Summit Street Development LLC v. State of 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
SUMMIT STREET DEVELOPMENT UNPUBLISHED
COMPANY, LLC, December 10, 2019
Plaintiff-Appellant,
v No. 346133
Court of Claims
STATE OF MICHIGAN, DEPARTMENT OF LC No. 18-000126-MK
TECHNOLOGY, MANAGEMENT, AND
BUDGET, DEPARTMENT OF LICENSING
AND REGULATORY AFFAIRS, and
MICHIGAN PUBLIC SERVICE
COMMISSION,
Defendants-Appellees.
Before: TUKEL, P.J., and SAWYER and RIORDAN, JJ.
PER CURIAM.
In this breach-of-contract action, plaintiff appeals as of right the order of the Court of
Claims granting summary disposition under MCR 2.116(C)(7) to defendants the State of
Michigan, the Department of Technology, Management, and Budget (DTMB), the Department
of Licensing and Regulatory Affairs, and the Michigan Public Service Commission. Because the
plain language of MCL 600.6452 provides that plaintiff had three years from the date its alleged
claim accrued to file this lawsuit against defendants, and because plaintiff filed its complaint
more than three years after the claim accrued, we affirm.
I. FACTUAL HISTORY
This case arises from a lease agreement between defendants and plaintiff under which the
state was to lease a parcel of property for commercial office space for the Public Service
Commission. Following approval by various state agencies and officials, the lease agreement
became effective on June 18, 2013. On May 2, 2014, the DTMB sent plaintiff a letter canceling
the lease, alleging that plaintiff had breached the lease by failing to meet a deadline.
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On November 21, 2014, plaintiff filed a petition for bankruptcy relief under Chapter 11
of the United States Bankruptcy Code. It is undisputed that on May 1, 2015, plaintiff timely
filed the notice required under MCL 600.6431 for claims against the state. On January 28, 2016,
the bankruptcy court entered an order approving plaintiff’s amended bankruptcy reorganization
plan. The plan specifically provided that plaintiff’s property, including all causes of action,
vested in plaintiff.
Plaintiff filed this lawsuit in the Court of Claims alleging breach of contract and other
claims on July 8, 2018—over four years after the DTMB sent its letter canceling the lease
agreement, and nearly 2½ years after the bankruptcy court approved the plan confirming that
plaintiff had full title to all causes of action. Defendants answered by moving for summary
disposition and asserted that, under MCL 600.6452(1), plaintiff’s complaint was untimely
because it was filed more than three years after plaintiff’s claim accrued.
The Court of Claims agreed with defendants and rejected plaintiff’s argument that the
general six-year limitation period for contract actions, MCL 600.5807(9), applied. Instead, the
Court of Claims ruled that for actions against the state in the Court of Claims, the maximum
three-year period set forth in MCL 600.6452(1) applied. The Court of Claims also rejected
plaintiff’s argument that 11 USC 108(a) rendered its filing timely.1 The Court of Claims
concluded that 11 USC 108(a) provided that plaintiff could timely file its complaint under either
the original period of limitations established by MCL 600.6452 or within two years of filing its
bankruptcy petition, whichever came later. It noted that plaintiff did not do so, and rejected
plaintiff’s assertion that equitable tolling could extend the time for filing its complaint. The
Court of Claims accordingly granted summary disposition to defendants under MCR
2.116(C)(7). This appeal followed.
II. STANDARD OF REVIEW
This Court reviews trial court rulings on motions for summary disposition and issues of
statutory interpretation de novo. McCahan v Brennan, 492 Mich. 730, 735-736; 822 NW2d 747
(2012).
A party may support a motion under MCR 2.116(C)(7) by affidavits,
depositions, admissions, or other documentary evidence. If such material is
submitted, it must be considered. MCR 2.116(G)(5). Moreover, the substance or
content of the supporting proofs must be admissible in evidence . . . . Unlike a
motion under subsection (C)(10), a movant under MCR 2.116(C)(7) is not
required to file supportive material, and the opposing party need not reply with
supportive material. The contents of the complaint are accepted as true unless
contradicted by documentation submitted by the movant. [Maiden v Rozwood,
1
The text of 11 USC 108(a) is set forth below.
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461 Mich. 109, 119; 597 NW2d 817 (1999) (quotation marks and citations
omitted).]
Furthermore, when the language of a statute is clear and unambiguous, this Court “will apply the
statute as written and judicial construction is not permitted.” Driver v Naini, 490 Mich. 239, 246-
247; 802 NW2d 311 (2011).
