The mandatory assessment of costs against the party and attorney when a civil action or defense to a civil action was frivolous.

In Davis v Highland Park Board of Education, Unpub Opin of the Court of Appeals (#315002 and 316235, 7/24/2014), defendant argued  that the trial court erred in awarding attorney fees and costs against plaintiff only, instead of plaintiff and his attorney.

Statutory interpretation is a question of law that is considered de novo on appeal. Elba Twp v Gratiot County Drain Comm’r, 493 Mich 265, 278 (2013).  MCL 600.2591(1) provides: Upon motion of any party, if a court finds that a civil action or defense to a civil action was frivolous, the court that conducts the civil action shall award to the prevailing party the costs and fees incurred by that party in connection with the civil action by assessing the costs and fees against the nonprevailing party and their attorney.

“Because the Legislature’s use of the term ‘shall’ denotes that the sanctions are mandatory,” trial courts do not “have discretion to forgo sanctions on the basis of an internal policy.” Cvengros v Farm Bureau Ins, 216 Mich App 261 (1996).  Because MCL 600.2591(1) plainly provides that the court shall award costs and fees to the prevailing party by assessing them against the nonprevailing party and their attorney, the trial court erred in awarding attorney fees and costs against plaintiff only.

Court of Claims in the Court of Appeals

In Okrie v State of Michigan, et al, __ Mich App __ (#319550, 8/19/2014) the Court of Appeals addressed the recent legislation establishing the Court of Claims in the Court of Appeals and collaterally the process for disqualification of Court of Claims/Court of Appeals judges.  In Okrie, the Court recognized that the effect of PA 164 requires the Court of Appeals to simultaneously house an appellate court and a trial court of limited jurisdiction (Court of Claims). Upholding the constitutionality of PA 164, the Court of Appeals nevertheless acknowledged that a fair concern may exists with the appearance of how this direct appellate review will function. That an appeal as of right for Court of Claims cases is in essence a horizontal or lateral appeal, and that a peaceful governance based on principles such as the rule of law depends on the public’s trust that the judicial system is fairly and impartially deciding cases. PA 164, with its apparently unprecedented system of housing the trial court for state claims in the only appellate court of right, could contribute to distrust in the appellate process when it concerns Court of Claims matters. See Hunt, Legal Ethics—Attorney Conflicts of Interest—The Effect of Screening Procedures and the Appearance of Impropriety Standard on the Vicarious Disqualification of a Law Firm, 70 Tenn L Rev 251, 278 (2002).

 

Courts have long been critical of “horizontal” or “lateral” appeals. One cannot lose sight of the fact that appeals only lie from one court to another. There must be a competent judicial tribunal to pass upon a case before an appeal can be taken to a higher court. In other words, the appellate process must proceed vertically, not sideways.  However, PA 164 requires judges from the Court of Appeals to first hear Court of Claims cases at the trial court level, and then provides for direct review of those decisions, as of right, by their colleagues on the Court of Appeals. At first glance, such a procedure could be viewed as giving the appearance that there is no meaningful appellate review, and that the same court is merely rendering an appellate opinion on a matter that it already decided. However, nothing in PA 164 requires a Court of Claims judge to review his or her decisions in appeals filed in this Court, and there exist internal and external procedures to address any potential conflicts.

 

If there is a possible conflict or reason for disqualification, the Court of Appeals screens cases to identify potential conflicts, flags the cases, and then the judge in question decides whether recusal is necessary. See Internal Operating Procedure (IOP) 7.213(D)-(3) (providing, in pertinent part, that “[the Court screens cases to identify potential conflicts based on even minimal involvement of a current Court of Appeals judge at the trial court level . . . . If, upon assignment of a case, a judge on the panel discovers a prior connection to the case, the judge will decide whether recusal is necessary.”). Further, if a Court of Claims judge does not recuse himself or herself when assigned a Court of Claims matter on appeal, the parties are free to move for disqualification. See IOP 7.213(D)-(3) (providing that “[a] party seeking to disqualify a judge of the Court may file a motion to disqualify.”).   Canon 2 of the Michigan Code of Judicial Conduct provides that judges “must avoid all impropriety and appearance of impropriety.” Under Canon 2, whether an appearance of impropriety exists requires consideration of whether the conduct would create in reasonable minds a perception that the judge’s ability to carry out judicial responsibilities with integrity, and impartiality.

