# Appendix — Cohl v. Otsego County, Michigan (No. 06-1417) > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386016_2476%3A2 ## Record - **Collection:** Supreme Court brief - **Document type:** Appendix - **Published:** January 1, 2007 ## Text QSupreme Court of the Vbnited States COHL, STOKER, TOSKEY & MCGLINCHEY, P.C., Petitioner V. 46% CIRCUIT TRIAL COURT, Respondent AND OTSEGO COUNTY, Respondent ON PETITION FOR WRIT OF CERTIORARI TO THE MICHIGAN SUPREME COURT APPENDIX IN SUPPORT OF PETITION FOR WRIT OF CERTIORARI ALLAN FALK (P13278) Counsel of Record and Counsel for Petitioner ALLAN FALK, P.C. 2010 CIMARRON DRIVE OKEMOS, MI 48864-3908 (517) 381-8449 APPENDIX Appendix A — Michigan Supreme Court order denying leave to appeal, issued Nov. 1, 2006 ...........++. la Appendix B - Michigan Supreme Court order denying rehearing, issued January 29, 2007 ...........0+: 3a Appendix C — Michigan Supreme Court order denying leave to appeal, issued Nov. 1, 2006 .............. 5a Appendix D — Michigan Supreme Court order denying rehearing, issued January 29, 2007 ...........:+. 7a Appendix E — Michigan Court of Appeals opinion Speed May DS, BOTS nevencscesresonsrseseveveenevenneenmanonsssensaseninehs 8a Appendix F - Trial court order issued May 30, 2003, granting sanctions against petitioner ............sseseeeees 52a Appendix G Trial court opinion issued May 30, 2003, granting sanctions against petitioner ................ 55a Appendix H Amici curiae petition of Michigan Judges Ass’n, Michigan District Judges Ass’n, and Michigan Probate Judges ASS’N ........cccsccseecseeeeeeereeeees 92a Appendix! 46" Circuit Trial Court v Crawford Co, 476 Mich 131 (2006) (majority decision only) ............. 98a Appendix J Michigan State Treasurer’s Report .... 134a Appendix K Michigan Supreme Court orders of November 1, 2006, remanding for EL rntnidneceeien cocececesesevesseecnscecovervesees 145a Appendix L Michigan Judges Ass’n annual ET ilitcintsincceecisetnescsveccesecsesvoecssseseotsosecesureses 149a Appendix M Michigan Judges Ass’n Articles of Incorporation and Assumed Name Certificate ... 155a Appendix N Judge Kolenda’s autobiographical NE ir eehandsaveries vecevsnvereesseesscorscvorescereececees 162a Appendix O Application for leave to appeal, Mich S Ct No. 128882) (sanctions as to 46" Circuit occ cccncsescsucescusnesoterecesecerse 164a Appendix P Application for leave to appeal, Mich S Ct No. 128884 (sanctions as to Otsego TT dEis Hitslttesesrernriecesoreoorcesreevereesoecesesseseovecosensees 235a Appendix Q - United States Constitution, Amendment Fourteen, Section 1 .......ccccceeecceeeeeeeee eens 306a Appendix R_ Transcript of Oral Argument, Michigan Court of Appeals, Feb. 15, 2005 EE Eis heisspavstvsoneeesseoseerconceeossccenoverersecessesserseees 307a Appendix S 28 U.S.C. §§1443(1) and 1446(b) ......... 346a Appendix T Michigan Supreme Court Admin RON BOR, A) BVLICIN. CIV ..00:c0ccccccccoscovrnecesesvescsssoeeee 347a Appendix U Mich. Comp. L. §§600.8148 and GDS sssnisesusinssaricnscatitainiviestssmiteadaniiniliaanntiiiiiieiliineds 350a Appendix V Michigan Court Rules 2.114(E) and 2326 CGF) QUE GIG tiveesecssonsincisnsniinntittiaitcinmmbndinias 35la Appendix W Michigan Uniform Budgeting and _ Accounting Act (UBAA) (Sections 16-20) ............. 352aa Appendix X Mich. Const. 1963, art. 6, §§1 RIVE SD .cocersnrviniovestiivisiannaviniesaniintdipiabaeinatniias 357a Appendix Y Mich. Comp. L. §600.226(1) ...........+. 358aa Appendix Z Rule 2 of the Rules Concerning the Judicial Conference of Michigan .............:s0000 359a Appendix AA Michigan Code of Judicial ene CIEE SE nctercscncsscrtcticendnncinniaaceniien 360a Michigan Supreme Court Order 11/1/2006 Order Entered: Nov. 1, 2006 128882 46" Circuit Trial Court Plaintiff, Counter- Defendant, Third- Party Plaintiff-Appellee Vv County of Crawford and Crawford County Board of Commissioners Defendants, and Kalkaska County, Third Party Plaintiff, Counter-Defendant, and County of Otsego, Appendix A Michigan Supreme Court Lansing, Michigan Clifford W. Taylor, Chief Justice Michael F. Cavanagh Elizabeth A. Weaver Marilyn Kelly Maura D. Corrigan Robert P. Young, Jr. Stephen J. Markman, Justices SC: 1228882 COA: 254181 Crawford CC: 02-005951-CZ Third Party Defendant-Appellee Cohl, Stoker, Toskey & McGlinchey, P.C., Appellant. / By order of December 28, 2005, the application for leave to appeal the May 3, 2005 judgment of the Court of Appeals was held in abeyance pending the decision in 46" Circuit Trial Court v Crawford County (Docket No. 128878). On order of the Court, the case having been decided on July 28, la Michigan Supreme Court Order 11/1/2006 Appendix A 2006, 476 Mich 131 (2006), the application is again considered and, pursuant to MCR 7.302(G)(1), in leu of granting leave to appeal, we VACATE in part the judgment of the Court of Appeals and we REMAND this case to the Court of Appeals, which shall hold this case in abeyance pending its decision on remand in 46th Circuit Trial Court v Crawford County (Court of Appeals Docket Nos. 246823, 248593 and 251390). If, after 46th Circuit Trial Court v Crawford County .is decided on remand, the Court of Appeals determines that Kalkaska and Crawford Counties are responsible for the 46th Circuit Trial Court’s attorney fees, the Court of Appeals shall consider whether Kalkaska and Crawford Counties should be liable for sanctions when they will be responsible for the fees of the attorneys that responded to the sanctionable pleadings. In all other respects, leave to appeal is DENJED, because we are not persuaded that the remaining questions presented should be reviewed by this Court. The motions for immediate consideration and for peremptory reversal are DENIED. The remaining motion for miscellaneous relief is GRANTED. A public question being involved, and in light of the relationships between the parties, no costs are awarded. KELLY, J., would deny leave to appeal. I. CORBIN R. DAVIS, Clerk of the Michigan Supreme Court, certify that the foregoing is a true and complete copy of the order entered at the direction of the Court. November 1, 2006 __—/s/ Corbin A. Davis Clerk 2a Michigan Supreme Court Order 1/29/2007 Appendix B Order Michigan Supreme Court Entered: Jan. 29, 2007 Lansing, Michigan Clifford W. Taylor, Chief Justice 128882 Michael F. Cavanagh Elizabeth A. Weaver 46" Circuit Trial Court Marilyn Kelly Plaintiff, Counter- Maura D. Corrigan Defendant, Third- Robert P. Young, Jr. Party Plaintiff-Appellee Stephen J. Markman, Vv Justices County of Crawford and Crawford County Board SC: 1228882 of Commissioners COA: 254181 Defendants, Crawford CC: 02-005951-CZ and Kalkaska County, Third Party Plaintiff, Counter-Defendant, and County of Otsego, Third Party Defendant-Appellee Cohl, Stoker, Toskey & McGlinchey, P.C., Appellant. / On order of the Court, the motion for reconsideration of this Court’s November 1, 2006 order is considered, and it is GRANTED. In light of the fact that the circuit court did not impose sanctions on Kalkaska or Crawford Counties in this case, but only imposed sanctions on Cohl, Stoker, Toskey & McGlinchey, P.C., and the parties concede that if sanctions 3a Michigan Supreme Court Order 1/29/2007 Appendix B are paid by Cohl, Stoker, Toskey & McGlinchey, P.C., the 46th Circuit Trial Court will not receive a double recovery of its attorney fees, we VACATE that part of our November 1, 2006 order that vacated the Court of Appeals opinion in part and remanded this case to the Court of Appeals. On reconsideration, the application for leave to appeal the. May 3, 2005 judgment of the Court of Appeals is again considered, and it is DENIED, because we are not persuaded that the- questions presented should be reviewed by this Court. I, CORBIN R. DAVIS, Clerk of the Michigan Supreme Court, certify that the foregoing is a true and complete copy of the order entered at the direction of the Court. January 29, 2007 __/s/ Corbin A. Davis Clerk 4a Michigan Supreme Court Order 11/1/2006 Appendix C Order Michigan Supreme Court Entered: Jan. 29, 2007 Lansing, Michigan Clifford W. Taylor, Chief Justice 128884 & (84) Michael F. Cavanagh Elizabeth A. Weaver County of Crawford and Marilyn Kelly County of Kalkaska, Maura D. Corrigan Plaintiffs Robert P. Young, Jr. Stephen J. Markman, Vv Justices County of Otsego, Defendant-Appellee SC: 1228884 COA: 254182 and Crawford CC: 02-010014-CZ Cohl, Stoker, Toskey & McGlinchey, P.C., Appellant. os / By order of December 28, 2005, the application for leave to appeal the May 3, 2005 judgment of the Court of Appeals was held in abeyance pending the decision in 46" Circuit Trial Court v Crawford County (Docket No. 128878). On order of the Court, the case having been decided on July 28, 2006, 476 Mich 131 (2006), the application “is again considered, and it is DENIED, because we are not persuaded that the questions presented should be reviewed by this Court. Sa Michigan Supreme Court Order 11/1/2006 Appendix C The miscellaneous motion is GRANTED. A public question being involved, and in light of the relationships between the parties, no costs are awarded. I, CORBIN R. DAVIS, Clerk of the Michigan Supreme Court, certify that the foregoing is a true and complete copy of the order entered at the direction of the Court. November 1, 2006 s/ Corbin A. Davis Clerk 6a Michigan Supreme Court Order 1/29/2007 Appendix D Order Michigan Supreme Court Entered: Jan. 29, 2007 Lansing, Michigan Clifford W. Taylor, Chief Justice 128884(88) Michael F. Cavanagh Elizabeth A. Weaver County of Crawford and Marilyn Kelly County of Kalkaska, Maura D. Corrigan Plaintiffs Robert P. Young, Jr. Stephen J. Markman, V Justices County of Otsego, Defendant-Appellee SC: 1228884 COA: 254182 and Crawford CC: 02-010014-CZ Cohl, Stoker, Toskey & McGlinchey, P.C., Appelant. innmeniagan vahiusbinienaiaiinisats / On order of the Court, the motion for reconsideration of this Court’s November 1, 2006 order is considered, and it is DENIED, because it does not appear that the order was entered erroneously. I, CORBIN R. DAVIS, Clerk of the Michigan Supreme Court, certify that the foregoing is a true and complete copy of the order entered at the direction of the Court. january 29, 2007___/s/ Corbin A. Davis Clerk Michigan Court of Appeals opinion 5/3/05 APPENDIX E STATE OF MICHIGAN COURTOFAPPEALS 46TH CIRCUIT TRIAL COURT, FOR PUBLICATION May 3, 2005 Plaintiff /Counter- 9:05 a.m. Defendant/ThirdParty- Plaintiff-Appellee, No. 254179 Vv Crawford Circuit Court LC No. 02-005951-CZ COUNTY OF CRAWFORD and CRAWFORD COUNTY BOARD OF COMMISSIONERS, Defendants /Counter-Plaintiffs / Third-Party-Plaintiffs-Appellants, COUNTY OF KALKASKA, Third-Party-Plaintiff/ CounterDefendant-Appellant, and COUNTY OF OTSEGO, Third-Party-Defendant-Appellee. COUNTY OF CRAWFORD and COUNTY OF KALKASKA, Plaintiffs- Appellants, Vv No. 254180 Otsego Circuit Court COUNTY OF OTSEGO, LC No. 02-010014-CZ _ Defendant-Appellee. [*2] 46TH CIRCUIT TRIAL COURT, Plaintiff /Counter-Defendant/Third Party-Paintiff-Appellee, 8a Michigan Court of Appeals opinion 5/3/05 APPENDIX E v No. 254181 Crawford Circuit Court L.C. No. 02-011004-CZ COUNTY OF CRAWPORD and CRAWFORD COUNTY BOARD OF COMMISSIONERS, Defendants /CounterPlaintiffs / Third-Party-Plaintiffs, COUNTY OF KALKASKA, Third-Party-Plaintiff/CounterDefendant, COUNTY OF OTSEGO, Third-Party-Defendant-Appellee, and COHL STOKER TOSKEY & MCGLINCHEY PC, Appellant. COUNTY OF CRAWFORD and COUNTY OF KALKASKA, Plaintiffs, v No. 254182 Otsego Circuit Court COUNTY OF OTSEGO, LC No. 02-010014-CZ, Defendant-Appellee, And COHL STOKER TOSKEY & MCGLINCHEY PC, Appellant. Before: Zahra, P.J., and Neff and Cooper, JJ. 9a Michigan Court of Appeals opinion 5/3/05 APPENDIX E COOPER, J. Kalkaska and Crawford Counties and the Crawford County Board of Commissioners (the Counties) appeal as of right in these consolidated appeals from various orders and the judgment entered by Judge Dennis Kolenda (the lower court) in the litigation pursued by the 46th Circuit Trial Court (the Trial Court) seeking adequate funding. The Counties also appeal from various orders entered in the related suit filed by the Counties against Otsego County, the control unit for the Trial Court. We affirm. [*4] I. Facts and Procedural Background These consolidated cases arise out of a funding dispute between the Trial Court and two of its funding units—the Counties. A detailed narrative of much of the history of this case is provided in 46th Circuit Trial Ct v Crawford Co,’ an opinion issued by this Court following an interlocutory appeal. In that appeal, this Court affirraed the lower court’s award of attorney fees to the Trial Court based on its inherent power to seek adequate funding. While that appeal was pending, however, this case proceeded in the lower court. The 46th Circuit Trial Court was created by order of the Michigan Supreme Court as an experiment in consolidating the various levels of trial courts into one, unified trial court system.’ The 46th Circuit was the only multi-county experimental court created and included Otsego, Crawford, and Kalkaska counties. During the early stages of unification, the Trial Court concluded that all employees, regardless of the county in which they physically worked, should earn equal pay and receive equal benefits. Wages needed to be redetermined, as many positions had been eradicated and others had taken on_ consolidated 10a Michigan Court of Appeals opinion 5/3/05 APPENDIX E functions. Consequently, in the summer of 2000, Chief Judge Alton Davis asked the employees to make cost-saving concessions to serve as a bargaining chip in securing the funding units’ approval of a retiree healthcare plan and an improved pension plan. The employees agreed to phase out longevity pay and dedicate a portion of all future wage increases to fund the retiree benefits package. Employees also agreed to accept a cost-saving PPO that offered less coverage and had a higher prescription co-pay. Following the funding units’ passage of resolutions approving these plans, the Trial Court implemented the employee concessions at substantial savings to the Trial Court and its funding units. During the August 29, 2000 meeting, at which the Crawford County Board of Commissioners passed resolutions approving the plans, the commissioners voiced their concerns about becoming financially responsible for potential future unfunded liability and over the low figure represented as the annual retiree payment cap:’ Judge Davis promised to put a “failsafe” provision in writing to outline the method of handling any unfunded liabilities. Despite these concerns, the Board passed the following resolutions at the conclusion of the meeting: MOTION by Hanson, seconded by Beardslee, to authorize the County [to] pay 24% of $50,000 ($12,000) for the year 2000 and that payment will increase at 4% per year until 2017, and at that time will pay an estimated $94,649 and that the Blue Cross/Blue Shield medical supplement payment per individual would be 1 46th Circuit Trial Court v Crawford Co, 261 Mich App 477; lla Michigan Court of Appeals opinion 5/3/05 APPENDIX E 682 NW2d 519 (2004), lv held in abeyance 687 NW2d 297 (2004) (pending the resolution of these consolidated appeals). 