*1 304 466 304 SERVICES, v INC KOONTZ AMERITECH 5, (Calendar 5). Argued Decided No. Docket No. 116366. December 12, June 2002. Nancy brought in Traverse Circuit Court Koontz an action the Grand Ameritech, seeking employer, against to collect unem- her former involuntarily employment ployment compensation. Her had been pension pay- terminated, time, lump-sum and, she elected a at that monthly pension chose to in a allowance. She also ment lieu of payment Unemployment Agency coor- into an ira. The transfer the prorated weekly pension weekly ben- her benefits with her dinated efits, rendering ineligible to receive benefits. A her Security Employment Board of Review referee reversed. The that, reversed, reinstating agency’s ground on the determination pension directly plaintiff into had transferred the funds because the funds within the her she had received IRA, lump-sum Employment Security Act, ruling Michigan and that the court, was a retirement benefit under the act. The distribution Philip Jr., J., Appeals, Rodgers, E. affirmed. The Court of P.J., JJ., reversed, holding and Neff and McDonald, Smolensk, plaintiff a retirement benefit and that the had not received phrase 421.27(f)(1) does not “receive or will receive” in MCL pension a direct rollover of a fund into an IRA. 239 Mich include appeals. App (1999) (Docket 208176). Ameritech No. opinion by joined by Justices In an Chief Justice Corrigan, Supreme Court held: Young, Weaver, Taylor, required plaintiff’s MCL coordination of the unem-
ployment pension her benefits because she received a with retirement benefit. requires unemployment compen- 421.27(i)(l) 1. MCL offset employer charged if with unem- sation for retirement benefits plan. ployment benefits funded the retirement The years age a benefit on the basis of her of ser- received Thus, contemplated benefit” as vice. she received “retirement 421.27(f)(4)(a). requires “Liquidation,” 421.27(f)(4)(a)(ii) distri- 2. as used in MCL employees. all in a fund for all bution of assets held phrase “liquidation private fund” is not of a retirement v Ameritech Thus, preference apply. ambiguous. rule remedial does not apparently Legislature determined that the same result should opts monthly employee regardless obtain of whether an for a annu- ity lump-sum payment. or for a *2 plaintiff 3. The mean- received her retirement benefits within the employer ing 421.27(f)(1), notwithstanding of MCL the fact that the directly funds into her ira. The funds trans- transferred the were direction, accepted directing she them their ferred at her and delivery to account. her concurring, deciding in Justice stated that that MCL Cavanagh, required plaintiff’s unemployment coordination of the pension benefits, necessary major- benefits with her it is not for the ity adopt approach McLough the of the dissent in White v Steel Products, Plymouth Twp, decided sub nom Corbett v Mich 522 453 (1996), and to overrule White to the extent that it is inconsistent majority’s with in the decision this case. White involved the statute, compensation worker’s while case a similar involves unemployment benefits statute that does contain “after-tax” not the language holding on which the in was based. two White The stat- clearly they different; materially language utes are contain different purposes. arguably and serve different Reversed. dissenting, Justice stated that the did receive not Kelly, meaning Employment a retirement within benefit the of the Secur-
ity Act, unemployment compensation and her benefits should not be eliminated. 421.27(f)(4)(a), defining “retirement benefit” as not includ- ing paid liquidation private pension an in amount the of a course fund, ambiguous. using Legislature’s retirement intent expression by referring should be ascertained stated to the purpose public policy. underlying act and With these in mind, only reasonable construction is one that would define a pension distribution under the made circumstances of this case as constituting a benefit. retirement meaning subject differing is also “receive” reasonable interpretations. it, Supreme construing In Court should defer to agencies responsible that the and state federal unemployment compensation administering it, i.e., given have as directly not inclusive of retirement funds an indi- transferred into vidual retirement account. part Justice Markman took no the decision of this case. David Davidson for plaintiff-appellee. Opinion Court Calille) Albert Department (by Law
Ameritech for the Finch), Richard G. L.L.P. Jones, (by & Lacey defendant-appellant.
