] are required to bring the interceptors to an acceptable level of service. (Id. at 45.)

b. The Macomb Defendants Did Nothing after Being Warned

Despite Giffels Websters dire warnings, the Macomb Defendants admit they performed

no inspections or repairs from February 20, 2013 until after the December 24, 2016 collapse that

Giffels Webster predicted. (Mot. at 4-5.) All of the actions that the Macomb Defendants

Motion claims they ever took with respect to the Sewer Interceptor were before Giffels

Websters December 2, 2013 application, since each of them was referenced in that application.

(See id.)2 Giffels Websters 2013 reports make crystal clear that these purported earlier actions

did not address the severe corrosion problem or the risk of a catastrophic collapse. (Ex. H at

60; Ex. I at 1, 43-45.)

c. The Macomb Defendants Have No Excuse for Their Breach

The Macomb Defendants failure to inspect and repair the Sewer Interceptor in response

to Giffels Websters 2013 warning was a clear breach of the 2010 Agreements and a reckless

disregard of their obligations that caused great harm. The Macomb Defendants knew that the

Sewer Interceptor inspections and repairs were necessary regardless of whether the grant

application was approved. Moreover, they knew they could recoup the costs of those inspections

1 Emphasis added throughout unless otherwise noted.

2 These de minimus actions were: (a) a study of hydrogen sulfide gas in 2011; (b) an interceptor
and manhole inspection study in 2012; (3) installation of a biofilter ventilation system in 2013;
(4) a corrosion and site inspection study in conjunction with the Oakland-Macomb Interceptor
Drain (OMID); and (5) a chemical addition project. (Mot. at 4.)

5
and repairs from the MIDD, just as they did for the $70 million cost of the 2016 collapse. As a

result, the Macomb Defendants have no excuse to have not done the inspections and repairs.3

Sterling Heights has presented powerful facts showing that the Macomb Defendants

breached their obligation to inspect, repair, and maintain the Sewer Interceptor.4

C. Sterling Heights Has Standing to Bring Derivative Claims

Against the Macomb Defendants (Counts III, IV, VII)

1. Sterling Heights Has The Right to Bring a Derivative Action

on Behalf of the MIDD Against the Macomb Defendants

The Macomb Defendants contend that Sterling Heights has no standing to bring claims

with respect to the 2010 Agreements, and that it is not the real party in interest, because the 2010

Agreements were between the MIDD and Macomb County, and Sterling Heights was not a party

to them. The Macomb Defendants miss the point because Sterling Heights brings these claims

derivatively on behalf of the MIDD, and, therefore, it is the MIDD that is suing and will recover.

In the face of the compelling facts here, and as completely explained in the SH MIDD

Brief, Sterling Heights has the right to sue the Macomb Defendants derivatively on behalf of the

MIDD. The Macomb Defendants may not breach their contractual and fiduciary obligations

with impunity, and escape responsibility for the $70 million in damages they caused, because

Macomb County controls the MIDD Board and, therefore, the MIDD will not sue them.

2. The Macomb Defendants Qui Tam Argument Is Just Wrong

Unable to counter Sterling Heights right to proceed derivatively, the Macomb

Defendants raise the straw man argument that a derivative claim is somehow really a qui tam

3 The grant that was applied for, if approved, also permitted reimbursement of inspection costs
incurred while the grant application was pending. See the November 23, 2016 letter which
confirmed that Macomb County may obtain reimbursement for any eligible costs previously
incurred since January 2, 2013. (Ex. J at 1.)
4 Curiously, the Macomb Defendants attempt to excuse their breach by claiming that Sterling
Heights learned what they were doing. (Mot. at 5.) However, it is not a defense to a breach
claim that the non-breaching party learned of the breach. How else could they sue?

6
claim and that Sterling Heights may not bring a qui tam claim. (Mot. at 9.) However, there is no

law saying that a derivative claim is a qui tam claim, and the Macomb Defendants cite none.

Regardless, Sterling Heights is not asserting a qui tam claim. A qui tam claim is a statutory right

of action, virtually always under the False Claims Act,5 which induces a private person or entity

to bring suit to enforce a statutorily-created claim. The qui tam plaintiff, by statute, usually

receives 25-30% of the proceeds of any recovery. See US ex rel Poteet v Medtronic, Inc, 552

F3d 503, 507 (CA6, 2009). Here, by contrast, Sterling Heights is proceeding derivatively on

behalf of the MIDD to enforce a breach of contract claim. It is not asserting a statutorily-created

claim which permits a stranger to be compensated with a percentage of the recovery.6 This is not

a qui tam claim.

3. In the Alternative, Sterling Heights Can Sue Directly for

Breach of the 2010 Agreements as a Third-Party Beneficiary

If, despite the compelling authority that holds Sterling Heights may sue derivatively, this

Court were to hold that it may not, then Sterling Heights in Count III has also pled direct claims

for breach of the 2010 Agreements as a third-party beneficiary of the 2010 Agreements. As the

Macomb Defendants acknowledge, an intended beneficiary to a contract may sue for a breach of

a contractual promise in their favor. (Mot. at 10.) Here, Sterling Heights was an intended

beneficiary of the 2010 Agreements because Macomb County has undertaken to give or to do

something directly to or for said person. MCL 600.1405(1). Macomb County directly invoiced

Sterling Heights each month for the services it claimed to perform for Sterling Heights benefit

under the 2010 Agreements. Given these facts, there is a material question of fact as to whether

Sterling Heights is a third-party beneficiary entitled to sue for breach of the 2010 Agreements.

5 The Michigan Supreme Court treats the term qui tam synonymously with False Claims Act
claims. See Shallal v Catholic Soc Servs of Wayne Cty, 455 Mich 604, 617; 566 NW2d 571, 577
(1997) (The False Claims Act (or qui tam violations) have existed in various forms since
1863.). There are also two other minor examples of qui tam claims: (1) under the Patent Act
(35 USC 292); and (2) under statutes protecting Native American rights (25 USC 201).
6 Any derivative recovery will be received by the MIDD.

7
 D. Sterling Heights Has Stated Valid Fiduciary Duty Claims
Against the Individual Macomb Defendants (Counts IV, VII)

1. Marrocco and Misterovich Owed

Fiduciary Duties to the MIDD and Others

From 2010 through 2016, Marrocco and Misterovich were: on the Board of the MIDD

and its officers; also Macomb County public officials; and also agents of the MIDD under the

2010 Agreements. Sterling Heights has sued these individuals derivatively on behalf of the

MIDD for breaching their fiduciary duties.

Michigan law is clear that public officials owe fiduciary duties to their communities and

the public, including the duty of loyalty. Macomb Cty Prosecutor v. Murphy, 464 Mich 149,

164; 627 NW2d 247, 25556 (2001) (All public officers are agents, and their official powers

are fiduciary. They are trusted with public functions of the good of the public . . . . (internal

citations omitted)). Thus, Marrocco and Misterovich owed fiduciary duties, including the duty

of loyalty: (i) to the MIDD and its public, as officials of the MIDD; (ii) to Macomb and its

public, as Macomb public officials; and (iii) to the MIDD, as its agents. Central Cartage v

Fewless, 232 Mich App 517, 524, 591 NW 2d 422 (1998); Prod Finishing Corp. v Shields, 158

Mich App 479, 48687, 405 NW2d 171, 174 (1987) (agent owes fiduciary obligations); Klarich

Assocs, Inc v Dee Zee, Inc, No 301688, 2012 WL 1649786, at *5 (Mich Ct App May 10, 2012)

(If an agency relationship is found, fiduciary responsibilities also exist.).7

2. To Try To Avoid Their Fiduciary Duties, the Individual

Macomb Defendants Rely on Cases that Plainly Do Not Apply

The Macomb Defendants contend that drain officials have no duty to inspect or repair

drains that are in imminent risk of collapse (see Mot. at 12-13), relying on Bosanic v Motz

Development, Inc, 277 Mich App 277, 285-286; 745 NW2d 513 (2007) and Arath II, Inc v

7 Marrocco and Misterovich undoubtedly were aware of their fiduciary duties, since the
Michigan Association of County Drain Commissioners, the industry group that encompasses
drain districts like the MIDD, routinely issues publications that warn drain officials to avoid
breaching their fiduciary duties. (See Ex. R.)

8
Heukels County Drain District, 288 Mich App 324; 792 NW2d 415 (2010). However, these

two cases are easily distinguished here because they did not involve situations, like here, where

Macomb County assumed the responsibility for inspecting and repairing the Sewer Interceptor

under the 2010 Agreements and were specifically warned of the risk of a collapse.

In both Bosanic and Arath II, the Court found that the defendant drain commissioner had

no independent authority to perform any repairs to the drain at issue because the property

owner had not alerted the commissioner to any problem and the commissioner was not

otherwise on notice of any problem. Bosanic, 277 Mich App at (defendant had no authority to

address the defect in the drain system); Arath II, 288 Mich App at 331-32 (Plaintiff failed to

establish that defendants even had the authority to act). In contrast, here the Macomb

Defendants knew there was a risk of catastrophic collapse, and they had the express authority to

make inspections and repairs to the Sewer Interceptor pursuant to the 2010 Agreements, and

they had assumed an agency role to act for the MIDD and make those repairs.