2 As will be discussed in further detail later, the “demonstration project” status of the Trial Court ended in 2004; however, the Trial Court continues to function as a unified court system. 3 Judge Davis told the Board that each retiree would be entitled to $4,087 per year; however, the Board was aware that the correct figure was over $1,000 more. [*5] capped at [sic] the year 2000 at $4,087.00 [and] would increase at 4% per year until 2017 for an employee to be eligible for $7,654.00 per year. MOTION by Wieland, seconded by Hanson, to request the [Trial] Court [to] not implement the MERS B-4 upgrade at this time, but recognize the change in the 2001/2002 budget cycle. Later that day, Judge Davis learned that the correct figure for the annual retiree payment was over $5,000, and immediately informed the Crawford Board of Commissioners of his error.* Following this meeting, the Trial Court created a comprehensive contract outlining the retiree benefits package to serve as an informative guide for the Trial Court and its employees. The coritract also included the promised memorialization of the “failsafe” provision. Kalkaska and Otsego counties immediately signed the contract, but Crawford County refused. The Crawford Board of Commissioners consulted with its auditor and labor counsel after approving the retiree benefits package and was advised that its approval was unwise. Crawford County was in the 12a Michigan Court of Appeals opinion 5/3/05 APPENDIX E middle of a budget crisis and was forced to cut many county services. As a result, the Board claimed that it had not approved the pension plan and was induced to approve the retiree healthcare plan by the Trial Court's misrepresentation of cost. This led to Crawford County’s ~ refusal in FY 2001, 2002, and 2003, to appropriate the full amount of their 24% of the “rial Court’s requested operating budget.’ Although Kalkaska County initially approved of the retiree benefits package and fully funded the Trial Court, it soon followed suit by rescinding its earlier resolutions and cutting appropriations. Following lengthy negotiation with its funding units, the Trial Court filed suit against the Counties, seeking the enforcement of the contract to implement the retiree benefits package and adequate funding based on the constitutional theory of inherent powers. The Counties filed a counterclaim for declaratory judgment regarding their duty to fund the Trial Court and defended against the contract claims based on fraud. Otsego County was brought into the litigation by the Counties, who also filed a separate suit against it. The Counties asserted that Otsego County, as the Trial Court’s contro] unit, had violated the Uniform Budgeting and Accounting Act (UBAA)° by disbursing funds to the Trial Court in excess of appropriations. The Counties also raised a fraud claim against Otsego. The Counties’ fraud defense and all claims against Otsego County were dismissed before a trial on the merits began. Following a six-day trial in the summer of 2003, the lower court ruled in favor of the Trial Court on both its contract and constitutional theories in pursuit of funding.’ 4 This incorrect figure was never presented to Kalkaska County. 5 Crawford County only fully funded the Trial Court in FY l3a Michigan Court of Appeals opinion 5/3/05 APPENDIX E 2004, in exchange for the Trial Court’s voluntarily dismissal of an additional funding claim for that year. Crawford County has fully funded the Trial Court in FY 2005. 6 MCL141.421 et seq. 7 Further facts necessary to this appeal will be discussed throughout this opinion where (continued...) [*6] II. Contract Claims The lower court determined that the resolutions passed by the funding units created an explicit contract with the Trial Court to implement the retiree benefits package. Even if the parties had not formed a contract, the lower court determined that one could be implied. On appeal, the Counties contend that the lower court improperly interpreted the Crawford Board’s resolution regarding the retiree healthcare plan as a valid acceptance, rather than a counteroffer. The Counties also contend that the Crawford Board’s resolution regarding the pension plan was not an approval of the plan, but showed the Board’s intent to table all discussion until the following year. We disagree. The lower court correctly determined that Crawford County approved the retiree benefits package and formed a valid contract with the Trial Court for its implementation. Issues of contract interpretation are questions of law that we review de novo.® Issues regarding the formation of a valid contract are all questions of fact,’ which we review for clear error.” The interpretation of a county resolution, like the interpretation of a statute, is a question of law, which we review de novo.” 14a Michigan Court of Appeals opinion 5/3/05 APPENDIX E We reject the Counties’ contention that the resolutions passed by the Crawford County Board of Commissioners did not amount to a valid acceptance of an offer to implement the retiree benefits package. “Decisions regarding the legitimacy of an offer and acceptance revolve around the particular facts pertaining to a specific transaction. . . .””"’ “‘[A]n acceptance sufficient to create a contract arises where the individual to whom an offer is extended manifests an intent to be bound by the offer, through voluntarily undertaking some unequivocal act sufficient for that purpose.’””’ The acceptance must be unambiguous and strictly conform to the essential terms of the offer.’ The Trial Court correctly asserts that the essential term of the offer to implement the retiree healthcare plan is the required annual appropriation, which would be (...continued)appropriate. 8 Burkhardt v Bailey, 260 Mich App 636, 646; 680 NW2d 453 (2004). 9 See In re Costs & Attorney Fees, 250 Mich App 89, 97; 645 NW2d 697 (2002) (Costs I) (regarding whether a legitimate offer has been made and accepted forming a valid contract); Hajt v Prevention Ins Agency, Inc, 196 Mich App 84, 87-88; 492 NW2d 460 (1992) (regarding whether there was consideration for a contract). 10 MCR 2.613(C); Alan Custom Homes, Inc v Krol, 256 Mich App 505, 512; 667 NW2d 379 (2003). 11 Eggleston v Bio-Medical Applications of Detroit, Inc, 468 Mich 29, 32; 658 NW2d 139 (2003). 12 Costs I, supra at 97, quoting Patrick v US Tangible Investment Corp, 234 Mich App 541, 549; 595 NW2d 162 (1999). 13 Id., quoting Kraus vu Gerrish Twp, 205 Mich App 25, 45; 517 NW2d 756 (1994). 15a Michigan Court of Appeals opinion 5/3/05 APPENDIX E 14 Eerdmans v Maki, 226 Mich App 360, 364; 573 NW2d 329 (1997); Giannetti v Cornillie, 204 Mich App 234, 237; 514 NW2d 221 (1994), rev’d on other grounds 447 Mich 998; 525 NW2d 459 (1994) (only a material departure from the terms of the offer invalidates an acceptance). [*7] 24% of $50,000 for Crawford County. The Crawford County Board of Commissioners clearly agreed to this term in the resolution. The annual payment cap was not an essential term. The change in amount did not affect the overall appropriation of the funding units. Therefore, this error was not a material deviation from an essential term and Crawford County’s resolution was a valid acceptance. Furthermore, the initial error in the representation of this figure did not negate the mutual assent of the parties. Fraud in the inducement is a defense to the formation of a contract. However, the claimant must prove that it actually relied upon a material misrepresentation.” The alleged “misrepresentation” was not material. Additionally, as will be discussed in great detail later, the lower court properly dismissed the Counties’ fraud defense before trial due to a lack of actual reliance. We also disagree with the Counties’ contention that the second Crawford County resolution did not approve of the pension plan. The only evidence supporting the Counties’ claimi is a series of affidavits by the individual commissioners stating their actual intent in passing the resolution. A county board speaks only through its official minutes and resolutions and their import may not be altered or supplemented by parol evidence regarding the intention of the _ individual members.’ The clear language of the second resolution shows the Board’s intent to approve of the plan, but delay l6a Michigan Court of Appeals opinion 5/3/05 APPENDIX E its implementation until the following cycle. We also reject the Counties’ contention that Crawford County’s failure to sign the written contract outlining the retiree benefits package vitiated the existence of a contract. The official minutes and resolutions of the August 29, 2000 meeting memorialize the agreement of the parties. They officially voted to approve the retiree benefits package and the Trial Court relied on those resolutions to the detriment of its employees. While Judge Davis created a formal written contract regarding the retiree benefits package, Crawford County’s signature on this extraneous writing was not required as evidence of the agreement.” The Counties also argue that any continued duty to perform under the contract ended when they passed resolutions rescinding their prior approval of the retiree benefits package. However, a party to a contract may not unilaterally modify or waive a contract.”* Finally, we 15 Samuel D Begola Services, Inc v Wild Bros, 210 Mich App 636, 639; 534 NW2d 217 (1995). 16 Tavener v Elk Rapids Rural Agricultural Sch Dist, 341 Mich 244, 251; 67 NW2d 136 (1954), quoting Stevenson v Bay City, 26 Mich 44, 45 (1872). 17 We reject the dissent’s assertion that the contract between the Counties and the Trial Court to implement the retiree benefits package lacked consideration as counties have a preexisting statutory duty to fund the courts. The Trial Court’s employees supplied the consideration for this contract by giving up rights to which they were otherwise entitled in order to secure the Counties’ agreement to the benefits package. 18 Quality Prods & Concepts Co v Nagel Precision, Inc, 469 Mich 362, 372-373; 666 NW2d 251 (2003); H ] Tucker Assocs, Inc v 17a Michigan Court of Appeals opinion 5/3/05 APPENDIX E Allied Chucker & Engineering Co, 234 Mich App 550, 564- 565; 595 NW2d 176 (1999). [*8] reject the Counties’ contention that the contract was invalid because its term exceeded the term of the current Board. There are many administrative functions that must be handled on a day-to-day basis that may require contracts lasting longer than the normal term of office.”” If a successor board had the power to repudiate these types of contracts at will, a government entity’s ability to do business would be compromised.” Accordingly, the lower court properly determined that the Trial Court had formed a valid contract with its funding units to implement the retiree benefits package. III. Right to Seek Adequate Funding Based on Inherent Powers The lower court also determined that the Trial Court had the inherent power to file suit seeking adequate funding from the Counties. Whether the Trial Court has the inherent power to compel the Counties to fund its retiree benefits package is a constitutional question, which we review de novo.” In discussing a court’s inherent power to seek adequate funding, this Court reasoned as follows in the previous appeal: The principles the lower court relied on in this regard have been accepted in Michigan for at least the last thirty-five years. In Wayne Circuit Judges v Wayne Co, 383 Mich 10, 33; 172 NW2d 436 (1969) (Wayne I), Justice Black, with Justice Dethmers concurring, noted the “unanimous” authority that a court charged with the responsibility for judicial service “receives and accepts with that responsibility -18a Michigan Court of Appeals opinion 5/3/05 APPENDIX E the inherent power and duty to take such action as is reasonably necessary to fulfil the constitutional obligation thus undertaken.” On rehearing two years later, the Supreme Court adopted the Black-Dethmers opinion as the opinion of the Court, noting that it had been “authenticated” by decisions handed down by the supreme courts of Missouri and Pennsylvania: In view of the developing strength of the principle of inherent power and duty of the judiciary, called into play as it was by the opinion of Justices Dethmers and Black aforesaid, this Court is constrained on rehearing to adopt that opinion; adding only that the judiciary . . . must stand foursquare in support of the constitutional doctrines which, most recently in the 19 See Harbor Land Co v Grosse Ile, 22 Mich App 192; 177 NW2d 176 (1970) (finding that a township board had the power to enter into a long-term contract for the construction and operation of a waste treatment plant). 20 As we affirm the lower court’s determination that an express contract existed to implement the retiree benefits package, we need not reach the lower court's alternate determination that an implied contract existed. However, we note that, if necessary, a contract could be implied under the circumstances to prevent the Counties’ unjust enrichment as the Trial Court’s employee concessions had already been implemented. See Martin v East Lansing Sch Dist, 193 Mich App 166, 177; 483 NW2d 656. 21 Harvey v Michigan, 469 Mich 1, 6; 664 NW2d 767 (2003). [*9} [Commonwealth v Tate, 442 Pa 45; 274 A2d 193 (1971)} case, were declared. “Must” we have accented, just as the Tate Court stressed “must possess” in this terse and pointed summary of constitutional necessity . . . : 19a Michigan Court of Appeals opinion 5/3/05 APPENDIX E “Expressed in other words, the Judiciary must possess the inherent power to determine and compel payment of those sums of money which are reasonable and necessary to carry out its mandated responsibilities, and its powers and duties to administer Justice, if it is to be in reality a co- equal, independent Branch of our Government. This principle has long been recognized not only in this Commonwealth but also throughout our Nation.” [Wayne Circuit Judges v Wayne Co, 386 Mich 1, 8- 9; 190 NW2d 228(1971) (Wayne II ), quoting Tate, supra at 52.] A more recent and oft-cited discussion of the inherent power doctrine is found in Employees & Judge of the Second Judicial Dist Court v Hillsdale Co, 423 Mich 705; 378 NW2d 744 (1985) [hereinafter Hillsdale]. The opinion of the majority agreed with the dissenting justices that “an inherent power analysis is implicated when judicial functions are in jeopardy” and reiterated that the “Court has stood ‘foursquare’ in support of the constitutional doctrine of inherent power” while concluding that the doctrine was not implicated under the facts of the case at hand. /d. at 724. In a dissent concurred in by two other justices, Justice Riley noted that, “irrespective of specific grant by constitution or legis!ation,’” the inherent power doctrine supplies “‘authority to irwcur and order paid all such expenses as are reasonably iuecessary for the holding of court and the administration of the duties of courts of justice.’” Id. at 734 (Riley, J., dissenting), quoting 20 Am Jur 2d, Courts, § 78, p 440, and 59 ALR3d, § 2, p 574. Justice Riley explained that [this inherent authority of the court is nonajudicatory. It does not deal with justiciable matters. It only relates to the administration of the business of the court. 