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In Rocheleau v. Elder Living Construction, LLC, the plaintiff sought to hold the defendants accountable for disseminating a screening report that cost him his job. The Plaintiff had applied for a job; his screening report from First Advantage disclosed prior criminal convictions, which were then disclosed to his current employer and he was fired. He argued that the dissemination of the report violated his rights under the Fair Credit Reporting Act. The Court held that since he did not file his lawsuit within two years of learning of the disclosure, his claim was time-barred.
United States constitutional law clearly authorizes a citizen to walk away from law enforcement if there is no grounds to arrest the individual. Jay Bradley Morris was charged with violation of a Michigan statute prohibiting certain activities, after he was arrested at a gas station. Bradley had a history of mental illness, was intoxicated, and had not been keeping up with his prescribed medications. When police were allegedly told of a "potentially suicidal, armed" man at a gas station, they responded with guns drawn. When the officers realized that Bradley apparently had no weapon, they seized his arms to search his clothing. He "broke their grip" and did not voluntarily "go to the ground." They took him down. The officers also alleged that he failed to put his arms in position to be handcuffed, so they were forced to "tousle" him into cuffs.
Morris's attorneys argued that his non-compliance did not rise to the level of an actionable felony, and that the Michigan statute under which he was charged is so over-broad that it is unconstitutional. The man's attorneys argued that the statutory language making it a felony to "knowing[ly] fail...to comply with a lawful command..." was constitutionally overly broad and not enforceable. The Court of Appeals judges, Murray, Boonstra and Kirsten Kelly, three of the Court's most conservative members, held that since Morris "refused to comply" with commands, "quite probably was uncooperative," since he "tightened his body" rather than cooperating, and "pulled his arm away" from them, he had, therefore, committed a felony by "some level of physical struggling."
Pansy Reid was hurt in a car accident. She was driving a car owned by her son-in-law, with whom she lived. He had insured the car with an insurer that was now defunct, and whose contracts had been taken over by Michigan Property & Casualty Company two years earlier. The insurer argued that Reid's son-in-law's failure to list her as a potential resident driver on the original application was a material misrepresentation that would allow it to void the coverage that he had purchased. The trial judge agreed and granted summary disposition.
The Court of Appeals reversed and reinstated the case, noting that dismissal was premature. The appellate judges pointed out that the insurer had not demonstrated that the alleged miscommunication was of such a nature that it substantially increased the risk of loss, bringing about a probability that the insurer would not have accepted the risk--or would have increased the premium. The "materiality" of the omitted information remained a question of fact under the proofs presented to-date.
When John Kosinski fell and fractured his ankle on his way to his car in the morning, he attempted to pursue a claim against his landlord and the snow removal contractor for negligence. He argued that the landlord and the contractor had not adequately removed snow from the sidewalk and had allowed it to be piled where it melted on to the sidewalk, creating a black ice hazard. He argued that because the lighting was inadequate, he didn't see the ice in time to avoid the danger.
The Court of Appeals noted recent precedent of the Michigan Supreme Court's majority which applied to Kosinski's claim. It held that since he was aware, generally, of the nature of Michigan winter weather, the presence of "black ice" was an "open and obvious danger" which the landlord owed no duty to address. The Court also held that since the fall was caused by a condition on the premises, Kosinski couldn't argue that the contractor didn't act with reasonable care, and that in any event, the contractor owed him no "duty" because the contractor's only duty was to the landlord.
It will surprise no one who is paying attention that another injury claimant's claim was summarily dismissed by Michigan's Supreme Court. Mike Lego, a police officer, was shot by Jake Liss, another police officer, during the attempted apprehension of an armed-robbery suspect. He sued Liss, arguing that Liss' discharge of his weapon constituted gross negligence and that therefore Liss didn't enjoy governmental immunity for his actions. Liss' attorneys argued that Lego's injury claim was barred by Michigan's "firefighter's rule" which grants immunity for any injury that "arises from the normal, inherent, and foreseeable risks" associated with police work and firefighting.
The Court of Appeals had held that Liss wasn't entitled to summary disposition because if Lego could prove that Liss acted in disregard of his training and that he violated numerous safety procedures, his wounding of Lego would not be an "inherent, foreseeable" risk. The high court held that even if Lego proved gross negligence by Liss, his gunshot injuries would still be a "foreseeable" risk of police work and therefore not actionable.
The Mackinac Circuit Court judge granted summary disposition of two cases filed against Arctic Cat, after two women rode the sled off the west bluff of Mackinac Island in 2010. The women, sisters, were apparently attempting a "Y" turn when they lost control of the sled and backed over the bluff. After reconstructing the incident, both investigators and product experts disagreed on what happened. While at least one first responder saw evidence of only one "stop" in the Y turn, another investigator was certain he had identified two. One product expert evaluated the evidence and concluded that the driver of the sled had shifted it into forward, but not completely, and when she accelerated the machine went backwards without warning. He argued that the shifting and reverse warning on the sled were defectively designed.
The Defendants' experts argued that reverse warnings are intended to serve bystanders, not the operator of a snowmobile and that in any event, the women's families' experts were mistaken in assuming that the shift lever had not been jostled in the fall from the bluff. The trial judge concluded that it would require too much speculation to find in favor of the women's families and granted summary disposition. On appeal, the higher court noted that the trial judge should not have assumed that the investigator who saw two attempted turns was mistaken, and therefore the judge erred in granting summary disposition without recognizing the conflict in the evidence.
Larry Klein was hurt in a car accident. He was on his way to a jobsite in a car owned by his wife, but driven by an acquaintance whom he only knew by a first name. The evidence apparently established that he couldn't drive, but his wife would allow him to use the car if it was operated by a licensed driver; on the date of injury, he had recruited a man named "Derrick" to drive him to a jobsite. After the collision occurred, Derrick drove the plaintiff back to the Party Store where they had met, and the plaintiff wasn't able to confirm his last name.
When Klein attempted to sue to recover for the injuries he suffered and couldn't identify "Derrick's" last name, he relied on the owner liability statute that holds the vehicle owner responsible for the negligence of the driver, if there is a chain of custody, as there was here. Klein could not confirm what "Derrick" did wrong to cause the accident, however, and relied upon the presumption of fault arising out of a rear-end collision. The car's insurer sought summary disposition, arguing that it should not be held accountable because the owner's passive, "vicarious" liability should not apply in this circumstance.
The trial judge agreed and granted summary disposition. Klein appealed. Among other arguments, Klein pointed to established precedent that presumes fault on the part of a driver who leaves the scene of an accident. The court ruled that this precedent did not apply where "Derrick" drove the victim back to the Party Store where they met. It also rejected the argument that "Derrick" should be presumed at fault because he enjoyed exclusive control of the instrumentality of injury. All-in-all, it appears to be a case driven more by circumstances than by logic: the court didn't like holding the absent, passive owner's insurer responsible for the conduct of a driver recruited by the "victim."
Plaintiff Babcock sued the State of Michigan, her employer, arguing that "various design features" of the building where she worked, included ramps and lack of handrails, constituted a denial of her rights as a "physically challenged" person under the ADA. The Sixth Circuit ruled that "there is a distinction between access to a specific facility and access to a public service, program or activity" and that Babcock had not established an enforceable private right of action. Therefore she could not overcome the State's 11th Amendment sovereign immunity.
