Coblentz v. City of Novi

Michigan Supreme Court
Lansing, Michigan
Chief Justice: Justices:

Opinion Clifford W. Taylor Michael F. Cavanagh
Elizabeth A. Weaver
Marilyn Kelly
Maura D. Corrigan
Robert P. Young, Jr.
Stephen J. Markman

FILED JULY 19, 2006

ANN COBLENTZ, LEE COBLENTZ,
JOHN LEWANDOWSKI, and
DEBORAH LEWANDOWSKI,

Plaintiffs-Appellants,

v No. 127715

CITY OF NOVI,

Defendant-Appellee.

BEFORE THE ENTIRE BENCH

KELLY, J.

This case asks us to determine if the trial court appropriately found

requested documents exempt from disclosure under the Freedom of Information

Act (FOIA), MCL 15.231 et seq. We address also whether it was appropriate for

defendant to charge fees to plaintiffs for the work of defendant’s attorney in

retrieving and separating documents plaintiffs sought under the act.

This case revolves around an underlying settlement agreement between

defendant and a third party. Plaintiffs filed a FOIA request for documents

associated with the agreement. Requested were “site plans” and “global readings”
on real property, all exhibits to the agreement, including certain exhibits listed as

intentionally deleted, and side agreements or letters related to the agreement.

The Court of Appeals affirmed the trial court’s decision that the requested

documents were exempt from disclosure. Coblentz v Novi, 264 Mich App 450; 691

NW2d 22 (2004). We affirm in part and reverse in part that decision. We conclude

that the Court of Appeals appropriately affirmed the grant of summary disposition

to defendant on plaintiffs’ request for “site plans” and “global readings.” But the

Court of Appeals erred in affirming summary disposition regarding the request for

all exhibits to the underlying settlement agreement, including the intentionally

deleted exhibits. These exhibits were not exempt from disclosure and were

sufficiently identified in the FOIA request.

The Court of Appeals also erred in affirming summary disposition for

defendant on the requested “side agreements” to the settlement agreement. These

items were not exempt because defendant failed to comply with MCL

15.243(1)(f)(iii). Finally, the Court of Appeals erred in finding appropriate the

fees that defendant charged for its attorney’s work in separating documents. The

attorney in question was not an employee of defendant. Therefore, we remand this

case to the trial court for entry of a judgment compelling disclosure consistent

with this opinion.

I. RELEVANT FACTUAL AND PROCEDURAL HISTORY

In a separate civil action against defendant, Sandstone Associates Limited

Partnership-A (Sandstone) obtained a judgment that totaled tens of millions of

dollars, including costs, interest, and attorney fees. Sandstone and defendant then

entered into an agreement in which defendant waived its appellate rights and

Sandstone received real property rather than the money judgment. The major

component of the agreement called for defendant to turn over 75 “net usable”

acres to Sandstone for development.

The property had previously been set aside as parkland. It is adjacent to

property owned by plaintiffs. Some of the property carried deed restrictions,

including possible reciprocal negative easements.1 Plaintiffs’ properties contained

the same deed restrictions. The settlement agreement required defendant to

arrange for the removal of the deed restrictions on its property and on plaintiffs’

property. It was agreed that, if defendant failed, it would convey additional

property to Sandstone. In an effort to remove the restrictions, defendant contacted

plaintiffs.

1
This Court has provided the following definition and example of a
reciprocal negative easement:
There must have been a common owner of the related parcels
of land, and in his various grants of the lots he must have included
some restriction, either affirmative or negative, for the benefit of the
land retained, evidencing a scheme or intent that the entire tract
should be similarly treated. Once the plan is effectively put into
operation, the burden he has placed upon the land conveyed is by
operation of law reciprocally placed upon the land retained. In this
way those who have purchased in reliance upon this particular
restriction will be assured that the plan will be completely achieved.
[Lanski v Montealegre, 361 Mich 44, 47; 104 NW2d 772 (1960)
(emphasis in original).]

Plaintiffs retained counsel who filed a FOIA request with defendant,

seeking:

1. All exhibits, including but not limited to exhibits G, T, U,
V, W, AA, BB, GG, MM, NN, PP, for the Agreement for Entry of
Consent Judgment dated June 25, 2002 between Sandstone and the
City of Novi;

2. Any and all site plans for Sandstone regarding the 75
dedicated acres; and . . . .

Defendant’s attorney responded to these requests by writing:

1. Exhibits G, T, U, V, W, AA, BB, GG, MM, NN, PP: I
have advised you by phone and letter that there are no such exhibits.
The reference in the index, indicating that they were intentionally
deleted, is merely to clarify for the reader that such exhibits have not
been lost or detached from the Agreement. These exhibits do not
exist, and never existed.

2. Site Plan: I have also advised you by phone and letter that
a site plan or concept plan for the 75 acres does not exist. It has
never existed. I do not know how [to] provide any further
explanation.

Plaintiffs then informally requested all side agreements to the Sandstone

settlement agreement and the “global readings.” Defendant’s attorney responded

that he did not know what “global” meant. With regard to the side agreements, he

stated that he assumed that this meant the “side letters” to the Sandstone

agreement. He indicated that he was attempting to learn from Sandstone’s counsel

which of the side letters were submitted with an understanding of confidentiality.

Plaintiffs next filed a second FOIA request. Among the items sought were:

1. Any and all side agreements entered into between the City
of Novi and Sandstone and/or its attorneys or representatives;

2. Global readings on “extra land”; global positioning
satellite (GPS) readings on “extra land”;

3. Settlement agreements, releases, copies of drafts in
settlement of the insurance cases relating to this property[.]

After plaintiffs’ second FOIA request, defendant began to negotiate with

Sandstone for release of the side agreements. Sandstone initially stated that none

could be released, but later agreed to release five of the seven side letters.

In response to this FOIA request, defendant told plaintiffs that global or

GPS readings did not exist. It also refused to release the two remaining side

agreements, stating:

The request is denied with regard to two documents
representing commercial and/or financial information voluntarily
submitted to the City of Novi for use in developing governmental
policy . . . as contemplated and required under MCL 15.243(g) [sic,
(1)(f)].

Plaintiffs filed a complaint in the circuit court seeking production of all

intentionally deleted exhibits. Plaintiffs claimed that they had located one of the

exhibits, exhibit AA, despite the fact that defendant contended that it never

existed. They also asked the court to order production of global readings, site

plans, and all side agreements.

Defendant filed a motion for summary disposition before the close of

discovery. Attached was an affidavit from its mayor, Richard Clark. Clark stated

that, as of the date of the affidavit, Sandstone had submitted no site plans for the

75 acres. He also affirmed that no “global readings” or GPS readings existed in

connection with the Sandstone settlement agreement. Plaintiffs responded, but did

not attach any documentary evidence rebutting Clark’s affidavit.

