Hallaq Wins First Motion for Summary Disposition

brandan-hallaq-profile-photoCongratulations to Brandan Hallaq, Esq. for winning his first Motion for Summary Disposition before the Honorable Archie Brown in the Washtenaw County Circuit Court. Mr. Hallaq successfully drafted and argued the motion on behalf of a condominium association against a co-owner for numerous bylaw infractions and violations of the Michigan Condominium Act. In addition to obtaining an order compelling the co-owner to comply with the condominium documents, the Court granted an award of attorneys fees in the association’s favor.

Mr. Hallaq graduated with his Juris Doctor, cum laude, from Wayne State University Law School in May 2016 before joining our Livonia office.  Mr. Hallaq focuses his practice in the areas of community association, business, and real estate law.  He may be reached at (734) 261-2400 or bhallaq@cmda-law.com.

Congratulations Brandan!

The Five Most Common Mistakes an Elder Law Attorney Sees

Schuster photo for websiteEverybody knows of the problems of aging adults, however few give it the serious attention it needs.  The failure to address these issues appropriately can result in serious financial distress and/or a loss of independence.  I have outlined five common mistakes made by aging adults and tips on how to avoid making them.

First Mistake: Doing nothing
If you do nothing to deal with aging you have a good chance of lifetime probate. That means the probate court must appoint a guardian or conservator to handle your affairs.  One study found that the number one cause of probate guardianship was the need for emergency medical treatment when the patient cannot give consent.

The cost of probate over your lifetime can be enormous and you lose control over your life.   It’s like being a child again.

Second Mistake: Only planning for death
Many people think they are “all set” if they have a will. A will is only effective at death.  We are talking about lifetime issues, not what happens after we die. For example, in a hospital or a nursing home an empowered advocate can mean the difference between life and death.

Third Mistake: Joint property with children
Many seniors think they are all set if they have a daughter or son on their bank accounts with them.  The thinking goes “that way they can pay the bills if I cannot.”  There are many problems with joint accounts.

The first is that it solves only one problem of aging: paying bills. Joint accounts give the child no ability to help the parent in any other way.  If the child calls the insurance company they will ask “Are you the insured?” The child will say “No. But, I’m joint on the bank account.” That goes nowhere.

The more serious problem is the risk of loss of life savings to a child who has financial bad luck.  The same can go for the house.  If a child is a joint owner, then if the child is sued, divorced or goes in bankruptcy so does your property.

And finally, joint accounts can be the source of probate battles after the death. What if a parent makes an account joint with one child? After the parent dies, will the child share it with the other children?  What if the parent’s will says to share equally?  Unfortunately there are no absolute legal rules and questions like these are often answered after a bitter battle in probate court.

Fourth Mistake: Paying employees under the table
People who perform personal services in the home are “employees.”  The recipient of the services is the employer, who is responsible for collecting and paying income, social security, Medicare, and unemployment taxes.

Let’s make it personal. Suppose the lady falls down the stairs carrying laundry.  She can file for workers’ compensation and have her medical bills and her wage loss paid by the employer – you.  If you “let her go” because daughter can now do it, the lady could file for unemployment.  And then you start hearing about back taxes, interest, and penalties

Fifth Mistake:  Not getting legal advice for “means tested” government benefits
Veterans “Aid and Attendance” and Medicaid nursing home benefits are very valuable to elders. But, they are “means tested.”   They have asset and income limits.  Few people know that these programs allow some common sense solutions to losing all your life savings before you get your earned benefits. Like the income tax you need to know what “deductions, credits and exemptions” the programs allow. When it comes to these government benefits get legal advice.

Conclusion: It is really easy to do it right
For the average person a “life care” plan is no more difficult than preparing for “death and taxes.”  All you have to do is identify your trusted assistants and give them legal authority to do what they will need to do – everything. And then make sure they know when to get professional advice.  Do that and you are 99% there to having aging go as smoothly as it can be.

Jim Schuster, a Certified Elder Law attorney, is an Of Counsel attorney at the law firm of Cummings, McClorey, Davis & Acho, P.L.C. He has been licensed to practice law since 1978 and practices entirely in the area of Elder Law. Mr. Schuster helps elders stay independent and in control and helps children of aging parents with the advice and legal documents they need to carry out their parents’ wishes and take care of their needs. Additionally, he assists clients with the complex Nursing Home Medicaid application process.