3. Marrocco and Misterovich Breached Their Fiduciary

Duties, Including the Duties They Owed to the MIDD

Marrocco and Misterovich breached their fiduciary duties, including those they owed to

the MIDD, by: failing to act with due care despite the urgent need to inspect and repair the

Sewer Interceptor after being warned of the risk of a catastrophic collapse; breaching their

duties of loyalty to the MIDD by preferring the Macomb Countys interests over the MIDDs;

and breaching their duties to the MIDD communities, including Sterling Heights, by invoicing

them for work that was not performed or that was for the benefit of the County generally. At

the very least, whether Marrocco and Misterovich breached their fiduciary duties to the MIDD

is a disputed factual issue that is not ripe for summary disposition. Kohl v Davis Lane Inv Co,

2002 WL 31958224, at *4 (Mich Ct App, Dec 27, 2002) (trial court improperly granted

summary disposition on fiduciary duty claim where there were disputed factual issues); In re

9
Estate of Zadra, No 232712, 2002 WL 1963715, at *2 (Mich Ct App, Aug 23, 2002) (In

general, the existence of a confidential or fiduciary relationship is a question of fact.) (citing In

re Estate of Swantek, 172 Mich App 509, 513-514, 432 NW2d 307 (1988)).

4. Marrocco and Misterovichs Fiduciary Duties Are Independent

of any Contractual Duty under the 2010 Agreements

The Macomb Defendants argue that no fiduciary duty claim can lie against Marrocco

and Misterovich because there was a contractual relationship between the MIDD and Macomb

County. That argument is nonsensical, since Marrocco and Misterovich are not parties to the

2010 Agreements. Marrocco and Misterovichs fiduciary duties arose because they were Board

members, officials and agents of the MIDD, and these obligations were owed independent of

any agreements the MIDD signed with Macomb County. See Murphy, 464 Mich at 164. Thus,

Sterling Heights is plainly suing for breach of a duty independent of the 2010 Agreements.

Moreover, even if certain of Marrocco and Misterovichs duties also arose from the

2010 Agreements, Michigan law recognizes that even where an individual owes contractual

obligations, he may also owe additional tort duties, as is the case here. For example, in

Courtright v Design Irrigation, 210 Mich App 528; 534 NW2d 181 (1995), defendant irrigation

company entered into a contract with a condominium to perform drainage work but failed to do

so. Plaintiff, a condominium resident, was subsequently injured because of defendants failure

to perform the contracted work and sued defendant in tort. When defendant attempted to defend

against plaintiffs suit by claiming only contract liability existed, the Court disagreed, holding

that defendant had an obligation independent of the contract to exercise due care. Id. at 529-32.

E. Sterling Heights Also Has Direct Claims against the Macomb

Defendants for Refund and Unjust Enrichment (Counts V, VI)

Regardless of whether Sterling Heights can sue derivatively on behalf of the MIDD,

Macomb County directly invoiced Sterling Heights each month and that relationship created a

separate contractual or quasi-contractual relationship between them that permits Sterling

10
Heights to sue Macomb County to recover money it improperly paid, under its claims for refund

(Count V) and unjust enrichment (Count VI).

1. Refund Claim (Count V)

The County directly invoiced Sterling Heights $10 million for repairs and other services

it claimed to have performed for Sterling Heights benefit, and, as it admits in its discovery

responses, there is no statutory requirement for directly invoicing Sterling Heights. (Ex. 1 at

No. 25 (Interrogatory Responses).) Sterling Heights alleges that the County overcharged

Sterling Heights by improperly billing for services that were not rendered or were improperly

passed on to Sterling Heights.

Michigan law recognizes that a party who pays an invoice may later sue to recover

improper amounts paid under those invoices. See, e.g., Solo v United Parcel Service Co, 819

F3d 788 (CA6, 2016) (applying Michigan contract law and reversing the district courts

dismissal of lawsuit to recover overcharges previously paid); IB Mini-Mart II, Inc v JSC Corp,

No 296982, 2011 WL 1435978, at *3 (Mich Ct App Apr 14, 2011) (permitting plaintiff to sue to

recover for improper invoices previously paid); Price, Heneveld, Cooper, Dewitt & Litton v

Annuity Inv'rs Life Ins Co, No 04-CV-0561, 2006 WL 696480, at *5 (WD Mich Mar 17, 2006),

aff'd sub nom., Price v. Annuity Inv'rs Life Ins Co, 244 F Appx 654 (CA6, 2007) (applying

Michigan law) (payment of periodic invoices for legal services does not preclude a later claim

for refund of those services); Young & Assocs., PC v Rocar Precision, Inc, No 218417, 2001

WL 637405, at *3 (Mich Ct App May 25, 2001) (summary disposition in favor of plaintiff on

account stated claim reversed even though defendant previously paid similar invoices). In fact,

Michigan law specifically recognizes a refund claim to recover amounts improperly invoiced

and paid. See, e.g., IB Mini-Mart II2011 WL 1435978, at *3 (permitting contract claim to

obtain refund of payments made for improper invoices).

The Macomb Defendants wrongly contend that Sterling Heightss refund claim is barred

by MCL 41.726 and the account stated doctrine. MCL 41.726 is a provision applicable to

11
assessments to Townships, not cities like Sterling Heights. And Sterling Heights claims do not

challenge the right to make assessments. Rather, Sterling Heights seeks to recover, as breach of

contract damages, Macomb Countys invoicing of amounts for work it failed to perform or

properly charge. The account stated doctrine is likewise inapplicable here. Account stated is an

affirmative claim for payment of a settled debt. MCL 600.2145. Here, no party brings such a

claim, and Sterling Heights does not agree the amounts it paid the County are proper. Sterling

Heights actual claim is for refund and breach of contract, under which it can recover the

improper amounts paid.

2. Unjust Enrichment Claim (Count VI)

Sterling Heights is also entitled to recover on an unjust enrichment claim because

Macomb County has been unjustly enriched by directly billing and accepting payment for work

that was never performed or which it was not entitled to bill. Michigan courts recognize this

claim. See Solo, 819 F3d at 797-98 (reversing dismissal of unjust enrichment claim under

Michigan law to recover contractual overcharges); IB Mini-Mart II, 2011 WL 1435978, at *3

(permitting unjust enrichment claim to recover improperly invoiced and paid amounts).

F. Sterling Heights Contract and Fiduciary Duty

Claims Are Not Barred By the Statute of Limitations

The Macomb Defendants claim that Sterling Heights contract and fiduciary duty claims

accrued in 2010 when the County entered into the 2010 Agreements and therefore are barred by

the six-year contract and three-year tort statute of limitations periods for such claims. The

Macomb Defendants are wrong, and Sterling Heights claims are not time barred.8

8 But even if the Macomb Defendants could somehow claim a time bar, Sterling Heights has pled
fraudulent concealment which prevents the limitations period from running. Ex A at 50.
Sterling Heights did not know, and the Macomb Defendants (who were fiduciaries) do not claim
they disclosed that, for example: the 2010 Report could not be relied upon; the Macomb
Defendants were warned in 2013 of the risk of catastrophic collapse; or that they ignored those
warnings and did not inspect or repair. Brownell v Garber, 199 Mich App 519, 531-32, 503

12
 1. The Contract and Quasi-Contract Claims Are Not Time Barred

a. Sterling Heights Claims Accrued Less Than

Six Years Before This Lawsuit Was Filed

Under the 2010 Agreements, signed on September 22, 2010, the Macomb Defendants had

ongoing contractual obligations to inspect and repair the Sewer Interceptor each year through the

collapse on December 24, 2016. The Macomb Defendants breached that obligation each year

when they failed to perform. HJ Tucker & Assocs, Inc v Allied Chucker & Engg Co, 234 Mich

App 550, 562-63; 595 NW2d 176 (1999) (affirming determination that plaintiff could pursue its

breach of contract action to recover its unpaid commissions owed for up to six years before the

filing of its complaint); Carey v Foley & Lardner, LLP, No 321207, 2016 WL 4203435, at *2-3

(Mich Ct App, Aug 9, 2016) (unpub) (per curiam) (attached as Ex. 2) (holding that breaches

within the limitations period are actionable). See Miller-Davis Co v. Ahrens Const., Inc, 495

Mich 161, 18082, 848 NW2d 95, 10506 (2014) (different breaches of a contract have

logically different points of accrual); Mahavisno v Compendia Bioscience, Inc, 164 F Supp 3d

964, 97273 (ED Mich, 2016) (separate breaches of the same contract can give rise to separate

statute of limitations periods).

Under Michigan law, each breach of contract claim accrues when the promisor fails to

perform under the contract. Cordova Chem Co v Dept of Natl Resources, 212 Mich App 144,

153; 536 NW2d 860 (1995). As a result, the limitations period begins to run on the date that the

breach occurs. Seyburn, Kahn, Ginn, Bess, Deitch and Serlin, PC v Bakshi, 483 Mich 345, 355;

771 NW2d 411 (2009). Therefore, the Macomb Defendants repeatedly breached the 2010

Agreements each year in which they failed to perform their obligations.

NW2d 81, 86 (1993) (reversing summary disposition for defendant fiduciary because fraudulent
concealment applies when a fiduciary fails to disclose).

13
 Moreover, it would have obviously taken the Macomb Defendants a reasonable time after

the 2010 Agreements were signed, had they not breached, to begin the process of inspecting and

repairing. As a result, the first breach claim did not accrue until a reasonable time elapsed after

September 22, 2010 with the Macomb Defendants not having done their job, which may be an

extended time period into late 2011 or 2012.9 In fact, the Macomb Defendants contend in their

Motion that they performed various projects in 2011 and 2012, essentially admitting that their

first breach would not have occurred until later. (Mot. at 4-5.)

And, importantly, the circumstances fundamentally changed in 2013 when the Macomb

Defendants failed to inspect and repair despite receiving a dire warning of collapse. Beginning

in 2013, there was a materially different situation and breach.