The court granted defendant’s motion in part. Regarding the site plans and

global readings, it found, on the basis of Clark’s affidavit, that none existed. It

concluded that further depositions of other city officials on the topic would be

duplicative. The circuit court denied defendant’s request for summary disposition

on the fee issue pending further hearings. It also deferred ruling on the side

agreements until it could make an in camera review. With respect to the

intentionally deleted exhibits, it found them irrelevant and granted summary

disposition for defendant.

Following its review of the side agreements that defendant claimed were

exempt, the court found that defendant properly complied with the requirements of

MCL 15.243(1)(f). The side letters, it found, fell within the governmental policy

exemption of FOIA because they helped to facilitate the Sandstone agreement.

Thus, it granted summary disposition to defendant.

The trial court then turned to the appropriateness of the fees for its attorney

that defendant charged to plaintiffs. Defendant contended that the fees were

appropriate because defendant’s attorney was the lowest paid employee who could

separate the exempt side letters from the nonexempt letters. The court granted

summary disposition to defendant on this issue. It found that the attorney was

defendant’s employee and concluded that the fees were appropriate under MCL

15.234. In the same order, the court denied plaintiffs’ motion for reconsideration.

On plaintiffs’ appeal, the Court of Appeals concluded that it was not

appropriate for the lower court to grant summary disposition concerning the

intentionally deleted exhibits on the basis of relevance. But it affirmed the

decision on alternative grounds, concluding that the intentionally deleted exhibits

were not part of the final settlement agreement. It based its conclusion on the fact

that these exhibits were listed in the agreement with the words “INTENTIONAL

DELETION” written next to them. Coblentz, 264 Mich App 453-454.

Regarding the global readings and site plans, the Court of Appeals found

that summary disposition was appropriate because of Clark’s affidavit and

plaintiffs’ failure to offer factual support for their existence. It also concluded that

summary disposition was appropriate despite the fact that discovery had not been

concluded. The Court opined that it was unlikely that further discovery would

provide the factual support necessary. Id. at 454-457.

It found that the two side agreements were exempt from disclosure.

Specifically, it concluded that defendant adequately complied with FOIA’s

requirement that it place a description of the exempt material in a central location

within a reasonable time. This is despite the fact that defendant did not file the

description until after plaintiffs had made their FOIA requests and until five

months after Sandstone had submitted the documents. The Court of Appeals

found this reasonable because negotiations had continued between defendant and

Sandstone over the deed restrictions. Id. at 458-459.

Finally, the Court of Appeals found the fees charged for the work of

defendant’s attorney appropriate. It concluded that defendant’s attorney met the

dictionary definition of an employee. And it found that he was the lowest paid

employee who could handle the FOIA request. Id. at 460-461.

Plaintiffs sought, and we subsequently granted, leave to appeal. 474 Mich

886 (2005).

II. STANDARD OF REVIEW

We review questions of statutory interpretation and the proper application

of statutes using a de novo standard. Adams Outdoor Advertising, Inc v City of

Holland, 463 Mich 675, 681; 625 NW2d 377 (2001). We review rulings on

motions for summary disposition using the de novo standard as well. Spiek v

Dep’t of Transportation, 456 Mich 331, 337; 572 NW2d 201 (1998). Summary

disposition was granted here under MCR 2.116(C)(10).2 In reviewing a ruling

made under this court rule, a court tests the factual support by reviewing the

documentary evidence submitted by the parties. Spiek, 456 Mich 337. We review

the evidence and all legitimate inferences in the light most favorable to the

2
MCR 2.116(C)(10) provides:
Grounds. The motion may be based on one or more of these
grounds, and must specify the grounds on which it is based:

* * *

(10) Except as to the amount of damages, there is no genuine
issue as to any material fact, and the moving party is entitled to
judgment or partial judgment as a matter of law.

nonmoving party. Wilkinson v Lee, 463 Mich 388, 391; 617 NW2d 305 (2000).

“Where the proffered evidence fails to establish a genuine issue regarding any

material fact, the moving party is entitled to judgment as a matter of law.” Maiden

v Rozwood, 461 Mich 109, 120; 597 NW2d 817 (1999).

The standard of review for FOIA cases was clarified this term in Herald

Co, Inc v Eastern Michigan Univ Bd of Regents, ___ Mich ___; ___ NW2d ___

(Docket No. 128263, decided July 19, 2006). The Court stated:

We continue to hold that the clear error standard of review is
appropriate where the parties challenge the factual findings of the
trial court. However, where the parties do not dispute the underlying
facts but rather challenge the trial court’s exercise of discretion, we
hold that an appellate court must review that determination for an
abuse of discretion, which this Court now defines as a determination
that is outside the principled range of outcomes. [Id., slip op at 2-3
(emphasis in original).]

The determination whether a description of material claimed to be exempt under

MCL 15.243(1)(f) was recorded in a central location within a reasonable time after

submission is a discretionary one. Therefore, the trial court’s decision on the

defendant’s compliance with the requirements of MCL 15.243(1)(f)(iii) is

reviewed for an abuse of discretion.

III. SITE PLANS AND GLOBAL READINGS

In response to plaintiffs’ request for site plans and global readings,

defendant provided Clark’s affidavit claiming that the documents did not exist. If

a record does not exist, it cannot be produced. Given that defendant denied the

existence of the records and that it provided supporting documentation for its

position, the burden shifted to plaintiffs to produce documentation to counter

defendant’s affidavit.

MCR 2.116(G)(4) provides:

A motion under subrule (C)(10) must specifically identify the
issues as to which the moving party believes there is no genuine
issue as to any material fact. When a motion under subrule (C)(10)
is made and supported as provided in this rule, an adverse party may
not rest upon the mere allegations or denials of his or her pleading,
but must, by affidavits or as otherwise provided in this rule, set forth
specific facts showing that there is a genuine issue for trial. If the
adverse party does not so respond, judgment, if appropriate, shall be
entered against him or her.

Under this court rule, a plaintiff cannot rest solely on its complaint. Affidavits,

pleadings, depositions, admissions, or other documentary evidence must be

offered to survive summary disposition. See Smith v Globe Life Ins Co, 460 Mich

446, 454; 597 NW2d 28 (1999). In this case, plaintiffs failed to provide such

documentary evidence.

Regarding the global readings, plaintiffs admit that they are unsure what

they were seeking. They base their request on a handwritten note contained in one

of the drafts of the Sandstone agreement. The note is in the margin and merely

states “global.” Plaintiffs concede that they were guessing at the meaning of the

word. Plaintiffs offer no documentary evidence showing that their guess was

well-founded. Therefore, the trial court properly granted summary disposition.

MCR 2.116(G)(4).

The site plans present a similar situation. While everyone agrees that,

eventually, site plans for the development must be filed with defendant, the

question is whether they had been filed at the time of plaintiffs’ FOIA request.

Again, defendant provided Clark’s affidavit to support its contention that site plans

had not been filed with the city, and plaintiffs offered nothing to contradict this

point. They did not even demonstrate that a local ordinance required Sandstone to

file a site plan by the date of the FOIA request.3 Without factual support to

contradict Clark’s affidavit, the trial court properly granted summary disposition

pursuant to MCR 2.116(C)(10).

