Msc 162830 Elia Companies Llc V University Of Michigan Regents Order 5/2/2023

• Court: Michigan Supreme Court
• Decided: May 2, 2023
• Docket: MSC 162830 ELIA COMPANIES LLC V UNIVERSITY OF MICHIGAN REGENTS Order 5/2/2023
• Status: Published

Opinion

Michigan Supreme Court Lansing, Michigan

Syllabus Chief Justice: Justices: Elizabeth T. Clement Brian K. Zahra David F. Viviano Richard H. Bernstein Megan K. Cavanagh Elizabeth M. Welch Kyra H. Bolden

This syllabus constitutes no part of the opinion of the Court but has been Reporter of Decisions: prepared by the Reporter of Decisions for the convenience of the reader. Kathryn L. Loomis

ELIA COMPANIES, LLC v UNIVERSITY OF MICHIGAN REGENTS

Docket No. 162830. Argued on application for leave to appeal December 7, 2022. Decided May 2, 2023.

Elia Companies, LLC, brought an action in the Washtenaw Circuit Court against the University of Michigan Regents, alleging breach of contract; violations of Michigan’s anti-lockout statute, MCL 600.2918; breach of covenant for quiet possession; constructive eviction; conversion; and unjust enrichment. In 2013, plaintiff entered into a 10-year lease with defendant to obtain space at the Michigan Union for establishing a coffee shop. In March 2017, defendant disclosed its plans to renovate the Union. Plaintiff’s complaint alleged that the parties’ lease required that they negotiate a relocation of the leased premises. However, defendant terminated the lease on April 20, 2018, based on plaintiff’s alleged default and ordered plaintiff to vacate the premises. Plaintiff brought the instant action in August 2018, and defendant, over plaintiff’s objection, filed a notice of transfer removing the case to the Court of Claims pursuant to MCL 600.6404(3) and MCL 600.6419(1) of the Court of Claims Act (the COCA), MCL 600.6401 et seq. Defendant moved for summary disposition, arguing that plaintiff’s action must be dismissed because plaintiff failed to comply with the notice and verification requirements of MCL 600.6431 of the COCA. The Court of Claims, CHRISTOPHER M. MURRAY, J., agreed and dismissed plaintiff’s case. Plaintiff appealed, and the Court of Appeals, SWARTZLE, P.J., and RONAYNE KRAUSE and RICK, JJ., affirmed in part and reversed in part. 335 Mich App 439 (2021). The panel affirmed the dismissal of plaintiff’s ancillary claims on governmental-tort-immunity grounds but reversed the dismissal of plaintiff’s contract claim. In doing so, the Court of Appeals relied on Progress Mich v Attorney General, 506 Mich 74 (2020), to hold that plaintiff could verify its complaint as required by MCL 600.6431(1) by filing an amended, verified complaint in the ordinary course of the proceedings, notwithstanding the fact that the one-year period for filing a verified notice or claim set forth in MCL 600.6431(1) had lapsed. Defendant sought leave to appeal the reinstatement of plaintiff’s contract claim in the Supreme Court, and the Supreme Court ordered and heard oral argument on whether to grant the application or take other action. 508 Mich 1004 (2021).

In a unanimous per curiam opinion, the Supreme Court, in lieu of granting leave to appeal, held:

The Court of Appeals erred when it excused plaintiff’s failure to timely comply with MCL 600.6431. All parties with claims against the state, except those exempted in MCL 600.6431 itself, must comply with the requirements of MCL 600.6431. MCL 600.6431 states that except as otherwise provided in this section, a claim may not be maintained against this state unless the claimant, within one year after the claim has accrued, files in the office of the clerk of the Court of Claims either a written claim or a written notice of intention to file a claim against this state or any of its departments, commissions, boards, institutions, arms, or agencies. Plaintiff did not timely comply with MCL 600.6431 because it failed to file, in the office of the clerk of the Court of Claims, a written claim or a written notice of intention to file a claim within one year after its claims accrued. The Court of Appeals erroneously applied Progress Mich to reason that plaintiff could correct any defect in its complaint in order to comply with the requirements of MCL 600.6431 and MCL 600.6434 during the pendency of the proceedings and in accordance with the court rules even after the one-year period set forth in MCL 600.6431 had expired. Progress Mich pertained to a distinct statute-of-limitations issue and did not purport to detract from Michigan jurisprudence requiring complete compliance with MCL 600.6431 to avoid dismissal of claims against the state. The plaintiff in Progress Mich had filed an amended and verified complaint well before the expiration of the one-year period set forth in MCL 600.6431; accordingly, the Progress Mich Court was not tasked with considering whether a party can cure a defective complaint after that one-year deadline has lapsed. The Court of Appeals thus misapplied the rationale of Progress Mich to excuse plaintiff’s failure to comply with MCL 600.6431. Plaintiff’s failure to comply with the notice and verification requirements of MCL 600.6431 mandated dismissal of this case.