Attorneys in the Estate Planning and Elder Law practice group at Cummings, McClorey, Davis & Acho, P.L.C. are available to answer any questions about the five common mistakes outlined above.  We offer compassionate, common sense solutions for seniors worried about the future.  Contact us at (734) 261-2400 or www.cmda-law.com.  To learn more about additional issues impacting elder law, follow our blog at cmdaelderlaw.com.

Panel Discussion on Understanding Long Term Care Needs to be held April 20

Gene Richards_8x10@300On Thursday, April 20th Norman E. Richards (Gene), a partner in our Livonia office, will join other elder law experts to present a panel discussion on Understanding Long Term Care Needs.  The seminar will be held at Waltonwood Cherry Hill in Canton and is open to the public.  For more information, please click here.

Norman E. Richards (Gene) focuses his practice on estate planning and elder law.  He assists clients with the development of customized estate plans to address their specific needs, including family owned businesses, senior adults concerned about long term care needs, and special needs trusts for children with special needs.  He may be reached at (734) 261-2400 or nrichards@cmda-law.com.

Grant Obtains Dismissals on behalf of Judge and Prosecutor

Greg Grant 2013colorGreg Grant, an attorney in our Traverse City office, recently obtained dismissals on behalf of a Northern Michigan judge and prosecutor in two separate civil rights cases. In both cases, the courts awarded his clients all of their attorney fees and costs. Mr. Grant aggressively defends judges, attorneys, and municipalities as a regular part of his practice.

Greg Grant focuses his practice on municipal law, employment and labor law, insurance defense, and litigation.  He has extensive litigation experience in the areas of employment and labor law, police liability, first amendment law, due process, Open Meetings Act and Freedom of Information Act, and has earned dismissals in each of these areas.  Additionally, he frequently provides educational and training seminars on municipal topics to clients. 

He may be reached at (231) 922-1888 or ggrant@cmda-law.com.

Michigan Court Rules in Favor of Condominium Association in Interpreting Newly-Amended MCL 559.167 (SB 610)

Kevin Hirzel_8x10@300Kevin Hirzel recently scored an important victory for a Michigan condominium associations.  The Oakland County Circuit Court held that the  MCL 559.167, as amended by 2016 PA 233, does not recreate “need not be built” units that were eliminated under the prior version of MCL 559.167.  The ruling will have an impact on any condominium projects that contain unconstructed “need not be built” units and also meet one of the following two (2) requirements:

 1.Construction of the condominium was commenced prior to September 21, 2006; or

2. An amendment to the master deed that expanded the condominium, contracted the condominium or exercised a right of convertibility was recorded prior to September 21, 2010.

As the court held in Cove Creek, if a condominium meets these requirements, a developer or successor developer automatically lost the right to construct the “need not be built” units and the land on which the units were located will remain as common elements owned by the co-owners. If a condominium does not meet the above requirements, it will be subject to the new “reversion” requirements contained in the 2016 amendment to MCL 559.167, and the “need not be built” units will remain in the condominium until the “reversion” requirements are satisfied.

History of MCL 559.167

As previously discussed in Senate Bill 610 Passes: Is the amendment to MCL 559.167 of the Michigan Condominium Act constitutional?, MCL 559.167 was enacted in 2001 in order to provide an end date for the development of condominiums. MCL 559.167(3) required that a developer, its successors or assigns either complete any units identified as “need not be built” on the condominium subdivision plan within ten (10) years of the date of commencement of construction or within six (6) years of exercising a right of conversion, expansion or contraction.  If the developer, its successors or assigns did not complete the “need not be built” units with the statutory time periods, the right to construct the units would automatically terminate and the undeveloped land would remain as common elements if it was not withdrawn from the condominium.

In contrast, the 2016 amendments to MCL 559.167, which became effective on September 21, 2016, created a new “reversion” process to eliminate “need not be built” units after the expiration of the six (6) year or ten (10) year statutory time periods. Newly created MCL 559.167(4) now requires 2/3 of the co-owners that are in good standing to vote to approve a “reversion” of “need not be built” units to common elements by adopting a declaration that will be recorded in the register of deeds after the expiration of the statutory time periods. If 2/3 co-owner approval is obtained, the condominium association must then send the declaration to a developer or successor developer at its last known address.  The developer or successor developer may withdraw the land on which the units were to be located or amend the master deed to make the units “must be built” within the sixty (60) day time period.   If the developer or successor developer fails to withdraw the land or amend the master deed within sixty (60) days, the condominium association may record the declaration, which becomes effective upon recording and the right to construct the “need not be built” units will be eliminated.

