9.5Declaratory Judgments
A.Court’s Power to Enter Declaratory Judgment
Any Michigan court of record with jurisdiction “[i]n a case of actual controversy within its jurisdiction,” may entertain a declaratory judgment action in that case, “whether or not other relief is or could be sought or granted.” MCR 2.605(A)(1). Circuit, district, and probate courts have jurisdiction in any case in which they would have jurisdiction if other relief was sought. MCR 2.605(A)(2). “When there is no actual controversy, the court lacks jurisdiction to issue a declaratory judgment.” Mercurio v Huntington Nat'l Bank, ___ Mich App ___, ___ (2023) (quotation marks and citation omitted). “An actual controversy exists when declaratory relief is needed to guide a plaintiff’s future conduct in order to preserve the plaintiff’s legal rights.” Id. at ___ (quotation marks and citation omitted). “When the injury a plaintiff seeks to prevent is merely hypothetical, a case of actual controversy does not exist.” Id. at ___.
“An actual controversy exists when declaratory relief is needed to guide a plaintiff’s future conduct in order to preserve the plaintiff’s legal rights.” Glorycrest Carpenter Rd, Inc v Adams Outdoor Advertising Ltd, ___ Mich App ___, ___ (2024) (quotation marks and citation omitted). In Glorycrest, plaintiff had “a concrete and distinct interest in the proper interpretation and application of both governing instruments as a successor party to the lease and a successor in interest of property affected by a restrictive covenant.” Id. at ___ (holding that plaintiff “identified an ‘actual controversy’ involving the controlling instruments that required a court to ‘declare the rights and other legal relations’ of the parties affected by the governing instruments and necessitating guidance as to future conduct”). Glorycrest, ___ Mich App at ___, quoting MCR 2.605(A)(1). “Although [plaintiff] labeled its claim as one for declaratory relief, it alleged that the lease was unenforceable because of mutual mistake and should be rescinded.” Id. at ___ (noting that “courts are not governed by the labels chosen by the parties” and that courts “determine the nature of an action by reading the complaint as a whole to determine the gravamen of the claim”). Because plaintiff “alleged a cause of action that combined an action for reformation or rescission with a request for declaratory relief,” the trial court “had jurisdiction to declare the rights and obligations of the parties under the lease regardless of the label [plaintiff] chose.”Glorycrest, ___ Mich App at ___, citing MCR 2.605(A)(2).
“[D]eclaratory relief is not mandatory.” Van Buren Charter Twp v Visteon Corp, 319 Mich App 538, 550 (2017). “[T]he language in [MCR 2.605] is permissive, and the decision whether to grant declaratory relief is within the trial court’s sound discretion.” Van Buren Charter Twp, 319 Mich App at 545, 550 (holding that a trial court may still deny declaratory relief even where a party’s claims have merit).
A declaratory judgment has “the force and effect of, and are reviewable as, final judgments.” MCR 2.605(E).
There must be an actual controversy that causes a party to seek a declaration of rights or legal relationships. MCR 2.605(A)(1); MCR 2.111(B)(2). “An ‘actual controversy’ under MCR 2.605(A)(1) exists when a declaratory judgment is necessary to guide a plaintiff's future conduct in order to preserve legal rights. The requirement prevents a court from deciding hypothetical issues. However, by granting declaratory relief in order to guide or direct future conduct, courts are not precluded from reaching issues before actual injuries or losses have occurred. The essential requirement of an ‘actual controversy’ under the rule is that the plaintiff pleads and proves facts that demonstrate an adverse interest necessitating the sharpening of the issues raised. UAW v Central Mich Univ Trustees, 295 Mich App 486, 495 (2012) (quotation marks and citations omitted).
A jury trial may be demanded in a declaratory action “under the circumstances and in the manner provided in the constitution, statutes, and court rules of the State of Michigan.” MCR 2.605(B). See Chapter 7 for more information on jury trials.
“The court may order a speedy hearing of an action for declaratory relief and may advance it on the calendar.” MCR 2.605(D).
Once a declaratory judgment has determined the rights of the parties, additional “necessary or proper relief” may be granted, including monetary damages, following reasonable notice and hearing. MCR 2.605(F); Hofmann v Auto Club Ins Ass’n, 211 Mich App 55, 90 (1995).
Questions of law arising from a declaratory judgment are reviewed de novo; whether to grant or deny declaratory relief is reviewed for an abuse of discretion. Guardian Environmental Svcs, Inc v Bureau of Const Codes & Fire Safety, 279 Mich App 1, 5-6 (2008).