In Barbara Zwiers' case against Dr. Sean Growney, the Court of Appeals finished the reversal and dismissal ordered by the Michigan Supreme Court when it affirmed summary judgment against her this week. The Court had previously ruled that she could amend her pleadings to move them one day back, after her lawyers erred in computing the mandatory 182-day "waiting period" and filed suit one day early. The Court of Appeals had ruled in Zwiers' favor in reliance upon Court Rules allowing the amendment of pleadings where no prejudice will result and where the interest of justice will be served.
A few months ago, the insurance-oriented majority of the Michigan Supreme Court granted leave to the malpractice defendants who had appealed this and a similar decision, and overturned the Court of Appeals' analysis. The case was returned to the lower court, where, this month, it was put to rest.
Michigan Supreme Court sides with doctors on issue of how much proof it takes to show error is "malpractice."
When Paulette Elher went in for gall bladder surgery, her surgeon, Dwijen Misra, Jr., M.D., got confused and clipped her common bile duct instead of trimming the cystic duct. He argued that it is hard to distinguish the organic structures in the abdomen during laparoscopic surgery, and therefore this happens once in every few hundred cases. He argued that under Michigan law, he had not "breached the standard of care" because this mistake can occur even if a doctor isn't "negligent." Elher hired a physician-professor from Case Western Reserve University who had spent a lifetime performing gall bladders surgeries. This doctor testified that since the surgeon didn't encounter unusual scarring or inflammation, he breached the standard of care in failing to accurately identify the structures he was cutting.
The Defendants asked the trial judge to strike the woman's expert's testimony, arguing that he could cite no scientific support for his opinion that cutting the wrong organ in this situation is malpractice. The trial judge agreed, struck the expert testimony and granted summary disposition to the defendant surgeon. Elher appealed and the Court of Appeals judges who reviewed the case overturned the lower court decision. The Court of Appeals majority noted the expert's superior credentials, recognized the controversy among surgeons on this question, pointed out that this type of medical opinion is not subject to research or testing, and concluded that it was for the jury to decide how much weight to give the conflicting expert opinions regarding negligence.
The Supreme Court granted leave to appeal and reinstated the trial judge's decision. The Justices who sided with the doctor and his insurers ruled that regardless of the woman's expert's background and expertise, his opinion wasn't admissible unless he provided medical literature support. Since he testified that there were no peer-reviewed articles in the medical literature confirming his opinion (because scientific medical literature does not address legal standards like negligence), the Court ruled that he could not offer his opinion at trial. The Court majority the Court held that "There is no doubt that Priebe...was qualified to testify as an expert based on his extensive experience." Nevertheless, the Justices concluded that regardless of his background, academic credentials and lifetime experience, his opinion wasn't "reliable" because he couldn't corroborate it with the opinions of other doctors.
The Court further held that even thought the trial judge erred by focusing on the lack of scientific testing and replication for the expert's opinion, since such testing simply isn't available in this context. Nevertheless, the majority Justices ruled that the judge's error didn't constitute an abuse of discretion or warrant overturning his decision to strike the expert.
Some lawyer actually recommended that Katrina Carter sue the court bailiff who tried to rescue her and injured her leg. She was involved in a custody dispute, in the courthouse, when one Robert Tippins attacked her and began "punching her in the face." The Deputy injured her ankle in the process of subduing the attacker. She sued alleging an intentional injury or gross negligence. The Court of Appeals agreed with the trial judge that no reasonable juror could reach the conclusion that the defendant was guilty of "gross negligence" under the circumstances.
In Gardner v. Evans, a group of evicted tenants sued, claiming that the eviction notices they received did not comply with the law and therefore constituted an abuse of their civil rights by the officers issuing the notices. They pointed to deficiencies in that the notices failed to advise them of their right to administrative review and appeal.
The Sixth Circuit ruled that while "fundamental fairness" required that the tenants receive notice, the content of the notice required was not "clearly established" and therefore the issuing officers were immune from liability for issuing defective notices.
When Jenifer Measel was hurt in a car wreck, she sought treatment at the chiropractor's office. The chiropractor attempted to charge her insurer, AAA, for a new patient intake, ultrasound treatments and massage. The Auto Club maintained that it didn't owe for the services because they were outside the license of practice of the providers. Both parties pointed to the amendment recently adopted by Michigan's Legislature, intending to clarify those services which a chiropractor may provide. The trial judge rejected AAA's defenses, finding the services "reasonable and necessary" and within the providers' license. He entered an order requiring payment.
The Auto Club appealed and the Court of Appeals reversed. It held that while some of the services were within the Michigan definition of chiropractic, they were either performed by the wrong person or did not relate solely to the spine--and therefore were not chargeable. It pointed to a prior holding that performance of an ultrasound is not within the practice of chiropractic.
Mid-shopping at the Randazzo's Fruit and Vegetable, Inc., Faye Milton needed to use the restroom. She was pointed to a doorway that opened on a dark hallway with the restroom at the end. She felt her way through the hallway, searching for a light switch, before falling when she encountered a wet step. When the grocery store denied any compensation for her injuries, she filed an injury claim. The Court granted the store summary disposition, holding that the dark hallway was an "open and obvious danger" which Milton should have simply avoided. Since the danger was evident on "casual inspection," the grocery store owes no duty to eliminate the hazard. She should have just wet her pants in the grocery aisle.
Judith Angeloff sued the City of Royal Oak after being injured on an allegedly defective sidewalk. The City argued that the sidewalk was actually owned by Grand Trunk Western Railroad, which owned the adjacent overpass, and that Grand Trunk was responsible for its maintenance. The City also argued that the sidewalk didn't meet the definition of a "sidewalk" under the statute that would make the City responsible for maintaining it. Ultimately, the Oakland County Circuit Judge granted summary disposition against the City on the issues of definition and responsibility, and also awarded sanctions to the Railroad for being forced to defend specious arguments raised by the City. The City appealed.
The Court first affirmed the summary disposition, noting that all of the facts of the case and the existing precedent supported the lower court's finding that the area of injury was a "sidewalk" under the City's control. It expressly noted that the deed issued to Grand Trunk involving the subject property made it "subject to the public's right of way" and the subdivision plat noted that the area was dedicated to public use. The area was clearly within the Thirteen Mile Road right of way--and "paved"-- and therefore met the statutory definition of a sidewalk the City was required to maintain. The Court also dismissed the self-serving claims by the City Engineer attempting to explain the City's motive in paving the area of injury.
With regard to the sanction motion, the higher court agreed with the City that there is no provision in existing law allowing one defendant to collect its expenses from another defendant as a "prevailing party." Nevertheless, the Court of Appeals upheld the sanctions imposed, pointing out that the City and its attorneys had no factual support for the false claims they raised in attempting to avoid responsibility for the injury.
Kali Pung was paralyzed at her neck level in a diving accident in 2006. She carried health insurance with Blue Cross Blue Shield at the time, and under her contract the insurer was required to provide her with private nursing help. In 2014, changes in the law governing insurance policies contained apparently contradictory language about whether BCBS could cancel Pung's policy. She argued that if similar policies were written by BCBS, it was obligated to continue her policy; BCBS argued that a separate section of the law allowed BCBS to cancel her policy if it didn't write similar coverages for the "small group market."
Not surprisingly, since she drew a Court of Appeals panel with Henry Saad, the insurer's best friend, Pung lost her argument on appeal. The appellate judges ruled that the provision Pung relied upon was rendered inoperable by the provision BCBS relied upon, and that the case she cited as a precedent would apply only to pregnant insureds attempting to avoid cancellation--not disabled insureds. The judges ruled that the public policy limitations on cancellation should apply to women who had "chosen" to become pregnant during the policy period and who likely faced limited expenses, but not to insureds who suffered illness or disease and might represent "enormous" liability exposure to the insurer.
