Defendant, Arthur Blackwell, II, appeals as of right the trial court’s judgment in favor of plaintiffs in this action alleging breach of contract, common-law conversion, statutory conversion, and breach of fiduciary duty. Defendant also challenges the trial court’s orders granting summary disposition for plaintiff Local Emergency Financial Assistance Loan Board (the Board) on defendant’s counterclaims and denying defendant’s motion for a judgment notwithstanding the verdict (JNOV), remittitur, or a new trial. Because the trial court properly granted summary disposition in favor of the Board on defendant’s counterclaims, the court did not abuse its discretion by granting the Board’s motion to amend its complaint, the jury’s verdicts were not legally inconsistent, and the court properly denied defendant’s motions for JNOV and remittitur, we affirm.
This appeal stems from defendant’s service as the emergency financial manager (EFM) for the city of Highland Park (the City) from April 2005 to April 2009. The jury determined that, during that time, defendant made unauthorized payments to himself from the City totaling $264,000. The trial court entered an amended judgment in favor of plaintiffs and against defendant in the amount of $332,837.11, which included $264,000 plus attorney fees and costs.
I. MOTION FOR SUMMARY DISPOSITION
Defendant first argues that the trial court erred by granting summary disposition in the Board’s favor on his countercomplaint that alleged breach of contract, unjust enrichment, and fraud against the Board.
Defendant argues that the trial court erred by granting summary disposition for the Board on his breach of contract claim because he, former Governor Jennifer Granholm, and the Board had an understanding that modified the terms of his written agreement with the Board and entitled him to compensation after his first year serving as the EFM of the City. According to defendant, Governor Granholm directed that he be paid. In granting summary disposition for the Board, the trial court determined that the Governor did not have authority to enter into an oral modification of defendant’s contract.
The authority of a state official to contract with an EFM is governed by statute. MCL 141.1218G)
If the governor determines that a financial emergency exists ..., the governor shall assign the responsibility for managing the local government financial emergency to the local emergency financial assistance loan board created under the emergency municipal loan act.... The local emergency financial assistance loan board shall appoint an emergency financial manager.... The emergency financial manager shall be entitled to compensation and reimbursement for actual and necessary expenses from the local government as approved by the local emergency financial assistance loan board. [Emphasis added.]
Thus, according to the statute, the Board has the sole statutory authority to appoint and compensate an EFM. The Governor’s authority is limited to determining whether a financial emergency exists and assigning the responsibility for managing the emergency to the Board. “Public officers have and can exercise only such powers as are conferred on them by law, and a State is not bound by contracts made in its behalf by its officers or agents without previous authority conferred by statute or the Constitution.” Roxborough v Mich Unemployment Compensation Comm,
The trial court also properly granted summary disposition for the Board on defendant’s unjust-enrichment claim. As the trial court correctly noted,
Further, with respect to defendant’s fraud claim, the trial court properly granted summary disposition under MCR 2.116(C)(7) and (8) because governmental immunity barred the claim and defendant failed to plead in avoidance of governmental immunity. The governmental tort liability act (GTLA), MCL 691.1401 et seq., provides that “a governmental agency is immune from tort
Defendant’s fraud claim was based on the alleged failure to fully disclose the City’s finances and the actual state of the City before defendant accepted the appointment as the City’s EFM and on defendant’s assertion that he was led to believe that he would be compensated for his work after the first year. The Board was exercising a governmental function when it appointed defendant as the EFM of the City, negotiated his compensation, and executed an employment contract and addenda. A “governmental function” is “an activity that is expressly or impliedly mandated or authorized by . . . statute ... or other law.” MCL 691.1401(b).
II. MOTION TO AMEND COMPLAINT
Defendant next argues that the trial court abused its discretion by granting
In any event, the trial court properly determined that defendant would suffer no prejudice as a result of the amendment. A motion to amend a complaint should ordinarily be granted absent any apparent or declared reason, such as undue delay on the part of the moving party or undue prejudice to the nonmoving party. Cole v Ladbroke Racing Mich, Inc,
III. MOTION FOE JNOV
Defendant next argues that the trial court erred by denying his motion for JNOV because the jury’s verdicts were legally inconsistent and against the great weight of the evidence. Initially, we note that defendant has abandoned his argument that the verdicts were against the great weight of the evidence because he failed to present any argument or offer any legal authority in support of that claim. See Mettler Walloon, LLC v Melrose Twp,
This Court must make “ ‘every attempt ... to harmonize a jury’s verdicts.’ ” Lagalo v Allied Corp,
Defendant argues that the jury’s determination that he did not breach his contract with the Board is legally and logically inconsistent with its determinations that he breached his fiduciary duty and converted the City’s funds. Defendant’s argument lacks merit. A review of the legal principles underlying each claim and an examination of how the principles were applied in this case demonstrate that the jury’s verdicts were not inconsistent. With respect to the breach of contract claim, the trial court instructed the jury as follows:
The issue for you, the jury, is whether Defendant breached the contract with the Plaintiff by receiving additional funds from Highland Park. If the contract — or excuse me, if the contracts between Plaintiff and Defendant only allowed Defendant to receive compensation from the Plaintiff, then Defendant breached the contracts. If, on the other hand, the contracts between Plaintiff and Defendant did not prevent Defendant from receiving additional compensation from Highland Park, the Defendant did not breach the contracts.