20a Michigan Court of Appeals opinion 5/3/05 APPENDIX E One aspect of the administration of district and circuit courts is the determination of the operational needs of the court and the establishment of a budget to provide for these needs. [Hillsdale, supra at 734-73 5.] It is clear from these and other precedents, see, e.g., Judicial Attorneys Ass’n v Michigan, 459 Mich 291, 299- 300; 586 NW2d 894 (1998); Livingston Co v Livingston Circuit Judge, 393 Mich 265, 273; 225 NW2d 352 (1975); Ottawa Co Controller v Ottawa Probate Judge, 156 Mich App 594, 602-603; 401 NW2d [*10] 869 (1986); [17th Dist Probate Ct v Gladwin Co Bd of Comm ‘rs, 155 Mich App 433, 45 1-452; 401 NW2d 50 (1986)], that a court has inherent power to take whatever steps are reasonably necessary to fulfill the judicial function.'7! In taking those steps reasonably necessary to fulfill the judicial function, a court must remember that “‘each branch must recognize and respect the limits on its own authority and the boundaries of the authority delegated to the other branches.’”” A court has the inherent power to seek “financing that is reasonable and necessary.”** When a court files suit seeking adequate funding, it must show that the funding unit has failed to appropriate funds to allow the court to function “servicably as a co-equal branch of Michigan’s government.”” This Court defined “serviceability” as follows: - Serviceability must_be defined in the context of Justice Black’s opinion, i.e. “urgent”, “extreme”, “critical”, and “vital” needs. A serviceable level of funding is the minimum budgetary appropriation at which statutorily mandated functions can be fulfilled. A serviceable level is not met when the failure to fund eliminates the function or creates an emergency immediately threatening the existence of the function. A serviceable level is not the optimal level. A 2la Michigan Court of Appeals opinion 5/3/05 APPENDIX E function funded at a serviceable level will be carried out in a barely adequate manner, but it will be carried out. A function funded below a serviceable level, however, will not be fulfilled as required by statute.!*! The lower court’s determination that the Trial Court’s requested budget, specifically the requested appropriation for the retiree benefits package, was reasonable and necessary represents a factual finding that we review for clear error.” The lower court found that the Trial Court had reduced its staff to the “bare bones” and would be unable to function at a serviceable level if required to make more cuts. The lower court further found that funding the requested benefits was indispensable to serviceability. Many employees had taken on extra duties and all employees had accepted concessions to their detriment. Continuing to operate without the bargained-for retirement benefits package would cause morale to plummet and competent 22 46th Circuit Trial Court, supra at 488-490. 23 Employees & Judges of the 2d Judicial Dist Ct v Hillsdale Co, 423 Mich 705, 717; 378 NW2d 744 (1985) (Hillsdale), quoting United States v Will, 449 US 200, 208; 101 S Ct 471; 66 L Ed 2d 392 (1980). 24 17th Dist Probate Ct v Gladwin Co Bd of Comm 'rs, 155 Mich App 433, 454-455; 401 NW2d 50 (1986) (Gladwin), citing Livingston Co v Livingston Circuit Judge, 393 Mich 265; 225 NW2d 352 (1975), and Hillsdale, supra. 25 Wayne Circuit Judges v Wayne Co, 383 Mich 10, 33; 172 NW2d 436 (1969) (Wayne 1). 26 Wayne Co Prosecutor v Wayne Co Bd of Comm ‘rs, 93 Mich App 114, 123-124; 286 NW2d 62 (1979). See also Wayne Co Sheriff v Wayne Co Bd of Comm ‘rs, 148 Mich App 702, 708; 385 NW2d 22a Michigan Court of Appeals opinion 5/3/05 APPENIMX E 267 (1983). 27 MCR 2.613(C); Alan Custom Homies, supra at 512. See also Gladwin, supra at 456-457. [*11] employees to take alternate employment, leading to a decrease in productivity. These findings were based on the record evidence and were not clearly erroneous. The Counties’ contention that the Trial Court’s budget request was excessive and unreasonable in light of the state of the Counties’ budgets is without merit. Although the Counties assert that they were financially unable to fund the Trial Court at the requested level, they have not demonstrated that the requested funds were necessary to fund other “obligations having the same rank and priority.” Second, the Trial Court presented evidence that certain employees in each of the funding units received identical pension benefits.” Third, the Trial Court was not required to select a retiree benefits package consistent with that provided by any of the three funding units. AO 1998-5 provides that a court with multiple funding units may implement “a single, uniform personnel policy that does not wholly conform with specific personnel polices of any of the court’s funding units.” Finally, we note that the lower court's factual determination that the retiree benefits package was a reasonable and necessary expense to the continued serviceability of the Trial Court is consistent with longstanding precedent finding similar court expenses to be within reason.” Accordingly, the lower court did not commit clear error by determining that the requested appropriation to fund the retiree benefits package was reasonable and necessary to the continued serviceability of the Trial Court. Michigan Court of Appeals opinion 5/3/05 APPENDIX E IV. Award of Attorney Fees to the Trial Court Based on Inherent Powers A. Entitlement to Attorney Fees Early in the litigation, the lower court determined that the Trial Court was entitled to recover its attorney fees expended in seeking adequate funding. The funding units were each required to provide one-third of these fees. As a court has the inherent power to seek adequate funding, it must also have the inherent power to seek attorney fees in order to bring such litigation. These attorney fees are based on the constitutional power of a court, not a party’s success on the merits. Furthermore, as the policy of this state is to assess interest on awards of 28 Wayne Co Prosecutor, supra at 128; Wayne Circuit Judges v Wayne Co, 15 Mich App 713, 728-729; 167 NW2d 337 (1969), rev'd in part on other grounds Wayne I, supra. 29 See AO 1998-5 § II. See also Livingston, supra at 288 (“In determining the amounts to be appropriated for judicial needs, a board of commissioners necessarily considers other county needs and the wage levels of other employees paid with county funds.”). 30 AO 1998-5 § VI. 31 See Judicial Attorneys Ass’n v Michigan, 459 Mich 291, 297; 586 NW2d 894 (1998), vacated in part on other grounds 460 Mich 590; 597 NW2d 113 (1999); Branch Co Bd of Comm'rs v Service Employees Internat’! Union, Local 586, 168 Mich App 340, 349; 423 NW2d 658 (1988); Ottawa Co Controller v Ottawa Probate Judge, 156 Mich App 594; 401 NW2d 869 (1986) (finding that a court has the power to set expenses, such as employee wages, within the funding unit’s overall appropriations to the court). See also Cameron v Monroe Co Probate Ct, 457 Mich 423, 427-428; 579 NW2d 859 (1998) 24a Michigan Court of Appeals opinion 5/3/05 APPENDIX E (finding that “the supervision and administration of court personnel is a necessary expense of justice for which the county is expected to pay”). [*12] attorney fees and costs, the lower court properly determined to assess interest at the statutory rate. The Trial Court was entitled to the fees incurred in litigating all its claims, as the contract claims were part and parcel of the inherent powers funding litigation. The lower court also determined that the Trial Court was entitled to attorney fees under MCL 49.73, which requires a county to secure and fund outside counsel for a county official, including a judge, who is named as a defendant, based on the Counties’ counterclaims. The Counties filed an interlocutory appeal of the lower court’s order. In the prior published opinion, this ‘Court affirmed the lower court’s order. However, this Court found that MCL 49.73 was inapplicable under the circumstances as the Trial Court had instituted this action.” Furthermore, this Court determined that the amount of attorney fees that a court may recover in funding litigation must be limited. Therefore, a court may only recover attorney fees at an hourly rate that was 150% of that charged by its funding unit’s counsel, and only 150% of the total fees expended by the funding unit.” The Counties continue to challenge the lower court's order and now contend that the previous published opinion of this Court was erroneous as well. Even if we were to agree with the Counties’ challenges, we would be unable to provide any relief. We are bound by the previous published opinion of this Court.“ We are further bound by the law of the case doctrine. Michigan Court of Appeals opinion 5/3/05 APPENDIX E The law of the case doctrine holds that a ruling by an appellate court on a particular issue binds the appellate court and all lower tribunals with respect to that issue. Thus, a question of law decided by an appellate court will not be decided differently on remand or in a subsequent appeal in the same case.!”! Accordingly, we decline to review the Counties’ claimed errors. B. Relieving Otsego County of its Duty to Pay the Trial Court’s Attorney Fees The Counties also challenge the lower court’s order relieving Otsego County of its responsibility to fund the Trial Court’s attorney fees and reapportioning its duty among the other two counties. Although Otsego County sought to be indemnified by the Counties for its share of the attorney fees, the lower court instead determined that it was entitled to relief based on equitable principles. In doing so, the lower court rejected the Counties’ attempt to reapportion 32 46th Circuit Trial Court, supra at 486-488. 33 Id. at 500-591. 34 MCR 7.215(C)(2); Catalina Marketing Sales Corp v Dep 't of Treasury, 470 Mich 12, 23; 678 NW2d 619 (2004). The fact that the Counties appealed this decision to the Michigan Supreme Court, which held the application in abeyance pending the resolution of these consolidated appeals, has no effect on the prior opinion’s precedential value. MCR 7.215(C)(2); Johnson v White, 261 Mich App 332, 347; 682 NW2d 505 (2004). 35 Ashker v Ford Motor Co, 245 Mich App 9, 13; 627 NW2d 1 (2001), citing Driver v Hanley (After Remand), 226 Mich App 26a Michigan Court of Appeals opinion 5/3/05 APPENDIX E 558, 565; 575 NW2d 31 (1997). [*13] the fees according to the Trial Court funding formula, under which Otsego County was responsible for the lion’s share of the budget. We review a lower court’s decisions in equity de novo and all underlying findings of fact for clear error.” “Jurisdiction of the courts of equity is recognized where ‘the facts involved in litigation are such that a claimed legal remedy, although available, will not afford adequate relief’”’’ Otsego County’s indemnification claim sounded in tort as it was based on the Counties’ “wrongdoing” in failing to fund the Trial Court and instigating this litigation. As the underlying suit is constitutional in nature, such indemnification would be precluded, denying Otsego County adequate relief. Otsego County was brought into this litigation with “clean hands”---it had continually funded the Trial Court at the requested level. Accordingly, it was entitled to the equitable relief granted by the lower court.” Additionally, the lower court properly found that the Counties were not immune from Otsego County’s motion to be relieved from its duty to pay the Trial Court’s attorney fees. As noted previously, the Trial Court’s right to collect attorney fees arose from its constitutional inherent powers. Those powers may not be abridged or restricted by statute, by allowing another governmental unit to be immune while violating that constitutional power.” The Counties also challenged the propriety of the lower court's order as Otsego County failed to present the claim to the Counties’ clerks pursuant to MCL 46.11(m). Although the lower court determined that the statute only requires the presentment of claims based on private wrongs, 27a Michigan Court of Appeals opinion 5/3/05 APPENDIX E nothing in the plain language of the statute supports that theory. However, it would have been futile for Otsego County to present its claim for relief to the Counties as the Counties continually fought the payment of the Trial Court’s attorney fees and were seeking the reapportionment of those fees in their favor. C. Determining the Reasonableness of the Trial Court's - Attorney Fees Without an Evidentiary Hearing In the previous appeal, the Counties challenged the lower court’s determination regarding the reasonableness of the Trial Court’s requested attorney fees. This Court determined that the Counties forfeited the right to an evidentiary hearing by failing to request one. This Court also 36 Eller v Metro Industrial Contracting, Inc, 261 Mich App 569, 571; 683 NW2d 242 (2004). 37 Mooahesh v Dep ‘t of Treasury, 195 Mich App 551, 561; 492 NW2d 246 (1992), quoting Wild v Wild, 360 Mich 270, 276- 277; 103 NW2d 607 (1960). 38 Rose v Nat'l Auction Group, 466 Mich 453, 462-463; 646 NW2d 455 (2002). 39 Persichini v William Beaumont Hosp, 238 Mich App 626, 638-639; 607 NW2d 100 (1999). See also Smith v Dep ’t of Public Health, 428 Mich 540, 544; 410 NW2d 749 (1987). 