Alexander v. City of Detroit
Alexander v. City of Detroit
Opinion of the Court
This is a class action against the City of Detroit in which all that remains to be determined is the proper distribution of funds remaining in a judgment escrow account. On January 21, 1985, the trial court ordered that the funds be made payable to defendant City of Detroit on the theory that the city was the last "owner” of the money contained in escrow. The Attorney General of Michigan appeals as of right claiming that the remaining funds should escheat to the state. We agree with the attorney general and reverse the judgment of the trial court.
Plaintiffs filed this action in 1969, challenging the constitutionality of a Detroit refuse collection ordinance applicable only to apartment buildings comprised of more than four units. In 1971, the trial court held that the ordinance was unconstitutional and entered a judgment in favor of plaintiff! class for $1,600,000, representing the amount in refuse charges that had been paid to the city
On March 6, 1975, the trial court issued an order compelling the city to commence payment of the judgment.
Six years passed with no significant court activity. In January of 1981, the trial court
On June 19, 1981, the attorney general filed an appearance and intervened as a matter of right, asserting a claim to the undistributed judgment under the Michigan Code of Escheats, MCL 567.11 et seq.; MSA 26.1053(1) et seq. Intervening plaintiff also served a formal claim upon the guardian ad litem. At the same time, the guardian ad litem filed with the court a report on his efforts to locate missing class members and a petition for fees and expenses incurred in performing his duties as guardian ad litem.
On February 8, 1982, the trial court issued an opinion denying plaintiffs’ petition for more attorney fees. As to the guardian ad litem’s petition for fees, the trial court delayed decision and instead took the request under advisement. In an apparent effort to bring this lawsuit to a close, the trial court further opined that this was a "spurious” class action and that unlocated class members would have to "opt in” prior to recovering their share of the judgment. The trial court further ordered notice of the instant class action and judgment to be published in all local newspapers, allowing unlocated class members until April 30, 1982, to submit to the court written claims for their portion of the judgment. After that date, recovery would be precluded. Intervening plaintiff’s motion for rehearing was subsequently denied.
On March 16, 1982, seven years after the city had satisfied the judgment against it by depositing with the court the money owed, intervening plaintiff filed a supplemental claim on behalf of the unlocated class members as their lawful successor in interest. At the same time, the Wayne County Public Administrator, at the request of the State
On May 4, 1982, intervening plaintiff filed a motion to remove the guardian ad litem on the ground that the intervening plaintiff and the county public administrator adequately represented the interests of the unlocated class members. Also sought was an order compelling the guardian ad litem to produce a legal memorandum prepared by his attorney on the applicability of the law of escheats to the unclaimed judgment fund. The trial court denied both requests by order of June 18, 1982, and this Court subsequently denied intervening plaintiff’s application for leave to appeal from that order.
By order of January 21, 1985, the trial court finally disposed of all funds remaining in the judgment account. The court awarded $38,190 to plaintiffs’ attorneys for fees incurred after March of 1975, and $78,320.68 to the guardian ad litem for fees and costs incurred on behalf of the unlocated class members. The court denied intervening plaintiff’s claim to the undistributed judgment fund on the ground that the unlocated class members never submitted their written claims to the court and thus were never owners of the property which the state sought to escheat. The court instead ordered that the balance of the judgment fund be paid to the City of Detroit as the former owner.
Section 11 of the Michigan Code of Escheats,
Whenever any officer of a court in this state, including federal courts, or any county officer is in possession of any money or other property collected or received pursuant to an order of court, and such officer is unable to distribute or pay out such money or property to the person or persons entitled thereto as prescribed by such order or decree of court, due to the failure of the distributee or distributees to claim the same, or for the reason that the whereabouts of such distributee or distributees cannot be ascertained and such inability shall continue for a period of 7 years from and after the receipt of such money or property by such officer, then it shall be the duty of such officer to report the same to the state board of escheats as abandoned property in conformity with the provisions of section 6 or 8 hereof. [MCL 567.21; MSA 26.1053(11).]
The parties here do not dispute that more than seven years have elapsed since the judgment was satisfied by the defendant and deposited with the trial court. The dispositive ■ issue is whether the unlocated class members are "entitled to” a portion of the unclaimed judgment fund, thus allowing the attorney general to proceed under the Code of Escheats.
In refusing to allow the remaining funds to escheat to the state, the trial court relied upon its earlier finding that the instant class action was spurious in nature and thus required class members to "opt in” by filing written claims with the court prior to April 30, 1982. The trial court reasoned that, because the unlocated class members never filed written claims, they were not entitled to any portion of the judgment fund and § 11 of the Code of Escheats thus did not apply.
Pursuant to the Code of Escheats, the state public administrator, or someone acting at the administrator’s behest, may institute proceedings in probate court to provide for the administration of abandoned property:
The attorney general, or the state public administrator, may cause appropriate proceedings to be instituted in the probate court of the proper county of this state for the administration of the estate of any person who is the owner of abandoned property discovered as provided for in this act or of which he otherwise has knowledge. [MCL 567.33; MSA 6.1053(23).]