In returning a verdict of no cause of action on the breach of contract claim, the jury apparently determined that nothing in the contract or the addenda expressly prohibited defendant from receiving additional compensation from the City. The fact that the contract and addenda did not prohibit such conduct, however, does not mean that it was authorized. Whether defendant’s compensation was authorized was the core issue of the breach-of-fiduciary-duty and conversion claims. With regard to the claim of a breach of fiduciary duty, the jury was asked to determine whether defendant breached his position of trust as the EFM. With respect to the conversion claims, the jury was asked to determine whether defendant wrongfully exerted dominion over the City’s property. In light of these legal principles and the undisputed fact that nothing in the parties’ contract or the addenda authorized defendant to compensate himself with City funds, a reasonable jury could have logically concluded that defendant breached the trust placed in him and wrongfully exerted control over City funds. Because the jury’s verdicts can be reconciled and are not logically or legally inconsistent, defendant is entitled to no relief.
IV MOTION FOR REMITTITUR
Defendant next argues that the trial court abused its discretion by denying his motion for remittitur. In particular, defendant argues that because the Attorney General was added as a plaintiff, the relation-back doctrine and the three-year period of limitations on the statutory conversion claim barred recovery of the portion of the damages that were incurred outside the applicable limitations period. The trial court determined that the statute of limitations did not bar recovery of any
Generally, “the relation-back doctrine does not extend to the addition of new parties.” Miller v Chapman Contracting, 477 Mich 102, 105;
[W]e find that where the original plaintiff had, in any capacity, an interest in the subject matter of the controversy, the defendant had notice of the interest of the person sought to be added as a plaintiff, and the new plaintiffs claim arises out of the conduct, transaction or occurrence set forth or attempted to be set forth in the original pleading, then a new plaintiff may be added and the defendant is not permitted to invoke a limitations defense.
The Court further stated:
“As long as defendant is fully apprised of a claim arising from specified conduct and has prepared to defend the action against him, his ability to protect himself will not be prejudicially affected if a new plaintiff is added, and he should not be permitted to invoke a limitations defense. This seems particularly sound inasmuch as the courts will require the scope of the amended pleading to stay within the ambit of the conduct, transaction, or occurrence set forth in the original pleading.” [Id., quoting 6A Wright, Miller & Kane, Federal Practice & Procedure (2d ed), § 1501, pp 154-155.]
In this case, as the trial court recognized, the original plaintiff — the Board — had an interest in the subject matter of the litigation. The claims of the added plaintiff — the Attorney General — were identical to those of the Board and arose out of the same conduct set forth in the original complaint. Both plaintiffs represented the interests of the state, and defendant was fully aware of the Attorney General’s interest given that the Attorney General filed the original complaint against defendant. In addition, there is no question that defendant was fully apprised of the claims against him and was prepared to defend against them. Further, as the trial court determined when it granted the Board’s motion to amend the complaint and as we have concluded in this appeal, defendant was not prejudiced by the addition of the Attorney General as a party. Accordingly, the trial court properly determined that the relation-back doctrine was applicable and that defendant was therefore not entitled to invoke a statute-of-limitations defense. Hayes-Albion,
Notes
Blackwell filed an original action alleging those claims against the Board in the Court of Claims, which was thereafter joined with the instant action that the Board filed against defendant in the Wayne Circuit Court.
Although MCL 141.1218 was in effect during the period relevant to this case, pursuant to
3 A claim alleging fraud is a tort claim. See Cummins v Robinson Twp,
During the relevant period, this language, with one insignificant difference, was codified at MCL 691.1401(d).
During the relevant period, this language, with slight differences that are not significant, was codified at MCL 691.1401(c).
During the relevant period, this language was codified at MCL 691.1401(f).