Cove Creek Condominium Association v Vistal Land & Home Development, L.L.C., et al.

One of the most important questions surrounding the 2016 amendment to MCL 559.167 was whether 2016 PA 233 would be applied retroactively or only prospectively. Specifically, newly created MCL 559.167(5) states, “A reversion under subsection (4), whether occurring before or after the date of the 2016 amendatory act that added this subsection, is not effective unless the election, notice, and recording requirements of subsection (4) have been met.” In Cove Creek Condominium Association v Vistal Land & Home Development, L.L.C., et al., Oakland County Circuit Court Case No. 16-155706-CH (Order Granting Summary Disposition, Dated February 10, 2017) the court held that MCL 559.167, as amended by 2016 PA 233, did not retroactively recreate “need not be built” units that had previously been eliminated from the Cove Creek Condominium (the “Condominium”). The court held that the co-owners’ vested ownership interest in the common elements that was acquired under MCL 559.167, as amended by 2002 PA 283, remained intact.

Facts

The Condominium was established by the recording of the Master Deed in the Oakland County Register of Deeds on April 21, 1989. Lifestyle Homes, a co-partnership, was the developer of the Condominium, which was originally to be composed of 31 units.  On May 11, 1989 Lifestyle Homes recorded the First Amended to the Master Deed indicating that Cove Creek Limited Partnership (“Cove Creek, LP”) was now the developer. On May 17, 1989, Lifestyle executed a deed transferring all of its interest in the Condominium to Cove Creek, LP.  Units 1-14 have never been constructed and were identified as “need not be built” on the condominium subdivision plan.  Units 15-31 were constructed and sold to non-developer co-owners.  Construction of the condominium commenced prior to October 27, 1989, as this was the date that the first constructed unit was conveyed to a non-developer co-owner.

On September 15, 2004, Cove Creek, LP executed a deed attempting to convey units 1-14 to Vistal Cothery, LLC. On November 6, 2006, Vistal Cothery, LLC attempted to deed units 1-14 to Vistal Land & Home Development, LLC (“VLHD, LLC”).  On October 31, 2016, VLDH, LLC attempted to deed units 1-14 to the America and Maria Cervi Living Trust (the “Trust”).  On November 3, 2016, the Trust advised the Cove Creek Condominium Association that it had withdrawn “need not be built” units 1-14 from the Condominium pursuant to MCL 559.167, as amended by 2016 PA 233.

Interpretation of the Plain Language of MCL 559.167

The defendants argued that MCL 559.167, as amended by 2016 PA 233, repealed and replaced all prior versions of MCL 559.167 on September 21, 2016.  The Court held that defendants’ argument failed for several reasons.  First, the court held that MCL 559.167, as amended by 2002 PA 283, eliminated any rights to construct units 1-14.  The court held that the time period to construct or withdraw units 1-14 ended no later than October 27, 1999.  The court held that even if the ten (10) year period did not begin to run until 2002, when 2002 PA 283 was enacted, that the time period to construct units 1-14 expired no later 2012.  Accordingly, the court held that the enactment of 2016 PA 233 did not change the fact that the right to construct units 1-14 ceased to exist no later than 2012.

The court also held that the plain language of MCL 559.167, as amended by 2016 PA 233, evidenced the legislature’s intent that 2016 PA 233 is not retroactive.  The court recognized that the term “reversion” was not contained in any prior version of MCL 559.167, and that a “reversion”, i.e. the 2/3 co-owner vote and recording of a declaration, could not have occurred prior to September 21, 2016, the date that 2016 PA 233 became effective.  Rather, the court acknowledged that the co-owners acquired vested rights under MCL 559.167(3), as amended by 2002 PA 283, no later than 2012.  Given that the co-owners acquired their rights under 2002 PA 283, newly created MCL 559.167(5) was inapplicable as it only applied to “A reversion under subsection (4)”.

The court also held that even if a “reversion” could have occurred prior to September 21, 2016, the plain language of MCL 559.167(5) indicates that it would not undo a completed “reversion”.  The court held that defendants’ interpretation attempted to substitute the word “occurred”, which is a past participle, for the word “occurring”, which is a present participle, in MCL 559.167(5).  The court held that the use of the word “occurring”, a present participle, meant that 2016 PA 233 only applied to condominiums in which the statutory time periods were running, but had not yet been completed.  However, if the 6 or 10 year statutory time periods had already expired, any “reversion” would have already occurred, i.e. been completed, and 2016 PA 233 would not apply.

