Kickham Hanley Pllc v. Oakland County Michigan ( 2019 )

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
KICKHAM HANLEY PLLC, UNPUBLISHED
May 2, 2019
Plaintiff-Appellant,
v No. 341076
Oakland Circuit Court
OAKLAND COUNTY MICHIGAN, LC No. 2017-159351-CZ
Defendant,
and
GEORGE W. KUHN DRAINAGE DISTRICT,
Defendant-Appellee.
Before: MURRAY, C.J., and SAWYER and REDFORD, JJ.
PER CURIAM.
Plaintiff, Kickham Hanley PLLC, appeals as of right the trial court’s order granting
summary disposition of its claims under MCR 2.116(C)(7) and (8) and denying its motion for
leave to amend its complaint. We affirm.
I. BACKGROUND
Plaintiff commenced this action against defendants1 after the settlement of a class action
lawsuit brought by a water and sewer ratepayer against Royal Oak, Michigan. The class
representative alleged Headlee Amendment violations, Const 1963, art 9, § 31, and challenged
Royal Oak’s mandatory debt service charge and mandatory stormwater disposal charge to users
of its water and sanitary disposal services. The circuit court in that action dismissed both counts
of the complaint and the class representative moved for reconsideration. While that motion
1
The trial court dismissed Oakland County based upon a stipulation of the parties.
pended, the parties settled. The circuit court approved the settlement and entered a final
judgment.
During the class action litigation, the class representative came to believe that defendant,
the George W. Kuhn Drainage District (GWKDD), inflated Detroit Water and Sewerage
Department (DWSD) charges for stormwater disposal and overcharged for several years Royal
Oak which passed on the charges to users. As part of the settlement in the class action lawsuit,
Royal Oak paid a settlement to the class and assigned any claims it may have had for refund of
the overcharges to plaintiff, as the trustee for a litigation trust. In its assignment, Royal Oak
made no warranty or representation that it, in fact, imposed any overcharges or that any refunds
were owed. The class members in turn released Royal Oak from any and all claims they had
against Royal Oak concerning the city’s rates and charges. The circuit court entered a final
judgment and order approving the settlement and appointing plaintiff as the trustee of a litigation
trust established for the benefit of the class members. The order authorized plaintiff to pursue a
claim for refund of the GWKDD’s alleged overcharges and ordered that any monetary recovery
be distributed to the class members.
In its complaint, plaintiff alleged that Royal Oak’s combined sewer system flows through
the George W. Kuhn Drain, which is owned and maintained by Oakland County. The GWKDD
is a component unit of Oakland County, comprised of several municipalities in the area,
including Royal Oak, whose stormwater and sewerage flow into the Kuhn Drain. The
GWKDD’s stormwater flow is conveyed for ultimate disposal by Oakland County to a treatment
plant operated by DWSD or the Great Lakes Water Authority (GLWA) for ultimate disposal.
The DWSD charges the GWKDD a flat annual rate for stormwater disposal based on a formula
tied to the amount of rainfall and the volume of surface water that enters the county’s system for
disposal. The GWKDD, in turn, proportionately allocates DWSD’s stormwater charges among
the municipalities in the district and charges each municipality that has a combined sewer
system, including Royal Oak, a flat rate per month for stormwater disposal based on an
apportionment formula stated in a resolution approved and adopted by the Drainage Board for
the George W. Kuhn Drain at a public meeting held on April 19, 2005, and specified in the
Drainage Board’s Final Order of Apportionment issued April 19, 2005, pursuant to the board’s
resolution. The Final Order of Apportionment provided for the apportionment of the costs of
administration, operations, and maintenance of the George W. Kuhn Drain. The Drainage Board
allocated 29.7915% of the costs to Royal Oak.
Royal Oak, in turn, passed through the charges imposed by the GWKDD to its ratepayers
by incorporating the charges into its water and sewer rates to recover the entire amount of the
GWKDD’s charge. The Drainage Board’s Final Order of Apportionment provided that the
charges to the municipalities, including Royal Oak, were comprised of two components: (1) the
DWSD’s charges to the George W. Kuhn Drain to treat the total stormwater flow and (2) the
administrative costs of operating and maintaining the balance of the George W. Kuhn Drain
System.
