Kincaid v. City of Flint
311 Mich. App. 76
| Mich. Ct. App. | 2015Background
- Water/sewer rate increase of 3.5% proposed Sept 16, 2011 to cover fund deficits; council approved and mayor signed.
- Emergency Manager Brown appointed Nov 28, 2011 under PA 4 of 2011 after financial emergency; May 5, 2012 Emergency Order No. 31 ratified Townsend’s increases and added 12.5% water and 45% sewer increases.
- Plaintiffs filed suit asserting ordinance violations and fund co-mingling; sought class certification, declaration of illegality under Headlee, and refunds.
- PA 4 was repealed by referendum; PA 436 of 2012 enacted, mirroring many PA 4 provisions, but ratification powers for EM remained disputed.
- The City’s ordinances 46-52.1 and 46-57.1 require 30 days’ notice and July 1 implementation; the court found September 2011 increases violated notice/implementation timing; the 12.5%/45% increases under Order No. 31 complied with notice but were still scrutinized.
- Court held EM had no authority to ratify unauthorized acts and remanded for amendment-related issues; comingling of funds claim was resolved in defendant’s favor based on record evidence.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Sept. 2011 increases violated city ordinances | Kincaid argues increases violated 46-52.1 and 46-57.1 | Flint argues ordinance aims and timing permitted the increases | Sept. 2011 increases violated notice and timing; rate increases not properly implemented; 46-52.1/46-57.1 violations established |
| Whether EM Brown had authority to ratify Townsend's increases | EM lacked ratification powers | EM could ratify under PA 4/436 provisions (disputed) | EM had no ratification authority; ratification not granted by statute; Order No. 31 not a valid ratification |
| Whether EM Brown could exercise authority to initiate rate changes under 141.1519(1)(a) | Increases improperly initiated by EM without initiation | EM could act to correct conditions | 141.1519(1)(a) requires initiation; EM did not initiate, so provision does not validate increases |
| Whether funds were illegally co-mingled to fund general obligations | Funds were pooled and used for non-water/sewer purposes | Accounting showed compliance with state law and separation of funds | No genuine issue of material fact; comingling claim rejected on record evidence |
| Whether denial of leave to amend was erroneous | Proposed amendments add viable claims | Amendment would conflict with decision and be futile | Remanded to consider proposed amendments with stated rationale; not final on amendments |
Key Cases Cited
- Maiden v. Rozwood, 461 Mich 109 (Mich. 1999) (summary judgment standard; de novo review on motions for summary disposition)
- Alcona Co v Wolverine Environmental Prod, Inc, 233 Mich App 238 (Mich. Ct. App. 1998) (de novo statutory interpretation and summary disposition standards)
- Major v Auto Club Ins Assoc, 185 Mich App 437 (Mich. Ct. App. 1990) (burden on party opposing MCR 2.116(C)(10) motion; need specific facts)
- Noyd v Claxton, Morgan, Flockhart & Vanliere, 186 Mich.App. 333 (Mich. Ct. App. 1990) (reversal when trial court fails to provide rationale for denial of amendment)