*1 MIRAC, PHILLIPSv INC January 16, 2002, Lansing. June Docket No. 227257. Submitted Decided 7, 2002, appeal sought. at 9:05 A.M. Leave to Margaret Phillips, personal representative Regeana as estate of Hervey, brought Saginaw against D. an action in the Circuit Court Mirac, Inc., alleging by § the defendant under 401 of the Code, 257.401, Mchigan Vehicle MCL as owner of a rental car parties involved the decedent’s fatal automobile accident. The any recovery by plaintiff agreed damages to limit to not less $150,000 $250,000. than A and not more than returned a $900,000 plaintiff. court, Leopold Borrello, J., verdict for the P. $250,000judgment plaintiff, ruling entered a for the that subsection recovery 401(3) limits from the owner of a motor vehicle —which period thirty days injury $20,000 for a leased of or less to for the or person any $40,000 injury death of one one accident or for the persons any death of two or more one accident in the absence of negligence leasing in the of the motor vehicle—violates state con- rights jury trial, equal protection, process. stitutional and due appealed. The defendant Appeals The Court of held: damages cap 401(3) 1. The of subsection does not violate the guaranteed 1963, 1, § trial as Const art 14. The Legislature power modify has the to abolish or common-law and statutory rights and remedies. If the can abolish a cause action, necessarily of it follows that it can limit the recov- damages cap erable for the cause of action. The in subsection way 401(3) in no removes from the the determination of the injured facts and of the amount of that Rather, 401(3) simply incurred. subsection limits the amount of damages that can be recovered from a lessor of motor vehicles. damages cap 401(3) equal 2. The of subsection does not violate protection guaranteed by 1963, 1, as § Const art 2. The classifica- 401(3) rationally tion schemes created subsection are related to legitimate government purpose, i.e., assuring oper- the continued by protecting large jury ation of the car rental business it from awards. damages cap 3. The of subsection does not violate due process guaranteed by of law as Const art 17. The test to legislation passes determine whether constitutional muster under
Opinion the Court Equal Process Clause and the Protection Clause is essen- Due tially the same. entry judgment Reversed and remanded for of a consistent with Appeals opinion. the Court dissenting, damages cap stated subsection J., Meter, *2 trial under violates to a the state constitution. trial The constitutional to a extends to the determination fixing damages damages. of The the amount if not of statutory cap. damages must to conform court reduce to the unconstitutionality finding be The trial court’s of should affirmed. Right — — — — Liability Jury Automobiles Owners’ Lessors to Trial — Equal Due Protection Process. liability in the owners statute of limitation recoverable $20,000 injury a to from a lessor of motor vehicle for the or death any injury person $40,000 of one in one or for or death accident persons any of one two or more in accident where the lease is for a thirty days period negligent or less and the lessor was not leasing rights of motor vehicle does not violate under the state equal trial, protection, process constitution and due (Const 2, 14, 17; 257.401[3]). art §§ MCL Trogan & Trogan, (by P.C. Nicholas R. Trogan, III), plaintiff. for the & Cooney,
Plunkett (by PC. Ernest R. Bazzana and Hans H. J. Pijls), for the defendant. Gage, P.J., JJ.
Before: Meter, and Hoekstra In this appeal, we must determine Hoekstra, statutory cap whether the on recoverable set forth in MCL 257.401(3) violates the Consti- Michigan provision tution. This a plaintiff’s recovery limits an action a against vehicle, lessor aof motor absent negligence bodily the lessor, injury when or death an occurs from a involving accident motor vehicle thirty days leased for or less. We find that the dam- ages cap provision of MCL does not violate 257.401(3) party’s a rights jury trial, equal protection, to or to due process law, under the Constitu- Michigan tion. Consequently, we hold that the statute is consti-
Opinion of the Court statute the trial court found the tutional. Because and remand. unconstitutional, we reverse HISTORY I. FACTS AND PROCEDURAL an automobile accident This action arises from Regeana 1997 that resulted in the death of October Hervey, passenger in the automobile driven Diane rented the automobile Da-Fel Reed. Reed had thirty days period in the accident for a involved doing business as Mirac, Inc., less from defendant Enterprise Margaret Phillips, who Rent-A-Car.Plaintiff personal representa- is the decedent’s mother and the this action estate, tive of the decedent’s commenced against on the of owner’s defendant1 basis Michigan under 401 of the Motor Vehicle Code parties stipulated MCL257.401.The that under (mvc), responsible for Reed’s law, defendant is operation authorized of the rented automobile. Plain- *3 negligent allege tiff did not that defendant was leasing the automobile to Reed. jury
A trial commenced in November and the jury plaintiff.2 a returned verdict favor of Both plaintiff presented entry and defendant orders for of entry judgment. sought judgment for Plaintiff of plus statutory $250,000, interest, fees, costs, and entry sought judgment $20,000, of for while defendant 1 Reed, jury negligent, Plaintiff also sued who the found but Reed is not party appeal. to this 2 ironically, regarding Interestingly, and that matter verdict for plaintiff’s damages $900,000. However, before the rendered its was verdict, parties, including plaintiff, herein, defendant and the driver of Reed, automobile, “high-low” agreement. agreement entered into a The plaintiff’s placed $150,000 $250,000 minimum and maximum on recov ery, subject pursuant agreement 257.401(3). The to reduction to MCL plaintiff entry will not seek stated that Reed is uncollectible and that against any judgment Reed on verdict. 589
Opinion of the Court pursuant 257.401(3) (subsection [3]), plus to MCL 401 argument interest, fees, and costs. After oral concerning constitutionality statutory cap 401(3), on recoverable in subsection the trial provision court determined that this is unconstitu- tional under the Constitution because it vio- rights equal protection, lates the to a trial, and process. April due Thus, on 26, 2000, the trial court judgment entered in favor of in the amount plus appeal of $250,000, interest, fees, and costs. This ensued.
