David Demerse v. Helen Newberry Joy Hospital

CourtMichigan Court of Appeals
DecidedJune 29, 2026
Docket373567
StatusPublished

This text of David Demerse v. Helen Newberry Joy Hospital (David Demerse v. Helen Newberry Joy Hospital) 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
David Demerse v. Helen Newberry Joy Hospital, (Mich. Ct. App. 2026).

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

DAVID DEMERSE, FOR PUBLICATION June 29, 2026 Plaintiff-Appellant, 9:30 AM

V No. 373567 Luce Circuit Court HELEN NEWBERRY JOY HOSPITAL, LC No. 24-006894-CK

Defendant-Appellee.

Before: WALLACE, P.J., and LETICA and FEENEY, JJ.

PER CURIAM.

In this declaratory action, plaintiff appeals by right the circuit court’s order granting summary disposition to defendant under MCR 2.116(C)(8) (failure to state a claim on which relief can be granted) and requiring plaintiff to submit to arbitration of defendant’s claims against him. On appeal, plaintiff contends that the trial court erred in: (1) ignoring basic tenets of contract, corporate, and agency law; (2) failing to take note of significant factual differences between leading Michigan caselaw and the instant case; and (3) ignoring the distinction between binding a resisting signatory to an arbitration agreement and binding a resisting non-signatory. We reverse and remand.

I. BACKGROUND FACTS AND PROCEDURAL HISTORY

At all relevant times, plaintiff was the sole member, owner, officer, director, and manager of Newton Hometown Pharmacy LLC (the Pharmacy), which operated a pharmacy in Newberry, Michigan. Defendant operates a hospital in Newberry. In 2015, defendant and the Pharmacy executed a services agreement (the Agreement), under which defendant engaged the Pharmacy for the procurement of drugs under a federal program known as the 340B Program, pursuant to 42 USC 256(b). Plaintiff signed on behalf of the Pharmacy in his capacity as its sole member. Plaintiff did not sign the agreement in his individual capacity. The Agreement included the following arbitration provision:

All claims and disputes that (1) are between Pharmacy and Hospital or either’s subsidiaries, parents, affiliates, officers, directors, and/or employees, and (2) arise out of or relate to the Agreement or its subject matter, interpretation,

-1- performance or enforcement, or any other agreement, transaction or occurrence between Hospital and Pharmacy (including any tort or statutory claim) . . . shall be arbitrated by a sole arbitrator . . . in accordance with the Center for Public Resources’ Rules for Non-Administered Arbitration . . . and judgment upon the award rendered by the arbitrator may be entered by any court having jurisdiction thereof.

In 2023, the Pharmacy initiated an arbitration proceeding against defendant. Defendant counterclaimed and requested leave to join plaintiff as a party. The Pharmacy, however, refused to agree to the joinder of plaintiff. Defendant then filed a notice of arbitration bringing claims against plaintiff individually. Defendant argued that the arbitration provision of the Agreement rendered its claims against plaintiff subject to arbitration. Defendant alleged that plaintiff violated the Agreement by removing prescriptions from 340B pricing, which resulted in financial losses to defendant. Defendant also alleged that, in late 2023, plaintiff, on behalf of the Pharmacy, executed a purchase agreement for the sale of the Pharmacy’s assets, and did not voluntarily disclose the sale to defendant until plaintiff was deposed in March 2024. Defendant further alleged that plaintiff then “sought to dilute [the Pharmacy’s] assets,” by making disbursements for less than fair market value in the intervening time. Defendant brought claims of tortious interference with the Agreement, tortious interference with a business relationship or expectancy, and fraudulent conveyance in violation of the Uniform Voidable Transactions Act, MCL 566.31, et seq.

In response, plaintiff filed this action for declaratory judgment, arguing that, because he was not a party to the Agreement, defendant’s claims against him in his individual capacity were not subject to its arbitration provision. Defendant moved for summary disposition under MCR 2.116(C)(8) and MCR 2.116(C)(10) (no genuine issue of material fact), arguing that plaintiff was bound by the arbitration provision under “agency theory,” citing Altobelli v Hartmann, 499 Mich 284; 884 NW2d 537 (2016), and Steward v Flint Sch Dist, 346 Mich App 700; 13 NW3d 673 (2023). Alternatively, defendant argued that plaintiff was properly bound by the arbitration provision by operation of the doctrine of piercing the corporate veil. Plaintiff responded that he, as a nonsignatory to the Agreement, was not bound to the arbitration provision under ordinary contract principles. Plaintiff additionally argued that defendant had not demonstrated wrongdoing to justify piercing the corporate veil.

At the conclusion of a hearing on the motion, the trial court reasoned as follows:

The Court finds persuasive the agency principles argument . . . .

Further, . . . in this instance, . . . Plaintiff . . . is it. There isn’t anyone else. He’s the sole officer, agent, and so on. And so, . . . I think under [MCR 2.116(C)(8)] the Court has to grant the motion for failure to state a claim upon which relief can be granted.

The court followed with a written order granting defendants’ motion for summary disposition and dismissing plaintiff’s complaint. This appeal followed.

-2- II. STANDARD OF REVIEW

This Court reviews summary disposition rulings de novo. See Grossman v Brown, 470 Mich 593, 598; 685 NW2d 198 (2004).

A motion for summary disposition under MCR 2.116(C)(8) “tests the legal sufficiency of a claim and is tested on the pleadings alone.” Singerman v Muni Serv Bureau, Inc, 455 Mich 135, 139; 565 NW2d 383 (1997). If a plaintiff alleges a claim on a written contract, the plaintiff must attach the contract to the complaint, and the contract becomes part of the pleadings the court must consider in deciding a (C)(8) motion. Laurel Woods Apartments v Roumayah, 274 Mich App 631, 635; 734 NW2d 217 (2007). See also MCR 2.113(C). When considering a motion under MCR 2.116(C)(8), a court must accept all well-pleaded factual allegations as true and construe them in the light most favorable to the nonmovant. Maiden v Rozwood, 461 Mich 109, 119; 597 NW2d 817 (1999). A court should only grant such a motion “where the claims alleged are so clearly unenforceable as a matter of law that no factual development could possibly justify recovery.” Id. (quotation marks and citation omitted).

Defendant’s proposed alternative ground for affirmance, piercing the corporate veil, implicates questions of fact, and summary disposition on this basis could only be properly granted under MCR 2.116(C)(10). Summary disposition under (C)(10) is warranted when, “[e]xcept as to the amount of damages, there is no genuine issue as to any material fact, and the moving party is entitled to judgment or partial judgment as a matter of law.” MCR 2.116(C)(10). A summary disposition movant must initially come forward with admissible evidence in support of its basis for relief “when judgment is sought based on subrule (C)(10).” MCR 2.116(G)(3). “[I]f a moving party presents evidence to support a motion for summary disposition under MCR 2.116(C)(10), the burden shifts to the party opposing the motion to produce evidence to show that there is a genuine issue of material fact.” Cleveland v Hath, 350 Mich App 320, 331; 32 NW3d 109 (2024).

A trial court’s determination that an issue is subject to arbitration is also reviewed de novo. In re Nestorovski Estate, 283 Mich App 177, 184; 769 NW2d 720 (2009). Likewise, issues of contract interpretation present questions of law that are reviewed de novo. Archambo v Lawyers Title Ins Corp, 466 Mich 402, 408; 646 NW2d 170 (2002).

III. ANALYSIS

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David Demerse v. Helen Newberry Joy Hospital, Counsel Stack Legal Research, https://law.counselstack.com/opinion/david-demerse-v-helen-newberry-joy-hospital-michctapp-2026.