STATE OF MICHIGAN IN THE CIRCUIT COURT FOR THE COUNTY OF WAYNE

MICHIGAN DEPARTMENT OF TRANSPORTATION, Plaintiff,

v.
DETROIT INTERNATIONAL BRIDGE COMPANYandSAFECOINSURANCE COMPANY OF AMERICA, Defendants,

Case Number 09~015581- CK Honorable Prentis Edwards

____________--------------~I ~

OPINION and ORDER At a session of said Court held in the Coleman A. Young Municipal Center Detroit, Michigan on: PRESENT:

NOV 9 3 2011'

The Honorable Prentis Edwards Wayne County Circuit Court Judge

This matter is before the Court for an Order to Show Cause Hearing to determine whether the Detroit International Bridge Company (DIBC) should be held in civil contempt for failure to comply with the February 1, 2010 Order of this Court. The February 1, 2010 Order required DIBC to construct a two-lane access road, relocate conflicting structures, and complete construction of its portion of the Ambassador Bridge Gateway Project Agreement (Gateway Agreement) in accordance with the plans attached to the Performance Bond and the Maintenance Agreement. The Order to Show Cause was initiated by an ex parte motion filed by the Michigan Department of Transportation (MDOT) pursuant to MCR 3.606(A), MCL 600.611, and MCL 600.1701et seq. BACKGROUND The background is based on Court's files and records in this case. In April 2004, MDOT and DIBC entered into a multi-million dollar contract to improve interstate freeway connections to the Ambassador Bridge with the approval and funding of the Federal Highway Administration. The Gateway Agreement provided for a division of the construction

responsibilities between MDOT and DIBC. DIBC was responsible for constructing a portion of the project identified as Part A. Part A includes the roads and ramps needed to directly join the Ambassador Bridge to 1-75/1-96. The Gateway Agreement indicated that the anticipated latest construction completion date for parts A, B, and FI would be no later than 48 months after the date of the April 23, 2004 agreement. The purpose of the Gateway Agreement was to improve access to the Ambassador Bridge, to facilitate public travel, and increase international trade. The project was designed to redirect bridge traffic from local surface streets and provide direct connections between the bridge and the interstate highways. The initial Gateway Agreement was subsequently modified to reflect changes relating to the acquisition of certain property by MDOT through condemnation proceedings for the benefit of DIBC. DIBC was required to post a Performance Bond to MOOT as a guarantee that its portion of the project would be completed. MDOT and DIBC also entered into a Maintenance Terms and Conditions Agreement that detailed their respective maintenance responsibilities of the parties and provided for a special return route for MDOT's maintenance and emergency vehicles. The project site plan that is illustrated in the C-l drawing identifies the major components that are part of the Gateway Agreement. The site plan was approved by the Federal Highway Administration, Customs and Border Protection, DIBC, MDOT, the City of Detroit and other stakeholders. DIBC is responsible for constructing various components that are shown in the C-l drawing including: 1. SO1 Bridge for outbound traffic to Canada

2. 4/3 lane road under the SO1 Bridge
3. S02 Bridge that connects to MDOT Bridge 4. S03 customs area 5. S04 Bridge over 23rd Street 6. SOS Bridge over 23rd Street 7. Access road 8. Truck road for traffic from Canada 9. Southern special return route 10. Northern special return route 11. 21 st street access to Welcome Center PAST COURT PROCEEDINGS MDOT filed this case on June 24, 2009, seeking specific performance of the contract and damages relating to an alleged breach of the contract by DIBC. In November 2009, DIBC filed a lawsuit relating to this contract against MDOT in the Michigan Court of Claims, case 09~00134MK~C30. The Michigan Court of Claims entered an order consolidating that case with this case. On December 15, 2009, the Michigan State Court Administrator assigned this Court to temporarily serve as Judge of the 30th Circuit Court of Claims to resolve the consolidated cases.

