Opinion
354708
01-06-2022
MR. SUNSHINE, EDWARD AMYOT, and STEPHEN EMSLEY, Plaintiffs-Appellants, v. DETROIT INSTITUTE OF ART BOARD OF DIRECTORS and DETROIT INSTITUTE OF ARTS, INC., Defendants-Appellees.
UNPUBLISHED
Oakland Circuit Court LC No. 2020-179801-CZ
Before: Stephens, P.J., and Sawyer and Servitto, JJ.
Per Curiam
The issue presented in this appeal is whether defendants, the Detroit Institute of Arts, Inc. (DIA), and its board of directors (Board), are subject to the Open Meetings Act (OMA), MCL 15.261 et seq. We conclude that defendants are not subject to the OMA because they are not public bodies within the meaning of the OMA. Accordingly, we affirm the trial court's grant of summary disposition under MCR 2.116(C)(8) (failure to state a claim upon which relief can be granted).
The analysis of this issue includes the role that the Art Institute Authorities Act (AIAA), MCL 123.1201 et seq. plays in applying the OMA. In 2010, the Legislature enacted the AIAA, MCL 123.1201 et seq., "to provide for the establishment of art institute authorities; to provide for the powers and duties of an art institute authority; to authorize the levy and collection of a property tax by an art institute authority; and to provide for the powers and duties of certain government officials." 2010 PA 296, title. The AIAA authorizes any county to form an "art institute authority" as "a public corporate body with the power to sue and be sued in any court of this state." MCL 123.1205.
Under the AIAA, an art institute authority is established when a majority of the county board of commissioners adopts the authority's articles of incorporation, which take effect upon filing with the Secretary of State. MCL 123.1207. Subject to approval of a majority of the voters in the county, the AIAA authorizes an art institute authority to levy "a tax of not more than 0.2 mill" on taxable property in the county "for the purpose of providing revenue to an art institute services provider that will be used exclusively for the benefit of the art institute with respect to which the art institute services provider renders services." MCL 123.1217(1). The AIAA defines "art institute" as "an encyclopedic art museum whose primary art collection and facility, at the date an authority is established, are owned by a municipality located in this state." MCL 123.1203(a). The AIAA defines "art institute services" as "the operation or support of an art institute," MCL 123.1203(b), and "art institute services provider" as "a nonprofit entity qualified under section 501(c)(3) of the Internal Revenue Code, 26 USC 501(c)(3), that, as its primary purpose, provides art institute services to an art institute." MCL 123.1203(c).
Pursuant to the AIAA, Wayne, Oakland, and Macomb each created art institute authorities. The art institute authorities of each county then engaged the DIA to operate and manage the museum. Turning to the instant dispute, shortly before the scheduled vote on renewal of the millage in each of the three counties, plaintiffs filed a complaint against defendants in the Oakland Circuit Court. Plaintiffs asserted that the DIA is an encyclopedic art museum as well a nonprofit entity that is both an art institute and an art institute services provider under the AIAA, and that the DIA, "as its primary purpose, operates and provides art institute services to the museum." Plaintiffs further asserted that the art institute authorities of Wayne, Oakland, and Macomb counties engaged the DIA to provide art institute services for the museum, that the DIA has complete responsibility for operation of the museum, that the DIA receives approximately 60% of its revenue through the millages assessed in Wayne, Oakland, and Macomb counties, that the funds collected and transferred to the DIA through the millages totaled $25.2 million in 2018 and $25.9 million in 2019, that the funds projected to be collected in 2022 total $27.9 million, and that defendants "exercise sole legislative and proprietary authority" over these funds. Plaintiffs also alleged that defendants are public bodies under the OMA, but do not comply with the requirements of the OMA. As examples of this noncompliance, plaintiffs asserted that defendants failed to establish rules for persons to address meetings of the Board, refused to allow persons to address meetings, failed to provide notice of meetings, failed to keep minutes of meetings, and failed to comply with the requirements of § 3 of the OMA, MCL 15.263.
The complaint describes "Mr. Sunshine" as "a citizens group organized to promote open meetings of Michigan Public Bodies."
