New Prods. Corp. v. Harbor Shores BHBT Land Dev., LLC., Docket No. 317309.

• Decision Date: 23 December 2014
• Docket Number: Docket No. 317309.
• Citation: 866 N.W.2d 850,308 Mich.App. 638
• Parties: NEW PRODUCTS CORPORATION v. HARBOR SHORES BHBT LAND DEVELOPMENT, LLC.
• Court: Court of Appeal of Michigan — District of US

308 Mich.App. 638

866 N.W.2d 850

NEW PRODUCTS CORPORATION

v.HARBOR SHORES BHBT LAND DEVELOPMENT, LLC.

Docket No. 317309.

Court of Appeals of Michigan.

Submitted Nov. 5, 2014, at Grand Rapids.

Decided Dec. 23, 2014, at 9:00 a.m.

Demorest Law Firm, PLLC, Royal Oak (by Mark S. Demorest, Michael K. Hayes, and Melissa L. Demorest ), for New Products Corporation.

Dickinson Wright PLLC, (by K. Scott Hamilton, Detroit John G. Cameron, Jr., and Christina K. McDonald, Grand Rapids) for Harbor Shores Golf Course, LLC, Michigan Magnet Fund E, LLC, and Whirlpool Corporation.

Kreis, Enderle, Hudgins & Borsos, P.C., Battle Creek (by Mark E. Kreter and James D. Lance ), for Harbor Shores BHBT Land Development, LLC, and Horizon Bank.

Plunkett Cooney, Kalamazoo (by Michael S. Bogren ) for the city of Benton Harbor.

Before: M.J. KELLY, P.J., and BECKERING and SHAPIRO, JJ.

Opinion

M.J. KELLY, P.J.

In this real property dispute, plaintiff, New Products Corporation, appeals by leave granted the trial court's order granting the motion by defendants Harbor Shores BHBT Land Development, LLC (Harbor Shores Development) and Horizon Bank asking the trial court to limit the issues to be tried by a jury. On appeal, the sole question is whether the trial court erred when it determined that Michigan's Constitution does not guarantee the right to a jury trial on each of New Products' claims. We conclude that the trial court did not err when it determined that New Products' claims, other than its trespass claim, were equitable and had to be decided by the trial court. Accordingly, we affirm the trial court's order and remand for further proceedings.

I. BASIC FACTS

In 1950, Elwood and Evelyn McDorman owned a 250–foot–wide parcel of land running south from Higman Park Road to the then existing channel of the Paw Paw River, which served as the boundary between the city of Benton Harbor (Benton Harbor) and Benton Charter Township (the Township). At around that time, engineers relocated the river approximately 500 feet north. To facilitate the relocation, Benton Harbor purchased a right of way over the McDormans' land for the new channel and transferred to them a 250–foot–wide parcel located to the south of their existing parcel. After that transfer, the McDormans owned a 250–foot–wide strip of land extending from Higman Park Road in the north to Klock Road in the south. The parcel in dispute is that part of the McDormans' land that was located in the Township before the relocation of the river, but which is now south of the relocated river.

New Products owns and operates a manufacturing facility in Benton Harbor along Klock Road. In 1955, New Products acquired the parcel that Benton Harbor transferred to the McDormans as part of the project to relocate the river along with the disputed parcel. Benton Harbor taxed both parcels and New Products paid the taxes. However, the Township continued to tax the disputed parcel and listed the taxpayer of record as Frank Hoffman.

In 1970, the Township foreclosed against Hoffman's property for unpaid taxes. The state acquired the property, but transferred it back to Hoffman in 1973. Larry and Heidi Heald acquired the property from Hoffman and his co-owners in 1991. Harbor Shores Development then purchased the disputed parcel from the Healds in 2007.¹ As part of a large development project, Harbor Shores Development conveyed a portion of the disputed parcel to Benton Harbor and a portion to defendant Harbor Shores Golf Course, LLC (Harbor Shores Golf). Harbor Shores Golf then constructed a golf course, which included the disputed parcel.

In September 2011, New Products sued Harbor Shores Development, Harbor Shores Golf, Benton Harbor, the Township, and other parties that might claim an interest in the disputed parcel. New Products alleged that it was the rightful owner of the parcel and that Harbor Shores Development and Harbor Shores Golf wrongfully constructed and maintained a golf course on it. It asked the trial court to permanently enjoin Harbor Shores Development, Harbor Shores Golf, and Benton Harbor from trespassing on the disputed parcel and to quiet title to the parcel in New Products. Finally, New Products asked the trial court to declare that none of the defendants have any interest in the parcel and declare that it falls within Benton Harbor's jurisdiction.

New Products demanded the right to have a jury decide all the issues. New Products later amended its complaint, but the claims were substantially the same.

