RECEIVED by Michigan Court of Appeals 1/20/2012 5:03:41 PM STATE OF MICHIGAN
IN THE COURT OF APPEALS
IN RE MANUEL J. MOROUN and DAN STAMPER, Court of Appeals No. 308053
Appellants,
MICHIGAN DEPARTMENT OF TRANSPORTATION, Wayne County Case No. 09-015581-CK Plaintiff,
v
DETROIT INTERNATIONAL BRIDGE COMPANY, and SAFECO INSURANCE COMPANY OF AMERICA,
Defendants.
APPELLANTS MANUEL J. MOROUN AND DAN STAMPER’S BRIEF ON APPEAL
ORAL ARGUMENT REQUESTED
KERR, RUSSELL AND WEBER, PLC MOGILL, POSNER & COHEN William A. Sankbeil (P19882) Kenneth M. Mogill (P17865) Joanne Geha Swanson (P33594) Jill M. Schinske (P70958) Attorneys for Appellant Manuel J. Moroun Attorneys for Appellant Dan Stamper 500 Woodward Avenue, Suite 2500 27 E Flint Street, 2nd Floor Detroit, MI 48226 Lake Orion MI 48362 (313) 961-0200 (248) 814-9470 [email protected]
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TABLE OF CONTENTS
INDEX OF AUTHORITIES...... ii STATEMENT OF BASIS FOR JURISDICTION ...... v STATEMENT OF QUESTIONS PRESENTED ...... vi INTRODUCTION ...... 1 CONCISE STATEMENT OF FACTS AND PROCEEDINGS ...... 3 A. Mr. Stamper and Mr. Moroun ...... 3 B. Sanctions Imposed By the January 12 Order and Subsequent Proceedings ...... 9 ARGUMENT ...... 12 I. Where, in Litigation Between an Agency of the State and a Corporation, a Trial Court Orders Two Individuals Affiliated With the Corporation to Be Jailed Until the Trial Court Determines There Has Been Completion of a Construction Project Without Having Given Notice to Either to Show Cause Why They Should Not Be Personally Sanctioned, the Trial Court’s Order is Unconstitutional, Violates the Notice and Hearing Requirements of MCL 600.1711(2) and MCR 3.606(A), and Must Be Reversed...... 12 A. The Standard of Review is De Novo...... 12 B. Mr. Moroun and Mr. Stamper Are Not DIBC...... 12 C. Absent an Order to Show Cause Specifically Naming Mr. Moroun and Mr. Stamper, Neither Has Received the Fair Notice to Which They Are Entitled as a Matter of Due Process, Statute and Court Rule...... 15 II. Because the Trial Court’s Order Jailing Appellants Did Not Give Them the “Keys To Their Cells” and Was Not the Least Restrictive Alternative Adequate to the Proposed End, It Was a Manifestly Improper Use of the Civil Contempt Power and Is Invalid as a Matter of Law...... 20 III. The February 1 Order Is Not Definite And Specific Enough To Serve As The Basis Of A Contempt Finding...... 26 A. The Order DIBC Has Allegedly Violated Is Not Clear And Definite, A Prerequisite To Any Contempt Charge...... 26 B. The February 1 Order Contains Contradictory Commands And It Is Therefore Impossible For DIBC To Comply...... 32 C. The Court Has Abandoned Paragraph 8 Of The Gateway Project Thus Making It Impossible for DIBC To Finish Construction...... 34 IV. Where, As Here, the Judge Who Ordered Incarceration Acted As Both Accuser and Finder of Fact, and Has Become Personally Embroiled in the Litigation, Any Further Proceedings Regarding Appellants Should Be Held Before a Different Judge...... 36 RELIEF REQUESTED ...... 39
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INDEX OF AUTHORITIES Cases Crampton v Department of State, 395 Mich 347; 235 NW2d 352 (1975) ...... 39 DeGeorge v Warheit, 276 Mich App 587; 741 NW2d 384 (2007) ...... 12 Edidin v Detroit Econ Growth Corp, 134 Mich App 655; 352 NW2d 288 (1984) ...... 27 Elliott v Bradshaw, 59 So3d 1182 (Fla App, 2011) ...... 22 Elliott v Smith, 47 Mich App 236; 209 NW2d 425 (1973) ...... 12 Grace v Center for Auto Safety, 72 F3d 1236 (CA 6, 1996) ...... 18 Henry v Rouse, 345 Mich 86; 75 NW2d 836 (1956) ...... 27 Holmes v Holmes, 281 Mich App 575; 760 NW2d 300 (2008) ...... 33 In re Contempt of Auto Club Ins Assoc, 243 Mich App 697; 624 NW2d 443 (2000) ...... 17 In re Contempt of Dudzinski, 257 Mich App 96; 667 NW2d 68 (2003) ...... 24 In re Contempt of Rochlin, 186 Mich App 639; 465 NW2d (1991) ...... 17 In re Contempt of Scharg, 207 Mich App 438; 525 NW2d 479 (1994) ...... 39 In re Contempt of Steingold, 244 Mich App 153; 624 NW2d 504 (2000) ...... 17 In re Hague, 412 Mich 532; 315 NW2d 524 (1982) ...... 24 In re MB, 101 Wash App 425; 3 P3d 780 (2000) ...... 22 In re Murchison, 349 US 133; 75 S Ct 623; 99 L Ed 942 (1954) ...... 37 In re Oliver, 333 US 257; 68 S Ct 499; 92 L Ed 682 (1948) ...... 15
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In the Matter of Hirsch, 116 Mich App 233; 323 NW2d 349 (1982) ...... 39 In the Matter of Meizlish, 72 Mich App 732; 250 NW2d 525 (1976) ...... 24 Kline v Kline, 104 Mich App 700; 305 NW2d 297 (1981) ...... 13 KLN v State, 881 NE2d 39 (Ind App, 2008) ...... 22 Laker v Soverinsky, 318 Mich 100; 27 NW2d 600 (1947) ...... 27 Lawrence M Clarke, Inc v Richco Constr, Inc, 489 Mich 265; 803 NW2d 151 (2011) ...... 15 M & C Corp v Erwin Behr GmbH & Co, KG, 2007 US Dist LEXIS 101806, unpublished opinion of the US District Court, ED Mich, issued February 9, 2007 (Docket No. 91-CV-74110-DT) ...... 18 M & M Aerotech, Inc v Dept of Treasury, 1999 Mich App LEXIS 2745 unpublished opinion per curiam of the Court of Appeals, issued November 23, 1999 (Docket No. 211460) ...... 12 Mathews v Eldridge, 424 US 319; 96 S Ct 893; 47 L Ed 2d 18 (1976) ...... 15 Mayberry v Pennsylvania, 400 US 455; 91 S Ct 499; 27 L Ed 2d 532 (1971) ...... 37 Mead v Batchler, 435 Mich 480; 460 NW2d 493 (1990) ...... 14 NLRB v Cincinnati Bronze, Inc, 829 F2d 585 (CA 6, 1987) ...... 26 People v Johnson, 407 Mich 134; 283 NW2d 632 (1979) ...... 16 People v Kurz, 35 Mich App 643; 192 NW2d 594 (1971) ...... 39 People v Lowenstein, 118 Mich App 475; 325 NW2d 462 (1982) ...... 39 People v Matish, 384 Mich 568; 184 NW2d 915 (1971) ...... 24 Porter v Porter, 285 Mich App 450; 776 NW2d 377 (2009) ...... 12, 16 Project BASIC v Kemp,
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947 F2d 11 (CA 1, 1991) ...... 17, 18 Richmond Black Police Officers Ass’n v City of Richmond, 548 F2d 123 (CA 4, 1977) ...... 19 Shillitani v United States, 384 US 364; 86 S Ct 1531; 16 L Ed 2d 622 (1966) ...... 24 Soloman v Western Hills Development Co, 110 Mich App 257; 312 NW2d 428 (1981) ...... 13 Spallone v United States, 493 US 265; 110 S Ct 625; 107 L Ed 2d 644 (1990) ...... 16, 24, 25 Taylor v Hayes, 418 US 488; 94 S Ct 2697; 41 L Ed 2d 897 (1974) ...... 37 United Mine Workers v Bagwell, 512 US 821; 114 S Ct 2552; 129 L Ed 2d 642 (1994) ...... 15, 21, 22, 24 Wayne County Executive v Acorn Investment Co, 2005 Mich App LEXIS 6, unpublished opinion per curiam of the Court of Appeals, issued January 4, 2005 (Docket Nos. 248925-248928) ...... 17 Wechsler v Aetna Life Ins Co, 83 Mich App 320; 268 NW2d 394 (1978) ...... 13 Wilcox v Gauntlett, 200 Mich 272; 166 NW 856 (1918) ...... 13, 14 Statutes MCL 450.1317(4) ...... 12 MCL 600.1711(2) ...... 14, 15, 19 MCL 600.1715 ...... 20 Other Authorities Schulman, Moscow & Lesser, Michigan Corporation Law & Practice (2012 Supp) ...... 13 Rules MCR 3.606 ...... 14 MCR 3.606(A) ...... 3, 15, 19 Constitutional Provisions Michigan Constitution, 1963, Art. 1 ...... 14 United States Constitution, Am V and XIV ...... 14
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STATEMENT OF BASIS FOR JURISDICTION
Jurisdiction exists in this Court pursuant to MCR 7.203(A), MCR 7.204 and MCR
7.202(6)(a). Appellants Manuel J. Moroun and Dan Stamper appeal from an Opinion and Order
entered by Wayne County Circuit Court Judge Edward Prentis on January 12, 2012 ordering
their imprisonment in the Wayne County Jail as a sanction for the contempt of the Detroit
International Bridge Company (“DIBC”) (“January 12 Order”) (Exhibit 1). Mr. Moroun and
Mr. Stamper timely filed their Claim of Appeal the same day the January 12 Order was entered.
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STATEMENT OF QUESTIONS PRESENTED
1. Whether the Trial Court’s January 12 Order must be reversed because it indefinitely incarcerates non-parties Manuel J. Moroun and Dan Stamper until the Trial Court determines there has been completion of a construction project without having given them notice to show cause why they should not personally be sanctioned, or an opportunity to be heard, in violation of the United States and Michigan Constitutions and the notice requirements of MCL 600.1711(2) and MCR 3.606(A)?