Sterling Heights filed its Complaint on May 8, 2017, and can recover for all the breaches

that occurred after May 8, 2011 (six years before the filing of this lawsuit). Sterling Heights

breach claims are not time barred.10

b. Sterling Heights Can Recover Damages for

All Breaches within the Limitations Periods

Under Michigan law, even if some of the Macomb Defendants breaches somehow

occurred prior to May 8, 2011, Sterling Heights may still recover damages for all the breaches

that occurred after May 8, 2011. HJ Tucker, 234 Mich App at 562-63 (plaintiff can recover for

all breaches within the limitations period); Carey, 2016 WL 4203435, at *2-3 (same). See

Miller-Davis, 495 Mich at 18082 (reversing court of appeals which held that separate

breaches of the same contract accrued at the same time, and allowing later breach claim to

proceed even though earlier breach claim was time barred); Mahavisno, 164 F Supp 3d at 972-

73 (denying summary judgment as to later breach of contract claim even though earlier

9 It is a question of fact what a reasonable time is here.

10 There is at the very least a disputed issue of fact regarding when the contract claims against
the Macomb Defendants accrued, which precludes summary disposition.

14
breaches of the same contract occurred outside the limitations period and were barred). Thus,

Sterling Heights is entitled to recover for all breaches that occurred after May 8, 2011.

2. The Fiduciary Duty Claim Is Not Barred by the Statute of Limitations

Marrocco and Misterovich were warned in writing in 2013 that the Sewer Interceptor

faced a catastrophic collapse without necessary inspections and repairs. After receiving those

warnings, Marrocco and Misterovich breached their fiduciary duties to the MIDD and others,

including their duties of loyalty and care, year after year thereafter when they failed to exercise

due care and cause the inspections and repairs. Sterling Heights filed this lawsuit on May 8,

2017, and, under longstanding Michigan law, can recover damages for all breaches of fiduciary

duty that occurred from May 8, 2014, which is three years prior to filing suit. See Cole v

Marathon Oil Corp, Case No. 17a0590n.06 (CA6, Oct 26, 2017) (attached as Exhibit 3) (even

though situation had existed for decades, dismissal on statute of limitations grounds reversed in

nuisance case involving Marathon refinery in Detroit because each alleged wrongful emission

within the three years before suit was filed was a new claim with a new limitations period and

plaintiff could recover for all such claims); Dept of Envtl Quality v Gomez, 318 Mich App 1, 28;

896 NW2d 39 (2016) (plaintiff may sue for violations occurring within the limitations period);

Midfield Concession Enters, Inc v Areas USA, Inc, 130 F Supp 3d 1122, 114243 (ED Mich,

2015) (plaintiff could bring claims based on actionable statements made by defendant in 2012,

even though claims based on similar statements made in 2009 were time barred).

G. Marrocco and Misterovich Do Not Have Absolute or Qualified Immunity

The Macomb Defendants claim that Marrocco and Misterovich are immune from suit

because Marrocco has absolute immunity as the Public Works Commissioner as the highest

elected official and Misterovich has qualified immunity because his actions were not grossly

negligent. (Mot. at 19.) They are wrong, and neither Marrocco, nor Misterovich has immunity.

15
 1. Marrocco and Misterovich Do Not Have Absolute Immunity

Marrocco is not entitled to absolute immunity as the highest elected official under MCL

691.1407(5) because that is not the position he occupied with respect to the MIDD. None of the

MIDD Board members are elected and, as a result, Marrocco could not be its highest elected

official. Therefore, Marrocco is not entitled to absolute immunity for the breaches of fiduciary

duty he committed as a MIDD Board member or agent.11

2. Misterovich and Misterovich Do Not Have Qualified Immunity

Marrocco and Misterovich are also not entitled to qualified immunity because their

conduct was grossly negligent and the proximate cause of Sterling Heights injury. See

MCL 691.1407(2). Gross negligence is conduct so reckless as to demonstrate a substantial

lack of concern for whether an injury results, MCL 691.1407(8)(a), and proximate cause is

the one most immediate, efficient, and direct cause preceding an injury, Robinson v City of

Detroit, 462 Mich 439, 458459, 613 NW2d 307 (2000).

As described above, Marrocco and Misterovich were warned in writing at least as early
as 2013 by their expert engineering firm that the Sewer Interceptor was at risk of catastrophic
collapse and hundreds of millions of dollars in damages if they failed to conduct necessary
inspections and repairs. Yet, despite repeated warnings, Marrocco and Misterovich sat on their
hands, allowing the December 24, 2016 catastrophic collapse and sinkhole to occur. Their
conduct was reckless, the very definition of gross negligence, and the direct cause of the
MIDDs injury. At the very least, there are material questions of fact that preclude summary
disposition. Indeed, [t]he determination whether a governmental employees conduct
constituted gross negligence that proximately caused the complained-of injury under MCL
691.1407 is generally a question of fact. Briggs v Oakland Co, 276 Mich App 369, 374; 742

11 The Macomb Defendants do not argue that Misterovich is entitled to absolute immunity
because they recognize he was not the highest elected official of any governmental entity.

16
NW2d 136 (2007); see, e.g., Bellinger v Kram, 319 Mich App 653; NW2d (2017)
(gross negligence and proximate cause were questions of fact that precluded summary
disposition); Tallman v Markstrom, 180 Mich App 141; 446 NW2d 618 (1989) (same).
H. In Any Event, Summary Disposition Is Premature and Improper at this
Early Stage of the Case When Discovery Has Just Begun and is Incomplete

Finally, the Macomb Defendants request for summary disposition is premature and

improper. Summary disposition is generally premature before discovery is complete. Davis v

City of Detroit, 269 Mich App 376, 379-80; 711 NW2d 462 (2005); Colista, 241 Mich App 529.

If further discovery stands a fair chance of uncovering factual support for the other partys

position, summary disposition is improper. Marilyn Froning Revocable Living Trust v

Bloomfield Hills Country Club, 283 Mich App 264, 292; 769 NW2d 234 (2009).

Sterling Heights has already uncovered substantial evidence of the Macomb Defendants

misconduct in the early stages of this litigation. As a result, there is far more than a fair chance

that discovery will uncover further factual support in support of Sterling Heights claims, and

summary disposition is improper.

IV. CONCLUSION

The Macomb Defendants Motion should be denied in its entirety.

HONIGMAN MILLER SCHWARTZ AND COHN LLP

By: /s/ I. W. Winsten

I. W. Winsten (P30528)
Matthew G. Mrkonic (P79406)
Olivia K. Vizachero (P81699)
2290 First National Building
Detroit, MI 48226
(313) 465-7608
iww@honigman.com
mmrkonic@honigman.com
ovizachero@honigman.com
Dated: November 9, 2017 Attorneys for City of Sterling Heights
25841390.9

17
 STATE OF MICHIGAN

IN THE CIRCUIT COURT FOR THE COUNTY OF MACOMB

In re CITY OF STERLING HEIGHTS Case. No. 17-000052-AS

/ Hon. Jennifer M. Faunce

CITY OF STERLING HEIGHTS,

Plaintiff,

vs.

MACOMB INTERCEPTOR DRAIN DRAINAGE

DISTRICT; COUNTY OF MACOMB; MACOMB
COUNTY WASTEWATER DISPOSAL DISTRICT;
CANDICE S. MILLER; BRYAN SANTO; ROB
MIJAC; ANTHONY MARROCCO; and WILLIAM
MISTEROVICH,

Defendants
/
I. W. Winsten (P30528) Joseph E. Viviano (P60378)
Matthew G. Mrkonic (P79406) Joseph C. Pagano (P57017)
Olivia K. Vizachero (P81699) Viviano, Pagano & Howlett PLLC
Honigman Miller Schwartz and Cohn LLP 48 S. Main St., Suite 2
2290 First National Building Mt. Clemens, MI 48043
660 Woodward Avenue (586) 469-1580
Detroit, MI 48226-3506 joe@vivianolaw.com
(313) 465-7000 jpagano@vivianolaw.com
iww@honigman.com Attorneys for MIDD Defendants
mmrkonic@honigman.com