40 See Manor House Apartiments v City of Warren, 204 Mich App 603, 606; 516 NW2d 530 (1994); Miller Bros v Dep ‘t of Natural Resources, 203 Mich App 674, 681; 513 NW2d 217 (1994) (finding that a party need not take futile actions). {[*14] determined that the Counties would not be entitled to a 28a Michigan Court of Appeals opinion 5/3/05 APPENDIX E hearing, even if one had been requested, because the parties presented a sufficient record from which the lower court could determine the reasonableness of counsel’s hourly rates and the hours expended on the litigation.” As the litigation continued, the lower court granted the Trial Court’s continuing requests for attorney fees without evidentiary hearings, although requested by the Counties. We review a lower court’s determination regarding the necessity of an evidentiary hearing regarding the reasonableness of requested attorney fees for an abuse of discretion.” As the Trial Court continually presented evidence of the same nature and quality, the lower court properly determined with each request that the record was sufficient for a review without an evidentiary hearing. V. Fraud and Innocent Misrepresentation In defense of the Trial Court's contract claims, the Counties asserted that Crawford County was induced to approve of the retiree healthcare plan, as Judge Davis misrepresented the actual costs of the plan. Specifically, the Counties claimed that Judge Davis represented that the annual payment per retiree would be over $1,000 less than the actual cost. The Counties also asserted that they were induced to approve of the pension plan upgrade without adequate cost information as the Trial Court and Otsego County misrepresented that they did not possess actuarial valuations regarding this plan. All of these claims were dismissed prior to trial, as they lacked factual support. A letter written by Crawford County Controller, Paul Compo, to the Counties’ counsel, Mr. Cohl, on December 17, 2001, became public during discovery. In this letter, Mr. Compo admitted that the Crawford County Board of Commissioners was aware of the correct 29a Michigan Court of Appeals opinion 5/3/05 APPENDIX E annual payment figure before passing the resolution approving the plan and included the incorrect figure in the resolution to cause a reaction.” Based on this letter, the lower court dismissed the Counties’ 41 46th Circuit Trial Court, supra at 502-504. 42 Id. at 502. 43 The letter states in relevant part: [Implementation Order 2000-11] states that each of the funding units had passed resolutions approving the shift in benefits. This is not entirely true. Crawford passed a motion to approve the caps in retirement health care insurance, knowing the numbers were wrong as a way to “call the [Trial Court's] bluff.” + The [Trial Court] also included a copy of the minutes for the Special Board Meeting of August 29th, 2000. During this meeting [sic] the Board agreed to fund the retirement health care as proposed for 17 years. They did not agree to the terms and conditions outlined in the proposed contract. They agreed to this (continued...) [*15] fraud defense against the Trial Court and imposed sanctions upon the Counties and their counsel for filing a frivolous defense. The lower court also dismissed the Counties’ claim that the Trial Court misrepresented actuarial valuations regarding the pension upgrade. The Counties learned by records received through a FOIA request before this litigation commenced that the Trial Court did not possess any relevant actuarial valuations. None of the valuations 30a Michigan Court of Appeals opinion 5/3/05 APPENDIX E_ analyzed the proposed pension plan and each contained a disclaimer that it was inapplicable to other levels of benefits. The lower court declined to sanction the Counties for raising the defense on this ground. Before trial, the Counties voluntarily dismissed their fraud claim against Otsego County. In 2001, Otsego County passed a resolution approving the pension plan. This resolution indicated that the approval was based on an actuarial valuation prepared in January of 2001. During discovery, Otsego County admitted that it never possessed the cited valuation and based its resolution approving of the pension plan on form language provided by MERS. The lower court sanctioned the Counties and their counsel for raising this claim as the Counties could not allege that they relied on a resolution and actuarial valuation dated after their own resolutions approving the pension plan. The Counties now challenge the lower court’s dismissal of their fraud claims against the Trial Court pursuant to MCR 2.1 16(C)(10).“ We review a lower court's determination regarding a motion for summary disposition de novo.” A motion under MCR 2.1 16(C)(10) tests the factual support of a party’s claim.” “In reviewing a motion for summary disposition brought under MCR 2.1 16(C)(10), we consider the affidavits, pleadings, depositions, admissions, or any other documentary evidence submitted in the light most favorable to the nonmoving party to decide whether a genuine issue of material fact exists.”“’ Summary disposition is appropriate only if there are no genuine issues of material fact, and the moving party is entitled to judgment as a matter of law. The elements of fraudulent misrepresentation are (1) the [declarant] made a material misrepresentation, (2) the representation was false, (3) when making the representation, the [declarant] knew or should have known it 3la Michigan Court of Appeals opinion 5/3/05 APPENDIX E was false, (4) the [declarant] made the representation with the intention that the [induced party} would act upon it, and (5) the [induced party] acted upon it and suffered damages (...continued) because they believed the information provided on this issue by the [Trial Court] was erroneous and would cause the {Trial Court] to react. 44 The lewer court actually granted the Trial Court’s motion to strike the Counties’ fraud defense. However, the lower court based its decision on the lack of factual support for the claims. Accordingly, we will review the lower court's decision as a motion for summary disposition pursuant to MCR 2.1 16(C)(10). 45 Beaudrie v Henderson, 465 Mich 124, 129; 631 NW2d 308 (2001). 46 Auto-Owners Ins Co v Astied Adjusters & Appraisers, Inc, 238 Mich App 394, 397; 605 NW2d 685 (1999). 47 Singer v American States Ins, 245 Mich App 370, 374; 631 NW2d 34 (2001). 48 MacDonald v PKT, Inc, 464 Mich 322, 332; 628 NW2d 33 (2001). [*16] as a result. A claim of innocent misrepresentation is shown if a party to a contract detrimentally relies on a false representation in such a manner that the injury suffered by that party inures to the benefit of the party who made the representation. [49] The letter from Mr. Compo clearly indicates that the Board knew of the error and purposely included the figure in its resolution. Furthermore, several commissioners admitted at their depositions that they knew of the error or believed the figure was incorrect. Accordingly, the lower court properly dismissed this defense. Furthermore, as the 32a Michigan Court of Appeals opinion 5/3/05 APPENDIX E Trial Court actually did not possess any relevant actuarial valuations to disclose to the Counties, the lower court properly dismissed that defense as well. However, the Counties also challenge the use of Mr. Compo’s letter by the opposing parties and the lower court. The Counties assert that the letter was protected by the attorney-client privilege and, therefore, any injustice caused as a result of its use must be remedied. The Trial Court and Otsego County do not dispute that the letter would be protected by the attorney-client privilege; however, they assert that the Counties waived their right to assert that privilege. Whether a party has waived the attorney-client. privilege is a question of law, which we review de novo.” : The Trial Court and Otsego County first relied upon the letter during Mr. Compo’s deposition. The Counties objected to its use at that time; however, neither party could determine how the letter was disclosed. Although the Counties contend that opposing counsel received this letter by improper means, the Counties concede for purposes of this appeal that the letter was disclosed to the opposing parties inadvertently during discovery. Following Mr. Compo’s deposition, the Trial Court and Otsego County continually relied on the letter in seeking the dismissal of the Counties’ fraud claims and in seeking sanctions for these frivolous claims. However, the Counties failed to reassert their objection to the use of the letter based on the attorney-client privilege until five months after the last fraud claim had been dismissed and three months after the lower court had entered its final judgment on the merits. The attorney-client privilege is personal and may only be waived by the client.” The client’s waiver of that privilege cannot be predicated upon an inadvertent disclosure; it must be “’an intentional, voluntary act and cannot rise by implication.’” 33a Michigan Court of Appeals opinion 5/3/05 APPENDIX E While the inadvertent disclosure of the letter did not waive the Counties’ right to assert the privilege, the Counties’ failure to object over a prolonged period of time is a voluntary and intentional act evincing the Counties waiver of that 49 Novak v Nationwide Mut Ins Co, 235 Mich App 675, 688; 599 NW2d 546 (1999). 50 As neither party disputes that the letter would be protected by the privilege, we will assume for purposes of this appeal that the privilege applies. 51 Leibel v General Motors Corp, 250 Mich App 229, 240; 646 NW2d 179 (2002). 52 Paschke v Retool Indus, 445 Mich 502, 518 n 15; 519 NW2d 441 (1994), quoting In re Passmore Estate, 50 Mich 626, 627; 16 NW 170 (1883); Letbel, supra at 240. 53 Sterling v Keidan, 162 Mich App 88, 91; 412 NW2d 255 (1987). [*17] privilege. Granting the Counties relief now, after their extended acquiescence to the use of the letter throughout this litigation, would result in a waste of judicial time and resources. Accordingly, we affirm all actions taken as a result of the use of this letter. VI, Standing Under the UBAA Prior to trial, the lower court sua sponte questioned the Counties’ standing to raise claims against Otsego County based on the UBAA. After giving the parties an opportunity to brief the issue, which the Counties neglected to do, the lower court found that the UBAA clearly provides that only the Attorney General and prosecuting attorney have 34a Michigan Court of Appeals opinion 5/3/05 APPENDIX E standing to institute a civil action for a violation of the act.™ Therefore, the lower court dismissed the Counties’ claims to the extent they were based on the UBAA.” The lower court also sanctioned the Counties’ counsel for filing these claims when the lack of standing was self-evident. Whether a party has standing is a question of law that we review de novo.” Generally, to have standing, “a party must have a legally protected interest that is in jeopardy of being adversely affected.”” A party raising a claim must have “’some real interest in the cause of action, or a legal or equitable right, title, or interest in the subject matter of the controversy.’” However, the Counties’ claims are governed by statute. This Court has already held that, according to the plain language of that statute, the only parties with standing to bring an action under the UBAA are the Attorney General and prosecuting attorney.* Accordingly, the lower court properly dismissed the Counties’ claims against Otsego County for lack of standing. We also reject the Counties’ contention that the lower court should not have raised the issue of standing. The Counties contend that the Trial Court waived its right to raise this defense by failing to include the defense as a motion for summary disposition under MCR 2.11 6(C)(5) in its first responsive pleading pursuant to MCR 2.11 6(D)(2). However, this Court has determined that a standing defense need not be raised under MCR 2.1 16(C)(5); it could also be raised under MCR 2.11 6(C)(8), which can be raised at any time.” Furthermore, we see no need to prohibit a lower court from considering an issue of its own accord, especially where that consideration will prevent further error for our review.” 54 MCL 141.440. 55 The Counties voluntarily dismissed these claims in their 35a Michigan Court of Appeals opinion 5/3/05 APPENDIX E entirety on the first day of trial when they could find no other grounds upon which to base their claims. 56 Nat'l Wildlife Fed’n v Cleveland Cliffs Iron Co, 471 Mich 608, 612; 684 NW2d 800 (2004). 57 In re Foster, 226 Mich App 348, 358; 573 NW2d 324 (1997). 58 Rayford v Detroit, 132 Mich App 248; 347 NW2d 210 (1984). 59 See Kaiser v Schreiber, 258 Mich App 357, 369-371; 670 NW2d 697 (2003), rev’d on other grounds 469 Mich 944; 670 NW2d 671 (2003). See also MCR 2.1 16(D)(3). 60 See LME v ARS, 261 Mich App 273, 287; 680 NW2d 902 (2004); Paschke v Retool Indus (On Rehearing), 198 Mich App 702, 706; 499 NW2d 453 (1993), rev’d on other grounds 445 Mich (continued...) [*18] VII. Sanctions for Frivolous Claims and Defenses The Counties and their counsel challenge the imposition of sanctions for filing a frivolous fraud defense against the Trial Court and for filing a frivolous fraud claim and claims predicated upon the UBAA against Otsego County. We review a lower court’s determination that a claim or defense is frivolous for clear error. A determination is clearly erroneous when, although there is sufficient evidence to support it, we are left with a definite and firm conviction that a mistake has been made.” Pursuant to MCR 2.114(D), an attorney or party that signs a pleading certifies that “to the best of his or her knowledge, information, and belief formed after reasonable inquiry, the document is well grounded in fact and is warranted by existing law or a good- faith argument for the extension, modification, or reversal of existing law[.]”” Sanctions may be imposed on the attorney, client or both for a violation of this rule. These 36a Michigan Court of Appeals opinion 5/3/05 APPENDIX E sanctions “may include an order to pay to the other party or parties the amount of reasonable expenses incurred because of the filing of the document, including reasonable attorney fees.”” A party raising a frivolous claim or defense is also subject to costs pursuant to MCR 2.625(A)(2) and MCL 600.259 1 as follows: 1. Upon motion of any party, if a court finds that a civil action or defense to a civil action was frivolous, the court that conducts the civil action shall award to the prevailing party the costs and fees incurred by that party in connection with the civil action by asserting the costs and fees against the nonprevailing party and their attorney 2. The amount of costs and fees awarded under this section shall include all reasonable costs actually incurred by the prevailing party and any costs allowed by law or by court rule, including court costs and reasonable attorney fees. (3) As used in this section: (a) “Frivolous” means that at least 1 of the following conditions is met: (ii) The party had no reasonable basis to believe that the facts underlying that party’s legal position were in fact true. (...continvume?}502; 519 NW2d 441 (1994). 37a Michigan Court of Appeals opinion 5/3/05 APPENDIX E 61 Kitchen v Kitchen, 465 Mich 654, 661-662; 641 NW2d 245 (2002); In re Attorney Fees & Costs, 233 Mich App 694, 701; 593 NW2d 589 (1999). 62 MCR 2.1 14(D)(2). 63 MCR 2.1 14(D){3). 64 MCR 2.625(A)(2) directs that costs may be charged pursuant to the statute. [*19] (iii) The party’s legal position was devoid of arguable legal merit.'