Frank Lawrence sued Caren Burdi and her law firm, after Burdi made disparaging comments about him during the pendency of a lawsuit against his employer. Lawrence had sought to become a lawyer and passed the bar exam, however, he was never passed by the character and fitness examiners. During the pendency of the lawsuit, Burdi suggested to his employer that she should be careful who she associated with. Burdi also filed Requests to Admit that alleged that Lawrence had two felony drug convictions and "cannot pass character and fitness" and was therefore denied admission to the bar. She refused to withdraw these allegations. The Judge ultimately held that the drug convictions were irrelevant and should be sealed, but that the bar passage requested admission might be marginally relevant and should not be "sealed."
Lawrence then filed a lawsuit for defamation and abuse of process, which the trial judge summarily dismissed, despite the fact that the drug claims were proved to be false and unsupported. The Court held that since the requested admissions were "part of the discovery process," the false statements were privileged courtroom communications not subject to defamation claims. The Court of Appeals disagreed and reinstated the claims.
The higher court pointed out that while all statements of opinion, like the hallway warning about "who you associate with" are merely "platitudes" and not actionable, a legal discovery document or pleading is only judicially privileged if it serves a legitimate relevant purpose. Words charging a commission of crime are defamatory per se, and in this case the requests to admit had no factual basis, were entirely false and served no "relevant, material or pertinent purpose" in the lawsuit. For that reason, aspersions to the character of a nonparty, who is also not a potential eyewitness, were not judicially privileged and may be the basis for a legal action.
The Charter Township of Shelby in Macomb County was forced to sue its own insurer, Argonaut, after the company refused to defend it in a civil rights action against three officers. The civil rights action arose out of an arrest that caused the arrestee's boyfriend, ex-husband to attempt to confront one of the involved officers at the officer's front porch (they were neighbors). When the officer's wife called the Township Office to complain after the boyfriend/ex-husband left, three officers responded and allegedly beat the ex-husband while arresting him in his own front yard. He sued and the Township tendered the defense to its insurer.
The insurer argued that the officers' actions were outside their official duties, intentional, and illegal; and therefore the policy did not cover them. The Township eventually spent over $400,000.00 in defending and settling the underlying claim. It sued the insurer and secured a summary judgment in the trial court. Insurers win most cases in Michigan, but cases involving cops and governmental entities are something else. In this case the Court of Appeals panel agreed with the trial judge that the insurer's circular argument of non-coverage would make its policy illusory. The policy purported to offer coverage for officers sued for "wrongful acts" committed "in law enforcement activity," but then purported to deny coverage if the actions were ultimately deemed a violation of law--the only actions for which damages could be awarded. The Court refused to recognize the insurer's right to take away with its left hand what had been sold with the insurer's right hand. It is refreshing to see a court actually hand a defeat to an over-reaching insurance company once in a while.
In Bauman v. Bank of America, the Sixth Circuit was faced with a question of permissive or compulsory joinder of claims. The Plaintiffs had brought an unsuccessful suit under the Fair Debt Collection Practices Act. After losing that case, they filed a separate action to quiet title to the property. In the second case, for the first time the bank filed a counter claim to collect the underlying debt. The Plaintiffs argued that the bank should be precluded from pursuing the counter claim because they did not join it in the original action. The court held that joinder of the underlying debt collection action was permissive and not compulsory, and therefore the bank was not prevented from filing a counterclaim in the second lawsuit.
Fifth Third sued its attorneys, Couzens Lansky, et al., for malpractice. The bank people claimed that its attorneys gave it bad advice in suggesting a foreclosure by advertisement rather than a judicial foreclosure. The bank argued that it experienced significant unanticipated costs because the attorneys recommended a "full credit bid" and encountered a related title action and class action in response. The appellate court pointed out that the attorneys made a recommendation based upon their analysis of the law, and that their analysis proved to be accurate following appeals in the initial actions. Pursuant to the "attorney judgment" rule, the lawyers' analysis was "legitimized" and an "honest belief well founded in the law and in the best interest of the client..." On that basis, no malpractice had occurred and summary disposition was properly granted.
Ryan Charles' family sued his employer, Spartan Steel Coating, LLC, after Charles was crushed while attempting to adjust the belt on a large steel recoiler machine. The machine had a history of failing repeatedly, and Charles was required to place his body inside the workings of the machine to make adjustments. He "pulled the plug" on the machine and informed a co-operator of his required maintenance, however, the co-worker simply assumed that Charles had finished, and reactivated it while Charles was still in danger. Unknown to either man, Charles' pulling of the plug on the machine only partially disabled its functioning, and it recycled crushing Charles.
The family argued that the extreme danger associated with maintaining the repeatedly-failing machine, combined with the fact of repeated failure, created an exception to the normal rule that an employer is entitled to immunity from injury or death claims filed by employees covered under workers compensation. Previously the exception to this "exclusive remedy" provision had allowed an injured worker who was subjected to a "continuously dangerous work environment" and statistically highly likely to be hurt, to sue for damages beyond workers compensation. Recent Michigan decisions of the Supreme Court have limited the right, however, to employees whom the employer "intends to injure." Since Charles' family could not point to any particular manager or employee who intended to injure him, his family was limited to the minimal benefits due under workers compensation.
Kristen Smith filed suit on behalf of her daughter against the Bronson Athletic Club and related people and entities, arguing that the Club should be held accountable for a counselor's sexual abuse of the seven year old. The lower court granted summary disposition, essentially holding that pursuant to Michigan Supreme Court recent precedent, an employer is not liable for an employee's criminal act. Ms. Smith appealed, arguing that by statute, the Club was subject to the duties imposed by the Child Care Organizations Act, as a child caring institution, thereby subject to the licensing rules and regulations imposed by that act. Smith argued that if the "camp" had complied with the law and properly trained its employees, the 17 year-old counselor who abused the minor plaintiff would have been recognized as an "at risk" person and would never have been left alone with a child. She presented two qualified expert witnesses to support this claim.
The two-judge majority of the Court of Appeals panel that heard the appeal rejected this analysis in its entirety. Although the "camp" had not complied with statutory requirements of a child care institution, the majority ruled that this criminal act was not foreseeable under any factual analysis. The majority cited recent Michigan Supreme Court precedent limiting any employer responsibility for ultra vires [acts outside one's job duties], or criminal acts of an employee, to situations where the illegal conduct was clearly foreseeable. They rejected the argument that where expert opinion testimony was supplied showing that criminal or sexual misbehavior should have been foreseen, the ultimate decision should be left to jurors.
In the Mackinac County action brought by Robert and Linda Metcalf against the Mackinac County Road Commission, the Court of Appeals reversed the local judge's grant of immunity to the Road Commission and reinstated the case. The Metcalfs argued that the Road Commission had abused its rights under a "Gravel Borrow Agreement," causing unreasonable harm to their land. They sought an order of the court requiring the Road Commission to restore their land to its prior condition.
The Road Commission argued that it was immune from the Metcalf's claim because it sounded in negligence or nuisance. The higher court studied and rejected this claim, pointing out that "governmental immunity" under statute is applicable to tort claims and is not applicable to duties undertaken through a private contract. It also rejected the Road Commission's claim that either the Statute of Frauds or the Parol Evidence Rule should bar the Metcalf's from enforcing what they claimed were understandings and agreements that were not mentioned in the language of the original "Agreement."