Appellants Manuel J. Moroun and Dan Stamper say “yes.” The Trial Court says “no.” MDOT did not seek any sanction against Appellants.
2. Whether the Trial Court’s January 12 Order indefinitely incarcerating Manuel J. Moroun and Dan Stamper is a manifestly improper use of the civil contempt power and invalid as a matter of law because it does not provide Mr. Moroun or Mr. Stamper the opportunity to purge the contempt by performing a specific unequivocal affirmative act and is not the least restrictive alternative adequate to the proposed end?
Appellants Manuel J. Moroun and Dan Stamper say “yes.” The Trial Court says “no.” MDOT did not seek any sanction against Appellants.
3. Whether the underlying February 1, 2010 Order used as the basis for sanctions is too vague and unclear to support an order to show cause?
Appellants Manuel J. Moroun and Dan Stamper say “yes.” The Trial Court says “no.” MDOT would say “no.”
4. Whether any further proceedings regarding Appellants should be held before a different judge when the judge who ordered incarceration acted as both accuser and finder of fact and has become embroiled in the case?
Appellants Manuel J. Moroun and Dan Stamper say “yes.” The Trial Court says “no.” MDOT would say “no.”
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INTRODUCTION
This appeal challenges the January 12 Order of Wayne County Circuit Court Judge
Prentis Edwards incarcerating Appellants Manuel J. Moroun and Dan Stamper in the Wayne
County Jail as a sanction for the contempt of the Detroit International Bridge Company
(“DIBC”). Mr. Moroun and Mr. Stamper are not DIBC. They have committed no crime. They
have not been charged with violating any court order, nor have they been heard on any such
charge. Mr. Moroun and Mr. Stamper had no notice that their personal liberty was at risk, and
have not been told what they personally did – or failed to do – to warrant this sanction.
The January 12 Order should be reversed for the following reasons. First, the
incarceration of Mr. Moroun and Mr. Stamper without notice, hearing or an opportunity to
defend violates the basic right to due process guaranteed to every citizen by our Federal and
Michigan Constitutions, and conflicts with the statutes and court rules that govern contempt
proceedings in the circuit court. The January 12 Order requires Mr. Moroun and Mr. Stamper to
remain in jail indefinitely or until DIBC fully complies with the Court’s February 1, 2010 Order
(“February 1 Order”) (Exhibit 2) granting the request of the Michigan Department of
Transportation (“MDOT”) for specific performance of a construction contract and directing
DIBC to complete its portion of the Ambassador Bridge Gateway Project.
Second, the January 12 Order violates the fundamental tenet of civil contempt that the
contemnor holds the keys to the jail in his pocket. The January 12 Order fails to identify any
specific act that Appellants must perform to purge the contempt and secure their release. The
Order simply states that Appellants will be released when DIBC has fully complied with the
February 1 Order, which means completion of the Project. MDOT believes completion of the
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Project to its satisfaction will take a minimum of nine to twelve months. The January 12 Order
is, in essence, an indefinite prison sentence that fails to provide either Appellant with the
proverbial key to his own release that is the hallmark of civil contempt. Further, the January 12
Order is not the least restrictive alternative adequate to the proposed end.
Third, the underlying February 1 Order – an order relating to an extremely complex
construction project the drawings as to which run to nearly 230 pages and involve extensive
construction activity under traffic at the busiest international crossing in North America -- is not
sufficiently definite and specific to support an order to show cause or contempt proceedings
against Mr. Moroun, Mr. Stamper or DIBC.
Finally, the Trial Court Judge improperly acted as both accuser and factfinder.
Throughout these proceedings, MDOT never sought contempt against Mr. Moroun or
Mr. Stamper individually; it was the Court, acting on its own, that injected Mr. Moroun and
Mr. Stamper into this process by ordering Appellants to appear in court on January 12 and
imprisoning them without a proper show cause hearing for DIBC’s asserted failure to comply
with the Court’s February 1 Order. The Trial Court improperly attributed to DIBC an
unexplained desire not to complete the Project when, in fact, DIBC is strongly motivated to
complete the Project as soon as possible, so that it can facilitate travel for commerce and the
public, put an end to costly litigation and get on with the business of the company. However, the
underlying February 1 Order – which orders specific performance of an executory construction
contract that leaves issues of design and construction plans to the parties’ further agreement – is
not sufficiently specific to resolve the issues between MDOT and DIBC, and the Trial Court has
refused DIBC’s requests for clarification of the February 1 Order, alternative dispute resolution,
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or trial on the remaining count of MDOT’s complaint. As a result, the Trial Court has prevented
the entry of a final order and, consequently, a right to appeal by DIBC. Any further proceedings
regarding Appellants in the trial court should be assigned to a different judge.
CONCISE STATEMENT OF FACTS AND PROCEEDINGS
In 2009, MDOT filed suit in Wayne County Circuit Court against DIBC and the Safeco
Insurance Company of America (“Safeco”) arising from a dispute between MDOT and DIBC
over completion of a portion of a multi-million dollar construction project known as the
Ambassador Bridge Gateway Project. MDOT, DIBC and Safeco are the only parties to the
lawsuit. The underlying dispute arises out of the parties’ differing interpretations of their
respective contractual obligations. Mr. Moroun and Mr. Stamper are not parties to the action and
have never been served with the process necessary to make them parties.
A. Mr. Stamper and Mr. Moroun
Dan Stamper is the President and a director of DIBC. He is 62 years-old, married and a
life-long Michigan resident with deep roots in the community.
Mr. Stamper is the primary decision-maker regarding the Gateway Project, as he has
candidly acknowledged in testimony before the Trial Court. September 1, 2011 Transcript (“9/1
Tr.”) (Exhibit 3) at 132-134, 141. At no point in the underlying litigation has the Trial Court
ordered Mr. Stamper to do or to refrain from doing any act, with one exception: On June 13,
2011, on MDOT’s ex parte motion pursuant to MCR 3.606(A), the Trial Court ordered Mr.
Stamper, in his capacity as President of DIBC, to appear before the court and “show cause why
the Detroit International Bridge Company should not be held in civil contempt for failure to
comply with the terms and provisions of this Court’s February 1, 2010, Opinion and Order.”
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June 13 Order (Exhibit 4) (Emphasis added). As directed by the Trial Court, Mr. Stamper, in his
capacity as President of DIBC, appeared at each hearing on the order to show cause directed at
DIBC.
At no point in the underlying action has MDOT sought or evidenced entitlement to
individual sanctions against Mr. Stamper. In particular, on October 21, 2011, MDOT filed its
Proposed Findings of Fact and Conclusions of Law with respect to the show cause hearing,
seeking the imposition of sanctions against DIBC and not seeking the imposition of any
sanctions against Mr. Stamper or against any other individual (Proposed Findings, Exhibit 5).
The Trial Court’s November 3, 2011 Order (“November 3 Order”) (Exhibit 6) reiterates
in its introductory paragraph that the “matter is before the Court for an Order to Show Cause
Hearing to determine 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.” Id.
(emphasis added). The same order concludes that “DIBC is in civil contempt of this Court.”
November 3 Order at 12. The Order does not find Mr. Stamper in contempt of court.
Mr. Moroun is a director but not an officer of DIBC. See Moroun’s Motion to Excuse
and Brief (Exhibit 7) and Moroun’s Reply (Exhibit 8). His trust is a minority shareholder in
DIBC Holdings, the holding company that is the sole owner of DIBC. Id. Mr. Moroun is 84-
years old and has had several heart procedures. January 12, 2012 Transcript (“1/12 Tr.”) at 21
(Exhibit 9). He is married, a long-time Michigan resident, and deeply rooted in the community.
This action has been pending for 2½ years. Prior to the November 3 Order directing
Mr. Moroun to be present in court on January 12, Mr. Moroun had never appeared, and was
never required to appear, at any court hearing related to the underlying litigation. He was not
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mentioned in any Court order or directed to take, or refrain from taking, any action. His
testimony was never solicited by subpoena or affidavit and, except for testimony elicited by
several general cross-examination questions propounded by an MDOT attorney relating to the
corporate structure of DIBC, Mr. Moroun was not mentioned in any testimony.1
The November 3 Order directed Mr. Moroun, for the first time, to attend a January 12
hearing scheduled by the Court to determine the appropriate sanctions to be imposed for DIBC’s
contempt. November 3 Order at 13. There was no notice that the Trial Court order directing
Mr. Moroun to appear at the January 12 hearing was to adjudicate Mr. Moroun’s conduct or to
subject him to sanctions for DIBC’s conduct. In the November 3 Order, Mr. Moroun, whom the
Court incorrectly referred to as the “owner of DIBC,” was ordered to appear “to ensure that the
proper decision makers for DIBC are present.” November 3 Order at 13. The only other
reference to Mr. Moroun in the November 3 Order related to an “option” urged upon the Court
by MDOT to appoint “a Receiver to stand in the place of the owner of DIBC Manual ‘Matty’
Moroun and its officers with authority to make decisions regarding … implementation of the …
Order.” November 3 Order at 12. The November 3 Order does not indicate that the purpose of
requiring Mr. Moroun’s appearance was to adjudicate his personal liberty, whether as a matter of
civil or criminal contempt or for any other reason.
By motion seeking to excuse his appearance from the January 12 hearing and to inform
the Court in advance that Mr. Moroun was not the owner of DIBC, Mr. Moroun demonstrated
1 Mr. Moroun’s name was mentioned at a September 1, 2011 hearing when Mr. Stamper was generally asked to whom he answers. Without answering specific to the Gateway Project, Mr. Stamper testified that he answers to the Centra Board and identified Mr. Moroun as a member of that board. As Mr. Moroun explained in his Reply, prior to 2008, DIBC was owned by Centra but is now wholly owned by DIBC Holdings. See Moroun Reply at 4 (Exhibit 8).
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that DIBC was wholly owned by DIBC Holdings, a fact MDOT later admitted. See MDOT
Response to Motion to Excuse (“MDOT Resp.”, attached as Exhibit 10) at 2 (admitting that
DIBC Holdings “owns DIBC” and is the “sole owner of DIBC”) and MDOT Resp. at 3
(attaching March 30, 2010 corporate disclosure statement attesting that DIBC is wholly owned
by DIBC Holdings).
