46th Circuit Trial Court v. Crawford County

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 28, 2006

46TH CIRCUIT TRIAL COURT,

Plaintiff, Counter-Defendant,
Third-Party Plaintiff-Appellee,

v No. 128878

COUNTY OF CRAWFORD AND CRAWFORD
COUNTY BOARD OF COMMISSIONERS,

Defendants, Counter-Plaintiffs,
Third-Party Plaintiffs-Appellants,

and

COUNTY OF KALKASKA,

Intervening Defendant,
Counter-Plaintiff, Third-Party
Plaintiff-Appellant

and

COUNTY OF OTSEGO,

Third-Party Defendant

_______________________________

BEFORE THE ENTIRE BENCH

MARKMAN, J.
 We granted leave to appeal to consider this funding dispute between the

46th Circuit Trial Court (hereafter the Trial Court) and two of its three county

funding units. This case involves a conflict between the legislative branch’s

exercise of the “legislative power” to appropriate and to tax, and the judicial

branch’s inherent power to compel sufficient appropriations to allow the judiciary

to carry out its essential judicial functions. Specifically, the Trial Court seeks to

compel the defendant counties to appropriate funding for the enhanced pension

and retiree health care plans it deems necessary to recruit and retain adequate staff

to allow it to carry out its essential judicial functions. The circuit judge found in

favor of the Trial Court, holding that the benefits were “reasonable and necessary”

to the court’s ability to perform its constitutional responsibilities and that the

counties created for themselves a contractual obligation to appropriate funds for

the enhanced pension and retiree health care plans. The Court of Appeals

affirmed. Because we conclude that such benefits were not “reasonable and

necessary” to the “serviceability” of the court, and because we conclude that the

defendant counties were not contractually obligated to appropriate funds for the

enhanced benefits plan sought by the Trial Court, we reverse the judgment of the

Court of Appeals and remand this case to the circuit judge for entry of a judgment

in favor of defendants.

I. FACTS AND PROCEDURAL HISTORY

The Trial Court’s predecessor, the 46th Circuit Court, was the circuit court

servicing Otsego, Crawford, and Kalkaska counties. Pursuant to Administrative

2

Order No. 1996-9, 451 Mich civ, the 46th Circuit Court, along with the district and

probate courts within these counties,1 became part of a demonstration project

designed to evaluate the feasibility of consolidating various court functions into a

single entity known as the 46th Circuit Trial Court.2 The chief judge of the 46th

Circuit Court was appointed the Trial Court’s chief judge (hereafter Chief Judge),

and Otsego County was designated as the Trial Court’s control unit.

In order to facilitate this consolidation, the Trial Court began a large-scale

administrative reorganization for the purpose of standardizing wages, benefits, and

personnel policies. During this reorganization in the summer of 2000, the Chief

Judge requested that his employees switch to a less-favorable prescription drug

and health insurance plan and that they relinquish longevity pay. In return for this

concession, the Chief Judge agreed to seek an enhanced employee pension plan

1
The other courts included in the demonstration project were the 83rd
District Court, to the extent it served Crawford County; the 87th District Court, to
the extent it served Kalkaska and Otsego counties; the Crawford County Probate
Court; the Kalkaska County Probate Court; and the Otsego County Probate Court.
2
The demonstration project was originally scheduled to last only two years
and encompassed six project courts: Barry County, Berrien County, Isabella
County, Lake County, Washtenaw County, and the 46th Circuit Court. However,
pursuant to Administrative Order No. 1997-12, 456 Mich clxxxi, the project was
extended “until further order of the [Supreme] Court.” Iron County was added as
a seventh demonstration project court in 1999. In 2002, the Legislature enacted
MCL 600.401 et seq., which permits a county or judicial circuit to consolidate all
or part of its operations subject to the approval of this Court. In January 2003, this
Court adopted Administrative Order No. 2003-1, 467 Mich cix, which provides in
part that “[s]ubject to approval of the Supreme Court, a plan of concurrent
jurisdiction may be adopted by a majority vote of judges of the participating trial
courts.”

3

and a new retiree health care plan funded by the counties. The Chief Judge

presented his enhanced benefits plan, first, to the Tri-County Committee, a

nonbinding committee that consisted of individuals representing each county, and

subsequently to each county’s board of commissioners. The boards of

commissioners for Otsego and Kalkaska counties passed resolutions agreeing to

implement the enhanced benefits plan. On August 29, 2000, the Crawford County

Board of Commissioners passed the following resolution:

MOTION by Hanson, seconded by Beardslee, to authorize
the County [to] pay 24% of $50,000 ($12,000) for the year 2000 and
that payment will increase at 4% per year until 2017, and at that time
will pay an estimated $94,649 and that the Blue Cross/Blue Shield
medical supplement payment per individual would be capped at [sic]
the year 2000 at $4,087.00 [and] would increase at 4% per year until
2017 for an employee to be eligible for $7,654.00 per year.

MOTION by Wieland, seconded by Hanson, to request the
[Trial] Court not implement the MERS [Municipal Employees’
Retirement System] B-4 upgrade at this time, but recognize the
change in the 2001/2002 budget cycle.

That same afternoon, the Chief Judge informed the Chairwoman of the Crawford

board that there had been an error in calculating the annual premium for the first

year of the retiree health care plan and that the $4,087 figure was too low. The

Chief Judge and the Chairwoman of the board subsequently agreed that the sum of

$5,763 should be substituted as the correct first-year premium. However, the

Crawford board never amended the resolution to reflect this new figure.

Following the vote in Crawford County, the Chief Judge prepared a

contract memorializing the agreement. Although the contract was signed by

4

representatives from Kalkaska and Otsego counties, Crawford County refused to

sign the contract because of the board’s concern regarding the prospect of a

sizeable unfunded liability.3 Shortly thereafter, on December 4, 2000, the Chief

Judge implemented both the enhanced benefits plan and the employee concessions

by order. Initially, Crawford County alone refused to appropriate its share of the

costs of the enhanced benefits plan for fiscal years 2001-2003. However,

approximately one year after the implementation order was entered, the Kalkaska

County Board of Commissioners rescinded its resolution approving the enhanced

benefits plan primarily on the basis of the concerns raised by Crawford County.4

Otsego County proceeded to fund the entire cost of the enhanced benefits plan

without reimbursement from the other funding units.

After unsuccessful attempts to settle the dispute, the Chief Judge

communicated the notice required by Administrative Order No. 1998-5 § III(1),

459 Mich clxxvi, of the Trial Court’s intention to sue Crawford County. After the

required 30-day waiting period expired, the Trial Court brought this action to

compel funding, claiming both that Crawford County was contractually obligated

to fund the enhanced benefits and that it had failed to provide sufficient funds to

3
Crawford County Commissioner Scott Hansen also noted that the board
rejected the contract because it was “not what [the board] approved [on August 29,
2000.]” Defendant’s appendix at 435a.
4
Kalkaska County paid its full share of the Trial Court’s budget in both
2001 and 2002. It failed to appropriate funds for its share of the enhanced benefits
plan for fiscal year 2003.

5

allow the court to operate. Specifically, the Trial Court argued that, absent the

enhanced benefits, the morale of its employees would decline, leading to lower

productivity and, as a result, the court would be unable to function. The Trial

Court further argued that it could not generate sufficient savings in its budget to

pay for the enhanced benefits and that any staff cuts would prevent the court from

operating at a serviceable level. Crawford County denied the allegations and

asserted in a counterclaim that the Trial Court had exceeded its authority when it

implemented the enhanced pension and retiree health care plans and that the Trial

Court had fraudulently misrepresented the costs of the latter. Kalkaska County

moved to intervene on behalf of Crawford County. In a separate action, Crawford

and Kalkaska counties sued Otsego County, claiming that Otsego County had

improperly implemented the enhanced pension and retiree health care plans and

had colluded with the Trial Court to withhold information about the cost of the

pension increase. The cases were consolidated and the State Court Administrator

assigned a circuit judge from outside the affected counties to preside over these

cases.

The circuit judge eventually found that the Trial Court’s requested budget,

specifically the requested appropriation for the enhanced benefits plan, was

“reasonable and necessary” to the court’s ability to perform its essential functions.