H. STANDARD OF REVIEW
constitutionality
question
of a statute is a
law that this Court reviews de novo. Tolksdorf v
(2001);
464
Griffith,
1, 5;
Mich
m. ANALYSIS appeal, On defendant maintains that the trial finding court’s that subsection violates a party’s rights equal protection, trial, to *4 process 401(3) to due of law was error. Subsection provides pertinent part: in
Opinion of the Court lessor, agent, negligent Unless the or his or her was leasing vehicle, of the motor the lessor’s under $20,000.00 bodily this subsection is limited to because of injury person any to or death of 1 1 accident and $40,000.00 bodily injury because of to or death of or more any persons 257.401(3).] 1 accident. [MCL constitutionality challenge to the of this cap question impression. raises of first
A. RIGHTTO TRIALBYJURY challenged court, In the trial first the dam- ages cap provision 401(3) claiming of subsection that the statute violates the under the Specifically,plaintiff Constitution to a trial. main- appeal, tained, and continues to maintain on that sub- 401(3) plaintiffs right section interferes with the to Legislature have the may assess and that the away” right. According plain- not “whittle this Legislature, enacting provision, tiff, the this has jury’s damages, circumvented the award of which by jury, “hollows and eviscerates the to trial rendering thus its existence one of mere form, and not substance.” contrary,
To the defendant contends that subsec- 401(3) tion is constitutional because it constitutes a legitimate Legislature’s valid and exercise of the police power. particular, argues defendant that sub- 401(3) section does not violate the authority because the has the to abolish modify rights they remedies, whether are based on common law or statutes. Defendant further argues 401(3) impinge that subsection does not on jury’s right to determine facts; rather, subsection merely legal consequences limits the *5 591 v Opinion Court jury’s finding. statutory According defendant, dam- caps constitute a ages legal, factual, rather than deter- subject mination and therefore are not to the right to jury a trial. our Michigan, guarantees constitution the right jury
to a
trial. In
part,
relevant
the Michigan Constitu
provides
tion
by jury
that
of trial
right
shall
“[t]he
remain, but shall be waived in all civil cases unless
by
parties
demanded
one of the
pre
the manner
1963,
scribed
law.” Const
art
14.3
1,
First, we
§
note that defendant does not challenge that the right
jury
to a
trial extends to an action under the civil lia
4
bility
et
act of the
MCL 257.401
Ftirther,
seq.
MVC,
Michigan
right
to a
trial includes the right to
have the
assess damages. See Woodv DAIIE, 413
Mich 573, 583-584;
Opinion of the Court plaintiff’s right does not on a provision impinge jury trial for two reasons.5 power or
First,
our
has the
to abolish
modify
rights
common-law and
and reme-
provides
dies. The
Michigan Constitution
“[t]he
force,
common law and the statute laws now in
not
constitution,
to this
shall remain in force
repugnant
they expire by
limitations, or
until
their own
are
art
changed,
repealed.”
