Lennon v. Lennon
| Docket Number | 355593 |
| Decision Date | 20 January 2022 |
| Parties | TIMOTHY LENNON, Plaintiff-Appellant, v. EDWARD G. LENNON, Defendant-Appellee. |
| Court | Court of Appeal of Michigan — District of US |
UNPUBLISHED
Oakland Circuit Court LC No. 2020-181202-CZ
Before: Gleicher, P.J., and K. F. Kelly and Ronayne Krause JJ.
Plaintiff appeals as of right the trial court's order granting defendant's motion for summary disposition under MCR 2.116(C)(10). Plaintiff further appeals the trial court's decision to quash a subpoena and grant a protective order prohibiting discovery until a decision was rendered on the summary disposition decision. We affirm the trial court's decision to quash the subpoena and to grant a protective order. However, we find error warranting reversal of the trial court's order granting defendant's motion for summary disposition and remand for further proceedings.
Plaintiff and defendant are brothers. Plaintiff was a member of the Board of Directors of the David A. Lennon Foundation, Inc. (Foundation), between 2004 and 2020. The Foundation was incorporated by defendant on March 3, 2004, to provide "[c]haritable contributions from individuals and organizations[.]" Defendant served as the President of the Foundation, which was dissolved on January 10, 2020.
Plaintiff filed a complaint in his capacity as a member of the board of directors of the Foundation. Although the complaint did not identify a specific cause of action, it requested inspection of the Foundation's books and records and sought to hold defendant liable for breaching his fiduciary duties. In particular, plaintiff sought indemnification for any tax liability possibly incurred as a result of the Foundation's loss of tax-exempt status in 2012. This loss of status purportedly occurred because defendant failed to file tax returns for the Foundation in certain tax years.
After plaintiff filed his complaint, defendant moved to quash a subpoena plaintiff served on the Bank of Ann Arbor for failing to comply with MCR 2.301(A) and sought a protective order prohibiting discovery until the trial court decided defendant's yet-to-be-filed motion for summary disposition. The trial court granted defendant's motion, and therefore, plaintiff was unable to engage in discovery prior to the decision on the disposition motion. The trial court issued an opinion and order that denied defendant's motion for summary disposition under MCR 2.116(C)(8), but granted the motion under MCR 2.116(C)(10), concluding that plaintiff failed to present evidence that he actually incurred a tax liability. This appeal followed.
"[This Court] review[s] for an abuse of discretion a trial court's decision on a motion for a protective order." Alberto v Toyota Motor Corp, 289 Mich.App. 328, 340; 796 N.W.2d 490 (2010). This Court also reviews for an abuse of discretion a trial court's decision on a motion to quash. Bush v Beemer, 224 Mich.App. 457, 465-466; 569 N.W.2d 636 (1997). "An abuse of discretion occurs when the decision results in an outcome falling outside the range of principled outcomes." Barnett v Hidalgo, 478 Mich. 151, 158; 732 N.W.2d 472 (2007).
"Appellate review of the grant or denial of a summary-disposition motion is de novo West v Gen Motors Corp, 469 Mich. 177, 183; 665 N.W.2d 468 (2003). The appellate court "review[s] a motion brought under MCR 2.116(C)(10) by considering the pleadings, admissions, and other evidence submitted by the parties in the light most favorable to the nonmoving party." Latham v Barton Malow Co, 480 Mich. 105, 111; 746 N.W.2d 868 (2008). "Summary disposition is appropriate under MCR 2.116(C)(10) if there is no genuine issue regarding any material fact and the moving party is entitled to judgment as a matter of law." West, 469 Mich. at 183. "A genuine issue of material fact exists when the record, giving the benefit of reasonable doubt to the opposing party, leaves open an issue upon which reasonable minds might differ." Id.
This Court also reviews de novo a motion under MCR 2.116(C)(8). Dell v Citizens Ins Co of America, 312 Mich.App. 734, 739; 880 N.W.2d 280 (2015). This motion tests the legal sufficiency of the complaint premised on the pleadings alone and may be granted only when the claims alleged are clearly unenforceable as a matter of law. Id. at 739-740.
