People v. Zitka

• Decision Date: 10 May 2018
• Docket Number: No. 338064, No. 338065,338064
• Citation: 325 Mich.App. 38,922 N.W.2d 696
• Parties: PEOPLE of the State of Michigan, Plaintiff-Appellant, v. Bruce H. ZITKA, Defendant-Appellee. People of the State of Michigan, Plaintiff-Appellant, v. Susan Hernandez-Zitka, Defendant-Appellee.
• Court: Court of Appeal of Michigan — District of US

325 Mich.App. 38

922 N.W.2d 696

PEOPLE of the State of Michigan, Plaintiff-Appellant,

v.Bruce H. ZITKA, Defendant-Appellee.

People of the State of Michigan, Plaintiff-Appellant,

v.Susan Hernandez-Zitka, Defendant-Appellee.

No. 338064

No. 338065

Court of Appeals of Michigan.

Submitted May 8, 2018, at Lansing.

Decided May 10, 2018

Approved for publication June 26, 2018, 9:10 a.m.

Bill Schuette, Attorney General, Aaron D. Lindstrom, Solicitor General, Laura Moody, Chief Legal Counsel, and Daniel C. Grano, Assistant Attorney General, for the people.

Dodge & Dodge, PC (by David A. Dodge ) for defendants.

Before: Meter, P.J., and Gadola and Tukel, JJ.

Gadola, J.

At issue in these consolidated appeals are the charges brought against each defendant for three counts of conducting a gambling operation without a license, MCL 432.218(1)(a), and three counts of using a computer to commit a crime, MCL 752.796 and MCL 752.797(3)(e). After conducting a preliminary examination, the district court found that probable cause existed to bind over defendants, Bruce H. Zitka and Susan Hernandez-Zitka, to the circuit court. The circuit court, however, entered orders granting defendants’ motions to quash the amended information and dismissing all charges. The prosecution appeals as of right, and we reverse and remand for further proceedings.

I. FACTUAL BACKGROUND

Defendants own and operate three Internet lounges located in Muskegon County: The Landing Strip, The Lucky Mouse, and Fast Lane. At these establishments, customers can open accounts to wager on and play games online, including slot and lottery-type games. On April 14, 2015, the Michigan Gaming Control Board (MGCB) began an investigation to determine whether illegal gambling activities were taking place at the lounges. The MGCB interrupted this investigation, however, when the Norton Shores Police Department began its own independent investigation of allegations that unlawful gambling activities were taking place at The Landing Strip. The city attorney for Norton Shores subsequently filed in the Muskegon Circuit Court a civil-nuisance-abatement action against The Landing Strip under the local zoning code. The parties ultimately agreed to dismissal of that case, and the court entered a stipulated order of dismissal on January 28, 2016, stating in part, "Defendants agree to operate the Landing Strip LLC without violation of any applicable gambling laws or ordinances as it is currently operating ."¹ (Emphasis added.)

Following the conclusion of the civil lawsuit, the MGCB resumed its investigation of the three lounges in February 2016. As a result of this investigation, defendants were each charged with three counts of conducting a gambling operation without a license, MCL 432.218(1)(a), and three counts of using a computer to commit a crime, MCL 752.796 and MCL 752.797(3)(e). The amended information alleges an offense period extending from February 1, 2016, through October 31, 2016. The district court conducted a two-day preliminary examination and, on January 27, 2017, issued an opinion and order determining that probable cause supported the charges and binding over the cases to the Ingham Circuit Court. In reaching this conclusion, the district court determined that the offense of using a computer to commit a crime, MCL 752.796 and MCL 752.797(3)(e), is a specific-intent crime, while conducting a gambling operation without a license, MCL 432.218(1)(a), constitutes a general intent crime. With respect to the Muskegon County Circuit Court’s stipulated order of dismissal, the district court was "not persuaded that the ... [order], in a civil proceeding, is particularly helpful here in relation to the probable cause standard."

In the Ingham Circuit Court, defendants filed identical motions to quash, arguing that the district court erred by determining that the offense of conducting a gambling operation without a license was a general-intent crime as opposed to a specific-intent crime. Defendants further asserted that because the stipulated order dismissing the civil case reflected a judicial determination that defendants were operating legally, defendants were acting under a mistake of law that negated the mens rea elements of both offenses. The circuit court granted defendants’ motions to quash and stated on the record as follows:

My opinion is based upon the fact that the Attorney General of this state, in part, has the authority to intervene in any litigation that they want to that would be something that relates to state law, I believe they could have gone back to the circuit judge in this case and asked to intervene and have this reargued in some fashion as to its applicability.

This appears to be a situation where apparently the Attorney General’s office and their other agencies were so aggrieved by these poor people that they felt it necessary to investigate for months and months as to whether they existed. They could have walked right in and seen. But in my opinion, when a circuit judge of—is it Muskegon?