Amici Curiae: Note Rhodes, P.C. William (by &
Evans, Plelkovic Commerce Chamber of Michigan for the Evans'), of Commerce. Chamber Regional Detroit D. for the Naida), James Pierce, (by & P.C. Naida Council. Compensation Unemployment Employer’s interpret a requires that we This case C.J. Corrigan, bene- unemployment coordination directing statute lump- Plaintiff received with benefits. fits employer-funded payment under sum plaintiff sought plan. When retirement *3 coordi- Unemployment Agency1 compensation, the weekly prorated her weekly benefits with nated her pen- of the amount pension payments (i.e., amount of weekly have received plaintiff would sion benefits The lump-sum payment). for a opted had she not plaintiff to ineligible rendered reduction ensuing Employment The any unemployment benefits. receive upheld the court Security circuit Board of Review Appeals reversed and The Court of the reduction. required. that coordination was held statute, MCL governing We hold plaintiff’s of coordination mandates 421.27(f)(1), benefits. We with her unemployment benefits of the Court of judgment therefore reverse the formerly Michigan Unemployment Agency known as the was Security Employment Commission. v Ameritech Opinion of the Court
Appeals Board of the decision and reinstate judgment circuit court. and the Review FACTS AND PROCEDURAL HISTORY I. UNDERLYING working began its Trav- Ameritech in Plaintiff years City Thirty Ameritech later, in 1965. office erse City offered to continue its Traverse office and closed employment plaintiffs declined, in another office. She electing retirement Ameritech’s to retire. instead plaintiff program $1,052.95 a entitled to incentive fully monthly pension which Ameritech allowance, plain- monthly payments, however, In lieu of funded. lump-sum in her elected to receive tiff chose $185,711.55. Plaintiff also amount of directly lump-sum into individual her transfer account retirement (IRA). unemployment compensa- applied for
Plaintiff then plaintiffs appli- response argued in tion. Ameritech Employ- Michigan 421.27(f) that MCL cation seq., Security coordi- Act, MCL421.1 et allowed ment plaintiff’s with the benefits nation of payments would have amount monthly payment if she had elected received Unemployment Agency agreed option. 421.27(f).This coor- under MCL directed coordination plaintiff’s in a unem- reduction dination resulted weekly, ployment $243 ren- in the amount any unemployment dering ineligible her to receive timely protested determination, Plaintiff benefits.2 *4 2 equal plaintiff’s pro-rata benefits would have been retirement Because weekly benefits, eligible unemployment greater was not than her she to or chargeable MCL to Ameritech. See to receive 421.27(f)(1)(a). Mich
Opinion op the Court Unemployment upheld Agency but the on decision redetermination. appealed
Plaintiff thereafter the A redetermination. Unemployment referee reversed the of decision the Agency ground on the that neither MCL required (5) plaintiff nor coordination since had trans- directly the ferred funds into her and thus ira had not the “received” funds within the Unemployment the act. The referee on relied Agency’s Interpretation Revised Benefit 20.641, No. employee which indicates that an who rolls a amount over into an IRA does not incur immediate liability income tax because the Internal Revenue Ser- payment vice does not consider the “received” purposes. income tax appealed
Ameritech the referee’s decision Employment Michigan Security Board of Review, Unemployment Agency’s which reinstated deter- split mination a decision. The Board Review taxability plaintiff’s pension ruled that the benefit operation 421.27(f) did not affect the of and that lump-sum distribution was a “retirement benefit” plain language Accordingly, under the of the act. required board concluded that coordination was 421.27(f)(1)(a). under MCL
One member of the Board of dissented, Review finding did not receive retirement ben- lump-sum efit because the distribution had been dissenting over rolled into an ira. member relied Interpretation on Revised Benefit No. 20.641 Department States United of Labor’s (USDOL) Unem- ployment Program Insurance Letter No. 22-97. The Letter No. 22-97 stated that amounts USDOL sixty days receipt rolled over an IRA into within are *5 309 v Ameritech Opinion of the Court purposes gross income tax- of federal income for purposes of 26 not “received” and thus are ation Unemployment 3304(a)(15)(A) of the Federal USC seq.3 dissenting et 26 USC 3301 Tax Act (futa), require 421.27(f) did not MCL concluded that member weekly plaintiffs benefit amount. of coordination Review’s the Board of court affirmed The circuit granted Appeals then leave The Court of decision. appeal4 court order. 239 Mich reversed the circuit (1999). App that another It held NW2d 395 34; 607 421.27(f)(5), governed and did not subsection, MCL Alternatively, require of benefits. coordination 421.27(f)(1) that even if MCL in dictum court stated required 1) applied, because coordination was not a “retirement benefit” had not received 2) meaning 421.27(f)(4), and of MCL within 421.27(f)(1) phrase MCL will receive” in “receive or a fund rollover of not include the direct does to an IRA.
II. STANDARD OF REVIEW
requires
us to ascertain
This case
statutory
proper application
of MCL421.27.Issues
questions
interpretation
law that we review de
are
244,
Mich
Co,
Ins
465
v Jackson Nat’l
novo. Oade
Life
Alpena
Donajkowski
(2001);
v
NW2d 126
250; 632
(1999).
Opinion
the Court
III. RELEVANTSTATUTES
essentially
has existed in
same form since
[Notwithstanding any provisions act, inconsistent weekly receiving benefit rate of each individual who is benefit,” or will receive “retirement as defined in [MCL adjusted provided 421.27(f)(4)], subpara- shall be as *6 graphs However, . . (a) . . an individual’s extended benefit weekly an account and individual’s extended benefit rate under shall be established without reduction [MCL 421.64] 421.27(f)(5)] under this subsection unless is effect [MCL (a) unemployment pay- If to the extent benefits chargeable employer able this under act would be to an financing plan who has contributed to the of a retirement receiving under the which claimant is or will receive a weekly yielding pro equal retirement benefit rata a amount larger weekly to or than the claimant’s benefit as other- rate act, wise established under the shall claimant unemployment chargeable receive that would benefits be employer the under this act.