Received on 11/9/2017 at 11:37 AM

ovizachero@honigman.com
Attorneys for City of Sterling Heights
Frank Krycia (P35383)
Peter C. Jensen (P25001)
Macomb County Corporate Counsel
One S. Main, 8th Floor
Mt. Clemens, MI 48043
(586) 469-6346
Attorneys for Macomb Defendants
EXHIBITS 1-3
Benjamin J. Aloia
Aloia & Associates, P.C.
48 S. Main Street, Suite 3
Mt. Clemens, MI 48043
(586) 783-3300
aloia@aloiaandassociates.com
Attorney for MIDD Defendants
/
EXHIBIT 1
EXHIBIT 2
Carey v. Foley & Lardner, LLP, Not Reported in N.W.2d (2016)
2016 WL 4203435
2016 WL 4203435
Only the Westlaw citation is currently available.
UNPUBLISHED OPINION. CHECK
COURT RULES BEFORE CITING.
UNPUBLISHED
Court of Appeals of Michigan.
Raymond J. CAREY, PlaintiffAppellee,
v.
FOLEY & LARDNER, LLP, DefendantAppellant.
Docket No. 321207.
|
Aug. 9, 2016.
Wayne Circuit Court; LC No. 13013005CK.
Before: RONAYNE KRAUSE, P.J., and GLEICHER
and STEPHENS, JJ.
ON RECONSIDERATION
PER CURIAM.
*1 Defendant appeals by leave granted the denial of
its motion for summary disposition of the majority of
the contract and employment law claims of plaintiff.
Carey v. Foley & Lardner, LLP, unpublished order
of the Court of Appeals, entered August 18, 2014
(Docket No. 321207). Plaintiff asserts that throughout his
employment, defendant breached his contract by engaging
in gender, race and age discrimination in determining
his compensation. He further contends he was subject to
retaliation by defendant for his complaints to defendant's
representatives. Plaintiff alleges he was paid at lower rates
than other partners who were younger, female and not
of European descent despite his commensurate or better
billing levels and generation of income for the partnership.
We affirm in part and reverse in part.
I. STANDARD OF REVIEW
This Court reviews de novo a trial court's decision on a
motion for summary disposition. Maple Grove Twp. v.
Misteguay Creek Intercounty Drain Bd., 298 Mich.App
2017 Thomson Reuters. No claim to original U.S. Government Works.
200, 206; 828 NW2d 459 (2012). In accordance with MCR
2.116(C)(7), a party may file a motion to dismiss a lawsuit
when [e]ntry of judgment, dismissal of the action, or
other relief is appropriate because of ... immunity granted
by law [or] statute of limitations.... When considering a
motion brought under MCR 2.116(C)(7), it is proper for
this Court to review all the material submitted in support
of, and in opposition to, the plaintiff's claim. Bronson
Methodist Hosp. v. Allstate Ins. Co., 286 Mich.App 219,
222; 779 NW2d 304 (2009), amended 489 Mich. 925
(2011) (citations omitted). In determining whether a
party is entitled to judgment as a matter of law pursuant
to MCR 2.116(C)(7), a court must accept as true a
plaintiff's well-pleaded factual allegations, affidavits, or
other documentary evidence and construe them in the
plaintiff's favor. Id. at 222223 (citations omitted).
A motion under MCR 2.116(C)(8) tests the legal
sufficiency of the claim on the pleadings alone to
determine whether the plaintiff has stated a claim on
which relief may be granted. Maple Grove Twp., 298
Mich.App at 206 (citation omitted). A trial court's grant of
summary disposition under MCR 2.116(C)(8) is deemed
to be proper if no factual development could justify the
plaintiff's claim for relief. Id. (citation omitted).
A motion brought pursuant to MCR 2.116(C)(10) tests
the factual sufficiency of the complaint. Cichewicz v.
Salesin, 306 Mich.App 14, 28; 854 NW2d 901 (2014). We
review a motion brought under MCR 2.116(C)(10) by
considering the pleadings, admissions, and other evidence
submitted by the parties in the light most favorable to
the nonmoving party. Latham v. Barton Malow Co.,
480 Mich. 105, 111; 746 NW2d 868 (2008). Summary
disposition is appropriate when there is no genuine issue
as to any material fact, and the moving party is entitled to
judgment or partial judgment as a matter of law . MCR
2.116(C)(10).
II. BREACH OF CONTRACT CLAIMS
*2 Defendant argues that the trial court erred by
failing to find that plaintiff's claims for breach of
his employment contract, promissory estoppel, unjust
enrichment, and fraudulent misrepresentation were
barred by the applicable statutes of limitation. Defendant
asserts that plaintiff's claims involve the abrogated
continuing wrong doctrine and, thus, should be precluded.
1
Carey v. Foley & Lardner, LLP, Not Reported in N.W.2d (2016)
2016 WL 4203435
Defendant further asserts that the existence of an express
contract bars a certain number of plaintiff's claims.
A. STATUTE OF LIMITATIONS
A six-year statute of limitations exists for breach of
contract actions. MCL 600.5807(8). Similarly, claims
of promissory estoppel and unjust enrichment are also
subject to a six-year limitations period. See Huhtala v.
Travelers Ins. Co., 401 Mich. 118, 124125; 257 NW2d
640 (1977); See also MCL 600.5813 (All other personal
actions shall be commenced within the period of 6
years after the claims accrue and not afterwards unless
a different period is stated in the statutes.); MCL
600.5815 (The prescribed period of limitations shall
apply equally to all actions whether equitable or legal relief
is sought....). A long line of Michigan cases [also apply]
the six-year period of limitations to fraud actions. Nat'l
Sand, Inc. v. Nagel Constr., Inc., 182 Mich.App 327, 333
334; 451 NW2d 618 (1990). The six-year limitation period
of MCL 600.5807(8) begins to run when the promisor
fails to perform under the contract. Cordova Chem. Co.
v. Dep't of Natural Resources, 212 Mich.App 144, 153;
536 NW2d 860 (1995). In other words, [f]or a breach of
contract action, the limitations period generally begins to
run on the date that the breach occurs. Seyburn, Kahn,
Ginn, Bess, Deitch and Serlin, PC v. Bakshi, 483 Mich. 345,
355; 771 NW2d 411 (2009).
Plaintiff's contract required periodic calculations of
compensation. Plaintiff argues that each allegedly
deficient annual compensation calculation comprises a
new or individual breach of the contract. In accordance
with MCL 600.5827, a breach of contract claim accrues
at the time the wrong upon which the claim is based
was done regardless of the time when damage results.
Our Supreme Court, in Twichel v. MIC Gen. Ins. Corp.,
469 Mich. 524, 532 n 5; 676 NW2d 616 (2004) (emphasis
deleted), quoting Black's Law Dictionary (7th ed), defined
an installment contract as [a] contract requiring
or authorizing the delivery of goods in separate lots,
or payments in separate increments, to be separately
accepted. Certain types of contracts that provide for
regular or periodic payments have been deemed similar or
analogous to installment contracts. H J Tucker & Assoc.,
Inc. v. Allied Chucker & Engineering Co., 234 Mich.App
550, 562563; 595 NW2d 176 (1999); Adams v. Detroit,
232 Mich.App 701, 704705; 591 NW2d 67 (1998); Harris
2017 Thomson Reuters. No claim to original U.S. Government Works.
v. Allen Park, 193 Mich.App 103, 107; 483 NW2d 434
(1992). Under this type of contract, a separate and distinct
breach of contract claim is recognized to accrue with each
deficient payment. H J Tucker, 234 Mich.App at 562563.
[E]very periodic payment made that is alleged to be less
than the amount due ... constitutes a continuing breach
of contract and the limitation period runs from the due
date of each payment. Harris, 193 Mich.App at 107; H
J Tucker, 234 Mich.App at 563. As such, each allegedly
deficient compensation payment made by defendant to
plaintiff constitutes a separate and distinct breach of the
partnership agreement.
*3 Defendant contends that plaintiff's claim is an
improper attempt to use the continuing wrong doctrine,
which was rejected in Blazer Foods, Inc. v. Restaurant
Props., Inc., 259 Mich.App 241, 246; 673 NW2d 805
(2003). Under the continuing wrong doctrine a claim
based on a defendant's wrongful conduct will re-accrue
each day that the wrongful conduct is continued, id. at 246,
248, and the statute of limitations will not initiate until the
wrong is abated, id. at 246. In other words, continuous acts
must be demonstrated, not ongoing harmful effects from
an original completed act. Id. The continuing wrong
doctrine has not, however, been applied in the context of
a breach of contract claim. Id. at 251.
The trial court correctly divided plaintiff's breach of
contract claims into two distinct periods: (a) those claims
that arose more than six years before plaintiff's filing of a
complaint and (b) claims that occurred within the six year
period immediately preceding plaintiff's filing of a cause
of action in this matter. As such, the trial court correctly
granted partial summary disposition in accordance with
MCR 2.116(C)(7).
B. UNJUST ENRICHMENT
Plaintiff's claim for unjust enrichment should have been
dismissed based on the existence of an express contract
concerning the same subject matter. A claim for unjust
enrichment is the equitable counterpart to the legal
claim for a breach of contract. An equitable claim of
unjust enrichment is premised on the theory that the law
will imply a contract to prevent the unjust enrichment
of another party. Belle Isle Grill Corp. v. Detroit, 256
Mich.App 463, 478; 666 NW2d 271 (2003). A contract to
preclude unjust enrichment will be implied only if there
2
Carey v. Foley & Lardner, LLP, Not Reported in N.W.2d (2016)
2016 WL 4203435

is no express contract covering the same subject matter.
Id. The parties' partnership agreement and the relevant
compensation provisions constitute an express contract
within the meaning of this rule. Thus, the court erred when
it denied summary disposition on the unjust enrichment
claims.
regarding his compensation under the agreement. The
statute of limitations for a fraud claim begins to run when
a plaintiff either is aware or should have been aware of an
injury due to the fraudulent conduct. MCL 600.5827; Moll
v. Abbott Laboratories, 444 Mich. 1, 1718; 506 NW2d
816 (1993). This Court applies an objective standard when
reviewing when a plaintiff discovered or should have
discovered an injury. Moll, 444 Mich. at 1718.

C. FRAUDULENT MISREPRESENTATION Plaintiff's complaint lists nine promises and

AND PROMISSORY ESTOPPEL representations that were allegedly made by defendant to
induce plaintiff to enter into an agreement of employment
Plaintiff also raised claims of fraudulent
with defendant. We have created the chart below,
misrepresentation and promissory estoppel indicating
identifying each claimed promise and representation and
defendant made promises or false representations to
when a claim began to accrue for each.
induce his entry into the agreement with defendant and
Promises / Plaintiff Plaintiff Plaintiff
Misrepresentations discovered should complained
the have to
misrep discovered Defendant
the
misrep

Plaintiff Feb 1,
would 2001
at all (Complaint,
times be 50, p.
treated 15)
as a full
partner of
defendant

Plaintiff Late Feb Feb 1, Before

would be or early 2002 late Feb
paid the March or early
guaranteed, 2003 March
minimum (Complaint, 2003
monthly 69, p. (Complaint,
and 22) 70, p.
annual 22)
compensation

Plaintiff's Feb 1,
monthly 2001
and (Complaint,
annual 63, p.
compensation 20)
would
annually
increase
based on
plaintiff's
productivity

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Carey v. Foley & Lardner, LLP, Not Reported in N.W.2d (2016)
2016 WL 4203435

Plaintiff's February Feb 1,

productivity 28, 2005 2002
would be (Complaint,
measured 116
by hours 117, pp.
recorded 4243)
by
plaintiff
and
billed by
defendant
to clients
for
professional
services
provided
by
plaintiff
to the
clients
as a
member
of
defendant
firm and
annual
revenue
realized
by
defendant
from
client
payment
of fees
charged
by
defendant
for
professional
services
provided
by
plaintiff
and/or
for which
plaintiff
was
entitled
to billing
and/or
supervisory
credit

