Jason Allen v. Charlevoix Abstract & Engineering Company ( 2019 )

Court of Appeals, State of Michigan
ORDER
Brock A. Swartzle
Jason Allen v Charlevoix Abstract & Engineering Company Presiding Judge
Docket No. 339162 David H. Sawyer
LC No. 14-000047 Amy Ronayne Krause
Judges
On the Court's own motion, the January 3, 2019 opinion is hereby AMENDED to correct
nonsubstantive errors in Sections I, III, and V of the opinion.
The Reporter of Decisions is DIRECTED to replace the second full paragraph on page 3
of the opinion with:
The magistrate resolved the matter of the $350,000 recovery,
which is not at issue in this appeal. The magistrate also determined that
the VP A did in fact contain a mathematical error but that he lacked
equitable jurisdiction and therefore could not modify the parties'
agreement. However, the magistrate also stated that he would have
modified the agreement if he had the power to do so and that "the correct
Franges numbers to be applied ... would be a future weekly rate of
$264.53 for 131.7464 weeks into the future before resumption of full
weekly benefits." On appeal, the MCAC affirmed the magistrate's ruling
that he lacked equitable power or authority to modify the VP A. The
MCAC declined to address the magistrate's "dicta" detailing how he
would have modified the VP A given the power to do so. Nevertheless, the
MCAC did observe that the facts in the matter were essentially
undisputed.
Section III of the released opinion is to be replaced with the following amended
Section III:
III. EQUITABLE POWERS OF WORKERS' COMPENSATION
MAGISTRATES
The primary issue presented on appeal is whether the MCAC
correctly determined that the magistrate lacked the equitable power
necessary to modify the VP A. A contract is legally enforceable even if
procured by fraud or mistake, and thus "plenary relief traditionally rests
exclusively in equity .... " Solo v Chrysler Corp (On Rehearing), 408
Mich 345, 352; 292 NW2d 438 (1980). We conclude that the MCAC
correctly determined that the magistrate lacked equitable jurisdiction and
therefore lacked the power to modify the VP A.
"Long ago, we recognized that the right to have equity
controversies dealt with by equitable methods is as sacred as the right of
trial by jury." Madugula v Taub, 496 Mich 685, 705; 853 NW2d 75
(2014) (quotation marks, citation, and brackets omitted). "That is, '[t]he
cognizance of equitable questions belongs to the judiciary as a part of the
judicial power, and under our Constitution must remain vested where it
always has been vested heretofore.'" Id. , quoting Brown v Buck, 75 Mich
274, 285; 42 NW 827 (1889). Thus, an administrative agency possesses
the jurisdiction to address any questions within its remit, but "it must be
borne in mind that it is an administrative tribunal only and not a court
possessing general equitable and legal powers." Mich Mut Liability Co v
Baker, 295 Mich 237, 242; 294 NW 168 (1940) (quotation marks and
citation omitted). "In the absence of an express legislative conferral of
authority, an administrative agency generally lacks the powers of a court
of equity." Deike v Scheuren, 185 Mich App 326, 332; 460 NW2d 324
(1990).
This Court has specifically observed that the MCAC's predecessor,
the former Bureau of Workmen's Compensation, "lack[ed] the requisite
jurisdiction of a court of equity to undertake the task of reformation of
[an] insurance policy." Auto-Owners Ins Co v Elchuk, 103 Mich App 542,
546; 303 NW2d 35 (1981), relying on Baker and its progeny. Elchuk was
also consistent with Scott v Grow, 301 Mich 226; 3 NW2d 254 (1942), in
which our Supreme Court observed that " 'jurisdiction to reform written
agreements' " " 'is exclusively vested in courts of equity' " and not in
courts of law. Scott, 301 Mich at 238-239, quoting Bush v Merriman, 87
Mich 260, 268; 49 NW 567 (1891 ). "Equity has exclusive jurisdiction to
rescind an agreement on the ground of mutual mistake." Solo, 408 Mich
at 353. Consequently, it is well established that the relief sought in this
matter, modification of a contract, is strictly equitable in nature, and the
magistrate, as a member of an administrative tribunal, had no equitable
jurisdiction.
Nevertheless, some confusion may have resulted from this Court's
observation that "[w]hile the [MCAC] has no equitable jurisdiction, it is
well established that it may apply equitable principles in appropriate
instances to further the purposes of the [WDCA]." Lulgjuraj v Chrysler
Corp, 185 Mich App 539, 544-545; 463 NW2d 152 (1990) (emphasis
added). To the extent Lulgjuraj can be understood to suggest that the
MCAC may exercise equitable powers, such as the power to reform a
contract, Lulgjuraj unambiguously conflicts with well-established and
thoroughly settled caselaw from our Supreme Court to the contrary. Our
Supreme Court has explained that equitable jurisdiction is not precisely
the same as equitable relief and that parties sometimes conflate "equity
jurisdiction with equity jurisprudence." Solo, 408 Mich at 353.
Nevertheless, "[e]quity has exclusive jurisdiction to rescind an agreement
on the ground of mutual mistake." Id. Because Lulgjuraj was decided
before November 1, 1990, it is not strictly binding pursuant to
MCR 7.215(J)(l), and even if it were, we would be required to ignore it in
favor of any conflicting Supreme Court precedent. See Paige v City of
Sterling Hts, 476 Mich 495,524; 720 NW2d 219 (2006).
In summary, the MCAC correctly determined that the magistrate
lacked equitable jurisdiction and therefore lacked the power to reform or
modify the VPA.
The first sentence in Section V is to be replaced with the following:
We affirm the MCAC's conclusions that modifying the VPA is
equitable in nature and that the magistrate lacked the equitable power to
do so.
In all other respects, the January 3, 2019 opinion remains unchanged.
A true copy entered and certified by Jerome W. Zimmer Jr., Chief Clerk, on
JUN 17 2019
Date