MCL 421.27(f)(1) requires thus unemploy- offset in compensation ment for retirement benefits if the employer charged unemployment with benefits funded plan. type the retirement This of reduction is known “narrow as coordination.” 1980,
Before federal law did not address coordina- unemployment tion of and retirement benefits. In March 1980, Congress amended 26 USC 3304(a)(15) require the futa unemploy- the coordination of ment benefits with employer-funded retirement bene- fits, regardless employer whether the who had funded retirement benefits was same employer whose account would for be charged v Ameritech Opinion op the Court type This of coordination
unemployment benefits. particu- 3304, Section as “broad coordination.” known requires of the futa larly (a)(15), subsection policy regarding coordi- to conform to federal states to insure unemployment eligibility nation of v Gen- Gormley or tax credits. See for federal funds App 781, 785-786; Mich Corp, Motors eral federal amend- response In to the (1983). NW2d 873 promptly adopted Legislature ment, Michigan by federal required to the extent broad coordination states: law. MCL 421.27(f)(5) subsection, any provision Notwithstanding other of this 1980, any 31, begins after March and with week that respect receiving governmental an individual is to which unemployment compensa- claiming or other weekly payable tion, to the individual benefit amount reduced, zero, but not below for those weeks shall be any prorated weekly governmental or the entire amount annuity, any pension, pay, or retired other retirement any previous payment that is based on work other similar only if This reduction shall be made it is of the individual. required against as a condition for full tax credit the tax imposed by act, chapter 23 the federal tax *7 1986, C of the internal revenue code of 26 USC of subtitle to 3311. 3301 mandate for broad coordination was federal 26 September 1980, Congress
short-lived. In amended present form, requires to its which 3304(a)(15) USC coordination, spec- that coordination only i.e., narrow amend- Despite in MCL the federal 421.27(f)(1). ified has never amended ment, Legislature the Michigan MCL 421.27 thus retains both broad 421.27(f)(5). We now address provisions. narrow coordination and interplay provisions. of those 312 466 304 Mich
Opinion
the Court
IV. PRINCIPLES OF STATUTORY INTERPRETATION
statutory
interpreting
When
our
language,
obliga-
may
tion is to ascertain the
intent that
legislative
rea-
sonably
inferred
expressed
be
from the words
in the
statute. Wickens v Oakwood Healthcare
System,
465
53, 60;
Mich
NW2d
(2001).
Legisla-
When the
conveyed
ture
unambiguously
has
in a
intent
stat-
ute,
speaks
itself,
the statute
judicial
and
con-
permitted. Huggett Dep’t
v
Natural
struction is not
Resources,
717;
711,
Mich
Courts
give
every
must
effect to
word, phrase, and
clause in
statute,
avoid
interpretation
must
that
render any part
would
of the statute surplusage
or nugatory. Wickens, supra at 60. Further, we give
statutory
undefined
plain
terms their
ordinary
Donajkowski,
supra at 248-249; Oakland
meanings.
Rd
Prop
Comm’rs v Michigan
Co
& Cas Guaranty
Ass’n,
V. ANALYSIS A. 421.27(f) INTERPRETATION OF MCL of Appeals Court determined that MCL controlled over MCL 421.27(f)(1): 27(f)(5) controlling We conclude subdivision with regard plaintiff’s to the coordination of retirement benefits. purpose Its was to government’s conform with the federal *8 v Ameritech Services^ Opinion of the Court uniformity
goal maintaining among pro- certain the state requirements grams regarding the coordination for unem- ployment compensation, purpose which would be defeated Michigan interpretations were to default to its own previous statutory provisions and, coordination under its in case, circumvent the clear result under subdivision plaintiff’s 27(f)(5) that coordination of benefits is not required.
Moreover, express statutory language mandates a 27(i)(5) conclusion that subdivision controls over subdivi- 27(f)(1). f(5) f(l) sion Subdivision was enacted after and provides: any provision “Notwithstanding other of this sub- [Emphasis original.] apply section . . . .” in To subdivision independently 27(f)(1) deny 27(f)(5) of subdivision plaintiff unemployment benefits is inconsistent with the interpretation result under federal law. Such an also creates inconsistency statute, contrary within the to the rules of statutory construing statutes, seeming construction. In provisions in inconsistencies the various should be recon- possible. ciled if [Citation omitted.] Accordingly, the Court of Appeals held that MCL exempted plaintiff’s from coordination.