The requested appropriation was “reasonable” because it was not “excessive” and

was “comparable to what other courts spend on like activities.” The requested

appropriation was also “necessary” because it had been “convincingly” proved

6

that loss of the benefits plan would destroy employee morale to the point where

the court could no longer function. The circuit judge also found that the August

29, 2000, resolution created an explicit contract with the Trial Court to implement

the enhanced benefits plan. In a published opinion, 266 Mich App 150; 702

NW2d 588 (2005), the Court of Appeals affirmed.5

This Court granted the defendant counties’ application for leave to appeal,

limited to the questions: (1) whether the appropriations sought for the enhanced

benefits plan were “reasonable and necessary to achieve the court’s constitutional

and statutory responsibilities”; (2) whether the defendant counties were

contractually obligated to fund the enhanced benefits plan at the level requested by

the Trial Court; and (3) whether there was evidence to support the conclusion that

the level of funding offered by the counties was insufficient to allow the court to

fulfill its essential functions. 474 Mich 986 (2005).6

5
Judge Zahra, concurring in part and dissenting in part, opined that
defendants had a preexisting statutory and constitutional duty to provide the Trial
Court with sufficient funding to carry out its constitutional responsibilities.
Because of this, the Trial Court’s contract claim failed for lack of consideration.
In addition, he observed that there was no statutory or other authority underlying
the contract claims between courts and their funding units.
6
In addition to affirming the judgment of the circuit judge on the Trial
Court’s contractual and “inherent power” claims, the Court of Appeals resolved a
number of other issues, including the Trial Court’s entitlement to attorney fees.
Applications for leave to appeal from those matters have been held in abeyance by
this Court for resolution of the instant case. Crawford Co v Otsego Co, 707
NW2d 350 (2005); 46th Circuit Trial Court v Crawford Co, 707 NW2d 351
(2005); Crawford Co v Otsego Co, 707 NW2d 351 (2005); 46th Circuit Trial
Court v Crawford Co, 707 NW2d 594 (2005).

7

 II. STANDARD OF REVIEW

Whether county funding of local court operations satisfies constitutional

requirements presents a constitutional question that this Court reviews de novo.

DeRose v DeRose, 469 Mich 320, 326; 666 NW2d 636 (2003). We review for

clear error the factual findings underlying the circuit judge’s determination of

whether the requested appropriation was “reasonable and necessary.” MCR

2.613(C).

Issues of contract interpretation are questions of law that we review de

novo. Archambo v Lawyers Title Ins Corp, 466 Mich 402, 408; 646 NW2d 170

(2002). We review for clear error the findings of fact underlying the circuit

judge’s determination whether a valid contract was formed. Alan Custom Homes,

Inc v Krol, 256 Mich App 505, 512; 667 NW2d 379 (2003). A finding is “clearly

erroneous” if, “the reviewing court, on the whole record, is left with the definite

and firm conviction that a mistake has been made.” Bynum v EASB Group, Inc,

467 Mich 280; 285; 651 NW2d 383 (2002). The interpretation of a county

resolution, as with the interpretation of a statute, is a question of law, which we

review de novo. Eggleston v Bio-Medical Applications of Detroit, Inc, 468 Mich

29, 32; 658 NW2d 139 (2003).

III. ANALYSIS

A. “INHERENT POWER”

The judiciary’s “inherent power” to compel funding is an extraordinary

power and is derived from the separation of governmental powers set forth

8

principally in Const 1963, arts 4-6, relating to the authorities of the legislative,

executive, and judicial branches of government, and Const 1963, art 3, § 2, which

provides:

The powers of government are divided into three branches:
legislative, executive and judicial. No person exercising powers of
one branch shall exercise powers properly belonging to another
branch except as expressly provided in this constitution.

The framers of Michigan’s Constitution understood well the importance of

separating the powers of government. The doctrine of separation of powers rests

on the notion that the accumulation of too much power in one governmental entity

presents a threat to liberty. James Madison expressed this sentiment more than

200 years ago when he wrote, “the accumulation of all powers, legislative,

executive, and judiciary, in the same hands, whether of one, a few, or many, and

whether hereditary, self-appointed, or elective, may justly be pronounced the very

definition of tyranny.” The Federalist, No. 47. Thus, governmental power was

separated-- with the Legislature exercising the “legislative power,” Const 1963, art

4, § 1; the Governor exercising the “executive power,” Const 1963, art 5, § 1; and

the judiciary exercising the “judicial power,” Const 1963, art 6, § 1.

The “legislative power” has been defined as the power “to regulate public

concerns, and to make law for the benefit and welfare of the state.” Cooley,

Treatise on the Constitutional Limitations (Little, Brown & Co, 1886), at 92.

Perhaps the most fundamental aspect of the “legislative power,” authorized by the

opening sentence of US Const, art I, § 8, which defines the powers of the

9

legislative branch, is the power to tax and to appropriate for specified purposes.

See also Const 1963, art 4. The power to tax defines the extent to which economic

resources will be apportioned between the people and their government, while the

power to appropriate defines the priorities of government. Partly in recognition of

the enormity of these powers, the framers of our constitutions determined that the

branch of government to exercise these powers should be that branch which is

closest to, and most representative of, the people.

This is true for other reasons as well. In contrast with the judiciary, for

example, the legislature is not restricted in the range of testimony that it may hear

as a prelude to enacting public policy, it is better positioned to accommodate

competing policy priorities, it is better equipped to effect compromise positions

after negotiation and bargaining, it is more regularly and directly accountable to

the people, and its membership is more broadly representative of society and its

various interests.

However, just as it is implicit in the separation of powers that each branch

of government is empowered to carry out the entirety of its constitutional powers,

and only these powers, it is also implicit that each branch must be allowed

adequate resources to carry out its powers. Although the allocation of resources

through the appropriations and taxing authorities lies at the heart of the legislative

power, and thus belongs to the legislative branch, in those rare instances in which

the legislature’s allocation of resources impacts the ability of the judicial branch to

carry out its constitutional responsibilities, what is otherwise exclusively a part of

10

the legislative power becomes, to that extent, a part of the judicial power. As

observed by James Madison:

[M]embers of each department should be as little dependent
as possible on those of the others, for the emoluments annexed to
their offices. Were the executive magistrate, or the judges, not
independent of the Legislature in this particular, their independence
in every other would be merely nominal. [Madison, The Federalist,
No. 51.]

As the legislative department alone has access to the pockets
of the people, and has in some constitutions full discretion, and in all
a prevailing influence over the pecuniary rewards of those who will
fill the other departments, a dependence is thus created in the latter,
which gives still greater facility to encroachments of the former.
[Madison, The Federalist, No. 48.]

In order for the judicial branch to carry out its constitutional responsibilities

as envisioned by Const 1963, art 3, § 2, the judiciary cannot be totally beholden to

legislative determinations regarding its budgets. While the people of this state

have the right to appropriations and taxing decisions being made by their elected

representatives in the legislative branch, they also have the right to a judiciary that

is funded sufficiently to carry out its constitutional responsibilities.

Thus, the judiciary’s “inherent power” to compel appropriations sufficient

to enable it to carry out its constitutional responsibilities is a function of the

separation of powers provided for in the Michigan Constitution. The “inherent

power” does not constitute an exception to the separation of powers; rather, it is

integral to the separation of powers itself. What is exceptional about the

judiciary’s “inherent power” is its distinctiveness from more traditional exercises

11

of the judicial power, involving as it does determinations that directly implicate

the appropriations power.

However, in order to accommodate this distinctive, and extraordinary,

judicial power with the normal primacy of the legislative branch in determining

levels of appropriations, the “inherent power” has always been sharply

circumscribed. The “inherent power” contemplates only the power, when an

impasse has arisen between the legislative and judicial branches, to determine

levels of appropriation that are “reasonable and necessary” to enable the judiciary

to carry out its constitutional responsibilities. However, levels of appropriation

that are optimally required for the judiciary remain always determinations within

the legislative power.

This Court has recognized the inherent powers doctrine for over 120 years.

In Stowell v Jackson Co Bd of Supervisors, 57 Mich 31; 23 NW 557 (1885), the

Jackson Circuit Court deemed it necessary to house jurors in a hotel during the

course of a murder trial. After the trial was over, however, the board of

supervisors refused to pay for the hotel charges. This Court undertook its analysis

by noting that the trial court has the power and discretion to determine whether a

jury needs to be secluded. We reasoned that, because the trial court has the power

to sequester the jury, it must also have the authority to bind the county funding

unit to pay for that sequestration. Id. To hold otherwise “would put it in the

power of a board of supervisors to prevent courts from exercising their proper

12

functions.” Id. at 34-35.7 Therefore, the Court concluded that, while the

Legislature controls the power of the purse, “the inherent power and duty of courts

to exercise their functions must authorize [payment for actions such as the

sequestration] as becomes expedient in the course of judicial business.” Id. at 34.

That the judiciary’s inherent power to compel funding also extends to the

appropriation of funds for employee salaries was expressed by Justice Black in his

dissenting opinion in Wayne Circuit Judges v Wayne Co, 383 Mich 10; 172 NW2d

436 (1969) (Wayne Co I). As he explained, the essence of the “inherent power”

doctrine is “that the constitutionally-assigned duty of a court such as ours

automatically carries with it the power and responsibility of making [continually]

sure that this ‘one court of justice’ (Const 1963, art 6, § 1) functions serviceably as

a co-equal branch of Michigan’s government . . . .” Id. at 33. To determine

whether a court can function “serviceably,” Justice Black indicated that the Court

must first determine whether the appropriation sought by the court is necessary to

address a “critical judicial need[]” and, if it is, then determine whether the amount

requested is reasonable “to meet the urgency of the situation.” Id. at 34.

