O County of Ingham v. Mi County Road Commission Self-Insurance Pool, 334077

Background

The Michigan County Road Commission Self-Insurance Pool (the Pool) was formed in 1984; its bylaws limited membership to county road commissions and required inter-local agreements permitting surplus refunds after one year.
Counties (Ingham, Jackson, Calhoun) paid premiums to the Pool and historically received pro rata surplus refunds from prior-year contributions.
In 2012 statutory amendments allowed county boards to dissolve appointed county road commissions and assume their functions; each county dissolved its road commission and the Pool refused to treat counties as continuing members, prompting withdrawal agreements or, in Jackson’s case, nonmembership.
The Pool refunded only the unused prorated current-year premiums but refused distributions of surplus equity attributable to prior years; the counties sued alleging unconstitutional lending (Const. 1963, art. 9, § 18), extortion (MCL 750.213), statutory conversion (MCL 600.2919a), and breach of contract.
After multiple appeals and remands (including this Court and the Michigan Supreme Court), the Supreme Court rejected this Court’s prior public-policy invalidation of the Pool’s withdrawal policy and remanded for consideration of the counties’ claims of unconstitutional lending, extortion, and conversion.
On remand this Court affirmed the trial court’s dismissal of the unconstitutional-lending, conversion, and extortion claims (and observed the Supreme Court’s ruling effectively resolves the breach-of-contract claim).

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Unconstitutional lending (Const. 1963, art. 9, § 18)	Pool’s refusal to return prior-year surplus unlawfully lent state credit to others	Any alleged lending was between political subdivisions/road commissions (not the State) and enforceable only among members; thus § 18 not violated	Dismissed — no unconstitutional lending: agreement is among political subdivisions or § 18 inapplicable
Statutory conversion (MCL 600.2919a)	Pool willfully exerted dominion over counties’ money and converted it to its own use	Claim is contractual (not an independent tort duty); counties had no contractual right to the contested distributions per Supreme Court	Dismissed — conversion fails as tort grounded in contract and counties lack required elements/contractual right
Extortion (MCL 750.213)	Pool threatened to “steal” successor shares to punish counties for dissolving commissions	Counties had no legal right to the distributions allegedly threatened; claim is tort grounded in exercise of contractual rights	Dismissed — fails element of threatening to injure property (no legal right) and barred as tort based on contract
Breach of contract	Counties as successors entitled to future surplus distributions	Inter-local agreements gave distributions to road commissions; dissolution ended that right	Effectively resolved against counties by Supreme Court; dismissal affirmed

Key Cases Cited

Ingham Co v. Mich. Co. Rd. Comm’n Self-Ins. Pool, 321 Mich. App. 574 (2017) (earlier Court of Appeals decision in this litigation)
In re Request for Advisory Opinion on Constitutionality of 1986 PA 281, 430 Mich. 93 (1988) (§ 18 applies to political subdivisions/instrumentalities)
Wayne Co. Bd. of Comm’rs v. Wayne Co. Airport Auth., 253 Mich. App. 144 (2002) (§ 18 violated only when obligation enforceable against the state for another’s benefit)
In re Advisory Opinion on Constitutionality of Act No. 346 of Pub. Acts of 1966, 380 Mich. 554 (1968) (purpose of art. 9, § 18 described)
People v. Harris, 495 Mich. 120 (2014) (elements of extortion under MCL 750.213)
Fultz v. Union- Commerce Assoc., 470 Mich. 460 (2004) (tort claims based on contract require independent duty)
Crews v. Gen. Motors Corp., 400 Mich. 208 (1977) (tort will not lie for mere nonperformance of contractual duty)
Lawsuit Fin., LLC v. Curry, 261 Mich. App. 579 (2004) (requirements for conversion of money)