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On October 29, 2009 and November 13, 2009, MDOT filed motions for summary disposition seeking specific performance of the contract. On February 1, 2010, this COUli granted MDOT's summary disposition motion for specific performance of the contract. DIBC filed for leave to appeal the Order to the Michigan Court of Appeals and to the Michigan Supreme Court. Both Courts denied relief to DIBC. On April 27, 2010, this Court issued an Order to Show Cause requiring Dan Stamper, President of the DIBC, to appear before this Court on May 10, 2010 and show cause why the DIBC should not be held in civil contempt for failure to comply with the terms and provisions of the Court's Order of February 1,2010. The Order required Dan Stamper to show cause why the construction of the DIBC's portion of the Gateway Project could not be completed within (1) one year and to show cause why Safeco Insurance Company of America (Safeco) should not be required to step in and complete the construction of DIBC's portion of the Gateway Project. DIBC obtained a stay from the Michigan Supreme COUli on May 5, 2010, preventing the enforcement of the February 1, 2010 Order. The stay was dissolved on May 28, 2010. DIBC removed the case to the United States District Court for the Eastern District of Michigan on June 7, 2010, pursuant to 28 USC 1446. The United States District Court remanded the case to this Court on August 17, 2010. The District Court ruled that it was objectively unreasonable for DIBC to remove the case from the Michigan State Court. The contempt hearing was rescheduled for September 23, 2010. On September 20, 2010, Superior Global Logistics, LLC (Superior) filed a motion to intervene in this case in this Court. On September 21, 2010, DIBC again removed the case to the United States District COUli alleging that a federal question arose from Superior's motion to intervene. The federal court rejected DIBC's theory and the case was again remanded to this Court on November 5, 2010. Thereafter, a hearing was re-scheduled for December 8, 2010, for the Order to Show Cause Hearing that had initially been scheduled for May 10,2010. On January 10,2011, this Court found DIBC in civil contempt for failing to comply with the February 1, 2010 Order. DIBC was sanctioned and again ordered to comply with the February 1,2010 Order. This matter is once more before this Court on the complaint of MDOT that DIBC has not complied with this Court's Order of February 1,2010. CURRENT HEARING The hearing began on July 7, 20ll, was adjourned to August 25,2011, and later adjourned to September 1, 2011, at the request of Safeco. Testimony was resumed on September 1, 2011 and the hearing was adjourned to October 3, 2011. The parties presented closing statements on October 5, 2011. The parties were ordered to submit statements of recommended findings and dispositions by Octo bel' 21, 2011. The matter was scheduled for the Court's decision on November3. 2011.