Plaintiff, as Royal Oak’s assignee, filed a two count complaint against Oakland County
and the GWKDD alleging a breach of contract claim and an equitable claim in assumpsit for
money had and received. Plaintiff alleged that the GWKDD charged Royal Oak in excess of the
amount DWSD charged for disposal of the stormwater and that the Drainage Board’s resolution
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contractually obligated the GWKDD to charge Royal Oak only its proportionate share of the
DWSD’s actual charges to the GWKDD. Plaintiff claimed that, by overcharging Royal Oak, the
GWKDD breached the contract causing Royal Oak breach of contract damages. Alternatively,
plaintiff alleged that, if no express contract existed, based on Royal Oak’s assignment of its
claims, plaintiff had entitlement to recover the GWKDD’s overcharges through an action in
assumpsit. The GWKDD, in lieu of filing an answer, moved for summary disposition under
MCR 2.116(C)(7) and (8). The GWKDD asserted that the Drainage Board’s resolution that
formed the basis of plaintiff’s breach of contract claim did not constitute a contract. The
GWKDD also asserted that plaintiff’s claims in actuality alleged tort liability from which the
GWKDD had governmental immunity. Regarding the assumpsit count, the GWKDD asserted
that plaintiff stood in the shoes of Royal Oak as its assignee and had no right to any damages
from the alleged overcharges because the city passed through the overcharges to the ratepayers
and suffered no compensable loss.
While the GWKDD’s summary disposition motion pended, plaintiff filed an amended
complaint that added an unjust enrichment claim. Defendant moved to strike plaintiff’s amended
complaint and the trial court granted the motion prompting plaintiff to file a motion for leave to
amend. At the conclusion of a hearing on the parties’ motions, the trial court granted defendant’s
motion for summary disposition under MCR 2.116(C)(8), denied plaintiff’s motion for leave to
amend, and dismissed plaintiff’s lawsuit with prejudice.
II. SUMMARY DISPOSITION UNDER MCR 2.116(C)(8)
A. STANDARD OF REVIEW
We review de novo the trial court’s grant of summary disposition under MCR
2.116(C)(8) to determine whether the opposing party failed to state a claim upon which relief can
be granted. Dalley v Dykema Gossett, PLLC, 287 Mich. App. 296, 304; 788 NW2d 679 (2010).
In Dalley, this Court explained:
A motion brought under subrule (C)(8) tests the legal sufficiency of the complaint
solely on the basis of the pleadings. When deciding a motion under (C)(8), this
Court accepts all well-pleaded factual allegations as true and construes them in
the light most favorable to the moving party. A party may not support a motion
under subrule (C)(8) with documentary evidence such as affidavits, depositions,
or admissions. Summary disposition on the basis of subrule (C)(8) should be
granted only when the claim is so clearly unenforceable as a matter of law that no
factual development could possibly justify a right of recovery. [Id. at 304-305
(quotation marks and citations omitted).
In a contract action the trial court may examine the contract attached to the complaint.
Liggett Restaurant Group, Inc v Pontiac, 260 Mich. App. 127, 133; 676 NW2d 633 (2003). “The
existence and interpretation of a contract are questions of law reviewed de novo.” Kloian v
Domino’s Pizza, LLC, 273 Mich. App. 449, 452; 733 NW2d 766 (2006). Further, whether an
equitable claim can be maintained presents a question of law subject to de novo review. Morris
Pumps v Centerline Piping, Inc, 273 Mich. App. 187, 193; 729 NW2d 898 (2006).
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B. BREACH OF CONTRACT
Plaintiff first claims that the trial court erred by granting summary disposition of its
breach of contract claim. We disagree.
The party claiming a breach of contract must establish by a preponderance of the
evidence (1) the existence of a contract, (2) the other party’s breach, and (3) damages to the party
claiming breach. Miller-Davis Co v Ahrens Constr, Inc, 495 Mich. 161, 178; 848 NW2d 95
(2014). An express contract is “an actual agreement of the parties, the terms of which are openly
uttered or declared at the time of making it, being stated in distinct and explicit language either
orally or in writing.” Benson v Dep’t of Mgt and Budget, 168 Mich. App. 302, 307; 424 NW2d 40
(1988) (quotation marks and citation omitted). In AFT Mich v Michigan, 497 Mich. 197, 235;
866 NW2d 782 (2015), our Supreme Court summarized the principles of contract formation as
follows:
A valid contract requires five elements: (1) parties competent to contract,
(2) a proper subject matter, (3) legal consideration, (4) mutuality of agreement,
and (5) mutuality of obligation. The party seeking to enforce a contract bears the
burden of proving that the contract exists. Contracts necessarily contain
promises: a contract may consist of a mutual exchange of promises, or the
performance of a service in exchange for a promise. [Citations omitted.]