amended
Const
7;
Alpena
Donajkowski
Co,
see
Power
*6
243,
14;
n
Nor do we believe that at the time the Constitution *7 of 1963 adopted, was the prohibit intent was to the Legislature from addressing appropriate A damages. number of Michigan statutes at provided, that time and continue to provide, for double or treble damages See, civil actions. e.g., MCL 230.7 (providing treble damages injuries for to bridges); MCL (pro- 429.103 viding double the amount of damages sustained breach contract of sale for Michigan wheat). Although these statutes increase, rather than decrease, the amount damages awarded, they nonetheless mod- ify jury the award. Such increases in damages demon- App 251
594 586 Opinion the Court jury strate that a defendant’s to have a assess right damages legislatively can be altered. Second, subsection does not 401(3) right violate jury trial because it does not on the impinge jury’s by jury to decide In right Michigan, cases. encompasses jury to have a hear a claim and determine issues of fact. Great Lakes Gas Trans- Partnership mission Ltd v Market, 226 Mich App 127, 132; 573 NW2d damages cap 61 in subsec- 401(3) way tion in no removes from the determination of facts and of the damages amount of injured plaintiff that the Rather, incurred. subsection simply 401(3) limits the amount of those damages 6 that can be recovered from a lessor of vehicles. words, only other subsection 401(3) legal limits the consequences Kirkland, jury’s of the See finding. supra 469. Once the has reached verdict, its merely the trial court enters a on the ver judgment See Heinz v Chi dict that is consistent law. with the cago Co, Rd Investment 289, 299-300; 47 (1996) (statute NW2d that a requiring damage award be reduced amount a receives from a collateral source does not violate the trial).7 Again, agree we with the 401(3) recovery damages Subsection does not limit the if the lessor negligent, was nor does it affect the to collect from other tortfeasors. inapplicable Heinz, supra, The trial court found which held that the jury’s collateral-source rule codified MCL 600.6303 did not alter the damages, simply recognized plaintiffs assessment of but that were compensated already part damages, for of the because “there was no stat utory jury’s ability plaintiffs damages.” limit on the to assess the We dis agree. Here, Heinz, jury’s ability like in there is no limit on the plaintiffs damages; rather, merely provides to assess a subsection recovery specific party, from a the lessor of vehicle specific period, amount, leased for a is limited to a certain not that the *8 Phillips Mirac,
Opinion of the Court conse- Idaho, legal that Supreme Court “[t]he jury’s are a matter for effect of a verdict quences and passing (by and the courts legislature (by laws) to the facts as found those laws applying Kirkland, supra at 469. jury).” 401(3) we hold that subsection reasons, For these by jury to trial as right guaran- does not violate the art Michigan Constitution, 1963, 1, Const teed 14. EQUAL B. PROTECTION in the trial court the dam- challenged Plaintiff also of subsection on the basis ages cap provision 401(3) under the Constitu- Michigan that it violates main- equal protection. Specifically, plaintiff tion to tained, appeal, and continues to maintain on that the scrutiny applies strict review standard because the fundamental trial is involved. Under this concludes that subsection standard, equal protection violates because defendant prove cap compel- cannot that the serves a interest. Plaintiff in the ling concludes, alternative, that the statute cannot survive the substantial rela- tionship test and also “flunks” the rational basis test. contends, contraiy, Defendant to the that subsection equal protection it 401(3) does not violate because rationally purpose related to the the via- protecting bility the automobile rental business in Michigan. guarantees Constitution person equal protection: shall be denied the “[n]o equal protection of the laws.” Const art 2.§ may may higher damages that be recoverable not assess a amount of from tortfeasors.
Opinion of the Court
guarantee requires
persons
“This constitutional
*9
similarly
Wysocki
situated be treated alike.”
v Felt,
App
(2001).
248 Mich
346, 350;
Here, the does not create an suspect classification, nor is the fundamental implicated, explained as above, and thus scrutiny required. reject plain- strict is not Thus, we scrutiny appropriate. tiff’s contention that strict is heightened scrutiny Nor is the of the substantial rela- tionship necessary. test In other cases, this Court has held that classification schemes created various legislation legisla- tort reform are social or economic subject Wysocki,supra tion to the rational basis test. at 366;Stevenson v Reese, 239 Mich 513, 517; 609 (2000); supra supra NW2d 195 Neal, 718; at Heinz, Phillips Mirac,
Opinion Court question the statute in fails into that cat- 300. Because applied. the rational basis test must be egory, recently explained Court has Supreme Our rational basis test: uphold review, legislation
Under rational-basis courts will rationally long legislation legiti- as as that is related to a purpose. prevail government highly mate To under this def- review, challenger erential standard of must show that “arbitrary wholly legislation in a rational is unrelated way objective A to the of the statute.” classification passes if reviewed on this basis constitutional muster by any legislative judgment supported facts, set of either reasonably assumed, which even if such known or could be may facts be debatable. Rational-basis review does not test wisdom, need, appropriateness legislation, or with whether the classification is made “mathematical *10 nicety,” inequity or even whether it results in some when put practice. Rather, presumed is constitu- into statute heavy party challenging tional, it burden of and the bears presumption. [Crego, supra (cita- rebutting at 259-260 that omitted).] tions present case, plaintiff
In the failed to overcome the constitutionality. presumption brief, plaintiff her lobby essentially asserts that the automobile rental duped problem into that a believing industry jury- regarding large existed within the determined awards in cases and negligence industry legislative protection needed operation the continued of these busi- order to ensure problem actually Michigan, nesses in when fact no Whether with this assertion is not agree existed. we “wisdom, appropri- the issue before us. The need or for us to decide. legislation” ateness of the is not only at 260. we must determine Crego, supra Rather, which could rea- “any facts, if set of either known or Mich Dissent Meter, sonably supports Legislature’sjudg- be assumed” Crego, supra legis- ment. at 259-260.We find that this passes reasonably lation that test because it can be Michigan legitimate assumed that has a interest in the operation continued of automobile rental businesses, protecting large damages those businesses from relationship awards in trials bears a rational 401(3) rationally that end. Because subsection is legitimate government purpose, related to a it sur- vives rational basis review and is constitutional. No Equal violation of the Protection Clause exists here.
