Larry Shears v. Douglas Bingaman
329776
| Mich. Ct. App. | Aug 24, 2017Background
- Plaintiffs (Shears and Fralick) filed a class action challenging Flint’s September 16, 2011 increases: a 35% water and sewer rate hike and an increased readiness-to-serve charge.
- Complaint alleged six counts, primarily asserting § 1983 due-process/property claims based on violations of Michigan statutes and Flint ordinances, and sought refunds, injunctions, and damages.
- Defendants (Bingaman, Earley, and the City of Flint) moved for summary disposition, asserting governmental immunity bars plaintiffs’ tort claims and that ordinances do not create private money-damage remedies.
- The trial court dismissed ordinance-based money-damage claims but allowed plaintiffs’ unjust-enrichment theory to survive, concluding unjust enrichment is equitable (not tort) and not barred by the GTLA; it denied summary disposition on that theory.
- Defendants appealed arguing all claims are barred by governmental immunity (MCR 2.116(C)(7)); the Court of Appeals reviewed de novo and examined whether plaintiffs plead in avoidance of immunity or otherwise stated an unjust-enrichment contract claim.
- The Court of Appeals reversed in part, holding plaintiffs did not plead unjust enrichment or any contractual entitlement, that statutory/ordinance provisions do not plainly create contractual rights, and that prior controlling decisions (including Kincaid and Trahey) support summary disposition for defendants.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether plaintiffs pleaded in avoidance of governmental immunity so tort claims may proceed | Ordinance violations and § 1983 claims create actionable rights; immunity not fatal | Plaintiffs failed to plead any statutory exception or nongovernmental function; claims barred by GTLA | Held for defendants: plaintiffs did not plead in avoidance of governmental immunity; summary disposition under MCR 2.116(C)(7) appropriate |
| Whether the complaint pleaded an unjust-enrichment claim (equitable/contract-based) | Court below found unjust-enrichment claim survived; plaintiffs argued equitable relief available | Defendants argued complaint contains no unjust-enrichment allegation or implied contract; relief is actually ordinance-based tort/constitutional claims | Held for defendants: complaint lacks any unjust-enrichment allegation or implied contract; cannot be converted into such post hoc |
| Whether ordinances/statutes created contractual rights (permitting implied contract/unjust enrichment) | Plaintiffs argued ordinances created entitlement to specific rates/charges, supporting restitution | Defendants argued strong presumption statutes/ordinances do not create contractual rights absent clear language | Held for defendants: applying Studier and related law, statutes/ordinances here do not plainly create contractual obligations; presumption against creating contracts controls |
| Whether prior appellate precedent (Kincaid, Trahey) and caselaw support plaintiffs’ claims | Plaintiffs relied on interpretation distinguishing their case | Defendants relied on Kincaid/Trahey overturning similar challenges to Flint’s rate increases | Held for defendants: Kincaid and Trahey favor defendants; claims largely replicate rejected issues, supporting summary disposition |
Key Cases Cited
- Rowland v. Washtenaw Co. Rd. Comm'n, 477 Mich. 197 (trial-court summary-disposition standard where immunity pleaded)
- Snead v. John Carlo, Inc., 294 Mich. App. 343 (question of law when governmental immunity applies)
- Moraccini v. City of Sterling Heights, 296 Mich. App. 387 (review of governmental immunity applicability)
- Hannay v. Dep’t of Transp., 497 Mich. 45 (enumeration of GTLA exceptions)
- County Road Ass’n of Mich. v. Governor, 287 Mich. App. 95 (pleading in avoidance of governmental immunity)
- Kendricks v. Rehfield, 270 Mich. App. 679 (pleading to avoid immunity)
- Adams v. Adams (On Reconsideration), 276 Mich. App. 704 (look to substance over form of complaint)
- In re Bradley Estate, 494 Mich. 367 (characterization of claims as ordinance-based/tort)
- Studier v. Mich. Pub. Sch. Emps.’ Retirement Bd., 472 Mich. 642 (strong presumption that statutes do not create contractual rights)
- Warren’s Station, Inc. v. Bronson, 241 Mich. App. 384 (application of Studier principles to ordinances)
- Karaus v. Bank of New York Mellon, 300 Mich. App. 9 (elements and effect of unjust-enrichment claim)
- Trahey v. Inkster, 311 Mich. App. 582 (reversal of trial court’s unjust-enrichment finding on municipal rate challenge)
- Kincaid v. Flint, 311 Mich. App. 76 (binding panel decision rejecting similar challenges to Flint rate increases)
- Rohl v. Leone, 258 Mich. App. 72 (appeal scope limited to appellant’s issues)