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Downriver BOR v. Harris: Michigan Court Grants Board Declaratory Judgment

Note: This case is not published in an official reporter and may not be cited as authority. Consult with counsel before relying on this case.

In 1989, the Michigan Court of Appeals addressed whether declaratory relief was available to a Board seeking to enforce a membership suspension under its Code of Ethics. The court of appeals held that a lower court may decide cases of actual controversy within its jurisdiction prior to injuries or losses actually occurring. The court of appeals also granted the Board summary judgment on Harris' due process claim.

Harris, a real estate agent, belonged to the Downriver Board of REALTORS® (Board). During his membership period, the Board received many complaints from sellers, buyers, and brokers alleging improper conduct by Harris. The Board's grievance committee investigated the complaints and professional standards panels held hearings. According to the Board, Harris was given notice of the meetings and opportunity to respond to the allegations. Several of the hearings resulted in a recommendation to suspend defendant's membership for three years.

After Harris threatened legal action, the Board sought declaratory relief to ensure its procedures did not violate his rights. Harris' answer asserted that the Board denied him due process. Harris also filed a counterclaim alleging that the Board denied him due process; specifically, that the suspension rendered it impossible for him to work in any real estate agency that belonged to the association.

The Board filed a motion for summary disposition pursuant to MCR 2.116(C)(8) (failure to state a claim upon which relief can be granted) and MCR 2.116(C)(9) (failure to state a valid defense). Harris also moved for summary disposition pursuant to MCR 2.116(C)(4) (lack of subject matter jurisdiction by the court) and MCR 2.116(C)(8). The trial court granted summary disposition in favor of the Board and against Harris. Harris appealed.

The Court stated that "in a case of actual controversy within its jurisdiction, a Michigan court of record may declare the rights and other legal relations of an interested party seeking a declaratory judgment, whether or not other relief is or could be sought or granted." The court of appeals also noted that "an action is considered within the jurisdiction of a court if the court would have jurisdiction of an action on the same claim or claims in which the plaintiff sought relief other than a declaratory judgment."

The Court noted that the case or controversy requirement is satisfied where a declaratory judgment or decree is necessary to guide a party's future conduct to preserve its legal rights. The court stated that while the actual controversy requirement prevents a court from deciding hypothetical issues, a court is not precluded from reaching issues before actual injuries or losses have occurred. The court found that an actual controversy existed in the instant case because the Board was proceeding with a disciplinary action against Harris and a judicial declaration of the Board's rights under its bylaws and procedures would prevent an actual injury to one party or the other.

Turning to the defendant's due process argument, the Michigan Court of Appeals found that Harris failed to allege specific facts regarding this claim. The court of appeals found Harris' statements conclusory and without basis, and affirmed the lower court's grant of summary disposition.

Downriver Board of REALTORS® v. Harris, No. 106871 (Mich. Ct. App. May 10, 1989). [Note: This opinion was not published in an official reporter and therefore should not be cited as authority. Please consult counsel before relying on this opinion.]