Plaintiffs requested various forms of relief, including orders compelling defendants to comply with the OMA, to provide minutes for all past meetings, to correct existing minutes to comply with the OMA, to comply with the OMA in all future meetings, motions, and minutes, and to permit persons to address meetings of the Board. Plaintiffs also sought orders enjoining future noncompliance with the OMA and concluded with a request for an award of costs and attorney fees. Defendants responded to the complaint by filing a motion for summary disposition pursuant to MCR 2.116(C)(8). Following a hearing on defendants' motion, the trial court granted summary disposition in favor of defendants and denied plaintiffs' request to amend the complaint on the basis of futility. Plaintiffs now appeal and we affirm.
A trial court's decision regarding a motion for summary disposition is reviewed de novo. El-Khalil v Oakwood Healthcare, Inc, 504 Mich. 152, 159; 934 N.W.2d 665 (2019). "De novo review means that we review the legal issue independently, without required deference to the courts below." Wright v Genesee Co, 504 Mich. 410, 417; 934 N.W.2d 805 (2019). A motion under MCR 2.116(C)(8) tests the factual sufficiency of the complaint based on the pleadings alone; all well-pleaded factual allegations are accepted as true and are construed in a light most favorable to the nonmoving party. Kazor v Dep't of Licensing & Regulatory Affairs, Bureau of Prof Licensing, 327 Mich.App. 420, 422; 934 N.W.2d 54 (2019). Judgment is properly granted under MCR 2.116(C)(8) when the claims are clearly unenforceable as a matter of law and no factual development could possibly justify recovery. Id. Issues of law and statutory interpretation are also reviewed de novo. Cooper v Auto Club Ins Ass'n, 481 Mich. 399, 406; 751 N.W.2d 443 (2008).
The question presented is whether the DIA is a public body under the OMA. We conclude that it is not. Plaintiffs first argue that they did plead in their complaint that defendants are public bodies and that for purposes of MCR 2.116(C)(8), that allegation must be accepted as true. While plaintiffs are correct that well-plead factual allegations must be accepted as true, whether defendants are public bodies under the OMA is a conclusion of law rather than a factual allegation. Therefore, it does not need to be accepted as true for purposes of resolving the summary disposition motion.
When interpreting statutory mandates, courts are required to discern and apply the intent of the Legislature, to examine the purpose of the statute, and to look to the plain meaning of the statutory language. Booth Newspapers, Inc v Univ of Mich. Bd of Regents, 444 Mich. 211, 221-222, 224; 507 N.W.2d 422 (1993). Unambiguous statutes must be enforced as written. Fluor Enter, Inc v Dep't of Treasury, 477 Mich. 170, 174; 730 N.W.2d 722 (2007).
As our Supreme Court has recognized, "[t]he threshold issue under the OMA is whether an entity is a 'public body.'" Herald Co v Bay City, 463 Mich. 111, 129; 614 N.W.2d 873 (2000), mod by Mich Federation of Teachers & Sch Related Personnel, AFT, AFL-CIO v Univ of Mich, 481 Mich. 657; 753 N.W.2d 28 (2008). "Public body" is defined in § 2 of the OMA:
"Public body" means any state or local legislative or governing body, including a board, commission, committee, subcommittee, authority, or council, that is empowered by state constitution, statute, charter, ordinance, resolution, or rule to exercise governmental or proprietary authority or perform a governmental or proprietary function; a lessee of such a body performing an essential public purpose and function pursuant to the lease agreement; or the board of a nonprofit corporation formed by a city under section 4o of the home rule city act, MCL 117.4o . [MCL 15.262(a).]
Plaintiffs have not alleged, and do not contend on appeal, that the DIA is a lessee of a body performing an essential public purpose and function pursuant to the lease agreement, nor that the Board is the board of a nonprofit corporation formed by a city under the Home Rule City Act, MCL 117.1a et seq.
As this Court explained in Davis v Detroit Fin Review Team, 296 Mich.App. 568, 591; 821 N.W.2d 896 (2012), in order to qualify as a public body under the OMA, an entity must be a state or local legislative or governing body, and it must be empowered by law to exercise governmental or proprietary authority or perform a governmental or proprietary function.