This Court also reviews questions involving statutory interpretation de novo. Lear Corp v Dep 't of Treasury, 299 Mich.App. 533, 536; 831 N.W.2d 255 (2013). "When interpreting statutes, the primary goal of the judiciary is to ascertain and give effect to the intent of the Legislature." Haynes v Beulah Village, 308 Mich.App. 465, 468; 865 N.W.2d 923 (2014). "In the absence of ambiguities, judicial construction is neither necessary nor permitted." Lear Corp, 299 Mich.App. at 537 (quotation marks and citation omitted). "However, if the intent of the Legislature is not clear, courts must interpret statutes in a way that gives effect to every word, phrase, and clause in a statute and avoid an interpretation that would render any part of the statute surplusage or nugatory." Haynes, 308 Mich.App. at 368 (quotation marks and citation omitted).
Plaintiff first contends the trial court abused its discretion when it granted defendant's motion to quash and for protective order. We disagree.
In the trial court, defendant sought to quash the subpoena to the Bank of Ann Arbor for plaintiffs failure to comply with MCR 2.301(A)(1). That court rule states:
In a case where initial disclosures are required, a party may seek discovery only after the party serves its initial disclosures under MCR 2.302(A). Otherwise, a party may seek discovery after commencement of the action when authorized by these rules, by stipulation, or by court order. [MCR 2.301(A)(1).]
In response, plaintiff did not dispute that initial disclosures were required and acknowledged that he had not complied with the court rule before serving the subpoena. Nonetheless, on appeal, plaintiff contends that it was a technical violation of the rule that was mooted once he served his initial disclosures before the hearing. Plaintiffs argument, however, is unpersuasive. If a plaintiff fails to comply with the requirements of a court rule, the trial court does not abuse its discretion by denying the requested relief for the noncompliance. See Grayling Twp v Berry, 329 Mich.App. 133, 152; 942 N.W.2d 63 (2019). Thus, in this case, the trial court's adherence to the court rule, which prohibits discovery before initial disclosures are served, was not an abuse of discretion. Id.
In addition to quashing the subpoena, the trial court also entered a protective order prohibiting discovery until it decided defendant's motion for summary disposition. Although Michigan has a broad policy on discovery, trial courts are authorized to limit discovery "to protect parties from excessive, abusive, or irrelevant discovery requests." Thomas M Cooky Law School v Doe, 300 Mich.App. 245, 260-261; 833 N.W.2d 331 (2013). MCR 2.302(C)(1) governs protective orders and states:
"A trial court has broad discretion to determine what constitutes 'good cause.'" Thomas M Cooky Law School, 300 Mich.App. at 264. "A variety of sound or valid reasons may support a trial court's decision to limit discovery . . . ." Id.
Plaintiff did not argue in the trial court that defendant failed to demonstrate good cause for the issuance of a protective order and has, therefore, failed to preserve the argument for appeal. See Lenawee Co v Wagley, 301 Mich.App. 134, 164; 836 N.W.2d 193 (2013). This argument is, therefore, subject to plain error review. Total Armored Car Serv, Inc v Dep 't of Treasury, 325 Mich.App. 403, 412; 926 N.W.2d 276 (2018). "To establish an entitlement to relief based on plain error, the injured party must show (1) that an error occurred, (2) that the error was plain and (3) that the plain error affected [its] substantial rights." Id. (quotation marks and citation omitted; alteration in original). "[A]n error affects substantial rights if it caused prejudice, i.e., it affected the outcome of the proceedings." In re Utrera, 281 Mich.App. 1, 9; 761 N.W.2d 253 (2008).
When defendant moved for summary disposition, he challenged whether plaintiff stated a claim as a matter of law, MCR 2.116(C)(8), asserting he owed no fiduciary duties to plaintiff, and that plaintiff was not entitled to the Foundation's records. Accordingly, the trial court was entitled under MCR 2.302(C)(1) to limit discovery until it decided the legal question of whether plaintiff stated a claim for relief in his complaint. This decision protected defendant, as well as plaintiff, from incurring undue expense and burden if the motion under MCR 2.116(C)(8) were granted. Plaintiff failed to demonstrate an abuse of discretion or plain error.[1]
Plaintiff next contends that the trial court erred by prohibiting plaintiff from conducting discovery then concluding that summary disposition was proper under MCR 2.116(C)(10) for plaintiffs failure to produce documentary evidence to create a genuine issue of material fact. We agree.
"Generally a motion for summary disposition under MCR 2.116(C)(10) is premature when discovery on a disputed issue has not been completed." Colista v Thomas, 241 Mich.App....
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