*! As noted previously, the lower court properly determined that Crawford County had actual knowledge that the annual payment cap represented by Judge Davis was incorrect at the time the resolution was passed. Their counsel learned of this fact one year before the lawsuit was initiated. Accordingly, the lower court properly determined that the Counties’ fraud defense against the Trial Court was frivolous at the time it was filed and, therefore, imposed sanctions against both the Counties and their counsel.” Also as noted above, it is clear from the plain language of the UBAA and binding precedent of this Court that the only parties with standing to raise a claim under that statute are the Attorney General and prosecuting attorney. This authority was available long before counsel filed these claims in this litigation. As these were statutory claims, counsel could have no argument that standing was conferred on any other ground. Accordingly, the lower court also properly imposed sanctions against counsel for filing the UBAA claims against Otsego County. The Counties and their counsel also challenge the lower court’s imposition of sanctions without first holding 38a Michigan Court of Appeals opinion 5/3/05 APPENDIX E an evidentiary hearing. As noted above, the Trial Court presented a sufficient record from which the lower court could determine the reasonableness of its fees without an evidentiary hearing. Otsego County presented an identically sufficient record, including detailed billing statements and affidavits of counsel.” Therefore, no evidentiary hearing was required to determine the reasonableness of the fees imposed as sanctions. However, the Counties also challenge the lower court’s determinations regarding the percentage of counsel’s time used in defending the claims for which sanctions were imposed. Judge Kolenda presided over the entire proceeding and was aware of the amount of time spent litigating the issues in court. Furthermore, he equitably divided the fees amongst each claim raised in the lawsuits. Under the circumstances, this formula was a reasonable approximation of the time actually expended and we find no abuse of discretion.® 65 MCL 600.2591. 66 The dissent argues that these sanctions are duplicative as the Counties were already required to pay the Trial Court's attorney fees and costs and, therefore, were unnecessarily punitive and a waste of taxpayer dollars. However, neither the court rule nor the statute makes a distinction between attorneys for private, versus public, clients. A careful review of the record in this case would indicate that both the proceedings before the lower court and this Court were entirely frivolous. These sanctions are designed to reimburse counsel for excess work necessitated by such meritless claims and were properly imposed. 67 The Counties do not contest the reasonableness of the hourly rates of Otsego County’s counsel. 68 See Costs I, supra at 104-106. 39a Michigan Court of Appeals opinion 5/3/05 APPENDIX E [*20] VI. Disinterested Judge The Counties contend that SCAO improperly assigned an interested judge in violation of AO 1998-5. The order requires the assignment of a disinterested judge to hear a case involving a funding dispute between a court and its funding unit. The Counties failed to move for Judge Kolenda’s disqualification in the lower court. Whatever their articulated reason for failing to do so, it is fatal to their claim. Accordingly, the Counties waived appellate review of their challenge to the judicial assignment by failing te raise an objection below.” IX. Motion for Guidance Shortly before we were scheduled to hear oral argument in this case, the Counties filed a motion for guidance asserting that the Trial Court ceased to exist on August 1, 2004, with the passage of AO 2004-2. With that order, the Michigan Supreme Court ended the demonstration project status of the 46th Circuit Trial Court. The Supreme Court also adopted the concurrent jurisdiction plan proposed by the Trial Court. However, a review of the concurrent jurisdiction plan clearly reveals that the Trial Court intends to continue to function as a unified trial court system. Accordingly, we reject the Counties’ frivolous contention that the entire litigation must be dismissed. Affirmed. | /s/ Jessica R. Cooper /s/ Janet T. Neff 69 See MCR 2.003(C)(1), (3). 40a Michigan Court of Appeals opinion 5/3/05 APPENDIX E [*21]STATE OF MICHIGAN COURTOFAPPEALS 46TH CIRCUIT TRIAL COURT, FOR PUBLICATION May 3, 2005 Plaintiff /Counter- 9:05 a.m. Defendant /ThirdParty- Plaintiff-Appellee, No. 254179 V Crawford Circuit Court LC No. 02-005951-CZ COUNTY OF CRAWFORD and CRAWFORD COUNTY BOARD OF COMMISSIONERS, Defendants /Counter-Plaintiffs / Third-Party-Plaintiffs-Appellants, COUNTY OF KALKASKA, Third-Party-Plaintiff/ CounterDefendant-Appellant, and COUNTY OF OTSEGO, Third-Party-Defendant-Appellee. COUNTY OF CRAWFORD and COUNTY OF KALKASKA, Plaintiffs-Appellants, Vv No. 254180 Otsego Circuit Court COUNTY OF OTSEGO, LC No. 02-010014-CZ Defendant-Appellee. 4la Michigan Court of Appeals opinion 5/3/05 APPENDIX E [*22] 46TH CIRCUIT TRIAL COURT, Plaintiff /Counter-Defendant /Third Party-Paintiff-Appellee, Vv No. 254181 Crawford Circuit Court L.C. No. 02-011004-CZ COUNTY OF CRAWFORD and CRAWFORD COUNTY BOARD OF COMMISSIONERS, Defendants/CounterPlaintiffs / Third-Party-Plaintiffs, COUNTY OF KALKASKA, Third-Party-Plaintiff/CounterDefendant, COUNTY OF OTSEGO, Third-Party-Defendant-Appellee, and COHL STOKER TOSKEY & MCGLINCHEY PC, Appellant. COUNTY OF CRAWPORD and COUNTY OF KALKASKA, Plaintiffs, v No. 254182 Otsego Circuit Court COUNTY OF OTSEGO, LC No. 02-010014-CZ Defendant-Appellee, And COHL STOKER TOSKEY & MCGLINCHEY PC, Appellant. 42a Michigan Court of Appeals opinion 5/3/05 APPENDIX E Before: Zahra, P.J., and Neff and Cooper, JJ. ZAHRA, J. (concurring in part and dissenting in part). I concur with the results reached in sections III, IV, V, VI, VIEL, and IX of the majority opinion. | respectfully dissent from sections II (addressing contract claims) and VII (addressing the imposition of sanctions) of the majority opinion. In short, I disagree with the majority’s conclusion that a valid contract existed between the Counties and the Trial Court. The Counties were under a preexisting duty to appropriate reasonable funds necessary for the Trial Court to carry out its constitutionally mandated duties. Thus, the promise to fund the Trial Court cannot constitute adequate consideration to support a contract. I further conclude that the imposition of sanctions on the Counties served no purpose except to punish the Counties. The sanctions mandated under MCL 600.2591 and MCR 2.625(A)(2) are intended only to compensate litigants for attorney fees and costs expended in answering frivolous claims and defenses. These [*24] sanctions should not be punitive. Here, the Counties were already paying the Trial Court’s reasonable attorney fees and costs. Therefore, the Trial Court did not incur expenses as a result of the Counties’ pursuit of allegedly frivolous claims and defenses.’ Thus, the award of attorney fees as a sanction was not warranted. I would reverse that portion of the lower court’s judgment that found the Counties in breach of contract. I would also vacate the award of attorney fees and costs as a sanction for pursuit of frivolous claimns and defenses. In all other respects, 1 would affirm the judgment of the lower court. 43a Michigan Court of Appeals opinion 5/3/05 APPENDIX E I. Contract Claims The majority concludes in section II of its opinion that the Counties breached an express contract with the Trial Court to implement an improved employee retirement plan. I dissent from this decision because the Counties could not enter into a contract with the Trial Court to fund something they had a preexisting duty to fund under statute and the Michigan Constitution. The duty of the counties to fund the circuit courts is defined by statute. MCL 600.59 1(1) requires the county board of commissioners in each county to annually appropriate funds for the operation of the circuit court in that county. Administrative Order No. 1998-5 sets forth the details of court budgeting.” Not only do counties have this statutory duty to fund circuit courts, but the judiciary possesses the inherent constitutional power to compel the counties to pay those sums of money that are reasonable and necessary to carry out the courts’ mandated responsibilities. 46th Circuit Trial Court v Crawford Co, 261 Mich App 477, 489; 682 NW2d 519 (2004), citing Wayne Circuit Judges v Wayne Co, 386 Mich 1, 8-9; 190 NW2d 228 (1971) (Wayne II). This includes the power to fix the salaries of its employees within the budget appropriations. Employees and Judge of the Second Judicial District Court v Hillsdale Co, 423 Mich 705, 722; 378 NW2d 744 (1985); Ottawa Co Controller v Ottawa Probate Judge, 156 Mich App 594, 603-604; 401 NW2d 869 (1986). The judiciary also has the inherent authority to manage its employees in order to carry out its operations. judicial Attorneys Ass ‘n v Michigan, 459 Mich 291, 297; 586 NW2d 894 (1998), vacated in part on other grounds 460 Mich 590; 597 44a Michigan Court of Appeals opinion 5/3/05 APPENDIX E 1 For purposes of addressing this issue, I shall assume without deciding that the claims and defenses pursued by the Counties were frivolous. 2 Administrative Order No. 1998-5, § II provides, in pertinent part: A court must submit its proposed and appropriated annual budget and subsequent modifications to the State Court Administrator at the time of submission to or receipt from the local funding unit or units. The budget submitted must be in conformity with a uniform chart of accounts. If the local funding unit requests that a proposed budget be submitted in line-item detail, the chief judge must comply with the request. . . . A chief judge may not enter into a multiple-year commitment concerning any personnel economic issue unless: (1) the funding unit agrees, or (2) the agreement does not exceed the percentage increase or the duration of a multiple-year contract that the funding unit has negotiated for its employees. . .. [*25] NW2d 113 (1999). “[T]he fundamental and ultimate responsibility for all aspects of court administration, including operations and personnel matters within the trial courts, resides within the inherent authority of the judicial branch.” Id. at 299. A court may file a civil action to compel funding “[iJf, after the local funding unit has made its appropriations, a court concludes that the funds provided for its operations by its local funding unit are insufficient to enable the court to properly perform its duties and that legal action is necessary ....” Administrative Order No. 1998-5, § III. Simply put, the Counties were obligated by statute 45a Michigan Court of Appeals opinion 5/3/05 APPENDIX E and constitution to provide the Trial Court funding adequate to fulfill its function. In fact, the Trial Court asserted its inherent power to order adequate and necessary funding under Administrative Order No. 1998- 5. The lower court concluded that funding for the retirement plan was reasonable and necessary for the Trial Court to fulfill its statutorily mandated function. The majority has determined that there is sufficient evidence to support the lower court's finding.’ “A pledge to undertake a preexisting statutory duty is not supported by adequate consideration.” Gen Aviation, Inc v Capital Region Airport Auth (On Remand), 224 Mich App 710, 715; 569 NW2d 883 (1997). Because the Counties had a preexisting duty to appropriate funds for the retirement plan, this duty could not provide adequate consideration for any alleged contractual relationship. Alar v Mercy Mem Hosp, 208 Mich App 518, 525; 529-NW2d 318 (1995). Further, the Trial Court could not offer the Counties anything in exchange for the Counties providing funding beyond that required by statute. The funding of the trial courts is not a bargained-for exchange subject to contract principles, but is a statutory obligation for the funding units and a constitutional right for the courts. Because the alleged contract between the Trial Court and the Counties lacked consideration, plaintiff's contract claims must fail. 3 The lower court’s finding that funding for the retirement plan was reasonable and necessary for the Trial Court to function is reviewed for clear error. MCR 2.613(C); Alan Custom Homes, Inc v Krol, 256 Mich App 505, 512; 667 NW2d 379 (2003). Clear error exists only where a reviewing court is left with a definite and firm conviction that a mistake has been made. Id. While I have concerns 46a Michigan Court of Appeals opinion 5/3/05 APPENDIX E whether the funding of a retirement plan can be necessary to the functioning of a court, | cannot conclude definitively that the lower court erred in making this finding, given the very unique circumstances surrounding the merger of courts under the demonstration project umposed upon the Counties. 4 Plaintiff alleged alternative counts of breach of contract and contract implied in law (quantum meruit), which he was entitled to do under MCR 2.11 1{A)(2). H ] Tucker & Assoc, Inc v Allied Chucker & Engineering Co, 234 Mich App 550, 573; 595 NW2d 176 (1999). Quantum meruit is an equitable principle. In re McKim Estate, 238 Mich App 453, 458; 606 NW2d 30 (1999) “A contract implied in law is not a contract at all but an obligation imposed by law to do justice even though it is clear that no promise was ever made or intended. A contract may be implied in law where there is a receipt of a benefit by a defendant from a plaintiff and retention of the benefit is inequitable, absent reasonable compensation. However, this fiction is not applicable where there exists a relationship between the parties that gives rise to the presumption (continued...) [*26] Additionally, neither the statutes governing appropriations for trial courts nor Administrative Order No. 1998-5 provide that trial courts and their funding units can enter contracts concerning court appropriations. Rather, Administrative Order No. 1998-5 speaks only of contracts between the courts and their employees. Because courts have the authority and responsibility for personnel matters, any contract regarding the salaries or benefits of court employees should be between the court and its employees, 47a Michigan Court of Appeals opinion 5/3/05 APPENDIX E not between the court and its funding unit.