The Court of Appeals failed to give every effect to word and phrase of MCL 421.27(f). While the court acknowledged phrase, “Notwithstanding any other provision of this in subsection” MCL 421.27(f)(5), it failed give effect to similar language MCL 421.27(f)(1), stating, any “notwithstanding inconsis- provisions tent of this act.” In addition, finding MCL 421.27(f)(5) controls over MCL 421.27(f)(1), Court rendered nugatory 421.27(f)(1), contrary interpretation. established rules of
We believe that of MCL language 421.27(f) clear and must unambiguous therefore be enforced as written. Huggett, supra 717; at 466
Opinion Court *9 Donajkowski, supra pro- at 248. MCL 421.27(f)(1) vides, pertinent part: in any provisions act, [Notwithstanding inconsistent of this weekly receiving benefit rate of each individual who is benefit,” will a in or receive “retirement as defined [MCL adjusted provided 421.27(f)(4)], subparagraph shall be as
(a) . . . . unemployment (a) pay- If and to the extent that benefits employer chargeable able under this act would be to an plan financing who has contributed to the of a retirement receiving under which the claimant is or will receive a yielding pro weekly equal retirement benefit a rata amount weekly larger to or than the claimant’s benefit rate as other- act, wise established under this the claimant shall not unemployment chargeable receive benefits that would be to employer [Emphasis under this act. added.] requires This text coordination where the claimant’s unemployment benefits are chargeable to the employer who contributed to the financing Thus, claimant’s retirement benefits. “narrow coordi- required any nation” is “notwithstanding inconsistent provisions of this act. . . .” requires
MCL on the other 421.27(f)(5), hand, necessary “broad coordination” where to conform to federal law: any provision Notwithstanding subsection, other of this any 31, 1980, begins week that after March and with respect receiving governmental to which individual is pension unemployment compensa- claiming or other
tion, weekly payable benefit amount to the individual reduced, zero, by for those weeks shall be but below prorated weekly any governmental the entire amount of or pension, pay, annuity, any other retirement or retired payment any previous other similar that is based on work only of the individual. This reduction shall be made it is if required against as a condition tax credit the tax for full imposed by act, chapter tax federal v Ameritech Opinion the Court of 1986, 26 USC revenue code C the internal subtitle of [Emphasis 3301 to 3311. added.] required provision the coordination broadens This only by compelling 421.27(f)(1) a reduction not MCL chargeable regard that the funds with regard employer but also with contributes, regardless any previous work,” on chargeable funds “based employer contributed the whether the requires 421.27(f)(5) coordi- such “broad MCL funds. necessary only to federal to conform when nation” law. Appeals analysis, contrary to the Court of
Thus, (5) 421.27(f)(1) inconsistent, are not but can always While MCL be harmonized. requires that the coordination *10 421.27(f)(5) employer chargeable MCL contributed, may require pension benefits on coordination of also previous such claimant’s work the basis of the if necessary to conform to federal broad coordination is law. pro- plain application language of these
Our nugatory. 421.27(f)(5) If does not render MCL visions require again Congress broad coordina- chooses prescribed in subsec- the additional reduction tion, triggered. 27(f)(5) That federal law does tion will be require presently not render the reduction does not compel 421.27(f)(5) nugatory the and does not MCL Michigan Legislature amend the statute. “LIQUIDATION”
B. THE MEANING OF apply 421.27(f)(5) the here,5 does not Because MCL required 421.27(f)(1) question whether MCL remains change 421.27(f)(5) applied, the result. it would not Even if MCL benefits, but, rather, Ameritech contrib- extended Plaintiff did not receive 466
Opinion the of Court plaintiff’s coordination of benefits. The Court of Appeals in dictum that even if MCL stated governed, require did it offset because did not receive a “retirement bene- meaning 421.27(f)(4)(a). fit” within of That provides: subdivision (4)(a) subdivision, used in As “retirement benefit” any type benefit, annuity, . . . that is:
mean a or of (i) employment as an Provided incident of under an plan, policy, agreement, including retirement established or security (5) federal if social subdivision is in effect.
(if) Payable to an individual because the individual has qualified age, length service, on basis of attained of or disability, whether or not the individual or was retired paid employment. Amounts to individuals in retired from liquidation private pension a course or retire- of of ment because termination or business fund of plant department employer the business involved shall not be considered'to be retirement benefits. [Emphasis added.] Appeals plaintiff’s pen-
The Court of determined that sion was anot retirement benefit within 421.27(f)(4)(a) liqui- of MCL because the fund was upon plaintiff’s dated termination when Ameritech City closed its Traverse office. This factual conclusion was erroneous!
Although City the Ameritech Traverse office was closed, the record does not reflect that the Random, liquidated. College fund was House Webster’s *11 Dictionary (2000) “liquidate” defines as “to settle or plaintiff. pension paid uted all to the benefits to Plaintiff did not receive any employer Ameritech, chargeable from other than the employer. Thus, if even federal law mandated broad coordination under implicated 421.27(f)(5), only MCL the facts of this case narrow coordi- required by already 421.27(f)(1). nation Koontz v Ameritech Opinion of the Court pay (a debt),” (accounts) order,” “to reduce to “to dis- by estate) apportioning (a business or solve (inventory, liabilities,” assets to offset the “to convert assets) get of, “to rid securities, cash,” or other into away esp. by up killing,” with,” “to break or do pertinent liquidate “to debts or accounts.” The more contemplate of an of these definitions the elimination entity or the abolition of all assets or accounts entire entity. liquidation involve such, within an As would pension distributing all its assets. the Ameritech fund employee’s single The distribution of a vested interest liquidation pension addition, is not a of the In fund. accept pension her could have elected to clearly monthly annuity, benefits as a which refutes Appeals the Court of conclusion that the fund had liquidated. been dissenting colleague
Our
maintains that we miscon-
by failing
meaning
421.27(f)(4)(a)
strue the
of MCL
to
“liquidation”
consider the entire sentence in which
appears.
attempts
ambiguity
generate
She
to
an
phrase “liquidation
private pension or retirement
of a
phrase
asserting
fund”
could refer
either
personal
or fund or to the
individual’s
account
reject
fund. We
the dissent’s view.
collective
phrase
in MCL
“liquidation.”
(a)(ii) hinges
discussed,
on the word
As
plain
requires
meaning of that term
distribution of
employees.
all
all
held
fund for
assets
“liquidate”
contends that the term
has
The dissent
may
many
interpreted
definitions, some of which
be
apply
account, such as that
to a sole
plaintiff.
ambigu-
belonging to
A word is not rendered
dictionary
merely
defines it
ous, however,
because a
ways.
