STATE OF MICHIGAN

IN THE COURT OF APPEALS

CITY OF DETROIT, COA Docket No. 348708

Plaintiff/Appellee,
Wayne Circuit Court No. 17-012432-CH
v. Hon. Robert J. Colombo, Jr. (P25806)

ADAMS REALTY SERVICES, LLC, and

WEST DAKOTA HOMES, LLC, and
MILRE HOMES, LLC, and
ADAMITIS HOMES, LLC, and
HILDALE HOMES, LLC, Jointly & Severally,

Defendants/Appellants.

_____________________________________________________________________________/

ROOSEN, VARCHETTI & OLIVIER, PLLC LAW OFFICES OF AARON D. COX PLLC
Richard G. Roosen (P35222) Aaron Cox (P69346)
James Varchetti (P79606) Josie Lewis (P69317)
Attorneys for Plaintiff/Appellee Attorneys for Defendants/Appellants
P.O. Box 2305 23380 Goddard Rd
Mount Clemens, MI 48046 Taylor, MI 48180
(586) 868-2737 734/287-3664
(586) 868-0259 (Fax) 734/287-1277 (Fax)

_____________________________________________________________________________/

PLAINTIFF/APPELLEE’S ANSWER TO DEFENDANTS/APPELLANTS’

DELAYED APPLICATION FOR LEAVE TO APPEAL

ORAL ARGUMENT NOT REQUESTED 1

1
Defendants/Appellants requested oral argument on the cover of their Application for Leave to
Appeal. Oral argument is not permitted on applications for leave to appeal. MCR 7.205(E)(1).
 TABLE OF CONTENTS

TABLE OF CONTENTS ………………………………………………………………………...i

INDEX OF AUTHORITIES ..........................................................................................................ii

STATEMENT OF APPELLATE JURISDICTION ......................................................................iii

COUNTERSTATEMENT OF THE QUESTION PRESENTED .................................................iv

COUNTERSTATEMENT OF FACTS...........................................................................................1

ARGUMENT

I. This Court should not grant leave to appeal because of the length and reason for
defendants’ delayed application for leave to appeal: defendants’ own non-excusable
neglect in properly securing an appeal of right. In any event, the trial court did not
err when it determined that it had jurisdiction. …………………………………….....3

A. Preservation of the Issue and Standard of Review…………………………………......3

B. The Court should deny leave to appeal because of the length and reason of
Defendants’ delay: Defendants’ own non-excusable neglect in timely and properly
pursuing an appeal of right.….……………………………………………………………3

C. The trial court did not err when it determined that it had jurisdiction over the
defendants because the amount in controversy satisfied the circuit court’s jurisdictional
threshold.………………………………………………………………………………….6

CONCLUSION AND REQUEST FOR RELIEF..........................................................................10

i
 INDEX OF AUTHORITIES
CASELAW

Boyd v Nelson Credit Centers, Inc, 132 Mich App 774, 780-781; 348 NW2d 25 (1984) . . . . . . . 8

Clohset v No Name Corp, 302 Mich App 550; 840 NW2d 375 (2013). . . . . . . . . . . . . . . . . . . . . .6

Hines v Volkswagen of America, Inc, 265 Mich App 432; 695 NW2d 84 (2005) . . . . . . . . . . . . . 3

Hodge v State Farm Mut Auto Ins Co, 499 Mich 211; 884 NW2d 238 (2016) . . . . . . . . . . . . .6, 9

Kar v Nanda, 291 Mich App 284; 805 NW2d 609 (2011) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Luscombe v Shedd’s Food Products Corp, 212 Mich App 537; 539 NW2d 210 (1995) ………...6

Zimmerman v Miller, 206 Mich 599; 173 NW 364 (1919) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9