7
Importantly, this Court noted that “[i]t would be very unsafe, and might
imperil the validity of a conviction, if the care of the jury should be left to the
discretion of an officer.” Id. at 32-33. In other words, the power to sequester a
jury, and the corresponding power to demand payment from the funding authority
to pay for that sequestration, plays a vital role in a court’s ability to conduct
criminal trials and, therefore, to exercise its constitutionally mandated
responsibilities.

13

 Less than two years later, this Court expressly adopted Justice Black’s

dissenting statement in Wayne Co I. Wayne Circuit Judges v Wayne Co (On

Rehearing), 386 Mich 1, 8-9; 190 NW2d 228 (1971) (Wayne Co II). In so

holding, this Court concluded that

“the Judiciary must possess the inherent power to determine and
compel payment of those sums of money which are reasonable and
necessary to carry out its mandated responsibilities, and its powers
and duties to administer Justice, if it is to be in reality a co-equal,
independent Branch of our Government.” [Id. at 9, quoting
Commonwealth, ex rel Carroll v Tate, 442 Pa 45, 52; 274 A2d 193
(1971) (emphasis in original).]

We further reasoned that the “inherent powers” doctrine is rooted in the

constitutional command that the judicial power of this state is vested exclusively

in “one court of justice . . . .” Const 1963, art 6, § 1. “The [L]egislature may not

abolish that court. Neither is it permissible for the [L]egislature to render the court

inoperative by refusing financial support.” Wayne Co II, supra at 14 (opinion by

T.E. Brennan, J.). Thus, the judiciary has the inherent power to seek the funding

necessary to sustain its ability to function serviceably in carrying out its

constitutional responsibilities. Wayne Co I, supra (Black, J., dissenting). On that

basis, this Court held that Wayne County must appropriate funds for those

positions “established by the law or needed in the operation of the circuit

court . . . .” Id. at 33.

Subsequent decisions make clear that the judiciary’s inherent power to

compel funding is limited to those appropriations required to meet “critical

judicial needs.” Wayne Co Prosecutor v Wayne Co Bd of Comm’rs, 93 Mich App

14

114; 286 NW2d 62 (1979). In Wayne Co Prosecutor, several county executive

officers sought an injunction against budget cuts proposed by the defendant

county. The Court of Appeals began its analysis by noting that, as is the case with

the judiciary, a funding authority is obligated to budget sums sufficient to allow

executive officers to carry out their mandated duties and obligations. However,

the Court of Appeals also recognized that the courts must not involve themselves

with the “truly discretionary appropriations decisions of a county board . . . .” Id.

at 122. To balance these concerns, the Court of Appeals held that

“serviceability” [is] the standard to be applied in determining
whether the board of commissioners has unlawfully underfunded the
county executive officers so that they are unable to fulfill their
statutory obligations. Serviceability must be defined in the context
of Justice Black’s opinion, i.e. “urgent”, “extreme”, “critical”, and
“vital” needs. A serviceable level of funding is the minimum
budgetary appropriation at which statutorily mandated functions can
be fulfilled. A serviceable level is not met when the failure to fund
eliminates the function or creates an emergency immediately
threatening the existence of the function. A serviceable level is not
the optimal level. A function funded at a serviceable level will be
carried out in a barely adequate manner, but it will be carried out. A
function funded below a serviceable level, however, will not be
fulfilled as required by statute. [Id. at 124, citing Wayne Co I
(Black, J., dissenting).]

This Court reiterated the limited nature of the “inherent power” doctrine in

Employees & Judge of the Second Judicial Dist Court v Hillsdale Co, 423 Mich

705, 717; 378 NW2d 744 (1985). In Hillsdale Co, this Court addressed the issue

of whether a funding unit could be compelled to appropriate funds for salary

increases that were neither approved by it nor “proven to be necessary to maintain

a statutory function of the court or to provide for the overall administration of

15

justice.”8 This Court began its analysis by noting that “[e]ach branch of

government has inherent power to preserve its constitutional authority.” Id. On

the other hand, “an indispensable ingredient of the concept of coequal branches of

government is that ‘each branch must recognize and respect the limits on its own

authority and the boundaries of the authority delegated to the other branches.’”

Id., quoting United States v Will, 449 US 200, 228; 101 S Ct 471; 66 L Ed 2d 392

(1980). Thus, a lawsuit to compel funding under the “inherent powers” doctrine is

limited to circumstances where “the overall operation of the court, or a

constitutional function is in jeopardy because of the actions taken by the funding

unit.” Hillsdale Co, supra at 717-719. This Court noted that there was no dispute

that, as found by the trial court, the plaintiff trial court was functioning at a level

“‘satisfactory to all.’” Id. at 722. Because there was no claim that the plaintiff

trial court could not exercise a statutory or constitutional function, there was no

basis to resolve “the issue of when and under what standards the judiciary may

compel expenditures beyond those appropriated . . . .” Id. at 722.

Justice Riley wrote separately for the purpose of “set[ting] forth principled

procedures to resolve, as fairly and expeditiously as possible, those conflicts

which necessarily arise when the legislative branch refuses to approve funding

8
In the companion case, Cheboygan Co Bd of Comm’rs v Cheboygan
Circuit Judge, the Cheboygan Circuit Court sought to compel funding for a part-
time mediation clerk. However, at issue in Cheboygan Co was the question of
whether a trial court may employ an administrative order to compel funding in
excess of the court’s appropriation. This Court concluded that the use of an
administrative order was inappropriate under MCR 8.112(B).

16

requested by the judicial branch for reasonable and necessary court operations.”

Id. at 728 (Riley, J., dissenting). Specifically, Justice Riley responded to the

majority’s failure to articulate a standard against which the court’s inherent power

to compel funding is to be measured. Justice Riley began her analysis by

recognizing that the “inherent powers” doctrine was designed to preserve the

balance of power between the three branches, not to upset that balance in favor of

judicial supremacy. In order to protect both the county board’s power over county

funds and the court’s ability to exercise the judicial power, Justice Riley

concluded that “the judiciary must bear the burden of articulating the

constitutional bases for asserting [the inherent power]” and that it must invoke the

authority “with caution, in a manner that will not place in jeopardy the public’s

confidence in the integrity of the judiciary.” Id. at 740. Specifically, Justice Riley

opined that the court seeking to compel funding must “set forth specific findings

of fact, identifying those judicial functions that will be in jeopardy if the

appropriation requested is denied, and conclusions of law indicating why the

function is required by the constitution.” Id. at 744.

We agree with Justice Riley that invocation of the “inherent power” of the

judiciary will least disrupt the constitutional balance between the judicial and

legislative branches where procedures of the sort she proposes are followed.

Accordingly, we adopt that portion of Justice Riley’s opinion that articulates the

procedure that trial courts must follow in pursuit of their “inherent power.”

17

 In litigation to compel funding, the plaintiff court must prove by clear and

convincing evidence that the requested funding is both “reasonable and

necessary.” Branch Co Bd of Comm’rs v Service Employees Int’l Union, 168

Mich App 340, 351; 423 NW2d 658 (1988); 17th Dist Probate Court v Gladwin

Co Bd of Comm'rs, 155 Mich App 433, 453; 401 NW2d 50 (1986). The plaintiff

court seeking to compel funding must demonstrate that “the overall operation of

the court, or a constitutional function is in jeopardy because of the actions taken

by the funding unit.” Hillsdale Co, supra at 717-719. Finally, a court deciding an

inherent powers claim must specifically set forth findings of fact identifying

specifically those judicial functions that will be in jeopardy if the appropriation

sought is denied, and conclusions of law indicating why such functions implicate

the constitutional responsibilities of the judiciary.

B. CLEAR & CONVINCING EVIDENCE

Because the Trial Court here has failed to demonstrate by clear and

convincing evidence that the enhanced benefits plan is both “reasonable and

necessary” to allow that court to function serviceably in carrying out its

constitutional responsibilities, we conclude that the circuit judge and the Court of

Appeals clearly erred in holding that the Trial Court could compel appropriations

for such plan. An appropriation is “necessary” when it is sought by the court to

address a “critical judicial need[]” that affects that court’s ability to function

“serviceably” in carrying out its constitutional responsibilities. Wayne Co I, supra

at 33-34. A “serviceable” level of funding is “the minimum budgetary

18

appropriation at which statutorily mandated functions can be fulfilled.” Wayne Co

Prosecutor, supra at 124. “A function funded at a serviceable level will be carried

out in a barely adequate manner, but it will be carried out.” Id.

To justify the conclusion that the enhanced benefits plan was both

“reasonable and necessary,” the circuit judge and the Court of Appeals both relied

on the claims of the Chief Judge that failure to provide the enhanced benefits

would negatively affect employee morale. However, we believe that the Trial

Court failed to demonstrate that there existed a morale problem that impaired the

court’s ability to function “serviceably” in carrying out its constitutional

responsibilities. Wayne Co II.