° The funding unit must appropriate sufficient funds to satisfy a contract between the court and its employees. If the funding unit considers an agreement between a local judiciary and its employees to be excessive because it appears that the budget reflecting the contract will exceed the total appropriation, the funding unit may file suit to test the reasonableness and necessity of the provisions contained in the agréement. Livingston Co, supra at 274; Stanley v City of Ferndale, 115 Mich App 703, 709; 321 NW2d 681 (1982). However, there is no legal authority supporting the pursuit of contract claims between courts and their funding units. Accordingly, I conclude that the contract claims lack legal merit. II. Sanctions for Frivolous Claims and Defenses The majority concludes in section VII of its opinion that the lower court properly sanctioned the Counties for raising frivolous fraud claims and defenses. I dissent because the sanction amounts to a duplicative award of attorney fees and costs to the Trial Court. If a party raises a frivolous.claim or defense, the court must award the prevailing party costs and fees incurred by that party in connection with the civil action. MCL 600.2591; MCR 2.625(A)(2). “The amount of costs and fees awarded under this section shall include all reasonable costs actually incurred by the prevailing party and any costs allowed by law or by (...continued) that services were rendered gratuitously.” [Id. at 457-45 8, quoting In re Lewis Estate, 168 Mich App 70, 74; 423 NW2d 600 (1988).] 48a Michigan Court of Appeals opinion 5/3/05 APPENDIX E In the present case, there can be no contract implied in law because the Counties did not receive any benefit from the Trial Court. The Counties were statutorily and constitutionally obligated to fund the retirement plan whether or not the Trial Court employees gave up employment benefits in exchange for implementation of the retirement plan. 5 In Judicial Attorneys Ass ‘n, supra at 299 n 6, our Supreme Court noted: Over the years, some trial court judges have arrived at agreements under which the trial courts have allowed their funding units to negotiate on their behalf- directly with court employees. In those jurisdictions, typically, the terms and conditions of the court employees vary little if at all from those of the funding unit employees. In contrast, in many jurisdictions the funding units have not desired to play any role concerning the terms and conditions of trial court employment. And in a few jurisdictions, from time to time, courts and their funding units have found themselves at loggerheads over employment issues. It is this category that our case law concerning separation of powers and court employment arises. [*27] assuming that the Counties’ fraud claims and defenses were frivolous, the lower court had the duty to award the Trial Court reasonable attorney fees and costs. In re Attorney Fees and Costs, 233 Mich App 694, 705; 593 NW2d 589 (1999). As recognized by the majority in section IV of its opinion, this Court concluded in Crawford Co, supra at 490-491, that under the Trial Court’s inherent powers, it was entitled to 49a Michigan Court of Appeals opinion 5/3/05 APPENDIX E recoup reasonable attorney_fees and costs it incurred in litigating all of its claims. The majority in the present case holds that the Trial Court is also entitled to attorney fees and costs under MCL 600.2591 for raising frivolous claims and defenses, thus effectively giving the Trial Court a duplicate recovery of attorney fees and costs. In McAuley v General Motors Corp, 457 Mich 513, 525; 578 NW2d 282 (1998), repudiated in part on other grounds by Rafferty v Markovitz, 461 Mich 265, 273 n 6; 602 NW2d 367 (1999), our Supreme Court held that the plaintiff was not entitled to recover duplicative attorr ey fees under the mediation rule because he already had been fully reimbursed for his reasonable attorney fees under statute. In so holding, the Court explained that only compensatory damages generally are available in Michigan, and that punitive sanctions may not be imposed. Id. at 519-520.° “Because the purpose of compensatory damages is to make the injured party whole for the losses actually suffered, the amount of recovery for such damages is inherently limited by the amount of loss; the party may not make a profit or obtain more than one recovery.” Id. at 520. If a party has already been fully reimbursed for reasonable attorney fees and costs, there are no “actual costs” remaining to be reimbursed. Id. at 521. However, if a party has been awarded something less than a reasonable attorney fee and there are actual costs remaining, an additional award may be appropriate in some cases. Id.’ Here, the Trial Court was awarded reasonable attorney fees and costs under the inherent power doctrine. MCR 2.625(A)(2) and MCL 600.2591 also provide for an award of coust costs and reasonable attorney fees. But there is no indication in MCR 2.625(A)(2) or MCL 600.2591 that a double recovery would be appropriate. Further, the 50a Michigan Court of Appeals opinion 5/3/05 APPENDIX E purposes of neither the statute, court rule, nor Michigan Constitution would be served by giving a court double recovery at the expense of its funding unit—a sum that would ultimately punish the taxpayers and result in the court recovering money that is not necessary for its functioning. 6 As the Court observed, there are “statutory exceptions to this general rule that specifically provide for punitive damages, e.g., MCL 15.240(7) .. ., MCL 600.29 1 1(2)(b). . ., MCL 750.53 9h(c).. . .” McAuley, supra at 520 n 8.- 7 In McAuley, supra at 522, our Supreme Court stated in dicta that there are situations where independent policies and purposes may serve to allow a party double recovery. Id. at 522. But in Rafferty v Markovitz, 461 Mich 265 Mich 273 n 6; 602 NW2d 367 (1999), the Supreme Court repudiated “the dicta in McAuley that left open the possibility of recovering attorney fees under both a court rule and a statute where each attorney-fee provision serves an independent purpose.” [*28] Because the Trial Court was already reimbursed for reasonable attorney fees and costs, I conclude that it is not entitled to a double recovery of these costs. McAuley, supra at 522-524. /s/ Brian K. Zahra S5la Trial Court’s May 30, 2003 Order APPENDIX F STATE OF MICHIGAN IN THE TRIAL COURT FOR THE 46™ JUDICIAL CIRCUIT 46TH CIRCUIT TRIAL COURT, Plaintiff/Counter-Defendant, Crawford County VS Case No. 02-05951-CZ CRAWFORD COUNTY, et al., Defendants/Counter-Plaintiffs, / CRAWFORD COUNTY, et al., Plaintiffs, Otsego County Case No. 02-10014-CZ vs OTSEGO COUNTY, ORDER Defendant. / At a session of said Court, held in the Kent County Courthouse, in the City of Grand Rapids, in said county on May 30, 2003. PRESENT: Hon. Dennis C. Kolenda Assigned Circuit Judge For the reasons stated in a written opinion being filed in these consolidated cases by this Court simultaneously 52a Trial Court's May 30, 2003 Order APPENDIX F herewith: IT IS HEREBY ORDERED AND ADJUDGED that the Trial Court’s motion for partial summary disposition be, and the same hereby is, DENIED. IT IS FURTHER ORDERED AND ADJUDGED that the Trial Court’s motion to strike allegations of misrepresentation and fraud be, and the same hereby is, GRANTED. IT IS FURTHER ORDERED AND ADJUDGED that Otsego County’s motion for summary disposition be, and the same hereby is, GRANTED in large part. All claims predicated on alleged violations of the Uniform Budgeting and Accounting Act are DISMISSED with prejudice. IT IS FURTHER ORDERED AND ADJUDGED that Crawford County’s and Kalkaska County’s motion for partial summary disposition seeking the dismissal of Counts I and II of the Trial Court’s complaint in Case No. 02-05951- CZ be, and the same hereby is, DENIED. IT IS FURTHER ORDERED AND ADJUDGED that Crawford County’s and Kalkaska County’s motion for partial summary disposition seeking the dismissal, in part, of Counts III and IV of the Trial Court's complaint in Case No. 02- 10014-CZ be, and the same hereby is, DENIED. IT IS FURTHER ORDERED AND ADJUDGED that the Trial Court’s motion for sanctions be, and the same hereby is, GRANTED in part. The law firm of Cohl, Stoker, Toskey and McGlinchey, PC, is to pay to counsel representing the Tnal Court all fees and expenses incurred by them in defense of the 53a - a eR ee, Trial Court's May 30, 2003 Order APPENDIX F allegation that the-TriatCourt misrepresented the anticipated cost of the retiree healthcare fund at issue in these cases. IT IS FURTHER ORDERED AND ADJUDGED that Otsego County’s motion for sanctions be, and the same hereby is, likewise GRANTED in part. Specifically, the law firm of Cohl, Stoker, Toskey and McGlinchey, PC, is to reimburse said county for all attorney fees and costs incurred by it in defense of all claims by Crawford County and Kalkaska County that Otsego County violated the Uniform Budgeting and Accounting Act. IT Is FURTHER ORDERED AND ADJUDGED that counsel for the Trial Court and counsel for Otsego County submit to this Court, within 14 days hereof, itemized statements to support the amount of sanctions sought by them as authorized immediately above. Counsel for Crawford County and Kalkaska County may have seven days thereafter to respond to the reasonableness and necessity of the requested fees. — — IT IS FURTHER ORDERED AND ADJUDGED that counsel for Otsego County submit to this Court, also within 14 days hereof, whatever information it has to substantiate the contention that counsel for Crawford County or Kalkaska County knew, or should have known that Otsego County did not know of the MERS actuarial studies which were the subject their claim of fraud by that county. Because it resolves only a few of the claims in these cases, this order does not close either of these cases. /sf Judge Dennis Kolenda Dennis C. Kolenda Assigned Circuit Judge 54a Trial Court's May 30, 2003 Opinion APPENDIX G STATE OF MICHIGAN IN THE TRIAL COURT FOR THE 46" JUDICIAL CIRCUIT 46TH CIRCUIT TRIAL COURT, Plaintiff/Counter-Defendant, Crawford County VS Case No. 02-05951-CZ CRAWFORD COUNTY, et al., Defendants/Counter-Plaintiffs, PARR: 5 CRAWFORD COUNTY, et al., Plaintiffs, Otsego County Case No. 02-10014-CZ VS OTSEGO COUNTY, OPINION Defendant. - Because these cases arise out of an intense dispute between a court and the counties which fund it over their inextricably intertwined, respective responsibilities for its operation and funding, this Court’ must walk a tightrope. ' The traditional references herein to “this Court” are to the undersigned. All references to the court embroiled in the dispute at the heart of this case will be to “the Trial Court.” 55a Trial Court’s May 30, 2003 Opinion APPENDIX G MERC v Detroit Symphony Orchestra, 393 Mich 116, 124 (1974).?-This Court must both remain assiduously “mindful of the delicate balance of power in each branch of our tripartite form of government and of the dangers of stepping into a ‘political thicket,’” Seventeenth District Probate Court v Gladwin County Bd of Comm, 155 Mich App 433, 437 (1986), lv app den 428 Mich 874 (1987) (hereinafter “the Gladwin County case”), and not be deterred or intimidated by the inherent difficulty of ~ that task into shirking its duty to decide. A decision must be made for the good of the public whom those government entities serve. Both the plaintiff Trial Court and the counties at odds with it must accept that one branch of government being told that it must yield to a proper decision by another branch is as much honoring the constitutional separation of powers as is one branch being told not to intrude into the prerogative of another. Both directives are the same. “... [A]n indispensable ingredient of the concept of co-equal branches of government is that ‘each branch must recognize and respect the limits on its own authority and the boundaries of the authority delegated to the other branches,” Second District Court v Hillsdale Co, 423 Mich 705, 717 (1985) (hereinafter “the Hillsdale County case”), quoting United States v Will, 449 US 200, 228; 101 S Ct 471; 66 L Ed 2d 392 (1980). Otherwise, the governed will be stripped of the protections provided by the division of the government's powers. When a dispute is between a court and another branch of government, it is, no doubt, disquieting to that other branch * Although it involved judicial review of administrative decisions, the Detroit Symphony Orchestra case involved balancing the responsibilities of independent branches of government, namely: the ability of the judiciary to review decisions by the executive. 56 a Trial Court's May 30, 2003 Opinion APPENDIX G to see the dispute submitted to the judiciary for resolution. The fear of a preference is understandable. That is, however, how our constitution divides powers. In our carefully crafted scheme of limited government, the courts have been assigned “responsibility for adjudicating each claim that comes before [them] ...,“Berger v Weber, 411 Mich 1, 12 (1981), including claims which arise out of ¢’sputes with the judiciary. Wickey v Employment Security Comm, 369 Mich 487, 492-493 (1963) (dissent per Souris, J.). In other words, for a court to refrain from ordering performance required of another co-equal branch, even if large sums of public money must be expended as a result, is to violate the constitutional separation of powers. Jail Inmates v Wayne Co Sheriff; 391 Mich 359, 364, 365, 369 (1974). Not utilizing an assigned power is no less inappropriate than is usurping a power assigned elsewhere. No doubt, the surest way to assuage the concerns of the county parties would be to rule in their favor, if not consistently, at least with some frequency. Perhaps, they will prevail in the end. Counties have often prevailed in cases like these. This Court cannot rule in their favor now, however, because, for the reasons stated below, they are not entitled to prevail on most of the matters before the Court. The task of a court is, first and foremost, to resolve the issues before it as the facts and the law combine to dictate an outcome. Berger v Weber, supra. That is the rule of law. The people of this State, by the way they have divided the State’s power, have confided certain decisions to the judiciary. For a court to do anything other than decide the cases confided to it in the way the law dictates would disobey the people, whose constitution is a charter for us all. 57 a Trial Court’s May 30, 2003 Opinion APPENDIX G Instead, to demonstrate to the counties that its decisions are not motivated by favoritism, personal interests or personal predilections, this Court will adhere vigorously to the discipline of careful legal reasoning and the citation of precedent for every proposition underlying its decisions. Decisions so crafted demonstrate that they are based on a continuity of principle and on an inherited tradition. Having a majestic past commands authority and integrity because such a history rebuts any intimation of favoritism by one judge for other judges, Cox, The Court and the Constitution (1987 ed). Only a legally sound decision, not favoritism, can sport such a pedigree. Statement of Facts On May 31, 1996, the Michigan Supreme Court directed the following courts in Crawford, Kalkaska and Otsego Counties to begin a demonstration project to evaluate the feasibility of merging into a single, fully consolidated trial court: the 46th Circuit Court, which had long served all three counties; the 83rd District Court, to the extent it served Crawford County; the 87th District Court, to the extent it served Kalkaska and Otsego Counties; the Crawford County Probate Court; the Kalkaska County Probate Court; and the Otsego County Probate Court. Those courts were designated the 46th Circuit Trial Court (hereinafter “the Trial Court”). See Admin Order 1996-9. The Honorable Alton T. Davis, then the Chief Judge of the 46th Circuit Court, was appointed the Trial Court’s Chief Judge with all the authority and responsibilities of that position for each participating court. The judges, magistrates and referees S— om ee en eee OS —- * Originally, the demonstration project was to last two years. The project remains in place. By Admin Order 1997-12, which was entered on December 19, 1997, the projects were extended until further order of the Supreme Court. 