STATUTES

MCL 211.3 ………………………………………………………………………….…………….7

MCL 211.47(4) ……………………………………………………………………………….. 8, 9

MCL 600.605 ……………………………………………………………………………………..6

MCL 600.8301(1) ……………………………………………………………………...…………6

COURT RULES

MCR 2.206 ……………………………………………………………………………………9, 10

MCR 2.205 ……………………………………………………………………………...……… 10

MCR 2.227 ……………………………………………………………………………………....10

MCR 7.205(G)……………………………………………………………………….…………3, 5

MCR 7.205(G)(1) ……………………………………………………………………..……….3, 6

MCR 7.216(A)(2) ……………………………………………………………………….………..5

ii
 STATEMENT OF APPELLATE JURISDICTION

The Court of Appeals has jurisdiction to entertain an application for leave to appeal under

MCR 7.203(B)(5) for any judgment or order when an appeal of right was available but was not

timely filed. This situation encompasses the present application for leave to appeal, which is

filed pursuant to MCR 7.205(G) (Late Appeal).

iii
 COUNTER-STATEMENT OF THE QUESTION INVOLVED

I. Did the trial court err when it determined that it had jurisdiction over the
defendants now seeking leave to appeal?

Trial court answered: no

Appellant answers: yes
Appellee answers: no

iv
 COUNTERSTATEMENT OF FACTS

On August 1, 2017, Plaintiff, the City of Detroit, filed a complaint in the Wayne County

Circuit Court against Adams Realty Services, LLC, seeking to recover $50,725.53 in unpaid

property taxes on multiple properties located within the City of Detroit. See generally

Complaint, 08/01/17. Plaintiff later filed its First Amended Complaint, which included

additional defendants, Sharon Adams, William Adams, and West Dakota Homes, LLC, jointly

and severally. First Amended Complaint, 12/13/17, p 1. Later, when plaintiff identified

additional parties associated with the properties at issue, it filed its Second Amended Complaint,

which listed as defendants Adams Realty Services, LLC, West Dakota Homes, LLC, Milre

Homes, LLC, Adamitis Homes, LLC, and Hildale Homes, LLC, jointly and severally. 2 Second

Amended Complaint, 04/25/18, p 1, attached hereto as Exhibit 1.3 The Second Amended

Complaint requested relief, in pertinent part, as follows:

That this Court enter an order of judgment in favor of Plaintiff for the tax years an
amount identified in paragraph 14 of this complaint ($50,725.53) with interest,
penalty and administrative fees to accrue as allowed under the State of Michigan
Statutes and City of Detroit Charter provisions as attributable to each owner for
the following amounts:

Adams Realty Services, LLC, $50,725.53 entire amount as prayed for in

Plaintiff’s Complaint
West Dakota Homes LLC $18,736.77
Milre Homes, LLC $7,673.92
Adamitis Homes, LLC $17,509.24
Hildale Homes, LLC $5,703.44
[Second Amended Complaint, 4/25/18, pp 4-5, ¶ a.]

2
The words jointly and severally are contained in the caption of the Second Amended
Complaint. Additionally, Plaintiff’s Complaint, First Amended Complaint, and Second Amended
Complaint are attached as Exhibits F, G, and H to the Defendants/Appellants’ Application for
Leave to Appeal.
3
Notably, in the Second Amended Complaint, plaintiff no longer included Sharon and William
Adams as defendants, though plaintiff neglected to dismiss them from the suit at that point.
1
 Pertinent to this application for leave to appeal, on or about December 13, 2018, Plaintiff

filed a motion for summary disposition under MCR 2.116(C)(4), (7), (9), and (10) asserting that

defendants were liable for unpaid taxes on the property and that summary disposition was

warranted (Plaintiff’s MSD, 12/3/18).

In turn, defendants filed a response to plaintiff’s motion and a counter-motion for

summary disposition alleging that the Circuit Court lacked subject-matter jurisdiction because

the Second Amended Complaint individually requested damages against West Dakota Homes,

Milre Homes, Adamitis Homes, and Hildale Homes (henceforward “the defendants/appellants”)

that were each less than $25,000.00 (Defendant’s MSD, 12/13/18, ¶¶ 3, 4). The motion further

asserted that plaintiff failed to state a claim with respect to defendants Adams Realty Services,

LLC, William Adams, and Sharon Adams, because those parties did not own the properties at

issue. Id. at ¶ 5.