Specifically, the Chief Judge testified that there “probably” would be

people who would quit their jobs and that the Trial Court would have trouble

finding new employees. However, the Chief Judge’s opinion was utterly

unsupported. The Trial Court failed to demonstrate that even one person had

either left its employ or was planning to leave its employ as a result of the alleged

inadequacy of the preexisting benefits plan.9 Further, the Trial Court was unable

9
The dissent argues that the testimony of Rudi Edel, the Trial Court’s
administrator, that “six [employees] left for wages and benefits” supports the
circuit judge’s conclusion that the enhanced benefits plan was “reasonable.” Post
at 9. However, when Edel was asked, “How many [of the six employees] told you
that the reason they were leaving was for better retirement plans?” he could not
identify even one such person. Defendants’ appendix at 1468a. Further, one of
the Trial Court’s judges, Judge Dennis Murphy, testified at a deposition that he
had never heard either directly or indirectly of any employee who had quit or
(continued…)

19

to identify even one person who had refused an offer of employment because the

preexisting benefits plan was inadequate.

Even assuming for the sake of argument that there was sufficient evidence

to support the Chief Judge’s claim of declining morale, a claimed effect on

employee morale, by itself, is not sufficient to invoke the “inherent powers”

doctrine. The circuit judge and the Court of Appeals based their holdings on

Gladwin Co. In Gladwin Co, the defendant funding unit determined compensation

for court employees without taking into account the training, responsibilities, and

duties of each position. As a result, for example, a probation officer was paid the

same amount as a register, and a newly hired juvenile probation officer was paid

the same wage as the defendant county’s general clerical employees. The Court of

Appeals concluded that, because of the morale problems caused by this “unfair

and inequitable” pay scheme, the additional appropriations for salaries for the

disputed positions were “reasonable and necessary.” Id. at 454-455.

However, we note that declining employee morale alone was not the

determinative factor in Gladwin Co. As noted by the Court of Appeals, the

irrational pay scheme instituted by the funding unit had caused the court to fill the

position of juvenile probation officer six times in less than 12 years. Further, the

court had considerable difficulty attracting competent employees for the position,

(…continued)

contemplated quitting their job in the event they did not receive a better pension

plan. Id. at 1225a.

20

as demonstrated by the two occasions on which the position had gone unfilled for

more than three months each. In other words, the irrational pay scheme had not

just caused the court’s employees to become “demoralized,” but such morale

problems had specifically manifested themselves in the court’s inability to hire

and retain probation officers. Accordingly, we conclude that a claim that court

employees suffer from a loss of morale is insufficient to support an inherent

powers claim, absent some showing that the claimed morale problems have

demonstrably caused court employees to be unable to carry out their constitutional

responsibilities.

Further, there is no evidence here that the productivity of court employees

has diminished to such an extent that the court cannot carry out its constitutional

responsibilities, or indeed that it has diminished to any extent. Rudi Edel,

administrator of the Trial Court, testified that the court was not suffering from any

speedy-trial problems either before or after the current funding controversy.

Defendants’ appendix at 1452a-1453a.10 In fact, the court has continued to

process its civil and criminal dockets adequately.11 Id. Moreover, an audit

10
Edel further acknowledged that, with current staffing levels, the Trial
Court is “getting our work done, our mandated and reasonable and necessary
functions.” Plaintiff’s appendix at 700b (emphasis supplied).
11
Edel testified that the Trial Court was not complying with at least one
administrative order of this Court, three or four federal statutes, and three or four
state statutes. Trial Transcript Vol 1 at 284. According to the dissent, this
evidence supports the circuit judge’s findings of fact. Post at 10. However, there
was no evidence to suggest that the Trial Court was fulfilling these requirements
(continued…)

21

conducted by the State Court Administrative Office determined that the Trial

Court’s quality control is “excellent.” Thus, unlike in Gladwin Co, there is no

evidence that the claimed morale problems rendered the court incapable of

carrying out any of its essential judicial functions. Even if we accept the Chief

Judge’s unsupported statements that some court employees may have “one eye on

another job” and will be “unhappy,” the Trial Court has failed to demonstrate that

those employees are unable to perform their jobs. In fact, the Trial Court’s own

expert testified that the employees were functioning “within the ranges that are

expected to be there by the State.” Plaintiff’s appendix at 852b.12 Further, the

(…continued)
before the instant controversy. Moreover, the requested appropriation is for
retiree benefits and would not result in a single additional person being hired. The
dissent opines that “people do choose jobs on the basis of the adequacy or
inadequacy of retiree benefits.” Post at 11. Doubtless, employees rely on any
number of factors in choosing jobs. While retirement benefits undeniably are
within a broad range of factors an employee considers in deciding whether to
accept an offer of employment, there is no demonstrated impact in this case of the
absence of additional such benefits upon the Trial Court’s ability to fulfill its
constitutional and statutory obligations. Accordingly, the appropriation at issue is
not “reasonable and necessary” in the sense that the judicial branch can impose
this appropriation upon unwilling counties as part of its inherent powers.
12
The expert, Ross Childs, who is the county executive of Grand Traverse
County, testified:

I looked at the budgets that were prepared. I read some of the
documents. I looked at it and made an assessment as to whether
there was what I thought “fat” in the budget. I didn’t see a lot of fat
in the budget. I looked at the caseloads and I went through the State
Court Administrator’s Officer and looked at the reports that were
there, the assignments and the staff and the caseload per staff for
caseworkers in the Friend of the Court and probation officers and so
(continued…)

22

Chief Judge admitted that his staff was “soldiering on” even in light of the

potential loss of the enhanced benefits plan. In other words, even assuming that

the employees were dissatisfied or unhappy, the Trial Court was, in fact, able to

function as a court even without the enhanced benefits plan. The question in an

inherent powers case is not whether all court employees are “satisfied” or

“happy,” but, rather, whether they are able to perform their jobs in a manner that

allows the Trial Court to function “serviceably” in carrying out its constitutional

responsibilities.

Also, the Chief Judge admitted at trial that he specifically asked for “the

best [pension] plan that’s available.” Trial transcript at 342. In other words, the

requested appropriation, by its own terms, comprises the maximum necessary to

improve employee morale, not what was “reasonable and necessary” to ensure that

its employees could carry out the Trial Court’s constitutional responsibilities.

Finally, any claimed morale problems that did exist among the Trial

Court’s employees seem predicated upon the Chief Judge’s own unilateral promise

to provide the enhanced benefits.13 To this extent, the Trial Court is seeking to

(…continued)
on were consistent; that they are well in -- within the ranges that are
expected to be there by the State. I didn’t find the fat in the budget.
[Id.]
13
The dissent argues that it was the counties’ decision to renege on the
agreement, and not the Chief Judge’s unilateral promises, that created the alleged
morale problems. Post at 13-15. However, when the Chief Judge implemented
the benefits plan by order in December 2000, he did so knowing that Crawford
(continued…)

23

require the counties to pay for a problem that it has arguably created. It cannot be

that a court can claim a “morale problem” where the alleged problem is a function

of unwarranted promises of benefit increases that it has made to its employees.

Under the circuit judge’s reasoning in this regard, any court could seek to invoke

its “inherent power” to compel its funding unit to make an appropriation beyond

what it was prepared to make-- no matter how unreasonable or unnecessary--

solely on the basis of such a unilateral promise. To adopt such a position would

not maintain the balance of powers between the legislative and judicial branches--

as the “inherent powers” doctrine is designed to do-- but would instead impose a

doctrine of judicial supremacy in favor of the branch of government least suited to

make policy-driven appropriations and taxing decisions.14

(…continued)
County was unwilling to go along. This was established in a September 29, 2000,
letter by the Chief Judge to the county boards of commissioners, which stated that
“should the contract fail to be executed prior to the year’s end, issues regarding
wages and longevity bonuses will have to be revisited.” Defendant’s appendix at
1695a. This was also established in a November 2000 letter by the Chief Judge to
the county boards of commissioners, which recognized that “Crawford County is
still considering that matter” and that “we must conclude our arrangement early in
the month of December.” Defendants’ appendix at 414a-415a. Had Crawford
County already agreed to the purposed benefits, as the dissent asserts, Crawford
County would not have needed to “consider” anything and there would have been
no need to “revisit” the wage and longevity pay concessions made by the Trial
Court’s employees.
14
Indeed, we note that Kalkaska County’s request for an additional one mill
of taxation to fund the Trial Court’s retirement expenses was overwhelmingly
defeated by the voters in that county, with 4,415 votes against the proposal to 568
votes in favor of the proposal. Defendants’ appendix at 1371a.

24

 In light of insufficient evidence that the appropriation for enhanced benefits

sought by the Trial Court was “necessary” to the ability of the court to function

“serviceably” in carrying out its constitutional responsibilities, the Trial Court has

failed to establish a right to compel funding from the defendants under the

“inherent powers” doctrine.15 Therefore, any increased benefits for the employees

of the Trial Court must come through the ordinary processes of negotiation and

bargaining between the Trial Court and the representatives of the people on the

Crawford, Kalkaska, and Otsego county boards of commissioners; such benefits

are not properly obtained by judicial order.

C. CONTRACT CLAIMS

Although we conclude that the requested appropriation was not “necessary”

to allow the Trial Court to function “serviceably” in carrying out its constitutional

responsibilities, we must also address the lower courts’ alternative conclusion that

defendants are contractually obligated to appropriate funding for the enhanced

benefits plan.