Reversed and remanded to the Court of Claims for reinstatement of summary disposition in favor of defendant.

Justice BERNSTEIN did not participate in the disposition of this case due to a familial relationship.

Justice BOLDEN did not participate in the disposition of this case because the Court considered it before she assumed office. Michigan Supreme Court Lansing, Michigan

OPINION Chief Justice: Justices: Elizabeth T. Clement Brian K. Zahra David F. Viviano Richard H. Bernstein Megan K. Cavanagh Elizabeth M. Welch Kyra H. Bolden

FILED May 2, 2023

STATE OF MICHIGAN

SUPREME COURT

ELIA COMPANIES, LLC,

Plaintiff-Appellee/ Cross-Appellant,

v No. 162830

UNIVERSITY OF MICHIGAN REGENTS,

Defendant-Appellant/ Cross-Appellee.

BEFORE THE ENTIRE BENCH (except BERNSTEIN and BOLDEN, JJ.)

PER CURIAM. At issue is whether plaintiff’s claims must be dismissed due to plaintiff’s failure to

timely comply with the notice and verification requirements of MCL 600.6431 of the Court

of Claims Act (the COCA). 1 We hold that they must. In concluding to the contrary, the

Court of Appeals erred by applying this Court’s decision in Progress Mich v Attorney

1 MCL 600.6401 et seq. General 2 to reason that plaintiff could “correct any defect in its complaint in order to

comply with [the requirements of MCL 600.6431 and MCL 600.6434] during the pendency

of the proceedings and in accordance with the court rules” even after the one-year period

set forth in MCL 600.6431 had expired. 3 Progress Mich pertained to a distinct statute-of-

limitations issue and did not purport to detract from our jurisprudence requiring complete

compliance with MCL 600.6431 to avoid dismissal of claims against the state.

Accordingly, we reverse the judgment of the Court of Appeals and remand this case to the

Court of Claims for reinstatement of summary disposition in favor of defendant. We deny

plaintiff’s application for leave to appeal as cross-appellant.

I. BASIC FACTS AND PROCEDURAL HISTORY

In 2013, plaintiff, Elia Companies, LLC, entered into a 10-year lease with

defendant, the University of Michigan Regents, to obtain space at the Michigan Union,

where it would establish a coffee shop. In March 2017, defendant disclosed its plans to

renovate the Union. According to plaintiff’s complaint, the parties’ lease required that they

negotiate a relocation of the leased premises. Plaintiff asserts that, rather than enter into

good-faith negotiations, defendant sent it a long list of relatively old grievances on

April 17, 2018, and terminated the lease on April 20, 2018, based on plaintiff’s alleged

default. Defendant ordered plaintiff to vacate the premises, and plaintiff was barred from

entering the building.

2 Progress Mich v Attorney General, 506 Mich 74, 94, 97-98; 954 NW2d 475 (2020). 3 Elia Cos, LLC v Univ of Mich Regents, 335 Mich App 439, 459; 966 NW2d 755 (2021).

2 In August 2018, plaintiff filed an action in the Washtenaw Circuit Court, alleging

breach of contract, violations of Michigan’s anti-lockout statute, 4 breach of covenant for

quiet possession, constructive eviction, conversion, and unjust enrichment. Defendant,

over plaintiff’s objection, filed a notice of transfer removing the case to the Court of Claims

pursuant to MCL 600.6404(3) and MCL 600.6419(1) of the COCA. Defendant ultimately

moved for summary disposition pursuant to MCR 2.116(C)(7), (C)(8), and (C)(10), arguing,

in pertinent part, that plaintiff’s entire action must be dismissed because plaintiff failed to

comply with the notice and verification requirements of MCL 600.6431 5 of the COCA. The

Court of Claims agreed and dismissed plaintiff’s case pursuant to MCR 2.116(C)(7).6

Plaintiff appealed as of right, and the Court of Appeals affirmed in part and reversed

in part in a published opinion. The panel affirmed the dismissal of plaintiff’s ancillary

claims on governmental-tort-immunity grounds but reversed the dismissal of plaintiff’s

contract claim. In doing so, the Court of Appeals relied on this Court’s decision in Progress

Mich to hold that plaintiff could verify its complaint as required by MCL 600.6431(1) by

filing an amended, verified complaint in the ordinary course of the proceedings,

4 MCL 600.2918. 5 MCL 600.6431(1) states that “[e]xcept as otherwise provided in this section, a claim may not be maintained against this state unless the claimant, within 1 year after the claim has accrued, files in the office of the clerk of the court of claims either a written claim or a written notice of intention to file a claim against this state or any of its departments, commissions, boards, institutions, arms, or agencies.” MCL 600.6431(2) then sets forth the requirements for the claim or notice required under Subsection (1). 6 The Court of Claims also reasoned that most of plaintiff’s claims would have been independently subject to dismissal as a matter of law because they were torts barred by governmental immunity, duplicative, or controlled by the lease contract.

