20221229_C361288_30_361288.Opn.Pdf

CourtMichigan Court of Appeals
DecidedDecember 29, 2022
Docket20221229
StatusUnpublished

This text of 20221229_C361288_30_361288.Opn.Pdf (20221229_C361288_30_361288.Opn.Pdf) is published on Counsel Stack Legal Research, covering Michigan Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
20221229_C361288_30_361288.Opn.Pdf, (Mich. Ct. App. 2022).

Opinion

If this opinion indicates that it is “FOR PUBLICATION,” it is subject to revision until final publication in the Michigan Appeals Reports.

STATE OF MICHIGAN

COURT OF APPEALS

WARREN CITY COUNCIL, FOR PUBLICATION December 29, 2022 Plaintiff-Counterdefendant-Appellee, 9:05 a.m.

v No. 361288 Macomb Circuit Court JAMES R. FOUTS, LC No. 2022-000923-AW

Defendant-Counterplaintiff-Appellant.

Before: CAVANAGH, P.J., and K. F. KELLY and GARRETT, JJ.

PER CURIAM.

In this budget dispute between plaintiff Warren City Council and its mayor, defendant James R. Fouts, defendant appeals by right the trial court’s stipulated order of final judgment in favor of plaintiff. The core issue presented is whether the Warren City Charter (“Charter”) permits plaintiff to unilaterally amend the recommended budget from defendant when passing a general appropriations resolution, or whether plaintiff is limited to simply affirming or rejecting the recommended budget as a whole. The trial court concluded that the Charter allowed plaintiff to make amendments to the budget and granted preliminary injunctive and declaratory relief in plaintiff’s favor. We affirm those orders, and hold that under normal principles of statutory construction, the Charter does not limit plaintiff to merely affirming or rejecting defendant’s recommended budget. Rather, under the Charter, plaintiff may enact any budget so long as it otherwise complies with the law.

I. BASIC FACTS AND PROCEDURAL HISTORY

In April 2021, in his capacity as mayor, defendant submitted a recommended budget to plaintiff for approval, which included a line item of $615,000 for the City of Warren Downtown Development Authority (“DDA”) for “Contractual Services” and a line item of $75,000 for DDA for “Community Promotions.” In addition to being mayor, defendant is also the chairperson of the DDA’s Board, and the money for the “Contractual Services” line item was for an advertisement campaign called “MI Warren” featuring defendant. Plaintiff met to consider defendant’s recommended budget and decided it would revise the budget to allocate $0 for DDA “Contractual Services” and $10,000 for DDA “Community Promotions.”

-1- On May 11, 2021, plaintiff adopted a General Appropriations Resolution (“Resolution”) for fiscal year 2021-2022 that included the revisions to the DDA projects, as well as a salary increase for the Deputy Council Secretary. Defendant vetoed the resolution, stating that plaintiff did not have the authority to “propose and adopt its own budget” but could only “act upon the budget proposed by the Mayor.” Plaintiff unanimously overrode the veto. Defendant nevertheless instructed finance staff to fund the DDA projects in the amounts he originally requested.

On September 15, 2021, the DDA Board approved an expenditure of $310,000 for the “MI Warren” advertising campaign, which was to be funded from the “Contractual Services” and “Community Promotions” budget line items. During the September 15 meeting, the DDA Board discussed the budget dispute and the following exchange was memorialized in the meeting minutes:

Mr. Fox then stated how council eliminated funding for the recently proposed budget immensely and how once again there is a conflict. The Mayor proposed a budget of $615,000.00 in contractual services for DDA and council cut it to zero. He also proposed $75,000.00 for community promotion and council cut it to $10,000.00.

The Mayor has decided that we are going to move forward with his budget until a compromise is agreed upon. Mayor Fouts stated that he met with Ms. Moore to try and avoid costly litigation. This is the first time in history that City Council has sued the mayor & clerk. This is also the first time in history that council has fired the city attorney on their own accord and hired an outside law firm to act as the city attorney, both of which are a violation of the city charter.

Mr. Vicari asked if any of the line items on the proposed budget were the same as past budgets. Mr. Fox stated that most of them are the same or similar. An example would be contractual services, last year the budget was $500,000.00 and this year we are requesting $615,000.00. Community promotion was $75,000.00 last year and the same amount was requested for this year. There is nothing strange or out of the ordinary in the new proposed budget.

The Mayor stated that he is willing to compromise, but unfortunately council is not willing to do so. Some members refuse to even meet with him to discuss the matter.