Plaintiffs complain that summary disposition was premature because

discovery had not been completed. They assert that they were unable to depose

defendant’s employees, including Clark, to obtain the information necessary to

counter defendant’s summary disposition motion. Such situations are controlled

by MCR 2.116(H), which provides:

Affidavits Unavailable.

(1) A party may show by affidavit that the facts necessary to
support the party’s position cannot be presented because the facts are
known only to persons whose affidavits the party cannot procure.
The affidavit must

(a) name these persons and state why their testimony cannot
be procured, and

(b) state the nature of the probable testimony of these persons
and the reason for the party’s belief that these persons would testify
to those facts.

3
Photographs suggested that Sandstone removed trees and graded the 75
acres at some point. But this is not evidence that defendant had site plans in its
possession at the time of the FOIA request. Plaintiffs point to nothing to show that
site plans were legally required to be filed before this activity could occur.

(2) When this kind of affidavit is filed, the court may enter an
appropriate order, including an order

(a) denying the motion, or

(b) allowing additional time to permit the affidavit to be
supported by further affidavits, or by depositions, answers to
interrogatories, or other discovery.

In this case, plaintiffs did not comply with MCR 2.116(H). They did not

offer the required affidavits of probable testimony to support their contentions.

Therefore, they cannot complain that discovery was prematurely ended.

Given that plaintiffs did not counter defendant’s documentary evidence as

required by MCR 2.116(G)(4) or MCR 2.116(H), the trial court appropriately

granted summary disposition to defendant under MCR 2.116(C)(10).

Accordingly, we affirm the Court of Appeals decision with regard to plaintiffs’

request for global readings and site plans.

IV. THE INTENTIONALLY DELETED EXHIBITS

In the final draft of the Sandstone agreement, the table of contents listed

and lettered the exhibits. Next to some of the letters, the words “INTENTIONAL

DELETION” were inserted. In their FOIA request, plaintiffs asked for all exhibits

to the Sandstone agreement, including the intentionally deleted exhibits.

Defendant argues that the FOIA request was not sufficiently clear. Much of this

argument is based on defendant’s contention that there was only one final

agreement and that plaintiffs requested the exhibits to that final agreement.

MCL 15.233(1) states, in relevant part:

Except as expressly provided in section 13 [exemptions from
disclosure], upon providing a public body’s FOIA coordinator with a
written request that describes a public record sufficiently to enable
the public body to find the public record, a person has a right to
inspect, copy, or receive copies of the requested public record of the
public body. [Emphasis added.]

Defendant never claimed, and still does not claim, that it does not know

what plaintiffs seek. But, focusing on its view of what constituted the final

agreement, it concludes that the requested exhibits either do not exist or that

defendant is not required to produce them. It claims that only the final agreement

is discoverable and that the requested exhibits were not part of it.

Even if the exhibits were not part of the final settlement agreement,

defendant had to disclose them. The FOIA request sufficiently identified them.

MCL 15.233(1). Defendant does not contend that it did not know what documents

plaintiffs were requesting. Because plaintiffs’ description was sufficient to enable

defendant to identify the documents, MCL 15.233(1) required defendant to

produce them regardless of whether they were part of the final agreement.

Defendant’s restrictive reading of the FOIA request is not consistent with

the language of the act. MCL 15.233(1). All that a request must accomplish is to

describe the record “sufficiently” to enable the public body to identify it. Because

defendant acknowledges that the FOIA request did that much, the request was

adequate.

The Legislature chose not to require an exacting standard in MCL

15.233(1). It could have required a “written request that describes a public record

precisely or fully.” But, instead, the Legislature chose to use the lesser standard of

“sufficiently.” The words chosen by the Legislature are presumed intentional. We

will not speculate that it used one word when it meant another. Detroit v Redford

Twp, 253 Mich 453, 456; 235 NW 217 (1931).

Moreover, requiring only a description sufficient to permit identification of

the requested items is consistent with the goals and intent of the Legislature in

enacting FOIA. It is a prodisclosure act. Swickard v Wayne Co Medical

Examiner, 438 Mich 536, 544; 475 NW2d 304 (1991). All public records are

subject to full disclosure unless they are clearly exempt. Id. If a request is

“sufficient” to allow the public body to find a nonexempt record, the record must

be disclosed. MCL 15.233(1).

Plaintiffs’ request satisfies this requirement. It specifically listed the

intentionally deleted exhibits by letter, G, T, U, V, W, AA, BB, GG, MM, NN,

and PP. Defendant’s response demonstrates that plaintiffs’ description was

adequate because it also listed these exhibits by letter. It is irrelevant that

defendant believed these exhibits not to be part of the final agreement. Plaintiffs’

request provided defendant enough information for it to understand what

documents plaintiffs wished to review.

A FOIA request must be fulfilled unless MCL 15.243 lists an applicable

specific exemption. MCL 15.233(1). Defendant points to no exemption

applicable to the intentionally deleted exhibits. Therefore, the trial court erred in

granting summary disposition to defendant, and the Court of Appeals erred in

affirming that decision. MCL 15.233(1) required the trial court to order defendant

to turn over the intentionally deleted exhibits.

V. THE SIDE AGREEMENTS OR SIDE LETTERS

A. THE SIDE LETTERS ARE NOT EXEMPT FROM DISCLOSURE

The trial court and the Court of Appeals found two of the side letters

exempt from disclosure pursuant to MCL 15.243(1)(f). That provision reads:

A public body may exempt from disclosure as a public record
under this act any of the following:

* * *

(f) Trade secrets or commercial or financial information
voluntarily provided to an agency for use in developing
governmental policy if:

(i) The information is submitted upon a promise of
confidentiality by the public body.

(ii) The promise of confidentiality is authorized by the chief
administrative officer of the public body or by an elected official at
the time the promise is made.

(iii) A description of the information is recorded by the public
body within a reasonable time after it has been submitted,
maintained in a central place within the public body, and made
available to a person upon request. This subdivision does not apply
to information submitted as required by law or as a condition of
receiving a governmental contract, license, or other benefit.

Because FOIA is a prodisclosure act,4 the public agency bears the burden of

proving that an exemption applies. MCL 15.240(4). In this case, defendant did

4
Swickard, 438 Mich 544.

not carry that burden. Because it failed to meet the requirements of MCL

15.243(1)(f)(iii), the side letters were not exempt.

B. DEFENDANT OFFERED NO LEGAL JUSTIFICATION
FOR THE DELAY IN THIS CASE

We hold that the trial court abused its discretion in finding that defendant

recorded a description of the side letters within a reasonable time after they were

submitted to defendant. The proffered reason for the delay, ongoing negotiations

between defendant and Sandstone to secure the public release of the letters, is a

consideration irrelevant to the recording requirements of MCL 15.243(1)(f)(iii).

