ADR CONSULTANTS, LLC, Plаintiff/Counterdefendant-Appellee, v MICHIGAN LAND BANK FAST TRACK AUTHORITY, Defendant/Counterplaintiff-Appellant, and MICHIGAN STATE HOUSING DEVELOPMENT AUTHORITY, Defendant-Appellant.
No. 341903
STATE OF MICHIGAN COURT OF APPEALS
January 24, 2019
FOR PUBLICATION. Court of Claims LC No. 15-000177-MK. 9:00 a.m.
Before: CAMERON, P.J., and BECKERING and RONAYNE KRAUSE, JJ.
CAMERON, P.J.
In this contract dispute, defendants, the Michigan Land Bank Fast Track Authority (MLB) and the Michigan Statе Housing Development Authority (MSHDA), appeal the Court of Claims’ November 29, 2017 opinion and order denying defendants’ motion for summary disposition under MCR 2.116(C)(7). Two years after the initial complaint was filed in the Court of Claims, plaintiff, ADR Consultants, LLC‘s (ADR), filed an amended complaint adding a breach of contract claim for $420,000. The trial court concluded that ADR‘s amended claim did not violate the one-year notice requirement for claims filed in the Court of Claims as set forth in
On August 29, 2012, ADR and the MLB entered into a contract wherein ADR would provide inspection demolition services in connection with the City of Dеtroit‘s Hardest Hit Blight Program. The MLB was tasked with “blight elimination” within the City of Detroit and across Michigan, which included demolition work. Additionally, the MLB was to manage and dispose “of public property in a coordinated manner to foster the development of that property.” The MLB, therefore, contracted with ADR to act as an MLB contraсtor for this blight elimination. ADR‘s role was to “assist the MLB and the Department of Technology, Management and Budget . . . in organizational, procurement, and management tasks.” ADR would “provide technical assistance and project management services to the MLB” and help the MLB manage the demolition of various sites. However, other contractors or subcontractors would conduct the actual demolition work.
After giving 90 days’ notice, the MLB could terminate the contract for convenience “if the State determine[d] that a termination [was] in the State‘s best interest.” Upon termination for convenience, however, the MLB was required to “pay [ADR] all charges due for Deliverable(s) provided before the date of termination and, if applicable, as a separate item of payment, for work-in-progress, based on a percentage of completion determined by the State.” Deliverables were included in those services performed by ADR. In other words, if the MLB terminated fоr convenience, it would be required to make all outstanding payments to ADR for the work it had provided up until termination.
After the contract was signed, the MLB requested that ADR perform additional services outside of the contract‘s scope, including new demolition project management and “in-process demolition inspectiоns.” The parties disputed whether these additional services were to be paid at a rate of $55 per hour, and this term was never written into the contract. However, the Executive Director at the MLB claimed that the parties verbally agreed to this price. ADR began work on these out-of-scope services on Septеmber 11, 2012.
In 2013, MSHDA tasked the Detroit Land Bank Authority (DLBA) with oversight of the Hardest Hit Fund program. In November 2013, the DLBA and the MLB signed an intergovernmental agreement (IGA) between themselves in which the MLB agreed to provide project management assistance to the DLBA for carrying out the Hardest Hit Fund program. The DLBA agreed to pay the MLB $100 for each propеrty that it provided demolition project management services. To accomplish its duties under the IGA, the MLB hired ADR as project manager to help administer the Hardest Hit Fund program. The DLBA would notify the MLB and request that ADR perform services, i.e., inspection work and blight certifications. The MLB would then notify ADR of the DLBA‘s request and engage ADR‘s services.
By September 2014, the MLB was allegedly $50,000 behind in its payments to ADR for both “[c]ontract and the in-process hourly rate demolition inspections.” Plaintiff claimed that it had not been paid for these services since January 2014. Additionally, by December 2014, ADR had allegedly not been paid for the Hardest Hit Fund inspections it had performed. James Wright of the DLBA allegedly informed ADR that the DLBA was experiencing financial issues and that ADR could not be paid until February 2015. However, on January 30, 2015, the DLBA allegedly informed ADR that the DLBA would not pay ADR. Moreover, the MLB reportedly
The parties dispute whether ADR was to receive additional compensation for managing the Hardest Hit Fund program. In its original complaint, ADR alleged that it had agreed to manage the Hardest Hit Fund program “at no cost in recognition of both its own desire to benefit the City as well as in recognition of, according to MLB, the funding mechanism that the [Hardest Hit Fund program] would generate for MLB.” However, in its amended complaint, ADR alleged that it had agreed to manage the Hardest Hit Fund program “in consideration оf [d]efendants’ agreement that [ADR] would continue to manage the blight demolition program, including additional demolitions within the [Hardest Hit Fund program] to which [ADR] was to be paid for its in-process inspections.” In both complaints, however, ADR alleged that the MLB advised ADR that the Hardest Hit Fund program would pay the MLB $100 per home, that there were apрroximately 4,200 such homes, and that this sum would therefore total $420,000. ADR further alleged that this $100 per property totaling $420,000 was intended to pay for subsequent blight removal efforts managed by ADR, but ADR never received the $420,000. In other words, in exchange for its work in the Hardest Hit Fund program, ADR expected to receive future demolition work within the blight elimination program for which it would be paid by the MLB. ADR valued this future work at $420,000, the same amount that the MLB received from the DLBA for the Hardest Hit Fund program.