Plaintiffs contend that their complaint properly alleged that the DIA is a public body subject to the OMA. However, the only allegations on that issue appear in just two paragraphs in the complaint. First, plaintiffs alleged that defendants "exercise the sole legislative and proprietary authority over the Tricounty Funds." Next, plaintiffs alleged that "Defendants Detroit Institute of Art Board of Directors (the Board) and Detroit Institute of Arts, Inc. (DIA) are public bodies subject to the Open Meetings Act (OMA)." The complaint includes no further allegations on this threshold issue.
Given the factors that must be considered in order to determine whether an entity is a public body under the OMA, these allegations are not allegations of fact, but legal conclusions. A legal conclusion is "[a] statement that expresses a legal duty or result but omits the facts creating or supporting the duty or result." Black's Law Dictionary (11th ed.) This definition clearly fits the allegations in paragraphs 22 and 23 of the complaint: plaintiff alleged no facts supporting the conclusion that defendants exercise legislative or proprietary authority over the millage funds, and no facts supporting the conclusion that defendants are public bodies under the OMA.
In Capitol Props Group, LLC v 1247 Ctr St, LLC, 283 Mich.App. 422, 426; 770 N.W.2d 105 (2009), this Court explained that "[a] statement of plaintiff's conclusions, unsupported by allegations of fact, does not suffice to state a cause of action." In that case, the plaintiff contended that the trial court should have accepted as true the allegation that the defendants violated local ordinances; this Court disagreed, finding that whether the defendants committed the alleged violations was a conclusion of law. In Davis v Detroit, 269 Mich.App. 376, 379, n 1; 711 N.W.2d 462 (2006), the plaintiff, pleading in avoidance of governmental immunity, alleged that the defendant was engaged in a proprietary activity; this Court held that "[p]laintiff's reliance on her allegation in her complaint that the city was engaged in a proprietary activity is unwarranted because only factual allegations, not legal conclusions, are to be taken as true under MCR 2.116(C)(7) and (8)." Similarly, in Lansing Sch Ed Ass'n v Lansing Bd of Ed, 293 Mich.App. 506, 519; 810 N.W.2d 95 (2011), this Court disagreed that the plaintiffs' allegations of physical assaults must be accepted as true for the purposes of MCR 2.116(C)(8) because the allegations were not allegations of fact: "the operative issue of whether these physical assaults occurred is a legal conclusion reached only after applying legal standards to a complex set of facts."
In this case, whether defendants exercised legislative or proprietary authority or satisfied the definition of public bodies under OMA are legal conclusions that could only be reached after examination of detailed factual allegations not included in the complaint. Thus, the trial court was not required to accept plaintiffs' allegations as true in deciding defendants' motion under MCR 2.116(C)(8).
We next turn to plaintiffs' argument that the DIA, by defendants' own admission, is not a private entity. Plaintiffs base this argument on the tax form that defendants file with the IRS, which is not to be used by private foundations, and that defendants conceded that, before the enactment of the AIAA the DIA and its collection was owned by the city and the museum was operated for the public. But we find neither of these facts, even if true, to be of consequence to the resolution of this case. First, the OMA's definition of "public body" is not dependent upon an entity's status for federal tax purposes. Second, even if plaintiffs' description of the DIA's status before the enactment of the AIAA is accurate, that is not relevant to this case. It is the current status of the DIA that is relevant.
But see Detroit Museum of Art v Engel, 187 Mich. 432, 440; 153 N.W. 700 (1915), where the Court observed that the DMA "was incorporated as a private corporation, and it must be conceded that it is now a private corporation, unless its organization has been changed."
Next, plaintiffs argue that defendants are public bodies under the OMA because the AIAA empowers the DIA to receive, appropriate, and spend the millage assessed by the Art Institute Authority. We disagree. The AIAA empowers the county art institute authorities, but does not empower art institute services providers, and plaintiffs have cited no other constitution, statute, charter, ordinance, or resolution that empowers defendants to exercise governmental or proprietary authority or perform a governmental or proprietary function. Thus, plaintiffs are not entitled to relief on this ground.
