Sunshine v. Detroit Inst. of Art Bd. of Dirs.

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MR. SUNSHINE, EDWARD AMYOT, and STEPHEN EMSLEY, Plaintiffs-Appellants, v. DETROIT INSTITUTE OF ART BOARD OF DIRECTORS and DETROIT INSTITUTE OF ARTS, INC., Defendants-Appellees.

No. 354708

Court of Appeals of Michigan

January 6, 2022

UNPUBLISHED

Oakland Circuit Court LC No. 2020-179801-CZ

Before: Stephens, P.J., and Sawyer and Servitto, JJ.

Per Curiam

The issue presented in this appeal is whether defendants, the Detroit Institute of Arts, Inc. (DIA), and its board of directors (Board), are subject to the Open Meetings Act (OMA), MCL 15.261 et seq. We conclude that defendants are not subject to the OMA because they are not public bodies within the meaning of the OMA. Accordingly, we affirm the trial court's grant of summary disposition under MCR 2.116(C)(8) (failure to state a claim upon which relief can be granted).

The analysis of this issue includes the role that the Art Institute Authorities Act (AIAA), MCL 123.1201 et seq. plays in applying the OMA. In 2010, the Legislature enacted the AIAA, MCL 123.1201 et seq., "to provide for the establishment of art institute authorities to provide for the powers and duties of an art institute authority; to authorize the levy and collection of a property tax by an art institute authority; and to provide for the powers and duties of certain government officials." 2010 PA 296, title. The AIAA authorizes any county to form an "art institute authority" as "a public corporate body with the power to sue and be sued in any court of this state." MCL 123.1205.

Under the AIAA, an art institute authority is established when a majority of the county board of commissioners adopts the authority's articles of incorporation, which take effect upon filing with the Secretary of State. MCL 123.1207. Subject to approval of a majority of the voters in the county, the AIAA authorizes an art institute authority to levy "a tax of not more than 0.2 mill" on taxable property in the county "for the purpose of providing revenue to an art institute services provider that will be used exclusively for the benefit of the art institute with respect to which the art institute services provider renders services." MCL 123.1217(1). The AIAA defines "art institute" as "an encyclopedic art museum whose primary art collection and facility, at the date an authority is established, are owned by a municipality located in this state." MCL 123.1203(a). The AIAA defines "art institute services" as "the operation or support of an art institute," MCL 123.1203(b), and "art institute services provider" as "a nonprofit entity qualified under section 501(c)(3) of the Internal Revenue Code, 26 USC 501(c)(3), that, as its primary purpose, provides art institute services to an art institute." MCL 123.1203(c).

Pursuant to the AIAA, Wayne, Oakland, and Macomb each created art institute authorities. The art institute authorities of each county then engaged the DIA to operate and manage the museum. Turning to the instant dispute, shortly before the scheduled vote on renewal of the millage in each of the three counties plaintiffs^[1] filed a complaint against defendants in the Oakland Circuit Court. Plaintiffs asserted that the DIA is an encyclopedic art museum as well a nonprofit entity that is both an art institute and an art institute services provider under the AIAA, and that the DIA, "as its primary purpose, operates and provides art institute services to the museum." Plaintiffs further asserted that the art institute authorities of Wayne, Oakland, and Macomb counties engaged the DIA to provide art institute services for the museum, that the DIA has complete responsibility for operation of the museum, that the DIA receives approximately 60% of its revenue through the millages assessed in Wayne, Oakland, and Macomb counties, that the funds collected and transferred to the DIA through the millages totaled $25.2 million in 2018 and $25.9 million in 2019, that the funds projected to be collected in 2022 total $27.9 million, and that defendants "exercise sole legislative and proprietary authority" over these funds. Plaintiffs also alleged that defendants are public bodies under the OMA, but do not comply with the requirements of the OMA. As examples of this noncompliance, plaintiffs asserted that defendants failed to establish rules for persons to address meetings of the Board, refused to allow persons to address meetings, failed to provide notice of meetings, failed to keep minutes of meetings, and failed to comply with the requirements of § 3 of the OMA, MCL 15.263.

Plaintiffs requested various forms of relief, including orders compelling defendants to comply with the OMA, to provide minutes for all past meetings, to correct existing minutes to comply with the OMA, to comply with the OMA in all future meetings, motions, and minutes, and to permit persons to address meetings of the Board. Plaintiffs also sought orders enjoining future noncompliance with the OMA and concluded with a request for an award of costs and attorney fees. Defendants responded to the complaint by filing a motion for summary disposition pursuant to MCR 2.116(C)(8). Following a hearing on defendants' motion, the trial court granted summary disposition in favor of defendants and denied plaintiffs' request to amend the complaint on the basis of futility. Plaintiffs now appeal and we affirm.