Yu Ju Chen, Bronson Healthcare, and Mary Free Bed Hospital were forced to sue Farmers Insurance Group after Chen suffered paralysis in a Michigan car accident. Chen was traveling in a car rented in Illinois by her boyfriend, on their way to their hometown in Canada. The car was owned and insured by Hertz, which has never been certified as an insurer in Michigan. Chen's attorneys sought PIP benefits from the insurer of her boyfriend's parents, Farmers, since the boyfriend was a resident of their home and Farmers was certified in Michigan. Farmers argued that its obligation under the Michigan no fault law was limited to paying PIP benefits for its "named insureds" and did not include the occupant of an uninsured car driven by a family member. In the alternative, it argued that its duty to pay medical benefits was limited by statute to $500,000.00.
The trial judge rejected Farmers' coverage position but agreed that it was subject to the half-million dollar medical limit. The insurer appealed. The Court of Appeals pointed to similar decisions previously decided which clearly obligated Farmers to pay all PIP benefits required by law. It noted that under those decisions, coverage for no fault benefits follows the person, not the vehicle, and therefore if the boyfriend had coverage, Farmers was obligated to pay PIP benefits even if the covered event occurred in a rented or "unowned" and uninsured vehicle. The high court also affirmed the limitation on PIP benefits owed to an out-of-state resident.
The Estate of Catherine Dawn Skidmore sued Consumers Energy Corporation in Calhoun County. Skidmore was electrocuted when she came into contact with a live, downed power line. She had observed the flash and fire caused by the line behind the neighbor's house and ran to the other end of his home to warn him. The power line contacted her leg in the dark yard and electrocuted her. Consumers secured summary disposition of the case by arguing that it owed no duty to a woman who intentionally approached a downed line.
The family appealed. The Court of Appeals noted that the family presented expert opinion and neighbor testimony confirming that the line had suffered numerous outages in the past several years and was not properly maintained. It cited a long string of legal precedents establishing the high degree of duty associated with operating dangerous high voltage. Applying those cases to the instant situation, the Court noted that it was a factual issue for jurors to determine whether Consumers was negligent, and if so, the degree of the "rescuer's" comparative fault. Typically, persons who expose themselves to danger to assist someone in danger are "foreseeable" and we take into account the emergency situation in analyzing their fault. The claim should not have been dismissed summarily.
Court holds that client cannot hold firm accountable for actions of attorney listed as "of counsel."
In Wallace v. Monroe, the plaintiff attempted to sue a law firm after his case was mis-handled by an attorney who shared office space with the firm. They also shared a receptionist. The allegedly negligent attorney was listed as "of counsel" on the Defendant's letterhead and advertising, and the client argued that he had no idea what that meant: to him it indicated he had hired one of the attorneys in the defendant's firm. The Court held that the client's understanding or misunderstanding of the "of counsel" representation [and the office, and receptionist-sharing arrangement] was irrelevant because the fee agreement he signed was only with the retained attorney and did not mention the defendant firm. Therefore, he could not claim that the retained attorney was an "apparent agent" of the defendant firm.
In Domingo v. Kowalski, the Sixth Circuit analyzed whether several special ed children could maintain a cause of action against their teacher. The teacher had used techniques like "gagging" a student to stop him from spitting; strapping a child to the toilet to keep her from falling; and forcing another child to drop her pants in full view of the remainder of the class to assist in toilet-training. The Court concluded that the criticized actions, while inappropriate, indicated a "clear educational or disciplinary motive..." were "not excessive"...were taken "in good faith..." and "not so brutal, demeaning or harmful as to shock the conscience." Therefore, they were not Constitutional violations of due process and not actionable under section 1983.
After apartment explosion, family's injury suit is summarily dismissed due to "insufficient evidence."
Stephen and Natasha McClain attempted to sue their apartment's owners and a repairman, after their rental unit was gutted by a fire that started with an explosion in the basement of the neighboring unit. They and their minor son were hurt. The facts showed that the fire resulted from a gas line which had apparently been "opened" in the basement, 1-3 hours before the explosion. A repair and clean-up man had been in the adjacent apartment approximately 3 and 1/2 hours before the explosion. The McClains argued that he and the landlord should be responsible for the damages because they had either caused the gas leak or left the empty apartment vulnerable to an arson attempt.
The Kent County trial judge dismissed all of the McClain's theories against both defendants, and they appealed. The higher court upheld the summary disposition, determining that the McClains lacked adequate evidence to hold either defendant accountable. They held that there was insufficient circumstantial evidence to support a claim that the repairman had been in the basement and caused the leak [even though the unit may have been found to have been "locked" during the fire inspection], and that a landlord could not be expected to detect an unsafe condition within three hours.
It was particularly surprising that the Court summarily ruled that the defendants would not be held accountable if it turned out that they negligently allowed access to the empty apartment: it ruled that the basement was not a "common area" which a landlord is obligated to maintain safely, and that it was not "foreseeable" that a third party might use access to the basement "simply to turn on the gas line..." Therefore, the landlord's duty to act where a "criminal assault" may be anticipated did not come into play.
Robert and Susan Thill attempted to sue their homeowners' insurance company, State Farm, after they suffered damage related to an ice dam on the roof. They initiated a claim, allowed it to sit idle for a few months, and then re-started it. State Farm issued a check for $156.18 for the "covered" portion of their claim and rejected several thousand dollars of additional alleged damages. The check came with a statement that the insurer "...will not give any further consideration to their claims." They retained counsel, but did not file suit for 13 months.
State Farm sought summary disposition, arguing that their lawsuit wasn't timely. The trial judge agreed and dismissed the case on summary judgment. The Appeals Court noted that the time limit in the State Farm policy was shorter than the Michigan statute applicable to homeowners' policies allows, and refused to apply it. Nevertheless, it did apply the one-year limitation contained in the latter statute, starting from the date of the final denial alleged in the letter that accompanied the token payment. On that basis, the Thills' damage claim was summarily dismissed.
Crystal Barnes sued to recover injury damages from the at-fault driver or from the State Farm Underinsured Motorist [UIM] coverage on the car she was operating. She had previously sought PIP benefits to cover her medical, and was sent to the Assigned Claims plan. Farmers Insurance was assigned the claim and fought it, arguing that Barnes should be covered through State Farm. (A friend had insured the vehicle, which was used, normally, to transport Barnes' mother for medical treatment.) Barnes didn't appear at the hearing where the two insurers argued over priority, and didn't timely appeal the judge's conclusion that the vehicle was "uninsured" as to Barnes because it was available to her for frequent use, without identifying her as the insured.
State Farm defended her subsequent injury, UIM claim with the theory that she could not recover because she didn't timely appeal and therefore couldn't argue that the vehicle was, in fact, properly insured. The Court of Appeals agreed and overturned the trial judge's conclusion that, with regard to a fault or UIM claim, Barnes enjoyed the right to show that she was not operating an "uninsured" vehicle. The appellate judges ruled that both cases turned on the issue of whether or not Barnes was properly considered an "owner" of the car, and therefore the original case outcome was binding.
When William Morse and his wife were badly hurt in a car accident in Hawaii involving a rental van, Auto Owners denied their right to PIP benefits and sued them and their health care providers, seeking a ruling that they weren't covered for PIP benefits. Auto Owners argued that the policy written with their son and his corporation should not apply to the Morses, and that the Morses had no standing to argue coverage. The Morses were identified as 'added drivers" on the policy which insured seven different vehicles.
