Author: LegalEase Solutions

QUESTIONS PRESENTED

1. If Oak Park evicts Katz, will Katz’s bedbug suit in Southfield be barred as res judicata?
2. Must Katz file a counterclaim (essentially the same suit previous filed) in the eviction, or can the present action remain in Southfield? 
3. If Katz files a counterclaim in the eviction proceeding, and that counterclaim states damages in excess of $25,000, can they remove to circuit court?

SHORT ANSWERS

1. Res judicata applies only when the parties have fully litigated the claim and a final judgment has resulted.[1] In the instant case, the claim for damages for bedbug infestation is not pleaded in the suit for eviction. Therefore, the bedbug suit may not be barred as res judicata.

2. A party may join claims and counterclaims for money judgment for damages[2] to summary proceedings. But, courts have held that this requirement isnot essential.[3] If Katz and landlord do not elect to join the suit for damages to the eviction proceedings, then the tenant may defend the eviction proceedings in Oak Park and continue with the bedbug infestation damages action in Southfield.

3. MCR 4.201(G) (2) (b) requires a suit exceeding the district court’s jurisdictional limits to be removed to the circuit court. The district court’s jurisdiction is limited to an amount not exceeding $25,000.00.[4] Therefore, if the counterclaim damages exceed $25,000.00, the counterclaim Plaintiff must petition for removal. Otherwise, the court will find sua sponte that it lacks jurisdiction over the claim.

RESEARCH FINDINGS

1. Res judicata

The Supreme Court of Michigan has held that “res judicata, presents a question of law that we review de novo.” Washington v Sinai Hosp of Greater Detroit, 478 Mich 412, 417; 733 NW2d 755, 758 (2007) (citing Pierson Sand & Gravel, Inc. v. Keeler Brass Co., 460 Mich. 372, 379, 596 N.W.2d 153 (1999). “The doctrine of res judicata bars relitigation of a claim where the same parties have fully litigated the claim and a final judgment has resulted.” Makowski v Towles, 195 Mich App 106, 107; 489 NW2d 133, 134 (1992) (citing Ward v. Detroit Automobile Inter-Ins. Exchange, 115 Mich.App. 30, 37, 320 N.W.2d 280 (1982). The Michigan Court of Appeals has held that “[a] question has not been actually litigated until put into issue by the pleadings, submitted to the trier of fact for a determination, and thereafter determined.” VanDeventer v Michigan Nat Bank, 172 Mich App 456, 463; 432 NW2d 338, 341 (1988).

The Sixth Circuit has set out the elements of res judicata as:

Res judicata is based on the following four elements:(1) a final decision on the merits by a court of competent jurisdiction; (2) a subsequent action between the same parties or their privies; (3) an issue in the subsequent action which was litigated or which should have been litigated in the prior action; and (4) an identity of the causes of action.

In re Alfes, 709 F.3d 631, 638 (6th Cir. 2013) (quoting Kane v. Magna Mixer Co., 71 F.3d 555, 560 (6th Cir.1995).

In the instant case, the suit filed by the tenant seeking damages to the property on account of bedbug infestation has not been decided on the merits by a court of competent jurisdiction. Further, it is doubtful whether the suit for eviction and bedbug infestation have identical causes of action. The relief sought in eviction proceedings and the bedbug infestation suit is also different. Therefore, even if the Oak Park court evicts the tenant, it may not bar the suit for damages filed by the client because the merits of the claim for damages are not determined by that court.

2. Necessity of filing a counterclaim in suit for eviction

MCL § 600.5739 allows a party to summary proceedings “join claims and counterclaims for money judgment for damages attributable to wrongful entry, detainer, or possession, for breach of the lease or contract under which the premises were held, or for waste or malicious destruction to the premises.”

However, the Courts of Appeals, in 1300 LaFayette E Coop, Inc. v Savoy, 284 Mich App 522, 527; 773 NW2d 57, 61 (2009) has held that “a party may join a claim for damages in a summary eviction proceeding up to the district court’s jurisdictional limits, but it is not required to do so.” In LaFayette, “neither district court complaint contained a request for money damages, [nor did] consent judgment contained an award of money damages.” Id., 284 Mich App at 529. The court held that “unlike an ordinary damages award, and unlike the award of costs expressly authorized by this section, the amount of past-due rent is not a judgment for damages enforceable by a writ of execution.” Id., 284 Mich App at 528. Therefore, if “no claim for damages is asserted in the district court, the district court judgment is conclusive only on the question of who has a right to possess the premises.” Id., 284 Mich App at 530. The court added that “a district court judgment is res judicata on the issue of who has the right to possess the premises, because that question is actually litigated in the district court.” Id. (citing Sewell v. Clean Cut Management, Inc., 463 Mich. 569, 574–577, 621 N.W.2d 222 (2001).

In the instant case, the tenant may join the claim for damages per MCL § 600.5739 to the suit for eviction. However, such a requirement is not mandatory. If the damages for bedbug infestation is not joined with the eviction suit, the tenant may continue with the separate suit for damages. The district court judgement will be res judicata only with the issue of right to possession.

3. Counterclaim exceeding $25,000.00

Per MCL § 600.8301 (1) “The district court has exclusive jurisdiction in civil actions when the amount in controversy does not exceed $25,000.00.”

Further, Michigan Court Rules set out the rule for removal of a suit exceeding the court’s jurisdictional limit:

If a money claim or counterclaim exceeding the court’s jurisdiction is introduced, the court, on motion of either party or on its own initiative, shall order removal of that portion of the action to the circuit court, if the money claim or counterclaim is sufficiently shown to exceed the court’s jurisdictional limit.

MCR 4.201(G) (2) (b).

Therefore, in the instant case, if the counterclaim damages exceed $25,000.00, the counterclaim Plaintiff must petition for removal. Otherwise, the court will find sua sponte that it lacks jurisdiction over the claim.

CONCLUSIONS

The suit in Southfield claims damages for bedbug infestation and the suit in Oak Part is for eviction. The claims, in order to be barred as res judicata requires final determination by a competent court. It is doubtful whether the claim for damages is pleaded in the suit for eviction for a final determination. However, the parties may join claims and counter claims for money damages to eviction proceedings. But, this is not a mandatory requirement. If the tenant and the landlord are not electing to join money damages to the eviction suit, the tenant needs to defend the eviction suit and pursue the claim for damages in the other suit. However, a claim or counter claim exceeding $25,000.00 shall be removed to the circuit court.

[1] Makowski v Towles, 195 Mich App 106, 107; 489 NW2d 133, 134 (1992) (citing Ward v. Detroit Automobile Inter-Ins. Exchange, 115 Mich.App. 30, 37, 320 N.W.2d 280 (1982).

[2] MCL § 600.5739

[3] 1300 LaFayette E Coop, Inc. v Savoy, 284 Mich App 522, 527; 773 NW2d 57, 61 (2009).

[4] MCL § 600.8301