MCL 15.243(1)(f)(iii) requires a public body to record a description of

material claimed to be exempt within a reasonable time after its submission to the

body. If it fails to comply with this requirement, the material is not exempt. MCL

15.243(1)(f). Whether the time the public body takes to record a description of the

material is reasonable is measured from the date the material is submitted. It is not

measured from the date the parties designate it as confidential. Because

reasonableness is a discretionary determination, we review the trial court’s finding

for an abuse of discretion. A court abuses its discretion if its determination falls

beyond the principled range of outcomes. Herald, ___ Mich ___, slip op at 3.

In this case, the side letters were sent to defendant between June and July

2002. Defendant did not record a description of them until November 26, 2002,

several weeks after plaintiffs’ November 1, 2002, FOIA request. The question,

then, is whether the trial court abused its discretion when it found that this four- to

five-month interval was reasonable. Defendant argues that the delay was

reasonable because, in the intervening months, defendant negotiated with

Sandstone to determine which of the seven side letters it could publicly release.

Defendant contends that, had it immediately recorded a description of the letters

and asserted a FOIA exemption, Sandstone would have been discouraged from

authorizing the letters’ public disclosure later. It argues that negotiations with

Sandstone to disclose the letters would have been rendered futile.

We reject the argument that defendant’s negotiations with Sandstone made

the delay reasonable and hold that the trial court abused its discretion when it

found that defendant complied with MCL 15.243(1)(f)(iii). Defendant’s proffered

reason cannot justify any delay in meeting the filing requirement. However

inconvenient the recording requirement may have been to defendant and

Sandstone, defendant was still required to comply with the provisions of MCL

15.243(1)(f). This exemption is intended to provide notice to the public that a

public body possesses trade secrets, commercial information, or financial

information submitted to it for use in developing governmental policy.

MCL 15.243(1)(f)(iii) describes how those documents must be made

available for public inspection. Only by the fortuity of plaintiffs’ ongoing

negotiations with defendant regarding the removal of deed restrictions from

plaintiffs’ property did plaintiffs become aware of the side letters. Otherwise,

plaintiffs would never have known or suspected that they existed. Defendant’s

rationale fails to explain how a requesting party could seek disclosure of a

document of which it was unaware.

Were we to accept defendant’s rationale, a public body could knowingly

possess such confidential information for extended periods without providing any

notice to the public that the information exists. This would defeat the purpose of

the recording requirements expressed clearly in MCL 15.243(1)(f). Therefore,

whether defendant could later secure Sandstone’s permission to release the side

letters is a consideration not legally relevant to its statutory obligation to record a

description of the letters. It cannot be interpreted as a basis for finding that

defendant filed a description within a “reasonable time.”

Justice Corrigan’s dissent argues that the unique facts of this case

warranted the lengthy delay and that the trial court’s discretionary determination

fell within the principled range of outcomes. It misses the point that defendant’s

justification for the delay is legally irrelevant. Defendant bears the burden of

qualifying the side letters as exempt under MCL 15.243(1)(f). Therefore,

defendant must prove that the four- to five-month delay in recording was a

“reasonable time.” It is true, as Justice Corrigan contends, that the permissible

time period for filing can vary. However, we do not need to pinpoint a general

rule concerning what length of time would have been reasonable in this appeal

because no valid reason was offered for the delay. We conclude simply that

defendant’s justification for the four- to five-month delay is legally irrelevant in

view of the notice requirements set forth in MCL 15.243(1)(f)(iii). Therefore, the

trial court’s finding that this interval was reasonable falls beyond the principled

range of outcomes.

Accordingly, we hold that the trial court abused its discretion in finding that

the delay was reasonable. Because defendant failed to comply with MCL

15.243(1)(f)(iii), the side letters are not exempt.5

VI. THE AVAILABILITY OF FEES FOR THE WORK OF DEFENDANT’S ATTORNEY

The lower courts erred in allowing defendant to charge plaintiffs for the

work of defendant’s attorney in locating the two allegedly exempt letters and

separating them from the nonexempt material. MCL 15.234(1) provides, in part:

A public body may charge a fee for a public record search,
the necessary copying of a public record for inspection, or for
providing a copy of a public record. Subject to subsections (3) and
(4), the fee shall be limited to actual mailing costs, and to the actual
incremental cost of duplication or publication including labor, the
cost of search, examination, review, and the deletion and separation
of exempt from nonexempt information as provided in section 14.

MCL 15.234(3) describes how the public body may calculate the cost of

producing FOIA documents. It provides, in part:

In calculating the cost of labor incurred in duplication and
mailing and the cost of examination, review, separation, and deletion
under subsection (1), a public body may not charge more than the
hourly wage of the lowest paid public body employee capable of
retrieving the information necessary to comply with a request under
this act.

5
We note that plaintiffs raised challenges in this case under the other two
sections of this exemption, MCL 15.243(1)(f)(i) and (ii). Because defendant failed
to comply with MCL 15.243(1)(f)(iii), we need not reach those claims. Therefore,
we take no position on Justice Corrigan’s discussion of “governmental policy.”

Pursuant to this statute, the public body may charge the rate of the lowest

paid public body employee capable of retrieving the information. While the lower

courts attempted to apply the language of the statute, they failed to distinguish

between an employee and an independent contractor. MCL 15.234(3) allows the

public body to charge for an employee’s actions; it does not mention independent

contractors. Therefore, to properly determine whether charges are appropriate, a

court must resolve whether the person who examined the records is an employee

or an independent contractor.

Although we have applied the economic realities test most often in the

workers’ compensation field, we conclude that it is instructive here. The test is a

useful tool for discerning whether an employee-employer relationship exists. See

Clark v United Technologies Automotive Inc, 459 Mich 681, 687; 594 NW2d 447

(1999). The test includes but is not limited to the following factors:

“First, what liability, if any, does the employer incur in the
event of the termination of the relationship at will?

“Second, is the work being performed an integral part of the
employer's business which contributes to the accomplishment of a
common objective?

“Third, is the position or job of such a nature that the
employee primarily depends upon the emolument for payment of his
living expenses?

“Fourth, does the employee furnish his own equipment and
materials?

“Fifth, does the individual seeking employment hold himself
out to the public as one ready and able to perform tasks of a given
nature?

“Sixth, is the work or the undertaking in question
customarily performed by an individual as an independent
contractor?

“Seventh, control, although abandoned as an exclusive
criterion upon which the relationship can be determined, is a factor
to be considered along with payment of wages, maintenance of
discipline and the right to engage or discharge employees.

“Eighth, weight should be given to those factors which will
most favorably effectuate the objectives of the statute.” [Hoste v
Shanty Creek Mgt, Inc, 459 Mich 561, 568 n 6; 592 NW2d 360
(1999), quoting McKissic v Bodine, 42 Mich App 203, 208-209; 201
NW2d 333 (1972); see also Askew v Macomber, 398 Mich 212, 217-
218; 247 NW2d 288 (1976), and Schulte v American Box Board Co,
358 Mich 21, 32-32; 99 NW2d 367 (1959) (Smith, J., concurring).]