In this case, all of the unlocated class members were known by name from various records retained by the City of Detroit. The petition filed by the Wayne County Public Administrator in probate court named each of those individuals. The probate court appointment entered April 1, 1982, specifically granted the Wayne County Public Administrator the
power and authority to administer and faithfully dispose of, according to law, all and singular the goods, chattels, rights, credits and estates of said persons identified as owners of abandoned prop*731 erty, which shall at any time come into your possession, or to the possession of any other person for you and to ask, gather, levy, recover and receive all goods, chattels, rights, credits and estates whatsoever of said persons identified as owners of abandoned property, which to them did belong.
On the authority of that order, the county public administrator filed in this circuit court class action a written claim on behalf of the named but unlocated class members. Since the claim was filed prior to April 30, 1982, we conclude that the unlocated class members were "entitled to” their portions of the undistributed judgment fund and that the trial court erred in refusing to apply § 11 of the Code of Escheats in distributing those funds in January of 1985. This case is thus remanded for entry of an order consistent with this opinion.
Intervening plaintiff raises another argument, which because of our resolution of the foregoing issue does not require an extended discussion. The attorney general claims error in the trial court’s refusal to compel production of a memorandum of law prepared by the attorney for the guardian ad litem prior to June of 1981. We hold that the trial court did not err in this regard. The memorandum of law is a work product of the attorney drafted for the specific purpose of legally advising his client. Since there is no evidence in this record to suggest that the guardian ad litem waived the attorney-client privilege of confidentiality, intervening plaintiff has no basis upon which to demand production of the memorandum. See Kubiak v Hurr, 143 Mich App 465, 472-473; 372 NW2d 341 (1985).
The only remaining question is whether the trial court possessed the authority to appoint a guardian ad litem on behalf of the unlocated class
We agree with intervening plaintiff that Michigan has no statute or court rule expressly authorizing the circuit court to appoint a guardian ad litem in the class action context. Former GCR 1963, 201.5(1), now MCR 2.201(E)(1), provided for the appointment of a guardian ad litem but only for purposes of representing minors and legal incompetents. See also MCL 700.401 et seq.; MSA 27.5401 et seq. and MCL 600.2045; MSA 27A.2045. Our independent review of the court rules and statutes, however, persuades us that the circuit court in this case did not exceed the scope of its authority when it appointed a guardian ad litem to represent the unlocated class members and their interests in the undistributed judgment fund.
It should be emphasized that the issue presented here concerns postjudgment proceedings only and our analysis is therefore limited to that context. When the trial court appointed a guardian ad
The circuit courts of this state have the express statutory authority to order a judgment debtor to pay into the court all or part of a judgment to be distributed to the judgment creditor. See MCL 600.572; MSA 27A.572, MCL 600.573; MSA 27A.573, MCL 600.1465; MSA 27A.1465 and MCL 600.6137; MSA 27A.6137. Where a judgment has been deposited with the court, the court is vested with a wide latitude of discretion in managing the deposited funds. 23 Am Jur 2d, Deposits in Court, §§ 1, 15, pp 736, 744. Moreover, postjudgment proceedings to determine the rights to funds deposited with the court are equitable in nature. 26A CJS, Deposits in Court, §9e, p 488. We conclude that the trial court in this case had the authority to exercise its discretion and take whatever steps were necessary to properly preserve, manage and distribute the funds contained in the judgment account so long as its actions were consistent with the primary goal of proper distribution.
At common law, the power to appoint a guardian rested with the courts of chancery and with American courts having equity powers. Even with the enactment of statutes making guardianships the primary function of probate court, courts in the same jurisdiction possessed of equitable powers have retained the power to appoint guardians unless expressly prohibited by statute. 39 Am Jur 2d, Guardian and Ward, § 24, pp 26-27. Interven
Circuit courts have the power and jurisdiction
(1) possessed by courts of record at the common law, as altered by the constitution and laws of this state and the rules of the supreme court, and
(2) possessed by courts and judges in chancery in England on March 1, 1847, as altered by the constitution and laws of this state and the rules of the supreme court, and
(3) prescribed by rule of the supreme court.
In addition, the class action court rule in effect at the time the trial court appointed the guardian ad litem expressly provided the court with authority to "impose such terms as shall fairly and adequately protect the interests of the class or association in whose behalf the action is brought or defended.” GCR 1963, 208.4. We thus conclude that the trial court in this case had inherent authority to appoint a guardian to protect the interests of the unlocated class members in post-judgment proceedings.
We further conclude that the appointment in this case did not constitute an abuse of the trial court’s discretion even given the involvement of the county public administrator and the attorney general. Neither the attorney general nor the public administrator were involved in these proceedings at the time the guardian ad litem was appointed in May of 1981. The trial court proceeded with the appointment upon being informed that the plaintiffs’ attorneys intended to move for an amendment of the attorney fee award, further depleting the amount of money available for distri
Nor are we persuaded that the trial court relied upon the guardian ad litem as a specially appointed judge or master or circuit court commissioner. The guardian ad litem at all times acted on behalf of the interests of the unlocated class members and the circuit court at all times viewed the guardian ad litem as the representative of an interested party.
Reversed in part, affirmed in part and remanded.
By order of March 24, 1975, the trial court awarded $800,000 in plaintiffs attorney fees and $13,378.07 in expenses. These fees and costs were to be paid out of the judgment fund and were to be assessed against each class member on a pro rata basis.
At this point, the original trial judge had been replaced by a successor.
Case-law data current through December 31, 2025. Source: CourtListener bulk data.