Macomb County Taxpayers Ass'n v. L'Anse Creuse Public Schools, Docket No. 172066

• Court: Court of Appeal of Michigan (US)
• Writing for the Court: TAYLOR
• Citation: 540 N.W.2d 684,213 Mich.App. 71
• Decision Date: 25 August 1995
• Docket Number: Docket No. 172066
• Parties: , 105 Ed. Law Rep. 696 MACOMB COUNTY TAXPAYERS ASSOCIATION, Michael Sessa, Philis Desaele, Charles Anglin, Walter Graves, and Joyce Fitch, Plaintiffs-Appellees, and Dearborn Public Schools and Grosse Pointe Public Schools, Intervening Plaintiffs-Appellees, v. L'ANSE CREUSE PUBLIC SCHOOLS, Center Line Public Schools, Fitzgerald Public Schools, Fraser Public Schools, Lake Shore Public Schools, Lakeview Public Schools, South Lake Public Schools, Utica Community Schools, Warren Consolidated Schools, and Warren Woods Public Schools, Jointly and Severally, Defendants-Appellees, and Michigan Department of Treasury, Michigan Department of Education, and Frank J. Kelley, Attorney General of the State of Michigan, Intervening Defendants-Appellants. John C. HART, a Taxpayer of the L'Anse Creuse Public Schools, and L'Anse Creuse Public Schools; Joseph Coach, a Taxpayer of the Center Line Public Schools, and Center Line Public Schools; Donald S. Durant, a Taxpayer of the Fitzgerald Public Schools and Fitzgerald Public Schools; Deuane Martin, a Taxpayer of the Lake Shore Public Schools, and Lake Shore Public Schools; Kenneth N. Eggly, a Taxpayer of the Lakeview Public Schools, and Lakeview Public Schools; Dale Cunningham, a Taxpayer of the South Lake Schools, and South Lake Schools; Gerald H. Schmidt, a Taxpayer of the Warren Woods Public Schools, and Warren Woods Public Schools; Cross-Plaintiffs/Cross-Appellees, v. MICHIGAN DEPARTMENT OF TREASURY, Michigan Department of Education, and Frank J. Kelley, Attorney General of the State of Michigan, Cross-Defendants/Cross-Appellants.

Page 684

540 N.W.2d 684 213 Mich.App. 71, 105 Ed. Law Rep. 696 MACOMB COUNTY TAXPAYERS ASSOCIATION, Michael Sessa, Philis
Desaele, Charles Anglin, Walter Graves, and Joyce
Fitch, Plaintiffs-Appellees,
and
Dearborn Public Schools and Grosse Pointe Public Schools,
Intervening Plaintiffs-Appellees,
v.
L'ANSE CREUSE PUBLIC SCHOOLS, Center Line Public Schools,
Fitzgerald Public Schools, Fraser Public Schools, Lake Shore
Public Schools, Lakeview Public Schools, South Lake Public
Schools, Utica Community Schools, Warren Consolidated
Schools, and Warren Woods Public Schools, Jointly and
Severally, Defendants-Appellees,
and
Michigan Department of Treasury, Michigan Department of
Education, and Frank J. Kelley, Attorney General
of the State of Michigan, Intervening
Defendants-Appellants.
John C. HART, a Taxpayer of the L'Anse Creuse Public
Schools, and L'Anse Creuse Public Schools;
Joseph Coach, a Taxpayer of the Center Line Public Schools,
and Center Line Public Schools;
Donald S. Durant, a Taxpayer of the Fitzgerald Public
Schools and Fitzgerald Public Schools;
Deuane Martin, a Taxpayer of the Lake Shore Public Schools,
and Lake Shore Public Schools;
Kenneth N. Eggly, a Taxpayer of the Lakeview Public Schools,
and Lakeview Public Schools;
Dale Cunningham, a Taxpayer of the South Lake Schools, and
South Lake Schools;
Gerald H. Schmidt, a Taxpayer of the Warren Woods Public
Schools, and Warren Woods Public Schools;
Cross-Plaintiffs/Cross-Appellees,
v.
MICHIGAN DEPARTMENT OF TREASURY, Michigan Department of
Education, and Frank J. Kelley, Attorney General
of the State of Michigan,
Cross-Defendants/Cross-Appellants. Docket No. 172066. Court of Appeals of Michigan. Submitted July 13, 1995, at Lansing.
Decided Aug. 25, 1995, at 9:05 a.m.
Released for Publication Nov. 17, 1995.