To "empower" means "to give official authority or legal power to" or to "enable." Merriam-Webster's Collegiate Dictionary (2003). The unambiguous purpose of the AIAA is stated in the enacting legislation: "to provide for the establishment of art institute authorities; to provide for the powers and duties of an art institute authority; to authorize the levy and collection of a property tax by an art institute authority; and to provide for the powers and duties of certain government officials." 2010 PA 296, title. The text of the AIAA is similarly unambiguous, and clearly empowers a county board of commissioners to create an art institute authority, which is in turn empowered to provide funding to an art institute services provider, to levy taxes, and to enter into contracts with an art institute services provider. MCL 123.1207; MCL 123.1211. The AIAA simply defines "art institute services" and "art institute services providers," MCL 123.1203, but does not grant authority or legal power or authority to art institute services providers.
Although the AIAA may enable an art institute services provider to receive millage funds, it does not specifically enable an art institute services provider to exercise governmental or proprietary authority or perform a governmental or proprietary function. To adopt plaintiffs' argument and find that the AIAA empowers the recipients of the millage funds would mean that any time that a statute empowers a public body to spend taxpayer funds the recipient of those funds is then "empowered." The language of the AIAA does not support that interpretation, and plaintiffs have provided no authority supporting that interpretation.
In their statement of facts, plaintiffs compare this case to Jackson v Eastern Mich. Univ Foundation, 215 Mich.App. 240; 544 N.W.2d 737 (1996), reasoning that, in Jackson, the Eastern Michigan University (EMU) foundation derived its authority from a resolution of the EMU board of regents, while in this case defendants derived their authority from the AIAA. This comparison does not withstand scrutiny: in Jackson, this Court held that the foundation was a public body under the OMA because the board of regents delegated the authority to manage the university's entire endowment fund to the foundation. Jackson, 215 Mich.App. at 247. Under the AIAA, the art institute authorities do not delegate any of their authority to manage the millage funds; the county art institute authorities have no authority to manage those funds, except to transfer them to an art institute services provider. Indeed, the AIAA prohibits the county authorities from participating "in the governance of an art institute." MCL 123.1205(4). Because the AIAA does not empower defendants to exercise governmental or proprietary authority or perform a governmental or proprietary function, the order granting summary disposition in favor of defendants should not be reversed on these grounds.
These precursor issues lead to the ultimate issue in this case: Is the DIA a public body under the OMA. If it is not, then plaintiffs have not stated a claim upon which relief can be granted. And we agree that the DIA is not a public body under the OMA. To satisfy the OMA's definition of "public body," the DIA must, first, be a "state or local legislative or governing body." MCL 15.262(a). The DIA is neither.
In Davis, 296 Mich.App. at 591-592, this Court examined whether a financial review team formed under the former Local Government and School District Fiscal Accountability Act, MCL 141.1501 et seq., was a "public body" under the OMA. First addressing whether a financial review team was a legislative body, this Court noted that the OMA does not define the term. Citing three dictionary definitions of "legislative," each of which defined the word as relating to the passage of laws, this Court held that the act "does not give a financial review team the power to make or enact law, to bring something into or out of existence by making law, or to attempt to bring about or control by legislation." Id. at 593. Thus, this Court ruled, "a financial review team cannot legislate and it has no legislative function." Id.
As in Davis, in this case, defendants do not have the power to make laws, to bring something into or out of existence by making law, or to control by legislation, and plaintiffs have provided no authority otherwise. In their complaint, plaintiffs simply alleged that defendants "exercise the sole legislative and proprietary authority over the Tricounty Funds." On appeal, plaintiffs simply contend that "passing motions appropriating the public fisc is legislating" and "appropriation by passing budget motions is the exercise of a legislative function." But plaintiffs have cited no authority to support the conclusion that passing a budget motion is tantamount to making law. Plaintiffs attempt to distinguish Davis on the basis that, unlike the Detroit financial review team, "the DIA has complete control over the Tricounty Funds once those funds are transferred and received by the DIA." But in Davis, this Court found that the financial review team was not a legislative body because it had no authority to make law. Davis, 296 Mich.App. at 592. The same is true in this case: defendants cannot make law, and thus are not legislative bodies.