Plaintiff Feb 1, Before

would 2001 Feb 1,
receive (Complaint, 2002
full billing 63, p. (Complaint,
credit for 20)

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Carey v. Foley & Lardner, LLP, Not Reported in N.W.2d (2016)
2016 WL 4203435

all clients 67, p.

and client 21)
matters
procured
by him
for full
supervisory
credit for
all client
matters
for
which he
provided
legal
representation
whether
or not he
procured
the client
or client
matter

Neither Feb 1,
defendant 2001
nor (Complaint,
partners 60, p.
of 20)
defendant
would
interfere
with then
extant
and
prospective
client
relationships
procured
by
plaintiff

In all February Feb 1,

other 28, 2005 2002
respects (Complaint,
plaintiff 116
would be 117, pp.
treated 4243)
the same
as other
founding
partners
of the
Detroit
office
and other
partners
of
defendant
relative to

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Carey v. Foley & Lardner, LLP, Not Reported in N.W.2d (2016)
2016 WL 4203435

compensation,
benefits
and all
other
terms and
conditions
of
employment,
including
but not
limited
to, billing
and
supervisory
credit for
clients
and client
matters
procured
by
plaintiff
as a
member
of the
defendant
law firm

In all February Feb 1,

other 28, 2005 2002
respects (Complaint,
plaintiff 116,
would be 118, 119
treated pp. 42,
without 43)
regard
to his or
others'
gender,
race
or age
relative to
compensation,
benefits
and all
other
terms and
conditions
of
employment,
including
but not
limited
to, billing
and
supervisory
credit for
clients
and client

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Carey v. Foley & Lardner, LLP, Not Reported in N.W.2d (2016)
2016 WL 4203435

matter
procured
by
plaintiff
as a
member
of the
defendant
law firm

Plaintiff's February Feb 1,

annual 28, 2005 2002
compensation (Complaint,
would 116
be the 117, pp.
greater 4243)
of 60% of
amounts
annually
billed by
defendant
for
professional
services
provided
by
plaintiff
or a
reasonable,
equitably
fair higher
percentage
of annual
revenue
realized
by
defendant
due to
plaintiff's
productivity
and from
client
payment
of fees
charged
by
defendant
for
professional
services
provided
by
plaintiff
and/or
for which
plaintiff
was
entitled

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Carey v. Foley & Lardner, LLP, Not Reported in N.W.2d (2016)
2016 WL 4203435

to billing
and/or
supervisory
credit,
which
defendant
was able
to set and
collect at
substantially
higher
hourly
rates
than that
charged
for most
other
similarly
situated
Detroit
and other
partners
of
defendant
because
of
plaintiff's
expertise
and
experience
and
relationships
he
maintained
with
clients
that he
procured
reasonably have expected to induce
*4 The admissions of plaintiff in the complaint, action of a definite and substantial
coupled with the objective reality that the promises character on the part of the promisee
were purportedly breached by a date certain, allow and (3) that, in fact, produced
us to surmise that the latest accrual of any alleged reliance or forbearance of that
misrepresentation or fraud was February 1, 2008, thus the nature (4) in circumstances requiring
statute of limitations has run as to all such claims. enforcement of the promise if
While a claim of promissory estoppel is grounded in injustice is to be avoided. A promise
contract law, Huhtala, 401 Mich. at 124125, it comprises is a manifestation of intention to act
an equitable doctrine, Martin v. East Lansing Sch. Dist., or refrain from acting in a specific
193 Mich.App 166, 178; 483 NW2d 656 (1992). This Court way, so made as to justify a promisee
has explained: in understanding that a commitment
has been made. The promise must be
The elements of a promissory definite and clear, and the reliance
estoppel claim consist of (1) a on it must be reasonable. [Zaremba
promise (2) that the promisor should Equip., Inc. v. Harco Nat'l Ins. Co.,

