2.2Subject-Matter Jurisdiction in General

“Subject-matter jurisdiction refers to a court’s power to act and authority to hear and determine a case.” Usitalo v Landon, 299 Mich App 222, 228 (2012). Every court is required to confirm that subject-matter jurisdiction exists, either upon challenge or sua sponte. Clohset v No Name Corp (On Remand), 302 Mich App 550, 560 (2013). “’Jurisdiction of the subject matter is the right of the court to exercise judicial power over a class of cases, not the particular case before it; to exercise the abstract power to try a case of the kind or character of the one pending.’” Wayne Co v AFSCME Local 3317, 325 Mich App 614, (2018), quoting Altman v Nelson, 197 Mich App 467, 472-473 (1992). “[A] judgment entered by a court that lacks subject-matter jurisdiction is void[.]” Clohset, 302 Mich App at 561.

Parties may not waive defects in subject matter jurisdiction. Travelers Ins Co v Detroit Edison Co, 465 Mich 185, 204 (2001). Accordingly, lack of subject matter jurisdiction is not waived by failure to raise it in the pleadings. MCR 2.111(F)(2). Lack of subject-matter jurisdiction may be raised at any time. MCR 2.116(D)(3). See also In re Brody Living Trust, 321 Mich App 304, 309 (2017) (holding that “subject-matter jurisdiction cannot be waived and can be raised at any time by any party or the court”) (citations, alterations, and quotation marks omitted), vacated in part on other grounds, 501 Mich 1094, 1094 (2018).¹ “Although parties have no time constraints when challenging subject-matter jurisdiction, procedurally a nonparty wishing to do so must first be a party to the action in the action’s normal course.” Kuhlgert v Mich State Univ, 328 Mich App 357, 380 (2019).

“The existence of subject-matter jurisdiction does not depend on the correctness of the trial court’s ultimate legal conclusions.” Usitalo, 299 Mich App at 228. “Thus, while the lack of subject-matter jurisdiction may be collaterally attacked, a court’s exercise of jurisdiction can only be challenged on direct appeal.” Id. at 229.

A.Transfer

“Except as otherwise provided in [MCR 2.227],” a court lacking subject matter jurisdiction may transfer the case to another Michigan court with proper jurisdiction. MCR 2.227(A). See also MCR 4.002 (transfer of actions from district court to circuit court). If the parties did not raise the jurisdictional issue, the court may not transfer the case “until the parties are given notice and an opportunity to be heard on the jurisdictional issue.” MCR 2.227(A).

“A circuit court may not transfer an action to district court under [MCR 2.227] based on the amount in controversy unless:

(a) the parties stipulate in good faith to the transfer and to an amount in controversy not greater than the applicable jurisdictional limit of the district court; or

(b) from the allegations of the complaint, it appears to a legal certainty that the amount in controversy is not greater than the applicable jurisdictional limit of the district court.” MCR 2.227(B)(1).

1.Order Transferring Jurisdiction, Case Records, and Required Fees

“The transferring court must enter all necessary orders pertaining to the certification and transfer of the action to the receiving court” and “order the plaintiff to pay the applicable statutory filing fee directly to the receiving court, unless fees have been waived in accordance with MCR 2.002.”² MCR 2.227(C)(1). “The [transferring] court may also order the plaintiff to pay reasonable compensation and attorney fees to the defendant for filing the case in the wrong court.” Id.

“The transferring court must serve the order [of transfer] on the parties and send a copy to the receiving court. The clerk of the court must prepare the case records for transfer in accordance with the orders entered under [MCR 2.227(C)(1)] and the Michigan Trial Court Records Management Standards and send them to the receiving court by a secure method.” MCR 2.227(C)(2). “If part of the action remains pending in the transferring court, certified copies of the papers filed may be forwarded, with the cost to be paid by the plaintiff.” MCR 2.227(E)(1). “The receiving court shall temporarily suspend payment of the filing fee and open a case pending payment of the filing fee and costs as ordered by the transferring court. The receiving court must notify the plaintiff of the new case number in the receiving court, the amount due, and the due date.” MCR 2.227(C)(3).

