Muskegon Twnshp v. Muskegon

CourtCourt of Appeals for the Sixth Circuit
DecidedSeptember 19, 2002
Docket00-2472
StatusPublished

This text of Muskegon Twnshp v. Muskegon (Muskegon Twnshp v. Muskegon) is published on Counsel Stack Legal Research, covering Court of Appeals for the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Muskegon Twnshp v. Muskegon, (6th Cir. 2002).

Opinion

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BBBBBBBBBBBBBBBBB &2816(/ $5*8('  3KLOLS $ *UDVKRII -U 9$5180 5,''(5,1* 6&+0,'7  +2:/(77 *UDQG 5DSLGV 0LFKLJDQ IRU $SSHOODQW  * 7KRPDV -RKQVRQ 3$50(17(5 2¶722/( 0XVNHJRQ 0LFKLJDQ IRU $SSHOOHH21%5,()3KLOLS$*UDVKRII-U9$5180 5,''(5,1* 6&+0,'7  +2:/(77 *UDQG 5DSLGV 0LFKLJDQ IRU $SSHOODQW  * 7KRPDV -RKQVRQ 3$50(17(5 2¶722/( 0XVNHJRQ 0LFKLJDQ IRU $SSHOOHH &/$< - GHOLYHUHG WKH RSLQLRQ RI WKH FRXUW LQ ZKLFK 2%(5'25)(5 ' - MRLQHG  6,/(5 - SS   GHOLYHUHGDVHSDUDWHRSLQLRQFRQFXUULQJLQSDUWDQGGLVVHQWLQJ LQSDUW BBBBBBBBBBBBBBBBB 23,1,21 BBBBBBBBBBBBBBBBB &/$< &LUFXLW -XGJH  Plaintiff, Charter Township of Muskegon, appeals from the district court’s order entered on November 13, 2000, denying its motion for relief from judgment under Federal Rule of Civil Procedure 60(b)(5), and sua sponte dismissing in its entirety this action brought against Defendant, the City of Muskegon, for lack of subject matter jurisdiction. For the reasons set forth below, ZH 5(9(56(WKHGLVWULFWFRXUW¶VRUGHUDVWRWKHODFNRIVXEMHFW PDWWHU MXULVGLFWLRQ DQG 5(0$1' WKH FDVH WR WKH GLVWULFW FRXUW IRU D KHDULQJ RQ WKH PHULWV RI 3ODLQWLII¶V 5XOH  E PRWLRQ %$&.*5281' In 1958, the Charter Township of Muskegon, Michigan ("the Township") issued revenue bonds to finance the  &KDUWHU7RZQVKLSRI0XVNHJRQ 1R 1R &KDUWHU7RZQVKLSRI0XVNHJRQ  Y&LW\RI0XVNHJRQ Y&LW\RI0XVNHJRQ

UHPDQGIRUVXFKDKHDULQJ7KH7RZQVKLSGRHVQRWH[SODLQ construction of the Muskegon Township Water Distribution ZKDW HYLGHQFH LW ZRXOG XVH WR UHIXWH DQ\ RI WKH SUHYLRXV System No. 2. The Township went into default, and in 1964, GHWHUPLQDWLRQVE\WKHFRXUW7KHUHIRUH,ZRXOGILQGWKDWWKH certain out-of-state bondholders filed a diversity action in the GLVWULFWFRXUWKDVPDGHLWVUXOLQJXQGHU5XOH E DQGWKDWLW United States District Court for the Western District of GLGQRWDEXVHLWVGLVFUHWLRQLQGHQ\LQJWKHUHOLHIUHTXHVWHG Michigan in order to protect their interests. The case was 7KXV,ZRXOGDIILUPWKHDOWHUQDWLYHGHFLVLRQE\WKHGLVWULFW docketed as No. 4731. Both the Township and the City of FRXUW,QP\RSLQLRQVXFKDUHVXOWGRHVQRWFRQWUDGLFWWKH Muskegon, Michigan ("the City") were named as defendants. GHFLVLRQLQ5RJHUV A trial was held in 1969. Excerpts from the proceedings over which District Judge W. Wallace Kent presided indicated that the parties were seeking to reach a settlement and that it was "understood that the decree [settlement] may include a provision that upon retirement of all the bonds and upon payment of all the bonds and upon payment of all the other obligations of the Township system, that the Township system will then become merged into and become part of the water system of the City of Muskegon." (J.A. at 78-79.) Significant to the matter at hand, the excerpts from the proceedings also indicate that the following colloquy took place: THE COURT: Mr. Frederick, did you have something to say? FREDERICK: Sir, going back to your last statement on the City’s assumption of the ownership of the system, should we have the words, "existing bond issue." THE COURT: Yes, existing bond issue. FREDERICK: There may be more issued in the future, and this could go on for ever and ever. THE COURT: Everything as to the bond issue, reference is made to that which is the subject of the lawsuit and no other bond issue. And no obligations except those required in order to remedy the default,  &KDUWHU7RZQVKLSRI0XVNHJRQ 1R 1R &KDUWHU7RZQVKLSRI0XVNHJRQ  Y&LW\RI0XVNHJRQ Y&LW\RI0XVNHJRQ

