THE COURT:

Harry versus State Employees' Retirement System, 05-460-AW.  Mr. Starr and Ms. Ward.

MS. WARD:

I have a document that I just served on Mr. Starr at this juncture, and I wonder if I could approach the Court?

THE COURT:

What is the document, ma'am?

MS. WARD:

It is a two-paged affidavit.

THE COURT:

No, ma'am.  I am not interested in anything from you today. But let me ask you this:  Did you file a brief?

MS. WARD:

Yes, sir, I did.  Timely.

THE COURT:

We did not receive it.  Did you get it, Mr. Starr?

MR. STARR:

I got what was called a response.

THE COURT:

Okay.  All right.  Well, we don't have it, ma'am.

MS. WARD:

Can I give you a copy?

THE COURT:

Wait a minute.  Defendant's response opposing Plaintiff's motion for summary disposition is in the file, James.  Did you look at the file today?

LAW CLERK:

No.  I went down and asked Kay.

THE COURT:

Apparently it was put in the file.

MS. WARD:

Your Honor, it was timely filed on the 7th.

THE COURT:

Just fine.  You have an additional affidavit?  Did you file the affidavit with us before today and then get it signed or something?

MS. WARD:

It was only executed yesterday based on recent circumstances.

THE COURT:

Oh.  Did you get a copy of that?

MR. STARR:

I just got it this morning.

THE COURT:

Okay.  All right.

MS. WARD:

Can I just approach with it, Your Honor?

THE COURT:

Sure.

MS. WARD:

I am trying to avoid misrepresenting something to the Court.  And I am happy to wait my turn.

THE COURT:

That's great.

MS. WARD:

Thank you, Your Honor.

THE COURT:

Go ahead, Mr. Starr.

MR. STARR:

Well, Your Honor, I have a motion in regard to our Freedom of Information Complaint.  And I guess at this point I -- if I understand what counsel's position is taken, is that she agrees with me that we are entitled to summary disposition in regard to our Complaint. And apparently she also agrees that we are entitled to attorney fees, reasonable attorney fees, and the 500 dollar punitive damages.  And so in light of that, the other motion I have is to her counterclaim.  And one, she has two defamation counts.  And as I -- there is no specificity in regard to what she claims was defamous.  And the case law that I have cited is very, very clear that it is necessary when you're claiming, making a claim for defamation that you set forth in the complaint the specifics of the, of what you claim.

     I have attached, in addition to the main case that I have cited, that is, just one moment, Royal Palace Homes, Inc., versus Channel.  I attached a fairly recent non-published case to my brief, which is Pierson and Gaffka versus Ahern, and then Tokio, et cetera.  And they say that the law requires that the very words of the libel be set out in the declaration and order.  That the court or judge may judge whether they constitute the ground for action.  And this case indicated that summary disposition was in order if the complaint failed to comply with that.  And the recent Ahern case and of Pierson versus Gaffka also reiterated the same position.  And that was in July 19th of this year, an unpublished case.  And I have another one that just came out on August 16th that I'll provide the Court with a copy to the same effect, and counsel.

     So her complaint is general, doesn't state specifics, and therefore, does not state a cause of action according to these cases.

     The intentional affliction of mental suffering on the public agency was the first time I've heard of that cause of action, and I couldn't find any case law in regard to that.

THE COURT:

Thank you, Mr. Starr.  Ma'am, why did you give me this affidavit today?

MS. WARD:

Well, I just wanted to be clear that we did make -- there is a footnote in the pleading that I filed that says that we paid them $500 based on the fact that a check was going to go with the pleading.  I didn't want to misrepresent the status.  I have the check here.  We tried to pay them.  I just wanted to not be accused of misrepresenting where we are with that and that's all the affidavit –

THE COURT:

Why would you want to pay them?

MS. WARD:

Can I make –

THE COURT:

Don't you normally pay people after you come to court or you get an order?

MS. WARD:

We are not objecting to the FOIA part of the case.  We've already given them the documents and we've already attempted to pay the penalty.  The only objection under the FOIA was the attorney fee request.  And that's laid out in our response.  The thing I'd like to point to the Court's attention -- and I understand you are at a bit of a disadvantage, but I did lay out in our response that we are more than happy to concede the initial Complaint.  We are only objecting as to the $1,275 based on the record of what had been done.  And that's up to this Court's discretion.  My client feels it is more than they should get and asked me to make such an argument.