58a Trial Court's May 30, 2003 Opinion APPENDIX G within the three counties were assigned to serve the whole court, not just the counties where they had been elected or were employed, and the Trial Court was authorized to enter into cooperative agreements with all three counties to test the feasibility of consolidating essential administrative functions, such as personnel and financial management, as well as traditional judicial functions, such as case management. Demonstration projects were also authorized in a handful of other counties (Barry, Berrien, Isabella, Lake and Washtenaw), but the 46th Circuit Trial Court is the only multi- county project, making consolidation there especially complex. The Circuit Court had employees in each county, and their pay and benefits varied. Each Probate and District Court was a distinct entity with employees whose pay, benefits and responsibilities also varied, and complicating even more its efforts at consolidation was the fact that the District Courts serviced counties which were outside the 46th Circuit and, therefore, were not part of the demonstration project, precluding full consolidation. The 83rd District Court also served Roscommon County, while the 87th District Court also served Antrim County. Eventually, the Legislature moved Antrim County into the 86th District Court and gave Koscommon County its own District Court. While that realignment eased consolidation in some regards, it complicated consolidation in other regards. Because Antrim County had served as the Control Unit for the 46th Circuit Court’s employees, the employees of the 87th District Court in Kalkaska and Otsego Counties, and the Otsego County Probate Court, a new Control Unit was necessary. Otsego County agreed to assume that responsibility. While Otsego County’s willingness to assume new duties helped the consolidation effort, the judges of the Trial Court decided that 59a Trial Court’s May 30, 2003 Opinion APPENDIX G more was needed. Employee benefits needed to be improved, standardized, and their administration centralized. Between 1996 and 2000, the components of the Trial Court had experienced extraordinary employee turnover, a phenomenon the judges attributed to low benefits and fragmented policies. Standardizing and enhancing benefits was seen as the way to retain employees. (1) : After extensive discussions with its components’ employees, the Trial Court was able to achieve standardization of wages and most personnel policies. Some upgrades were accomplished, but there were also significant concessions from the employees. Some wages were frozen, and just about everyone gave back some fringe benefits. After much discussion, the employees agreed to switch from a $2.00 co-pay for prescription medicines to a $10.00 deductible, to switch insurance coverage to a less expensive and _ less comprehensive PPO, and to set aside a portion of each forthcoming pay raise to help fund healthcare benefits for retirees. The employees also agreed to give up longevity pay. In return, the Trial Court agreed to seek an enhancement of the employees’ pensions to the MERS* benefit level of B-4. Retirement packages for most court staff varied from B-1 to B-3 benefit levels, depending upon which court unit for which an employee worked. The employees of the 87th District Court participated in a simplified employee pension (SEP) plan consisting of individual accounts. Consolidation required, as a matter of pension law, a single plan for all court employees, and the B-4 level was proposed. * MERS is an acronym for Municipal Employees Retirement System of Michigan. 60a Trial Court’s May 30, 200% Opinion APPENDIX G Several bargaining ur. © ‘vithin the Kalkaska County Sheriffs Department had such benefits, as did elected and some appointed officials in Otsego County. The Tria] Court also agreed to seek better healthcare benefits for retirees. Typically, relatively generous retirement programs are how government has attracted good employees from the private sector, despite the lower wages typically paid by the government. The judges of the Trial Court believe that those upgrades are financially feasible because they also believed that a sizeable share of the cost will be offset by savings from the employees’ concessions. (2) Obviously, all changes in wages and benefits must be coordinated with the counties. They fund and administer them. Initially, the Trial Court worked with what was dubbed the Tri-County Court Committee; it was composed of representatives of the counties. Their objective was to reach tentative agreements on Trial Court administration and funding to be recommended to the three counties’ Boards of Commissioners for ratification. Early on, and without difficulty, the Trial Court and the Tri-County Court Committee had reached consensus on numerous items, e.g., the centralization of administration. There was also a quick consensus on a formula for sharing the expenses of the consolidated Trial Court. Crawford County was to be responsible for 24%; Kalkaska County for 32%; and Otsego County for 44%. The Boards quickly ratified those recommendations. Finally, there developed a consensus on the proposed pension upgrade and retiree healthcare fund. Because ratification had been routine, it was expected that the boards would likewise accept the recommendations about pensions and retiree health care. 6\a Trial Court’s May 30, 2003 Opinion APPENDIX G On August 29, 2000, the Crawford County Board of Commissioners met to consider the Trial Court’s proposed retiree healthcare fund and pension upgrade. Not unexpectedly, there was much concern about costs. Some commissioners voiced concerns for “unfunded liabilities” and pressed for procuring actuarial studies from Blue Cross/Blue Shield on the anticipated cost of the retiree healthcare fund and from MERS on the cost of the pension upgrade. Eventually, motions were made to accept the healthcare fund and “to hold off in 2001 and 2002” the pension upgrade. Vigorous debate followed. There was considerable confusion about the latter motion. Initially, its proponent characterized it as proposing that the Trial Court “should be asked to not put that [the pension upgrade] into effect until 2004.” Then, she said that she was proposing that the pension upgrade be left “open for discussion” in the next budget cycle. The meetings were tape-recorded and have been transcribed for purposes of the motions at hand, but, unfortunately, the transcript is peppered with notations of “inaudible,” that simultaneous speakers could not be deciphered, and that the “tape sounds like it stops and starts again.” It is conceded that there are gaps in the recordings. Ultimately, a vote was taken on both motions. There was a roll call vote on the motion to accept the healthcare proposal. There was a voice vote on the pension motion. In due course, minutes were prepared by the Crawford County Clerk and distributed to all the members of the Board in advance of their next meeting. Those minutes were then formally approved without correction by unanimous vote. They state that the 62a Trial Court’s May 30, 2003 Opinion APPENDIX G following resolutions had been unanimously adopted at the August 29 meeting: “MOTION by Hanson, seconded by Beardslee, to authorize the County [to] pay 24% of $50,000 ($12,000) for the year 2000 and that payment will increase at 4% per year until 2017, and at that time will pay an estimated $94,649 and that the Blue Cross/Blue Shield medical supplement payment per individual would be capped at [sic] the year 2000 at $4,087.00 [and] would increase at 4% per year until 2017 for an employee to be eligible for $7,654.00 per year. Roll call: Corlew - aye; Golnick - aye; Hanson - aye; Pinkelman -absent; Wieland - aye; Beardslee - aye; Motion carried. MOTION by Wieland, seconded by Hanson, to request the [Trial] Court [to] not implement the MERS B-4 upgrade at this time, but recognize the change in the 2001/2002 budget cycle. Ayes (5) five; nays (0) none; absent (1) one, Motion carried.” Shortly after the meeting, but still that afternoon, Judge Davis was informed by the Trial Court’s administrator that an arithmetic mistake had been made in calculating the base annual Blue Cross premium for the first year of the retiree healthcare fund; that premium represented the benefit to retirees which “would be capped.” Judge Davis immediately contacted the Chair of the Board to inform her of the mistake. She and he met, and she suggested substituting the sum of $5,763.00. Judge Davis agreed. The Chair reviewed the new figure with the other commissioners still present in the county building. No objection was expressed then, or, for a considerable time thereafter. 63a Trial Court’s May 30, 2003 Opinion APPENDIX G The erroneous low figure was, it turns out, no surprise to Crawford County. Based on experience with Blue Cross/Blue Shield, it knew that the premium to be paid for the benefits being sought would be at least $5,763.00 figure. That is what was being paid for comparable benefits for non-court county employees. In his deposition, the Crawford County Controller testified that he knew “precisely” what the premium would be and that at least one commissioner, the most vocal objector to accepting the Trial Court’s proposal, although he voted for it in the end, also knew that “a mistake was made.” The controller also acknowledged in his deposition, as did some commissioners in their depositions, knowing that the projected 4% annual increase “was wrong.” Then, discovery unearthed a letter in which the Crawford County Controller wrote: - “... Crawford [County] had passed a motion to approve the caps in retirement healthcare insurance, knowing the numbers were wrong as a way to ‘call the [Trial] Court’s bluff’ Crawford [County] never agreed to the B-4 benefit in retirement because we could never receive an actuarial cost on the benefit. .. During this meeting, the Board agreed to fund the retirement healthcare as proposed for 17 years. They did not agree to the terms and conditions outlined in the proposed contract. They agreed to this because they believed the information provided on this issue by the Courts was erroneous and would cause the Court to react...” With regard to the pension upgrade, some Crawford County Commissioners testified in depositions that they understood the words “recogniz[ing] the change in the 64a Trial Court's May 30, 2003 Opinion APPENDIX G 2000/2001 budget cycle” to mean “bring[ing] ... back” that proposed upgrade the next year, ie., to have, in effect, tabled that particular proposal. All of that county’s commissioners have submitted affidavits which aver: “It was my belief that the Crawford County Board of Commissioners’ intent was not to approve the implementation of the MERS B-4 Plan the next year, but rather [to] wait until after receiving actuarials from MERS to consider the change during the 2000-2001 Budget Cycle.” Months before the meeting of August 29, 2000, the Trial Court’s administrator had received from MERS actuarial studies for pensions with a B-4 benefit level, but not the same benefit program which the Court was proposing for its employees. The proposals had changed since those studies had been requested. They did not consider an E-2 rider, nor what is described as “F-5050 20,” and those studies presumed an 8-year vesting period, not the 10-year vesting period ultimately proposed. The studies were not passed along to Judge Davis or to the Board of Commissioners because the administrator did not consider them pertinent. He came to that conclusion because of the first paragraph in each: “The valuation enclosed does address costs and rates for ONLY the specific benefit program as requested. These costs and rates may not be reliably combined or modified to yield accurate actuarial results for other benefits not included in the original requests. Thus, if the parties agree to another benefit program (or combination of programs) not identical to those contained in the current valuations, you are obligated to advise MERS in writing as soon as possible so that MERS actuary 65a Trial Court's May 30, 2003 Opinion APPENDIX G may determine the required contribution to support the benefit plan selected” [emphasis in original]. That disclaimer tracked a directive stated on the form which MERS had provided to the Trial Court to request actuarial studies, and which that Court’s administrator had filled out, signed and submitted. The form’s final paragraph read: “...