2017 Thomson Reuters. No claim to original U.S. Government Works. 8

Carey v. Foley & Lardner, LLP, Not Reported in N.W.2d (2016)
2016 WL 4203435
280 Mich.App 16, 41; 761 NW2d
151 (2008) (internal citations and
quotation marks omitted).]
Plaintiff has alleged that defendant made promises that
induced him to enter into an agreement with defendant
in 2000. His complaint, also acknowledged that he was
aware that those promises were not fulfilled as of October
2001. Thus, his claim as to the original promises made
to him accrued as of that date and was barred by the
statute of limitation in October 2006. Plaintiff asserts that
each year, when defendant failed to calculate and pay
his compensation, a new or renewed promise upon which
separate promissory estoppel claims could be prosecuted
arose. This mirrors his contract accrual argument with
which we agree. However, alternative and concurrent
counts for breach of contract and promissory estoppel
cannot be brought when an enforceable contract exists as
it does here where the performance that constitutes the
consideration for the contract is the same performance
that demonstrates detrimental reliance in a promissory
estoppel claim. Gen Aviation, Inc. v. Cessna Aircraft Co.,
915 F.2d 1038, 1042 (CA 6, 1990). In other words,
[p]romissory estoppel is not a doctrine designed to give
a party to a negotiated commercial bargain a second
bite at the apple in the event it fails to prove breach of
contract. Walker v. KFC Corp., 728 F.2d 1215, 1220 (CA
9, 1984). Therefore, plaintiff is precluded from pursuing
simultaneous claims of promissory estoppel.
D. COLLATERAL ESTOPPEL
Defendant next asserts that plaintiff is collaterally
estopped from pursuing his breach of contract claims
premised on the assertion of employment discrimination
under Michigan's ElliottLarsen Civil Rights Act
[ELCRA], MCL 37.2101 et seq., due to the federal district
court's factual determination that defendant's reasons for
its actions were not pretextual. We agree.
*5 This Court reviews de novo the application of
collateral estoppel as a question of law. Estes v. Titus, 481
Mich. 573, 578579; 751 NW2d 493 (2008).
Generally, for collateral estoppel to apply three elements
must be satisfied: (1) a question of fact essential to
the judgment must have been actually litigated and
determined by a valid and final judgment; (2) the same
2017 Thomson Reuters. No claim to original U.S. Government Works.
parties must have had a full and fair opportunity to litigate
the issue; and (3) there must be mutuality of estoppel.
Monat v. State Farm Ins. Co., 469 Mich. 679, 682684; 677
NW2d 843 (2004) (internal citations and quotation marks
omitted). Mutuality, for purposes of estoppel, exists when
the litigant asserting collateral estoppel would have been
bound by the previous litigation, had the judgment gone
against him. Id. at 684685. Such is the case here.
The federal court reviewed the circumstances pled in
this case to determine if the plaintiff was a member
of a protected class due to gender, age and race.
Those considerations are identical to the requirement for
protected class membership under MCL 37.2202.
In accordance with MCL 37.2202:
(1) An employer shall not do any of the following:
(a) Fail or refuse to hire or recruit, discharge, or
otherwise discriminate against an individual with
respect to employment, compensation, or a term,
condition, or privilege of employment, because of
religion, race, color, national origin, age, sex, height,
weight, or marital status.
The federal court found that plaintiff met that burden of
going forward.
The federal court ruled that plaintiff failed to present
evidence that he was subject to adverse employment
actions due to membership in any protected class. The
ultimate question in every employment discrimination
case involving a claim of disparate treatment is whether
the plaintiff was the victim of intentional discrimination.
Reeves v. Sanderson Plumbing Prod., Inc., 530 U.S. 133,
153; 120 S.Ct. 2097; 147 L.Ed.2d 105 (2000). Direct
evidence, indirect evidence or circumstantial evidence can
be used to prove discriminatory treatment. Sniecinski v.
Blue Cross and Blue Shield of Mich, 469 Mich. 124, 132;
666 NW2d 186 (2003). Direct evidence has been defined
as evidence which, if believed, requires the conclusion
that unlawful discrimination was at least a motivating
factor in the employer's actions. Hazle v.. Ford Motor
Co., 464 Mich. 456, 462; 628 NW2d 515 (2001), quoting
Jacklyn v. Schering Plough Healthcare Prod. Sales Corp.,
176 F3d 921, 926 (CA 6, 1999).
In Venable v. Gen Motors Corp., 253 Mich.App 473,
476477; 656 NW2d 188 (2002) (citations and footnotes
9
Carey v. Foley & Lardner, LLP, Not Reported in N.W.2d (2016)
2016 WL 4203435
omitted), to establish a rebuttable prima facie case of
discrimination, this Court explained:
[O]ur Supreme Court adapted the McDonnell
Douglas framework to the Michigan Civil Rights
Act. This was done to accommodate additional
types of discrimination claims-including employment
discrimination based on sex and age-and to
accommodate other adverse employment action[s].
The framework, long used by courts of this state,
requires a showing that plaintiff was (1) a member of
a protected class, (2) subject to an adverse employment
action, (3) qualified for the position, and that (4) others,
similarly situated and outside the protected class, were
unaffected by the employer's adverse conduct.
*6 Plaintiff contends that as an older, white male
he was subject to disparate treatment in compensation
when compared to younger, female and non-Caucasian
employees of defendant. Under ELCRA, the plaintiff
has a similar burden. The only direct evidence alleged in
the federal court or here is the purported differential in
compensation alleged by plaintiff.
Focusing on female comparators, the federal district
court evaluated plaintiff's Equal Pay Act, 29 USC
206(d), claim and rejected the claim premised, in part,
on plaintiff's inability to demonstrate that each of
the proposed comparators perform job duties that are
substantially equal to his. Specifically, the federal court
found that a cursory review of the profiles of Plaintiff
and the proposed comparators suggests that their legal
practices engage different skills, knowledge, expertise, and
tasks. The federal court found that plaintiff failed to meet
his burden of demonstrating that he and his comparators
perform substantially equal work. The federal court
made the factual determination that in some cases the
proposed comparator did not earn more than Plaintiff on
an annual basis, and that any alleged discrepancy set
forth by plaintiff was attributable to his attempting to
impose a formula that does not reflect how Defendant
determines compensation.
Under ELCRA, a plaintiff who has made a prima facie
claim where the defendant offers a purported business
reason for the employment action must provide proof of
pretext. Again the federal court examined the same issue
and found that, defendant was able to demonstrate to
the satisfaction of the federal district court the reasons
for higher compensation to a specific female attorney
2017 Thomson Reuters. No claim to original U.S. Government Works.
based upon various gender-neutral factors, resulting
in defendant having established the affirmative defense
that its compensation decisions were based upon any
other factor other than sex. The federal district court
determined that defendant's reasons or explanations for
any differential in compensation were not pretextual,
stating: There is no evidence that these factors are
shams or are used by the firm merely to mask sex
discrimination. The federal district court clearly rejected
plaintiff's contention that his compensation by defendant
was discriminatory. Specifically:
Plaintiff disagrees with Defendant's
assessment of his performance....
Plaintiff's evidence in this regard is
largely based upon his opinion of
others' qualifications, contributions
to firm, and/or performance.
Although Plaintiff may disagree
with Defendant's justifications for
any perceived pay disparity or
feel that Defendant's method of
determining compensation is unfair,
Plaintiff has not set forth facts
that raise an inference that
any such differential was based
upon gender or that Defendant's
reasoning is pretextual. Indeed, a
review of partner compensation
for Defendant's Detroit office
reveals that the highest-paid
partners (as well as the decision-
makers regarding compensation) are
overwhelmingly white men.
*7 The federal court also rejected plaintiff's reverse sex
and race discrimination claims under Title VII regarding
his compensation. The federal court found:
Plaintiff has failed to
muster evidence that Defendant
discriminates against whites and/
or men, and thus cannot establish
a prima facie case of reverse
discrimination under Title VII....
Plaintiff has not presented facts
raising such an inference, with
respect to gender or race.
10
Carey v. Foley & Lardner, LLP, Not Reported in N.W.2d (2016)
2016 WL 4203435
Similarly, the federal court rejected plaintiff's age
discrimination claim based on the failure to present
evidence of intentional age discrimination with respect to
his pay, noting that even if it were assumed that plaintiff
was treated less favorably than younger attorneys, he
had failed to set forth facts raising an inference that
Defendant's reasons for doing so were pretextual. The
ruling of the federal district court was affirmed by the
federal appellate court finding plaintiff failed to provide
evidence that any of the partners to whom he compared
himself performed substantially equal work, thereby
rendering plaintiff unable to establish a genuine factual
dispute regarding at least one element of a prima face case
of discrimination. Carey v. Foley & Lardner, LLP, 577
F Appx 573, 574575 (CA 6, 2014). Based on the federal
district court's finding that plaintiff had failed to come
forward with direct evidence of pay disparity premised on
sex, age or race, collateral estoppel is applicable. Monat,
469 Mich. at 682684.
In examining plaintiff's claims this Court would examine
whether the employees whom plaintiff claimed were
treated differently than he were in fact comparable. The
federal district court ruled that plaintiff failed to meet
his burden of establishing that the individuals identified
were properly comparable and, in addition, that plaintiff
had received higher compensation than some of the
identified individuals used for comparison. Further, even
if plaintiff had been able to establish a prima facie case of
discrimination under the applicable framework, he could
not survive the burden shifting analysis that comprises
the next step in evaluating his claim. The federal district
court explicitly found that the reasons or justifications
provided by defendant for any disparity in compensation
were legitimate, nondiscriminatory and not pretextual. As
such, plaintiff's claims under the ELCRA are precluded
based on collateral estoppel.
Plaintiff has also, however, in the state court alleged a
claim of unlawful retaliation premised on his assertion
that his complaints to defendant's management regarding
his disparate compensation resulted in a reduction in his
compensation. Specifically, plaintiff claimed:
Defendant through its Management
Committee and other agents treated
Plaintiff differently than similarly
situated younger partners with
respect to compensation during each
2017 Thomson Reuters. No claim to original U.S. Government Works.
of its fiscal years since and beginning
with Defendant's 2001 fiscal year
because of his complaints.
*8 Based on plaintiff's amended pleading, his complaints
to defendant regarding his alleged discriminatory
treatment occurred yearly, each time he was notified of
his annual compensation for since [sic] and beginning with
defendant's 2001 fiscal year.
To establish a prima facie case of retaliation a plaintiff
must demonstrate:
(1) that he engaged in a protected activity; (2) that
this was known by the defendant; (3) that the defendant
took an employment action adverse to the plaintiff;
and (4) that there was a causal connection between
the protected activity and the adverse employment
action. [Garg v. Macomb Co. Community Mental
Health Servs., 472 Mich. 263, 273; 696 NW2d 646
(2005), amended 473 Mich. 1205 (2005), quoting
DeFlaviis v. Lord & Taylor, Inc., 223 Mich.App 432,
436; 566 NW2d 661 (1997).]
To establish causation, the plaintiff must show that
his participation in activity protected by the CRA [Civil
Rights Act] was a significant factor in the employer's
adverse employment action, not just that there was a
causal link between the two. Barrett v. Kirtland Comm
College, 245 Mich.App 306, 315; 628 NW2d 63 (2001).
In other words, to support a claim of retaliation, [t]he
employee's charge must clearly convey to an objective
employer that the employee is raising the specter of a claim
of unlawful discrimination pursuant to the [EL]CRA. Id.
at 319. If the evidence demonstrates only that the plaintiff
was simply asserting generic, non-[discriminatory]-based
complaints regarding working conditions, a claim for
retaliation has not been established. Id. at 319320. This
plaintiff, however, pleads that his complaints were specific
and concerned ELCRA issues.
As a preliminary matter, this cause of action was not
addressed by the federal court and, therefore, is not
collaterally estopped. Defendant argues that plaintiff
cannot establish the causal link between the complaints
and the subsequent years' compensation decisions. We
agree that expiration of an extended period between
a plaintiff's participation in a protected activity and
the adverse employment action may preclude a finding
that the engagement in a protected activity comprised a
11
Carey v. Foley & Lardner, LLP, Not Reported in N.W.2d (2016)
2016 WL 4203435
significant factor in the adverse employment action. See
Aho v. Dep't of Corrections, 263 Mich.App 281, 291292;
688 NW2d 104 (2004). Courts have consistently held that
a lengthy period between the protected activity and the
adverse employment action precludes a nexus between
the two events. Id. at 291. However, what constitutes a
lengthy period is case specific. Since compensation was a
yearly decision, we cannot say as a matter of law that time
alone bars this cause of action.
E. INTEGRATION CLAUSE
Defendant also asserts that plaintiff's breach of contract
claim should have been dismissed based on the existence
of an integration clause within the Partnership Agreement
belying any different or ancillary agreements between
the parties. Defendant further contends that the breach
of contract claim should have been dismissed based
on the prior determinations of the federal court that
plaintiff had failed to demonstrate that defendant's yearly
compensation calculations were pretextual or were not in
conformance with the agreement and, therefore, could not
be construed to be arbitrary or done in bad faith.
*9 The parties' partnership agreement contains an
integration clause. Plaintiff implicitly suggests that the
contract is voidable based on his allegations that he
was induced by fraud to enter into the contract and,
later, coerced into signing the agreement for his full
partner position without a complete disclosure of the
contract terms. Specifically, plaintiff contends he was
forced to enter into an agreement with defendant in 2000
because defendant had jeopardized plaintiff's relationship
with his prior employer and that defendant made false
promises to entice plaintiff's entry into the agreement. He
further contends that he was forced by defendant to sign
the partnership agreement in 2004, without having been
provided a full copy of the agreement, thereby lacking
a meeting of the minds to establish an enforceable
contract.
In general, a party breaches a contract if it fails to
perform a required promise, obligation or duty required
by the contract. See Schware v. Derthick, 332 Mich.
357, 364365; 51 NW2d 305 (1952). In this contract,
defendant promises to compensate plaintiff in the sole
or absolute discretion of an identified Committee. There
is no language in the agreement that entitles plaintiff
2017 Thomson Reuters. No claim to original U.S. Government Works.
to a specified level of compensation or that the amount
of compensation be determined in the manner preferred
or advocated by plaintiff. As such, plaintiff has failed
to establish a breach of the agreement by defendant
based on the express terms of the partnership agreement.
Notably, plaintiff does not rely on or identify any specific
provision of the contract as the basis for his breach of
contract claim. All of his allegations pertaining to breach
of contract reference either fraud by defendant in inducing
his entry into the contract or discriminatory treatment in
determining his compensation.
Plaintiff's suggestion that defendant has failed to fulfill
promises made to induce plaintiff's entry into the
Agreement are without merit, in part, premised on the
existence of the integration clause. When parties to a
contract explicitly include within the contract a provision
indicating that the contract is a full and complete
integration of their agreement, courts have given such
an expressed declaration full effect. UAWGM Human
Resource Ctr. v. KSL Recreation Corp., 228 Mich.App
486, 493499; 579 NW2d 411 (1998).
In this instance, however, plaintiff has alleged fraud,
which can render a contract voidable at the instance of
the innocent party. Id. at 503 (citation omitted). But, in
the context of an integration clause ... only certain types
of fraud would vitiate the contract. Id. Specifically:
[W]hile parol evidence is generally
admissible to prove fraud, fraud that
relates solely to an oral agreement
that was nullified by a valid merger
clause would have no effect on
the validity of the contract. Thus,
when a contract contains a valid
merger clause, the only fraud that
could vitiate the contract is fraud
that would invalidate the merger
clause itself, i.e., fraud relating
to the merger clause or fraud
that invalidates the entire contract
including the merger clause. [Id.]
*10 To the extent that plaintiff contends that the terms
of the written agreement are different from promises made
by defendant before the agreement was reduced to a
writing, his claim cannot be sustained premised on the
existence of the integration clause. A sustainable claim of
fraud requires the demonstration of a reasonable reliance
12
Carey v. Foley & Lardner, LLP, Not Reported in N.W.2d (2016)
2016 WL 4203435
on a misrepresented fact. Barclae v. Zarb, 300 Mich.App
455, 482; 834 NW2d 100 (2013). A party's reliance on oral
promises or representations made before entering into a
fully integrated written contract is deemed to be per se
unreasonable. UAWGM, 228 Mich.App at 504.
Further, plaintiff's argument that he was coerced into
signing an agreement without full disclosure of its terms
is somewhat disingenuous given plaintiff's profession as
an attorney, particularly in his areas of practice, and the
length of the time the parties have continued to perform
under the contractual agreement. As noted, defendant's
misrepresentations and coercive actions are alleged to
have occurred in 2001 and early 2004. Based on plaintiff's
filing of his complaint in 2011, his claims are precluded
by the applicable statute of limitations. Nat'l Sand, Inc.,
182 Mich.App at 333334. Plaintiff's claim that he signed
an agreement without having access to, or defendant's
provision of, all of the contract terms is unavailing as
[t]he stability of written instruments demands that a
person who executes one shall know its contents or
be chargeable with such knowledge. Christy v. Kelly,
198 Mich.App 215, 217; 497 NW2d 194 (1992), quoting
Sponseller v. Kimball, 246 Mich. 255, 260; 224 NW 359
(1929). Thus, [i]t is well established that a person cannot
avoid a written contract on the ground that he did not
attend to its terms, did not read it, supposed it was
different in its terms, or that he believed it to be a matter
of mere form. Rowady v. K Mart Corp., 170 Mich.App
54, 60; 428 NW2d 22 (1988). Specifically, a person who
signs and executes an instrument without inquiring as
to its contents cannot have the instrument set aside on
the ground of ignorance of the contents. Christensen
v. Christensen, 126 Mich.App 640, 645; 337 NW2d 611
(1983).
Plaintiff also suggests that defendant fraudulently induced
his entry into their contract by misrepresenting future
actions. Fraud in the inducement occurs where a
party materially misrepresents future conduct under
circumstances in which the assertions may reasonably be
expected to be relied upon and are relied upon. Fraud in
the inducement to enter a contract renders the contract
voidable at the option of the defrauded party. Samuel D
Begola Servs., Inc. v. Wild Bros, 210 Mich.App 636, 639
640; 534 NW2d 217 (1995) (internal citations omitted). To
establish fraud in the inducement, it must be shown that
(1) the defendant made a material representation; (2)
the representation was false; (3) when the defendant
2017 Thomson Reuters. No claim to original U.S. Government Works.
made the representation, the defendant knew that is was
false, or made it recklessly, without knowledge of its
truth and as a positive assertion; (4) the defendant made
the representation with the intention that the plaintiff
would act upon it; (5) the plaintiff acted in reliance upon
it; and (6) the plaintiff suffered damage. [Belle Isle Grill
Corp, 256 Mich.App at 477 (citation omitted).]
*11 Even assuming that fraud occurred and plaintiff's
reliance on the alleged misrepresentations was reasonable
there exists, however, a commensurate responsibility that
a person ... who has been defrauded, must act promptly;
and, if he would repudiate the contract, he must do
nothing in affirmance of it after ascertaining the facts.
Blackburne & Brown Mtg. Co. v. Ziomek, 264 Mich.App
615, 628; 692 NW2d 388 (2004) (citations omitted). In this
instance, the alleged fraud and coercion occurred in 2001,
yet plaintiff delayed until 2011 to file a lawsuit despite his
acknowledgement that he was aware that defendant was
not abiding by their alleged agreement since 2001.
F. GOOD FAITH AND FAIR DEALING
To the extent plaintiff suggests his breach of contract
claim was not subject to dismissal based on his
demonstration of bad faith and arbitrary conduct by
defendant, this assertion is indiscernible from his claims of
fraud and discrimination. The term bad faith is defined
in Black's Law Dictionary (10th ed) as [d]ishonesty of
belief, purpose, or motive. The federal court rejected
plaintiff's contentions of discrimination having found
defendant's explanation for its compensation decisions
to be neither discriminatory nor pretextual. The federal
court's determination is, thus, contrary to any suggestion
of bad faith. Arbitrary is defined as [d]epending
on individual discretion; of, relating to, or involving a
determination made without consideration of or regard
for facts, circumstances, fixed rules, or procedures.
Id. The Partnership Agreement permits the designated
committee to determine individual or final distributions
in its sole discretion or absolute discretion. Where a
party to a contract makes the manner of its performance
a matter of its own discretion, the law does not hesitate
to imply the proviso that such discretion be exercised
honestly and in good faith. Ferrell v. Vic Tanny Intern,
Inc., 137 Mich.App 238, 243; 357 NW2d 669 (1984)
(citations omitted). However, as explained in Barber v.
SMH, Inc., 202 Mich.App 366, 372373; 509 NW2d 791
13
Carey v. Foley & Lardner, LLP, Not Reported in N.W.2d (2016)
2016 WL 4203435
(1993), this Court has refused to recognize a cause of
action for breach of an implied covenant of good faith
and fair dealing in the employment context. Even if
applicable, any implied good faith requirement imposed
was satisfied by the federal district court's determination
that defendant's explanations for plaintiff's compensation
were neither discriminatory nor pretextual based on its
exploration of the factors and methods used by defendant
in determining individual compensation.
III. AMENDED COMPLAINT
Finally, defendant contends the trial court erred in failing
to strike plaintiff's amended complaint as violative of the
Michigan Rules of Court and futility. This Court reviews
for an abuse of discretion the trial court's decision to
strike a pleading. Belle Isle Grill Corp., 256 Mich.App at
469. The interpretation of a court rule presents an issue
of law that this Court reviews de novo. Acorn Inv. Co.
v. Mich. Basic Prop. Ins. Ass'n, 495 Mich. 338, 348; 852
NW2d 22 (2014); Muci v. State Farm Mut Auto Ins. Co.,
478 Mich. 178, 187; 732 NW2d 88 (2007). A court by
definition abuses its discretion when it makes an error of
law. Kidder v. Ptacin, 284 Mich.App 166, 170; 771 NW2d
806 (2009) (citation and quotation marks omitted).
*12 When construing a court rule, the legal principles
governing the interpretation and application of statutes
are applicable. In re KH, 469 Mich. 621, 628; 677
NW2d 800 (2004). The objective of the judiciary when
interpreting a statute is to discern and give effect to the
intent of the Legislature. Whitman v. City of Burton, 493
Mich. 303, 311; 831 NW2d 223 (2013). The most reliable
evidence of the Legislature's intent is deemed to be the
language of the statute. Id. When construing statutory
language, [the court] must read the statute as a whole and
in its grammatical context, giving each and every word
its plain and ordinary meaning unless otherwise defined.
In re Receivership of 11910 South Francis Rd, 492 Mich.
208, 222; 821 NW2d 503 (2012). Effect is to be given to
every word, phrase, and clause within the statute, and the
court is to avoid a construction that would render part of
the statute surplusage or nugatory. Johnson v. Recca, 492
Mich. 169, 177; 821 NW2d 520 (2012). If the language
of a statute is clear and unambiguous, the statute must be
enforced as written and no further judicial construction is
permitted. Whitman, 493 Mich. at 311.
2017 Thomson Reuters. No claim to original U.S. Government Works.
MCR 2.118 provides, in pertinent part:
(A) Amendments.
(1) A party may amend a pleading once as a matter
of course within 14 days after being served with a
responsive pleading by an adverse party, or within 14
days after serving the pleading if it does not require a
responsive pleading.
(2) Except as provided in subrule (A)(1), a party may
amend a pleading only by leave of the court or by
written consent of the adverse party. Leave shall be
freely given when justice so requires.
Plaintiff served his complaint on defendant on December
27, 2013. Rather than filing an answer to the complaint,
defendant elected to file a motion for summary disposition
on January 16, 2014. While the motion was pending,
plaintiff filed an amended complaint, adding a claim for
retaliation, on January 31, 2014.
A motion for summary disposition is not considered a
responsive pleading. MCR 2.110(A); City of Huntington
Woods v. Ajax Paving Indus., Inc., 179 Mich.App 600,
601; 446 NW2d 331 (1989). In accordance with MCR
2.110(A), a pleading includes only a complaint, a cross-
complaint, a counterclaim, a third-party complaint, an
answer to any of the former, and a reply to an answer.
MCR 2.110(A) specifically states, [n]o other form of
pleading is allowed. Because defendant never filed a
responsive pleading to plaintiff's complaint, but only a
motion for summary disposition, plaintiff had the right
to file an amended complaint as a matter of course under
MCR 2.118(A)(1). As explained within the commentary
provided by authors Dean and Longhofer in Michigan
Court Rules Practice (4th ed), 2118.2, p. 552:
Since the time allowed for an
amendment as of right is limited to
14 days after service of a responsive
pleading, it is important to
note that the term pleading
is defined under MCR 2.110(A)
to include only complaints, cross-
claims, counterclaims, third-party
complaints, an answer to any of
these, and a reply to an answer. The
list does not include, for example,
a motion for summary disposition,
14
Carey v. Foley & Lardner, LLP, Not Reported in N.W.2d (2016)
2016 WL 4203435