At the motion hearing the Court rejected the contention that it lacked jurisdiction because

the complaint alleged joint and several liability and the amount in controversy exceeded the

circuit court’s jurisdictional threshold. (Motion Transcript, 12/21/18, p 16).4 The circuit court

held that Adams Realty Services, LLC, William Adams, and Sharon Adams were not liable

because they did not own the properties at issue. Id. at 12, 19. But the Court held that the

remaining corporate defendants (i.e. the instant defendants/appellants) were liable, and the Court

rejected their various other arguments.5 Id. at 19. The Court entered an order on January 3, 2019

that granted Plaintiff’s motion for summary disposition in part and granted Defendant’s counter

4
The transcript of the motion hearing is attached as Exhibit L to the Defendants/Appellants’
Application for Leave to Appeal.
5
The defendant’s response and counter motion for summary disposition raised several other
issues that are not pertinent to the issue that is the crux of the instant application for leave to
appeal. Consequently, those miscellaneous issues are not addressed or discussed in this brief.

2
motion for summary disposition in part (Order, 1/3/19). The order held the instant

defendants/appellants liable in the amounts listed on Plaintiff’s Second Amended Complaint. Id.

Thereafter, counsel for defendants filed a claim of appeal by right, which was later

dismissed for lack of jurisdiction as will be discussed in further detail infra. When that effort to

obtain appellate review failed, defendants/appellants filed a late application for leave to appeal,

and this Answer from Plaintiff followed.

ARGUMENT

I. This Court should not grant leave to appeal because of the length and reason for
defendants’ delayed application for leave to appeal: defendants’ own non-excusable neglect
in properly securing an appeal of right. In any event, the trial court did not err when it
determined that it had jurisdiction.

A. Preservation of Issue & Standard of Review

Generally, an issue must be raised, addressed, and decided by the trial court to be

preserved for appellate review. Hines v Volkswagen of America, Inc, 265 Mich App 432, 443;

695 NW2d 84 (2005). The issue of jurisdiction was raised and addressed below (See Motion

Transcript, 12/21/18, p 16), so the issue would be preserved if the Court exercised its

discretionary authority to grant leave to appeal.

Whether the trial court had subject-matter jurisdiction is question of law reviewed de

novo. Kar v Nanda, 291 Mich App 284, 286; 805 NW2d 609 (2011).

B. The Court should deny delayed leave to appeal because of the length and
reason of the delay: defendants’ own non-excusable neglect in timely and
properly pursuing an appeal of right in accordance with the court rules.

The Court should deny the delayed leave to appeal because defendants/appellants failed

to properly pursue the appeal of right that was available to them.

3
 Defendants’ late Application for Leave to Appeal is necessarily being brought pursuant to

MCR 7.205(G) (Late Appeal) because a previous appeal of right was dismissed for lack of

jurisdiction and defendants/appellants’ instant application for leave was not timely filed. Under

MCR 7.205(G)(1), “The answer may challenge the claimed reasons for delay” and “[t]he court

may consider the length of and reason for the delay in deciding whether to grant the application.”

In this instance, the length and reason for the delay weigh decidedly against this Court exercising

its discretionary power to grant the late application for leave to appeal.

Indeed, the reason for defendants/appellants’ late application for leave is their own non-

excusable neglect in timely and properly pursuing an appeal of right in conformance with the

court rules. When claiming an appeal of right, counsel for the defendants filed a claim of appeal

stating that Adams Realty Services, LLC, was claiming an appeal from the underlying judgment.

See Exhibit 2. This Court observed that Adams Realty Services was not an aggrieved party and

sent counsel a defect correction letter asking counsel to explain how Adams Realty Services was

aggrieved when the underlying order stated that it was not liable to plaintiff. See Exhibit 3. The

defect correction letter provided 21 days to correct defects and ensure conformity with the court

rules. Id. The law firm representing Adams Realty Services responded with a letter stating that

it represented all defendants in the case and that defendants other than Adams Realty Services

were the appellants and were appealing the portion of the judgment that pertained to them. See

Exhibit 4. Yet, counsel for defendants neglected to timely move to amend the claim of appeal or

to file a new claim of appeal that properly named the four aggrieved parties as appellants.