THE COURT:

I think the rule would be that I would ask Mr. Starr to submit to the other side a copy of his hourly billing and how he arrived at the amount that's due and see if you object.  And if not, he would then set a hearing date with me where I would determine whether that's a fair amount or not.  I would say, Counsel, that based on what lawyers charge nowadays -- I mean, I wish I had known I would have probably stayed in the bar.  I don't know.  But it doesn't seem to be an onerous amount of money.  Now, maybe he's including some expenses for defending the other portion of this lawsuit in there.  And if he isn't -- if he is, that shouldn't be included.  But once again, he would have to itemize his billing for you.  So would that serve its purpose?

MS. WARD:

In fairness, to be candid, I do have a bill from him.  Our only problem was a one-page Complaint was filed and we were charged eight hours for drafting what is essentially, you know, three quarters of a page of text.  My client wants me to make this position known.  If the Court rules against us, so be it.  I just want to move to the next part of this.

THE COURT:

All right.  Well, I don't feel in my own opinion that the amount charged, that amount is an unusually large amount for billing.  I would also say that the length of a complaint oftentimes does not reflect the nature of the thing.  I mean, this is a -- frankly, Freedom of Information has become a difficult area for people.  And I don't know how much Mr. Starr deals in it, but I am assuming he had to do some research as to what, if any, merit there was to his client's case before he filed this.  I don't want to speak out of hand, but I am assuming Mr. Starr is no more an expert in this area than I am.  And so we all have to look this stuff up.  So I don't think this is an unreasonable bill.

MS. WARD:

Well, Your Honor, I've made the argument.  And just for purposes of being complete, it is attachment 3.  So I did make it known to the Court what he had charged.

THE COURT:

All right.  I don't think it is an unreasonable amount.  I've seen bills for thousands and thousands and thousands of dollars.

MS. WARD:

I know, Your Honor.  And I'm trying to do my job advocating on behalf of my client's position.

THE COURT:

Okay.

MS. WARD:

They have money -- you know, their money is -- part of this comes from public funds.  And there is certain things that need to be addressed based on that.

THE COURT:

Yeah.  Well, I am well aware of the current argument that since it's public funds you never want to spend any.  I think that was handled by John Engler several years ago when he destroyed state government.

MS. WARD:

Your Honor, I am not here as a supporter of Mr. Engler.

THE COURT:

No.

MS. WARD:

I want to make sure we are very clear about that.

THE COURT:

He is our only Governor, in fact, who actually kept his campaign promise because he did say he would destroy state government, and he did.

MS. WARD:

Not to move into politics but there's probably -- we are probably more aligned on that issue then you think.  Just trying to earn a living, though.

THE COURT:

Okay.

MS. WARD:

Let me get to our count.  I want to point the Court to two things.  And I know that you haven't had an opportunity to read our pleadings.

THE COURT:

I read the Counter Complaint. That I have read.

MS. WARD:

Okay.  If you look what we alleged in paragraph 7 was pretty specific.  We said that on MERSDIRT.COM, the web site at issue, which allegedly -- and there is an affidavit attached from Ms. Ann Wagner, who is the CEO of MERS.  She was accused of unethical and improper use of MERS funds for the purpose of making illegal payoffs to former MERS employees.  That's what we alleged in the Counter Complaint.

THE COURT:

Payoffs.

MS. WARD:

Okay.  And I want to just draw the Court's attention to one place in this web site.

THE COURT:

Let me ask you, did you actually say that in the Complaint or did you just refer to the exhibit?

MS. WARD:

Your Honor, this is paragraph number 7 under common allegations in the Complaint, the Counter Complaint we filed.

THE COURT:

Okay.  See, I didn't read that.

MS. WARD:

Okay.  It was filed on July 22nd along with our answer.  And it was filed behind the answer and it may have confused the Court and I apologize for that.

THE COURT:

No, no, that's okay.  I see it.

MS. WARD:

The other thing I wanted to say on my own behalf about the pleading I filed, I actually brought a copy up to your chambers personally on September 7th because I knew that we were only a week away.  So I did hand deliver that.  I don't know why –

THE COURT:

I never got any of this.

MS. WARD:

I am not trying to belabor it. I did want you to know I did walk it up the stairs so there would not be a delay.