Administrative Order No. 1998-5, 459 Mich clxxvi-clxxvii, provides in

pertinent part:

A court must submit its proposed and appropriated annual
budget and subsequent modifications to the State Court
Administrator at the time of submission to or receipt from the local
funding unit or units. The budget submitted must be in conformity

15
Because we conclude that the enhanced benefits were not “necessary,”
we need not determine whether those benefits were a reasonable means “to meet
the urgency of the situation.” Wayne Co I, supra at 33-34 (Black, J., dissenting).

25

 with a uniform chart of accounts. If the local funding unit requests
that a proposed budget be submitted in line-item detail, the chief
judge must comply with the request. . . . A chief judge may not
enter into a multiple-year commitment concerning any personnel
economic issue unless: (1) the funding unit agrees, or (2) the
agreement does not exceed the percentage increase or the duration of
a multiple-year contract that the funding unit has negotiated for its
employees. . . .

* * *

If, after the local funding unit has made its appropriations, a
court concludes that the funds provided for its operations by its local
funding unit are insufficient to enable the court to properly perform
its duties and that legal action is necessary, the procedures set forth
in this order must be followed.

Our primary task in construing a statute is to discern and give effect to the

intent of the Legislature. Sun Valley Foods Co v Ward, 460 Mich 230, 236; 596

NW2d 119 (1999). “The words of a statute provide ‘the most reliable evidence of

its intent . . . .’” Id., quoting United States v Turkette, 452 US 576, 593; 101 S Ct

2524; 69 L Ed 2d 246 (1981). This Court must consider “both the plain meaning

of the critical word or phrase as well as ‘its placement and purpose in the statutory

scheme.’” Sun Valley, supra at 237, quoting Bailey v United States, 516 US 137,

145; 116 S Ct 501; 133 L Ed 2d 472 (1995). “The statutory language must be read

and understood in its grammatical context, unless it is clear that something

different was intended.” Sun Valley, supra at 237. “If the language of the statute

is unambiguous, the Legislature must have intended the meaning clearly

expressed, and the statute must be enforced as written.” Id. at 236. “[T]he same

principles of statutory construction apply in determining [this Court’s] intent in

26

promulgating rules of procedure . . . .” People v Davis, 181 Mich App 354, 356;

448 NW2d 842 (1989).

As noted above, the Constitution imposes a duty on a county board of

commissioners to appropriate funds “reasonable and necessary” to allow the court

to function serviceably in carrying out its constitutional responsibilities. Once the

board of commissioners has made a funding determination, AO 1998-5 imposes a

duty on the court not to exceed either the total amount appropriated by the board

or the amount specified in a line-item appropriation. Where the total or line-item

appropriation is insufficient, the court must follow the procedures set forth in AO

1998-5. A trial court may only challenge a funding decision made by a county

board if “the funds provided for its operations . . . are insufficient to enable the

court to properly perform its duties . . . .” Id. Thus, the county board’s

appropriations to the judiciary can be challenged either through the political

process, i.e., by seeking an additional appropriation from the board, or through the

legal process, when the board has failed to appropriate enough money to allow the

court to function serviceably in carrying out its constitutional responsibilities.

However, if it decides not to exercise either of these two options, a trial court must

live within the budget appropriated by its board.

The circuit judge and the Court of Appeals majority concluded that a

county board could also be bound by contract to appropriate a certain level of

funding to its trial courts. However, the county board has a preexisting

27

constitutional duty to appropriate a serviceable level of funding to its trial courts.

An essential element in a contract claim is legal consideration. Yerkovich v AAA,

461 Mich 732, 740; 610 NW2d 542 (2000). “Under the preexisting duty rule, it is

well settled that doing what one is legally bound to do is not consideration for a

new promise.” Id. at 740-741. Such a contract would appear to fail for lack of

consideration. Puett v Walker, 332 Mich 117, 122; 50 NW2d 740 (1952). In other

words, because the county board has a preexisting duty to appropriate a

serviceable level of funding to its court, a county cannot be compelled under

contract law to appropriate “reasonable and necessary” funds to enable the court to

function serviceably in carrying out its constitutional responsibilities.

Moreover, there was no “meeting of the minds” between the Trial Court

and Crawford County because the terms of the retiree health care plan were altered

after the Crawford County resolution was passed. West Bloomfield Hosp v

Certificate of Need Bd (On Remand), 223 Mich App 507, 519; 567 NW2d 1

(1997). Here, the resolution passed by Crawford County authorized a $4,087 cap

on payments made in the first year of the benefit program. However, the actual

first year cap was $5,763. The board never amended the resolution to reflect that

new figure, and never voted on any amended resolution. The circuit judge and the

Court of Appeals majority held that the resolution constituted a valid acceptance

of the Trial Court’s offer because “[t]he annual payment cap was not an essential

term.” 266 Mich App at 160. We disagree. One of the principal concerns raised

by Crawford County was that the retiree health care plan would create “massive

28

liabilities [for Crawford County] in the future.” Defendants’ appendix at 330a. A

higher first-year premium would exacerbate these concerns, because the health

care plan would potentially have to pay an extra $1,676 for each person covered

by the plan in the first year. Obviously, if the fund is required to pay a higher

annual premium, the amount of money set aside for the benefit would be depleted

faster than anticipated when the board passed its resolution. We conclude that the

unambiguous language of the resolution is consistent with the understanding that

Crawford County was willing to agree to the plan only if the starting health

insurance cost was $4,087 for each employee. Because this figure was not the

eventual starting cost of the health insurance, there was simply no meeting of the

minds and therefore no contract. Further, no one disputes that the enhanced

benefits plan could not have been implemented without the consent of all three

funding units. Because the purported contract fails with respect to Crawford

County inasmuch as there was no meeting of the minds, any contract between the

Trial Court and the other funding units for the enhanced benefits plan must also

fail.

In summary, a county board's duty to appropriate funds to the judiciary

arises from the Constitution. Because a county has a preexisting duty to fund its

trial courts, a county cannot enter into a contract with the Trial Court to fund the

enhanced benefits plan at a specific level. Moreover, the purported contract fails

with respect to Crawford County because there was no meeting of the minds.

Because all three funding units had to agree to implement the enhanced benefits

29

plan, any contract between the Trial Court and the other funding units for the

enhanced benefits plan must also fail.

IV. CONCLUSION

We conclude that the Michigan Constitution only permits the judicial

branch to directly compel the legislative branch to appropriate when a court has

not received sufficient funding to operate at a serviceable level. Hillsdale Co,

supra at 722. A court deciding an “inherent power” claim must set forth findings

of fact identifying specifically those judicial functions that will be in jeopardy if

the appropriation requested is denied, and conclusions of law indicating why such

functions implicate the constitutional responsibilities of the judiciary. We hold

that the Trial Court here has failed to demonstrate by clear and convincing

evidence that the requested appropriation for enhanced benefits was “reasonable

and necessary” to the “serviceability” of the court. The Trial Court has failed to

produce any evidence that even one employee was planning to leave if the

enhanced benefits were not adopted or that anyone has refused to accept

employment with the court because of the preexisting benefits plan. Moreover,

the evidence demonstrates that the Trial Court has continued to carry out its

essential judicial functions adequately. While the Trial Court may or may not

have been functioning “happily” or “optimally,” it is nonetheless reasonably

functioning, which is all that is required to preclude the exercise of the judiciary's

“inherent power.”

30

 We also conclude that because a county has a preexisting constitutional

duty to fund its courts, the defendant counties could not enter into a contract with

the Trial Court to fund the enhanced benefits plan at a specific level. Moreover,

the purported contract fails with respect to Crawford County because there was no

meeting of the minds. Since all three funding units had to agree to implement the

enhanced benefits plan, any contract between the Trial Court and the other funding

units for the enhanced benefits plan must also fail.

Accordingly, we reverse the judgment of the Court of Appeals and remand

this matter to the circuit judge for entry of judgment in favor of the defendant

counties. Increased public employee benefits in defendant counties must be

enacted through the democratic processes of government-- through the decision-

making of the legislative branch-- not by judicial order.

Stephen J. Markman
Clifford W. Taylor
Robert P. Young, Jr.

31

 STATE OF MICHIGAN

SUPREME COURT

46TH CIRCUIT TRIAL COURT,

Plaintiff, Counter-Defendant,
Third-Party Plaintiff-Appellee,

v No. 128878

COUNTY OF CRAWFORD AND CRAWFORD
COUNTY BOARD OF COMMISSIONERS,

Defendants, Counter-Plaintiffs,
Third-Party Plaintiffs-Appellants,

and

COUNTY OF KALKASKA,

Intervening Defendant,

Counter-Plaintiff, Third-Party

Plaintiff-Appellant

and

COUNTY OF OTSEGO,

Third-Party Defendant

_______________________________

CORRIGAN, J. (concurring).