No single factor is controlling when applying the test. Clark, 459 Mich 689.

In this case, defendant’s attorney did not receive a paycheck or other

employee benefits from defendant. The record reflects that the attorney was

employed by a law firm that defendant retained as city attorney. The attorney

acted as the lead attorney for the firm in that capacity. His social security and

other employment benefits were paid by his law firm. Defendant did not directly

pay the attorney for his services. Rather, defendant paid the law firm, which, in

turn, paid the attorney.

The law firm provided the material and equipment necessary for the

attorney to perform services for defendant. The attorney did not work exclusively

for defendant, but acted as the attorney for other municipalities as well. There was

no indication that the attorney was at all dependent on defendant for his living

expenses. It appears that the attorney’s law firm maintained control over the

attorney. Finally, defendant had no liability for the attorney in the event that his

association with defendant was terminated

This is the classic example of an independent contractor. The attorney was

the employee of the law firm. He and the law firm acted as independent

contractors for defendant. Because MCL 15.234(3) does not mention independent

contractors, defendant was not entitled to charge for the attorney’s work.

FOIA allows public bodies to charge a requesting party only for

employees’ labor. MCL 15.234(3). Because the attorney who examined and

separated the side letters was not defendant’s employee, the lower courts erred in

allowing defendant to charge plaintiffs under MCL 15.234(3) for the attorney’s

work.

VII. CONCLUSION

We affirm the part of the Court of Appeals decision that held that defendant

was not required by FOIA to produce documents regarding global readings and

site plans. Plaintiffs did not, as required by MCR 2.116(G)(4), counter

defendant’s affidavit, and they did not demonstrate, pursuant to MCR 2.116(H),

that further discovery would disclose such documents. Therefore, the trial court

properly granted summary disposition to defendant on this issue.

We reverse the part of the Court of Appeals decision regarding the

intentionally deleted exhibits. Plaintiffs’ request provided defendant sufficient

information for defendant to know which documents plaintiffs wished to review.

Because no exemption from disclosure applied, MCL 15.233(1) required the trial

court to order defendant to turn over the intentionally deleted exhibits.

We also reverse the part of the Court of Appeals decision regarding the two

side letters that defendant claimed were exempt. Defendant failed to comply with

MCL 15.243(1)(f)(iii). It did not place a description of the material in a central

location within a reasonable time of submission. This failure eliminates the side

letters from being exempt.

Finally, we reverse the part of the decision affirming the allowance of fees

for the work of defendant’s attorney. The attorney was an independent contractor.

The lower courts erred in failing to note the legal distinction between employees

and independent contractors. MCL 15.234(3) allows recovery for the costs

associated only with employees.

We remand this case to the trial court for entry of a judgment compelling

disclosure consistent with this opinion.

Marilyn Kelly
Clifford W. Taylor
Elizabeth A. Weaver
Robert P. Young, Jr.
Stephen J. Markman

STATE OF MICHIGAN

SUPREME COURT

ANN COBLENTZ, LEE COBLENTZ,
JOHN LEWANDOWSKI, and
DEBORAH LEWANDOWKSI,

Plaintiffs-Appellants,

v No. 127715

CITY OF NOVI,

Defendant-Appellee.

CAVANAGH, J. (concurring in part and dissenting in part).

I concur with all parts of the majority opinion except for parts II and VI.

While I agree with the result reached by the majority in part VI—that plaintiffs

should not have to pay defendant the requested fee—I believe the reason is simply

that the failure to charge a fee for searching, examining, and reviewing the side

agreements would not result in an unreasonably high cost to defendant. MCL

15.234(3) states, in relevant part:

A fee shall not be charged for the cost of search, examination,
review, and the deletion and separation of exempt from nonexempt
information as provided in section 14 unless failure to charge a fee
would result in unreasonably high costs to the public body because
of the nature of the request in the particular instance, and the public
body specifically identifies the nature of these unreasonably high
costs.

Defendant charged $150 for the city attorney to search, examine, and

review materials for the requested side agreements. But the nature of the request
for the side agreements was a routine request under the Freedom of Information

Act, MCL 15.231 et seq., and complying with the request would not result in an

unreasonably high cost to defendant. Therefore, there was nothing about the

nature of the request in this particular instance to warrant charging a fee to cover

defendant’s costs. Accordingly, I concur with all parts of the majority opinion,

except for part II and part VI; with regard to part VI, I concur only with the result.

Michael F. Cavanagh

STATE OF MICHIGAN

SUPREME COURT

ANN COBLENTZ, LEE COBLENTZ,
JOHN LEWANDOWSKI, and DEBORAH
LEWANDOWSKI,

Plaintiff-Appellants,

v No. 127715

CITY OF NOVI,

Defendant-Appellee.

CORRIGAN, J. (concurring in part and dissenting in part).

I concur with the majority in all respects but one. I dissent from its holding

that the Court of Appeals erred in affirming summary disposition for defendant on

plaintiffs’ request for the “side letters” to the settlement agreement. I believe that

the letters were properly ruled exempt from disclosure under the “trade secrets or

commercial or financial information” exemption of the Freedom of Information

Act (FOIA), MCL 15.243(1)(f). The trial court did not abuse its discretion in

holding that defendant recorded a description of the side letters within a

reasonable time after they were submitted. Nor did the trial court err in holding

that defendant satisfied the remaining requirements of the exemption.
I. Facts and Procedural History

Sandstone Associates Limited Partnership-A (Sandstone) sent the two “side

letters” at issue to defendant on June 25, 2002, and July 23, 2002.1 When

plaintiffs first informally requested the side letters on October 16, 2002,

defendant’s attorney responded on October 21, 2002, by saying that he was

waiting for advice from Sandstone’s lawyers regarding whether to disclose the

side letters because some of them “were submitted with an understanding of

confidentiality.” Plaintiffs filed a formal FOIA request for the side letters on

November 1, 2002, asking defendant to disclose “[a]ny and all side agreements

entered into between the City of Novi and Sandstone and/or its attorneys or

representatives[.]” On November 26, 2002, after negotiating with Sandstone,

defendant produced five side letters, but denied plaintiffs’ request in regard to

two documents representing commercial and/or financial
information voluntarily submitted to the City of Novi for use in
developing governmental policy in connection with the settlement of
Oakland County Circuit Court litigation entitled [Sandstone
Associates Limited Partnership-A v City of Novi, Oakland Circuit
Court Docket No. 95-501532-CK], as contemplated and required
under MCL 15.243[(1)(f)].

On the same day, defendant recorded and filed with the city clerk

descriptions of the two side letters that it had refused to disclose. Both of these

1
Defendant and Sandstone entered their agreement settling Sandstone’s
multimillion dollar judgment against defendant on June 25, 2002. Sandstone
dated and sent the first draft of the first side letter to defendant’s attorney on the
same day. Sandstone sent a revised version of this letter, along with the other side
letter at issue, to defendant on July 23, 2002.

side letters had been written by Sandstone and sent to defendant’s attorney and

marked as confidential. In one letter, Sandstone named the prices it would pay to

purchase plaintiffs’ (and others’) properties, assuming that the properties were free

from deed restrictions (Letter 1). In the other letter, Sandstone identified which

parcels of property (including plaintiffs’) have deed restrictions that give their

owners the enforceable right to prohibit commercial use (Letter 2).