Further, to create a contract, there must be an offer and acceptance by the parties signifying their
unambiguous mutual assent or meeting of the minds on the essential terms. Kloian, 273 Mich
App at 452-253 (citations omitted).
In this case, plaintiff alleged one count of breach of contract based on the resolution
adopted by the Drainage Board. It argued to the trial court that the resolution coupled with the
Drainage Board’s Final Order of Apportionment constituted an express contract that the
GWKDD breached. The record reflects that plaintiff attached the resolution and the Final Order
of Apportionment to its complaint as exhibits making them part of its pleadings and relied on
those documents to allege the existence of a contract between the GWKDD and Royal Oak.
Therefore, the trial court could properly consider those documents for determination of
defendant’s summary disposition motion under MCR 2.116(C)(8). Liggett, 260 Mich. App. at
133.
Plaintiff argues as it did to the trial court that the resolution and the Final Order of
Apportionment constituted a binding express contract between the GWKDD and Royal Oak that
the GWKDD breached. We disagree.
The language of the Drainage Board’s resolution and its Final Order of Apportionment
plainly establish that these two documents neither individually, nor combined, constituted a
binding contract between the GWKDD and Royal Oak. The documents expressed no offer or
promises made by either party to the other that required acceptance. Nor did the documents
express the five elements necessary for the creation of a valid contract in Michigan.
The Drainage Board’s resolution and its Final Order of Apportionment expressed
independent determinations made by the Drainage Board, as statutorily required under Chapter
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20 of Michigan’s drain code of 1956, MCL 280.461 et seq. which governs intracounty drains.
The GWKDD is a drainage district, a governmental body with powers conferred upon it by law.
See MCL 280.5. The drain code authorizes recovery of the costs of county drains necessary for
the public health, MCL 280.462, and makes drainage boards responsible for the operation and
maintenance of such drains, MCL 280.478.2 Under the drain code, drainage boards must
establish percentages to apportion the costs of operating and maintaining drains to the public
corporations assessed for the costs of the drain, considering the benefits that accrue to each
public corporation and the extent to which each public corporation contributes to the conditions
which make the drain necessary. See MCL 280.468; MCL 280.469; MCL 280.478. Drainage
boards are statutorily required to determine, after notice and a hearing, the apportionment of the
costs and confirm their determinations by issuance of a final order of apportionment. See MCL
280.469; MCL 280.478. The drain code, however, nowhere provides that a final order of
apportionment issued by a drainage board constitutes a contract with the municipal entities to
which the order applies. Nor does the drain code grant a right of action to such entities for an
alleged breach of a final order of apportionment.
The resolution and Final Order of Apportionment at issue in this case, therefore,
constituted a statutorily required determination that apportioned the costs of stormwater disposal
and treatment by the DWSD, and allocated to the municipalities in the GWKDD their
proportionate share. Neither the resolution nor the Final Order of Apportionment, nor those
documents combined constituted contracts on which Royal Oak could base a breach of contract
claim. Plaintiff, therefore, failed and could not meet its burden of establishing the existence of a
contract. Accordingly, the trial court properly granted summary disposition of plaintiff’s breach
of contract claim under MCR 2.116(C)(8).3
2
MCL 280.462 provides: “County drains which are necessary for the public health may be
located, established and constructed under the provisions of this chapter where the cost thereof is
to be assessed wholly against public corporations.” MCL 280.478 provides, in part: “Any
necessary expenses incurred in the administration and in the operation and maintenance of the
drain and not covered by contract shall be paid by the several public corporations assessed for
the cost of the drain.”
3
Defendant also argues that, because plaintiff’s claims were premised on the resolution and
Final Order of Apportionment, the claims challenged the propriety of the Final Order of
Apportionment and the legality of apportioning the costs to Royal Oak. Defendant contends that
plaintiff’s claims were barred by the limitations period prescribed under MCL 280.483 which
governs challenges to orders of apportionment. We find no merit to defendant’s argument
because plaintiff’s complaint plainly did not challenge the apportionment decision. Further, we
decline to review this issue because it is not necessary for the disposition of this case. See Fast
Air, Inc v Knight, 235 Mich. App. 541, 549-550; 599 NW2d 489 (1999).