Constitutionality of retroactive application of MCL 559.167, as amended by 2016 PA 233

The court also ruled that defendants’ interpretation of MCL 559.167, as amended by 2016 PA 233, would render MCL 559.167 unconstitutional and that Michigan courts have an obligation to interpret a statute to be constitutional if possible.  Specifically, the court relied on Gorte v Dept of Transp, 202 Mich App 161, 164; 507 NW2d 797, 799 (1993). In Gorte, the plaintiff filed a complaint for adverse possession against the state on March 3, 1988 claiming that he held title to land via adverse possession from the state. Id. at 164.  MCL 600.5821 was amended to preclude adverse possession claims against the state and became effective on March 1, 1988, prior to the filing of the lawsuit. Id.  The trial court held that since 1966, plaintiff and his predecessors had adversely possessed the disputed acreage and that the amendment to MCL 600.5821 did not bar plaintiff’s adverse possession claim because he had a vested property right before March 1, 1988. Id.  In affirming the trial court, the Court of Appeals held:

…a statute may not be applied retroactively if it abrogates or impairs vested rights. In re Certified Questions, 416 Mich. 558, 572, 331 N.W.2d 456 (1982)…where a period of limitation has expired, the rights afforded by that statute are vested and the action in question is barred. Russo, supra, 439 Mich. at 594–595, 487 N.W.2d 698. Thus, § 5821, as amended, cannot be applied to plaintiffs if it would abrogate or impair a vested right.

Defendant argues that, in amending § 5821, the Legislature intended to void not only causes of action accruing after the effective date of the statute, but also causes of action for adverse possession against the state that could have been asserted before March 1, 1988, but were not….We are constrained, however, to follow the rules of statutory construction that dictate that a statute of limitations may not be applied retroactively to take away vested rights. We therefore interpret § 5821, as amended, to preclude the running of the period of limitation against the state for purposes of adverse possession after the effective date of the statute. We further interpret § 5821 as inapplicable where applying the statute would abrogate or impair vested rights.

Because the statute cannot be applied if it would abrogate or impair a vested right, it is necessary to determine when a claim of title to property by adverse possession vests. Generally, the expiration of a period of limitation vests the rights of the claimant. Russo, supra….Defendant argues the contrary view, that plaintiffs’ possession of the property merely gave plaintiffs the ability, before the amendment of § 5821, to raise the expiration of the period of limitation as a defense to defendant’s assertion of title. Contrary to defendant’s arguments, however, Michigan courts have followed the general rule that the expiration of the period of limitation terminates the title of those who slept on their rights and vests title in the party claiming adverse possession….Thus, assuming all other elements have been established, one gains title by adverse possession when the period of limitation expires, not when an action regarding the title to the property is brought.

Id. at 167-169 (emphasis added).

The court held that similar to the adverse possession statute, Gorte makes clear that the vested rights of the co-owners cannot be constitutionally abrogated under MCL 559.167, as amended by 2016 PA 233.

MCL 559.167, as amended by 2002 PA 283, eliminates “need not be built” units by operation of law

Finally, the court rejected the defendants’ argument that some form of recording or a replat is required to eliminate the right to construct units under MCL 557.167, as amended by 2002 PA 283. The court relied on the plain language of the statute as well as the statute of frauds, MCL 566.106.  Specifically, the court held that the right to construct “need not be built” units is eliminated by operation of law and that a property interest created by operation of law is not subject to the statute of frauds.  As such, the court granted summary disposition in favor of the Cove Creek Condominium Association and held that the “need not be built” units ceased to exist and that the defendants could not withdraw the undeveloped land from the condominium in 2016.

Conclusion

            While Cove Creek Condominium Association v Vistal Land & Home Development, L.L.C., et al., Oakland County Circuit Court Case No. 16-155706-CH (Order Granting Summary Disposition, Dated February 10, 2017) is only a circuit court opinion, it certainly provides a significant amount of guidance in interpreting MCL 559.167.  Until there is a published court of appeals opinion that interprets MCL 559.167, attorneys, co-owners, condominium associations, developers, successor developers and title companies should be aware of the following takeaways from the Cove Creek case:

  1. MCL 559.167, as amended by 2002 PA 283, applies to ALL condominiums that existed at the time the statute was enacted, not just condominiums that were created on or after the effective date of 2002 PA 283.
  2. “Need not be built” condominium units are automatically eliminated by operation of law under MCL 559.167, as amended by 2002 PA 283, and a replat or recording of any additional documents is not necessary.
  3. Vested rights in the common elements acquired by the co-owners under MCL 559.167, as amended by 2002 PA 283, cannot constitutionally be eliminated by 2016 PA 233.
  4. The co-owner voting “reversion” process, and the additional 60 day time period for a developer to withdraw “need not be built” units that was created by 2016 PA 233 only applies to condominiums in which the six (6) or ten (10) year statutory periods had not expired prior to September 21, 2016 or to condominiums created after September 21, 2016.

