Mason County v. Department of Community Health

Order Michigan Supreme Court
Lansing, Michigan
February 3, 2012 Robert P. Young, Jr.,
Chief Justice
143721 Michael F. Cavanagh
Marilyn Kelly
Stephen J. Markman
Diane M. Hathaway
MASON COUNTY and OCEANA COUNTY, Mary Beth Kelly
Plaintiffs-Appellees, Brian K. Zahra,
Justices
v SC: 143721
COA: 295365
Mason CC: 08-000269-CK
DEPARTMENT OF COMMUNITY HEALTH,
DIRECTOR OF DEPARTMENT OF
COMMUNITY HEALTH, DIRECTOR OF
COMMUNITY MENTAL HEALTH SERVICES
BUREAU, and DIRECTOR OF PROGRAM
DEVELOPMENT CONSULTATIONS &
CONTRACTS DIVISION,
Defendants-Appellants,
and
WEST MICHIGAN COMMUNITY MENTAL
HEALTH SYSTEM, and RICHARD
VANDENHEUVEL,
Defendants-Appellees.
_________________________________________/
On order of the Court, the application for leave to appeal the August 2, 2011
judgment of the Court of Appeals is considered, and it is DENIED, because we are not
persuaded that the question presented should be reviewed by this Court.
MARKMAN, J. (dissenting).
I respectfully dissent, and would grant leave to appeal. Defendant West Michigan
Community Mental Health System (WMCMHS) refused to make lease payments on
buildings it leased from plaintiffs Mason and Oceana Counties because the Department of
Community Health (DCH), which funds WMCMHS, considered the lease agreements not
to be arm’s-length transactions within the meaning of an Office of Management and
Budget Circular, with which a contract between WMCMHS and codefendant DCH
requires compliance. The circuit court granted plaintiffs’ motion for summary
disposition, and in a published opinion, the Court of Appeals affirmed.
2
Codefendant DCH argues that the Court of Claims has exclusive jurisdiction in
this case because plaintiffs’ claims pertain to the state’s contracts with WMCMHS and
require state payments to WMCMHS. The Court of Claims has exclusive jurisdiction
“[t]o hear and determine all claims and demands, liquidated and unliquidated, ex
contractu and ex delicto, against the state and any of its departments, commissions,
boards, institutions, arms, or agencies.” MCL 600.6419(1). In Parkwood Ltd Dividend
Housing Ass’n v State Housing Dev Auth, 468 Mich 763 (2003), we held that the Court of
Claims has exclusive jurisdiction over a declaratory judgment action directly involving a
state contract.
In this case, the circuit court held that it had jurisdiction because the witnesses are
all “local individuals.” The Court of Appeals affirmed because this is a “simple breach of
contract [action] between two parties . . . neither of which is a state agency,” and stated:
That breach of the contract between plaintiffs and WMCMHS
occurred as a result of WMCMHS’s contract with defendants. Not being
parties to the contract between defendants and WMCMHS, however,
plaintiffs have no rights under that contract and could not seek a declaratory
ruling regarding the contract with the state at the Court of Claims. [Mason
Co v Dep’t of Community Health, 293 Mich App ___, ___ (2011), slip op at
5.]
The concern I have with this analysis is that plaintiffs did also bring this cause of action
against DCH, and the issue decided by the circuit court was whether WMCMHS would
be breaching its contract with DCH if it made the lease payments to plaintiffs. Thus, the
action was (a) brought against a state department and (b) involved the interpretation of a
state contract. In order to avoid raising unnecessary confusion concerning the exclusive
jurisdiction of the Court of Claims, I would grant leave to appeal.
I, Corbin R. Davis, Clerk of the Michigan Supreme Court, certify that the
foregoing is a true and complete copy of the order entered at the direction of the Court.
February 3, 2012 _________________________________________
0131 Clerk