The Honorable Prentis Edwards

Transcription

1 " STATE OF MICHIGAN IN THE CIRCUIT COURT FOR THE COUNTY OF WAYNE MICHIGAN DEPARTMENT OF TRANSPORTATION, Plaintiff, Case Number CK v. Honorable Prentis Edwards DETROIT INTERNATIONAL BRIDGE COMPANY and SAFECO INSURANCE COMPANY OF AMERICA, Defendants, ---:1 OPINION and ORDER OF THE COURT At a session of said Court held in the Coleman A. Young Municipal Center Detroit, Michigan on: ~ PRESENT: The Honorable Prentis Edwards Wayne County Circuit Court Judge PROCEDURAL HISTORY This matter comes before the Court for an Order to Show Cause Hearing to decide whether the Detroit International Bridge Company (DIBC) should be held in civil contempt for failure to comply with the February 1, 2010 Order of this Court. The Court takes judicial notice of this Court's files and records that chronicle the past actions in this case. In April of 2004, the Michigan Department of Transportation (MOOT) and DIBC entered into a multi-million dollar agreement to improve interstate freeway connections to the Ambassador Bridge with the approval and funding of the Federal Highway Administration. This project was referred to as the Ambassador Bridge Gateway Agreement (Gateway Agreement). The MDOT filed this case on June 24, 2009, seeking specific performance of the contract and damages relating to the alleged breach of the contract by DIBC. In November 2009, DIBC filed a lawsuit relating to this contract against MDOT in the Michigan Court of Claims, case MK-C30. The Court of Claims entered an order consolidating that case with this case. On December 15, 2009, the

2 Michigan State Court Administrator assigned this Court to temporarily serve as Judge of the 30th Circuit Court of Claims to resolve the consolidated cases. On February 1, 2010, this Court granted MDOT's summary disposition motion for specific performance of the contract. DIBC appealed the Order to the Michigan Court of Appeals and to the Michigan Supreme Court. Both Courts denied the appeals of DIBC. The February 1, 2010 Order required DIBC to remove all conflicting structures and complete construction of its portion of the project in accordance with the plans attached to Exhibit E to the Performance Bond and the Maintenance Agreement. Additionally, the Order specifically required DIBC to submit to this Court and MDOT a detailed timetable for completing construction of Part (A), including removing conflicting structures and dates for commencing and completion as required by the Agreements and the Performance Bond within 21 days of the Order. At a hearing on April 23, 2010, with all parties present, the MDOT complained to the Court on the record that DIBC had not removed structures constructed in the path of the design contained in the contract in violation of the Court's Order of February 1, MDOT requested that DIBC be held in contempt of Court. There was also a discussion regarding the adequacy of the timetable that DIBC belatedly submitted to the Court on April 22, The Court at that time directed that an Order to Show Cause Order be prepared and served on DIBC and Dan Stamper. On April 27, 2010, this Court signed the Order to Show Cause and scheduled a hearing for May 10, The Order to Show Cause directed Dan Stamper, President of the DIBC, to appear before this Court and show cause why the DIBC should not be held in civil contempt for failure to comply with the terms and provisions of the Court's Order of February 1, The Order required Dan Stamper to show cause why the construction of the DIRe's portion of the Gateway Project (Part A) cannot be completed within (1) one year and to show cause why Safeco Insurance Company of America should not be required to step in and complete the construction of the DIBC's portion of the Gateway Project. The Order to Show Cause further stated that the Order was issued pursuant to the Court's inherent authority as well as the authority in MCL , et seq. and MCL DIBC obtained a stay from the Michigan Supreme Court on May 5, 2010, staying the February 1,2010 Order. The stay was dissolved on May 28, DIBC removed the case to the United States District Court for the Eastern District of Michigan, on June 7, 2010 pursuant to 28 USC The United States District 2