42 USC 407(a) precludes any order that would compel one to satisfy an obligation from the proceeds of one’s SSDI/SSI benefits.

In People v Lampart, __ Mich App __ (#315333, 7/31/2014) the Court of Appeals held that, to the extent the trial court’s consideration of SSDI benefits results in an order of restitution that could only be satisfied from those benefits, the use of the court’s contempt powers then would violate 42 USC 407(a).  As noted, the protection afforded to SSDI benefits extends after those benefits are received. Philpott, 409 US at 415-417; State Treasurer, 468 Mich at 155;Whitwood, 265 Mich App at 654. See also United States v Smith, 47 F3d 681, 684 (CA 4, 1995) (holding, under a federal statute employing similar language to 42 USC 407(a), that a court could not order restitution against benefits after they were received because “[t]he government should not be allowed to do indirectly what it cannot do directly[,]” meaning that it could not require the defendant “to turn over his benefits as they are paid to him.”).  42 USC 407(a) represents a clear choice by Congress to exempt all social security benefits, whether from SSDI or SSI, from any legal process, save for a few enumerated exceptions not at issue in this case. See Bennett, 485 US at 398 (explaining that 42 USC 407(a) demonstrates Congress’ “clear intent . . . that Social Security benefits not be attachable.”); Philpott, 409 US at 417 (emphasis added) (explaining that 42 USC 407(a) acts as a “broad bar against the use of any legal process to reach all social security benefits.”).

Under the Michigan Constitution, crime victims are entitled to restitution. Const 1963, art 1, § 24. Under the Crime Victims’ Rights Act (CVRA), MCL 780.751 et seq, it is mandatory, not discretionary, for trial courts to order convicted defendants to “make full restitution to any victim of the defendant’s course of conduct that gives rise to the conviction.”People v Fawaz, 299 Mich App 55, 64-65 (2012), quoting MCL 780.766(2). The defendant’s ability to pay is irrelevant; only the victim’s actual losses from the criminal conduct is to be considered. Id. at 65; People v Crigler, 244 Mich App 420, 428; 625 NW2d 424 (2001) (“Since June 1, 1997, MCL § 780.767; MSA 1287(767) no longer includes the defendant’s ability to pay among the factors to be considered when determining the amount of restitution.”).

42 USC 407(a) acts as  an anti-attachment statute for social security benefits, and provides that: The right of any person to any future payment under this subchapter shall not be transferable or assignable, at law or in equity, and none of the moneys paid or payable or rights existing under this subchapter shall be subject to execution, levy, attachment, garnishment, or other legal process, or to the operation of any bankruptcy or insolvency law.  The protection afforded to money received as social security benefits extends before and after the benefits are received. Philpott v Essex Co Welfare Bd, 409 US 413, 415-417; 93 S Ct 590; 34 L Ed 2d 608 (1973). See also State Treasurer v Abbott, 468 Mich 143, 155 (2003); Whitwood, Inc v South Blvd Prop Mgt Co, 265 Mich App 651, 654 (2005). The fact that the payments have been made does not make them lose the character of “Social Security benefits” or make them subject to legal process. To the contrary, the protections of 42 USC § 407(a) apply, by their terms, to “moneys paid or payable”; the fact that benefits have been paid and may be on deposit in a recipient’s bank account does not shed them of that protection until they are in some way converted into some other kind of asset. Philpott, 409 US at 415-417. Thus, even after a recipient receives SSDI benefits and deposits them into a bank account, the SSDI benefits are still protected by 42 USC 407(a). Whitwood, 265 Mich App at 654. When a state court order attaches to social security benefits in contravention of 42 USC 407(a), the attachment amounts to a conflict with federal law, and such a conflict is one “that the [s]tate cannot win.” Bennett v Arkansas, 485 US 395, 397; 108 S Ct 1204; 99 L Ed 2d 455 (1988).