3 notwithstanding the fact that the one-year period for filing a verified notice or claim set

forth in that statute had lapsed. 7 Defendant sought leave to appeal the reinstatement of

plaintiff’s contract claim in this Court. 8

II. STANDARD OF REVIEW

A trial court’s ruling on a motion for summary disposition is reviewed de novo. 9

Issues of statutory interpretation are also reviewed de novo. 10

III. ANALYSIS

As an initial matter, we reject plaintiff’s argument that it was not required to comply

with the notice and verification requirements of MCL 600.6431 because plaintiff initially

filed suit in the circuit court rather than in the Court of Claims. As this Court held in

Christie v Wayne State Univ, 11 all parties with claims against the state, except those

exempted in MCL 600.6431 itself, must comply with the requirements of MCL 600.6431.

This includes claims initiated in the circuit court. Plaintiff did not timely comply with this

7 Elia Cos, 335 Mich App at 459-460. 8 Plaintiff cross-appealed, arguing that the Court of Appeals erred by upholding the Court of Claims’ dismissal of its claim alleging statutory conversion, MCL 600.2919a, and its claim that defendant violated the anti-lockout statute, MCL 600.2918. Plaintiff also argued that the Court of Appeals incorrectly applied tort immunity under the governmental tort liability act (the GTLA), MCL 691.1401 et seq., even though defendant’s leasing of the commercial space to plaintiff was a proprietary function excluded from the GTLA’s immunity, see MCL 691.1413. 9 Maiden v Rozwood, 461 Mich 109, 118; 597 NW2d 817 (1999). 10 Fairley v Dep’t of Corrections, 497 Mich 290, 296; 871 NW2d 129 (2015). 11 Christie v Wayne State Univ, ___ Mich ___, ___; ___ NW2d ___ (2023) (Docket No. 162706).

4 provision, as it failed to file, in the office of the clerk of the Court of Claims, “a written claim

or a written notice of intention to file a claim” within one year after its claims accrued. 12

The Court of Appeals excused plaintiff’s failure to timely comply with MCL

600.6431, citing Progress Mich to conclude that plaintiff could “correct any defect in its

complaint in order to comply with [the requirements of MCL 600.6431 and MCL

600.6434] during the pendency of the proceedings and in accordance with the court rules”

even after the one-year period set forth in MCL 600.6431 had expired. 13 This was in error

and contrary to our jurisprudence. As we explained in Christie, this Court has stated that

adherence to the conditions set forth in MCL 600.6431 is necessary “to successfully expose

the defendant state agencies to liability.” 14 In the context of the GTLA, this Court in

12 MCL 600.6431(1). Plaintiff argues that it satisfied the notice and verification requirements of MCL 600.6431 with an affidavit from Zaid Elia, plaintiff’s managing member, which was filed with plaintiff’s November 2018 response to defendant’s first motion for summary disposition. While the affidavit was signed and verified before an officer authorized to administer oaths, we agree with the Court of Claims that the affidavit was neither a “written notice of intention to file a claim” nor a “written claim.” We agree with the reasoning of the Court of Claims that

[t]he affidavit did not state an intent to file a claim in [the Court of Claims], nor was it the “claim” itself. Nor was the affidavit “file[d] in the office of the clerk of the court of claims,” see § 6431(1), in a way that would indicate it was intended to put defendant on notice of a claim. Rather, it was attached at the end of a response to a dispositive motion, and it was intended to offer evidentiary support for the assertions plaintiff made in its briefing. A document offered as evidentiary support to a responsive brief does not satisfy the purposes of the notice requirement. See [McCahan v Brennan, 492 Mich 730, 744 n 24; 822 NW2d 747 (2012)] (describing the purposes served by the notice required in § 6431). 13 Elia Cos, 335 Mich App at 459. 14 Fairley, 497 Mich at 298.