Following an in camera review of the two side letters and two affidavits

submitted by defendant, the trial court determined that the letters were exempt

from disclosure under the “trade secrets or commercial or financial information”

exemption of the FOIA:

The court is satisfied that Defendant complied with each of
the three listed requirements of MCL 15.243(1)(f) and thus
disclosure of the two side letters would be inappropriate. The court
finds that the two letters contain financial or commercial information
of Sandstone’s voluntarily provided to Defendant by Sandstone in
confidence. Further, the letters fall within the policy-making
potential contemplated by the Legislature in drafting this exemption
to the FOIA. They were intended to facilitate the Settlement
Agreement and Consent Judgment and assist Defendant in making
the policy decisions with regard to that settlement. The court finds
that the content of the letters relates to Defendant’s deliberations on
the selection of the best government policy for the potential
expenditure of substantial sums of money and the retention of land
for public use.

The Court of Appeals affirmed, holding that defendant had satisfied all the

requirements of the exemption.

II. Analysis

I cannot conclude that the lower courts erred in holding that the two side

letters are exempt from disclosure under the “trade secrets or commercial or

financial information” exemption. When reviewing the application of an FOIA

exemption, an appellate court reviews legal determinations de novo, factual

findings for clear error, and discretionary determinations for an abuse of

discretion. Herald Co, Inc v Eastern Michigan Univ Bd of Regents, ___ Mich ___,

___; ___ NW2d ___ (Docket No. 128263, decided July 19, 2006), slip op at 6-8.

The “trade secrets or commercial or financial information” exemption provides:

(1) A public body may exempt from disclosure as a public
record under this act any of the following:

* * *

(f) Trade secrets or commercial or financial information
voluntarily provided to an agency for use in developing
governmental policy if:

(i) The information is submitted upon a promise of
confidentiality by the public body.

(ii) The promise of confidentiality is authorized by the chief
administrative officer of the public body or by an elected official at
the time the promise is made.

The burden is on the public body to demonstrate that the record is exempt from

disclosure. MCL 15.240(4); Federated Publications, Inc v City of Lansing, 467

Mich 98, 108; 649 NW2d 383 (2002).

A. “A description of the information is recorded by the public body
within a reasonable time”

What constitutes a “reasonable time” is a discretionary determination, as

this Court described in Federated Publications, Inc, supra at 106-107. Thus, the

trial court’s determination is subject to review for an abuse of discretion. Herald

Co, supra, slip op at 6-8. This Court “cannot disturb the trial court’s decision

unless it falls outside the principled range of outcomes.” Id. at 8. The trial court’s

decision that defendant recorded a description of the side letters within a

reasonable time after their submission to defendant, MCL 15.243(1)(f)(iii), did fall

within the principled range of outcomes.

Even after defendant and Sandstone agreed to settle Sandstone’s

multimillion dollar judgment against defendant, they continued to negotiate

questions regarding deed restrictions on the subject property. Sandstone believed

that certain of the seven side letters (including the two letters at issue) had been

submitted upon defendant’s promise of confidentiality and hence were exempt

from disclosure under the FOIA. While defendant agreed that some of the letters

had been submitted upon a promise of confidentiality, it kept open the possibility

that the letters might not be exempt under the FOIA. Defendant thus negotiated

with Sandstone to determine which of the letters might be voluntarily disclosed

under the FOIA. These negotiations continued until Sandstone eventually agreed

to disclose five of the seven letters on November 26, 2002, the same day that

defendant recorded the descriptions and filed them with the city clerk. Defendant

did not know whether it was going to assert an FOIA exemption regarding these

side letters until its negotiations with Sandstone ended. If defendant had recorded

the information contained in all of these letters and asserted the “trade secrets or

commercial or financial information” exemption earlier than it did, Sandstone

might not have agreed to disclose five of the letters.

The majority’s holding that defendant’s delay in recording descriptions of

the side letters was unreasonable is inconsistent the statutory language. By using

the phrase “reasonable time,” the Legislature made clear that the permissible time

period can vary. MCL 15.243(1)(f)(iii) does not define what constitutes a

“reasonable time.” But this Court has defined “reasonable time” as follows: “By

reasonable time is to be understood such promptitude as the situation of the parties

and the circumstances of the case will allow. It never means an indulgence in

unnecessary delay . . . .” Maley-Thompson & Moffett Co v Thomas Forman Co,

179 Mich 548, 555; 146 NW 95 (1914). Yet the majority disregards the word

“reasonable” in the statute by holding that the circumstances surrounding

defendant’s recording of the descriptions, including the negotiations between

defendant and Sandstone, are “irrelevant,” ante at 16, and by concluding that the

delay was unreasonable because, despite the circumstances, “defendant was still

required to comply with the provisions of MCL 15.243(1)(f),” ante at 17. The

majority holds that defendant was required to record descriptions earlier than it did

“[h]owever inconvenient the recording requirement may have been to defendant

and Sandstone,” ante at 17, and despite “whether defendant could later secure

Sandstone’s permission to release the side letters,” ante at 18. In so holding, the

majority consciously shifts the focus away from whether defendant’s actions were

reasonable in this case. To say, as the majority does, that the negotiations

between defendant and Sandstone are irrelevant is to say that defendant was

required to record the descriptions of the side letters within a certain unspecified

time regardless of what time was reasonable under the circumstances. This is

contrary to the text of the statute.

The majority holds that the negotiations between defendant and Sandstone

were irrelevant to the statutory obligation to record descriptions of the side letters

within a reasonable time because the statutory exemption’s recording requirement

is intended to provide notice to the public. In support of this holding, the majority

states that plaintiffs would never have discovered the existence of the side letters if

they had not accidentally happened on a reference to the side letters.2 The

majority’s reasoning appears to be based on the faulty assumption that defendant

never recorded the descriptions of the side letters. Defendant did give plaintiffs

notice of the side letters when it recorded the descriptions on November 26, 2002.

2
Plaintiffs learned of the side letters upon examining a nonfinal draft of the
agreement that was voluntarily disclosed by defendant.

Thus, plaintiffs would have received notice within a reasonable time that

defendant possessed the side letters even if plaintiffs had not discovered the letters

before defendant recorded the descriptions. Further, the statute does not create a

race between the requesting party and the public body. That plaintiffs discovered

the existence of the side letters before defendant recorded the descriptions does not

necessarily mean that defendant did not record the descriptions within a

reasonable time. I do not question that the public body must record the

descriptions and give notice to the public in order to comply with MCL

15.243(1)(f)(iii). But the issue is not whether defendant gave notice that it

possessed the side letters before plaintiffs discovered the side letters, but whether

defendant gave notice within a reasonable time that it possessed the side letters.