A trial court's decision regarding a motion for summary disposition is reviewed de novo. El-Khalil v Oakwood Healthcare, Inc, 504 Mich. 152, 159; 934 N.W.2d 665 (2019). "De novo review means that we review the legal issue independently, without required deference to the courts below." Wright v Genesee Co, 504 Mich. 410, 417; 934 N.W.2d 805 (2019). A motion under MCR 2.116(C)(8) tests the factual sufficiency of the complaint based on the pleadings alone; all well-pleaded factual allegations are accepted as true and are construed in a light most favorable to the nonmoving party. Kazor v Dep't of Licensing & Regulatory Affairs, Bureau of Prof Licensing, 327 Mich.App. 420, 422; 934 N.W.2d 54 (2019). Judgment is properly granted under MCR 2.116(C)(8) when the claims are clearly unenforceable as a matter of law and no factual development could possibly justify recovery. Id. Issues of law and statutory interpretation are also reviewed de novo. Cooper v Auto Club Ins Ass'n, 481 Mich. 399, 406; 751 N.W.2d 443 (2008).

The question presented is whether the DIA is a public body under the OMA. We conclude that it is not. Plaintiffs first argue that they did plead in their complaint that defendants are public bodies and that for purposes of MCR 2.116(C)(8), that allegation must be accepted as true. While plaintiffs are correct that well-plead factual allegations must be accepted as true, whether defendants are public bodies under the OMA is a conclusion of law rather than a factual allegation. Therefore, it does not need to be accepted as true for purposes of resolving the summary disposition motion.

When interpreting statutory mandates, courts are required to discern and apply the intent of the Legislature, to examine the purpose of the statute, and to look to the plain meaning of the statutory language. Booth Newspapers, Inc v Univ of Mich. Bd of Regents, 444 Mich. 211, 221-222, 224; 507 N.W.2d 422 (1993). Unambiguous statutes must be enforced as written. Fluor Enter, Inc v Dep't of Treasury, 477 Mich. 170, 174; 730 N.W.2d 722 (2007).

As our Supreme Court has recognized, "[t]he threshold issue under the OMA is whether an entity is a 'public body.'" Herald Co v Bay City, 463 Mich. 111, 129; 614 N.W.2d 873 (2000), mod by Mich Federation of Teachers & Sch Related Personnel, AFT, AFL-CIO v Univ of Mich, 481 Mich. 657; 753 N.W.2d 28 (2008). "Public body" is defined in § 2 of the OMA:

"Public body" means any state or local legislative or governing body, including a board, commission, committee, subcommittee, authority, or council, that is empowered by state constitution, statute, charter, ordinance, resolution, or rule to exercise governmental or proprietary authority or perform a governmental or proprietary function; a lessee of such a body performing an essential public purpose and function pursuant to the lease agreement; or the board of a nonprofit corporation formed by a city under section 4o of the home rule city act, MCL 117.4o. [MCL 15.262(a).]^[2]

As this Court explained in Davis v Detroit Fin Review Team, 296 Mich.App. 568, 591; 821 N.W.2d 896 (2012), in order to qualify as a public body under the OMA, an entity must be a state or local legislative or governing body, and it must be empowered by law to exercise governmental or proprietary authority or perform a governmental or proprietary function.

Plaintiffs contend that their complaint properly alleged that the DIA is a public body subject to the OMA. However, the only allegations on that issue appear in just two paragraphs in the complaint. First, plaintiffs alleged that defendants "exercise the sole legislative and proprietary authority over the Tricounty Funds." Next, plaintiffs alleged that "Defendants Detroit Institute of Art Board of Directors (the Board) and Detroit Institute of Arts, Inc. (DIA) are public bodies subject to the Open Meetings Act (OMA)." The complaint includes no further allegations on this threshold issue.

Given the factors that must be considered in order to determine whether an entity is a public body under the OMA, these allegations are not allegations of fact, but legal conclusions. A legal conclusion is "[a] statement that expresses a legal duty or result but omits the facts creating or supporting the duty or result." Black's Law Dictionary (11th ed.) This definition clearly fits the allegations in paragraphs 22 and 23 of the complaint plaintiff alleged no facts supporting the conclusion...