* * *

...[The Muskegon Circuit Court judge] has the right to make these rulings and put these rulings in effect. But as I have seen in my cases, I have been chastised. I have been appealed. I have even had people come in here and consent to things and your office appealed that because the consent was wrong. I am just amazed. These cases are dismissed.

II. STANDARD OF REVIEW

A trial court’s decision regarding a motion to quash an information is reviewed for an abuse of discretion. People v. Miller , 288 Mich. App. 207, 209, 795 N.W.2d 156 (2010). An abuse of discretion occurs when a decision "falls outside the range of reasonable and principled outcomes," People v. Waterstone , 296 Mich. App. 121, 131–132, 818 N.W.2d 432 (2012), and "[a] trial court necessarily abuses its discretion when it makes an error of law," People v. Duncan , 494 Mich. 713, 723, 835 N.W.2d 399 (2013). "To the extent that a lower court’s decision on a motion to quash the information is based on an interpretation of the law, appellate review of the interpretation is de novo." Miller , 288 Mich. App. at 209, 795 N.W.2d 156.

III. DISCUSSION

A. COLLATERAL ESTOPPEL

The prosecution contends that the circuit court abused its discretion by determining that the charges brought against defendants were barred pursuant to collateral estoppel in light of the stipulated order of dismissal in the civil case. We agree.

The doctrine of collateral estoppel generally precludes relitigation of an issue in a subsequent proceeding when that issue has previously been the subject of a final judgment in an earlier proceeding. Porter v. Royal Oak , 214 Mich. App. 478, 485, 542 N.W.2d 905 (1995). Collateral estoppel applies when the following three conditions are satisfied: "(1) a question of fact essential to the judgment must have been actually litigated and determined by a valid and final judgment; (2) the same parties must have had a full [and fair] opportunity to litigate the issue; and (3) there must be mutuality of estoppel." Monat v. State Farm Ins. Co. , 469 Mich. 679, 682–684, 677 N.W.2d 843 (2004) (quotation marks and citations omitted; alteration in original). Mutuality of estoppel requires that the party seeking to invoke the doctrine establish that his or her adversary was either a party to, or in privy with a party to, the previous action. Id . at 684, 677 N.W.2d 843.

In the vast majority of cases, parties seek to apply collateral estoppel in the context of two civil proceedings. However, our Supreme Court has recognized the concept of "cross-over estoppel," i.e., "the application of collateral estoppel in the civil-to-criminal context." People v. Trakhtenberg , 493 Mich. 38, 48, 826 N.W.2d 136 (2012), citing People v. Gates , 434 Mich. 146, 155, 452 N.W.2d 627 (1990). Yet, in light of the fundamental procedural differences in the civil versus criminal contexts, the Supreme Court has advised exercising caution in applying cross-over estoppel. See Trakhtenberg 493 Mich. at 48, 826 N.W.2d 136 ("[W]e must hesitate to apply collateral estoppel in the reverse situation—when the government seeks to apply collateral estoppel to preclude a criminal defendant’s claim of ineffective assistance of counsel in light of a prior civil judgment that defense counsel did not commit malpractice."); Gates , 434 Mich. at 157, 452 N.W.2d 627 ("[S]uch procedural differences raise serious doubt about the soundness of applying ‘cross-over estoppel’ in situations such as this case presents.").

The first prong of the collateral estoppel analysis requires that the ultimate issue to be determined in the subsequent action be the same as that involved in the first action. Rental Props. Owners Ass’n of Kent Co. v. Kent Co.Treasurer , 308 Mich. App. 498, 529, 866 N.W.2d 817 (2014). Specifically, the common ultimate issues "must be identical, and not merely similar," and additionally "must have been both actually and necessarily litigated." Id . In order for an issue to be "actually litigated," it must have been submitted to and determined by the trier of fact. Id. , citing VanDeventer v. Mich. Nat’l Bank , 172 Mich. App. 456, 463, 432 N.W.2d 338 (1988).

Under the present circumstances, the previous civil litigation initiated by the Norton Shores city attorney in the Muskegon Circuit Court concerned defendants’ compliance with local zoning laws in operating The Landing Strip. Accordingly, the legality of defendants’ operations under the state criminal laws was not at issue, nor was their operation of The Lucky Mouse or Fast Lane. Further, no issue in the civil litigation was submitted to or determined by the factfinder; rather, the parties negotiated and stipulated to dismissal of the action. The stipulated order stated, in part, that "[d]efendants agree to operate the Landing Strip LLC without violation of any applicable gambling laws or ordinances as it is currently operating ." (Emphasis added). But because the scope of the civil action was limited to defendant...