3 Court remanded the case to this Court on August 17,2010. The District Court ruled that it was objectively unreasonable for DIBC to remove the case from the Michigan State Court. The contempt hearing was again schedule for September 23, On September 20, 2010, Rush Trucking Company filed a Motion to intervene in this case in this Court. On September 21, 2010, DIBC again removed the case to the United States District Court. The case was again remanded to this Court on November 5, JURISDICTIONAL CHALLENGE The Order to Show Cause hearing was re-scheduled to commence on December 8, At the onset ofthe hearing DIBC filed a motion pursuant to MCR for relief from the Order to Show Cause. DIBC contended that the Court lacked jurisdiction over DIBC and Dan Stamper, president ofdibc, because there was no affidavit in this case to support the issuance of the Order to Show Cause. DIBC claimed that the absence of an affidavit denied DIBC the opportunity to meaningfully prepare for the hearing and therefore denied DIBC's procedural and substantive due process rights. DIBC asserted that the Show Cause Order did not comply with the requirements ofmcl (2). The statute provides as follows: Sec (2) When any contempt is committed other than in the immediate view and presence of the court, the court may punish it by fine or imprisonment, or both, after proof of the facts charged has been made by affidavit or other method and opportunity has been given to defend. A valid Show Cause Order requires a sufficient foundation of competent evidence in an affidavit or other method and the opportunity to defend. The Michigan Supreme COUlt in In re Albeit, 383 Mich. 722 (1970), held that a trial court could take judicial notice of its own records to satisfy the "other method" used in Mel, (2). In Matter of Lewis, 24 Mich. App. 265 (1970), the COUl't determined that the voluntary appearance of the contemnor was sufficient to uphold a contempt conviction where the contemnor was given an opportunity to defend. The requirements of the statute ensure that the alleged contemnor has notice of the facts charged and an opportunity to defend. In Porter v. Porter, 285 Mich. App. 450 (2009), the Michigan Court of Appeals discussed the requirement of an affidavit to initiate civil contempt proceedings. In Porter, the Court made this observation. 3

4 Michigan courts have the inherent independent authority to punish a person for contempt. Consequently, even if the contempt proceedings were procedurally defective, the trial court was not deprived of its jurisdiction over the subject matter or the parties. The Porter Court pointed out that most of the prior cases addressing this issue involved criminal contempt or applied statutes that have since been amended. The Court indicated that MCL (2) has been amended to include proof of facts for an order to show cause supported by "affidavit or other methods". There is no question here that the DIBC had notice of the facts charged and an opportunity to defend. The charges and the need for a hearing were discussed with the parties on the record during the April 23, 2010 hearing. DIBC has had an extended period of time to prepare for the hearing. This Order to Show Cause hearing has been pending for over six months, during which time DIBC has used some of the issues contained in the Order to Show Cause to support its attempts to remove the case to Federal Court. The Order to Show Cause hearing has been re-scheduled two times because of the improper removal of the case to Federal Court by the DIBC. The August 17,2010 Order of the Federal Court remanding this case to this Court the first time, indicates that DIBC based its demand for removal to the Federal Court on this Court's April 27, 2010 Show Cause Order. Specifically, DIBC alleged in the Federal removal proceedings that the Show Cause Order requiring the DIBC to show cause why construction of its portion of the Gateway Project cannot be completed in one year created a Federal question. The affidavit of Thomas D. LaCross, the engineer who serves as project manager for DIBC's portion of the Gateway Project, was submitted to the United States District Court in June 2010, in support ofdibc's removal request and admitted as DIBC's Exhibit 4 in these proceedings, fully discusses the issues contained in the Order to Show Cause. DIBC was given notice of the facts charged, reasonablc timc to prepare a defense, a hearing on the "harges, and an opportunity to defend. The Court finds that DIBC's Motion for Relief from the Order to Show Cause is without merit and the motion is Denied. FACTS The Order to Show Cause hearing began with DIBC calling Victor Judnic, delivery engineer for MDOT, as its first witness. DIBC also called Thomas LaCross and Dan Stamper as witnesses. In addition, DIBC presented 17 exhibits consisting of numerous designs, photographs, documents, and schedules relating to the Gateway Agreement. MDOT also presented Victor Judnic as a witness and 8 exhibits which included designs, photographs, 4