under MCR 2.116, or a motion where amendment would be futile. An amendment

is futile where, ignoring the substantive merits of the
to strike or for a more definite
claim, it is legally insufficient on its face. [Id. (citations
statement under MCR 2.115. A
omitted).]
party may therefore appropriately
reply to a motion under either rule
Plaintiff's retaliation claim is not futile. The retaliation
with an amended pleading designed
claim added to plaintiff's complaint alleged that he
to cure the defect revealed by
complained to defendant yearly, in conjunction with
the motion (assuming a responsive
his receipt of notification of his compensation, that he
pleading has not also been filed and
was dissatisfied with the amount received and attributed
served more than 14 days before the
the perceived disparity as being attributable to age
proposed amendment).
discrimination. Because we find that this is a jury question,
*13 As such, the trial court did not err in determining the amended complaint should be allowed. Defendant
that the timeframes of MCR 2.118 did not preclude however, is not precluded from challenging plaintiff's
plaintiff's filing of an amended complaint. retaliation claim by timely filing a motion for summary
disposition with the trial court.
Leave to amend a pleading should be freely granted if
justice requires. MCR 2.118(A)(2); Hakari v. Ski Brule, Affirmed in part, reversed in part and remanded to the
Inc., 230 Mich.App 352, 355; 584 NW2d 345 (1998). trial court for further action consistent with this opinion.
We do not retain jurisdiction.
However, leave to amend a complaint may be denied
for particularized reasons, such as undue delay, bad
faith, or dilatory motive on the movant's part, repeated All Citations
failure to cure deficiencies by amendments previously
Not Reported in N.W.2d, 2016 WL 4203435
allowed, undue prejudice to the opposing party, or