Accordingly, the claim of appeal remained fatally defective 21 days after this Court

issued its defect correction letter. This Court properly dismissed the claim of appeal for lack of

jurisdiction because the appeal was not pursued by an aggrieved party. See Exhibit 5, City of

4
Detroit v Adams Realty Servs, LLC, unpublished order of the Court of Appeals, entered February

12, 2019 (Docket No. 347321).

Thereafter, counsel for defendants filed a Motion to Reinstate the Appeal, and later, filed

a combination Motion for Reconsideration and Motion for Relief pursuant to MCR 7.216(A)(2).

The crux of these motions was a request that the Court reinstate the appeal because of excusable

neglect and then exercise its discretionary powers under MCR 7.216(A)(2) to amend the claim of

appeal by adding the aggrieved parties that defendants’ counsel previously neglected to add.6

Plaintiff answered both of defendants’ motions asserting that counsel’s initial failure to

name an aggrieved party on the claim of appeal may have been due to excusable neglect. But

plaintiff argued that it was not excusable neglect when defendants’ counsel failed to move to

amend the claim of appeal or to file a new, timely claim of appeal in the name of the aggrieved

parties. This Court apparently agreed with plaintiff’s position and denied the motion to reinstate

the appeal, denied the motion for reconsideration, and denied the motion for relief pursuant to

MCR 7.216(A)(2). See Exhibit 6, City of Detroit v Adams Realty Servs, LLC, unpublished order

of the Court of Appeals, entered April 2, 2019 (Docket No. 347321).7 Thus, the appeal remained

dismissed. Four weeks after entry of the order denying the three motions, defendants/appellants

filed the instant late application for leave to appeal under MCR 7.205(G).

This Court should deny leave to appeal because defendants/appellants waited several

weeks to file this application after their motions for reinstatement and reconsideration were

denied, not to mention that several months have elapsed since the circuit court’s January 4, 2019

order that defendants/appellants are seeking leave to appeal. Further, as explained above, the

6
These motions—and plaintiff’s answers thereto—are presumably available internally to the
Court of Appeals; the COA docket number of the pertinent matter is 347321.
7
The order was originally entered on March 20, but it was apparently re-issued on April 2, 2019
because the original mailing of the order to defendants’ counsel was apparently returned.

5
reason for the late application is the defendants/appellants’ own non-excusable neglect8 in timely

and properly pursuing the available appeal of right in conformance with the court rules. These

are appropriate factors for this Court to consider when deciding whether to grant leave, MCR

7.205(G)(1), and these considerations preponderate heavily against granting leave in this

instance.

C. The trial court did not err when it determined that it had jurisdiction over
the defendants because the amount in controversy satisfied the circuit court’s
jurisdictional threshold.

In any event, this Court should deny the delayed application for leave to appeal because

the circuit court correctly determined that it had subject-matter jurisdiction over this case.

Circuit courts have original jurisdiction over all civil claims unless exclusive jurisdiction

is given by law to another court. MCL 600.605. In turn, district courts have exclusive

jurisdiction over civil actions when the amount in controversy does not exceed $25,000.00.

MCL 600.8301(1). Thus, the circuit court has jurisdiction if the amount in controversy exceeds

$25,000.00. Courts determine the amount in controversy by examining the prayer for relief set

forth in the plaintiff’s pleadings. Hodge v State Farm Mut Auto Ins Co, 499 Mich 211, 223-224;

884 NW2d 238 (2016). A court’s “subject-matter jurisdiction is established by the pleadings and

exists when the proceeding is of a class the court is authorized to adjudicate and the claim stated

in the complaint is not clearly frivolous.” Clohset v No Name Corp, 302 Mich App 550, 561; 840

NW2d 375 (2013) (internal quotations and citations omitted); see also Luscombe v Shedd’s Food

Products Corp, 212 Mich App 537, 541; 539 NW2d 210 (1995) (Stating that a court’s subject-

matter jurisdiction is determined by reference to the allegations).