The November 3 Order did not indicate that a purpose of the hearing was to punish
Mr. Moroun or Mr. Stamper for DIBC’s actions, and there wasn’t a scintilla of evidence to
support any sanctions against Mr. Moroun or Mr. Stamper. Legally, under well-recognized
principles of corporate law, a corporation’s distinct legal identity immunizes its shareholders and
directors from liability for the conduct of the corporation absent their active participation, and
there were neither allegations nor evidence of any such acts by Mr. Moroun. Constitutionally, the
federal and state Constitutions (along with applicable Michigan statutes and court rules) simply
did not allow Mr. Moroun to be held in contempt or sanctioned for DIBC’s contempt without
factually supported notice and an opportunity to be heard. Shockingly, premised on procedural
error and erroneous factual findings, and without regard for the well-accepted legal principles
addressed below, the Trial Court ordered that Mr. Moroun, along with Mr. Stamper, be
imprisoned for an indefinite period of time (until the Trial Court believes the Project is
complete).2
2 The Court’s remarks at the January 12 hearing - repeated in the January 12 Order - illuminate the Court’s refusal to distinguish between DIBC and Mr. Moroun. At the hearing, the Court remarked that DIBC “has filed … a Request for, to Excuse Mr. Moran – Moroun from this hearing” and that “[I]t is the Detroit International Bridge Company’s contention or claim that Mr. Moroun is not the owner of the Detroit International Bridge Company and that he has no authority regarding the Ambassador Bridge Gateway Project.” 1/12 Tr. (Exhibit 9) at 13 (emphasis added). See also January 12 Order at 1 (“In addition, DIBC has … a request that
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The Court’s asserted reliance upon “the record” to support the premise that Mr. Moroun
exercised decision-making authority over the Gateway Project is revealing. In the January 12
Order, the Court goes so far as to say that there has never been “the slightest hint” “[t]hroughout
these lengthy proceedings” that “Mr. Moroun does not have an ownership in the DIBC or have
any authority related to this Project” and “[r]egardless of the designation assigned to
Mr. Moroun, the record in this case clearly shows that he has the power over decisions with
respect to the Project and the power to ensure compliance with the Order of this Court.”
January 12 Order at 2. The Court does not explain how it could possibly reach a factual
conclusion based upon the absence of record evidence on this issue inasmuch as Mr. Moroun’s
authority was never an issue in the case, and all of the record evidence regarding responsibility
for the Gateway Project places decision-making authority in Mr. Stamper. See 9/1 Tr. at 132-
134, 141 (Exhibit 3). Nonetheless, the Court concluded that Mr. Moroun was a “decision
maker” and used this conclusion as the basis for its decision to incarcerate Mr. Moroun. From
the bench, the Court explained:
The key, the key decision makers at the Detroit International Bridge Company, Manuel Moroun, Dan Stamper and Matthew Moroun have the responsibility to ensure that the Detroit International Bridge Company fully comply with the order of this Court. Control of the compliance process is in the hands of these key decision makers at the Detroit International Bridge Company.
1/12 Tr. at 15-16. Similarly, identifying Mr. Moroun, Mr. Stamper and Matthew Moroun as
“key decision makers,” the January 12 Order states that DIBC decision makers have “the …
Manuel “Matty” Moroun … be excused from attending the January 12, 2012 hearing. It is the contention of DIBC that Mr. Moroun is neither the owner of the DIBC nor a decision maker regarding the Ambassador Bridge Gateway Project (Project). DIBC therefore asserts that Mr. Moroun’s presence at the hearing would not assist the Court in devising an appropriate sanction”) (emphasis added). The Court was wrong in stating DIBC was making the request. Mr. Moroun, through his individual counsel, filed the motion to excuse.
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requisite understanding of the project” to ensure its timely completion, that “control of the
compliance process is in the[ir] hands,” and that they “have the obligation to ensure the
completion of [DIBC’s] portion of the Project in accordance with the February 1, 2010 Order.”
January 12 Order at 4.
This was the first time throughout these lengthy proceedings that the Trial Court had ever
intimated that it intended Mr. Moroun to be held personally liable or responsible for DIBC’s
compliance with the Court’s orders or that it believed that Mr. Moroun had made decisions
contrary or inconsistent with the Court’s orders. At no time had Mr. Moroun ever been held to
have personally violated any order of the Court, or ordered to show cause why he personally
should not be held in contempt or imprisoned for DIBC’s contempt. MDOT sought no relief
against Mr. Moroun, as evidenced by MDOT’s October 21, 2011 Proposed Findings of Fact and
Conclusions of Law (Exhibit 5), and each of the show cause orders entered by the Trial Court
have been directed solely to DIBC. See, e.g., 4/27/2010 Order to Show Cause (Exhibit 11);
6/13/2011 Order to Show Cause (Exhibit 4).
Further, nothing in the record supports the Trial Court’s perception of Mr. Moroun as a
decision maker regarding the Gateway Project or DIBC’s compliance with court orders. There is
nothing in the record regarding Mr. Moroun’s “understanding of the project.” There is
absolutely no evidence that Mr. Moroun assumed “[c]ontrol of the compliance process” or
exerted “power and control over decisions regarding compliance with the February 1, 2010 Court
Order” or “construction of DIBC’s portion of the Project.” January 12 Order at 4. Nor is there
any evidence that Mr. Moroun “did not intend to carry out construction of [DIBC’s] portion of
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the Project in conformity with the Order of this Court, without the Court imposing meaningful
coercive measures.” Id. at 5.
B. Sanctions Imposed By the January 12 Order and Subsequent Proceedings
On January 12, 2012, the Trial Court announced the sanctions it was imposing as a result
of its finding that DIBC was in civil contempt of court. After ordering DIBC to pay a fine of
$7,500.00 within 14 days and directing MDOT to submit within 14 days its costs and attorney
fees incurred in the litigation, the Court ordered the immediate jailing of Mr. Moroun and
Mr. Stamper:
IT IS ORDERED THAT Manuel “Matty Moroun” and Dan Stamper shall be imprisoned in the Wayne County Jail until the Detroit International Bridge Company complies with the February 1, 2010 Order of this Court.
IT IS ORDERED THAT the imprisonment of Manuel “Matty” Moroun and Dan Stamper shall cease when the Detroit International Bridge Company has fully complied with the February 1, 2010 Order of this Court or they no longer have the power to comply with the February 1, 2010 Order of this Court.
IT IS FURTHER ORDERED THAT this matter is continued until February 9, 2010 for further review of the status of the project and the appearance of the Vice President of DIBC, Matthew Moroun.
January 12 Order at 6. See also 1/12 Tr. at 16. In ordering that Mr. Stamper and Mr. Moroun be
jailed, the Trial Court did not state whether it was finding either or both in contempt of court or
whether it was ordering them to be jailed as a sanction for its finding that DIBC was in civil
contempt of court. 1/12 Tr. at 12-16. Mr. Stamper and Mr. Moroun were not at any time given a
trial or a hearing before being jailed.
The January 12 Order indefinitely imprisons Mr. Moroun and Mr. Stamper until there is
“full” compliance by DIBC (not by Mr. Moroun or Mr. Stamper) with the Court’s February 1
Order (Exhibit 2). The February 1 Order stated in part that DIBC shall “complete construction
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of its portion of the Gateway Project in accordance with the plans attached to the Performance
Bond and the Maintenance Agreement.” February 1 Order at 15.
Based upon the work that MDOT asserts remains to be performed, incarceration would
continue for a minimum of nine to twelve months – the time necessary to complete the Project.
For example, to complete modifications on Piers 11, 12 and 13, just one of the items MDOT
insists needs to be completed, MDOT’s own estimate is that such work will take 34 weeks. See
MDOT’s June 1, 2011 Motion for Relief To Ensure Real and Meaningful Progress (without
exhibits) (Exhibit 12), at 3. This is just one item; the Trial Court has listed seven items that need
to be completed.
Upon announcement of the Trial Court’s decision, Mr. Moroun and Mr. Stamper
immediately moved (by oral and written motion) for release pending appeal and orally moved to
stay the January 12 Order pending appeal. The Trial Court denied both motions. See Order
Denying Release Pending Appeal (“Release Order”) (Exhibit 13) and Order Denying Stay
Pending Appeal of Order Directing that Manuel J. Moroun and Dan Stamper Be Imprisoned in
the Wayne County Jail (“Stay Order”) (Exhibit 14). Appellants immediately filed in this Court a
Claim of Appeal from the January 12 Order, an Emergency Motion for Release Pending Appeal
of Order of Imprisonment, and a Motion for Immediate Consideration. Late in the day of
January 12, this Court granted immediate consideration of the Motion for Release and, on a 2-1
vote, denied release pending appeal (January 12, 2012 COA Order, Exhibit 15). Hours later and
seeking immediate consideration, Appellants filed an Emergency Motion for Peremptory
Reversal and/or For Stay of Enforcement. On January 13, 2012, this Court granted immediate
consideration of the motion, stayed “[e]nforcement of the January 12, 2012, order of the Wayne
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County Circuit Court ... only with respect to the imprisonment of Moroun and Stamper, until
further order of this Court”; and directed that Mr. Moroun and Mr. Stamper be “released
forthwith.” The Court also ordered expedited briefing and hearing of Mr. Moroun’s and
Mr. Stamper’s appeal (January 13, 2012 COA Order, Exhibit 16).
On January 18, 2012, the Trial Court issued a further order indicating that at the
impending February 9, 2012 civil contempt proceeding, “a determination will be made regarding
the need for further steps to coerce compliance with the Feburary 1, 2010 Order of this Court.”
January 18 Order (Exhibit 17). The Order states that the Court will review a January 6, 2012
report prepared for MDOT by HNTB regarding the estimated costs to complete DIBC’s portion
of the Project and costs MDOT “may be incurring as a result of DIBC’s delay.” The Order also
directs the court-appointed monitor to submit a report “updating his January 5, 2012 report
indicating work relating to DIBC’s portion of the Ambassador Bridge Gateway Project
performed between January 5, 2012 and February 3, 2012” and addressing the status of certain
specified items. Id. The Order further directs MDOT to submit by February 6, 2012 an estimate
of the time MDOT would require to complete DIBC’s portion of the Gateway Project.