Hampshire
variety
Upjohn
in a
Co v New
*12
Opinion of the Court
Ins Co,
197,
8;
438 Mich
n
208-209,
In the context of the statute, “liquidation” the term pertains multiple to accounts rather than to an indi- vidual account. The exempts statute from the cate- gory of “retirement benefits” those “paid amounts individuals in the course of liquidation private of a pension or retirement fund.” Therefore, the text con- templates that liquidation pertains multiple merely accounts and not the single account of an pensioner. individual In addition, liquidation must occur because of “termination of the business or of a plant department of the business.” Such a termina- tion would involve all employees within the business, plant, or department, merely not em- single ployee. Therefore, in accordance with the doctrine of noscitur a sociis, phrase “liquidation private of a pension or retirement fund” is not ambiguous; the lan- guage clearly refers to the distribution of all assets within the fund. Moreover, the dissent does not explain how the fund was liquidated where, as dis- v Ameritech
Opinion
the Court
have
to collect
could
chosen
above,
cussed
monthly annuity.
as a
her
asserts
dissent
Further,
421.27(f)(4)(a)
should
statute that we
is a remedial
plaintiff.
liberally
We do
favor
construe
statutory interpretation,
apply preferential rules of
*13
discovering
ambiguity and
an
however, without first
underlying
legislative
attempting
intent
to discern
ambiguous
1,Mich
Detroit,
Crowe v
words.
Only
inquiry
(2001).
fruit-
if that
NW2d 293
13; 631
produces
intent,
demonstration of
do
no clear
less, or
“dice-loading”
preferential
rule.6
a
or
we resort to
ambiguity
rule of
exists, the remedial
no
Because
apply.
preference
Id.
does
interpretation of
asserts that our
The dissent also
produces “unconscionable results.” It is
the statute
judiciary,
to second-
however,
not the role
policy
legislative
guess
Our
of a
choice.
the wisdom
interpret,
obligation
rewrite,
not to
is to
constitutional
apparently
Legislature
that
determined
the law. The
regardless of whether
result should obtain
the same
annuity
monthly
employee opts
or for a
for a
an
plaintiff
lump-sum payment.
had elected a
Here, if
annuity
lump-sum payment,
monthly
in lieu of the
no
question
have been ineli-
exist that she would
would
gible
benefits.
to receive
pension
plaintiff
accept her
chose to
Moreover,
relocating
another Ameritech
to
benefits instead
opportunity
plaintiff
had offered
office. Ameritech
employment
location,
in another
but
her
to continue
plaintiffs
payout
to do so. The
followed
she declined
Interpretation:
Courts and the
Scalia,
A Matter
Federal
See also
pp
NJ, 1997),
(Princeton,
27-29.
Law
Opinion of the Court decision to retire rather than relocate. While the dis- plaintiff sent contends that had no choice but to accept sup- her benefits, the record does not port Accordingly, this assertion. the condition set 421.27(f)(4)(a)(ii), providing excep- forth in MCL apply tion to the term “retirement benefit,” does not in this case. payment plaintiff
Thus, whether Ameritech’s was depends a “retirement benefit” on whether it was “a annuity, any type” payable benefit, qualified her [she] “because has on the basis of age length attained defining [or] . service ...” In Legislature “retirement benefit,” the has used words ordinary meaning, apply of common and and we them accordingly. Donajkowski, supra at 248-249;Oakland supra undisputed Co Rd Comm’rs, at 604. It is received a benefit on the basis of her age years of service. Thus, she received a “retire- contemplated ment 421.27(f)(4)(a). benefit” as in MCL *14 C. THE MEANING OF “RECEIVE OR WILL RECEIVE” Appeals The Court of stated, also in dictum, that plaintiffs even if distribution were a retirement bene- exempt fit, it was from coordination because “the Legislature did not intend the terms ‘receive or will 27(f)(1) § receive’ under to include the direct rollover of a fund to an ira ... .” The Court stated:
This construction of the statute is the most reasonable comports interpretations with the benefit of both the ua and the usdol. Mesc Interpretation Revised Benefit No. (November 29, 1995); 20.641 Unemployment Insur- Usdol Program ance 22-87, Letter Change (June 19, No. 1995). 1 In reaching conclusion, our we are mindful that the role of the judiciary judicial engage is not to legislation, but rather 321 Koontz v Ameritech Opinion of the Court by way Legislature. chosen
to determine
[Citation
incorporate
interpret
the statute
We decline to
omitted.]
clearly
requirements
adopted
any change that overrides
App
Legislature.
Mich
47.]
[239
impression
of first
in the
While this issue is one
unemployment compensation, it has been
context of
analogous
in the
context of
addressed
somewhat
compensation.