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DIBC began the hearing on July 7, 2011, by commenting on recent work that has been performed on the Gateway Agreement. MDOT gave opening remarks arguing that DIBC has not gone forward with construction that conforms to the approved design contained in the C-I drawing of Exhibit E to the Performance Bond and the Maintenance Agreement. DIBC presented a number of exhibits including progress reports, photos, and various drawings relating to the Gateway Agreement. MOOT presented several exhibits including the Ambassador Bridge Gateway Project Agreement, a blow-up of part of the Project Site Plan (C-l), and drawings prepared by DIBC. DIBC presented the testimony of Thomas D. LaCross. Mr. LaCross is employed by Hubbell, Roth, and Clark, Inc a consulting engineer firm. He indicated that he is a professional engineer serving as Project Manager for the Gateway Project for DIBC. He explained that he had prepared 12 biweekly reports since January 24, 2011, chatting the progress of DIBC's construction on the Gateway Project. He reviewed the reports explaining design and construction activities that occurred for the periods covered. Mr. LaCross indicated that DIBC did not submit construction plans to MDOT for review and approval prior to the construction of SOL Mr. LaCross stated that at a meeting held on February 7, 2011, Mr. Judnic indicated that SO1 was approved as constructed. He indicated that although pier 19 was not constructed in the location identified in Exhibit E to the Performance Bond, he did not believe that it would have to be moved to complete the Gateway Project. At the September 1, 2011 hearing, Mr. LaCross reviewed progress reports prepared for the period between the July 7, 2011 hearing and September 1st hearing that showed activity on the project by DIBC during that time. Mr. LaCross indicated that SOl has been completed; in addition, he indicated that plans have been developed for the truck road and the access road. The drawings for the truck road and the access road were admitted as plaintiffs exhibits 3, 4 and 5. Mr. LaCross indicated that the construction plans had not been prepared in conformity with C-l for the access road because DIBC has acquired the property in that area and a road as shown in C-l was not necessary. While acknowledging that construction plans have not been prepared in conformity with C-l, Mr. LaCross contends that the plans satisfy the requirements of Exhibit E to the Performance Bond. He indicated that DIBC has requested variances under Section 8 of the Gateway Agreement. On October 3, 2011, Mr. LaCross gave information further updating the work that had been performed by DIBC since September 1,2011. He indicated that DIBC is on schedule to complete its portion of the project by January 11, 2012 and that remediation of piers 11, 12, and 13 was not factored into the schedule. In addition, the removal of pier 19 was not considered. DIBC next called Mr. Michael Anderson, who is employed as an engineer by a security firm that represents Safeco. He indicated that he attends meeting and investigates areas of dispute and reports back to Safeco. Based on his review of the plans, he believes that SO1 was built in conformity with the approved plans. He acknowledged that piers 11, 12 and 13 depicted
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in the as-built plans for SOl submitted by DIBC, conflict with the approved design. He indicated that at a meeting held on March 23,2011, MOOT took the position that piers 11, 12, and 13 were not in conformity with the approved plans. He stated that Mr. Judnic had stated his approval of piers 11through 18 at a meeting held on February 7, 2011. He further indicated that pier 19 does not conflict with Cvl , During Mr. Anderson's testimony, the construction process under the contract was discussed. The process begins with a design. The second step is the submission of preliminary construction plans based on the design, during that time conflicts are resolved by the parties. Final construction plans are then reviewed and approved by the parties and submitted to the contractor for construction. DIBC failed to submit preliminary or final construction plans to MOOT prior to constructing SO1. Mr. Dan Stamper, President of DIBC testified that all of his time is devoted to the Gateway Project. He asserted that DIBC intends to comply with the Court Orders; however, he stated that there are outstanding disagreements with MDOT regarding construction plans. He explained that DIBC disagreed with MOOT regarding the locations of piers 11, 12, 13, 19, the truck road, and the access road. He asserted that because MDOT did not timely object to the plans that OIBC provided it proceeded with the construction of SO1 and that he has written letters to MDOT in an attempt to resolve the conflicts. Mr. Stamper indicated that DIBC has complied with the construction requirements of the agreement and the Order of the Court. He suggested that MDOT has violated Section 8 by unreasonably withholding approval for requested variances. He explained that DIBC is not restricted by the design in drawing C ~1 and that there are other designs in Exhibit E that DIBC relied on. He indicated that letters have been sent to Customs and Border Protection to get their views regarding certain aspects of this construction project. Mr. Stamper explained that the plans attached to the Performance Bond are only conceptual designs and that changes made by DIBC in the configuration, are not material changes. He asserted that the variances to the C-l plans complied with the function and purpose of the concept design. Victor Judnic is employed by HNTB Corporation, MDOT's design consultant for the Gateway Agreement. He formerly served as Senior Delivery Engineer for MOOT thru March 12, 2011 on the Gateway Agreement. He is presently assisting MOOT with the Gateway Agreement. He indicated that no preliminary or final construction plans were submitted by DIBC to MOOT prior to the start of construction of SOL He stated that the 4/3 lane road that was constructed under SO1 does not go thru piers 11; 12 and 13 as required by C-l. He indicated that SO1 is in general conformity with C-I, except for the conflict with the piers. He does not recall saying that SOl was approved. No written request was submitted by DIBC for approval and he asserts that he does not have the authority to approve changes to the design. Mr. Judnic stated that DIBC submitted construction plans on August 30, 2011, that do not comply with the approved design. In addition; he indicated that conforming plans have not been submitted for the access road, the northern special return route, the southern return route, the 4/3