The Morses sought to "reform" the policy to comport with the coverages that were intended, and the trial judge granted them partial summary disposition. The Court of Appeals reversed. It held that while the Morses had "standing" to dispute the issue, the judge was mistaken in allowing the contract of insurance to be reformed: reformation requires proof of "fraud, mutual mistake or inequitable conduct." Since the corporate owner of the insureds' vehicles was required to carry coverage, the policy, as written, could be enforced because the corporate owner had "an insurable interest." Therefore, it didn't matter that it didn't provide PIP benefits to the Morses when occupying a different vehicle. The court also held that it didn't improperly shift the burden of paying PIP benefits to the Assigned Claims Plan, because in this instance the injuries occurred outside the State of Michigan where the ACF would not provide coverage.
The latter ruling seems inconsistent with public policy, however, as it does seem like the policy inappropriately shifted the PIP risk: it just so happened that in this instance, geography played a role in letting all the insurers off the hook.
Michelle Johnson lived with her parents until a few months before her impending marriage, and was a "named driver" on their AutoOwners auto coverage. She was not a "named insured," however. While occupying a cab, she was injured by a hit and run driver who was never identified. She sought Uninsured Motorist Coverage under the family policy, which AutoOwners denied on the basis that she was no longer lived with her folks, and the UM coverage applied only to "relatives" who "reside" with the named insured.
After Auto Owners' denial, she answered Requests to Admit indicating that she no longer "resided" at the parents address and now resided with the fiancé. She claimed that she was "transitioning" out of the family home, still had many things in the home including a bedroom, and had not yet changed her formal address. The Court of Appeals rejected the trial judge's holding that her situation presented a question of fact for the jury and drew a distinction between evidentiary and judicial admissions. It ruled that having "admitted" to a change of residence, she was no longer allowed to dispute her lack of domicile with the parents, regardless of what facts she might cite. The admissions were "conclusive" and summary disposition of her claim was granted.
Carol Wendzel was bit by Susan Feldstein's dog. Both lived at the Whethersfield Apartments. Whethersfield prohibited dogs in the apartment complex, or its common areas, but Feldstein "fostered" a nine-year-old German Shepard. During the next seven months, the dog bit three people in the apartment common area. After the first bite, the apartment manager learned of the presence of the dog and required Feldstein to sign a "dog addendum" by which she agreed to indemnify the apartment complex for any resulting injury.
The dog bit a young man a couple of months later, and two months after that, it bit Wendzel. She sued the owner but also joined the apartment complex, arguing that it had negligently failed to control the safety of the property. At mediation, the apartment complex and Wendzel settled her claim for $80,000.00. The apartment then sought indemnification from the owner (or more likely her renter's insurance). The judge entered judgment for the apartment complex and Feldstein appealed. She argued that the addendum was not a breach of Michigan law which prohibits apartment owners from exculpating themselves from tort liability. The agreement didn't let the apartment complex off the hook: it simply allowed the apartment complex's insurer to seek reimbursement of payments made to a victim. The court also held that there was no public policy against holding a prospective dog owner ultimately responsible for the dog's behavior. Lastly, the court rejected Feldstein's argument that the indemnity agreement did not apply to a settlement and required a judgment of liability after trial.
In Coulechi v. Serra, a silly neighborhood dispute ultimately required appellate intervention when a subdivision homeowners' group attempted to limit one of the property owner's use of a back parcel of land that was outside the platted subdivision. The Court noted that the subdivision group lacked any authority or jurisdiction over the unplatted lot, and that they failed to establish that it constituted a nuisance. It was not subject to any deed restrictions and the plaintiffs entirely failed to meet their burden of showing "significant harm" resulting from the use.
Jessica Peregord was badly hurt in a car accident while a passenger in her boyfriend's grandmother's car. She had no vehicle or insurance, so she claimed PIP benefits from first the insurer of the owner and then the insurer of her father's car. Both rejected her claim, so she eventually went to the Assigned Claims plan [MACF], which required Farmers Insurance to pay her benefits. Farmers then sued Allstate and the Auto Club, sensibly pointing out that one or the other of them owed the PIP benefits--depending on where Peregord was found to be "domiciled."
The young woman still had a bedroom at her father's house, but she had moved in with a family friend two months earlier. She cared for the friend's cat; paid a modest rent; changed her school mailing address; put her name on the apartment mailbox; and changed the address on her driver's license. She was "transitioning" out of the house. Allstate refused to pay her PIP benefits because it argued she still resided with her father. The Auto Club said she no longer did, and the lower court ultimately agreed with ACIA (the Auto Club) and granted summary disposition. Allstate appealed, arguing that the issue of domicile was a genuine issue of material fact that should have been presented to the jury. The higher court disagreed. Given her testimonial intent to stay with her friend indefinitely and the concrete steps she took to effect that intent, the Court ruled that her domicile had indeed changed from her father's home.
Farm Bureau sued Blue Cross Blue Shield and Spectrum Health to avoid paying for skilled nursing services provided to a Farm Bureau insured who was injured in a car accident. The injured woman had Blue Cross coverage that required her to get approval for skilled care after 14 days; she also had "coordinated" no fault benefits that required her to exhaust her Blue Cross coverage before Farm Bureau paid for any medical. When she was maintained at Spectrum beyond the initial 14 days without Blue Cross approval and without promising to pay on her own, Farm Bureau argued that it was relieved of any duty to pay for the services.
The Court held that the pre-authorization limitation in the Blue Cross contract was enforceable and that it also released Farm Bureau from any obligation to pay for skilled nursing. Since Spectrum's contract with Blue Cross limited Spectrum's capacity to pursue non-authorized benefits from the injured patient, it also released her auto insurer, regardless of the propriety of Blue Cross' initial denial.

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POSADOS, Collector of Internal Revenue, et al.
Messrs. O. R. McGuire, Pro hac vice, Wm. C. Rigby, and L. H. Hedrick, all of Washington, D. C., for petitioners.
Messrs. G. B. Guevara, of Pasay Rizal, Philippine Islands, and L. H. Cake, of Washington, D. C., for respondent.
This was a suit begun by an original petition in the Supreme Court of the Philippine Islands under section 2947 of the Compiled Acts of the Philippine Commission, 1907, Praying for an original writ of mandamus directed to Juan Posados, Jr., collector of internal revenue of the Islands and of Manila, and to Benjamin F. Wright, insular auditor, requiring the collector to issue warrants payable to the city of Manila for the share of the internal revenue taxes collected by him due to the city under the statutory law, and requiring the auditor to countersign those warrants. In furtherance of the main prayer there was a prayer for a temporary injunction against the issue and countersigning of warrants for a part of such receipts in favor of the metropolitan water district. The metropolitan water district and the insular treasurer were also made parties. The Supreme Court, after answers and hearing, granted the prayer for mandamus against the collector and auditor.