8
Again, this Court presumably agreed that the neglect was not excusable otherwise it would
have granted the motion to reinstate the appeal.

6
 In this case, the four defendants/appellants requesting delayed leave to appeal make much

of the fact that the Second Amended Complaint listed damage amounts that are less than the

$25,000.00 jurisdictional threshold with respect to each of them individually. Thus,

defendants/appellants believe that the circuit lacked jurisdiction. But this argument ignores

plaintiff’s theory of the case.

In the instant case, plaintiff’s theory was that defendant Adams Realty Services, LLC,

operated or otherwise controlled or managed the properties subject to taxation as a property

manager or administrator for the other four corporate defendants/appellants that now seek leave

to appeal: West Dakota Homes, LLC, Milre Homes, LLC, Adamitis Homes, LLC, and Hildale

Homes, LLC. Plaintiff issued notices of tax assessments to defendant Adams Realty Services,

and it was proper for Plaintiff to do so under MCL 211.3, which states in pertinent part:

Real property shall be assessed in the township or place where situated, to the
owner if known, and also to the occupant, if any; if the owner be not known, and
there be an occupant, then to such occupant, and either or both shall be liable for
the taxes on said property, and if there be no owner or occupant known, then as
unknown. A trustee, guardian, executor, administrator, assignee or agent, having
control or possession of real property, may be treated as the owner. [MCL 211.3
(emphasis added).]
As such, plaintiff properly issued the assessments to Adams Realty Services—the property

administrator/manager believed to have control or possession of the properties—and the tax

liability for the properties exceeded $25,000.00, which satisfies the jurisdictional threshold of the

circuit court. Indeed, the Second Amended Complaint alleged that Adams Realty Services was

liable in the amount of $50,725.53, which is well above the circuit court’s $25,000.00

jurisdictional threshold. Second Amended Complaint, 4/25/18, pp 4-5, ¶ a. Thus, the amount in

controversy always satisfied the circuit court’s jurisdictional limit.

7
 Further, as reflected in the caption of plaintiff’s Second Amended Complaint, plaintiff

alleged joint & several liability existed. Second Amended Complaint, 4/25/18, p 1. Adams

Realty Services was liable as the administrator/manager/controller of the properties, and each of

the remaining four corporate defendants/appellants were liable for taxes on the individual

properties they owned but that were controlled or managed by Adams Realty Services. See

Second Amended Complaint, 4/25/18, ¶¶ 6, 8. Stated another way, joint and several liability

existed between Adams Realty Services as the property manager/administrator of the subject

properties and each of the remaining corporate defendants/appellants to the extent that they were

the actual owners of the properties.9 Thus, plaintiff was not improperly attempting to aggregate

claims to reach the jurisdictional threshold as defendants/appellants claim; the threshold was

already satisfied by the claim against Adams Realty Services.10 The fact that each remaining

defendant/appellant was jointly and severally liable with Adams Realty Services in an amount

less than $25,000.00 simply does not defeat the circuit court’s jurisdiction. And the fact that the

court ultimately determined that Adams Realty Services was not liable also did not divest the

9
To be clear, plaintiff was not alleging that joint and several liability existed among the four
defendants/appellants themselves. Joint and several liability existed between Adams Realty
Services and the individual corporate defendants/appellants to the extent that they were liable for
the same unpaid taxes based upon their ownership of the properties that Adams Realty Services
was managing on their behalf. By way of example, if property commonly known as 20207
Coventry was owned by West Dakota Homes LLC but administrated/managed by Adams Realty
Services, both entities could be liable for unpaid taxes on that property. See MCL 211.3.
10
Defendants/appellants cite Boyd v Nelson Credit Centers, Inc, 132 Mich App 774, 780-781;
348 NW2d 25 (1984) for the proposition that claims from multiple plaintiffs cannot be
aggregated to reach the circuit court’s jurisdictional threshold. This is an accurate statement of
the law, but Boyd is not on-point or is otherwise distinguishable for two reasons. First, there is
only one plaintiff, the City of Detroit, and Boyd noted that claims of a single plaintiff may be
aggregated. Id. at 781. Second, the instant case is distinguishable because the circuit court’s
subject-matter jurisdiction was already satisfied with the claim against Adams Realty Services
for an amount more than $50,000.00. The fact that the defendants/appellants were jointly and
severally liable with Adams Realty Services for amounts less than $25,000.00 does not divest the
circuit court of subject-matter jurisdiction.