I concur in the result and virtually all of the reasoning of Justice

Markman’s lead opinion. In particular, I agree that “the judiciary has the inherent

power to seek the funding necessary to sustain its ability to function serviceably in
carrying out its constitutional responsibilities.” Ante at 14. Further, I agree with

the lead opinion that on the facts of this case, the enhanced retirement benefits

sought by plaintiff do not fall within the judiciary’s inherent authority to compel

funding. I do not, however, join the portion of the lead opinion that adopts the

reasoning set forth in Wayne Co Prosecutor v Wayne Co Bd of Comm’rs, 93 Mich

App 114; 286 NW2d 62 (1979).

In general, this Court does not reach constitutional issues that are not

necessary to resolve a case. People v Riley, 465 Mich 442, 447; 636 NW2d 514

(2001). In my view, the existing authorities of this Court fully support the

conclusion in Justice Markman’s opinion that the enhanced retirement benefits at

issue here are not reasonable and necessary to the serviceability of plaintiff’s

court. See, e.g., Wayne Circuit Judges v Wayne Co (On Rehearing), 386 Mich 1;

190 NW2d 228 (1971) (Wayne County II), and other decisions of this Court

discussed in the lead opinion.

Therefore, because plaintiff’s inherent-powers claim must fail under this

Court’s own case law, I do not decide whether to adopt the analytic approach set

forth by the Court of Appeals in Wayne Co Prosecutor. In particular, I do not find

it necessary to adopt the assertions in Wayne Co Prosecutor that “[a] serviceable

level of funding is the minimum budgetary appropriation at which statutorily

mandated functions can be fulfilled,” and that “[a] function funded at a serviceable

level will be carried out in a barely adequate manner, but it will be carried out.”

Wayne Co Prosecutor, supra at 124.

2

 In my view, it is simply not necessary in this case to decide whether the

judiciary’s inherent authority to compel funding should be limited to “minimum

budgetary appropriation[s]” and to functions that are carried out “in a barely

adequate manner.” Rather, I decide this case on the basis of the existing

authorities of this Court, which fully support our decision in this case.

For these reasons, I express no view on whether this Court should adopt the

analysis outlined in Wayne Co Prosecutor. In all other respects, I concur in the

analysis and conclusions set forth in Justice Markman’s lead opinion.

Maura D. Corrigan

3

 STATE OF MICHIGAN

SUPREME COURT

46TH CIRCUIT TRIAL COURT,

Plaintiff, Counter-Defendant,
Third-Party Plaintiff-Appellee,

v No. 128878

COUNTY OF CRAWFORD AND CRAWFORD
COUNTY BOARD OF COMMISSIONERS,

Defendants, Counter-Plaintiffs,
Third-Party Plaintiffs-Appellants,

and

COUNTY OF KALKASKA,

Intervening Defendant,

Counter-Plaintiff, Third-Party

Plaintiff-Appellant

and

COUNTY OF OTSEGO,

Third-Party Defendant

_______________________________

WEAVER, J. (dissenting).

I respectfully dissent from the result and reasoning of the lead opinion. I

would hold that Judge Dennis C. Kolenda, the trial judge who conducted the six

day hearing in this case and reviewed the 300 exhibits totaling approximately

5,500 pages, did not clearly err in finding that the enhanced pension plan and the
retiree health care plan were reasonable and necessary to the 46th Circuit Trial

Court’s ability to perform its mandated responsibilities.

I would affirm the judgment of the Court of Appeals in holding that Judge

Kolenda did not clearly err in finding that the requested appropriation to fund the

enhanced pension plan and the retiree health care plan was reasonable and

necessary.

A

This funding dispute between the 46th Circuit Trial Court (Trial Court) and

two of the three counties it serves arose out of the consolidation of certain courts

in Kalkaska, Crawford, and Otsego counties, pursuant to Administrative Order No.

1996-9, 451 Mich civ.

During the early stages of unification, the Trial Court concluded that all

employees doing the same job, regardless of the county in which they physically

worked, should earn equal pay and receive equal benefits. After negotiations with

Chief Judge Alton Davis of the Trial Court, the employees agreed to phase out

longevity pay and dedicate a portion of all future wage increases to fund the retiree

benefits package. The court employees also agreed to accept a cost-saving health

care insurance plan that offered less coverage and had a higher prescription copay.

Chief Judge Davis then secured the agreement of the three counties, Crawford,

Kalkaska, and Otsego, to fund an enhanced pension plan and a retiree health care

plan.

2

 After Judge Davis entered an order implementing those new plans,

Crawford and Kalkaska counties reneged on their agreement and passed

resolutions disapproving those plans. Thus, at the time that Judge Davis entered

the implementation order that gave the employees their new benefits, he was

acting according to the existing approval of the counties. After lengthy

negotiations failed, this suit followed.

As a coequal, independent branch of the government, the judiciary has the

inherent power “‘to determine and compel payment of those sums of money which

are reasonable and necessary to carry out its mandated responsibilities, and its

powers and duties to administer Justice. . . .’”1 When a court and funding unit

cannot reach agreement, the court may initiate suit to compel expenditures in

excess of appropriations.2

The question before us is whether the enhanced pension plan and the retiree

health care plan are reasonable and necessary for the Trial Court to carry out its

mandated responsibilities, and its powers and duties to administer justice.3

The lead opinion attempts to limit the judiciary’s inherent power to compel

funding by adopting the Court of Appeals reasoning in Wayne Co Prosecutor v

1
Wayne Circuit Judges v Wayne Co (On Rehearing), 386 Mich 1, 9; 190
NW2d 228 (1971) (citation omitted).
2
Employees & Judge of the Second Judicial Dist Court v Hillsdale Co, 423
Mich 705, 716; 378 NW2d 744 (1985).
3
Wayne Circuit Judges v Wayne Co (On Rehearing), supra at 9.

3

Wayne Co Bd of Comm’rs,4 that “[a] serviceable level of funding is the minimum

budgetary appropriation at which statutorily mandated functions can be fulfilled,”

and that “[a] function funded at a serviceable level will be carried out in a barely

adequate manner, but it will be carried out.” But Justice Corrigan writes

separately to say that “it is simply not necessary in this case to decide whether [to

adopt the Wayne Co Prosecutor standard].”5 An opinion of this Court that does

not obtain four signatures is not binding precedent.6 Consequently, the lead

opinion does not change the existing standards used to determine whether a court

can use its inherent power to secure funding.

B

This Court reviews the factual findings underlying the trial court’s

determination whether a requested appropriation was “reasonable and necessary”

for clear error.7 “An appellate court should not reverse the findings of a trial court

in such a case unless its findings are clearly erroneous. ‘A finding is “clearly

erroneous” [if] although there is evidence to support it, the reviewing court on the

entire evidence is left with the definite and firm conviction that a mistake has been

4
Wayne Co Prosecutor v Wayne Co Bd of Comm’rs, 93 Mich App 114,
124; 286 NW2d 62 (1979) (emphasis added).
5
Ante at 3.
6
People v Jackson, 390 Mich 621, 627; 212 NW2d 918 (1973).
7
Herald Co v Eastern Michigan Univ Bd of Regents, 475 Mich __; __
NW2d __ (Docket No. 128263, decided July 19, 2006). Morris v Clawson Tank
Co, 459 Mich 256; 587 NW2d 253 (1998).

4

made.’”8 The fact-finder has not clearly erred “simply because [the appellate court

is] convinced that it would have decided the case differently.”9 If there are two

permissible views of the evidence, the fact-finder’s choice between them cannot

be clearly erroneous.10 Further, assessment of credibility lies within the trial

court’s province.11 Under MCR 2.613(C), “regard shall be given to the special

opportunity of the trial court to judge the credibility of the witnesses who appeared

before it.”12

Although the lead opinion purports to review Judge Kolenda’s factual

findings for clear error, it in fact engages in a review de novo. The lead opinion

does not give due deference to Judge Kolenda’s ability to assess the credibility of

the witnesses before him, and imposes its own inaccurate interpretation of the

record to conclude that the enhanced pension plan and the retiree health care plan

were not reasonable and necessary.

In his 53-page opinion, Judge Kolenda specifically found that the “Trial

Courts witnesses [were] credible and persuasive” and the defendant’s witnesses

8
In re Miller, 433 Mich 331, 337; 445 NW2d 161 (1989) (citation omitted).
9
Anderson v Bessemer City, 470 US 564, 573; 105 S Ct 1504; 84 L Ed 2d
518 (1985).
10
Id. at 574.
11
Id.
12
Morris, supra at 275.

5

were “ignorant of many pertinent facts”; Judge Kolenda also found that the

defendant’s witnesses’ answers were “shallow,” “evasive,” and “conclusive.”

Judge Kolenda stated:

This Court found the Trial Court’s witnesses to be credible
and persuasive. They gave testimony which reflected careful and
thoughtful assessments of the pertinent facts. Crawford County’s
expert was a witness who rationalized a pre-ordained opinion. He
was ignorant of many pertinent facts and his assessments were
shallow. Furthermore, much of his testimony was evasive, betraying
a realization that he could not sustain his conclusions. Crawford
County’s controller was not dishonest, but he could not articulate
any persuasive bases for the conclusory positions he took. The
several county commissioners who testified were not helpful. They
testified only to what they have convinced themselves, or have been
convinced, happened and was intended.[13]

Judge Kolenda’s candid assessment of the credibility of the witnesses must

provide guidance to this Court’s review of his factual findings.