Trial courts must be careful to avoid any order that in fact would compel one to satisfy a restitution obligation from the proceeds of one’s SSDI benefits. Trial courts may appropriately (and perhaps periodically) ascertain one’s assets and sources of income, perhaps through a contempt hearing, and to enter such further orders as are appropriate, while avoiding any directive, either explicit or otherwise, that will in fact cause one to have to invade one’s SSDI benefits (or the proceeds thereof) to satisfy her/his continuing restitution obligation.  If it were determined that the only asset, or source of income, is and remains from SSDI/SSI benefits, 42 USC 407(a) prohibits the use of legal process—including by a finding of contempt—from reaching those benefits to satisfy the restitution order. See Philpott, 409 US at 417. If, however, one is found to have other income aside from SSDI/SSI benefits, or other assets that are derived from other sources, that income or those assets could be used to satisfy the restitution award.  A trial court’s contempt powers are a permissible tool to enforce a restitution order.  A contempt hearing can be an appropriate vehicle for determining income and assets from which the restitution order may properly be enforced. See Causeley, 78 Mich App at 251;Moncada, 81 Mich App at 27-28. However, a trial court may not compel one to satisfy her/his restitution obligation out of her SSDI/SSI benefits, by a contempt finding or other legal process, as to which one is entitled to the protections of 42 USC 407(a).

Gang-related expert testimony.

In People v Bynum, __ Mich __ (#147261, 7/11/2014) the Michigan Supreme Court held that MRE 402 and MRE 702 requires a trial court to act as a gatekeeper of gang-related expert testimony to determine whether the proposed testimony is relevant and will assist the trier of fact to understand the evidence. The introduction of evidence regarding a defendant’s gang membership is relevant and can “assist the trier of fact to understand the evidence” when there is fact evidence that the crime at issue is gang-related.  However, ordinarily, expert testimony about gang membership is of little value to a fact-finder unless there is a connection between gang membership and the crime at issue.  Additionally, an expert witness may not use a defendant’s gang membership to prove specific instances of conduct in conformity with that gang membership, such as opining that a defendant committed a specific crime because it conformed with his or her membership in a gang. Such testimony violates MRE 404(a).

Sometimes, identifying whether a crime is gang-related requires an expert to establish the significance of seemingly innocuous matters—such as clothing, symbolism, and tattoos—as features of gang membership and gang involvement. At other times, “an expert’s testimony that the crime was committed in rival gang territory may be necessary to show why the defendant’s presence in that area, a fact established by other evidence, was motivated by his gang affiliation.”  In other words, understanding the connection between the crime and gang activity is sometimes beyond the ken of common knowledge. Accordingly, the relevance of gang-related expert testimony “may be satisfied by fact evidence that, at first glance, may not indicate gang motivations, but when coupled with expert testimony, provides the gang-crime connection.”

In the context of gang-related violence, expert testimony may be admitted regarding general characteristics of gang culture for an appropriate purpose, such as helping to elucidate a gang member’s motive for committing a gang-related crime. For example, if someone got a member of the gang in trouble, the gang would retaliate” as part of “the State’s attempt to establish a motive” for such retaliation. The testimony, of course, must otherwise meet the rules of evidence before it can be admitted, and MRE 404(a) limits the extent to which a witness may opine about a defendant’s gang membership.  In that regards MRE 404(a) provides that “[e]vidence of a person’s character or a trait of character is not admissible for the purpose of proving action in conformity therewith on a particular occasion.  An expert may not testify that, on a particular occasion, a gang member acted in conformity with character traits commonly associated with gang members. Such testimony would attempt to prove a defendant’s conduct simply because he or she is a gang member.

In Bynum, the expert exceeded the limitations of MRE 404(a) when he went beyond discussing the general characteristics of gang membership and gang culture and testified that he believed that the defendant exemplified, on a particular occasion, the character trait of a gang member who needed to protect territory through violence.  By proffering an opinion that the defendant exhibited the character trait of violence commonly associated with gang members to explain how the defendant allegedly premeditated in the murder, the expert gave the jury a separate reason for rejecting the defendant’s self-defense claim.