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lane road; SO1, 21 st Street, and the truck road. He pointed out that Pier 19 is in conflict with the truck road. Mr. Judnic explained that the C- 1 drawing shows the layout of each component in relation to other components. It shows how all the components work together. He indicated that C- 1 also shows the relationship of the components to city streets and expressways. He expressed that there are many significant conflicts with DIBC's construction, construction plans, and the C1 drawing. Mr. Sweeney is the senior development engineer for MDOT. He oversees design and construction. He indicated that requests for design changes would come to him. The decision to approve design changes would be made by a team. He indicated that he did not have the authority to direct that ramps be open. FACTS DIBC has provided plans for construction and has constructed parts of a design that is not in agreement with the approved design. DIBC's request for a variance for the alternate design has been denied by MDOT. The proposed substitute design materially changes the approved design. The proposed construction plans leave out important parts of the approved design including the two-lane access road and special return routes shown on the C-l drawing and the Maintenance Agreement. Additionally, DIBC has not removed various conflicting structures that are in the path of roads shown in the approved design. The C- 1 drawing in Exhibit E to the Performance Bond required DIBC to construct a four lane road that proceeds in a southerly direction under SO1 and between its piers. The C-l drawing shows the four lanes making a turn to the west; paralleling Fort Street and then narrowing to three lanes. The as-built plans submitted by DIBC, show that piers of SO1·(piers 11, 12, and 13) are in conflict with the four lane road that passes under SOL DIBC did not submit preliminary and final construction plans to MDOT for approval; prior to the start of construction of SOl as required by the Gateway Agreement. DIBC constructed a two lane road that proceeds in a southerly direction under SOl between the piers conflicting with the C-l drawing. Cars using those two lanes may stop for fueling, stop at the duty free store or proceed to SO1. Truck traffic is routed in a southwesterly direction at pier 11, through newly constructed toll booths toward a truck fueling area. The car fueling area is in the path of the 4/3 lane road shown in C-l, SOl as presently constructed, is not in compliance with the February I, 2010 Order of this Court. Mr. LaCross and Mr. Anderson acknowledged that SOl was not constructed in conformity with C-l of Exhibit E to the Performance Bond. DIBC has sought approval for variances; including approval for nonconforming as-built plans for SO1 from MOOT; however, those requests have not been approved. DIBC has not submitted construction plans that satisfy the requirements of the plans attached to the

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Performance Bond and the Maintenance Agreement for the access road and the truck road. The truck road from Canada is a two lane road that carries truck traffic in a westerly direction, parallel to Fort Street. The truck road continues to the S02 Bridge to S32 to convey truck traffic onto the freeways. Pier 19 conflicts with the proposed truck road. Plans have not been submitted for the correction of piers 11, 12, 13 and the relocaton of pier 19. STANDARD OF PROOF In order to prove civil contempt, proof of the alleged noncompliant conduct must be established by clear and unequivocal evidence. Calcutt v. Harper Grace Hospitals, 184 Mich. App. 749 (1990). The issue presented by this Order to Show Cause, is whether there is clear and unequivocal evidence that DIBC is presently not complying with the requirements of this Court's Order of February 1, 2010. In addition, is there clear and unequivocal evidence that the acts and omissions of DIBC tend to impair the authority or impede the functioning of the Court. There are several factors to be considered to establish indirect civil contempt. Did contemnor fail to comply with an Order of the Court? Does the failure to comply impair the authority 01' impede the functioning of the COUlt? the conduct outside of the view and presence of the COUlt? Is the alleged contemnor under a present duty to comply with the Court's Order? Does the alleged contemnor have the ability to comply with the Court's Order?

Is

CONCLUSION A fail' review of the relevant evidence in this matter requires an affirmative response to each of the above questions. During this lengthy hearing both parties elicited testimony that often produced information that is not pertinent to the inquiry that is the focus of the hearing. The question raised by this Order to Show Cause Hearing is whether there is clear and unequivocal evidence that DIBC is not presently complying with the February 1,2010 Order of this Court, In addition, is there clear and unequivocal evidence that the conduct ofDIBC impairs the authority 01' impedes the functioning of the COUlt. The C-I drawing contained in Exhibit E attached to the Performance Bond shows the overall configuration of the components required to be constructed, C-l is the Project Site ~lan, The Maintenance Agreement provides for the maintenance road and the maintenance responsibilities of the parties. Mr. Stamper's claims that DIBC has complied with this Court's Orders are not supported by the evidence. While some progress has been made toward the completion of the project, the evidence shows that construction of significant elements of the approved design has not began; additionally, plans have been prepared for construction that are not in compliance with the approved design.