5 Rowland v Washtenaw Co Rd Comm held that the 120-day notice provision in MCL

691.1404 of the GTLA “was constitutional,” that “no ‘saving construction’ was necessary

or allowed,” and that “the engrafting of [a] prejudice requirement onto the statute was

entirely indefensible.” 15 Five years later, this Court held in McCahan v Brennan that the

reasoning of Rowland equally applied to the notice provision in MCL 600.6431 of the

COCA, holding that “statutory notice requirements must be interpreted and enforced as

plainly written and . . . no judicially created saving construction is permitted to avoid a

clear statutory mandate.” 16 Ultimately, the Court concluded that the “[f]iling [of a] notice

outside the statutorily required notice period does not constitute compliance with the

statute.” 17 In 2015, in Fairley v Dep’t of Corrections, this Court explained that, by enacting

MCL 600.6431, “the Legislature has qualified a claimant’s ability to bring a claim against

the state by requiring that ‘the claim or notice shall be signed and verified by the claimant

before an officer authorized to administer oaths.’ ” 18 In holding that the plaintiffs’ claims

had to be dismissed, the Court ruled that, when a “notice [is] either unverified but timely

or untimely but verified, . . . it fails to meet the conditions precedent to maintaining a suit

against the [state].” 19 Accordingly, under our well-established jurisprudence, a party

bringing suit against the state must fully comply with the terms of MCL 600.6431,

15 Rowland v Washtenaw Co Rd Comm, 477 Mich 197, 211; 731 NW2d 41 (2007). 16 McCahan, 492 Mich at 733. 17 Id. at 747. 18 Fairley, 497 Mich at 298, quoting MCL 600.6431(1), as enacted by 1961 PA 236. 19 Fairley, 497 Mich at 300.

6 regardless of a finding of prejudice. Under this caselaw, plaintiff’s failure to comply with

MCL 600.6431 mandates the dismissal of its claims. This should have been the end of the

Court of Appeals’ inquiry.

Instead, the Court of Appeals applied this Court’s decision in Progress Mich to

conclude that plaintiff’s claims need not be dismissed despite plaintiff’s failure to timely

comply with MCL 600.6431. But Progress Mich did not purport to detract from our

jurisprudence requiring complete compliance with MCL 600.6431 to maintain a claim

against the state. In Progress Mich, the plaintiff’s original complaint filed under the

Freedom of Information Act (FOIA) 20 failed to comply with the verification requirement

of MCL 600.6434. 21 Unlike in this case, the plaintiff in Progress Mich subsequently filed

an amended and verified complaint well before the expiration of the one-year period set

forth in MCL 600.6431. Thus, the Progress Mich Court was not tasked with considering

whether a party can cure a defective complaint after that one-year deadline has lapsed. The

distinct issue presented was whether the initial filing of the unverified complaint tolled the

applicable statute of limitations to prevent dismissal of the case on statute-of-limitations

grounds. This Court held that an unverified complaint can toll the 180-day FOIA

limitations period, as “nothing in the language of [FOIA] suggests that the verification

requirement of MCL 600.6434 (or MCL 600.6431) has any bearing on the question of when

20 MCL 15.231 et seq. 21 MCL 600.6434(2) of the COCA provides that a party’s complaint “shall be verified,” and MCL 600.6434(3) and (4) provide instruction as to how the complaint shall be served and filed. The Court in Progress Mich stated that the “[d]efendant did not address verification under MCL 600.6434 separately from verification under MCL 600.6431, and while the statutes function slightly differently, there is no difference between their verification requirements.” Progress Mich, 506 Mich at 93.

7 an action is commenced or whether the statutory period of limitations is tolled.”22 The Court

did not alter its previous holdings that compliance with MCL 600.6431 is required to avoid

dismissal of claims against the state. The Court of Appeals thus misapplied the rationale of

Progress Mich to excuse plaintiff’s failure to comply with MCL 600.6431.

IV. CONCLUSION

We conclude that plaintiff’s failure to comply with the notice and verification

requirements of MCL 600.6431 mandates dismissal of this case. Accordingly, we reverse

the judgment of the Court of Appeals and remand this case to the Court of Claims for

reinstatement of summary disposition in favor of defendant. We deny plaintiff’s

application for leave to appeal as cross-appellant. 23

Elizabeth T. Clement Brian K. Zahra David F. Viviano Megan K. Cavanagh Elizabeth M. Welch

BERNSTEIN, J., did not participate in the disposition of this case due to a familial relationship.

BOLDEN, J., did not participate in the disposition of this case because the Court considered it before she assumed office.

22 Progress Mich, 506 Mich at 98. 23 In light of our conclusion that plaintiff’s claims fail due to plaintiff’s failure to comply with MCL 600.6431, we need not consider the issues set forth in plaintiff’s cross-appeal.