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C. ASSUMPSIT
Plaintiff next argues that the trial court erred by granting defendant summary disposition
because, in the absence of an express contract, it could recover the overcharges on equitable
grounds in assumpsit for money had and received. We disagree.
A claim in assumpsit is “an equitable action, and can be maintained in all cases for
money which in equity and good conscience belongs to the plaintiff.” Hoyt v Paw Paw Grape
Juice Co, 158 Mich. 619, 626; 123 N.W. 529 (1909) (quotation marks and citation omitted). The
right to bring an action in assumpsit “exists whenever a person, natural or artificial, has in his or
its possession money which in equity and good conscience belongs to the plaintiff, and neither
express promise nor privity between the parties is essential.” Id. at 626 (citation and emphasis
omitted); see also Trevor v Fuhrmann, 338 Mich. 219, 223-224; 61 NW2d 49 (1953). As our
Supreme Court explained in Moore v Mandlebaum, 8 Mich. 433, 448 (1860):
We understand the law to be well settled that an action of assumpsit for
money had and received is essentially an equitable action, founded upon all the
equitable circumstances of the case between the parties; and if it appear, from the
whole case, that the defendant has in his hands money, which, according to the
rules of equity and good conscience, belongs, or ought to be paid, to the plaintiff,
he is entitled to recover; and that as a general rule, where money has been
received by a defendant under any state of facts which would in a court of equity
entitle the plaintiff to a decree for the money, when that is the specific relief
sought, the same state of facts will entitle him to recover the money in this action.
“The basis of a common-law action for money had and received is not only the loss occasioned
to the plaintiff on account of the payment of the money, but the consequent enrichment of the
defendant by reason of having received the same.” Trevor, 338 Mich. at 224-225.
In this case, plaintiff alleged a claim in assumpsit for money had and received on the
ground that the GWKDD improperly overcharged Royal Oak contrary to the Drainage Board’s
resolution. Plaintiff based that alternative claim on its position as Royal Oak’s assignee.
Plaintiff did not dispute that Royal Oak passed through the alleged overcharges to its water and
sewer ratepayers. The trial court ruled that plaintiff, as Royal Oak’s assignee, could not maintain
the assumpsit claim because Royal Oak suffered no recoverable loss. The trial court did not err
in this regard.
Under Michigan law, an assignee stands in the shoes of the assignor and acquires only the
same rights as the assignor and remains subject to the same defenses as the assignor. Coventry
Parkhomes Condo Ass’n v Fed Nat’l Mortg Ass’n, 298 Mich. App. 252, 256-257; 827 NW2d 379
(2012). Therefore, as Royal Oak’s assignee, plaintiff acquired no more rights than Royal Oak
had at the time of the assignment and it remained subject to the same defenses as Royal Oak. In
this case, plaintiff sought a refund of the alleged overcharges as Royal Oak’s assignee. Royal
Oak, however, passed through to its water and sewer ratepayers the GWKDD’s charges by
incorporating them into the water and sewer rates. Royal Oak suffered no loss because the funds
it paid to the GWKDD were recovered from its ratepayers who paid their water and sewer bills.
The record reflects that plaintiff conceded at the hearing that Royal Oak did nothing wrong and
had authority to charge its ratepayers whatever amount the GWKDD charged Royal Oak,
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including the alleged overcharges, because Royal Oak was “purely a pass-through.” Thus, if the
GWKDD overcharged and collected fees from Royal Oak for stormwater disposal, plaintiff can
claim no right to recover from the GWKDD because Royal Oak suffered no loss from its
payment of the alleged overcharges. Royal Oak passed on the charges and passed on the
ratepayers’ payments. Royal Oak recouped any excess payments from its water and sewer
ratepayers. Royal Oak had no claim against the GWKDD that it had in its possession money
which in equity and good conscience belonged to Royal Oak. Royal Oak, therefore, occasioned
no compensable loss. Trevor, 338 Mich. at 224-225; Hoyt, 158 Mich. at 626. The trial court
correctly discerned that Royal Oak had no claim in assumpsit. Consequently, plaintiff failed and
could not state a claim in assumpsit.