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The projected date for completion of this construction project contained in the initial contract expired over 3 years ago. The April 23, 2004 Agreement slated completion of the project for no later than 48 months after the date of the agreement. The Court records plainly indicate that for a time starting in late 2009 up until May 2011, DIBC performed virtually no construction within Part A of the Gateway Project. DIBCs evasion of construction activities continued even after this Court entered an Order on February 1, 2010, specifically directing DIBC to commence construction. Construction resumed briefly after DIBC was found in contempt of Court on January 10,2011. The construction was increased in May 2011. DIBC argues that it has been stymied in its efforts to comply with the requirements of the Court's Order because MDOT changed its position regarding the work that has to be done; DIBC charges MDOT with "changing the rules in midstream". DIBC asserts that MDOT did not raise an issue regarding a conflict with the 4/3 road and SOl piers 11, 12 and 13 until June 1, 2011. DlBC argues that because of the delay in raising any objection to the 4/3 road coupled with MOOT's acceptance of SOl as constructed, MOOT should be barred from raising the issue at this time. DlBC claims that the 4/3 road as constructed fulfills the purpose and function of the road contemplated by the parties. DIBC indicates the 4/3 road as constructed has 12 lanes for toll booths rather than 4 lanes for toll booths which is an improvement and will reduce back-ups and delays. Curiously, DIBC also argues that there are requirements in the initial contract that are in conflict with requirements contained in later amendments to the initial contract. DIBC appears to suggest that MDOT's shifting positions, contract amendments and delays in objecting to nonconforming construction leaves it in a quandary trying to figure out what to build. DIBC's position is somewhat confusing. Despite its problems keeping up with MDOT's changing positions, DIBC has repeatedly asserted that it has complied with, and is complying with, this Court's Orders concerning the construction of its portions of the Gateway Project. Yet, over two months ago on August 11, 2011, this Court ordered DIBC to immediately convey to MOOT the customary easement for highway purposes to enable MDOT to construct S02. DIBC assured the Court that the easement would be conveyed. Later, it appears that DIBC indicated that the easement was not necessary. Now, DIBC claims that it needs to know what is required so that it can comply with the Court's Orders. DIBC has put forth a spurious argument. DIBC contends that at a February 1, 2011 meeting of the parties, Mr. Judnic stated that SO1 was approved. DIBC failed to mention a meeting of the parties on March 23, 2011, where Mr. Anderson, the Safeco representative testified that MDOT indicated that piers 11, 12, and 13 of SOl were not in compliance with the approved design. In addition, the path of the access road is defined by a recorded easement. There is no dispute regarding where it should be located. Yet, DIBC has submitted plans that change the path of the access road.

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Mr. LaCross stated that the access road design was altered because DIBC decided that the access road shown in the C-l drawing in Exhibit E, is no longer necessary in that location since DIBC now owns the property in that area. That decision was made in spite of this Court's March 15, 2011 Order, in which the COUlt indicated that the access road was to be constructed on the path of the easement. In January 2011, DIBC filed a motion pursuant to MCR 2.612(C)(1)(e) requesting that the February 1; 2011 be modified to eliminate the requirement to build the access road. On March 15,2011, this Court entered an Order denying DIBC's motion and indicated that DIBC was obligated to construct the access road. Throughout these proceedings DIBC has simply ignored the requirements of the February 1, 2010 Order. On August 11, 2011, this Court reminded DIBC of its obligation to correct the piers under SOl. The Order provided in part as follows: It is also important to note that stepped up construction activities do not necessarily indicate compliance with the agreed design. For example, DIBC claims that SOl is done, yet the C-l drawing of the agreed design requires the construction of a four lane road that proceeds in a southerly direction under SO1. The records in this case show that SOl has been constructed at variance with the design plans in Exhibit E to the Performance Bond. Piers 11, 12, and 13 conflict with the required four lane road for outbound traffic to Canada. Construction must proceed in conformity with the agreed design in the Exhibit E plans to the Performance Bond. The February 2010 Order required DIBC to submit a detailed timetable for completing construction of its portion of the Gateway Project, including removing conflicting structures with dates for commencing and completing the tasks. In January 2011, the Court found that the timetable DIBC submitted for completing construction of its part of the project in response to the February 1,2010 Order was illusory. At that time DIBC had completed over 60% of its portion of the required construction. DIBC submitted a timetable that would have required significantly more time to complete the approximately 40% remaining construction as would have been required for the total time expected for the entire project. DIBC's timetable scheduled construction into 2013. DIBC's timetable would have resulted in the project taking over nine years to complete instead of the projected four years. On January 10, 2011, DIBC was again ordered to submit a detailed timetable that would ensure full compliance with the February 1, 2010 Order within one (1) year from January 10,2011. The timetable submitted in response to the January 10, 2011 Order is also illusive. It does not provide a credible construction plan. Significant portions of the construction have been ·built without complying with the approved designs. DIBC has not submitted a timetable to correct the variances or remove conflicting structures.

