1.Money Claims and Counterclaims
Generally, money claims and counterclaims are freely joinable in summary proceedings. See MCL 600.5739(1); MCR 4.201(H)(1)(a). MCL 600.5739(1) states in part:
“Except as provided by court rules, a party to summary proceedings may 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.”
“A money claim must be separately stated in the complaint. A money counterclaim must be labeled and separately stated in a written answer.” MCR 4.201(H)(1)(a)(i).
The amount of money sought by a claim or counterclaim “shall not exceed the amount in controversy that otherwise limits the jurisdiction of the court.”1 MCL 600.5739(1).
Landlords must pay a supplemental filing fee to bring a money action. MCL 600.5756(2).2 Fees must be waived for indigent individuals. MCR 2.002; MCR 2.002(A)(1) (fee waiver not applicable to public or private organizations “unless an applicable statute provides that no fee(s) shall be required”).
“Notwithstanding any other provision of [MCR 2.002], courts must enable a litigant who seeks a fee waiver to do so by an entirely electronic process.” MCR 2.002(L).
For more information on the waiver of fees, see the Michigan Judicial Institute’s Civil Proceedings Benchbook, Chapter 1. If service is not completed as required by MCR 2.105 and the defendant fails to appear or to file an answer, “a money claim must be dismissed without prejudice, or adjourned until service of process is complete[.]” MCR 4.201(H)(1)(b)(i)-(ii).
2.Equitable Claims and Counterclaims
A claim or counterclaim for equitable relief may be joined with the complaint or the answer. MCR 4.201(H)(1)(a)(ii).
B.Separation of Claims for Possession From Money Claims or Counterclaims
In general, all claims and counterclaims are tried together, but joinder is not mandatory. See MCR 4.201(H)(1)(a)(i); 1300 LaFayette East Coop, Inc v Savoy, 284 Mich App 522, 527 (2009). A money counterclaim must be tried with a possession claim “[i]f adjudication of [the] money counterclaim will affect the amount the defendant must pay to prevent issuance of an order of eviction, . . . unless it appears to the court that the counterclaim is without merit.” MCR 4.201(H)(1)(e).
MCR 4.201(H)(1)(c)-(d) provide for the separation of possession claims from money claims or counterclaims in certain specified circumstances—pursuant to local court rule, where trying both at the same time would result in a substantial delay in trying the claim for possession, or where the possession claim must be resolved before determining damages. Separation of claims or counterclaims from disposition of the claim for possession does not prejudice those claims or counterclaims. MCL 600.5739(1).
According to MCR 4.201(H)(1)(c)-(d):
“(c) A court with a territorial jurisdiction which has a population of more than 1,000,000 may provide, by local rule, that a money claim or counterclaim must be tried separately from a claim for possession unless joinder is allowed by leave of the court pursuant to [MCR 4.201(H)(1)(e)].
(d) If trial of a money claim or counterclaim
(i) might substantially delay trial of the possession claim, or
(ii) requires that the premises be returned before damages can be determined,
the court must adjourn the trial of the money claim or counterclaim to a date no later than 28 days after the time expires for issuing an order of eviction. A party may file and serve supplemental pleadings no later than 7 days before trial, except by leave of the court.”
C.Costs of Repair, Cleaning, or Maintenance
If a money judgment based on the cost of repairs is awarded to a landlord for the tenant’s physical damage to the property, the amount of money awarded must include the cost of the landlord’s labor in making the repairs just as any order for the cost of repairs would include the cost of a third party’s labor. MCL 600.5739(2). A landlord must be compensated for his or her labor “at a rate the court determines to be reasonable based on usual and customary charges for the repairs.” Id.
Similarly, where the court finds that the landlord breached the lease because of his or her failure to repair the property and the court grants a money judgment to the tenant “for or based on the cost of repairs,” the amount of money awarded must include the cost of the tenant’s labor just as it would if repairs were made by a third party. MCL 600.5739(3). “A tenant’s labor . . . shall be compensated at a rate the court determines to be reasonable based on usual and customary charges for the repairs.” Id.
Committee Tip:
A fixed dollar amount set by the lease for a landlord’s performance of some repair or service is a liquidated damage. Unless there is a reasonable relationship between the fixed charge and the actual cost a landlord incurs for performing the repair or service, the liquidated damage provision constitutes an illegal penalty charge and is unenforceable.
Any damages awarded to a landlord should reflect ordinary depreciation and wear and tear. For example, it is not appropriate to award a landlord the full cost of carpeting damaged by a tenant; that cost must be discounted to reflect the carpet’s age and its condition when the tenant moved in.
1.Money Claims and Counterclaims
The amount of money sought by a claim or counterclaim “shall not exceed the amount in controversy that otherwise limits the jurisdiction of the court.”3 MCL 600.5739(1). On the court’s own motion or on the motion of either party, all money claims and counterclaims exceeding the district court’s jurisdiction must be removed to circuit court, in accordance with MCR 4.002, “if the money claim or counterclaim is sufficiently shown to exceed the court’s jurisdictional limit.” MCR 4.201(H)(2)(b). See also Adamski v Cole, 197 Mich App 124, 129 (1992).
If the money claim or counterclaim is removed, a jury demand must be timely reasserted in the circuit court. The Court of Appeals has determined that when an action is not entirely removed from district court “a jury demand made in response to a complaint for summary proceedings in district court does not operate as a jury demand with regard to collateral claims that are removed to the circuit court because the claims exceed the district court’s jurisdictional limits.” Adamski, 197 Mich App at 130.
2.Other Claims and Counterclaims
Claims or counterclaims of discrimination under the Persons With Disabilities Civil Rights Act or the Elliott-Larsen Civil Rights Act (ELCRA) must be removed from district court to circuit court because circuit courts have exclusive jurisdiction over such claims.4 MCL 37.1606(2); MCL 37.2801(2). See also Reynolds v Robert Hasbany MD PLLC, 323 Mich App 426, 433-434 (2018) (holding that MCL 37.2801(2) “takes precedence over the general jurisdictional grant set forth in MCL 600.8301[ of the Revised Judicature Act],” and “provides for exclusive circuit court jurisdiction, regardless of the amount in controversy”).
Summary proceedings involving an equitable defense or counterclaim need not be removed from district court. MCR 4.201(H)(2)(a).