5 documents, and schedules. The testimony of LaCross indicated that because of the acquisition of private property fronting Lafayette Street, the immediate removal of tollbooths is not necessary to complete the construction of the DIBC's portion of the Gateway Project. LaCross asserted that there would be no conflicting structures within Part (A) if MDOT cooperated in the relocation of the secondary maintenance road and in the alignment of the truck road from the cargo inspection facility. Dan Stamper offered information regarding anticipated traffic control problems that would result if the Court Order were followed. He also voiced concerns about security problems relating to the sterile zone at the Ambassador Bridge. During his testimony, it was pointed out that there are many activities that take place at the border crossing that have to be coordinated. He indicated that changes in the border area have to be approved and coordinated with all of the entities that have responsibilities in that area. He stressed his contention that MDOT should open certain ramps for construction on the project to start again. He suggested that DIBC has been stymied in its efforts to comply with the Court Order because of MDOT's refusal to agree to certain design changes. He indicated that despite their best efforts, they have been unable to come up with a timetable that would provide for the completion of Part (A) within (1) one year. The testimony of LaCross and Judnic was quite the opposite of each other. In response to the Court's requirement in the February 1, 2010 Order that DIBC provide a detailed timetable for the completion of Part (A), a timetable was submitted two month after the date required for compliance. The Order required that the timetable be submitted within 21 days after the February 1, 2010 Order. Over two months after the timetable was due, DIBC submitted a sketchy plan on April 22, 2010, that requires an excessive amount of time for completion. The document accompanying the timetable indicated that it was being submitted solely to avoid DIBC being held in contempt of the February 1,2010 Court Order. LaCross testified that he was responsible for producing the timetable that requires 3 years for the completion of Part (A). DIBC's timetable is separated into eleven steps. The first step starts on May 3,2010 and ends over three years later with step eleven starting on October 4, 2011 and ending on June 28, The timetable submitted by DIBC does not satisfy the requirements of the February 1, 2010 Order. DIBC's construction timetable is at variance with the design detailed in Exhibit E 5

6 to the Perfonnance Bond and the Maintenance Agreement. Notwithstanding the detailed explanation offered by LaCross regarding how the timetable was constructed, it is apparent that the timetable was a scheme used to delay the implementation of the Court's Order. For example, according to LaCross no work has been done on any of the steps listed in the timetable even though it was submitted in April The evidence elicited during the hearing indicated that the total time for completion of DIBC's portion of the Gateway Project, Part (A), was to have been within three years. The evidence further established that at least 60 to 70 percent of the work has been completed on Part (A). The DIBC timetable requires more time to complete less than half of Part (A), than the original estimated time for constructing the entire Part (A). LaCross and Dan Stamper suggested that the time allowed for DIBC's construction timetable took into account the need to facilitate the flow of international traffic and to provide opportunities to certain agencies of the United States government to perfonn their functions. Those agencies include Homeland Security, Customs, and Border Protection and Immigration. Victor Judnic, the receiving engineer for MDOT, testified that Part (A) could be completed within (1) one year. He indicated that DIBC's timetable does not take full advantage of modern technology. He indicated that some of the tasks listed in the DIBC timetable were assigned an excessive amount of time for completion. The timetable lists activities being done consecutively when many of the activities can be perfonned concurrently. He stated that tasks listed in steps 4, 6, and 7 of the DIBC timetable, are not part of Part (A) of the Gateway Project. Judnic submitted a timetable providing for the completion of Part (A) within 365 days. He indicated that he took into consideration weather conditions, security concerns, traffic control problems, and other variables that would have an effect on construction when he prepared his timetable. The testimony of the witnesses is evidence of the fact that the Gateway Project, including Part (A), is a large complex undertaking that involves coordination with a number of entities. The entire project involves difficult and challenging tasks relating to construction, traffic control, security concerns, and coordinating the responsibilities of a number of entities in this important border crossing area. Despite the challenges, the evidence shows that the majority of the work has been completed on the project. The evidence presented during this hearing clearly established that the remaining work on Part (A) of the Gateway Project can be completed within 6