Kevin Hirzel is a Partner in our Livonia and Clinton Township offices and leads the Community Association Practice Group. He frequently represents Builders, Community Associations, Condominium Associations, Cooperatives, Co-Owners, Developers, Homeowner Associations, Investors, Property Owners and Property Managers throughout the State of Michigan. Mr. Hirzel can be contacted at (734) 261-2400 or khirzel@cmda-law.com. Please view The Michigan Community Association Law Blog at http://micondolaw.com for additional resources on Michigan Community Association Law.

Acho Appears on Radio Shows to Discuss NLRB Ruling Against NCAA

Jim Acho 2016Jim Acho, a partner in our Livonia office, appeared on several radio shows today after a crucial ruling against the NCAA was handed down by the National Labor Relations Board (NLRB) over the weekend. Of local interest, Jim was a guest on WJR’s popular Frank Beckmann Show, a show on which Jim has appeared more than a dozen times the past 15 years.

To listen to Jim’s interview, click here.

Grant Obtains a No Cause of Action Verdict in Federal Court

Greg Grant 2013colorGreg Grant of the Traverse City office recently obtained a no cause of action verdict in an excessive force trial in federal court.  Mr. Grant represented four corrections officers whom the plaintiff alleged used excessive force against him while he was inmate in a Michigan county jail.  Specifically, the plaintiff claimed that he was maced twice and tasered twice while locked in his cell.

The evidence at trial demonstrated that the plaintiff failed to follow verbal commands and was assaultive toward one of the officers.  The key to winning at trial was proving that the officers acted in accordance with jail policies and practices to preserve internal order and discipline, and to maintain institutional security.

Greg Grant, an attorney in our Traverse City office, focuses his practice on municipal law, employment and labor law, maritime law, insurance defense, and litigation.  He may be reached at (231) 922-1888 or ggrant@cmda-law.com.

Cross Obtains Favorable Arbitration Award for Concert Promoter

 After a prolonged dispute, Matt Cross obtained an arbitration award for a valued client, a Detroit-based concert promoter.  The promoter paid the producer of the show a $40,000 deposit in five installments to perform its show in Detroit last year.  The producer pulled out last minute and refused to return the promoter’s deposit, citing the promoter’s failure to timely pay two of the five scheduled payments.  Mr. Cross convinced the arbitrator that the producer waived any breach on the part of the promoter and the arbitrator returned an award in favor of the promoter for the full deposit amount plus attorney’s fees and costs. 

Matt Cross is an attorney in our Traverse City office where he focuses his practice on business law, insurance defense, law enforcement defense and litigation, and municipal law. He may be reached at (231) 922-1888 or mcross@cmda-law.com.

Acho Attends Ohio State Legends Dinner for UM-OSU Week

jim-acho-osu-1Jim Acho, a partner in our Livonia office represents more than former Detroit Lions and ex-UM players. In fact, he represents more ex-Ohio State players than any other school and has handled matters for six former OSU All-Americans, ranging from contracts, employment agreements, to litigation.

Tom Skladany, 3 time All American at OSU (1974-76) and a former President of the NFL Alumni Association as well as Ohio State Football Alumni Association, invited Jim as his guest for the John Hicks Unlimited Love/Unverferth House dinner which is held annually in Columbus the week of UM-Ohio State game, and jim-acho-osu-2raises funds for cancer research through the Ohio State Medical School.

For three hours every year, Jim admittedly hates Ohio State, but the other 364 days and 21 hours, he has a great fondness for both OSU and the great legends he has represented and continues to represent. CMDA and Jim both enjoy and appreciate the relationship with Tom Skladany and look forward to many more years representing former Ohio State players and coaches.  

The Unverferth House, the umbrella for which the John Hicks Unlimited Love dinner is held, is a noble charity named for two great men of deep character and is a worthy cause. For more information, please visit: http://unverferthhouse.org/ 

Jim Acho focuses his practice on sports and entertainment law, labor and employment law, law enforcement defense, and plaintiff’s personal injury.  He may be reached at (734) 261-2400 or jacho@cmda-law.com.