In Davis, this Court then examined whether the financial review team was a "governing body." Davis, 296 Mich.App. at 593-594. Because the OMA does not define the term, this Court again turned to dictionaries, citing several definitions of "govern," before observing:
Further, the Legislature has elsewhere defined "governing body" to mean a body that has some specific authority over a political subdivision: a board of commissioners for a county, a city or village council, a township board, a body with legislative powers, or any body that has general governing or policymaking authority over a political subdivision. [Id. at 594.]
Thus, in Davis, this Court focused on the authority an entity exercises over a political unit or subdivision. In this case, plaintiffs do not allege that defendants have any authority over any political unit or subdivision.
The Davis Court further explained that because the OMA requires that a public body must be empowered by the state constitution, charter, ordinance, resolution or rule to "exercise governmental or proprietary authority or perform a governmental or proprietary function," MCL 15.262(a), a court must examine the authority or function that the entity in question is empowered by law to exercise or perform. The focus must be on the authority delegated, rather than the authority actually exercised. Davis, 296 Mich.App. at 594. In this case, the AIAA does not empower the DIA to exercise any governmental authority or perform any governmental or proprietary function, and plaintiffs have not cited any other statute, charter, ordinance, resolution, or rule that empowers defendants to do so.
In this case, plaintiffs' argument boils down to the assertion that because defendants have independent authority to spend the county millage funds, they are public bodies subject to the OMA. This is an unwarranted expansion of the OMA and the AIAA.
The OMA does not include the receipt of public funds in the definition of "public body." The Legislature could have done so, as it did in the FOIA, which includes, as public bodies, entities that are "primarily funded by or through state or local authority . . . ." MCL 15.232(h)(iv). Thus, in this case, defendants may qualify as public bodies under the FOIA if they are primarily funded through the county millage funds, see Sclafani v Domestic Violence Escape, 255 Mich.App. 260, 270; 660 N.W.2d 97 (2003), while not fitting the definition of public bodies under the OMA.
Moreover, in enacting the AIAA, the Legislature expressly provided that county art institute authorities are subject to the OMA: "The business that an authority may perform shall be conducted at a public meeting of the authority held in compliance with the open meetings act, MCL 15.261 to 15.275." MCL 123.1209(4). The AIAA contains no such provision regarding art institute services providers. When examining the language of a statute, courts may consider the maxim "expressio unius est exclusio alterius," meaning "that the express mention of one thing in a statute implies the exclusion of other similar things." Alcona Co v Wolverine Environmental Prod, Inc, 233 Mich.App. 238, 247; 590 N.W.2d 586 (1998). In this case, the express application of the OMA to art institute authorities, but not to art institute services providers, implies that the Legislature did not intend for the OMA to apply to art institute services providers.
The trial court aptly compared defendants to vendors. Under plaintiffs' interpretation of the OMA, any time a government agency contracts with a vendor to provide a service, that vendor would be subject to the OMA. The trial court properly rejected this argument and granted defendants' motion for summary disposition.
Finally, plaintiffs argue that they had a right to amend their complaint pursuant to MCR 2.116(I)(5). We review the trial court's decision for an abuse of discretion. Liggett Restaurant Group, Inc v City of Pontiac, 260 Mich.App. 127, 138; 676 N.W.2d 633 (2003). An abuse of discretion occurs when the court's decision falls outside the range of reasonable and principled outcomes. In re Kostin, 278 Mich.App. 47, 51; 748 N.W.2d 583 (2008). "An error of law necessarily constitutes an abuse of discretion." Denton v Dep't of Treasury, 317 Mich.App. 303, 314; 894 N.W.2d 694 (2016).
Plaintiffs have not established that any amendment of their complaint would not be futile. That is, plaintiffs have not demonstrated what allegations or claims could be added to their complaint that would create a claim upon which relief could be granted. An appellant may not give issues cursory treatment with little or no citation to supporting authority and the failure to properly address the merits of an assertion constitutes abandonment of the issue on appeal. Davis, 296 Mich.App. at 585. Absent a more concrete argument that would support a valid reason to allow amendment, we decline to consider this issue further and determine that the trial court abused its discretion in denying amendment.
Affirmed. Defendants may tax costs.