Cadle Co. v. Kentwood

• Decision Date: 30 July 2009
• Docket Number: Docket No. 279430.
• Citation: 285 Mich. App. 240,776 N.W.2d 145
• Court: Court of Appeal of Michigan — District of US
• Parties: The CADLE COMPANY v. City of KENTWOOD.

776 N.W.2d 145

285 Mich. App. 240

The CADLE COMPANY v. City of KENTWOOD.

Docket No. 279430.

Court of Appeals of Michigan.

Submitted December 03, 2008, at Lansing.

Decided July 30, 2009, at 9:10 a.m.

Steven E. Bratschie & Associates, P.C. (by Scott Mancinelli and Daniel J. Gunn), Kentwood, for the plaintiffs.

Law, Weathers & Richardson, P.C. (by Michael J. Roth and Les Morant), Grand Rapids, for the defendants.

Before: SAAD, C.J., and FITZGERALD and BECKERING, JJ.

PER CURIAM.

Plaintiffs appeal as of right the circuit court's June 27, 2007, order granting summary disposition in favor of defendants (collectively referred to as "the district court"), ruling that MCL 600.8407(1) and In re Goehring, 184 Mich.App. 360, 457 N.W.2d 375 (1990), preclude assignees from participating in all stages of prosecution in a small claims case, including postjudgment proceedings. We affirm.

I. PERTINENT FACTS AND PROCEDURAL HISTORY

Plaintiffs, Ohio corporations or limited liability companies, are factoring and financing companies that purchase large packages of individual notes and judgments from banks. According to plaintiffs, banks sell nonperforming loans in large packages worth millions of dollars because the banks do not have the time or expertise to process them. In this case, plaintiffs paid Fifth Third Bank valuable consideration for numerous small claims court judgments. In order to obtain writs, garnishments, and executions against property in connection with these judgments, plaintiffs had to file the assignments of these claims with the appropriate district court.¹ Plaintiffs submitted to the district court four assignments of small claims judgments, but the district court refused to process them.

Plaintiffs filed a complaint in the circuit court seeking a writ of superintending control under MCR 3.302 compelling the district court to process the assignments. Plaintiffs requested that the circuit court determine whether MCL 600.8407(1) and Goehring were applicable to the assignment of small claims judgments and, if so, that the court declare MCL 600.8407(1) unconstitutional on the grounds that it is vague and ambiguous, not rationally related to a legitimate governmental interest, deprives plaintiffs of their liberty to contract and property rights without due process of law, and amounts to a taking without just compensation. MCL 600.8407(1) is in Chapter 84 of the Revised Judicature Act (RJA), MCL 600.101 et seq., and provides that "[a] claim shall not be filed or prosecuted in the small claims division by an assignee of a claim or by a third party beneficiary under a third party beneficiary contract."

The district court filed a motion to dismiss pursuant to MCR 3.302, for summary disposition pursuant to MCR 2.116(C)(8) and (10), and for sanctions pursuant to MCR 2.114. The district court argued that in Goehring, supra at 364, 457 N.W.2d 375, this Court interpreted the term "prosecution," as used in MCL 600.8408(1),² and concluded that the term was not restricted to any stage of the proceedings. Therefore, when a party elects to proceed in the small claims division, it voluntarily surrenders its right to counsel at all stages of the proceedings, including postjudgment proceedings. Goehring, supra at 365, 457 N.W.2d 375. According to the district court's argument, MCL 600.8407(1) likewise prohibits the assignment of claims during prosecution, including postjudgment proceedings. The district court maintained that plaintiffs' right to challenge MCL 600.8407(1) was waived when Fifth Third Bank elected to proceed in the small claims division, and that regardless of the waiver, the statute is constitutional.

In opposing the motion, plaintiffs sought to distinguish Goehring from the instant case because Goehring did not address MCL 600.8407(1), or whether assignees may collect judgments for their own benefit, without the assistance of counsel. Plaintiffs considered the prosecution of small claims to be completed once judgments were entered, and asserted that they were merely attempting to collect the judgments. Plaintiffs further claimed that they did not waive their constitutional challenge of the applicable statute because they had no notice that assignment would be prohibited, and allowing assignment of judgments was consistent with the purpose of the statutory scheme for the small claims division: to promote the efficient and inexpensive resolution of small claims.

