County of Ingham v. Mi County Road Commission Self-Insurance Pool
321 Mich. App. 574
| Mich. Ct. App. | 2017Background
- The Michigan County Road Commission Self-Insurance Pool (the Pool) was created in 1984; membership was limited by its bylaws to county road commissions and members paid annual premiums with the possibility of periodic surplus refunds.
- In 2012 Michigan amended statutes (MCL 224.6 and MCL 46.11) to allow county boards to dissolve appointed county road commissions and transfer their "powers, duties, and functions" to the county board of commissioners.
- Ingham, Jackson, and Calhoun Counties dissolved their appointed road commissions under the amended statutes; Ingham and Calhoun executed withdrawal agreements with the Pool effective on dissolution dates; Jackson did not.
- The Pool refunded unused pro rata premiums for the 2012–2013 year but refused to refund surplus equity from prior years, asserting that the counties (not being road commissions) were not entitled to those surplus refunds.
- The counties sued asserting entitlement to surplus refunds (among other claims). The trial court granted summary disposition for the Pool under MCR 2.116(I)(2). The counties appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether counties that dissolved appointed road commissions are successors in interest to those commissions | Counties: dissolution transfers the commissions' rights and interests to county boards; counties thus succeeded to contracts, property, and claim rights | Pool: dissolution terminated the road commissions; only "powers, duties, and functions" transferred, not property or contractual interests | Court: Counties are successors in interest; transfer construed to include rights and obligations necessary to avoid unconstitutional impairment of contracts |
| Whether successor counties qualify as Pool members under bylaws limited to "county road commissions" | Counties: statutory succession makes counties equivalent to the former road commissions for Pool membership | Pool: bylaws permit only road commissions, not counties, so successors are ineligible | Court: Successor counties qualify for membership because bylaws reference statutory road commissions and counties succeeded to those commissions |
| Effect of withdrawal agreements on entitlement to prior-year surplus refunds | Counties: withdrawal agreements did not abrogate entitlement to prior surplus refunds (agreements limited to withdrawal of membership) | Pool: withdrawal agreements and actual withdrawal bar counties from receiving surplus refunds | Court: Jackson County never signed a withdrawal; Ingham and Calhoun’s withdrawal agreements limited to membership withdrawal and did not extinguish rights to prior-year surplus refunds |
| Proper disposition on summary-judgment motions | Counties: disputed facts and legal errors precluded judgment for Pool | Pool: trial court correctly entered judgment for Pool | Court: Trial court erred; counties entitled to judgment on successor-membership and entitlement-to-refunds issues; case reversed and remanded |
Key Cases Cited
- Village of Dimondale v. Grable, 240 Mich. App. 553 (Michigan Ct. App. 2000) (summary disposition standards)
- Spiek v. Michigan Dep’t of Transportation, 456 Mich. 331 (Michigan 1998) (C(10) summary-disposition standard)
- Maiden v. Rozwood, 461 Mich. 109 (Michigan 1999) (evidence viewed in light most favorable to nonmoving party)
- Mich. Muni. Liability & Prop. Pool v. Muskegon Co. Bd. of Co. Rd. Comm’rs, 235 Mich. App. 183 (Michigan Ct. App. 1999) (local-government statutory authority principles)
- Robinson v. City of Lansing, 486 Mich. 1 (Michigan 2010) (statutes must be read as a whole)
- People v. Nyx, 479 Mich. 112 (Michigan 2007) (interpret statutes to avoid constitutional doubts)
- Health Care Ass’n Workers Comp. Fund v. Director of the Bureau of Worker’s Comp., 265 Mich. App. 236 (Michigan Ct. App. 2005) (contract-impairment test for statutes)
- Rossow v. Brentwood Farms Dev., Inc., 251 Mich. App. 652 (Michigan Ct. App. 2002) (contract/bylaw interpretation rules)