C

Judge Kolenda first found that the enhanced pension plan and the retiree

health care plan are necessary. As Justice Riley stated in her dissent in Hillsdale,

supra, “to be reasonable and necessary the need must not only be practical rather

than relative, but it must be shown that the funds are needed for the effective

administration of justice.”14 Judge Kolenda’s ultimate finding on the issue of

necessity was that

13
Unpublished opinion of the Trial Court for the 46th Judicial Circuit,
issued July 25, 2003 (Docket Nos. 02-05951-CZ and 02-10014-CZ), p 4 n 4
(hereafter Trial Court opinion).
14
Supra at 744 (Riley, J., dissenting).

6

 [t]his Court is also convinced that funding the proposed retiree
healthcare and upgraded pensions are indispensable to the Trial
Court continuing to function at a serviceable level. Without those
benefit enhancements, staff morale, which is already low, will
plummet, with the result that productivity will suffer badly, soon
falling below serviceable levels. In addition, good employees will
leave, and competent replacements will not be found. Those
prospects establish that the benefits which the Trial Court seeks to
fund are indispensable to maintaining a workforce which is itself
indispensable to the Trial Court fulfilling its obligations, making
those benefits themselves indispensable. The prospect is enough.
The Trial Court need not wait for its operations to actually fall below
serviceable levels. [Seventeenth Dist Probate Court v] Gladwin
County [Bd of Comm’rs, 155 Mich App 433, 449; 401 NW2d 50
(1986)]. [Emphasis added.][15]

Judge Kolenda’s ultimate finding that the enhanced pension plan and the

retiree health care plan are necessary was based in part on Judge Kolenda’s factual

determination that employees were quitting work while waiting for the new

benefit package:

Some employees have left out of dissatisfaction with the
delay in finalizing the healthcare fund and pension upgrade, but
many have stayed in anticipation of getting those benefits. However,
if not awarded them, many employees are expected to leave. Moral
[sic] will be affected even more; and the judges’ ability to lead the
Court will be destroyed. The ultimate effect would, obviously, be a
serious loss of productivity.[16]

The lead opinion asserts that the proposed benefits are not necessary

because the “Trial Court has utterly failed” to demonstrate the necessity:

[T]he Chief Judge testified that there “probably” would be
people who would quit their jobs and that the Trial Court would

15
Trial Court opinion, supra at 45.
16
Id. at 18.

7

 have trouble finding new employees. However, the Chief Judge’s
opinion was utterly unsupported. The Trial Court failed to
demonstrate that even one person had either left its employ or was
planning to leave its employ as a result of the alleged inadequacy of
the preexisting benefits plan.[17]

This statement mischaracterizes the record. Rudi Edel, the trial court

administrator and magistrate for the 46th Circuit Trial Court, testified that six

employees left for wages and benefits:

[W]e had a turnover rate in the court . . . 36 employees, and
by now I think it’s around 46/47 employees. Some of those—three
or four or five . . . were discharged. Some of those employees left
the court as a result of moving out of the area. Some of those
employees left the court because they were dissatisfied with wages,
benefits. And some of them even with court reform; they were not
happy with a shift in their job duties. . . . Another component is that
we wanted to attract employees to our court, and to do that we need
to have a good benefit structure.[18]

Rudi Edel later quantified the exact number of employees who recently quit

because of poor wages and benefits. “Out of the 36 people identified on this list, I

can definitely identify that six left for wages and benefits.”19

In Gladwin Co20 the Court of Appeals held that enhanced pay for a position

is “reasonable and necessary” for a court to carry out its assigned functions where

17
Ante at 19.

18
Bench trial volume I, p 132.

19
Bench trial volume I, p 283.

20
Seventeenth Dist Probate Court v Gladwin Co Bd of Comm’rs, 155 Mich

App 433; 401 NW2d 50 (1986).

8

there was testimony that the court employees had protested the present rate of

compensation in writing and orally, that the present rate of compensation had

created a morale problem in the court, and the plaintiff’s expert witness testified

that the current compensation structure was not rational.21 The lead opinion

attempts to distinguish Gladwin Co, stating that

employee morale alone was not the determinative factor in Gladwin
Co. As noted by the Court of Appeals, the irrational pay scheme
instituted by the funding unit had caused the court to fill the position
of juvenile probation officer six times in less than 12 years.[22]

This attempted distinction between the facts of Gladwin Co and the present case

fails. In Gladwin Co, the plaintiff went through six juvenile probation officers in

less than 12 years. Here, Judge Kolenda noted in his opinion that “[s]ome

employees have left out of dissatisfaction with the delay in finalizing the

healthcare fund and pension upgrade,”23 and Rudi Edel testified that “six

[employees] left for wages and benefits.”

Benefit packages are necessary when at least six frustrated employees quit

work because of poor wages and benefits at a court already staffed at bare bones

and just getting by. Here, as in Gladwin Co, something more than morale

establishes that the additional funding is necessary. In both cases, six employees

had quit their jobs.

21
Id. at 455.
22
Ante at 20 (emphasis omitted).
23
Trial Court opinion, supra at 18.

9

 The lead opinion also attempts to refute Judge Kolenda’s finding of

necessity by stating that “there is no evidence that the employees’ productivity has

diminished . . . to any extent”:

[T]here is no evidence here that the productivity of court
employees has diminished to such an extent that the court cannot
carry out its constitutional responsibilities or indeed that it has
diminished to any extent. Rudi Edel, administrator of the Trial Court,
testified that the court was not suffering from any speedy-trial
problems either before or after the current funding controversy. [24]
Again, the lead opinion’s conclusion ignores evidence adduced at trial to support

Judge Kolenda’s factual findings. Judge Kolenda found that without the benefit

enhancements, “productivity will suffer badly, soon falling below serviceable

levels.” This was supported by testimony that the Trial Court cannot comply with

its statutory and court-ordered requirements at the current staffing level. Rudi

Edel stated that the court was not complying with at least one administrative order

of this Court, three or four federal statutes, and three or four state statutes:

I found that with our current staffing levels we are complying
with all the requirements with very few exceptions. And I would
need to see the report to specifically outline those exceptions. I know
one is administrative order 1991-4. There is [sic] three or four
federal statutes that our Friend of the Court does not comply with;
three or four state statues. And these are issues that we just don’t
have the manpower to get to.[25]

Furthermore, the testimony of Rudi Edel establishes that the court workers are

currently working “110 percent.” He testified that “[i]f nobody goes on vacation
24
Ante at 21 (emphasis added).
25
Bench trial volume I, p 284.

10

and if nobody gets sick with our current staffing level, once we replace the

assignment clerk, we’ll get the job done.”26

The lead opinion asserts that the enhanced benefits were not reasonable and

necessary to address the Trial Court’s failure to comply with its court-imposed and

statutory requirements because the “requested appropriation is for retiree benefits

and would not result in a single additional person being hired.”27 Under the lead

opinion’s rationale, retiree benefits will never be “necessary.” But retiree benefits

are part of a comprehensive compensation package; contrary to the lead opinion’s

contention, people do choose jobs on the basis of adequacy or inadequacy of

retiree benefits.

The lead opinion also quotes from the testimony of expert witness Ross

Childs, the county executive of Grand Traverse County, to support its contention

that the Trial Court was “not suffering from any speedy-trial problems. . . .”28 The

lead opinion states:

In fact, the Trial Court’s own expert testified that the
employees were functioning “within the ranges that are expected to
be there by the State.”[29]

26
Bench trial volume I, p 121.
27
Ante at 22 n 11 (emphasis in original).
28
Ante at 21.
29
Ante at 22.

11

But this quote takes Mr. Childs’s testimony out of context. Ross Childs’s

statement was made in the context of excess budgets.30 Mr. Childs actually said

that the Trial Court’s budget is “within the ranges that are expected to be there by

the State.”31 Mr. Childs’s full statement was:

I looked at the—the budgets that were prepared. I read some of the
documents. I—I looked at it and made an assessment as to whether
there was what I thought “fat” in the budget. I didn’t see a lot of fat
in the budget. I looked at the caseloads and I went through the State
Court Administrator’s Officer and looked at the reports that were
there, the assignments and the staff and the caseload per staff for
caseworkers in the Friend of the Court and probation officers and so
on were consistent; that they are well in—within the ranges that are
expected to be there by the State. I didn’t find the fat in the
budget.[32]

Mr. Childs’s statement had nothing to do with the ability of the employees to

perform their jobs. The statement was in the context of “fat” within the Trial

Court’s budget. The lead opinion’s statement that the “Trial Court’s own expert

testified that the employees were functioning ‘within the ranges that are expected

to be there by the State’” is a mischaracterization.