7 one year without unreasonably interfering with Ambassador Bridge traffic, the operation of the bridge, or put at risk the bridge and the surrounding area. The evidence further established that DIBC has not undertaken any ofthe tasks required by the February 1,2010 Order ofthis Court. STANDARD OF PROOF In order to prove civil contempt, proof of the alleged noncompliant conduct must be established by clear and unequivocal evidence. In re Contempt of Calcutt, 184 Mich. App. 749 (1990). The issue present by this Order to Show Cause is whether there is clear and unequivocal evidence that DIBC failed to comply with the requirements of this Court's Order of February 1, In addition, is there clear and unequivocal evidence that the acts and omissions of DIBC tend to impair the authority or impede the functioning of the Court. There are several factors to be considered to establish indirect civil contempt. Did the alleged contemnor fail to comply with an Order ofthe court? Does the failure to comply impair the authority or impede the functioning of the court? Is the conduct outside of the view and presence of the court? Is the alleged contemnor under a present duty to comply with the court's Order? Does the alleged contemnor have the ability to comply with the court's Order? CONCLUSION The evidence presented at the hearing produced affirmative responses for all of the above questions. There is no evidence on the record that would remotely suggest that DIBC has complied with the February 1, 2010 Order. In fact, the evidence plainly shows that with the exception of the demolition of one building, no work has been done on Part (A) since October In addition, DIBC has failed to submit a credible construction timetable as required by the February 1, 2010 Order. It is clear that DIBC has utilized a strategy to thwart efforts to implement the requirements of this Court's February 1,2010 Order. DIBC appears to offer the following explanations for its refusal to comply with the Court's Order. 1. That agencies of the United States government would be unable to properly perform their functions at the Ambassador Bridge if the Court's Order was followed. 2. That MDOT's refusal to cooperate in determining what can be built and how to get the ramps open prevents DIBC from following the Court's Order. 7

8 The record in this case is void of any credible evidence to support the claims offered by DIBC. The tactics used by DIBC have rendered useless any efforts to obtain compliance with the February 1, 2010 Order of this Court. The actions of DIBC have served to hinder and delay the enforcement of the Order of this Court. DIBC has shown a complete disregard for the February 1,2010 Order of this Court. DIBC has chosen not to comply with the February 1,2010 Order of this Court. The Court records contain the Order from the United States District Court remanding the case to this Court for the second time. That Order is further evidence of how the actions of DIBC impede the functioning of the Court. The United State District Court stated the following in its Order ofnovember 5, 2010: il ';1,II Considering this Court's more than thirty-three years as a judicial officer, DIBC may be entitled to its recognition as the party who has devised the most creative schemes and maneuvers to delay compliance with a court order. DIBC's schemes fail, however, as they lack support in the law of this Circuit. The conduct that resulted in the noncompliance by DIBC occurred outside of the view and presence ofthe Court. DIBC is presently under a duty to comply with the Court Order and it has the ability to comply. The Court has considered the evidence, as well as the arguments of the parties and finds by clear and unequivocal evidence that DIBC is presently not complying with the February 1, 2010 Order of this Court. This Court further finds by clear and unequivocal evidence that DIBC's conduct impairs the authority and impedes the functioning of this Court. DIBC is in civil contempt of this Court The Order to Show Cause also seeks to have Safeco Insurance Company of America step in and complete DIBC's portion of the Gateway Project. A default was entered against Safeco early in this case which has not been set aside. Counsel for Safeco has appeared at the show cause hearings while acknowledging that MCR 2.603(A)(3) bars Safeco from proceeding in this action. The Court advised Counsel for Safeco that if damages were being considered against Safeco, a separate hearing would be held at which time Safeco would be permitted to participate in determining the extent of the damages. During these proceedings no evidence was presented 8