McLouth Steel Prod
White v
worker’s
Plymouth Twp,
Corbett v
ucts, decided sub nom
(1996).7In White,
NW2d 478
this Court
522;
Mich
418.354(1)(d),
construed MCL
of the Worker’sDisabil
ity
seq.,
Compensation Act, MCL 418.101 et
which
compensation
that worker’s
benefits be coor
directs
“[t]he
dinated with
after-tax amount of the
payments
being
retirement
received or
received . . . .”
employee
lump-sum pension
in White rolled his
question
an IRA. was whether the
distribution into
precluded
nature
the rollover transfer
nontaxable
payments with the
coordination of the retirement
compensation
This Court ruled in
worker’s
benefits.
rejected
employee.
favor of the
It
as “literalism” the
employer’s
employee
that the
“received”
contention
the transferred amount. This Court also stated
interpretation
language
was consistent with the
418.354(1)(d), limiting coordination to the
after-
pension:
tax amount of the
aspect
ira,
of a rollover into an
reason of the tax-free
By
and, hence,
“after-tax
there is no taxable event
no tax or
being
at
amount” that is “received or
received.” [Id.
547.]
Co,
Brewery
293, 304-305;
See,
Drouillard v Stroh
generally,
449 Mich
employer
lump-
(1995) (holding
could coordinate a
MCL compensa- tion counterpart of MCL 418.354(l)(d), but it lacks the “after-tax amount” language on which the White majority part. relied in question here is whether plaintiff “received” the transferred amounts. Random House Webster’s College Dictionary (2000) defines “receive” as “to take into one’s possession,” “to have (something) bestowed, conferred, etc.,” “to hold, bear, or contain,” and “to take, get, accept, or meet with something.” In light of these definitions, we conclude received her retirement benefits within the meaning of MCL 421.27(f)(1), notwithstanding precisely, 418.354(13) More defines “after-tax amount” as the gross remaining subtracting amount after the amount “which would have paid, any, been if . . under . state income tax and federal . income tax . . .” [Emphasis added.] *16 323 Koontz v Ameritech Opinion of the Court directly
fact that Ameritech transferred the funds into disagree dissenting colleague her IRA. We with our plaintiff that did not take the funds into her possession meaning dictionary within the of the defi- nition “receive.” The funds were transferred at plaintiff’s direction. She is able to withdraw the funds any at time and use them as she sees fit. Ameritech clearly upon plaintiff, plain- conferred the funds accepted by directing tiff those funds them into an Accordingly, inescapable account of her choice. it is plaintiff that ing received the funds. Because the dissent-
opinion following in White is reasoned, better that approach, plaintiff we conclude that “received” the distribution at issue within the of MCL 421.27(f)(1).9 Appeals,
Like the Court of the dissent would erro- neously elevate a construction from an extratextual unambiguous language source above the of the stat- repeatedly, may ute itself. As we have stated courts beyond not look the clear text of a statute to discover unexpressed legislative Valley intent. Sun Foods Co v (1999). Ward, 460 230, Mich 236; 596 NW2d Although generally this Court accords due deference agency charged executing to an administrative with 9 We overrule White to pres the extent that it is inconsistent with our holding. majority part ent statutory The White also in relied on the lan guage 418.354(l)(d) support “after-tax amount” in MCL of its decision. aspect correctly We do not decide whether that of White was decided because it is irrelevant to our determination in this case. concurring colleague overruling part Our asserts that inWhite is unnec- essary because, White, unlike the statute in the statute before us does not language. contain the acknowledge, “after-tax amount” He fails to how- ever, language, major- addition to the “after-tax amount” the White ity part “receive,” relied in on an erroneous definition of conditioned on question. concurring opinion, the taxable nature of the funds in there- fore, part upon reasoning majority overlooks which the in White based its decision. 466
Opinion by Cavanagh, J.
particular
grant
statute, we
no deference here be-
plain meaning
of the statute controls. “An
cause
agency
inteipretation
plain
cannot overcome the
meaning of a statute.” Consumers Power Co v Public
Comm,
148, 157, 8;
Service
460 Mich
n
VI. CONCLUSION 421.27(f)(1)required We conclude that MCL coordi- plaintiffs unemployment nation of benefits with her pension benefits. Plaintiff received a “retirement ben- 421.27(f)(1). efit” within the of MCL That required coordination, subsection whether or not the subject funds were to taxation at the time of their receipt. Accordingly, judgment we reverse the of the Appeals Court of and reinstate the decision of the judgment Board of Review and the of the circuit court. JJ., concurred with
Weaver, Young, Taylor, Corrigan, C.J. I J. concur with the result in this case Cavanagh, 421.27(f)(1) required plain
that MCL coordination of unemployment tiffs benefits with her bene separately reaching However, fits. I write because in necessary majority it is result, for the adopt approach the dissent’s from White v McLouth Plymouth Products, Steel decided sub nom Corbett v Twp, (1996), 522; 453 Mich 556 NW2d478 and to over Koontz v Ameritech Dissenting Opinion by J. Kelly,
rule White to the extent that it is inconsistent with today’s holding. White, In this Court construed MCL 418.354(1)(d) Disability Compensation of the Worker’s provided compensa Act which that worker’s (wdca), tion benefits be coordinated with “[t]he after-tax payments amount of the or retirement being (Emphasis added.) received or received . . . .” The White Court stated: adopt
The construction that we is consistent with the lan- guage statute, provides which for an offset “of the payments amount of the or retirement after-tax being employee received or (Empha- received . . . .” By added.) aspect sis reason of the tax-free of a rollover and, into an hence, there is no taxable event no tax or ira, “after-tax amount” being is “received or received.” [White, supra at 547.]