According to plaintiff, as of January 31, 2022, the DDA “spent $180,266.90 in unappropriated funds and a total of $302,593.98 had been encumbered for ‘Contractual Services’ and $60,000 for ‘Community Promotions.’ ”

On March 3, 2022, plaintiff filed a verified complaint seeking a writ of mandamus, declaratory judgment, and injunctive relief. Plaintiff alleged defendant’s actions violated the Charter, the Uniform Budgeting and Accounting Act, MCL 141.421a et seq. (“UBAA”), and the recodified tax increment financing act, MCL 125.4101 et seq. (“RTIFA”). Plaintiff sought a ruling in its favor regarding its powers under the Charter and an order enjoining defendant’s further expenditure of unappropriated money.

-2- Plaintiff also moved for a temporary restraining order and preliminary injunction. Plaintiff claimed it would suffer irreparable harm in the absence of an injunction because it was likely no money already expended could ever be recouped, thereby causing injury to plaintiff and residents of the City of Warren. Plaintiff also argued that the public interest would be served by granting an injunction because the public had a “fundamental interest in having its elected officials operate within the confines of the law . . . .” In response, defendant argued that injunctive relief was not warranted because plaintiff was unlikely to prevail on its claims because under the Charter, plaintiff’s role in the budget process was limited to reviewing and then approving or disapproving defendant’s recommended budget. According to defendant, under Detroit City Council v Stecher, 430 Mich 74; 421 NW2d 544 (1988), the Charter did not grant plaintiff the authority to amend the budget. Defendant also argued that plaintiff was unlikely to succeed on its mandamus claim because plaintiff did not identify a clear legal right it possessed different from that owed to the citizenry at large and did not identify a clear legal duty owed by defendant.

The trial court held a hearing on plaintiff’s motion on March 28, 2022. Plaintiff argued the case was nearly identical with Zelenko v Burton City Council, unpublished per curiam opinion of the Court of Appeals, issued May 15, 2018 (Docket No. 339746),1 a case in which this Court sided with the defendant-city council after a budget dispute with the plaintiff-mayor in which the Court concluded the defendant could amend the plaintiff’s proposed budget. Defendant argued, however, that Zelenko was wrongly decided and the language of the charter at issue was different than the Charter.

On March 31, 2022, the trial court issued a written opinion and order granting plaintiff’s motion for preliminary injunction. The court found Zelenko to be persuasive, stating:

The procedure for the annual budget in Zalenko [sic] is similar to the procedure in this case. In Zalenko [sic], the city charter required department heads to submit statements of financial needs and anticipated revenues to the mayor by February 1, and the mayor assembles the statements and prepares a proposed budget. Id. The mayor then submits the proposed annual budget to the city council. Id. The city council “shall, by resolution, adopt a budget for the ensuing fiscal year” at a regular meeting. Id. ( emphasis added).

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Township of Casco v. Secretary of State
701 N.W.2d 102 (Michigan Supreme Court, 2005)
Detroit City Council v. Stecher
421 N.W.2d 544 (Michigan Supreme Court, 1988)
Citizens for Protection of Marriage v. Board of State Canvassers
688 N.W.2d 538 (Michigan Court of Appeals, 2004)
Bonner v. City of Brighton
848 N.W.2d 380 (Michigan Supreme Court, 2014)
Hillsdale County Senior Services, Inc v. Hillsdale County
494 Mich. 46 (Michigan Supreme Court, 2013)
Eddington v. Torrez
874 N.W.2d 394 (Michigan Court of Appeals, 2015)
O’connell v. Director of Elections
894 N.W.2d 113 (Michigan Court of Appeals, 2016)
Pioneer State Mutual Insurance v. Dells
836 N.W.2d 257 (Michigan Court of Appeals, 2013)
Barrow v. City of Detroit Election Commission
836 N.W.2d 498 (Michigan Court of Appeals, 2013)
Barrow v. City of Detroit Election Commission
305 Mich. App. 649 (Michigan Court of Appeals, 2014)
Mayor of Cadillac v. Blackburn
857 N.W.2d 529 (Michigan Court of Appeals, 2014)
Sau-Tuk Industries, Inc. v. Allegan County
892 N.W.2d 33 (Michigan Court of Appeals, 2016)

Cite This Page — Counsel Stack

Bluebook (online)
20221229_C361288_30_361288.Opn.Pdf, Counsel Stack Legal Research, https://law.counselstack.com/opinion/20221229_c361288_30_361288opnpdf-michctapp-2022.