THE COURT:

Okay.

MS. WARD:

And if you look at our attachment to our answer, and now I want to talk about attachment 4 to our answer.

THE COURT:

Yes, ma'am.

MS. WARD:

Our response opposing their motion.

THE COURT:

A tab every once in a while would be helpful.  I got it.  Okay.

MS. WARD:

Okay.  I just want to explain to the Court that we took -- we took pages on a web site that frankly, Your Honor, the documents in question had to be printed.  The entire thing consists, I don't want to guess how many pages, but I'll give you a finger here.  I'm giving you about half an inch.  And if you look at that, there is two entries.  And I am going to draw your attention at the bottom, the 9-6, 2005 entry.  It says page one out of four.

THE COURT:

I'm sorry, what date?

MS. WARD:

9-6, 2005.

THE COURT:

Okay.

MS. WARD:

Page one out of four.  I am looking at page 2 of that subset.

THE COURT:

I don't see any one out of four.

MS. WARD:

Up at the top, Your Honor. Northeast corner of the document.

THE COURT:

Page one out of four or two out of four.

MS. WARD:

That's the section.  It is four pages.  This is how I keep them apart.

THE COURT:

All right.

MS. WARD:

If you look at page 2, Your Honor, and I've highlighted, there's no way for me to draw your attention, but basically you look at the first bullet point, there is a statement.  And then the third bullet point and then the paragraph after that one, which is quoted in our response.  It's quoted verbatim at page three of our response.

THE COURT:

Okay.

MS. WARD:

Your Honor, two points very briefly.  Number one, the case cited by Mr. Starr for the Plaintiff deals with a different issue.  Here we are talking about a statutory claim based on the statute that says when you accuse somebody of a crime, falsely accuse them of a crime, it is defamation per se, libel per se, depending on how you, you know, how you, how you publish the material. And there, just so you know, I'm talking about MCL 6.2911(1) (sic).  Publishing words that accuse someone of committing a criminal offense is defamation, per se.  And what I'm trying -- what I would like the Court, under -- this is a (C)(8) motion.  There has been no discovery.  I believe we've met the threshold required for a defamation claim per se.

     Now, the only problem -- and perhaps this is my inartfulness.  The original Complaint was against MERS. Obviously, now we've dragged in the CEO of MERS and accused her of illegal payoffs.  And the concern is that if there is a problem with the intentional infliction claim, I'd be happy to limit that claim to Ms. Wagner.  And there is an affidavit from her, attachment 5 after this, that I think adequately addresses the intentional infliction of emotional distress part of this.

THE COURT:

All right.  Well, let me ask a question.  This was a Freedom of Information case.  And I am not really clear if you have the ability to file a counterclaim in this file.  It may well be that your Complaint should have been in a separate pleading.

MS. WARD:

Well, the problem, Your Honor -- and I want to show you the nexus, because they are interably linked.  The MERS web site specifically going through the entire chronology of the Freedom of Information Act part of things, and then comes to the conclusion based on the documents released, that there was illegal payoffs.  And I think under -- and I recognize the Court has discretion in this matter, as well.  I think it would be a mistake to sever this, because they are linked.  There is a nexus as to the parties.  There is a nexus as to how this came about.  And the problem here, Your Honor, is without understanding – and I –

THE COURT:

But all of the evidence is still available, isn't it?  What difference does it make if you just have a separate proper civil file?  I don't -- all I'm trying to say is I have a Freedom of Information Act case. I am not clear if a defamation action is proper.  Of course, it is a Circuit Court case.  Well, go ahead.

MS. WARD:

Well, Your Honor, my other argument would be that that's not the motion that was brought.  The motion was not brought –

THE COURT:

I am just looking at procedure. It has nothing to do with you.

MS. WARD:

And I am a little out there on procedure here, too, because one would not have expected once we complied with the act and offered them the money, that this MERSDIRT thing would continue to engage in defamatory conduct.  But my only point is, is I think they are linked. I think they are connected.  I think to sever it and put it in front of a different judge would prejudice my client, but more importantly, the only motion before you is whether we've met the (C)(8) standard for the claim.  And the only thing that I am willing to concede is if the Court has a problem finding intentional infliction on behalf of a corporation, which I could find no case law for, but I do know, and this is how I came up with this, you know, we have prosecuted corporations criminally.

THE COURT:

Who owns MERS?  Is it a private company?