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ARGUMENT
I. Where, in Litigation Between an Agency of the State and a Corporation, a Trial Court Orders Two Individuals Affiliated With the Corporation to Be Jailed Until the Trial Court Determines There Has Been Completion of a Construction Project Without Having Given Notice to Either to Show Cause Why They Should Not Be Personally Sanctioned, the Trial Court’s Order is Unconstitutional, Violates the Notice and Hearing Requirements of MCL 600.1711(2) and MCR 3.606(A), and Must Be Reversed.
A. The Standard of Review is De Novo.3
While a trial court’s decision regarding a contempt motion is reviewed for an abuse of
discretion, issues of law, including issues of constitutional law arising in the context of a
contempt proceeding are reviewed de novo. DeGeorge v Warheit, 276 Mich App 587, 591; 741
NW2d 384 (2007); Porter v Porter, 285 Mich App 450, 455; 776 NW2d 377 (2009).
B. Mr. Moroun and Mr. Stamper Are Not DIBC.
The fiction underlying the January 12 Order is that non-parties Mr. Moroun and
Mr. Stamper are tantamount to DIBC and stand in its place vis a vis the contempt proceedings.
This is not so. It is an elemental principle of corporate law that the identities of shareholders,
officers and directors are legally distinct from the corporation. As this Court explained in M &
M Aerotech, Inc v Dept of Treasury, 1999 Mich App LEXIS 2745 at *13, unpublished opinion
per curiam of the Court of Appeals, issued November 23, 1999 (Docket No. 211460),4 “[i]t is
well-established that a corporation is an entity separate from that of its individual shareholders,
officers, and directors” citing, Schusterman v Employment Security Comm’n, 336 Mich 246,
259-260; 57 NW2d 869 (1953) (emphasis added); Elliott v Smith, 47 Mich App 236, 240; 209
NW2d 425 (1973) (“The corporation is a separate and distinct legal entity, notwithstanding the
3 This de novo standard of review applies to each of the contempt issues raised. 4 Unpublished opinions are attached as Exhibit 18.
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fact that Robert H. Smith was the sole shareholder, president of the corporation, and one of the
directors”).
Even if one of these gentlemen was a shareholder, which they are not, it would be of no
legal moment. A shareholder’s immunity from personal liability has, in fact, been codified.
MCL 450.1317(4) provides that
[u]nless otherwise provided in the articles of incorporation, a shareholder of a corporation is not personally liable for the acts or debts of the corporation except that he or she may become personally liable by reason of his or her own acts or conduct.
See also, Schulman, Moscow & Lesser, Michigan Corporation Law & Practice (2012 Supp),
§3.9(a), p 3-17 fn 57, citing, Gledhill v Fisher & Co, 272 Mich 353, 358; 262 NW 371 (1935),
which states, “A refusal to recognize the ordinary immunity of stockholders not only overturns a
basic provision of statutory or common law, but is also contrary to a vital economic policy
underlying the whole corporate concept,” quoting, Powell, Parent and Subsidiary Corporations, p
6; Wechsler v Aetna Life Ins Co, 83 Mich App 320, 325; 268 NW2d 394 (1978) (“A corporation
is a legal entity separate from its shareholders.”); Kline v Kline, 104 Mich App 700, 702; 305
NW2d 297 (1981), citing Bourne v Muskegon Circuit Judge, 327 Mich 175, 191; 41 NW2d 515
(1950); Soloman v Western Hills Development Co, 110 Mich App 257, 262-265; 312 NW2d 428
(1981) (“Generally, the law treats a corporation as an entirely separate entity from its
stockholders, even where one person owns all of the corporation’s stock.” “[T]he trial court’s
finding of individual liability in the absence of any improper use of the corporate form is
inequitable to [defendants]”).
Directors are likewise not liable for the acts of the corporation. In Wilcox v Gauntlett,
200 Mich 272; 166 NW 856 (1918), plaintiff gave the seller a security deposit to protect against
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the buyer’s failure to settle its account. Instead of retaining the deposit in a special account, the
company commingled the deposit with its general funds. When the company later became
insolvent, plaintiff sued the directors alleging that they were personally liable for negligently
failing to ensure that the deposit was used for the single purpose for which it had been given.
The Supreme Court disagreed, stating:
Whether this act was done by Gauntlett and the other defendants, directors of the corporation, or by Gauntlett alone without their knowledge, the act was nevertheless a corporate act and not one of the individual. No personal liability of the directors arose under the circumstances and the verdict in their favor was properly directed.
Id. at 275 (emphasis added).
These principles are not arguable. Indeed, accepting the Trial Court’s logic would mean
that a shareholder could be held in contempt of court if a corporation did not satisfy the court’s
money judgment – a preposterous proposition contrary to commercial law in every state. If the
Trial Court’s ruling is upheld, no one would ever again incorporate a business in Michigan, and
corporations would be loathe to remain here. Thus, any such notion must be dispelled. With
loss of personal liberty at risk – a highly individual and closely guarded constitutional treasure –
this Court’s first task is to determine whether Mr. Moroun and Mr. Stamper were individually
accorded the due process rights required in contempt proceedings. As demonstrated below, they
clearly were not. 5
5 See Mead v Batchler, 435 Mich 480, 498; 460 NW2d 493 (1990) (“It is axiomatic that the liberty interest of every citizen – the right to personal, physical freedom – is of paramount importance under the constitution.”)
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C. Absent an Order to Show Cause Specifically Naming Mr. Moroun and Mr. Stamper, Neither Has Received the Fair Notice to Which They Are Entitled as a Matter of Due Process, Statute and Court Rule.
The right to be free from abusive use of the contempt power applies to everyone,
regardless of wealth or poverty or whether the person at risk is publicly popular, unpopular or
unknown. The United States and Michigan Constitutions (U.S. Const, Am V and XIV; Mich
Const 1963, art 1, §17), MCL 600.1711(2), and MCR 3.606 all require that, except as to matters
of summary criminal contempt, before any person may be incarcerated for civil or criminal
contempt they must be given fair notice that they are being charged with contempt and a
meaningful opportunity to be heard on that charge. The rights to be heard at a meaningful time
and in a meaningful manner are the two most basic of an individual’s rights to due process of
law. It is, in fact, “[t]he fundamental requirement of due process.” Mathews v Eldridge, 424 US
319, 333; 96 S Ct 893; 47 L Ed 2d 18 (1976) (cites omitted) (emphasis added). Except in cases
of summary criminal contempt, this right specifically applies in all cases of alleged contempt. In
the well-known case of In re Oliver, 333 US 257, 275; 68 S Ct 499; 92 L Ed 682 (1948), a case
arising out of Michigan’s discredited “one-man grand jury” practice, the United States Supreme
Court made it clear that
due process of law ... requires that one charged with contempt of court be advised of the charges against him, have a reasonable opportunity to meet them by way of defense or explanation, have the right to be represented by counsel, and have a chance to testify and call other witnesses in his behalf, either by way of defense or explanation.
(emphasis added). See also Lawrence M Clarke, Inc v Richco Constr, Inc, 489 Mich 265, 274-
275; 803 NW2d 151 (2011); United Mine Workers v Bagwell, 512 US 821, 827; 114 S Ct 2552;
129 L Ed 2d 642 (1994), (“civil contempt sanctions ... may be imposed in an ordinary civil
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proceeding upon notice and an opportunity to be heard”) (emphasis added); Spallone v United
States, 493 US 265, 273; 110 S Ct 625; 107 L Ed 2d 644 (1990) (vacating findings of contempt
against non-party individual members of city council); People v Johnson, 407 Mich 134, 149 fn
15; 283 NW2d 632 (1979).
The right to meaningful notice is also codified in Michigan by statute and court rule.
MCL 600.1711(2) provides that in all cases of non-summary contempt, no person may be
sanctioned unless “opportunity has been given to defend.” MCR 3.606(A) is even more detailed,
requiring that the alleged contemnor receive notice that he or she is personally being charged
with contempt. The rule provides in relevant part that
For a contempt committed outside the immediate view and presence of the court, on a proper showing on ex parte motion supported by affidavits, the court shall either
(1) order the accused person to show cause, at a reasonable time specified in the order, why that person should not be punished for the alleged misconduct; or
(2) issue a bench warrant for the arrest of the person.
(emphasis added). Notably and understandably, in a society that highly values individual
freedom, the rule does not treat notice to an alleged contemnor as notice to the alleged
contemnor’s agents or employees. The case law as to notice has consistently reiterated the
importance of these principles. In Porter, supra, 285 Mich App at 456-457, for example, this
Court stated that “in a civil contempt proceeding, the accused must be accorded rudimentary due
process, i.e., notice and opportunity to present a defense” (emphasis added). The failure to
follow this process deprives the court of subject matter jurisdiction over the contempt
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proceedings. In re Contempt of Steingold, 244 Mich App 153, 159-160; 624 NW2d 504 (2000)
(cite omitted).
Importantly as to the instant matter, in In re Contempt of Auto Club Ins Assoc, 243 Mich
App 697, 712-713; 624 NW2d 443 (2000), this Court not only emphasized that a civil contempt
proceeding “must follow the procedures established in MCR 3.606,” it also reversed a finding of
contempt against the Auto Club Insurance Association where the order to show cause named
only its attorney, not the association itself, as an alleged contemnor. See also Wayne County
Executive v Acorn Investment Co, 2005 Mich App LEXIS 6 at *8-9, unpublished opinion per
curiam of the Court of Appeals, issued January 4, 2005 (Docket Nos. 248925-248928) (vacating
finding of contempt against non-party with ownership interest in subject properties and
“remand[ing] the case for the trial court to conduct a second show cause hearing to allow Karr to
attend and present a defense”).
Even where notice has been given, it must be specific. In In re Contempt of Rochlin, 186
Mich App 639, 649; 465 NW2d 388 (1990), for example, this Court reversed one of the criminal
contempt charges against Rochlin where the charge was that he had perjured himself in failing to
disclose his ownership interest in two automobiles and he was found guilty of contempt for
having perjured himself in concealing a bank account.
The First Circuit Court of Appeals illustrates these principles in Project BASIC v Kemp,
947 F2d 11, 17 (CA 1, 1991), making particularly clear the specificity of notice that is required
before one may be held in contempt:
[T]hose who would suffer penalties for disobedience must be aware not merely of an order’s existence, but also of the fact that the order is directed at them. This tenet has not been stated frequently. Withal, the relative rarity of articulation testifies more to the sheer obviousness of the principle, cf., e.g., M. de Cervantes,
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Don Quixote de la Mancha, Pt. III, bk. 10 (1615) (“Forewarned, forearmed.”), than to doubts about its legitimacy. We think it is beyond serious question that, as a necessary prelude to a finding of contempt, the putative contemnor should have reasonably definite advance notice that a court order applies to it...