The circuit court opined that in light of this Court's interpretation of the term "prosecution" in MCL 600.8408(1), as analyzed in Goehring, the term "prosecuted" in MCL 600.8407(1) should be interpreted in the same manner. Thus, the circuit court concluded that assignees are precluded from being involved in all stages of small claims court proceedings, including postjudgment proceedings. The circuit court reasoned that the specification in MCL 600.8408(2),³ requiring a person with direct knowledge to pursue a small claim, indicated the Legislature's intent to "keep these things short, to the point, sweet, and finite." The circuit court noted that in electing to pursue a claim in the small claims division, the parties waived certain rights, as set forth in MCL 600.8412.⁴ Fifth Third Bank elected its remedy and waived its ability to assign.

With respect to plaintiffs' constitutional challenge of MCL 600.8407(1), the circuit court held that the statute was a reasonable provision rationally related to the economic administration of the civil justice system where there are small claims, that it was not vague, ambiguous or arbitrary, and that it did not cause a taking of private property without just compensation because the law was in effect long before plaintiffs purchased the judgments and parties are presumed to know the law. The circuit court further ruled that plaintiffs did not have standing pursuant to MCL 600.8408, that the judgment could not be assigned pursuant to MCL 600.8407(1), and that when the case was submitted to the small claims division, the parties waived any other requirements or difficulties pursuant to MCL 600.8412. The circuit court granted the district court's motions to dismiss and for summary disposition,⁵ but denied its request for sanctions. The circuit court stated that it could not reasonably conclude that plaintiffs' claims were frivolous in light of the fact that other district courts permitted the assignment of small claims in similar circumstances.⁶ This appeal followed.

II. ASSIGNMENT OF SMALL CLAIMS JUDGMENTS

Plaintiffs first argue that the trial court erred by determining that MCL 600.8407(1) and Goehring preclude the assignment of small claims judgments. Plaintiffs contend that MCL 600.8407(1) does not expressly prohibit assignees from pursuing collections on small claims judgments. Rather, it merely bars an assignee from filing or prosecuting a small claims action before obtaining a judgment. According to plaintiffs, a distinction between prejudgment and postjudgment actions is acknowledged in MCR 4.301, which addresses the applicability of other court rules after judgment. Plaintiffs further contend that this Court's interpretation of the word "prosecution" in MCL 600.8408(1), as addressed in Goehring, does not apply to the term "prosecuted" in MCL 600.8407(1) and, alternatively, that Goehring was wrongly decided. We disagree.

A. STANDARD OF REVIEW

"The grant or denial of a petition for superintending control is within the sound discretion of the court. Absent an abuse of discretion, this Court will not disturb the denial of a request for an order of superintending control." Goehring, supra at 366, 457 N.W.2d 375. A court does not abuse its discretion in refusing to grant a writ of superintending control where the party seeking the writ fails to establish grounds for granting a writ. Shepherd Montessori Ctr. Milan v. Ann Arbor Charter Twp., 259 Mich.App. 315, 347, 675 N.W.2d 271 (2003). "For superintending control to lie, the petitioners must establish that the respondents have failed to perform a clear legal duty and the absence of an adequate legal remedy." Recorder's Court Bar Ass'n v. Wayne Circuit Court, 443 Mich. 110, 134, 503 N.W.2d 885 (1993) (emphasis in original).

"This Court reviews the grant or denial of summary disposition de novo to determine if the moving party is entitled to judgment as a matter of law." Maiden v. Rozwood, 461 Mich. 109, 118, 597 N.W.2d 817 (1999). When ruling on a motion brought under MCR 2.116(C)(10), the court must consider the affidavits, pleadings, depositions, admissions, and other documentary evidence submitted by the parties in the light most favorable to the party opposing the motion. Reed v. Breton, 475 Mich. 531, 537, 718 N.W.2d 770 (2006); MCR 2.116(G)(6). Summary disposition is appropriate only when the evidence fails to establish a genuine issue regarding any material fact. Id. The interpretation of a statute is a question of law that we review de novo. Carter v. Ann Arbor City Attorney, 271 Mich.App. 425, 438, 722 N.W.2d 243 (2006).

B. ANALYSIS

This case presents an issue of first impression with respect to the interpretation of MCL 600.8407(1) and whether its prohibition against assignees filing or prosecuting claims in the small claims division includes postjudgment proceedings. As previously stated, MCL 600.8407(1) provides that "[a] claim shall not be filed or prosecuted in the small claims division by an assignee of a claim or by a third party beneficiary under a third party beneficiary contract." The parties dispute the meaning of the term "prosecuted" as used in the statute.

The primary goal of judicial interpretation of statutes is to ascertain and give effect to the intent of the Legislature. The first step is to examine the plain language of the statute itself. The Legislature is presumed to have intended the meaning it plainly expressed. If the statutory language is clear and unambiguous, appellate courts presume that the Legislature intended...