Plaintiff argues that federal antitrust law principles articulated in the United States Court
of Appeals for the Sixth Circuit’s decision in Oakland Co v Detroit, 866 F2d 839 (CA 6, 1989)
and the Supreme Court’s decision in Illinois Brick Co v Illinois, 431 U.S. 720; 97 S. Ct. 2061; 52 L
Ed 2d 707 (1977) should be considered and applied in this case. Both of those cases, however,
are distinguishable because in Oakland Co, the Sixth Circuit addressed whether counties had
standing to bring a federal antitrust action and seek treble damages under the Racketeering
Influence and Corrupt Organizations Act (RICO), and in Illinois Brick, the Supreme Court
addressed who could seek recovery under the Clayton Act in an antitrust action. The courts
considered who constituted an injured party within the meanings of RICO and the Clayton Act
for federal antitrust violation claim purposes. The courts based their decisions on concerns that
holding otherwise would lead to the filing of numerous antitrust actions and unmanageable
antitrust class actions that presented enormous evidentiary complexities and uncertainties. We
do not find the rationale for the courts’ decisions applicable in this case. Further, neither case
involved an equitable action in assumpsit. Accordingly, we decline to apply federal antitrust law
principles in this case.
Although the ratepayers may have had viable claims against a government entity for the
overcharges they allegedly paid, 4 the class members settled and released Royal Oak from any
and all liability for refunds of their alleged overpayments. Under Hoyt, the right to bring an
action for assumpsit must be held by the plaintiff who can establish that the defendant has in its
possession money which, in equity and good conscience, belonged to the plaintiff. In this case,
plaintiff sued as Royal Oak’s assignee for recovery of money paid to the GWKDD. The money
plaintiff sought did not belong to Royal Oak, its assignor, but to the ratepayers. Therefore, the
4
See Bond v Public Schools of Ann Arbor, 383 Mich. 693; 178 NW2d 484 (1970).
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trial court did not err by granting the GWKDD summary disposition of plaintiff’s claim in
assumpsit. 5
III. GOVERNMENTAL IMMUNITY
Defendant argues that, in the absence of a contract, plaintiff’s claims constituted
negligence claims subject to government immunity under the Governmental Tort Liability Act
(GTLA), MCL 691.1401 et seq. Plaintiff counters by asserting that the trial court correctly
decided that government immunity did not apply in this case. We agree that the trial court
correctly determined this issue.
Under MCR 2.116(C)(7), “[s]ummary disposition may be granted when, among other
things, a claim is barred by governmental immunity.” Dybata v Wayne Co, 287 Mich. App. 635,
637; 791 NW2d 499 (2010). “When considering a motion brought under subrule (C)(7), the trial
court must consider any affidavits, depositions, admissions, or other documentary evidence
submitted by the parties to determine whether there is a genuine issue of material fact precluding
summary disposition.” Id. (citations omitted). “If no facts are in dispute, or if reasonable minds
could not differ regarding the legal effect of those facts, then the question whether the claim is
barred by governmental immunity is an issue of law.” Id. at 637. Further, this Court reviews de
novo the application of governmental immunity. Id. at 638.
“The [GTLA] provides ‘broad immunity from tort liability to governmental agencies
whenever they are engaged in the exercise or discharge of a governmental function.’ ” Milot v
DOT, 318 Mich. App. 272, 276; 897 NW2d 248 (2016), quoting Ross v Consumers Power Co (On
Rehearing), 420 Mich. 567, 595; 363 NW2d 641 (1984). There is no dispute that the GWKDD, a
unit of Oakland County, a political subdivision of the state of Michigan, is a governmental entity
generally immune from tort liability under MCL 691.1407(1). Milot, 318 Mich. App. at 276.
This Court explained in Yellow Freight Sys, Inc v State of Michigan, 231 Mich. App. 194, 203;
585 NW2d 762 (1998), rev’d on other grounds 464 Mich. 21 (2001), rev’d 537 U.S. 36; 123 S. Ct.
371; 154 L. Ed. 2d 377 (2002), that “[a]n action in assumpsit for money had and received is not an
action in tort.” “Therefore, governmental immunity from tort liability under MCL
691.1407 . . . does not apply.” Id. Accordingly, we find no merit to defendant’s argument that,
in the absence of a contract, plaintiff’s assumpsit claim should have been construed as a
negligence claim barred by governmental immunity. We hold that the trial court did not err in
concluding that governmental immunity did not apply in this case.