except as the income of the  well, no, I BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB think we can leave it right there, because from then on you are the operators. So &21&855,1*,13$57',66(17,1*,13$57 when those obligations are liquidated, BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB then the system becomes part of the City system. It is merged into it. 6,/(5&LUFXLW-XGJHFRQFXUULQJLQSDUWDQGGLVVHQWLQJLQ SDUW  , FRQFXU ZLWK WKH FRQFOXVLRQ DQG UHDVRQLQJ RI WKH KNUDSON: Okay, they take over the assets and PDMRULW\RSLQLRQRQZKHWKHUWKHGLVWULFWFRXUWKDGMXULVGLFWLRQ liabilities. ,Q VKRUW , DJUHH WKDW WKHUH ZDV MXULVGLFWLRQ WR FRQVLGHU WKH PRWLRQXQGHU)HG5&LY3 E  +RZHYHU,GLVVHQW THE COURT: Liabilities and everything; it all IURP WKH GHFLVLRQ WKDW WKH PDWWHU VKRXOG EH UHPDQGHG IRU becomes part of the City system. IXUWKHUSURFHHGLQJV (J.A. at 79.) $GPLWWHGO\5RJHUVY6WUDWWRQ,QGXVWULHV,QF)G  WK&LU VWDWHVWKDW³LIDFRXUWGRHVQRWKDYH On June 15, 1972, judgment was entered by Judge Kent. MXULVGLFWLRQLSVRIDFWRLWFDQQRWDGGUHVVWKHPHULWVRIDFDVH´ The judgment, which provided a method for ensuring that the +RZHYHUZHQRZKROGWKDWWKHGLVWULFWFRXUWKDGMXULVGLFWLRQ bonds would be paid, resulted from efforts by the Township LQWKHFDVH7KHFRXUWPDGHDQDOWHUQDWLYHUXOLQJFDOOHGGLFWD and the City to reach a settlement. The judgment ordered the E\WKHPDMRULW\RSLQLRQWKDWLIMXULVGLFWLRQZHUHSUHVHQWWKHQ City to assume operation of the water system in the capacity LWZRXOGVWLOOGHQ\WKHPRWLRQWRUHOLHYHWKH7RZQVKLSIURPD of trustee and to loan sufficient funds to the water system to ILQDOMXGJPHQW cure any default in its bonded obligations. Paragraphs 7 and 12 of the judgment are relevant to this case and provide, 7KHGLVWULFWFRXUWVHWRXWYDOLGUHDVRQVZK\LWZRXOGGHQ\ respectively, that WKH PRWLRQ  )LUVW  WKH DUJXPHQW E\ WKH 7RZQVKLS WKDW LWV ILQDQFLDOKHDOWKKDGFKDQJHGWRVXFKDGHJUHHWKDWWKH [t]he rates and charges of the township customers shall FRQVHQW MXGJPHQW VKRXOG EH VHW DVLGH ZDV LQVXIILFLHQW WR become uniform with the rates and charges throughout UHYHUVHWKHLQWHQWRIWKHMXGJPHQW,WIRXQGQRLQHTXLW\LQWKH the City when all the outstanding bonds have been fully WUDQVIHURIWKHZDWHUV\VWHPWRWKH&LW\0RUHRYHUWKHGLVWULFW paid for the existing bond issue and the City has been FRXUW GHFLGHG WKDW WKH 7RZQVKLS KDG QRW ILOHG LWV PRWLRQ fully reimbursed of any monies it may have obliged to ZLWKLQDUHDVRQDEOHWLPHEHFDXVHWKH\HDUGHOD\LQILOLQJ loan to the Muskegon Township Water Distribution WKHPRWLRQZDVZHOOEH\RQGWKHWLPHOLPLWDWLRQFRQWHPSODWHG System No. 2.

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Bluebook (online)
Muskegon Twnshp v. Muskegon, Counsel Stack Legal Research, https://law.counselstack.com/opinion/muskegon-twnshp-v-muskegon-ca6-2002.