The substance of the controversy is this: The city of Manila, under Spain, owned the waterworks furnishing water to the city for a great many years, and, since the United States became the sovereign in the Islands, the city, created a municipal corporation by the present Philippine government (chapter 60, title 10, of the Philippine Administrative Code, No. 2711), was authorized to issue bonds for $2,000,000 to enlarge and improve them. March 6, 1919, the Legislature of the Philippine Islands passed a law creating a metropolitan water district for the city and neighboring territory (Act No. 2832), made it a corporation governed by directors, and turned over the works to its management. A dispute has arisen as to whether the city of Manila should pay to the metropolitan water district compensation for water used by the city government. The authorities of the city of Manila contend that the city is not liable, because the waterworks are and have been its property for centuries. The issue was considered by the metropolitan water district board, and a majority of the board reached the conclusion that there was no money due from the city for the water paid. The Governor General has appellate administrative jurisdiction over the decisions and resolutions of the board-Act 3109-and he took the view of the minority of the board, and held that the city did owe the metropolitan district for the water furnished it. The city was not a party to this proceeding. In accord with the conclusion of the Governor General, the insular auditor directed the collector of internal revenue to withhold from the city's share of the internal revenue collections money enough to pay what was due for the water, and directed the collector to issue his warrant for that amount from the share of the city in the internal revenue collections in enforcement of the claim of the metropolitan board for the amount due.
Section 3 of the Organic Act of the Philippine Islands, known as the Jones Law (39 Stat. 545, c. 416; Comp. St. § 3810), directs that no money shall be paid out of the treasury, except in pursuance of an appropriation by law; that all money collected on any tax levied or assessed for a special purpose shall be treated as a special fund in the treasury and paid out for such purpose only.
By section 8 of the same act (Comp. St. § 3812) the general legislative power, except as therein otherwise provided, was granted to the Philippine Legislature, authorized by the act.
'The decisions of the auditor shall be final and conclusive upon the executive branches of the government, except that appeal therefrom may be taken by the party aggrieved or the head of the department concerned within one year, in the manner hereinafter prescribed.' Comp. St. § 3817d.
'That any person aggrieved by the action or decision of the auditor in the settlement of his account or claim may, within one year, take an appeal in writing to the Governor General, * * *. If the Governor General shall confirm the action of the auditor, he shall so indorse the appeal and transmit it to the auditor, and the action shall thereupon the final and conclusive. Should the Governor General fail to sustain the action of the auditor, he shall forthwith transmit his grounds of disapproval to the Secretary of War,' whose decision is 'final and conclusive.' Comp. St. § 3817e.
By section 588 of the Administration Act of 1917, as amended by Act No. 3066, adopted after the passage of the Jones Act, it is provided that the insular auditor shall have the power to authorize and enforce the settlement of accounts subsisting between the different bureaus or offices of the insular service, between such bureau or office and any provincial, municipal, or city government, between provincial governments, between municipal or city governments, and between any such provincial and municipal or city governments.
The contention on behalf of the insular auditor is that the city of Manila, on the one hand, and the metropolitan water board, on the other, are branches of the insular government, and that by virtue of the foregoing statutes he is given authority to settle accounts between them, and that his decision is final and conclusive upon such executive branches, with the appeal provided as above stated. He maintains that this gives him the authority to decide, as between the metropolitan water board and the city of Manila, whether the city should pay the water board for the water furnished it, because it is necessarily involved in the settlement of accounts between the two corporations and branches of the insular government; that, having decided that the money was due for the water furnished from the city to the metropolitan board, he is further charged by section 588 of the Administrative Code with the duty of enforcing that decision and settlement. He may therefore, he says, direct the collector of internal revenue to issue a warrant for such share of the city in the internal revenue collections as may be enough to pay the debt owing from the city to the water board, and that this is a necessary implication from his power by law to enforce such settlement.
'Sec. 490. Disposition of Internal Revenue in General.-Internal revenue collected under the laws of the Philippine Islands and not applied as hereinabove provided or otherwise specially disposed by the law shall accrue to the Insular Treasury and shall be available for the general purposes of the Government, with the exception of the amounts set apart by way of allotment under the next succeeding section.
'Sec. 491. Allotments of Internal Revenue for Special Purposes.-Of the internal revenue accruing to the Insular Treasury under the preceding section there shall be set apart ten per centum as a provincial allotment, ten per centum as a road and bridge allotment, and twenty per centum as a municipal allotment; but the amounts allotted to said several purposes during any year shall not be greater than the amount allotted for the same purposes during the fiscal year nineteen hundred and nine.
'Sec. 494. Apportionment and Use of Municipal Allotment.-The municipal allotment shall be for the benefit of the inhabitants of the Islands in the purview of their community requirements, being available for municipal or other use as hereinbelow provided.
It is apparent from reading the foregoing sections that they are directions by statutory law as to the distribution of the collections made by the internal revenue collector, and that the share to be paid to the city of Manila is fixed thereby, and the exact figure can be ascertained mathematically. This requires no exercise of discretion, judicial or otherwise, after the total amount of the internal revenue receipts are known, and in this case there is no dispute as to that amount. It becomes the ministerial duty of the internal revenue collector to draw his warrant for the share of the city thus fixed by statute. It becomes the duty of the insular auditor, when such a warrant of the internal revenue collector is presented to him, after ascertaining that the amount for which it is drawn is in accord with the directions of the statute, to countersign the same. Kendall v. United States, 12 Pet. 524, 9 L. Ed. 1181; Wright v. Ynchausti, 272 U. S. 640, 651, 652, 47 S. Ct. 229, 71 L. Ed. 454.
No matter what the power of the auditor may prove to be with reference to the settlement of accounts as between the city of Manila and the metropolitan water board, or what his power with reference to enforcing the settlement so reached by him, nothing in the laws of the Islands is disclosed to us which enables the auditor in the enforcement of such settlements to dispense with or to suspend the operation of positive law in reference to the course which shall be followed in the disposition by the internal revenue collector of the receipts from internal revenue collections which he is directed by the statute to pay to the city. His duty is clearly set forth, and he has nothing to do but to comply with it, having ascertained exactly what the share of the city is under the foregoing provisions.
When this share comes to the city under the warrant to be drawn in its favor by the collector, the question of what shall thereafter be done in respect to it is not a matter that we are called upon to consider. Whether the issue between the metropolitan water board and the city of Manila, in the absence of agreement, is one that must then be decided by a suit in court brought by the metropolitan water board against the city, asking for a judgment for the water paid, or whether the issue is to be determined by the insular auditor in his asserted power of settling and enforcing accounts between the two branches of the government, are issues not before us. The only question here is what should be done with the share of the collections made by the internal revenue collector under the sections of the Administrative Code already quoted. By section 2442 of the Laws of the Philippines relating to the City of Manila, there is a provision for a permanent continuing appropriation during the time the city remains the capital of the islands from any funds in the insular treasury, not otherwise appropriated, equal to 30 per cent. of the expenses of the city government within certain other limitations and the insular auditor is to ascertain the amount thus appropriated and transfer it to the city. How far this would involve quasi judicial or administrative discretion not to be controlled by mandamus, it is not necessary for us to consider or decide; because this case relates only to internal revenue receipts and their distribution in respect of which the provisions of law are specific and mandatory as we have seen. The conclusion of the Supreme Court of the Philippines in directing a mandamus to issue against the internal revenue collector and the insular auditor was in accordance with the statutory law of the Philippines and was right.
A majority of the Supreme Court of the Philippines reached this conclusion. That court further expressed an opinion as to the relation of the city of the insular auditor and his functions which was not necessary, it seems to us, to decide this case. We desire therefore to limit our opinion to the mere question whether the city's share of the internal revenue collections must be paid to the city by the collector.


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ARGUED: Sunanda Kumari Holmes, Chevy Chase, Maryland, for Appellant. James Patrick Ulwick, Kramon & Graham, P.A., Baltimore, Maryland, for Appellees. ON BRIEF: Laura Maroldy, Kramon & Graham, P.A., Baltimore, Maryland; Kevin M. Murphy, Alan Titus, Carr Maloney, P.C., Washington, D.C., for Appellees.