A court order, then, must not only be specific about what is to be done or avoided, but can only compel action from those who have adequate notice that they are within the order’s ambit. For a party to be held in contempt, it must have violated a clear and unambiguous order that left no reasonable doubt as to what behavior was expected and who was expected to behave in the indicated fashion...
Project BASIC was cited with approval in Grace v Center for Auto Safety, 72 F3d 1236, 1241
(CA 6, 1996), where the court reiterated the high degree of specificity necessary in an order that
is the basis of an allegation of contempt based on its violation:
“In a civil contempt proceeding,” we have said, “the petitioner must prove by clear and convincing evidence that the respondent violated the court’s prior order.” Glover v. Johnson, 934 F.2d 703, 707 (6th Cir.1991), citing N.L.R.B. v. Cincinnati Bronze, Inc., 829 F.2d 585, 590 (6th Cir.1987). The order must be “definite and specific,” in the words of Cincinnati Bronze, 829 F.2d at 591. In a formulation used by other circuits, the order must be “clear and unambiguous.” Project B.A.S.I.C. v. Kemp, 947 F.2d 11, 16 (1st Cir.1991) (citing numerous cases). “[U]nbroken lines of authority ... caution us to read court decrees to mean rather precisely what they say,” and ambiguities must be resolved in favor of persons charged with contempt. NBA Properties, Inc. v. Gold, 895 F.2d 30, 32 (1st Cir.1990) (Breyer, J.).
(emphasis added). See M & C Corp v Erwin Behr GmbH & Co, KG, 2007 US Dist LEXIS
101806 at *15, unpublished opinion of the US District Court, ED Mich, issued February 9, 2007
(Docket No. 91-CV-74110-DT), report and recommendation adopted in part 2007 US Dist
LEXIS 90092, unpublished opinion of the US District Court, ED Mich, issued December 7,
2007, quoting, 11A Wright, Miller & Kane, Federal Practice and Procedure (Civil 2d), §2960:
“[W]hen it is sought to charge a person with contempt who was not a party to the original action and thus not already within the jurisdiction of the court, that party must be served with process as in any other civil action.”
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See also Richmond Black Police Officers Ass’n v City of Richmond, 548 F2d 123, 126-127 (CA
4, 1977) (due process violated, inter alia, when two of three appellants found in contempt even
though not directed to show cause).
In the instant case, the Trial Court’s June 13, 2011 order to show cause did not place
Mr. Moroun or Mr. Stamper on notice that either was personally charged with contempt. To the
contrary, by not including either as a person who might be held in contempt at the hearing,
especially after directing Mr. Stamper to show cause only why DIBC should not be held in
contempt, the order affirmatively gave Mr. Moroun and Mr. Stamper notice that each was not a
person who might be held in contempt.
That neither Mr. Moroun nor Mr. Stamper has been a subject of the Trial Court’s
hearings as to whether DIBC is or is not in contempt of court is further reflected by the fact that
(1) MDOT did not request a finding of contempt against either Mr. Moroun or Mr. Stamper in its
October 21, 2011 Proposed Findings of Fact, Conclusions of Law, and Practical
Recommendations (Exhibit 5) submitted following the conclusion of hearings on the June 13,
2011 order to show cause, and (2) the Trial Court’s January 10, 2011 Order (Exhibit 19) and
November 3, 2011 Order (Exhibit 6) found DIBC and not Mr. Moroun or Mr. Stamper in
contempt of court and did not direct Mr. Moroun or Mr. Stamper personally to take or refrain
from taking any action. Mr. Moroun and Mr. Stamper have had no notice whatsoever that they
were personally at risk of being jailed for DIBC’s contempt.
Neither MDOT nor the Trial Court has ever alleged, let alone proven, that Mr. Moroun’s
or Mr. Stamper’s acts or conduct make them personally liable for DIBC’s asserted violations. If
the Trial Court intended to imprison any specific individuals, it was required to afford them
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personal notice and an opportunity to defend in accordance with their federal and state due
process rights, statutory law, court rules and case law.
For all of these reasons, neither Mr. Moroun nor Mr. Stamper received the fair notice to
which each was entitled as a matter of federal and state constitutional law, MCL 600.1711(2) and
MCR 3.606(A). The Trial Court’s January 12 incarceration order denied due process of law and
must be reversed.
II. Because the Trial Court’s Order Jailing Appellants Did Not Give Them the “Keys To Their Cells” and Was Not the Least Restrictive Alternative Adequate to the Proposed End, It Was a Manifestly Improper Use of the Civil Contempt Power and Is Invalid as a Matter of Law.
The January 12 Order requires that Mr. Moroun and Mr. Stamper be jailed “until the
Detroit International Bridge Company complies with the February 1, 2010 Order of this Court”
and that their incarceration is to continue until “the Detroit International Bridge Company has
fully complied with the February 1, 2010 Order of this Court or they no longer have the power to
comply with the February 1, 2010 Order of this Court.”6 While Appellants’ incarceration is to
cease when DIBC has “fully complied with the February 1, 2010 Order ... or they no longer have
the power to comply with the February 1, 2010 Order”, the Order is a manifestly improper
exercise of the civil contempt power for multiple reasons:
6 The January 12 Order does not expressly find either Mr. Moroun or Mr. Stamper in contempt of court. The Order refers to MCL 600.1715 as the basis for imposing contempt sanctions, January 12 Order at 5, but it does not state whether the Court was independently finding Mr. Moroun and Mr. Stamper in contempt of court or jailing them as a part of the sanction it was imposing against DIBC. This Court, in captioning this case as “In re Contempt of Manuel J. Moroun and Dan Stamper” and referring in its January 12, 2012 order to MCL 600.1715 as the basis for the Trial Court’s order, appears to have concluded that the Trial Court found Mr. Moroun and Mr. Stamper in contempt. Appellants agree that, regardless of the absence of such a label in the Trial Court’s order, its order was one of contempt.
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1. The January 12 Order requires their incarceration but does not direct either Mr. Moroun or Mr. Stamper to take or refrain from taking any specific act or acts.
2. Appellants’ incarceration and release are entirely dependent on the actions of DIBC, regardless of who orders those actions or fails to do so on behalf of DIBC.
3. Completion of the remaining portions of the Gateway Project as ordered by the Trial Court will take from nine to twelve months.
4. The Gateway Project is a massive undertaking requiring multiple, frequent decisions and then follow-up action by engineers, contractors, sub- contractors and others. Mr. Stamper, as president of DIBC and the person with overall responsibility for completion of DIBC’s portion of the project, has issued and continues to issue orders to bring the Project to completion, but once he has issued the orders he can issue at any given point in time, follow through with these directives takes time, often weeks or months, yet the Trial Court’s January 12, 2012 Order requires him to remain jailed until all work directed by him to be done has been completed.7
In Bagwell, supra, the United States Supreme Court, in discussing civil contempt, stated
“civil contempt sanctions, or those penalties designed to compel future compliance with a court
order, are considered to be coercive and avoidable through obedience, and thus may be imposed
in an ordinary civil proceeding upon notice and an opportunity to be heard.” 512 US at 827.
“Imprisonment for a fixed term similarly is coercive when the contemnor is given the option of
earlier release if he complies. . . . In these circumstances, the contemnor is able to purge the
contempt and obtain his release by committing an affirmative act, and thus ‘carries the keys of
his prison in his own pocket.’” Id. at 828. In discussing fixed fines as a civil contempt sanction,
the Court stated “fixed fines also may be considered purgable and civil when imposed and
suspended pending future compliance.” Id. at 829.
7 Of course, jailing the key decision-maker while decisions need to be made and he is prepared to make them not only punishes rather than coerces, it also further materially impedes completion of the project.
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For a contempt order to be considered as civil contempt, the opportunity to purge must be
one that allows for immediate release. Acts requiring an extended period of time to complete are
the antithesis of a present ability to purge; a civil contemnor may, therefore, not be held in jail
while awaiting the completion of such acts.
Elliott v Bradshaw, 59 So3d 1182 (Fla App, 2011), is illustrative. In that case, the
petitioner had been held in civil contempt and jailed for failing to make alimony payments. The
trial court had ordered that he purge the contempt by paying approximately $38,000.00, which
the trial court had found that petitioner could pay given the value of his residence and his ability
to sell that home. The Florida Court of Appeals reversed. While agreeing that the petitioner had
sufficient equity in his home to purge the contempt, the court concluded that the petitioner could
not immediately sell the home and thus lacked the present ability to purge. See also KLN v State,
881 NE2d 39, 44 (Ind App, 2008) (order finding juvenile in civil contempt and requiring him
continually to comply with detention center rules for a period of weeks invalid because it was
impossible for juvenile immediately to comply; “the ‘purge condition’ put in place by the
juvenile court ... required him to continue to behave in a certain way for seventy-seven days – far
from an immediate solution”); In re MB, 101 Wash App 425, 468; 3 P3d 780 (2000)
(incarceration impermissibly punitive where contemnor was deprived of the ability to purge for
almost 24 hours).
The January 12 Order is not coercive – and therefore manifestly improper – because (i) it
ordered immediate imprisonment not conditioned upon future compliance; and (ii) Appellants
are not able to purge the contempt by performing an identified affirmative act. As to the
impropriety of the immediacy of the punishment, Bagwell requires that the contemnor must be
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told what the sanction will be unless the contemnor complies with the Court’s order. Appellants
should have been advised (assuming they had notice and an opportunity to be heard, which did
not occur here) that unless they performed certain affirmative acts they would be subject to
sanctions. That is not what occurred here, however; instead without being advised of any
charges or a hearing to demonstrate absence of contempt, these Appellants were jailed without
an opportunity for future compliance to purge the contempt.