9 regarding Safeco. For that reason, no decision will be made regarding Safeco's obligation at this time. SANCTIONS It is well established that the Court has independent inherent authority as well as statutory authority to impose sanctions for contempt. In re Contempt of Dougherty, 429 Mich. 81 (1967); MCL et seq. In addition, the Court in Homestead v. Holly Twp., 178 Mich. App. 239 (1989), pointed out that the statute authorizes payments for losses including attorney fees sustained as a result of the other party's contempt. The Dougherty case and MCL (2), indicate that in civil contempt cases where there is an omission to do what is still within the contemnor's power to do, imprisonment may be imposed until he performs or no longer has the power to perform. The law is clear that the sanctions imposed for contempt should be the least that is adequate to accomplish the purpose. Township of Prairieville v. Vankeuren, 2004 Mich App Lexis The purpose for sanctions here is to coerce compliance by DIBC with the Order of February 1,2010. It does not appear that the imposition of financial sanctions alone will serve to coerce DIBC to comply with the February 1, 2010 Order. As the United States District Court Judge aptly pointed out, DIBC has devised the most creative schemes and maneuvers to delay compliance with a court order. The Judge assessed DIBC cost and attorney fees after the first attempt to remove this case to federal court. DIBC again attempted to remove this case to the federal court and was again assessed costs and attorney fees. The Judge stated in his November 5,2010 Order, remanding the case again, the following: Here again, because well-established law informed DIBC that its removal was not proper, the court awards MDOT the cost and expense including reasonable attorney fees, it incurred as a result of the removal. Given the history of this case, it is evident that stringent sanctions are needed to bring about compliance with the February 1, 2010 Order of this Court. IT IS THEREFORE ORDERED that the Detroit International Bridge Company shall pay a fine of$7, to this Court within 14 days of the date of this Order. 9

10 ) IT IS ORDERED THAT the Michigan Department of Transportation shall submit to the Court its cost and reasonable attorney fees incurred as result of these contempt proceedings within (14) days of the date of this Order, at which time the Court will enter an Order awarding MDOT a specific amount of costs and fees. IT IS ORDERED THAT The Detroit International Bridge Company shall forthwith submit to this Court, the Michigan Department of Transportation, and to the monitor, Charles Scales, a detailed timetable that will ensure full compliance with the February 1, 2010 Order within one (1) year from the date ofthis Order. IT IS ORDERED THAT DIBC shall submit bi-weekly reports regarding all work scheduled, in progress, or completed relating to Part (A) to the Court, MOOT, the Monitor, and a representative from Safeco Insurance Company of America (Safeco). The first report shall be due January 24, 2011 and every other Monday thereafter until the project is completed. IT IS ORDERED THAT DIBC, MDOT, the Monitor, and Safeco's representative shall participate in bi-weekly construction coordination meetings to coordinate any construction issues beginning the week of January 24, 2011 and thereafter every other week until the project is completed. IT IS ORDERED THAT Dan Stamper, President of the Detroit International Bridge Company shall be imprisoned in the Wayne County Jail until the Detroit International Bridge Company begins to comply with the February 1,2010 Order of this Court or when he no longer has the powcf tu l;umply with the February I, 2010 Order. IT IS FURTHER ORDERED THAT the imprisonment of Dan Stamper, President of the Detroit International Bridge Company shall cease when the Detroit International Bridge Company begins to comply with the February 1, 2010 Order or he no longer has the power to comply with the February 1, 2010 Order. Date: January 10, DGE PRENTIS EDWARDS A TRUE COpy CATHY M. GARRETT WAYNE COUNTY CLEf~}< ~ ~~-, BY 1-:> -,... ;~ty OI.EfU(