The instant case involves an bene- compensa- fits statute that is similar to the worker’s tion in White, statute but does not contain the “after- language. Although remaining language tax” similar, these statutes is it is not identical. The two clearly they materially different; statutes are contain language arguably different serve different purposes.
Because of the differences between statutes, these majority the does not need to address White. The clearly holding White Court stated that its was based language on the “after-tax” in the wdca statute it was construing. respectfully disagree majority’s IJ. with the Kelly, plaintiff’s unemployment compen-
conclusion that
sation benefits should be eliminated because she
has received retirement benefits as defined
the
466 Dissenting Opinion by
J.
Kelly,
Security
Employment
Michigan
MCL421.1
Act
(mesa).
statutory
seq.
majority
lan-
et
reads the relevant
despite strong
guage
unambiguous,
as
indications to
contrary.
entirety
It fails to consider the
of the
the
“liquidation”appears
sentence in which the word
interpretive
disregards
letters that define “receive.”In
doing,
majority
meaning
so
misconstrues
421.27(f)(4)(a).
Appeals
The Court
advanced
correct inter-
pretation.
holding
I
affirm
would
did
meaning
not receive a “retirement benefit” within the
unemployment compensation
of the act and that her
consequence.
benefits should not be eliminated as a
I. STATUTORY CONSTRUCTION
primary
construing
goal
When
is to
statute, our
give
Legisla-
ascertain and
effect to the intent of the
writing
ture in
it. Turner v
Club
Ass’n,
Auto
Ins
(1995).
judicial
22, 27;
Mich
interpretation usually
The MESA allows a claimant or eliminated where it to be reduced under 421.27(f)(1). receiving a, MCL “retirement benefit.” is annuity, pension or benefit, that term as “a It defines any payable type . . . individual was [when] . . . employment.” 421.27(f)(4)(a)(ii). MCL from retired expressly a retirement benefit act excludes as But the liq paid any to individuals “in the course amounts private pension or retirement fund of a uidation plant of the business or of a because of termination employer department of the business of or . . . .’’Id.1 involved plaintiff job case, lost her with defendant
In this
facility
where she
because defendant closed
question
retirement funds
is whether her
worked.
statutory
ben-
definition of “retirement
fall within the
exception.
efit” or within the
“liquidation
private pension
expression
of a
or
27(f)(4)(a)(ii)
§
a dis-
fund” in
could mean
retirement
pension
employer
all
monies that an
tribution of
employees.
all
Defendant here maintains
holds for
421.27(f)(4)(a) provides:
subdivision,
benefit,
As used in this
“retirement benefit” means
annuity,
any type
part
or
or that
thereof
is
subparagraph (b)
described in
that is:
employment
(i)
as an incident of
under an established
Provided
plan, policy,
including
agreement,
federal
social
retirement
or
security
(5)
if subdivision
effect.
qualified
Payable
(ii)
to an individual because the individual has
service,
disability,
age, length
whether
of attained
or
on the basis
employment.
or was retired from
or not
the individual
retired
private
paid
liquidation
in the course of
of a
Amounts
to individuals
of the business
or retirement
fund because of termination
employer
department
plant
of the business of the
or of a
benefits.
shall not be considered to be retirement
involved
The offers no port pertinent” its conclusion that the “more defini- “liquidate” contemplating tion of is that the elimina- corporate pension tion of all assets. The mere fact prefers that it this to a definition more favorable to bearing Legislature has no “liquidate” on what intended to mean. The varied definitions of the word leave room for reasonable minds to differ. It inescapable statutory language is that ambiguous.
2 It is not clear from the record whether defendant distributed retire employees facility ment funds to all in the it that closed. It is known that employees way five plaintiff. other were affected in the same as College See Dictionary (2001). Random House Webster’s v Ameritech Dissenting Opinion by J. Keiuy, majority’s interpretation, “hquidation” means distribution of all monies held all employees, produces unconscionable results. For example, “liqui- in this case, Ameritech would never by shutting date” all its fund monies down employee one or some Hence, of its facilities. no in plaintiff’s situation could ever collect example, benefits. As extreme if defendant dis- charged employees, all its it could distribute all but one dollar of the funds fund. Then, the liquidated major- fund would not have been under the ity’s reading because all the assets would not have doing, been distributed. In so defendant could reduce employees’ unemployment or eliminate all its bene- Legislature fits. The could not have intended the example. result either practical implications majority’s reading *21 27(f)(4)(a)(ii) enormously
§of are detrimental to employees plaintiff. plaintiff’s During hearing like Michigan Employment Security before the Board of manager Review, defendant’s human resources testi single pen fied that there is a common trust fund for Michigan sion monies to which both defendant and corpora Bell contribute. Absent closure of the entire tion and all funds, its whenever defendant facility, always escape paying shuts down one it will employees to the who worked there. majority by por- distorts the facts of this case
traying plaintiff’s acceptance of her as funds plaintiff jobs a choice. Defendant offered two other corporation. approxi- However, both were located mately plaintiff two hours from her residence. When declined them because the commute would be unrea- sonable, defendant distributed her retirement funds.