Moreover, Appellants do not carry the keys to their cell in their pockets. By ordering that
Mr. Moroun and Mr. Stamper be incarcerated until “the Detroit International Bridge Company
has fully complied with the February 1, 2010 Order of this Court or they no longer have the
power to comply”, the Court has directed their imprisonment for an extended period of time far
beyond the time that each could possibly take any action to attempt to secure DIBC’s compliance
with the order. That is, even if Mr. Moroun and Mr. Stamper do everything in their power to
obtain compliance with the Trial Court’s Order, until those individuals responsible for the actual
construction complete their work, Mr. Moroun and Mr. Stamper would remain in the Wayne
County Jail by the terms of the Court’s Order. The affirmative acts necessary to purge the
contempt, i.e., the keys to one’s cell, are not within the control of the Appellants.
Lest there be any question of Appellants’ interpretation of the Trial Court’s Order,
language at page 4 of the Order makes it clear: Judge Edwards explicitly characterizes
Mr. Moroun and Mr. Stamper as the “key decision makers [who] have the power to complete
DIBC’s portion of the Project” (emphasis added). By wording his order as he did, the Trial
Court expressed the intent that Mr. Moroun and Mr. Stamper remain incarcerated until the
project is completed, not just until they have done all they can do to see to its completion.
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Further, the Trial Court’s Order violates due process because it is not the exercise of the
least possible power adequate to the end proposed. A judge’s power to impose sanctions for
contempt is an extreme power that is “uniquely … ‘liable to abuse.’” International Union,
Bagwell, 512 US at 831 (cite omitted). For this reason, it may only be used when necessary.
That is, “in selecting contempt sanctions, a court is obliged to use the ‘least possible power
adequate to the end proposed.’” Spallone, supra, 493 US at 276 (cite omitted); Shillitani v
United States, 384 US 364, 371; 86 S Ct 1531; 16 L Ed 2d 622 (1966) (cites omitted). An order
of contempt may only properly be issued when the constitutional, statutory and court rule-based
procedural safeguards designed to prevent abuse have been scrupulously followed.
As the Michigan Supreme Court stressed in People v Matish, 384 Mich 568, 572; 184
NW2d 915 (1971), echoing the United States Supreme Court, “The contempt power is awesome
and must be used with the utmost restraint.” In re Hague, 412 Mich 532, 555; 315 NW2d 524
(1982). This Court has expressed the same sentiment, noting in In re Contempt of Dudzinski,
257 Mich App 96, 109; 667 NW2d 68 (2003), that the contempt power must be used “judiciously
and only when the contempt is clearly and unequivocally shown” and in In re Meizlish, 72 Mich
App 732, 740; 250 NW2d 525 (1976), where this Court explained that “‘[t]he limits of the power
to punish for contempt are the least possible power adequate to the end proposed’”, citing,
Harris v United States, 382 US 162, 165; 86 S Ct 352; 15 L Ed 2d 240 (1965).
Rather than imposing sanctions against DIBC – the only entity found to be in contempt –
the Trial Court imposed sanctions on Mr. Moroun and Mr. Stamper; rather than initially
imposing sanctions that did not involve incarceration, the Trial Court’s first sanction was the
most draconian, the immediate incarceration of Mr. Moroun and Mr. Stamper.
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Spallone, a case in which a city had been ordered to enact a public housing ordinance
required in a consent decree in a civil rights case, teaches that, where an entity has been ordered
to perform certain acts and fails to do so, sanctions against individuals affiliated with the entity
may not be considered unless sanctions against the entity itself have first been tried and have
failed. As the Supreme Court stressed in that case, the lower court
should have proceeded with such contempt sanctions first against the city alone in order to secure compliance with the remedial order. Only if that approach failed to produce compliance within a reasonable time should the question of imposing contempt sanctions against petitioners even have been considered. “This limitation accords with the doctrine that a court must exercise ‘[t]he least possible power adequate to the end proposed.’”
493 US at 280 (cites omitted).
Just as the lower court in Spallone was required first to have sought compliance with the
consent judgment before imposing sanctions against individual city council members, the Trial
Court here was required to seek compliance against DIBC before considering the imposition of
sanctions against Mr. Moroun or Mr. Stamper or any other individual. In failing to do so, the
Trial Court failed to exercise “‘[t]he least possible power to the end proposed.’” Id.
In summary, everything about the January 12 Order is wrong. Mr. Moroun and
Mr. Stamper were not given the required notice, hearing and opportunity to defend before being
personally sanctioned for DIBC’s asserted contempt. The sanction the Trial Court elected to
impose – incarceration – was not the least restrictive option adequate to achieve the desired end,
and neither Mr. Moroun nor Mr. Stamper have the ability to purge DIBC’s contempt and unlock
the door to their jail cell by performing some specified act. The January 12 Order is a manifestly
improper use of the civil contempt power and invalid as a matter of law. Reversal is required.
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III. The February 1 Order Is Not Definite And Specific Enough To Serve As The Basis Of A Contempt Finding.
There is no question that Appellants did not receive the due process, statutory and
constitutional protections to which they are entitled which compels a reversal of the January 12
Order. Reversal is also mandated by the fact that the February 1 Order is not definite and
specific enough to serve as the basis of a contempt finding. Stated another way, even if the
January 12 Order is reversed, neither Appellants nor DIBC know what specific acts they need to
perform in order to avoid future contempt. As detailed below, simply stating to DIBC “complete
construction of the project” is insufficient direction to DIBC or its officers and directors to
comply with that directive because there are still unresolved issues with regard to that
construction on which MDOT and DIBC must reach agreement and cooperate.
A. The Order DIBC Has Allegedly Violated Is Not Clear And Definite, A Prerequisite To Any Contempt Charge.
A definite and specific order is a condition precedent to the lawful conduct of contempt
proceedings. NLRB v Cincinnati Bronze, Inc, 829 F2d 585, 591 (CA 6, 1987). See also, cases
discussed, supra, at 17. Michigan courts have cautioned against doing exactly what Judge
Edwards has done here: ordering specific performance when the material terms of the contract
are not sufficiently certain. While the actual language of the Gateway Agreements is not
ambiguous, they are executory contracts, the performance of which anticipates the cooperation of
the parties and the ability to agree upon design and construction plans. Moreover, there is a
specific provision of the contract (Paragraph 8) allowing changes to the planned design and/or
construction throughout the entire length of the contract. That provision allows immaterial
changes without approval of the other party and material changes with approval, which may not
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be unreasonably withheld, delayed or conditioned. That provision requires a continuing, detailed
analysis and involvement with the project and the contract as the agreement of the parties
concerning design and construction continuously evolves over time. Ordering specific
performance for such a contract, as has been borne out here, is a recipe for disaster.
For a court to order specific performance, the material terms of the contract must be
sufficiently certain so that it would be practical for the court to enforce performance of the
provisions upon which the parties agreed. Edidin v Detroit Econ Growth Corp, 134 Mich App
655, 660–661; 352 NW2d 288 (1984) (denying specific enforcement of contract requiring not
only conveyance of land but also ongoing partnership in project’s construction and
management). The purpose of this requirement is to ensure that the court may “proceed
intelligently and practically” in carrying out the parties’ agreement. Id. at 661 (cites omitted).
When material terms are unclear or undefined, the court will not order specific performance
because the court would then be making a contract for the parties or supplying the material terms
for them. Henry v Rouse, 345 Mich 86, 92; 75 NW2d 836 (1956). Further, a contract that would
require the court’s undue supervision will not be specifically enforced. See Laker v Soverinsky,
318 Mich 100, 104; 27 NW2d 600 (1947).
The Order DIBC has allegedly violated, and for which DIBC has been held in contempt
and for which Appellants have been imprisoned, is the February 1 Order granting partial
summary disposition to MDOT and ordering DIBC to specifically perform. The February 1
Order generally directs, in relevant part, that MDOT’s “motion to compel DIBC to complete
construction of its portion of the Gateway Project in compliance with the design incorporated in
the Performance Bond is granted.” (February 1 Order at 15). The February 1 Order further
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generally directed that DIBC must “complete construction of its portion of the Gateway Project
in accordance with the plans attached to the Performance Bond and the Maintenance
Agreement.” Id. Because the “design incorporated in the Performance Bond” and the “plans
attached to the Performance Bond and the Maintenance Agreement” were not final design plans,
were not final construction plans, were internally inconsistent in major respects, were clearly
marked as “For Information Only-Nor For Construction” and in large part were only conceptual,
the February 1 Order and the material it references alone are not clear and definite enough to
allow the construction. Moreover, because of Paragraph 8 of the contract, the contract
anticipated that the design and construction of the project was subject to modification by the
parties either unilaterally, if the modification were immaterial, and by approval of the parties
(which approval could not be unreasonably withheld, delayed or conditioned) if the modification
were material. In other words, the contract requires ongoing review and analysis to determine
whether a change is material or immaterial, and, if material, whether approval is being
unreasonably delayed, conditioned or withheld. By definition, such a contract in terms of
performance is not clear and definite and ordering specific performance of such a contract does
not and cannot provide definite and specific direction.
What may appear to be simple – ordering DIBC to complete construction according to
certain plans – is not. The February 1 Order is fundamentally flawed because the plans attached
to the Performance Bond – commonly referred to as Exhibit E – contain 230 pages of drawings
that are stamped “For Information Only – Not for Construction.” The parties’ competing
affidavits in support of summary disposition embodied a vigorous, material, and factual debate
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as to whether or not the Exhibit E drawings were a final, agreed design,8 a debate that was
ultimately settled by Judge Edwards finding, as urged by MDOT in its Motion for Partial
Summary Disposition, that Exhibit E was the final “Agreed Design” between the parties. But
having an Agreed Design9 is far from having final construction drawings pursuant to which
structures, roads and other parts of the plaza can be constructed. Indeed, not even MDOT claims
that the drawings in Exhibit E are construction drawings from which DIBC could complete
construction of DIBC’s portion of the Gateway Project. See Testimony of MDOT’s engineer,
Victor Judnic, 12/8/10 Tr., at 26 (Exhibit 21) admitting that the drawings in Exhibit E were
concept drawings that were not for construction. When DIBC was ordered to complete
construction of its portion of the Gateway Project there were no final construction drawings from
which DIBC could build. And therein lies the problem.