8
court of jurisdiction. See Zimmerman v Miller, 206 Mich 599, 604-605, 173 NW 364 (1919)

(stating that the jurisdiction of the court is determined by the amount in the plaintiff’s pleadings,

not by the amount ultimately recovered).

The defendants/appellants point out that under MCL 211.47(4), a person cannot be liable

for unpaid property taxes unless the person owned the real property for the year in which the tax

was levied. At first blush, this statutory subsection seems to defeat plaintiff’s claim against

Adams Realty Services because that defendant allegedly managed, but did not own, the

properties at issue. But MCL 211.47(4) was an amendment to the General Property Tax Act that

was enacted in November of 2017,11 which is after plaintiff filed suit in August of 2017. The

application and operation of this new amendment was an unsettled question of law. And to the

extent that this amendment operated to defeat plaintiff’s claims against Adams Realty Services, it

did not divest the circuit court of subject-matter jurisdiction because that is determined based

upon the complaint, not the amount recovered. Hodge, 499 Mich at 223-224; see also

Zimmerman, 206 Mich at 604-605. Stated another way, MCL 211.47(4) merely provided Adams

Realty Services with a new defense, but it did not divest the circuit court of jurisdiction.

Further, joinder of the corporate defendants other than Adams Realty Services (i.e. the

instant defendants/appellants) was proper under MCR 2.206 even if the amounts they were

individually alleged to owe did not exceed $25,000.00. Again, plaintiff’s theory was that

defendants/appellants were jointly and severally liable with Adams Realty Services to the extent

the tax liability was for properties owned by defendants/appellants but managed/controlled by

Adams Realty Services. And Adams Realty Services was alleged to be liable in an amount well

over $25,000.00, which clearly satisfied the circuit court’s jurisdictional threshold. The question

11
2017 PA 189 amended MCL 211.47 by adding the language contained in MCL 211.47(4).

9
of liability for unpaid taxes on the properties at issue was a common question of law amongst

Adams Realty Services and the instant defendants/appellants. And upon plaintiff’s information

and belief, Adams Realty Services and the instant defendants/appellants—while all separate

corporate entities—shared common ownership, common legal counsel, and were reasonably

expected to present similar defenses such that their presence together in one action greatly

promoted the efficient administration of justice and preserved judicial economy. Thus, their

joinder and presence in one case was proper under MCR 2.206(A)(2)(b) or MCR 2.205(A), and

the circuit court properly determined that it had subject matter jurisdiction because the amount in

controversy satisfied the circuit court’s jurisdictional threshold.12

CONCLUSION AND REQUEST FOR RELIEF

WHEREFORE, for the foregoing reasons, plaintiff requests that this Court DENY the

delayed application for leave to appeal because of the length and reason for the delay, MCR

7.205(G)(1), and for lack of merit in the grounds presented.

Respectfully Submitted,

/s/ James Varchetti______________________

ROOSEN, VARCHETTI & OLIVIER, PLLC
Richard G. Roosen (P35222)
James Varchetti (P79606)
Attorneys for Plaintiff
P.O. Box 2305
Date: 5/16/19 Mt. Clemens, MI 48046
OFN: 184660 (586) 868-2737

12
In any event, even if the circuit court lacked jurisdiction—and it did not lack jurisdiction for
the reasons stated in this brief—the circuit court need not dismiss the case. A court that
determines that it lacks subject-matter jurisdiction may transfer the case to a court that would
have subject-matter jurisdiction. MCR 2.227.

10