[213 Mich.App. 72] Sawyer, Johnston & Chmura by John Chmura, Mount Clemons, for Macomb County Taxpayers Association and others.

Hardy, Lewis, Pollard & Page, P.C. by Dennis R. Pollard and Neil H. Goodman, Birmingham, for L'Anse Creuse Public Schools and others.

Page 686

Frank J. Kelley, Attorney General, Thomas L. Casey, Solicitor General, and Paul J. Zimmer, Assistant Attorney General, for Department of Treasury and others.

Before TAYLOR, P.J., and McDONALD and COLLINS, ^* JJ.

[213 Mich.App. 73] TAYLOR, Presiding Judge.

Intervening defendants, Michigan Department of Treasury, Michigan Department of Education, and Michigan Department of Attorney General (state defendants), appeal as of right the trial court's order awarding attorney fees to individual defendants who are school board members, and to individual plaintiffs who are members of the Macomb County Taxpayers Association. We affirm in part and reverse in part.

The Macomb County Taxpayers Association, a voluntary unincorporated association, and several of its members originally brought this action against twelve out-of-formula Macomb County school districts, seeking an injunction to prevent them from participating, pursuant to the school district commercial and industrial property tax base sharing act, 1991 P.A. 108, M.C.L. § 380.751; M.S.A. § 15.4751, in tax base sharing, and also to bar the school districts from making any payments to poorer in-formula school districts. State defendants intervened and filed a cross-claim against the school districts, requesting that the court compel tax base sharing or order reimbursement of state aid accepted by the school districts. The association and its members then filed an amended complaint against state defendants alleging the act was unconstitutional. By stipulation of the parties, on March 24, 1992, the court entered an order allowing eight of the school districts to each add one taxpayer from its school district as a cross-claim plaintiff for the purpose of asserting cross-claims against state defendants. ¹ In a two-count cross-complaint against state defendants, cross-claim plaintiffs, individual school board members, asserted that the act violated the fifteen-mill limitation[213 Mich.App. 74] on general ad valorem taxes, Const. 1963, art. 9, § 6, and improperly reduced the state financing for an existing activity required of local government by state law. Const. 1963, art. 9, § 29.

Following motions for summary disposition, the trial court found that the basic mechanism of tax base sharing was constitutional, but reserved plaintiffs' and the school districts' claims under a portion of the Headlee Amendment, Const. 1963, art. 9, § 29, for later decision. Upon completing its consideration of those claims, the court concluded that the act was unconstitutional because its sanction for not sharing tax revenues, namely, loss of state aid, violated § 29.

State defendants then filed a motion requesting the court to apply a limited construction to the act that would preserve its constitutionality. The court denied the motion. With regard to costs, the trial court stated in an order dated January 25, 1993.

Since this is a final Opinion and Order in this matter the Court should consider the matter of costs. Plaintiffs and the school districts are the prevailing parties and shall file a bill of costs within twenty-eight days. MCR 2.625(F)(2). The Headlee Amendment also provides that if a taxpayer's suit is sustained the taxpayer shall receive from the applicable unit of government his cost. This provision has been interpreted to require the payment of reasonable attorney fees. Durant v. Board [Dep't] of Education, 186 Mich App 83; 463 NW2d 461 (1990). Reasonable attorney fees that had been incurred in maintaining this suit by taxpayers may be included in their bill of costs.

The association and its individual members, as well as the school districts, and the individual [213 Mich.App. 75] school board members, filed bills of costs in which they requested attorney fees. ²

Page 687

After a hearing, the court denied the school districts' and the association's request for attorney fees because they were not taxpayers. However, the court allowed the individual plaintiffs and school board members to proceed because they were taxpayers, and conducted an evidentiary hearing to determine reasonable attorney fees. The parties stipulated that the individual school board members were not contractually required to, nor did they, in fact, make any payments to the school districts or to their law firm for legal services rendered. Indeed, the retainer agreement with the law firm was with the school boards, who themselves had an internal arrangement...