Since February 1, 2010, DIBC and MDOT have had little success in reaching agreement
as to what should be constructed, and there are no set of final construction drawings dictating
what should be built. For example, the January 12, 2012, Order criticizes DIBC for not having
constructed the S04 and S05 bridges over 23rd Street. Previously, the Court stated that it would
not get involved in DIBC’s rights in 23rd Street and the legal status of 23rd Street. (February 1
Order at 7). Judge MacDonald of the Wayne County Circuit Court ruled in a separate case that
23rd Street is to be vacated by the City of Detroit, and MDOT previously conceded that if 23rd
Street was vacated then the S04 and S05 bridges would not have to be built.10 Despite these
8 In light of Paragraph 8 and the right of the parties to make material and immaterial changes, the concept of an immutable “final agreed design” is contrary to the clear terms of the contract. 9 DIBC disputes that there is an “Agreed Design” but for purposes of this argument assumes that Exhibit E is the “Agreed Design.” 10 Victor Judnic testified that if 23rd Street was vacated, S04 and S05 would not have to be
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facts, Judge Edwards still ruled on January 12, 2012, that the S04 and S05 bridges over the soon
to be vacated 23rd Street have to be built. Even if one puts aside the logic of that ruling, there are
no drawings that show the dimensions, orientation, alignment, slope, size and angle of the S04
and S05 bridges. These drawings would have to be created by DIBC and then reviewed and
approved under Paragraph 8 of the Gateway Agreement by MDOT, something MDOT has been
unwilling to do as to any aspect of DIBC’s construction. See infra for discussion on Paragraph
8.
Another example of the ambiguity of the February 1 Order, as well as the Court’s
subsequent orders, is the Court’s criticism that Pier 19 conflicts with the truck road shown in
Drawing C-1 from Exhibit E. The parties do not agree on the location and characteristics of the
truck road, and nothing in the contracts state exactly where the truck road should be located.
DIBC has been ordered to build a truck road pursuant to Exhibit E drawings that do not show the
exact location of the truck road within any reasonable degree of engineering certainty. Who is to
decide exactly where the truck road is located? How can Appellants and DIBC have certainty
that they will purge themselves of contempt (or avoid future contempt) when the contract to
which they have been charged to specifically perform contains no specific information as to
where the truck road should be located?
What DIBC has proposed to do is build the truck road at the location shown in drawings
FS-1, FS-2 and FS-6 attached to the November 2007 truck road permit submitted by DIBC and
approved by MDOT.11 MDOT refuses to approve the truck road in this location even though the
built, but instead the roads could be at grade. (12/13/10 Tr. (Exhibit 20) at 31-32, 109). 11 These are the drawings which MDOT claimed in its Complaint at paragraphs 97-108 and in footnote 21 that DIBC was obligated to follow in constructing the truck road. The location of the
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alignment of the truck road is the same as the alignment for the truck road depicted in drawing
C-1 of the so-called “Agreed Design.”12 The parties are therefore at an impasse that has not been
resolved by the Court, and as such DIBC cannot construct the truck road.
The alleged failure to relocate Pier 19 is yet another example of the Court’s unclear
orders. Neither the February 1 Order nor the first contempt order against DIBC dated
January 10, 2011, mentioned Pier 19 or the necessity for relocating Pier 19. Yet, despite the
absence of any specific requirement for DIBC to do anything with respect to Pier 19, in its
November 3 Order, the Court concluded that DIBC was in contempt for failing to relocate Pier
19. Exactly where Pier 19 shall be relocated, how it is to be relocated, and what deconstruction
plans are necessary is unclear and is left for DIBC to figure out under the threat of imprisonment,
fines and receivership.
The bottom line is that the Court’s February 1 Order, as well as the subsequent contempt
orders of January 10, 2011 and November 3, 2011, lack the requisite specificity to hold a party in
contempt for allegedly failing to comply with them. What the lower court has done is akin to
holding a builder in contempt for failing to construct a home according to the site plan when all
the builder had were some concept and some non-final design drawings and no detailed
construction drawings. On major issues, there is simply no agreement between DIBC and
MDOT as to what must be constructed, the contracts do not specifically state what needs to be
truck road in those drawings is the same as the location of the truck road in drawing C-1 included as part of the so-called “Agreed Design.” 12 The Court appointed Monitor, Charles R. Scales, Jr., advised DIBC’s counsel, Dan Stamper, Tom LaCross and Michael Anderson (Safeco’s engineer) that Pier 19 does not conflict with the truck road though DIBC does not know what Monitor Scales advised Judge Edwards in his January 5, 2012, report because Monitor Scales has refused to produce this report, amounting to improper ex parte contact with Judge Edwards.
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constructed, and the Court has not ruled with any specificity what needs to be constructed by
DIBC. Under these circumstances, the February 1 Order is deficient for contempt purposes.
B. The February 1 Order Contains Contradictory Commands And It Is Therefore Impossible For DIBC To Comply.
By ordering DIBC to “complete construction of its portion of the Gateway Project in
accordance with the plans attached to the Performance Bond,” the lower court has made it
impossible for DIBC to comply because the drawings of Exhibit E, which are the plans attached
to the Performance Bond, in addition to being incomplete in parts and preliminary, also contain
contradictory information. For example, the November 3 Order found that DIBC constructed
Piers 11, 12 and 13 of S01 at variance with the design in Exhibit E, and that DIBC has to make
the necessary changes to these piers to conform to the one page, concept site plan C-1 Drawing.13
(November 3 Order at 13). DIBC has constructed Piers 11, 12 and 13 in geometric compliance
with drawings RC – 24, 25, 26 and 27 of Exhibit E, and the spacing of the columns in these piers
over and adjacent to the Ramp to Canada is identical to the spacing shown in drawings RC – 36,
37, 38, 39, 40 and 41 of the Record Drawings. See Exhibit 22, December 27, 2011 Report of
American Consulting Professionals at 2; 7/7/11 Tr., Michael Anderson testimony at 135 (Exhibit
23). DIBC is therefore left in a position where it has constructed Piers 11, 12 and 13 in exact
13 Not only is Drawing C-1 a concept drawing and not a design drawing, but additionally MDOT never complained of Piers 11, 12 and 13 of S01 in its Complaint or its Motion for Partial Summary Disposition. Piers 11, 12 and 13, which were completed in April 2009 before the lawsuit was filed, are not mentioned in the February 1 Order or the first contempt order. At the first show cause hearing MDOT never complained about S01. Piers 11, 12 and 13 first appeared in any Court order on August 11, 2011, when the Court found they conflicted with the agreed design in Exhibit E. 8/11/11 Order (Exhibit 24) at 6. By finding DIBC in contempt of the February 1 Order on November 3, 2011, for failing to construct Piers 11, 12 and 13 consistent with Exhibit E, the Court has allowed MDOT to retroactively complain of construction it has already approved, and has essentially allowed the February 1 Order to mean whatever MDOT says it means.
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compliance with the detailed design drawings in Exhibit E, but in conflict with a concept
drawing (C-1) contained in Exhibit E. This predicament highlights why no one can construct in
compliance with Exhibit E because Exhibit E contains contradictory drawings.
Moreover, it is axiomatic that if a provision or document directed at a specific item is in
conflict with a provision or document of a general nature, the specific provision or document
takes precedence. This contract interpretation standard is black letter law in Michigan. See
Holmes v Holmes, 281 Mich App 575, 596; 760 NW2d 300 (2008). The Court refers to
document C-1 to conclude that Piers 11, 12 and 13 are built incorrectly. C-1 is a general
document that is a sketch of the Gateway Project from the “fly over” level and contains no site
lines, elevations, dimensions or specificity. DIBC built Piers 11, 12, and 13 in accordance with
the detailed RC drawings that are specific to the construction of Piers 11, 12, and 13. All of the
RC drawings as well as C-1 are part of the documents that were attached to the performance
bond. The specific RC drawings conflict with the general C-1 drawing. Michigan law finds that
the RC drawings prevail. DIBC built to the RC drawings. The Trial Judge has committed
manifest error by holding DIBC in contempt and jailing Mr. Moroun and Mr. Stamper for not
tearing down Piers 11, 12 and 13 which were built to RC drawing specifications and try
somehow to build Piers 11, 12 and 13 pursuant to a sketch without dimensions, angles or
specificity.
There is simply no affirmative act that DIBC, Mr. Moroun or Mr. Stamper can perform to
resolve these contradictory drawings. DIBC built Piers 11, 12 and 13 of S01 pursuant to the
detailed RC drawings in Exhibit E – which is exactly what the Court ordered – and the Court
found DIBC in contempt. Without the cooperation of MDOT and the enforcement of the
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approval process contained in the Gateway Agreement, it is impossible for DIBC, or anyone
else, to comply with the February 1 Order.
C. The Court Has Abandoned Paragraph 8 Of The Gateway Project Thus Making It Impossible for DIBC To Finish Construction.
Paragraph 8 of the April 23, 2004 Gateway Agreement (Exhibit 25) pertains to the
approval process under the contract and states in relevant part that design plans must be
approved before either preliminary or final construction plans are prepared. (Exhibit 25 at 7).
Each party is entitled to review base and final design plans and preliminary and final
construction plans, and has 20 working days to approve or disapprove. Id. If the party
disapproves of the plans, that party shall include its reason(s) for disapproval and “the reasonable
conditions upon which such plans will be approved.” A party cannot simply reject the proposed
plans of the other party, which is exactly what MDOT has done here. Even assuming arguendo
that Exhibit E is a final, agreed design (which it is not), MDOT will not approve any
construction plans submitted by DIBC, and has refused to provide the reasonable conditions
upon which such plans will be approved.
The location of the truck road and Pier 19 typifies the problem created by the Court’s
failure to enforce Paragraph 8. DIBC has submitted a permit to MDOT to build the two lane
truck road that runs from the truck cargo inspection facility traveling west to S02 of DIBC and
then onto the freeways. Attached to the permit are design drawings depicting the location of the
proposed truck road. The location of the proposed truck road is in the exact location as the
design drawings or sheets attached to a truck road permit approved by MDOT in 2007. Indeed,
MDOT states in its Complaint that it approved the proposed truck road design sheets or drawings
FS-1, FS-2 and FS-6 that were attached to the truck road permit. (MDOT Complaint, ¶¶ 98-
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107). The truck road DIBC proposes to build is in the exact location as depicted in FS-1, FS-2
and FS-6, and two engineers have testified that it is not in conflict with Pier 19. 12/8/10 Tr.