In April 2013, Harbor Shores Development and Horizon Bank filed a motion to limit the issues to be tried by a jury. They argued that New Products' claims for quiet title, injunctive relief, and declaratory relief were all equitable and should be decided by the court. They maintained that only New Products' claim for damages from trespass should be submitted to a jury, if necessary. The remaining defendants concurred with the motion.

The trial court held a hearing on the motion in June 2013. At the hearing, New Products maintained that its claims involving “ownership of the land and whether New Products was entitled to possession” were claims that a jury traditionally decided. It stated that its quiet title and declaratory relief claims were—in effect—common-law actions for ejectment, which under Michigan's Constitution must be decided by a jury. The trial court did not agree. The trial court noted that New Products never used the term “ejectment” in its complaint, but instead repeatedly referred to equity and equitable relief. Relying on the language in MCL 600.2932 and the related court rule, MCR 3.411, the court determined that, with the exception of New Products' claim for trespass, the claims were equitable and should be tried by the court.

The trial court entered an order granting the relief requested in the motion on July 12, 2012. This Court granted New Products' request for leave to appeal the order and for a stay pending resolution of the appeal in August 2013.²

II. RIGHT TO JURY TRIAL IN TITLE DISPUTES

A. STANDARDS OF REVIEW

On appeal, New Products argues that Michigan's Constitution protects its right to have a jury decide any claim that would have been submitted to a jury before the merger of law and equity. Because its claims for quiet title and declaratory relief are in the nature of a claim for ejectment and because ejectment was a law claim that would have been decided by a jury before the merger, New Products maintains that the trial court erred when it determined that New Products was not entitled to have a jury decide the title dispute. This Court reviews de novo whether the trial court properly interpreted and applied this state's Constitution, statutes, and court rules.

Adair v. Michigan, 486 Mich. 468, 477, 785 N.W.2d 119 (2010) ; Brecht v. Hendry, 297 Mich.App. 732, 736, 825 N.W.2d 110 (2012). This Court also reviews de novo whether the trial court properly applied this state's common law. Bailey v. Schaaf (On Remand), 304 Mich.App. 324, 343, 852 N.W.2d 180 (2014).

B. THE RIGHT TO A JURY TRIAL AFTER THE MERGER OF LAW AND EQUITY

Our Supreme Court has the power to “establish, modify, amend and simplify the practice and procedure in all courts” through general rules of practice and procedure. Const. 1963, art. 6, § 5. The Constitution also provides that the “distinctions between law and equity proceedings shall, as far as practicable, be abolished.” Id. With the adoption of the General Court Rules of 1963, our Supreme Court eliminated the separate character of actions at law and actions in equity and established one form of action, which practice continues to this day. See Livingston v. Krown Chem. Mfg., Inc., 394 Mich. 144, 149–150, 229 N.W.2d 793 (1975) ; MCR 2.101(A) ; MCR 2.111(A)(2)(b).

Although equity and law claims have been merged in modern practice, courts must continue to recognize the distinction between law and equity to preserve the “constitutional rights to trial by jury in legal matters and trial by court in equity matters.” Madugula v. Taub, 496 Mich. 685, 705, 853 N.W.2d 75 (2014) (quotation marks, citations, and emphasis omitted). Courts must recognize these distinctions because our Constitution provides that the “right of trial by jury shall remain....” Const. 1963, art. 1, § 14 ; see also MCR 2.508(A). This guarantee preserves the right to have a jury try all issues where the right existed before the adoption of the Constitution. Madugula, 496 Mich. at 704, 853 N.W.2d 75; Anzaldua v. Band, 216 Mich.App. 561, 564, 550 N.W.2d 544 (1996) (“The ‘shall remain’ language indicates that this provision retains the right to a jury trial as it existed at the time the constitution was adopted and neither restricts nor enlarges it.”). But the right is not limited to causes of action that existed before the adoption of the Constitution: “[T]he constitutional guarantee also applies ‘to cases arising under statutes enacted subsequent to adoption of the Constitution which are similar in character to cases in which the right to jury trial existed before the Constitution was adopted.’ ” Madugula, 496 Mich. at 704–705, 853 N.W.2d 75, quoting Conservation Dep't v. Brown, 335 Mich. 343, 346, 55 N.W.2d 859 (1952). And, although the Legislature can confer a right to trial by jury, Madugula, 496 Mich. at 696, 853 N.W.2d 75, it cannot abrogate an existing right by reclassifying what was traditionally a law claim as an equitable claim:

The constitutional guaranty applied to cases arising under statutes enacted subsequent to adoption of the Constitution, which are similar in character to cases in which the right to jury trial existed before the Constitution was adopted. The right to trial by jury, in cases where it existed prior to adoption of the Constitution, may not be defeated by enactment of a statute providing for trial on the chancery side of issues formerly triable in proceedings at law. Where there are questions of fact to be determined and the issues are such that at common law a right to

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