Dissenting Opinion by Kelly, J. option She did not have the them in to leave defen- obliged dant’s trust fund. She was to have them rolled paid monthly annuity.4 into an IRA to her in a It inis light of these facts defendant believes the funds liquidated meaning were not within the of MCL 421.27(f)(4)(a)(ii).
My
27(f)(4)(a)(ii)
keeping
§of
construction
is in
with the fact that the mesa
is a remedial statute. As
by principle,
liberally
such,
it should be
construed to
displaced employee. Empire
afford benefits to a
Iron
Mining Partnership v Orhanen,
410,
455 Mich
415-
(1997). My
416;
B. THE “IS PHRASE RECEIVING OR WILL RECEIVE” disagree majority’s rejection I also with the Appeals finding Court of within the that, 421.27(f)(1), the funds were not “received.” majority again, Once aside brushes reasonable interpretations than other its own and characterizes a unambiguous. word as
The facts of case show that did not possession take the funds into her within dictionary Instead, definition “receive.” defendant directly transferred the funds into an individual retirement ac c ount in her name. Appeals interpreted
The Court of decision “receive” by part relying interpretive on letters issued *22 4 any point during appellate proceed Defendant did not at the trial ing Accordingly, question contest this. there is no this Court reason for accuracy plaintiff’s required of assertion that she was see her retire supports ment funds distributed. record The the claim. 331 v Ameritech Dissenting Opinion by J. Kelly, Department
United States Labor and the (usdol)5 Employment Security Michigan Commission.6 Both employer conclude when that, transfers an employee’s retirement funds into an individual retire- employee ment account, the does not receive them purposes unemployment compen- of the relevant sation laws. majority ignores choosing
The
letters,
these
instead
to construct a definition of “receive” on the basis of a
opinion7
dissenting
dictionary
definitions. How-
long-established principle
ever, it is a
lawof
“
given
‘[t]he construction
to a statute
those
charged
duty
always
executing
with the
it is
enti-
respectful
ought
tled to the most
consideration and
”
cogent
not to be overruled without
reasons.’ Oak-
Superintendent
land Schs Bd Ed v
Inst,
Pub
401
(1977), quoting
37, 41;
Mich
from the administrative
provide
which
a reasonable construction of the statu-
tory language
purpose
consistent with the
and policy of the mesa. This Court should accord that
interpretation
due deference and hold that
Unemployment
Usdol
Program
22-87, Change
Insurance
Letter No.
(June 19, 1995).
6 Michigan Employment Security
Interpre
Commission Revised Benefit
(November 29, 1995).
tation No. 20.641
majority adopts
reasoning
opinion
dissenting
from the
Products,
Plymouth
White v McLouth Steel
decided sub nom Corbett v
Twp,
522;
(1996).
doing,
part
453 Mich
II. PUBLIC POLICY the correct inter- controversy regarding The here statutory of pretation of the definition “retirement by public the considering benefit” is best resolved provides: policy expressly declared the mesa. It insecurity unemployment due to is a serious Economic health, morals, people menace to the and welfare of the of Involuntary unemployment subject general this state. is requires legisla- interest and concern which action prevent spread lighten ture to and to its burden which so crushing upon unemployed often falls with force family, worker and his to the detriment of the welfare of people security requires protection of this state. Social Employers against this hazard of our economic life. should employment. system- encouraged provide be stable periods employment during atic accumulation of funds provide periods unemployment by setting benefits for aside of reserves to be used for the benefit unemployed through own, persons no fault of their thus power maintaining purchasing limiting the serious consequences assistance, public social of relief good, general people and the welfare of the of this state. [MCL421.2.] majority despite disregards part of the act public
the fact declaration of Legislature’s policy paramount importance. contained there is of position Plaintiff lost her with defendant as a result of facility defendant’s decision to close the where she worked. She had vested benefits that defen- prematurely. dant distributed and treated as hers employ- Had defendant offered reasonable ment, plaintiff could have left her Koontz v Ameritech Dissenting Opinion by J. Kelly, plaintiffs employ- Instead, undisturbed. it terminated prevented drawing unemployment ment and her from required paying benefits. It her to choose between her expenses living preseving current her retirement contrary explicit public policy monies, to the only plaintiff’s state. Defendant’s scheme exacerbated insecurity. economic
III. CONCLUSION Ambiguity statutory language exists in the 27(f)(4)(a) § of the mesa that defines a “retirement including paid benefit” as not an amount in the liquidation private pension course of of a or retire- Legisla- ment fund. The Court should ascertain the using expression by referring ture’s intent in that purpose underlying the stated of the MESA and the public policy. only With these in mind, the reasonable construction is one that defines a distribution made under the circumstances of this case as not constituting a “retirement benefit.” meaning subject differing of “receive”is also interpretations. construing reasonable In it, this Court meaning should defer to the that the state and federal agencies responsible administering unemployment compensation given majority ignores have to it. The principle, preferring a definition constructed from dissenting opinion dictionary definitions, which keeping plain it contends is in with the approach contrary the statute. This to the reason- interpretation by able advanced the administrative agencies purpose policy and to the of and the under- lying the mesa. The term should be construed as not directly inclusive of retirement funds transferred into an individual retirement account. 466
Dissenting Opinion Kelly, J. Appeals holding I would affirm the Court of unemployment compensation was entitled to under the mesa. part J., took no the decision of this Markman, case.