This case does not involve the situation cited by the majority in which the

“requesting party [is required to] seek disclosure of a document of which it was

unaware.” Ante at 18.

The majority believes that the four-month delay was unreasonable simply

because it was too long. The majority effectively holds that whether the public

body met the requirements of MCL 15.243(1)(f)(iii) depends only on the length of

time the public body takes to record a description of the information, rather than

whether that amount of time was reasonable under the circumstances. If the

Legislature had not intended for the time to vary with the circumstances, it would

have imposed a definite time limitation on the public body recording the

description, rather than stating that the description must be recorded within a

reasonable time.

Additionally, after having recited the appropriate standard of review, the

majority nonetheless engages in a review de novo. Given the unusual situation

presented by these facts, in which defendant waited to record the descriptions until

negotiations regarding disclosure had concluded, the trial court accorded leeway in

the recording process to defendant. There is good reason behind the abuse of

discretion standard we articulated in Herald Co, supra, slip op at 6-8. The trial

court is given the discretion to determine what amount of time is reasonable

precisely so that it may take into account the public body’s recording of the

description in each case and examine why the recording took the amount of time it

did under the circumstances. Allowing the trial court the discretion to determine

what amount of time is reasonable under the circumstances does not defeat the

purpose of the recording requirements of the statute. Both the trial court and the

Court of Appeals held that defendant recorded the description of the side letters

within a reasonable time. This reasoned outcome accounts for defendant’s

decision to record the descriptions after the conclusion of successful negotiations

between defendant and Sandstone. The trial court’s determination fell within the

principled range of outcomes. Id. at 8. The trial did not abuse its discretion in

determining that defendant recorded descriptions of the information within a

reasonable time after they were submitted.

B. “Submitted upon a promise of confidentiality”

In one of the side letters (Letter 1), Sandstone stated that “[t]he terms of

this letter are confidential under all respects, not subject to disclosure and would

not be covered by any FOIA request.” The other side letter (Letter 2) was

submitted with and related to Letter 1. Thus, Sandstone expressly stated that the

letters were confidential. But to satisfy the exemption, the information must be

submitted upon a promise of confidentiality by the public body. Defendant

satisfied this requirement by offering the unrebutted affidavit of Ronald Hughes,

the Sandstone partner who had signed the side letters. Hughes stated that

defendant promised to keep the letters confidential before Sandstone sent them to

defendant. He averred that the letters “were expressly submitted and conditioned

on their confidentiality contemporaneous with their execution . . . .” Plaintiffs

failed to offer any evidence in rebuttal. In light of Hughes’s uncontested affidavit,

the trial court did not err in finding no genuine issue of material fact that the letters

were submitted upon defendant’s promise of confidentiality.

C. “Authorized by the chief administrative officer of the public
body or by an elected official”

Hughes also stated in his affidavit that “Sandstone understood that the

promise of confidentiality was both known and authorized by the Mayor and City

Manager, at the time of the letters[’] execution, and Sandstone would not have

submitted the letters absent such a promise of confidentiality from the City of

Novi.” As noted, plaintiffs failed to rebut this affidavit. Thus, the trial court did

not err in finding no genuine issue of material fact that the chief administrative

officer or an elected official had promised confidentiality.

D. “For use in developing governmental policy”

Finally, I agree with the lower courts that the two side letters at issue

contain financial or commercial information that was “for use in developing

governmental policy.” MCL 15.143(1)(f). The FOIA does not define

“governmental policy.” This Court has never interpreted this phrase in the

context of the FOIA. Further, courts in other jurisdictions interpreting their own

FOIAs have never defined this phrase.3 It is thus difficult to form a precise

definition of “governmental policy.” Governments claim authority and

responsibility over large groups of individuals, and the methods they employ to

decide how to carry out their numerous functions vary widely. Nonetheless, this

Court has defined “policy” in the employment contract context as “‘a definite

course or method of action selected (as by a government, institution, group, or

individual) from among alternatives and in the light of given conditions to guide

and usu[ally] determine present and future decisions; . . . a projected program

3
Other jurisdictions have interpreted their own versions of the “trade
secrets or commercial or financial information” exemption. None of these
jurisdictions has statutes that include the “governmental policy” language found in
Michigan’s exemption. For example, numerous federal courts have interpreted the
federal FOIA provision that exempts from disclosure “trade secrets and
commercial or financial information obtained from a person and privileged or
confidential[.]” 5 USC 552(b)(4). But the federal exemption does not require that
the information be provided “for use in developing governmental policy.”

consisting of desired objectives and the means to achieve them . . . .’” In re

Certified Question (Bankey v Storer Broadcasing Co), 432 Mich 438, 455-456;

443 NW2d 112 (1989), quoting Webster’s Third New International Dictionary,

Unabridged Edition (1964); see also Silberman, Chevron—The intersection of

law & policy, 58 Geo Wash L R 821, 822 (1990) (offering a similar definition).4

This definition applies equally to the term “policy” in the FOIA exemption at

issue, and I would adopt it here. I emphasize that this definition does not

encompass every decision regarding a course of action made by a governmental

entity. Obviously, governmental bodies adopt many courses of action that do not

guide present or future decisions. Such decisions may be categorized as

4
I distinguish the phrase “governmental policy” from the phrase “public
policy” because these phrases are generally used to convey different meanings. In
Terrien v Zwit, 467 Mich 56, 68 n 13; 648 NW2d 602 (2002), this Court declined
to define “public policy,” but held that “public policy is defined by reference to
the laws actually enacted into policy by the public and its representatives.” As the
Court observed in Skutt v Grand Rapids, 275 Mich 258, 264; 266 NW 344 (1936),
quoting Pittsburgh, C, C & St L R Co v Kinney, 95 Ohio St 64; 115 NE 505
(1918):

“What is the meaning of ‘public policy?’ A correct
definition, at once concise and comprehensive, of the words ‘public
policy’, has not yet been formulated by our courts. . . . In substance,
it may be said to be the community common sense and common
conscience, extended and applied throughout the State to matters of
public morals, public health, public safety, public welfare and the
like. It is that general and well-settled public opinion relating to
man’s plain, palpable duty to his fellow men, having due regard to
all the circumstances of each particular relation and situation.”

Thus, “public policy” is used as a basis for governmental decisions, rather
than being a “course or method of action” for making present or future decisions.

“operational” decisions rather than “policy” decisions. Operational decisions

concern routine, everyday matters and do not require evaluation of broad policy

factors. See Rogers v State, 51 Hawaii 293, 296-298; 459 P2d 378 (1969)

(interpreting a “discretionary function” exception to governmental immunity).