Before WIDENER and MICHAEL, Circuit Judges, and BEAM, Senior Circuit Judge of the United States Court of Appeals for the Eighth Circuit, sitting by designation.
Affirmed by published opinion. Judge WIDENER wrote the opinion, in which Senior Judge BEAM joined. Judge MICHAEL wrote an opinion concurring in the judgment and concurring in part.
This case concerns the procedure under Maryland and federal law for shareholders of a corporation in receivership to sue for allegedly negligent or wrongful accounting practices by firms hired to audit the corporation's records.
The present suit originated with action taken by the receiver to evaluate PrimeHealth's financial status.4 The receiver retained Walpert & Wolpoff (Walpert), an accounting firm owned by American Express Tax and Business Services to audit PrimeHealth as of December 31, 1998. He employed Johnson Lambert and Co. to perform the same audit for 1999. Goldmark alleges the following against Walpert. First, Walpert had a conflict of interest because it was already under contract with the Administration and the Commissioner to audit other Maryland HMO's and MCO's. Second, this conflict induced Walpert to perform PrimeHealth's audit without utilizing generally accepted accounting procedures and generally accepted auditing standards, ultimately rendering PrimeHealth insolvent. Third, apart from its desire to retain the Administration's independent auditing contract, the motivation for Walpert's wrongful conduct was racial bias, since both PrimeHealth and Goldmark were African-American owned companies. Goldmark makes the same allegations, except the racial bias claim, against the firm hired to perform the 1999 audit, Johnson Lambert and Company. In addition, Goldmark claims that Johnson Lambert, aware of Walpert's negligence, failed to disclose any wrongdoings to Walpert, PrimeHealth, or the receiver.
A brief procedural history of this case follows. In mid-April 2001, Goldmark directly sued Walpert and Johnson Lambert. On June 26, 2001, the district court dismissed the case with prejudice under Rule 12(b) (6) for failure to state a claim; however, the order noted that it did "except to the extent the plaintiff purports to maintain a derivative claim, which is dismissed without prejudice to refiling after demand will have been made on the Receiver."
Goldmark filed the present derivative action in early August 2001. Section III, paragraph nine of this complaint reads: "Goldmark made a demand on PrimeHealth's Receiver to sue the defendants herein, however, he refused to do so." This allegation is corroborated by a line filed in the Baltimore City Circuit Court. On September 21, 2001, Walpert, American Express, and Johnson Lambert moved to dismiss the complaint. On October 17, 2001, the district court granted defendants' motions to dismiss for failure to state a claim upon which relief can be granted pursuant to Rule 12(b) (6), stating that plaintiff failed to illustrate a violation of the business judgment rule and that there was no allegation that the receiver's failure to bring suit had been brought to the attention of the Maryland court overseeing the receivership, another requirement for bringing a suit such as this. Motions for reconsideration were denied on November 12, 2001.
On appeal Goldmark asks that we reverse the judgment of the district court, arguing along the way that it erred in denying the motions for reconsideration and denying leave to file an amended complaint. We affirm the district court's decision to dismiss the case but emphasize that our dismissal is not a decision on or an expression of opinion with relation to the merits of the claim that Goldmark seeks to derivatively assert against Walpert and Johnson Lambert. We discuss the decision to dismiss the case but because the amended complaint does not allege that Goldmark has petitioned the Baltimore City Circuit Court, which is the receivership court, to prosecute its claim against Walpert and Johnson Lambert, the motion of Goldmark to amend its complaint is patently without merit and we so hold.
The claims derivatively asserted by Goldmark against Walpert and Johnson Lambert are claims of the corporation not the claims of Goldmark itself. They are rights of action and a part of the property of the corporation. We see no difference between this suit of the corporation against its employees Walpert and Johnson Lambert and the suit of a corporation against its officers for misappropriation of its property. In such a case, the Supreme Court held the claim "is a right of the corporation" and continued " [t]he whole property of the corporation within the jurisdiction of the court which appointed the receiver, including all its rights of action, except so far as already lawfully disposed of under orders of that court, remains in its custody, to be administered and distributed by it. Until the administration of the estate has been completed and the receivership terminated, no court of the one government can by collateral suit assume to deal with rights of property or of action, constituting part of the estate within the exclusive jurisdiction and control of the courts of the other." Porter v. Sabin, 149 U.S. 473, 478, 479, 13 S. Ct. 1008, 37 L. Ed. 815 (1893).
The Court in Porter affirmed the federal circuit court which had dismissed the case in which the state court, which appointed the receiver, had denied a petition for stockholders to prosecute the claim against the officers of the corporation. And the Porter Court stated " [i]t is for that [receivership] court, in its discretion, to decide whether it will determine for itself all claims of or against the receiver, or will allow them to be litigated elsewhere. It may direct claims in favor of the corporation to be sued on by the receiver in other tribunals ...." 149 U.S. at 479, 13 S. Ct. 1008.
The same result was obtained in the case of Wabash R. Co. v. Adelbert College, 208 U.S. 38, 28 S. Ct. 182, 52 L. Ed. 379 (1908), in which an Ohio state court had authorized foreclosure of a mortgage on the property of the railway which was in receivership in a circuit court of the United States. In the Wabash case the Court reasoned " [w]hen a court of competent jurisdiction has, by appropriate proceedings, taken property into its possession through its officers, the property is thereby withdrawn from the jurisdiction of all other courts. The latter courts, although of concurrent jurisdiction, are without power to render any judgment which invades or disturbs the possession of the property while it is in the custody of the court which has seized it." 208 U.S. at 54, 28 S. Ct. 182. "Those principles [with respect to receivership] are of general application and not peculiar to the relations of the courts of the United States to the courts of the states; they are, however, of especial importance with respect to the relations of those courts, which exercise independent jurisdiction in the same territory, often over the same property, persons, and controversies; they are not based upon any supposed superiority of one court over the others, but serve to prevent a conflict over the possession of property, which would be unseemly and subversive of justice; and have been applied by this court in many cases ...." 208 U.S. at 54, 28 S. Ct. 182.
The Court is of the opinion that these allegations are insufficient. The receiver is the officer of the court, and acts under its supervision and by its direction. The refusal of the receiver was not the act of the court, but was subject to the court's review and control. The plaintiffs at bar are not shown to have invoked the court's consideration and decision. Nor does the appeal that the receiver's refusal was brought to the court's attention. The orderly course is to present the question on petition and hearing in the pending receivership cause. And thus obtain the court's judgment and order. 197 A. at 626. And the Maryland Court of Special Appeals in Tafflin v. Levitt, 92 Md.App. 375, 608 A.2d 817 (1992), followed Pritchard and held that in such a case, to maintain a derivative suit for the benefit of the corporation in receivership, a demand on the receiver and a petition of the receivership court are applicable. 608 A.2d at 820.
I concur in the judgment. In addition, I readily join in the majority's opinion to the extent it holds that Maryland law required Goldmark Friendship, L.L.C. to petition the state receivership court for an order directing the receiver to bring the derivative action that Goldmark seeks to prosecute itself. I respectfully decline to join the general discussion about whether federal courts can exercise authority over property that is under the supervision of a state receivership court.
The Baltimore City Circuit Court issued an order adopting and finalizing the report of the Administration and dismissing Goldmark's, PrimeHealth's, and Dr. Chinwuba's petitions for circuit court judicial review which was affirmed in PrimeHealth Corp. v. Ins. Comm'r, 133 Md.App. 375, 758 A.2d 539 (2000).