"

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In addition, DIBC has prepared plans for parts of the remaining construction that do not conform to the requirements of the Order of the Court. However, DIBC remains steadfast in its insistence that the construction and prepared plans are in compliance with the February 1,2010 Order of the Court. The conduct and statements of DIBC confirm the fact that DIBC is not presently complying and does not intend to comply with the Order of this Court. DIBC has repudiated the February 1, 2010 Order of this COUlt, Mr. Stamper's claim that DIBC submitted plans to MDOT that were not timely objected to is at odds with the statements of Mr, Anderson, engineer for the security firm employed by Safeco, Mr. LaCross Project Manager for DIBC, and the other evidence in the case. DIBC did not submit construction plans to MDOT for SOl prior to construction. DIBC has requested that MDOT approve as-built construction plans for SOl under the provisions of Section 8 of the Gateway Agreement. However, there is no provision for approval of as-built construction plans in Section 8 of the Gateway Agreement. The Gateway Agreement requires that each party submit preliminary and final construction plans for review and approval before the start of construction, DIBC has not complied with that requirement. As a result of DIBC's failure to provide pre-construction plans, the construction of SOl is at variance with C-l, Some of the SO1 piers are in direct conflict with the 4 lane road under SO1. The evidence shows that DIBC has made several design changes that have not been approved by MDOT and built unapproved construction that is in conflict with the approved contract design and the Order of this Court. In addition, DIBC has not constructed or corrected various components as required by the February 1, 2010 Order of this Court. The list includes the following items that are not in compliance with the February 1,2010 Order of this Court. 1. The location of pier 19 interferes with the path of the truck road required by the Performance Bond and Maintenance Agreement. 2. DIBC has not constructed the two-lane truck road from the truck plaza to S02. 3, DIBC has not submitted construction plans to re-align the three piers of SOl that were constructed in conflict with the four-lane road. 4. DIBC's plans for the Access Road do not conform to the requirements of the February 1, 2010 Order of this Court. 5. DIBC has not constructed the north or south special return routes required by the Maintenance Agreement. 6. The design of 2 1st Street does not satisfy the requirements of the Plans attached to the Performance Bond, 7. DIBC has not conveyed the customary easement for highway purposes as required by the August 11,2011 Order of this Court.

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DIBC has also failed to remove all of the auto fueling stations and canopies that conflict with the two lane truck road and the 4/3 lane road. According to the testimony of DIBC's President Dan Stamper, DIBC is not obligated to construct its portion of the Gateway Project in accordance with C~1 of Exhibit E included in the plans attached to the Performance Bond. He indicated that the designs that DIBC relies 011 are supported by other drawings included in Exhibit E. He also suggests that the designs are subject to modification by DIBC. There is no evidence to support Mr. Stamper's position. The evidence shows that DIBC is not presently complying and does not intend to comply with the Orders of this Court. DIBC has not constructed SO1 in conformity with C~1 which is part of the plans attached to the Performance Bond. DIBC has not constructed the 4 lane road under SOl, the truck road and the access road as required by the February 1,2010 Order of this COUli. Further DIBC has not submitted construction plans to bring the nonconforming construction into compliance with the Order of this Court. The conduct of DIBC outside of the view and presence of the Court has made ineffectual efforts to obtain compliance with this Court's Order of February 1,2010. DIBC's conduct has served to impede the implementation of the Order of this COUlt and impair the authority of the Court. DIBC has chosen to build nonconforming construction and prepared nonconforming construction plans instead of complying with the plans attached to the Performance Bond and the Maintenance Agreement. The Court records contain the Order of the United States District COUltrejecting DIBC's second attempt to remove this matter to the that Court. The language used in that Order aptly reflects the continuing decision of DIBC to impede the enforcement of this Court's Order. The Judge of the United State District Court stated the following in his Order of November 5, 2010:

Considering this Court's more than thirty-three years as a judicial officer, DIBC may be entitled to its recognition as the party who has devised the most creative schemes and maneuvers to delay compliance with a court order. DIBC's schemes fail, however, as they lack support in the law of this Circuit. The conduct of DIBC that resulted in its failure to comply with the February 1, 2010 Order of this Court occurred outside of the view and presence of the Court. DIBC is presently under a duty to comply with the February 1, 2010 Order of this Court and it has the ability to comply. Over 20 months have passed since the February 1,2010 Order was entered without any significant effort on the part of DIBC to comply with the Court's Order. The records in this case clearly show that SO1 has been constructed at variance with the design in Exhibit E plans to the Performance Bond and the Maintenance Agreement. Piers 11, 12, and 13 conflict with the required four lane road for outbound traffic to Canada. The construction plans for the truck road and the access road do not comply with the requirements of the Court Orders. Construction plans that meet the requirements of the approved design have not been submitted.

II

t

I,

The Court has considered the evidence as well as the arguments of the parties and finds by clear and unequivocal evidence that DIBC is presently in violation of the February 1, 2010 Order of this Court. This Court further finds by clear and unequivocal evidence that DIBC's conduct impairs the authority and impedes the functioning of this Court. DIBC is in civil contempt of this Court. SANCTIONS It is well established that the Court has independent inherent authority as well as statutory authority to impose sanctions for contempt. In re Contempt of Dougherty, 429 Mich. 81 (1987); MCL 600.1701 et seq. In addition, the COU1tin Homestead Development Co. v. Holly Twp" 178 Mich. App. 239 (1989), pointed out that the statute authorizes payments for losses including attorney fees sustained as a result of the other party's contempt. The Dougheliy case and MCL 600.1715(2) indicate that in civil contempt cases where there is an omission to do what is still within the contemnor's power to do, imprisonment may be imposed until he performs 01' no longer has the power to perform. The law is clear that the sanctions imposed for contempt should be the least that is adequate to accomplish the purpose. Township of Prairieville v. Vankeuren, 2004 WL 1908237. The purpose for sanctions here is to coerce compliance by DIBC with the February 1, 2010 Order. Notwithstanding the surge in construction initiated in May 2011, it is clear that DIBC is not and does not intend to carry out construction in conformity with the plans attached to the Performance Bond and the Maintenance Agreement, As the United States District COUlt Judge correctly pointed out, DIBC has devised the most creative schemes and maneuvers to delay compliance with a Court Order. The tactics used by February 1,2010 Order of enforcement of the Order present ability to complete Court, DIBC have rendered useless any efforts to obtain compliance with the this Court. The actions ofDIBC have served to hinder and delay the of this Court. The evidence clearly established that DIBC has the the construction of this project in compliance with the Order of this

The Court has several options that it may consider in order to bring about compliance with the February 1, 2010 Order. One of the options available is to require DIBC's surety Safeco to take over the responsibility for completing the project. A default has been taken against Safeco. However, even without the default, Safeco as surety is liable for the responsibilities of its principle DIBC, which includes completing the construction project and monetary damages. Another option is to have MDOT or some other construction company complete DIBC's portion of the project. Financial sanctions as well as imprisonment may be imposed as an option. Another option would be the appointment of a Receiver to stand in the . place of the owner of DIBC Manuel "Matty" Moroun and its officers with authority to make

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·,

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decisions regarding the implementation of the February 1, 20 I0 Order of this Court. The Court shall review the options and make a determination regarding sanctions on January 12, 2012. This matter is adjourned until January 12, 2012 for a determination regarding the appropriate sanctions to be imposed in this case. In the interim, DIBC shall remove conflicting structures and perform construction in accordance with the February 1, 2010 Order of this Court, which includes making the necessary changes to piers 11, 12, and 13 under SOl to conform to the C-l drawing. In addition DIBC shall relocate Pier 19. In order to ensure that the proper decision makers for DIBC are present: IT IS ORDERED THAT Manuel "Matty" Moroun, owner of DIBC along with the top company officer for DIBC appear before this Court on January 12,2012 at 9 a.m. IT IS FURTHER ORDERED that Charles Scales, Monitor, shall submit to the Court a report indicating tasks remaining to be completed on DIBC's portion of the project by January 5, 2012. The report shall include the status of piers 11, 12, 13, 19, and the conveyance of the easement as required by the August 11, 2011 Order of this Court.

Date:

November 3, 2011

'.

A TRUE COPY CATHY M. GARRETT
UNTY CLIiFlK

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