Operational decisions may also be characterized as “the execution or

implementation of previously formulated policy.” Hanson v Vigo Co Bd of

Comm’rs, 659 NE2d 1123, 1126 (Ind App, 1996) (also interpreting a

“discretionary function” exception to governmental immunity).5

5
In interpreting the “discretionary function” exception to its governmental
immunity statute, the Arizona Court of Appeals offered contrasting examples of
operational, as opposed to policy, decisions:

By way of illustration, a decision by the district board to
construct a playground at a school and allocate funds for that
purpose would be a policy decision protected by immunity.
Deciding what specific pieces of equipment to have on the
playground would not be a policy decision, but rather would be an
operational level decision. See, e.g., Warrington v. Tempe
Elementary Sch. Dist., [187 Ariz 249, 252; 928 P2d 673 (Ariz App,
1996)] (school district’s decision regarding placement of bus stop is
an operational level decision); Evenstad [v State], 178 Ariz. [578] at
582-84, 875 P.2d [811] at 815-17 (App. 1993) (issuance of driver’s
license by MVD is an operational level decision; prescribing rules
for issuance is making of policy); Rogers v. State, 51 Haw. 293, 296-
98, 459 P.2d 378, 381 (Haw. 1969) (operational level acts concern
routine, everyday matters, not requiring evaluation of broad policy
factors; operational acts include kinds of road signs to place and
which center line stripes to repaint); Stevenson v. State Dept. of
Transp., 290 Or. 3, 9-12, 619 P.2d 247, 251-52 (Or. 1980) (decision
to build a highway rather than a railroad track is exercise of
governmental discretion or policy judgment entitled to immunity;
planning and design of the road does not involve use of discretion in
the sense that a policy decision is required). [Schabel v Deer Valley
(continued…)

Although the Court of Appeals correctly ruled that the side letters were

provided to defendant for use in developing governmental policy, the panel’s

reasoning in reaching this conclusion was faulty. The panel stated that “[t]he

information in the side letters clearly concerned public policy” because “[i]t

related to how defendant intended to settle the Sandstone litigation, a situation

with the potential to bankrupt defendant and seriously affect its residents.”

Coblentz v Novi, 264 Mich App 450, 458; 691 NW2d 22 (2004). The agreement

was of overarching importance to defendant and the development of defendant’s

policy because it settled the Sandstone judgment against defendant, which could

have bankrupted defendant and affected its residents by causing budget cuts and

tax increases or assessments against each resident. Nonetheless, because the side

letters were sent after defendant entered into the agreement with Sandstone, they

did not affect whether defendant entered into the agreement, and accordingly did

(…continued)
Unified School Dist No 97, 186 Ariz 161, 166; 920 P2d 41 (Ariz
App, 1996).]

See also Gutbrod v Hennepin Co, 529 NW2d 720, 723 (Minn App, 1995)
(citations omitted) (“Planning level decisions . . . involve questions of public
policy and the balancing of competing policy objectives. . . . [O]perational level
decisions relate ‘to the ordinary day-to-day operations of the government’ and
involve the exercise of scientific or professional judgment.”).
I recognize that the FOIA exemption at issue is worded differently than,
and applied differently from, the governmental immunity statutes in these cases.
Nonetheless, I find persuasive the analyses of “policy” versus “operational” in
these cases in interpreting what constitutes “policy” within the meaning of
Michigan’s “trade secrets or commercial or financial information” exemption.

not affect whether defendant went bankrupt. The letters did not alter or void the

agreement if defendant was unable to clear the deed restrictions or convince

plaintiffs to sell their properties. Because the agreement had already settled the

Sandstone judgment when the side letters were sent, the danger of this judgment

causing defendant to go bankrupt had abated. Thus, the side letters were not

provided to defendant for use in developing its policy to discharge the Sandstone

judgment and avoid bankruptcy.

Nonetheless, defendant did use the side letters in developing governmental

policy. The agreement expressly provided that defendant would forfeit additional

public land (either 4.8 or 9.6 acres at Sandstone’s option) if it failed to purchase

plaintiffs’ properties or otherwise clear the deed restrictions on the properties.

Thus, the agreement demonstrates that before the side letters were sent, defendant

had already made the policy decision that it would agree either to find a way to

remove the deed restrictions on plaintiffs’ property or to relinquish additional

parkland. But at the time defendant entered the agreement, it had not yet decided

which of these two alternatives it would choose. The agreement itself contained

no policy to assist in this decision. Because the decision whether to remove the

deed restrictions or forfeit additional parkland was not a routine decision that

merely required application of policy developed in the agreement, defendant had a

remaining policy decision to make after it entered into the agreement. That

defendant had already agreed on the two alternatives before the side letters were

sent did not alter defendant’s need to develop policy in order to choose between

these two alternatives.

The side letters confirm the deed restrictions on the properties and the

amount Sandstone would pay defendant for plaintiffs’ properties once they were

free from restrictions. By offering in the letters to advance all or part of the

money to defendant to purchase plaintiffs’ properties, Sandstone sought to

influence defendant’s decision whether to purchase plaintiffs’ properties, pay

plaintiffs to waive the right to enforce their deed restrictions, or forfeit additional

public land to Sandstone. Because disclosure of the letters would reveal to

plaintiffs the amount Sandstone was willing to pay for their properties, it would

also affect defendant’s ability to purchase plaintiffs’ properties. Defendant’s

decision regarding whether to attempt to purchase plaintiffs’ properties or try to

lift the deed restrictions on the properties not only directly affected plaintiffs

individually, but it also affected the residents of the city because it determined

whether defendant would be forced to forfeit several acres of property set aside

for public use. If defendant decided to purchase plaintiffs’ properties, it would

result in large expenditures of public funds, which would affect defendant’s

budget and its residents. On the other hand, if defendant was unable to lift the

deed restrictions or decided not to purchase plaintiffs’ properties, defendant

would forfeit additional public property to Sandstone. The loss of this additional

land would affect all of defendant’s residents.6

Regardless of defendant’s ultimate decision, the information in the side

letters was provided for use in guiding defendant’s management of public affairs.

The letters affected a budgetary decision concerning allocation and substantial

expenditure of public funds to retain public land. Thus, the letters were provided

to defendant to develop a course of action that would materially affect the future

of its citizens. The letters did not involve a mere operational decision regarding a

routine matter for which a policy was already in place. Defendant’s decision on

how to deliver its governmental functions within its budget obviously constituted

a policy decision. Thus, the Court of Appeals did not err in holding that that the

side letters contained financial or commercial information provided to defendant

for use in developing governmental policy.

III. Conclusion

I dissent from the majority’s conclusion that plaintiffs were entitled to

disclosure of the side letters. In my opinion, the trial court did not abuse its

discretion in determining that defendant recorded descriptions of the side letters

within a reasonable time after they were submitted. Because defendants met all of

6
Thus, this case is distinguishable from Herald Co, Inc v Tax Tribunal, 258
Mich App 78, 85; 669 NW2d 862 (2003), in which the Court of Appeals held that
the “trade secrets or commercial or financial information” exemption did not apply
because the single individual tax determination “lack[ed] the policy-making
potential contemplated by the Legislature in drafting this exemption to the FOIA.”

the other requirements of the “trade secrets or commercial or financial

information” exemption of the FOIA, the side letters were exempt from disclosure.

Maura D. Corrigan