Jury trial waivers entered in the original court are not effective after transfer; however, jury trial demands are preserved. MCR 2.227(E)(3). “A party who had waived trial by jury may demand a jury trial after transfer by filing a demand and paying the applicable jury fee within 28 days after the filing fee is paid under [MCR 2.227(D)(1)].” MCR 2.227(E)(3). If a jury fee was paid prior to transfer, “the clerk of the transferring court must forward it to the clerk of the receiving court as soon as possible after the case records have been transferred.” MCR 2.227(D)(2).

2.Proceedings After Transfer

Once a case is transferred to a court of proper jurisdiction, the case proceeds “‘as if it had been originally filed there.’” Ashley Ann Arbor, LLC v Pittsfield Charter Twp, 299 Mich App 138, 157 (2012), quoting MCR 2.227(E)(1).³ The receiving court must dismiss the action if the plaintiff fails to pay the filing fee or fails to submit proof of the payment of any expenses ordered by the transferring court within 28 days of the date of the transfer order. MCR 2.227(D)(1).

The time for filing any further pleadings runs from the date the filing fee is paid under MCR 2.227(D)(1). MCR 2.227(E)(1). The receiving court must issue a new summons to the plaintiff if a defendant was not served with process when the action was transferred. MCR 2.227(E)(2).

B.Internal Affairs of Foreign Corporations Doctrine

The internal affairs of foreign corporations doctrine “is the rule that the courts of one State will not exercise the power of deciding controversies relating merely to internal management of the affairs of a corporation organized under the laws of another State or of determining rights dependent upon such management, but will leave questions relating to the management of the internal affairs of a foreign corporation to be settled by the tribunals of the State which created the corporation.” Wojtczak v American United Life Ins Co, 293 Mich 449, 452 (1940) (quotation marks and citation omitted). However, “circuit courts in Michigan have broad subject-matter jurisdiction over claims involving corporations,” MCL 600.3605, and “Wojtczak should not be read as negating the subject-matter jurisdiction the trial court otherwise holds under MCL 600.605.” Daystar Seller Fin, LLC v Hundley, 326 Mich App 31, 37 (2018). Rather, “Wojtczak simply recognizes that the choice-of-law considerations implicated by the internal affairs doctrine should guide a trial court’s discretion in determining whether it ought to decline jurisdiction over certain actions involving foreign corporations that would be more appropriately adjudicated in another forum.” Id. at 37-38 (“the trial court erred as a matter of law in dismissing [the] case for want of subject-matter jurisdiction” because “the claims [of the] case [did] not require the trial court to become involved in the management of the internal affairs of a foreign business entity”).

C.Ecclesiastical Abstention Doctrine

“The ecclesiastical abstention doctrine arises from the Religion Clauses of the First Amendment of the United States Constitution and reflects [the Michigan Supreme] Court’s longstanding recognition that it would be inconsistent with complete and untrammeled religious liberty for civil courts to enter into a consideration of church doctrine or church discipline, to inquire into the regularity of the proceedings of church tribunals having cognizance of such matters, or to determine whether a resolution was passed in accordance with the canon law of the church, except insofar as it may be necessary to do so, in determining whether or not it was the church that acted therein.” Winkler v Marist Fathers of Detroit, Inc, 500 Mich 327, 337-338 (2017) (quotation marks and citations omitted).

The ecclesiastical abstention doctrine “requires a case-specific inquiry that informs how a court must adjudicate certain claims within its subject matter jurisdiction; it does not determine whether the court has such jurisdiction in the first place.” Winkler, 500 Mich at 327. “The existence of subject matter jurisdiction turns not on the particular facts of the matter before the court, but on its general legal classification.” Id. “What matters . . . is whether the actual adjudication of a particular legal claim would require the resolution of ecclesiastical questions; if so, the court must abstain from resolving those questions itself, defer to the religious entity’s resolution of such questions, and adjudicate the claim accordingly.” Id. at 341-342 (holding that “[i]t is for the circuit court, in the first instance, to determine whether and to what extent the adjudication of the legal and factual issues presented by the plaintiff’s claim would require the resolution of ecclesiastical questions”).

D.Standard of Review

Whether a court has subject-matter jurisdiction is a question of law that is reviewed de novo. Mich Ass’n of Home Builders v City of Troy, 497 Mich 281, 285 (2015).