[I]f another benefit program is selected or negotiated an Amendment to Request for Valuation must be submitted.” Crawford County’s own independent auditor had explained why at the meeting where the pension upgrade was discussed and voted on. He explained that pensions consist of numerous variables, and that “strange things happen” when any of those variables are altered. On September 12, 2000, the Kalkaska County Board rejected both the retirees’ healthcare fund and pension upgrade proposed by the Trial Court. However, at its meeting on October 10, 2000, that Board voted “to approve the benefit program for the courts as presented.” That Board had been given the correct cost for the healthcare fund, but the MERS actuarial studies were not disclosed for the same reason they had not been presented to the Crawford County Board. The Otsego County Board likewise approved the pension upgrade and the healthcare fund for retirees proposed by the Trial Court. Its resolution reflected, too, the correct “cap” for retiree healthcare benefits, but it, too, was not told of the MERS actuarial studies. Immediately after the Crawford County Board voted, Judge Davis offered to draft a document to memorialize his assurances to that Board that the healthcare fund would pay benefits only so long as employee contributions kept it solvent. Some commissioners had been concerned about the 66a Trial Court's May 30, 2003 Opinion “APPENDIX G prospect of a sizeable unfunded liability. Those commissioners appeared placated by the limitations accepted by Judge Davis. He promptly submitted the promised document, and it said what had been promised, but Crawford County delayed signing it, and, ultimately refused. The Chairs of the Kalkaska County and Otsego County Boards did sign, however, immediately upon presentation. On December 4, 2000, Judge Davis issued an implementation order which recited that “[eJach of the Funding Units has passed resolutions accepting the benefit shifts which are governed by this order.” True to its title, that order directed implementation of the various changes in employees’ benefits, including their concessions. Thereupon, all the Trial Court’s employees were transferred to a central payroll administered by Otsego County; the Blue Cross/Blue Shield coverage was changed; the co-pay for prescription drugs was increased; and longevity pay was phased out. Both Crawford County’s and Kalkaska County’s MERS assets were transferred to Otsego County, and it began paying the invoices from MERS, which it continues to do, and billing the other counties for their shares. The healthcare fund began in 2001 and now has a substantial balance. Otsego County and the employees are making their promised contributions, and until recently, Kalkaska County contributed its share. (3) On December 11, 2001, the Kalkaska County Board rescinded its resolution of October, 2000, approving the retiree healthcare fund and the pension upgrade. It did so, it said, to “review the thick packets from Crawford County” and to “join with Crawford County for some serious discussion.” On February 1, 2002, Crawford County passed a resolution 67a Trial Court’s May 30, 2003 Opinion APPENDIX G rescinding its acceptance of the healthcare fund for retirees. Its resolution of rescission was silent with regard to the pension upgrade. The Otsego County Board has not rescinded its acquiescence in the benefits program. It continues to honor that acceptance and, in effect, to partially subsidize the other counties, while this case remains unresolved, by making payments for all the Trial Court’s employees, payments for which it is not being reimbursed. The employees have not rescinded their concessions, and the counties have retained the benefits of those concessions. Statement of Proceedings When a facilitated mediation, conducted jointly by the Michigan Association of Counties, represented by a commissioner from Eaton County, and the Michigan Judges’ Association, represented by Judge Richard Lamb from Kalamazoo County, failed to achieve an amicable resolution, Chief Judge Davis gave the notice required by Admin Order 1998- 5(111)(1) of the Trial Court’s intent to sue Crawford County. At that time, both Otsego and Kalkaska Counties were cooperating. When the mandatory 30-day waiting period passed without a resolution, the Trial Court filed Case No. 02-5951- CZ against Crawford County. That was done on November 19, 2002. Count I alleges breach of an explicit contract. The Trial Court alleges that the three counties had come to an agreement on, among other things, the pension upgrade and the healthcare fund for retirees, but that Crawford County had reneged on its commitment. A breach of an implied contract is alleged in Count II. Specifically, the Trial Court contends that, because Crawford County has had the benefit of the concessions traded for the healthcare fund and the pension upgrade, it 68a Trial Court’s May 30, 2003 Opinion APPENDIX G cannot legally refuse to fund those benefits, even if there is no actual agreement regarding them. Count III alleges that Crawford County failed during the 2001 and 2002 budget years to provide sufficient funds to the Trial Court to enable it to operate. Count IV makes the same claim regarding the 2003 budget year. According to the Hillsdale County case, courts may institute suit against their funding units if there is disagreement about essential funding. Crawford County answered the Trial Court’s complaint, first, with denials of any contract, whether explicit or implied, and of any underfunding. It, then, filed a countercomplaint. Its Counts I and I seek a declaratory judgment that the Trial Court exceeded its authority when it implemented the pension upgrade and retirees’ healthcare fund. Count II alleges that the Trial Court misrepresented the cost of the retiree healthcare proposal and the lack of actuarial projections for the pension upgrade. “Silent fraud” is alleged in Count IV. Specifically, Crawford County asserts that the Trial Court had a duty to disclose the actuarial projections which it did have, even if they did not relate to the specific pension upgrade under consideration. Those misrepresentations, assert Crawford County, vitiated any agreement which might otherwise be enforceable. On the same day that Crawford County filed its counterclaim, Kalkaska County intervened in Case No. 02- 5951-CZ. That county is asking, for all practical purposes, for permission to back out of its acceptance of the benefits enhancement on the same grounds that Crawford County is seeking to avoid any acceptance. That position was not unexpected because, just a few days earlier, Crawford and Kalkaska Counties had filed Case No. 0210014-CZ against Otsego County. In that case’s Counts | and II, those counties 69a Trial Court’s May 30, 2003 Opinion APPENDIX G accuse Otsego County of improperly implementing the pension upgrade and the retirement healthcare fund, and Count II alleges that Otsego County colluded with the Trial Court to withhold key information about the cost of the pension upgrade. The first rulings asked of this Court related to attorney fees. The Trial Court claimed that the counties are obligated to pay for the attorneys assisting it in these cases and in the dispute which preceded their filing. This Court agreed in an opinion dictated from the bench. Later, it decided that the counties’ obligation for fees should be equal, but opined that Otsego County might have a claim against Crawford and Kalkaska Counties for reimbursement of what it had to pay.’ It is those counties which are creating the dispute. Otsego County has implemented the Trial Court’s benefits proposals, and it is siding with that court in these cases. On April 30, 2003, Otsego County filed a counterclaim in Case No. 02-10014-CZ asking for reimbursement. That counterclaim is not now before this Court. The time for answering it has just expired. Based on disclosures during intense, expedited discovery, all the parties have filed motions for summary disposition and/or partial summary disposition. It is those several motions which are being addressed and resolved by this opinion. Crawford and Kalkaska Counties contend that it is indisputable that there was no agreement, either explicit or implied, to enhance any of the Trial Court’s employees’ pensions or post-employment healthcare benefits, and that those benefits are not essential to the functioning of the Trial Court, meaning that their funding cannot be mandated. The Tria] Court responds that Crawford and Kalkaska Counties’ allegations of fraud are frivolous and that, therefore, because te wae ee * An appeal of those rulings is pending. 70a Trial Court’s May 30, 2003 Opinion APPENDIX G its contract claims have been shown to be indisputable, it is entitled to summary judgment on its Counts I and II. Finally, the Trial Court contends that Counts III and IV present fact questions. Otsego County filed a motion which insists that there is absolutely no evidence of any fraud, intentional or innocent, by it and that all of its actions as the control unit for the Trial Court have been proper. In their brief in response to Otsego County’s motion, counsel for Crawford and Kalkaska Counties withdrew the claims of fraud by Otsego County. That withdrawal was confirmed by their counsel on May 1, 2002 at oral argument on the several motions before this Court. At oral argument on all the pending motions, their counsel identified the Uniform Budget and Accounting Acf (hereinafter “UBAA”) as the principal basis for their remaining claim. Finally, the Trial Court and Otsego Counties have also filed motions asking for sanctions. They both insist that the other counties’ fraud allegations in Case No. 02-05951-CZ- have always been groundless, and Otsego County insists, in addition, that their allegations in Case No. 02-10014-CZ of unauthorized conduct by it are also groundless. Because groundless claims violate MCR 2.114(D), sanctions are mandated by MCR 2.114(E), Otsego County contends. The Trial Court asks that an appropriate portion of its attorney fees be assessed against opposing counsel. Otsego County asks that it be reimbursed a portion of its fees by Crawford and Kalkaska Countes. Applicable Law Applied This Court concludes that the claims by Crawford and Kalkaska Counties of fraud by the Trial Court are without any 7ia Trial Court’s May 30, 2003 Opinion APPENDIX G merit. This Court also concludes, however, that, because there remain significant disputed questions of fact, the Trial Court’s several claims in Case No. 02-05951-CZ must go to trial for resolution, although on narrowed contentions. This Court also concludes that Crawford and Kalkaska Counties lack standing to complain that Otsego County has violated the UBAA. Hence, because they have withdrawn their claim of fraud by Otsego County, that county is entitled to the dismissal of Case No. 02-10014-CZ to the extent it is based on the UBAA. Finally, some sanctions are in order. A. Trial Court’s Contract Claims Crawford and Kalkaska Counties contend that it is indisputable that there is no enforceable agreement with the Trial Court. Specifically, those counties insist (i) that, while Otsego and Kalkaska Counties agreed to the retiree healthcare fund, Crawford County agreed only to something else, making that County’s resolution a counteroffer, not an acceptance, (ii) that that counteroffer was rejected by the Trial Court as “unacceptable,” and (iii) that, therefore, there was no agreement about the retiree healthcare fund. The agreement of the other two counties was not enough, argue Crawford and Kalkaska Counties, because agreement by all three counties was necessary. Crawford County also insists that it never agreed to the pension upgrade. Finally, Crawford County insists that any acceptance by it of either benefit was conditioned on a mutually-acceptable written memorialization, which was never achieved. This Court disagrees with all those contentions. (1) It is true that the Crawford County resolution 72a Trial Court's May 30, 2003 Opinion APPENDIX G acquiescing in the retiree healthcare fund capped the annual benefit at $4,000.00 per employee, and capped the annual! increase at 4%, while the proposal to which the other counties agreed contained a cap of $5,763.00. Under circumstances other than those presented by this case, the Crawford County resolution would likely have been a counteroffer, which, because never accepted, would mean that no contract materialized. When two of three necessary parties agree to one cost figure, while a third necessary party agrees to another cost figure, there likely is no agreement at all, contend the counties, and this Court agrees. Dubey v Macomb Concrete Corp, 81 Mich App 662, 673 (1978). Those principles do not apply, however, to this case. As will be discussed in much greater detail below, when the Crawford County Board adopted its resolution agreeing to a healthcare fund with a benefit cap of $4,087.00 for the first year, plus 4% thereafter, it, in the person of its controller and some of its members knew that the cap had to be $5,763.00 to be feasible and that annual increases would likely be greater. As a matter of common sense, practicality, and fairness, the law has long held that, when one side of a negotiation knows that a proposed term carries a meaning different than appears on its face, acceptance is acceptance of the proposal as actually understood, not as verbalized. Cf., Biltmore Land Co v Estate of Munro, 271 Mich 125, 129 (1935); and Ardis v Grand Rapids & Indiana Ry Co, 200 Mich 400, 414 (1918). The effect of that principle applied to the facts of this case is the following: Because Crawford County knew that the cost per retiree of the health care fund would be $5,763.00, and that the annual increases would exceed 4%, its Board of Commissioners’ resolution agreeing to that fund was an agreement to those amounts, even though the resolution 73a Trial Court’s May 30, 2003 Opinion APPENDIX G articulated different numbers. That means, in turn, that the Crawford County resolution of August 29, 2000, was not a counteroffer, but was an acceptance of the Trial Court’s proposal on the subject. Hence, when Otsego and Kalkaska Counties also agreed to the fund with those annual caps, there was a complete acceptance of the Trial Court's offer. (2) While not a model of draftsmanship, the resolution adopted by the Crawford County Board regarding the pension upgrade admits of only one interpretation. Inartful or clumsy wording does not necessarily mean an ambiguity, Raska v Farm Bureau Ins Co, 412 Mich 355, 362 (1982); and Meagher v Wayne State University, 222 Mich App 700, 722 (1997), lv app den 457 Mich 874 (1998), and that is the situation presented by the Crawford County resolution. A “request” that the Trial Court “not implement the MERS B-4 upgrade at this time,” but “recognize the change in the 2000-2001 budget cycle,” means that the Board agreed to the upgrade. Those words cannot be contorted to say that the proposal to upgrade the pension was rejected. No words conveying that message are to be found in the resolution. Its words convey quite the contrary message. Had the Board rejected the proposal, there would be no need to “request” deferral of its “implement[ation].” A_ rejected proposal will never be implemented, so “requesting” a deferral and “recogniz[ing]” it later are meaningless in the context of a rejected proposal. The use of those words is intelligible only if in reference to an accepted proposal. Admittedly, the discussion which preceded the vote on the resolution suggests a desire by some to table the proposal until the next year, and, plainly, the affidavits from the 74a Trial Court’s May 30, 2003 Opinion APPENDIX G commissioners aver that they did not mean to accept the proposal, even on a deferred basis. It has long been the law of this State, however, dating back to Stevenson v Bay City, 26 Mich 44, 45 (1872), that the powers of a county board “are exercised through its official resolutions and proceedings, recorded in its official minutes,” Crain v Gibson, 73 Mich App 192, 200 (1977), lv app den 400 Mich 828 (1977), so that “their import cannot be altered or supplemented by parol testimony.” Tavener v Elk Rapids Rural Agricultural School District, 341 Mich 244, 251 (1954). Why was explained as follows: “When the law requires municipal bodies to keep records [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386016_2476%3A2. Public record. Not legal advice.