To summarize, evidence presented at trial demonstrates that the friend of

the court cannot meet all of its duties mandated by court administrative order and

state and federal statutes. Furthermore, the rest of the court’s work can only be

performed if the employees work at “110 percent” and no one goes on vacation or

30
Bench trial volume II, p 485.

31
Id.

32
Bench trial volume II, pp 484-485 (emphasis added).

12

gets sick. As previously stated, clear error exists only when the appellate court ‘“is

left with the definite and firm conviction that a mistake has been made.’”33 The

lead opinion has not provided a factual basis to justify its “definite and firm

conviction that a mistake has been made” because there is evidence on the record

to support Judge Kolenda’s factual finding that the Trial Court cannot comply with

its statutory requirements because of its shortage of manpower.

Finally, the lead opinion asserts that the Trial Court created the morale

problem:

[A]ny claimed morale problems that did exist among the Trial
Court’s employees seem predicated upon the Chief Judge’s own
unilateral promise to provide the enhanced benefits. To this extent,
the Trial Court is seeking to require the counties to pay for a
problem that it has arguably created.[34]

The lead opinion misstates the facts. Judge Davis did not make a unilateral

promise to provide enhanced benefits, nor did he create the morale problem.

Judge Kolenda specifically found that on December 4, 2000, Chief Judge

Davis “issued an implementation order which recited that ‘[e]ach of the Funding

Units has passed resolutions accepting the benefit shifts which are governed by

this order.’”35 One week later, the Kalkaska board rescinded its approval of the

33
In re Miller, supra at 337 (citation omitted).

34
Ante at 23-24.

35
Trial Court opinion, supra at 16.

13

retiree health care fund and the pension upgrade; then on February 1, 2001, the

Crawford board also rescinded its acceptance of the health care fund for retirees.36

Thus, at the time that Judge Davis entered the implementation order that

gave the employees their new benefits, he was acting according to the existing

approval of the counties. The morale problem was created when the counties

reconsidered their decision to adopt the retiree health care and pension benefits.

There was testimony offered to establish that Judge Davis did not make a

unilateral promise of benefits. Linda Franklin, the probate register in Crawford

County, explained how Judge Davis informed the employees of the proposed

benefit package. She describes the process as a “proposed” exchange of “certain

substantial benefits” for “better benefits.” At no time did Linda Franklin state that

the enhanced benefits were “promised” to her or the other employees:

Judge Davis called a staff meeting for the court employees in
all three counties, I believe in the summer of 2000. At that meeting
he explained to the employees what he was going to propose as far
as standardizing and increasing the benefits for the three county
court employees.

In return he requested that we give up certain substantial
benefits that we had as a contribution to obtaining those better
benefits for all of us.

He asked us to give up our longevity payments. He asked us
to give up a certain percentage of our wage increases over a three-
year period. And he asked us to accept a different health plan that
would gave a higher co-pay for prescription drugs and doctor visits,
I believe.

* * *
36
Id. at 17.

14

 The Court’s employees, I believe, were excited and we wanted
to do what we could to try to obtain these better benefits, and so we all
assented at that meeting that we would be willing to give up those
substantial benefits if he were able to increase our benefits to these
higher levels.[37]

This evidence refutes the lead opinion’s theory that Chief Judge Davis created the

morale problem by making a unilateral promise to provide enhanced benefits.

D

Judge Kolenda found that the benefits are reasonable because they were

modest, not excessive, the product of sound judgment, and available to other

employees in the counties.38

First, Judge Kolenda found the retiree health care benefit was reasonable

because it was “capped at a modest annual sum,” stating:

The counties are not being asked to provide healthcare
benefits to court employees. That could be expensive, although,
given the need for healthcare coverage, what fair compensation
might require, but the counties are being asked only to make modest,
defined annual contributions to a fund from which the Court will buy
whatever benefits can be acquired with the assets in that fund. The
counties have no exposure beyond the annual contribution, which,
even as it escalates, is capped at a modest annual sum.[39]

37
Bench trial volume II, pp 533-534 (emphasis added).
38
The majority does not address whether the benefits were reasonable.
Ante at 25 n 15.
39
Trial Court opinion, supra at 48.

15

 Second, Judge Kolenda found that the amount requested for the benefits

package was “reasonable” because the benefits were not excessive, and the

product of sound judgment, stating:

In sum, a proposed appropriation is reasonable, even though
considerably more than what a funding unit is willing to provide, if it
is not excessive, e.g., is comparable to what other courts spend on
like activities; if it is within the funding unit’s ability to pay; and if it
reflects sound judgment, e.g., is the product of careful analysis and
thought. The budget which the Trial Court proposes in these cases
meets those tests. Therefore, that court is entitled to have that budget
fully funded.[40]

Third, Judge Kolenda determined that the pension plan is reasonable

because it is available to some other employees in Crawford and Kalkaska

counties, as well as some employees in nearby counties.41

Finally, Judge Kolenda found that the enhanced pension was “not

excessive” even though it is the “top of the line” pension available through the

state pension system. The lead opinion disagrees with this finding, and contends

that the benefits are not reasonable and necessary because the requested

appropriation is the “maximum” necessary to improve employee morale, asserting:

Also, the Chief Judge admitted at trial that he specifically
asked for “the best [pension] plan that’s available.” Trial transcript
at 342. In other words, the requested appropriation, by its own
terms, comprises the maximum necessary to improve employee
morale, not what was “reasonable and necessary” to ensure that its

40
Id. at 47.

41
Id.

16

 employees could carry out the Trial Court’s constitutional
responsibilities.[42]

The statement that the requested appropriation is the “maximum necessary to

improve employee morale” is taken out of context. At trial, Judge Davis testified:

[U]nder the [old benefit package], you offer to pay a pension
benefit to somebody that either is not sufficient or is barely sufficient
to pay . . . [for] the group health care plan once they retire.

So 20 years of service, [and] out the door they go. . . . [Their
health care costs] just [eat] up every nickel of [their pension]. And
what are you living on? Social Security or your savings or maybe
you get another job.[43]

With this pension deficit in mind, Judge Davis made the following statements

regarding the “maximum” pension:

So the time has come . . . to recognize that these people have
done what’s been asked of them and I feel for a variety of reasons
that we have . . . two glaring deficits in our overall structure.

Number one, we have not a good pension circumstance with
the MERS [Municipal Employees’ Retirement System] pensions that
are afforded to . . . court people. Plus they are different county to
county and I want unification. . . [T]hat’s our goal. And so what I
want from you is the best MERS plan that’s available . . .

The second thing that is a glaring problem . . . is there’s no
provision for these people when they leave work for any kind of
healthcare. They’re just on their own. . . . It’s a problem in attracting
people. It is a double-edged sword in that respect: In all the time I’ve
been involved in county government, I’ve seen circumstances where
people . . . who should go because they are tired, they’re worn out,
they’re sick . . .; [but] they don’t go because this is the only place
42
Ante at 23.
43
Bench trial volume II, p 346.

17

 they can get their medical benefits. . . . So I want some kind of
medical retirement plan for these people.[44]

Judge Davis was asserting that the “maximum” pension is reasonable

because the larger pension keeps the retirees from having to dip into their life

savings or take a second job to pay for their living expenses.

The lead opinion would establish as a rule of law that the “maximum”

benefit out of those available to a court could never be considered reasonable and

necessary. But Judge Kolenda found that the “maximum” pension was both

necessary and reasonable under these specific circumstances, stating:

The proposed pension upgrade is also not excessive. That it
is the “top of the line” pension available through MERS does not
mean that it is extravagant. First of all, being more generous than
other pensions does not mean extravagant. It simply means more
than something which is less. . . .
* * *
Further buttressing the conclusion that the B-4 pension is not
excessive is the fact that it is part of the benefit package which the
Trial Court must provide in order to retain its employees and
compete for qualified replacements. What is needed to be
competitive cannot possibly be deemed excessive, even if somewhat
[45]
generous.

Under In re Miller,46 clear error exists only when the appellate court ‘“is

left with the definite and firm conviction that a mistake has been made.”’ Review

44
Id. at 342-343.
45
Trial Court opinion, supra at 48. As stated above, Judge Kolenda also
found that the benefits are reasonable because they were modest, not excessive,
the product of sound judgment, and available to other employees in the counties.
46
In re Miller, supra at 337 (citation omitted).

18

of the record does not show that Judge Kolenda clearly erred in finding that the

enhanced pension plan and the retiree health care plan are reasonable.

CONCLUSION

As Judge Kolenda noted, the evidence in this case consists of six days of

hearings, 14 witness testimonials, and 5,500 pages of exhibits. Judge Kolenda

“read and carefully considered” all of the evidence before he held that the

employee benefits were both reasonable and necessary. The lead opinion has

failed to justify its “definite and firm conviction that a mistake has been made.”

Without the facts necessary to establish a “definite and firm conviction,” the

judgments of Judge Kolenda and the Court of Appeals should be upheld. The fact-

finder has not clearly erred simply because the appellate court is convinced that it

would have decided the case differently.47

Elizabeth A. Weaver
Michael F. Cavanagh
Marilyn Kelly

47
Anderson, supra at 573.

19