(Exhibit 21) at 89, 93-96; 7/7/11 Tr. (Exhibit 23) at 108, 102-103, 115-116, 140-141. MDOT’s
engineer testified that he does not know whether Pier 19 is in the path of the truck road as shown
in C-1. 12/13/10 Tr. (Exhibit 20) at 99; 10/4/11 Tr. (Exhibit 26) at 5. Yet, MDOT refuses to
approve the permit so that the truck road could be constructed. MDOT has also refused to
provide the reasonable conditions upon which the truck road plans will be approved, but instead
insists upon a location from a 2006 drawing that preceded the compilation of Exhibit E that
MDOT admits was superseded by the drawings in Exhibit E.14 (10/4/11 Tr. (Exhibit 26), Judnic
testimony at 6). The Court has refused to compel MDOT to provide reasonable conditions upon
which the truck road plans will be approved and thus the truck road remains incomplete.
Appellants raise these issues regarding the underlying February 1 Order because, without
the Court enforcing Section 8 of the Gateway Contract, it is impossible for DIBC to comply with
the February 1 Order, and either Appellants or DIBC will be right back in front of this Court
someday regarding future contempt. DIBC has proposed that the truck road be constructed in a
specific location that is consistent with C-1 of Exhibit E and does not conflict with Pier 19.
MDOT has refused to approve those plans. Absent the enforcement of Paragraph 8 to resolve
this and other issues, the project is at a standstill. DIBC and/or its directors and officers are left
with the untenable choice to (i) build to MDOT’s preference, which is not a requirement of the
14 The truck road in these superseded drawings just so happens to conflict with Pier 19 which is why MDOT wants this as the truck road location and no other one. Yet, these drawings are not part of Exhibit E – to which DIBC has been ordered to construct – and the truck road DIBC proposes to build conforms to C-1 of Exhibit E and does not conflict with Pier 19. Report of American Consulting Professionals (Exhibit 27) at 1.
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contract and will costs millions in unnecessary deconstruction and construction activities; or (ii)
do nothing, be held in contempt of court and face fines, imprisonment or the appointment of a
receiver. The parties bargained for the give and take anticipated by Paragraph 8. Changes could
be made and the parties were to consider them in good faith. It is clear from the reading of the
2004 Agreement that the benefit of the bargain to DIBC was to be able to make proposed
changes to construction on DIBC’s own property, paid for by DIBC’s own money, performed by
DIBC’s own construction contractor, at DIBC’s own risk, to facilitate traffic traversing DIBC’s
own property. And yet, the Trial Judge finds that no changes can be made unless MDOT agrees
to those changes without the requirement of reasonableness. The court may not reform a
contract that does not need reformation and even if a contract needs reformation, it is to be
reformed in a manner intended to meet the intentions of the parties. The only reason DIBC is
left in this position is because the Court has ordered construction to plans that were conceptual
and preliminary, and not for construction, and because the Court has refused to enforce
Paragraph 8 of the Gateway Agreement to resolve disputes between DIBC and MDOT. An
Order that in effect states DIBC has to build to MDOT’s preference cannot be a proper order for
contempt proceedings.
IV. Where, As Here, the Judge Who Ordered Incarceration Acted As Both Accuser and Finder of Fact, and Has Become Personally Embroiled in the Litigation, Any Further Proceedings Regarding Appellants Should Be Held Before a Different Judge.
In determining to jail Mr. Moroun and Mr. Stamper, the Trial Judge was acting on his
own as both accuser and finder of fact. As stated above, MDOT had not sought the imposition of
any sanctions against Mr. Moroun or Mr. Stamper personally; MDOT sought only sanctions
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against DIBC. By wearing these two inherently conflicting hats, the Trial Judge violated the
appearance of impartiality constitutionally required of him.
The right not to be tried before one’s accuser grows out of the Supreme Court’s
recognition in In re Murchison, 349 US 133, 136-137; 75 S Ct 623; 99 L Ed 942 (1955), that
A fair trial in a fair tribunal is a basic requirement of due process. Fairness of course requires an absence of actual bias in the trial of cases. But our system has always endeavored to prevent even the probability of unfairness... “[E]very procedure which would offer a possible temptation to the average man as a judge ... not to hold the balance nice, clear and true between the State and the accused, denies the latter due process of law.”... Such a stringent rule may sometimes bar trial by judges who have no actual bias and who would do their very best to weigh the scales of justice equally between contending parties. But to perform its high function in the best way “justice must satisfy the appearance of justice.” Fair trials are too important a part of our free society to let prosecuting judges be trial judges of the charges they prefer.
(cites omitted) (emphasis added).
The self-evident notion that “[f]air trials are too important a part of our free society to let
prosecuting judges be trial judges of the charges they prefer,” has also led the Supreme Court to
prohibit judges from presiding in cases in which they have become personally embroiled,
Mayberry v Pennsylvania, 400 US 455, 465-466; 91 S Ct 499; 27 L Ed 2d 532 (1971), or where
“‘marked personal feelings’” are present, Taylor v Hayes, 418 US 488, 503; 94 S Ct 2697; 41 L
Ed 2d 897 (1974).
Judge Edwards has demonstrated his personal embroilment in the underlying litigation,
first and foremost by summarily jailing Mr. Moroun and Mr. Stamper without affording either of
them any due process whatever. Incarcerating any person, including Mr. Moroun and
Mr. Stamper, for non-compliance with the February 1 Order, where the Order neither directed
nor prohibited either of them to do or refrain from doing any act, without notice or an
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opportunity to be heard, and without any ability to purge the contempt, is a draconian act of Star
Chamber proportions that itself requires reassignment of the case. The injustice is exponentially
heightened, – and embroilment is even more clearly demonstrated, – when one considers the lack
of specificity in the underlying February 1 Order. As explained above, the February 1 Order is
not definite or specific enough to serve as the basis for contempt.
Personal embroilment is further demonstrated by Judge Edwards’ refusal to take the
action needed to bring the underlying case to a final conclusion and to allow DIBC to appeal to
this Court by right. For example:
1. The basis for the contempt finding against DIBC and the order jailing Mr. Moroun and Mr. Stamper – DIBC’s asserted non-compliance with the contract – is a hotly contested issue. Because DIBC believes in good faith that Judge Edwards’ rulings against it regarding the Gateway Agreement have been seriously wrong and damaging to the company’s contractual rights and economic interests, DIBC has sought repeatedly to bring the underlying case to resolution so that it can appeal by right to this Court. Specifically, DIBC has requested that Judge Edwards grant a trial on Count VII of MDOT’s complaint. See DIBC’s Motion for a Finding of Completion of Performance and to Schedule Immediate Trial (Exhibit 28). Judge Edwards has nevertheless refused to schedule the case for trial, thereby leaving DIBC with no appeal of right despite the multiple public and private interests at stake in the litigation and leaving him solely able to interpret the underlying parties’ conflicting interpretations of the Gateway Project agreements. See December 13, 2011 Opinion and Order of the Court (Exhibit 29). This has allowed the Court to remain in control of the case and avoid any right to an appeal by DIBC. Instead, the Trial Court has effectively made MDOT – the adverse party – the adjudicator of DIBC’s compliance.
2. Judge Edwards has denied DIBC’s Motion for Revision, Clarification and/or Amendment of February 1st Order, a motion brought by DIBC so that it can understand clearly what it is that the Court is directing it to do in order to comply with that very vague order.
3. Judge Edwards has denied DIBC’s Motion to Compel Referral of Matter to Alternative Dispute Resolution (Exhibit 30); Order dated August 8,
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2011 (Exhibit 31), brought by DIBC in order to resolve, quickly and efficiently, its disputes with MDOT.
4. Judge Edwards has used the court’s awesome power of contempt not just to jail Mr. Moroun and Mr. Stamper without due process but also to use the fact of that jailing as a means of coercing DIBC into accepting MDOT’s interpretation of the disputed portions of the Agreement without any appellate review by this Court.
Individually and taken together, these acts reflect a degree of personal embroilment that
requires reassignment to a different judge, should further proceedings be required. As a matter
of Michigan law, reassignment is required even without a showing of actual bias when the judge
“might have prejudged the case because of prior participation as an accuser, investigator, fact
finder or initial decisionmaker.” Crampton v Department of State, 395 Mich 347, 351; 235
NW2d 352 (1975) (cites omitted); see also In re Contempt of Scharg, 207 Mich App 438; 525
NW2d 479 (1994); People v Lowenstein, 118 Mich App 475; 325 NW2d 462 (1982); In the
Matter of Hirsch, 116 Mich App 233, 241; 323 NW2d 349 (1982); People v Kurz, 35 Mich App
643; 192 NW2d 594 (1971).
Regardless of the presence or absence of actual bias, the Trial Judge’s status as self-
appointed accuser and fact-finder alone creates too great a risk to a fair trial to permit the judge
to sit in judgment. In the event of further proceedings in the Trial Court regarding Appellants,
those proceedings should be assigned to a different judge.
RELIEF REQUESTED
For all of the reasons stated above, the portion of the January 12, 2012 Opinion and Order
jailing Mr. Moroun and Mr. Stamper should be reversed and any further proceedings in the Trial
Court regarding Appellants should be assigned to a different judge. While Messrs. Moroun and
Stamper are mindful of this Court’s direction in its January 13 Order, they are justly
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apprehensive of what further proceedings may entail if the action remains pending before Judge
Edwards. MCR 7.216(A)(7) provides that this Court may enter any order or grant further or
different relief as the case may require, and MCR 7.216(A)(9) states this Court may direct the
parties as to how to proceed in any case pending before it. Thus, in addition to the relief
requested above, it is respectfully requested that this Court assign the entire underlying action to
a different judge. Appellants should also be granted such other and further relief as equity and
justice require.
KERR, RUSSELL AND WEBER, PLC By: /s/ William A. Sankbeil William A. Sankbeil (P19882) Joanne Geha Swanson (P33594) Attorneys for Appellant Manuel J. Moroun 500 Woodward Avenue, Suite 2500 Detroit, MI 48226 (313) 961-0200 [email protected]
MOGILL, POSNER & COHEN
By: /s/ Kenneth M. Mogill Kenneth M. Mogill (P17865) Jill M. Schinske (P70598) Attorneys for Appellant Dan Stamper 27 E Flint Street, 2nd Floor Lake Orion MI 48362 Dated: January 20, 2012 (248) 814-9470
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