MS. WARD:

It is a public entity that's sort of a bifurcated entity created by -- originally, it was under the state government.  And then it sort of became -- and I have to tell you I am not an expert on this either, but I tried to follow Mr. Engler's great vision and I got lost. But it is a quasi public entity.  We've taken the position in the FOIA that we are subject to FOIA as a public entity.  The only point, Your Honor, is we depend on the relationship between the municipalities.  There is nothing to obligate them to utilize MERS services.  And this MERSDIRT.COM web site was published and information sent to all of their potential -- I mean, their current clients and their potential clients or customers or whatever the appropriate word is.  And I believe we met the (C)(8) standard.

THE COURT:

All right.  Thank you.  Mr. Starr? Comment on these issues?  Any other comment?

MR. STARR:

Just a couple of things.  Your Honor, I generally don't have my settlement negotiations presented before we have a settlement.  I mean, that has been my understanding.  But Ms. -- the CEO is not a party to this action, so if she has some mental suffering as a result of criticisms, and I don't see anything in here that says that, where he accused them of a crime.  Now, there may be people that think that that should, that misspending the public money should be a crime, but I don't think it is unless you're going to embezzle it.  But I am not aware of it.  He hasn't cited any criminal statute that he claims that they violated.  And what he is, he is criticizing a public agency and he's causing them apparently what he wants to, and that is he wants them to change.  And as a person he has every right to make criticism.  And his criticisms in this case are such that public, people in public agencies are required to put up with that as long as they are not charged, maliciously charged with a crime, and he has not done that.  In any event, the case law –

THE COURT:

That's a different issue than whether or not there is enough specificity in the Complaint.

MR. STARR:

The specificity knocks the case out.  The lack of specificity knocks the defamation case out. The fact that -- the emotional distress of a public agency is just not a cause of action.  And so we are entitled to summary disposition in regard to the counterclaim.

THE COURT:

Ma'am, it is the Court's position that you need to file an independent complaint against Mr. Harry on behalf of each of your clients for whatever claims you think they have.  I agree with Mr. Starr that a corporation cannot suffer emotional distress.  I am not sure what psychiatrist you could find that would tell me General Motors had a nervous breakdown because of lack of sales or something.  So it doesn't seem likely that that would be any good.  But the CEO could have emotional distress.  Likewise, the defamation items appear to go against her, not against the company.  But if you feel the company has some grounds you can include them.  But Mr. Starr correctly points out this lady is not even a party to this piece of litigation. This is simply a Freedom of Information Act case.  And you have the right, without prejudice, to go ahead and file a complaint and an appropriate pleading with the Court on that basis and serve Mr. Harry.

MS. WARD:

Can I respond one more time?  I have just one more thing for the record, Your Honor.  I realize that you've made your ruling, but in actuality, the CEO of MERS is a party because when you start to talk about what's MERS, it is its officers.

THE COURT:

Madam, MERS is not its officers. MERS is a corporation who has officers that perform its business.  That is basic Michigan and worldwide corporation law.  A corporation is an entity in and of itself.  It is not its officers.  It is a company separate and apart from everyone who works there.  That's basic stuff.  Do not stand up and correct me on something that is basic to the operation of the system.  All I'm trying to tell you is you've got a complaint that in my view has some validity to it.  Whether it's good or bad, I don't know.  But I think you need to file it in an independent action because this lady, in her own right, has not had any involvement in this file, only as an officer of this company and that's all.  So Mr. Starr, this case stands dismissed without prejudice for the Plaintiff bringing an appropriate action.

MR. STARR:

Your Honor, I would like to -- I would like to ask for costs.

THE COURT:

Not a chance.

MR. STARR:

Okay.

THE COURT:

But nice of you to ask.  Prepare an order on the first part, unless you two have one.  And on the second part you can file -- you can put that in there, too.

MR. STARR:

Should I prepare an order for both parts?

THE COURT:

Yeah, I think you should.  Yeah, you are good at it.  You're going to give him the check?

MS. WARD:

I've been trying.

THE COURT:

He's happy to take it.

MS. WARD:

I need you to note it and date it so I can put it in the record, otherwise they will think I took it.

THE COURT:

So file your complaint.

MS. WARD:

Yes, sir.

THE COURT:

And have a nice day.

MS. WARD:

Thank you, Your Honor.