Just as the district court correctly held that merely requesting the receiver to prosecute this suit, and his refusal of the request, is of itself an insufficient reason to permit this case to continue, the Pritchard case so holds. We emphasize that we do not decide that merely filing a petition in the receivership Maryland court is a sufficient predicate for permitting this case to proceed in this court. As Porter v. Sabin, supra, and Wabash R. Co. v. Adelbert College, supra demonstrate, even such a petition and its refusal by action of the receivership court may well not be sufficient predicates upon which to rest this derivative action asserting a right of action belonging to the receiver. Indeed, in Wabash R. Co. the Court stated: "The defendants in error [plaintiff here] must pursue their remedy in that [receivership] court, which doubtless will consider the decisions of the state courts on questions of state law with the respect which the decisions of this court require." 208 U.S. at 57, 28 S. Ct. 182.


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• Prosecution of all the Directors of a Company for not depositing of the Employees' Provident Fund contribution after deducting from the employees will not be justified and only those persons would be liable who have actually deducted the employees' contribution and not the other person.
Kailashkumar Radhakrishan Kilnoria v. State of Gujarat, (1994) III LLJ (Supp) 428: 1991 LLR 733: 1991(63) FLR 794. (Guj HC).
• Initiation of prosecution proceedings by the Provident Fund authorities without deciding the pending representation will not be valid.
Motoshri Mudranalaya v. State of Maharashtra, (1994) III LJ (Supp) 428: 1991 LLR 900: 1991 (63) FLR 736: 1991-II LLN 900 (Bom HC).
• Employees' Provident Fund Scheme, 1952 - Paragraphs 36A, 43, 67(b) Prosecution against the Directors of the Company - For non-submission of statements in Form No. 12 and contribution cards in Form No. 3A - Alleging that all the accused are the persons in charge of the said establishment. Respondent for the conduct of its business. Except against the petitioner, the complaint is untenable against other 13 accused.
Transport Corporation of India Ltd. v. RM. Gandhi, 1991 LIC 2017: 1992 LLR 40: 1992(64) FLR 697 (Bom HC).
• Prosecution of Directors for default in payment of fund amount in time - Filing of declaration by the Company on Form SA - Stating the names of Managing Director and the two Directors including the appellant - As not only the owners but as in charge are responsible for the conduct of the business of the establishment - Prosecution of the appellant - Director being in charge and responsible for the Management of the factory - Whether legal? Yes.
Srikanta Datta Narasimharaja Wodiyar v. Enforcement Officer, Mysore, (1993) 3 see 217: AIR 1993 SC 1656: 1993 LIC 1359: (1993) 2 LLN 69: 1993 LLR 497 (SC).
• Executive or the Financial Director will not be liable for prosecution under EPF & MP Act when General Manager is responsible for compliance of the same.
B.I.E. Ltd. Cawnpore Woollen Mills Branch v. The Provident Fund Inspector, Kanpur, 1998 LLR 266 (All HC).
• Prosecution of a Managing Director, not incharge of company's business, for failure to pay P.F.'s contributions will not be justified.
Rajgopalachari S. v. Bellary Spinning and Weaving Company Ltd., 1998 LLR 344 (Karn HC).
• A Director of the company being incharge of administration will be liable for prosecution for non compliance of Provident Funds Act.
Bhagchand Jain v. P.F. Inspector, (1994) 4 LLN 939: 1998 CWN 595: 2000 II LLJ 599: 1999 LLR 912: 1999 (82) FLR 608 (Cal HC).
• Acquittal of employer for violation of EPF & MP Act will be justified when the Act did not apply to the establishment.
State through Inspector of Provident Fund, Office of the Regional Provident Fund Commissioner, Orissa, Bhubaneshwar v. M/s. Rameshwarlal Mallram, 2000 LLR 346 (Ori HC).
• Arrest of a Director declaring as employer in Form 5 for non-payment of provident fund dues will not be set-aside.
Binod Kumar Biyala v. The Regional Provident Fund Organization, West Bengal, (2001) 88 FLR 216: (2001) I LLJ 305: 2000 LLR 1172 (Cal HC).
• Recovery of EPF contributions will not be stalled on company's plea that it is before BIFR.
Universal Paper Mills Ltd. v. Regional Provident Fund Commissioner, (2001) 91 FLR 591: (2001) 2 LLJ 1139: 2002 LLR 41 (Cal HC).
• Prosecution of a Director for non-deposit of EPF contributions is to be reexamined to determine responsibility.
M. Shivram v. The Enforcement Officer, Employees' Provident Funds Shimoga, 2002 LLR 132 (Karn HC).
• Prosecution of Managing Director for non-deposit of EPF contribution cannot be quashed because the offences were committed before his joining.
Aniruddha Kumar Dhote v. State of Maharashtra, (2002) 94 FLR 94: 2002 LLR 914 (Bom HC).
• High Court cannot direct closure or prosecution for non-payment of provident contribution due to pendency of proceedings under SICA.
Aluminium Industries Ltd. v. Provident Fund Inspector, (2002) 101 FJR 128: (2002) 3 LLN 826: (2002) III LLJ 422: 2002 LLR 943 (AP HC).
• A private complaint filed by General Secretary of the Union for prosecution of the executives of the Company will not be set aside when the EPF contributions amounting to Rs. 1,72,80, 485 have been deducted but not deposited.
Shrikant Bangur v. Shree Synthetics Shramik Union, 2004 LLR 403 (MP HC).
• Prosecution of a Director of the Company for default in payment of EPF contributions will be quashed when the Director was not in over all charge of the Company and also he had ceased to be Director as under revealed from the Form 32 the Companies Act before the alleged non-payment of contributions.
R. Dhandayuthnpani v. C.R. Kaleel, 2004 LLR 142 (Mad HC).
• A complaint for prosecution in defaulting the payment of provident fund dues as filed after three years from the default will barred by limitation when the punishment for violation of the provisions is also prescribed for three years.
R. Dhandayuthapani v. C.R. Kaleel, 2004 LLR 142 (Mad HC).
• Prosecution of directors of a Company for non deposit of EPF contributions though deducted from the wages of the employees will be quashed since they do not come within the purview of 'employer' as defined by the Employees' Provident Funds & Miscellaneous Provisions Act.
Sharad Mittersain Jain v. State of Maharashtra, (2004) I Mah LJ 776: 2004 LLR 367 (Bom HC).
• Penal action and withdrawal of the exemption by the PF Authorities will be set aside when there was reasonable explanation for not producing the balance sheet.
Mitra S.K. Pvt. Ltd. v. The Regional Provident Fund Commissioner, (1) West Bengal, (2) Sikkim, (2005) 30 AIC 764: 2005 LLR 428 (Cal HC).
• Issuance of arrest warrant of the employer for failure to furnish the required information for determination of provident fund contribution will he gross misuse of power.
Vignan Education Development Society, Ongole v. Assistant Provident Fund Commissioner and Authority, Guntur, 2005 LLR 451 (AP HC).
• Prosecution under IPC for non-deposit of provident contributions despite deductions will not be quashed.
Ram Prasad Sao v. State of Bihar, 2007 LLR 1172 (Jhar HC).
• Acquittal of employer will not to be interfered when the Provident Fund Inspector did not lead supporting evidence.
Provident Fund Inspector, Kota v. Bhagi Bai, 2008 LLR 1048 (Raj HC).

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