End of Document 2017 Thomson Reuters. No claim to original U.S. Government Works.

2017 Thomson Reuters. No claim to original U.S. Government Works. 15

EXHIBIT 3
Cole v. Marathon Oil Corporation, --- Fed.Appx. ---- (2017)
2017 WL 4857544
Only the Westlaw citation is currently available.
This case was not selected for
publication in West's Federal Reporter.
See Fed. Rule of Appellate Procedure 32.1
generally governing citation of judicial
decisions issued on or after Jan. 1, 2007.
See also U.S.Ct. of App. 6th Cir. Rule 32.1.
United States Court of Appeals,
Sixth Circuit.
Gregory COLE; Annie Shields, Plaintiffs-Appellants,
v.
MARATHON OIL CORPORATION; Marathon
Petroleum Corporation; Marathon Petroleum
Company LP, Defendants-Appellees.
No. 16-2660
| Plaintiffs sued Marathon on February 22, 2016, asserting
Filed October 26, 2017
ON APPEAL FROM THE UNITED STATES
DISTRICT COURT FOR THE EASTERN DISTRICT
OF MICHIGAN
Attorneys and Law Firms
Steven J. German, German Rubenstein, New York,
NY, Nicholas A. Migliaccio, Migliaccio & Rathod,
Washington, DC, Christopher Nidel, Law Office,
Washington, DC, Alyson Oliver, Law Office, Rochester,
MI, for Plaintiffs-Appellants
Amy M. Johnston, Michael Christopher Simoni, Miller
Canfield Paddock & Stone, Detroit, MI, for Defendants-
Appellees
BEFORE: COOK, KETHLEDGE, and DONALD,
Circuit Judges.
Opinion
PER CURIAM.
*1 This case arises from Marathon Petroleum
Company's operation of an oil refinery in Detroit,
Michigan. Plaintiffs, residents living near the refinery,
sued Marathon, alleging that the refinery's discharge
of noxious pollutants contaminated their property and
constituted a private nuisance. The district court dismissed
2017 Thomson Reuters. No claim to original U.S. Government Works.
Plaintiffs' case on statute-of-limitations grounds. We
reverse and remand.
I.
Marathon has continuously operated an oil refinery
in southwest Detroit since the 1930s. The refinery's
operations include crude distillation, catalytic cracking,
hydrotreating, reforming, alkylation, sulfur recovery and
coking to produce gasoline, distillates, asphalt, fuel-
grade coke, chemical-grade propylene, propane, slurry
and sulfur. According to Plaintiffs, these manufacturing
processes result in the generation, creation, release,
emission and discharge of Refinery Contaminants,
hazardous substances, noise, odors, vapors, soot, dirt and
fumes.
Seeking to represent a class of similarly situated neighbors,
claims sounding in nuisance and negligence (they
filed an amended complaint on March 8, 2016). 1 In
particular, Plaintiffs allege that their properties have
been contaminated with toxic and hazardous substances
released from Defendants' Detroit Refinery, that the
Refinery Contaminants have been linked to asthma,
cancer, lung disease, nervous system harm, blindness and
other serious illness, and that noxious odors and loud
noises emanating from the refinery interfere with their
property use.
Marathon moved to dismiss pursuant to Fed. R. Civ. P.
12(b)(6), asserting that Plaintiffs failed to allege sufficient
facts to support their nuisance and negligence claims,
and that Michigan's three-year statute of limitations
foreclosed recovery. According to Marathon, Plaintiffs'
alleged injuries first occurred more than three years before
Plaintiffs filed suit: Plaintiffs do not plead any facts from
which the Court can infer that their alleged injuries first
occurred less than three years ago. Plaintiffs countered
that Marathon's present, continuing and ongoing
acts' give rise to [their] claims.
The district court declined to address the
parties' sufficiency-of-the-pleadings arguments, instead
dismissing the nuisance and negligence claims as time-
barred. Plaintiffs appealed.
1
Cole v. Marathon Oil Corporation, --- Fed.Appx. ---- (2017)
II.
Michigan's statute of limitations for private nuisance and
negligence claims requires filing within three years after
the claim first accrued to the plaintiff. Mich. Comp. Laws
600.5805(1), (10). The claim accrues when both the last
[wrongful] conduct and first, subsequent corresponding
injury occured. Marilyn Froling Revocable Living Tr. v.
Bloomfield Hills Country Club, 283 Mich.App. 264, 769
N.W.2d 234, 250 (2009). Seeking dismissal of Plaintiffs'
claims, Marathon argued that Michigan's statute of
limitations barred Plaintiffs' nuisance and negligence
claims, and the district court agreed. We review de novo
a district court's determination that a plaintiff filed a
complaint outside of the applicable limitations period.
Tolbert v. Ohio Dep't of Transp., 172 F.3d 934, 938 (6th
Cir. 1999).
*2 In granting Defendants' motion to dismiss, the court
emphasized that Plaintiffs fail to identify when their
nuisance claim first accrued or a single date in which
the act (i.e. Defendants' operation of its refinery) and
Plaintiffs' incidental injuries first occurred. As the court
put it, Plaintiffs do not allege any facts from which the
[c]ourt can infer that the alleged injuries first occurred less
than three years ago. Instead, the [c]ourt is left to speculate
as to when the period of limitations began to run. And
although the complaint alleged that Marathon continued
to pollute within the limitations period, the court reasoned
that the complaint wholly lacks facts showing that the
alleged nuisance (i.e. Defendants' operation of its refinery)
is any different than it was outside of the limitations
period.
Footnotes
1 The complaint also included a strict-liability claim, which the district court dismissed because it is not a viable claim under
Michigan law. Plaintiffs decline to challenge that ruling on appeal.
End of Document
2017 Thomson Reuters. No claim to original U.S. Government Works.
The district court erred when it concluded that all
of Plaintiffs' claims accrued at the first incident of
Marathon's allegedly wrongful conduct, even though the
conduct and resultant harm continue to the present
day. Under Michigan's statute-of-limitations law, each
alleged violation ... [is] a separate claim with a
separate time of accrual. Dep't of Envtl. Quality v.
Gomez, 318 Mich.App. 1, 896 N.W.2d 39, 53 (2016).
Marathon's alleged wrongful conduct is the generation,
creation, release, emission and discharge of Refinery
Contaminants. Thus, each discharge is a violation giving
rise to a separate claim. Id.; Garg v. Macomb Cty. Cmty.
Mental Health Servs., 472 Mich. 263, 696 N.W.2d 646, 658
(2005). Plaintiffs' complaint includes allegations of both
past and present wrongful conduct. Any claims for alleged
discharges occurring prior to February 22, 2013, which
was three years prior to Plaintiffs' complaint, are time-
barred. See Mich. Comp. Laws 600.5805(10); Garg, 696
N.W.2d at 660. Any claims for discharges occurring after
February 22, 2013, are timely. See Gomez, 896 N.W.2d
at 53 ([T]hat some of a plaintiff's claims accrued outside
the applicable limitations period does not time-bar all the
plaintiff's claims.). The district court therefore erred in
dismissing the complaint as time-barred.
III.
For these reasons, we reverse and remand for further
proceedings consistent with this opinion.
All Citations
--- Fed.Appx. ----, 2017 WL 4857544
2017 Thomson Reuters. No claim to original U.S. Government Works.
2
 STATE OF MICHIGAN

IN THE CIRCUIT COURT FOR THE COUNTY OF MACOMB

In re CITY OF STERLING HEIGHTS Case. No. 17-000052-AS

/ Hon. Jennifer M. Faunce

CITY OF STERLING HEIGHTS,

Plaintiff,

vs.

MACOMB INTERCEPTOR DRAIN DRAINAGE

DISTRICT; COUNTY OF MACOMB; MACOMB
COUNTY WASTEWATER DISPOSAL DISTRICT;
CANDICE S. MILLER; BRYAN SANTO; ROB
MIJAC; ANTHONY MARROCCO; and WILLIAM
MISTEROVICH,

Defendants
/

PROOF OF SERVICE

I hereby certify that on November 9, 2017 the foregoing Sterling Heights Brief in
Opposition To The Macomb Defendants Motion For Summary Disposition was e-filed with the
Clerk of the Court using the electronic filing system, which will send notification of such filing to
all parties of record.
/s/ I. W. Winsten
I. W. Winsten (P30528)

Received on 11/9/2017 at 11:37 AM

iww@honigman.com
25970326.1