III. ANALYSIS
The plain language of MCL 600.6452 provides that, at most, a party has three years to
file a claim against the state in the Court of Claims. The statute provides, in relevant part, that all
claims against the state must be filed in the Court of Claims no later than three years after those
claims accrue, or they will be “forever barred”:
(1) Every claim against the state, cognizable by the court of claims, shall be
forever barred unless the claim is filed with the clerk of the court or suit instituted
thereon in federal court as authorized in section 6440, within 3 years after the
claim first accrues.
(2) Except as modified by this section, the provisions of RJA chapter 58, relative
to the limitation of actions, shall also be applicable to the limitation prescribed in
this section. [(MCL 600.6452(1)-(2) (emphasis added).]
In Gleason v Dep’t of Transp, 256 Mich. App. 1, 2; 662 NW2d 822 (2003), this Court interpreted
MCL 600.6452(1) as a default position, but that if a different statute provided for a limitation
period shorter than three years then that shorter period would apply:
Subject to shorter limitation periods contained in other statutes that would
supersede the “all-purpose” three-year limitation period set forth in legislation
pertaining to the Court of Claims, “[e]very claim against the state, cognizable by
the court of claims, shall be forever barred unless the claim is filed . . . within 3
years after the claim first accrues.” [Alterations in original.]
Accordingly, MCL 600.6452(1)-(2) establishes that a three-year statute of limitations applies to
all claims brought in the Court of Claims unless a shorter period of limitations is established in
Chapter 58 of the RJA. See id.
Plaintiff, however, argues that MCL 600.6452(2) preserves the six-year limitations period
from Chapter 58 of the RJA, MCL 600.5807(9), applicable to actions grounded in contract. But
both the plain language of MCL 600.6452(1) and (2) and this Court’s opinion in Gleason hold
otherwise. Plaintiff relies on several cases from this Court and our Supreme Court in support of
its position, but none of those cases analyzed MCL 600.6452. In fact, most of them did not even
mention MCL 600.6452, and many were decided before the Legislature enacted MCL 600.6452
in 1963. Accordingly, the Court of Claims properly ruled that plaintiff’s claim was untimely
under MCL 600.6452.
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Plaintiff additionally asserts that under the Bankruptcy Code, 11 USC 108(a)(1), its filing
of a bankruptcy petition tolled the statute of limitations. 11 USC 108(a)(1) provides for a
potential extension of time for the commencement of a lawsuit:
If applicable nonbankruptcy law, an order entered in a nonbankruptcy proceeding,
or an agreement fixes a period within which the debtor may commence an action,
and such period has not expired before the date of the filing of the petition, the
trustee may commence such action only before the later of—
(1) the end of such period, including any suspension of such period occurring on
or after the commencement of the case
Plaintiff argues that 11 USC 108(a)(1) tolled the statute of limitations during the pendency of its
bankruptcy proceedings. This Court, however, has rejected a similar argument in the past. See
Ashby v Byrnes, 251 Mich. App. 537, 542-543 (2002), overruled in part on other grounds by
Mayberry v Gen Orthopedics, PC, 474 Mich. 1; 704 NW2d 69 (2005) (“We find plaintiffs’
argument that the bankruptcy stay itself tolls the Michigan period of limitation to be inconsistent
with the language of 11 USC 108(c).”).2 Thus, 11 USC 108(a) did not of its own force toll the
statute of limitations. Accordingly, the Court of Claims properly ruled that the bankruptcy filing
did not sufficiently extend the time for filing this complaint.
Plaintiff also argues that the doctrine of equitable tolling rendered its complaint timely.
As explained by our Supreme Court in Trentadue v Buckler Lawn Sprinkler, 479 Mich. 378, 406;
738 NW2d 664 (2007), however, the doctrine of equitable tolling does not apply here.
Specifically, in the section of its opinion in Trentadue, titled “Equitable Tolling,” our Supreme
Court held that the use of equity to avoid application of a statute of limitations is “limited to
those circumstances when the courts themselves have created confusion” regarding the proper
application of a statute of limitation. Id. No such confusion exists here. Thus, the Court of
Claims properly rejected this argument.
Affirmed. Defendants, as the prevailing parties, may tax costs pursuant to MCR 7.219.
/s/ Jonathan Tukel
/s/ David H. Sawyer
/s/ Michael J. Riordan
2
11 USC 108(c) is similar to 11 USC 108(a) except that it extends the time for filing claims
against the debtor rather than claims of the debtor.
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