According to the MLB, however, it informed ADR at the outset that it would not receive any further compensation from the MLB for the work ADR performed in the Hardest Hit Fund program. MLB denied that the $100 per home was ever intended to gо to ADR, whether directly or indirectly. This $420,000 claim is at the heart of this appeal.
On July 31, 2015, ADR filed its Notice of Intent to File Claim with the Court of Claims. The original complaint was filed on August 14, 2015, and the $420,000 claim was neither raised nor addressed. Defendants filed their first motion for summary disposition on January 5, 2016, contending, inter alia, that
the only example defendants’ [sic] offer in support of their position is an allegation in the complaint that February 2014 was the last time [ADR] received pаyment for in-process demolition inspections. However, this statement does not exclude the possibility that [ADR] performed in-process demolition inspections after July 31, 2014 for which it was not paid. Defendants have not substantiated their assertion that plaintiff is seeking to recover for claims that accrued prior to July 31, 2014.
On July 10, 2017, ADR filed a motiоn to amend its complaint to add the claim for $420,000 in future inspection services. According to defendants, ADR was disingenuously seeking to add the $420,000 claim because it had admitted in its original complaint that it had
On August 25, 2017, defendants filed a motion for summary disposition under
On November 29, 2017, the trial court issued an opinion and order on both of defendants’ summary disposition motions. Regarding the
defendants raised these same arguments in their July 24, 2017 brief in response to plaintiff‘s motion for leave to file an amended complaint. By way of its July 24, 2017 order, the Court rejected those arguments. Defendants’ second (and third) attempts to rаise the same arguments read more like an untimely motion for reconsideration, and the Court rejects the same.
The trial court denied defendants’ motions for summary disposition. On appeal, defendants argue the trial court erred because ADR failed to provide notice of the claim for $420,000 within one year of the claim‘s accrual in violation of
II. STANDARD OF REVIEW
A decision on a motion for summary disposition and the interpretation of a statute are reviewed de novo. Dextrom v Wexford Co, 287 Mich App 406, 416; 789 NW2d 211 (2010). When reviewing a motion brought pursuant to
Defendants argue that the trial court erred when it concluded that
“[A] state cannot be sued without its consent, granted by a legislative enactment.” Greenfield Const Co, Inc v Mich Dep‘t of State Hwys, 402 Mich 172, 193; 261 NW2d 718 (1978). However, “the government may voluntarily subject itself to liability,” and it “may also place conditions or limitations on the liability imposed.” McCahan v Brennan, 492 Mich 730, 736; 822 NW2d 747 (2012). The Court of Claims Act,
No claim may be maintained against the state unless the claimant, within 1 year after such claim has accrued, files in the office of the clerk of the court of claims either a written claim or a written notice of intention to file a claim against the state or any of its departments, commissions, boards, institutions, arms or agencies, stating the time when and the place where such claim arose and in detail the nature of the same and of the items of damage alleged or claimed to have been sustained, which claim or notice shall be signed and verified by the claimant before an officer authorized to administer oaths.
This statute “details the notice requirements that must be met in order to pursue a claim against the state, including a general deаdline of one year after accrual of the claim.” McCahan, 492 Mich at 744-745. A plaintiff must satisfy the conditions of
The parties do not dispute that the original complaint was filed within the one-year notice period under
To determine the interplay between the relation-back doctrine and
This Court in Progress Mich concluded that because the original complaint was neither signed nor verified, it was invalid because it did not satisfy the requirements under
In this case, unlike in Progress Mich, ADR‘s initial complaint complied with the Court of Claims Act under
As stated previously, in order for an amended complaint to relate back, it must “spring[] from the same transactional setting as that pleaded originally.” Kostadinovski, 321 Mich App at 744. In this case, the amended claim did spring from the contractual arrangement between ADR and defendants, specifically that ADR would provide blight removal services on behаlf of the MLB.
As a final point, we note that in Progress Mich, this Court held that the plaintiffs could not amend their complaints to comply with the verification requirement under
Affirmed.
/s/ Thomas C. Cameron
/s/ Jane M. Beckering
/s/ Amy Ronayne Krause