5
Defendant also argues that this action improperly imposed against it a certified class from the
earlier settled action despite the fact that defendant was not a party to that action. Although
defendant raised this issue before the trial court, the trial court did not decide the issue.
Therefore, the issue was not preserved for review by this Court and we decline to review it.
Further, the issue is not necessary for the disposition of this case. Fast Air, Inc, 235 Mich. App. at
549-550.
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IV. AMENDED COMPLAINT
Plaintiff also argues that the trial court erred by granting defendant’s motion to strike its
first amended complaint and by denying its motion for leave to amend under MCR 2.118(A)(2)
based on futility. We disagree.
We review for an abuse of discretion a trial court’s decision to strike a pleading. Belle
Isle Grill Corp v Detroit, 256 Mich. App. 463, 469; 666 NW2d 271 (2003). We also review for
an abuse of discretion a trial court’s decision regarding a motion for leave to file an amended
complaint. Kostadinovski v Harrington, 321 Mich. App. 736, 742-743; 909 NW2d 907 (2017).
An abuse of discretion occurs when the court’s decision results in an outcome outside the range
of principled outcomes. Decker v Trux R US, Inc, 307 Mich. App. 472, 478; 861 NW2d 59
(2014). A trial court abuses its discretion when it makes an error of law. Kostadinovski, 321
Mich. App. at 743. We review de novo a trial court’s interpretation of a court rule. Acorn
Investment Co v Mich Basic Prop Ins Ass’n, 495 Mich. 338, 348; 852 NW2d 22 (2014).
“[W]hether a claim for unjust enrichment can be maintained is a question of law” subject to de
novo review. Morris Pumps, 273 Mich. App. at 193.
“The principles of statutory construction apply to the interpretation of the Michigan Court
Rules.” Decker, 307 Mich. App. at 479. We look to “ ‘the plain language of the court rule in
order to ascertain its meaning’ and the ‘intent of the rule must be determined from an
examination of the court rule itself and its place within the structure of the Michigan Court Rules
as a whole.’ ” Id., quoting Henry v Dow Chem Co, 484 Mich. 483, 495; 772 NW2d 301 (2009).
“ ‘If the rule’s language is plain and unambiguous, then judicial construction is not permitted and
the rule must be applied as written.’ ” Decker, 307 Mich. App. at 479, quoting Jenson v Puste,
290 Mich. App. 338, 342; 801 NW2d 639 (2010).
In this case, plaintiff filed the complaint on June 20, 2017. In lieu of answering, on
August 18, 2017, the GWKDD moved for summary disposition pursuant to MCR 2.116(C)(7)
and (C)(8). Before responding to the GWKDD’s summary disposition motion, plaintiff filed an
amended complaint. That prompted the GWKDD to move to strike plaintiff’s amended
complaint under MCR 2.115(B) on the ground that its filing of a motion for summary disposition
precluded plaintiff from filing an amended complaint without first obtaining leave from the trial
court under MCR 2.118(B)(2). At the hearing on the GWKDD’s motion to strike, the trial court
held in abeyance its ruling. Nevertheless, the trial court later entered an order granting the
GWKDD’s motion and striking plaintiff’s amended complaint.
MCR 2.118 governs amendment of a party’s pleadings. Ligons v Crittenton Hosp, 490
Mich. 61, 80; 803 NW2d 271 (2011). MCR 2.118(A) provides, in pertinent part:
(1) A party may amend a pleading once as a matter of course within 14
days after being served with a responsive pleading by an adverse party, or within
14 days after serving the pleading if it does not require a responsive pleading.
(2) Except as provided in subrule (A)(1), a party may amend a pleading
only by leave of the court or by written consent of the adverse party. Leave shall
be freely given when justice so requires.
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MCR 2.118(A)(1) permits a party to “amend a pleading once as a matter of course within
14 days after being served with a responsive pleading by an adverse party[.]” Ligons, 490 Mich.
at 80 (quotation marks and citation omitted). MCR 2.110(A) specifies that the term “pleading”
includes only a complaint, a cross-complaint, a counterclaim, a third-party complaint, an answer,
and a reply to an answer, and states that “[no] other pleading is allowed.” “[W]hen a court rule
specifically defines a given term, that definition alone controls.” Ligons, 490 Mich. at 81
(quotation marks and citation omitted). The GWKDD’s motion for summary disposition,
therefore, was not a responsive pleading. Huntington Woods v Ajax Paving Indus, Inc, 179 Mich
App 600, 601; 446 NW2d 331 (1989). Accordingly, plaintiff’s right as a matter of course to
amend its complaint under MCR 2.118(A)(1) was not triggered by GWKDD filing of its motion
for summary disposition of plaintiff’s claims in its original complaint. Plaintiff’s filing without
leave to amend did not comport with the requirements of MCR 2.118(A)(1). The trial court,
therefore, did not abuse its discretion by striking plaintiff’s improperly filed amended complaint.
The record reflects that plaintiff then moved for leave to amend its complaint to state two
claims in assumpsit and to assert a new count for unjust enrichment. Under MCR 2.118(A)(2),
“[a] court should freely grant leave to amend a complaint when justice so requires.” Lane v
Kindercare Learning Ctrs, Inc, 231 Mich. App. 689, 696; 588 NW2d 715 (1998). In Lane, this
Court explained:
Ordinarily, a motion to amend a complaint should be granted, and should be
denied only for the following particularized reasons: (1) undue delay, (2) bad faith
or dilatory motive on the part of the movant, (3) repeated failure to cure
deficiencies by amendments previously allowed, (4) undue prejudice to the
opposing party by virtue of allowance of the amendment, or (5) futility of the
amendment.
* * *
An amendment is futile if it merely restates the allegations already made or adds
allegations that still fail to state a claim. [Id. at 697 (citations omitted).]
In this case, the record reflects that the trial court considered plaintiff’s proposed
amended complaint and determined that the amended allegations and proposed unjust
enrichment claim failed to overcome plaintiff’s original complaint’s deficiencies and failed to
state a claim upon which relief could be granted. The trial court concluded that plaintiff’s new
unjust enrichment claim was futile for the same reasons that plaintiff’s assumpsit claim failed.
The equitable right of restitution exists when a person has been unjustly enriched at
another person’s expense. Morris Pumps, 273 Mich. App. at 193. The law will imply a contract
“to prevent unjust enrichment when one party inequitably receives and retains a benefit from
another.” Id. at 194; see also Belle Isle Grill, 256 Mich. App. at 478. To sustain a claim of unjust
enrichment, “a plaintiff must establish (1) the receipt of a benefit by the defendant from the
plaintiff and (2) an inequity resulting to the plaintiff because of the retention of the benefit by the
defendant.” Morris Pumps, 273 Mich. App. at 195. “In other words, the law will imply a contract
to prevent unjust enrichment only if the defendant has been unjustly or inequitably enriched at
the plaintiff’s expense.” Id.
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In this case, plaintiff stood in the shoes of Royal Oak as its assignee. It alleged in its
proposed amended complaint that the GWKDD was unjustly enriched by overcharging Royal
Oak for the costs of stormwater disposal. Although plaintiff alleged that the GWKDD received a
benefit and asserted that it would be unjust for the GWKDD to retain the alleged overcharges,
plaintiff cannot establish any inequity resulting to Royal Oak from the GWKDD’s retention of
the overcharges because Royal Oak passed through to ratepayers the alleged overcharges and
recouped from them the amount it allegedly overpaid. While the retention of the alleged
overcharges collected by the GWKDD may have resulted in an inequity to the ratepayers, Royal
Oak suffered no loss. The record reflects that plaintiff did not specifically allege in its proposed
amended complaint that any inequity resulted to Royal Oak. Royal Oak could not state a claim
for unjust enrichment under the circumstances presented in this case. Therefore, plaintiff, as
Royal Oak’s assignee, could not state a claim for unjust enrichment. Because Royal Oak
admittedly passed through the charges to its water and sewer ratepayers, the GWKDD was not
unjustly enriched at the expense of Royal Oak. Id. at 195. Accordingly, plaintiff’s proposed
unjust enrichment claim suffered from the same defect as its assumpsit claim and the trial court
could properly deny plaintiff’s motion to amend on the ground of futility. Therefore, the trial
court did not abuse its discretion by denying plaintiff’s motion for leave to amend its complaint.
Affirmed.
/s/ Christopher M. Murray
/s/ David H. Sawyer
/s/ James Robert Redford
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