C. DUE PROCESS Finally, challenges appeal defendant on the trial holding damages cap court’s that the violates the Due Process Clause of the Constitution, which provides person deprived that no shall “be of life, lib- erty property, process without due of law.” Const 1963, art 1, 17. Because the test to determine legislation passes whether constitutional muster Equal under the Due Process and Protection Clauses essentially supra same, Doe, at 682, 36; n Shav- Attorney ers v General, 612-613; 267 (1978), NW2d 72 subsection does not violate process. due entry judgment
Reversed and remanded for con- opinion. sistent with this We do not retain jurisdiction.
Gage, P.J., concurred.
(dissenting).
respectfully
J.
I
dissent
Meter,
damages cap
257.401(3)
because I believe the
in MCL
right
by jury
guaranteed by
violates the
to trial
as
the
v
.
by
Dissent
Meter,
Michigan
the trial court’s
I would affirm
Constitution.
unconstitutionality.
finding of
by
right
“[t]he
of trial
constitution states that
Our
civil cases
shall be waived
all
remain,
shall
but
by
parties in the manner
one of the
unless demanded
by
prescribed
1963,
1,
art
14. The
law.” Const
right
particular confers a
statute in
owner’s
provides
damages
jury,
actual
because it
for
trial
an action at law at the time the
and it constituted
adopted.
Band,
See Anzaldua v
1963constitution was
(1998).
538-539,548;
Mich
578 NW2d306
Michigan,
right
to the
In
the
trial extends
Leary
damages.
e.g.,
See,
Fisher,
determination of
Equico
(1929),
Les-
574, 578;
tion’s outcome appears case to me rather clear: Because our consti- by jury, and because the tution confers to trial by jury to trial extends to determi- cap damages, in the instant nation of if court Indeed, the trial case is unconstitutional. automatically reduce the amount of must cap, to the to conform assessed *12 600 251 by Meter, J. Dissent “fix[ing] damages” then the is not the amount of required by Leary. as See id. majority
The
contends that because the
provides
Constitution
that “[t]he common law and the
repugnant
statute laws now in force, not
to this con-
they expire by
stitution, shall remain in force until
changed,
their own limitations, or are
amended or
repealed,”
Legislature
see Const 1963,
3, 7,
art
impose statutory
caps.
majority
free to
The
Legislature
states, “Where the
can abolish a cause of
necessarily
action, it
follows that it can limit the dam-
ages recoverable for the cause of action.” Ante at 592.
argument
The fatal flaw with this
is that the existence
particular
many
of a
cause of action, at least in
by
Many
instances, is not mandated
the constitution.
Legislature,
causes of action are creatures of the
Legislature
therefore the
is free to abolish these
causes of action. The
trial, on the other
hand, is indeed mandated
the constitution, as dis-
Accordingly,
Legislature
cussed earlier.
is not free
abrogate
right.
to
Legis-
this
In
words,
other
while the
may
away
given, may
lature
take
what it has
it
not
away
given.
take
what the constitution has
Support for this rationale can be found in
v
Sofie
Corp,
Fibreboard
112 Wash
2d
651-652; P2d
(1989),
amended
power, however, has limits: it upon must not encroach con- protections. stitutional case, by denying this litigants an jury [by way essential function of the damages caps], of Legislature has exceeded those limits. Dissent Meter, . . of . Because the constitutional nature of the to trial, litigants simply have a continued interest it —it by legislative long as the be cannot removed action. As litigants cause action continues exist and the have jury, long access to a access remains as as the cause action does. [Emphasis added.] Similarly, long I believe that here, as as a cause of action statute, remains under the owner’s liti- *13 gants jury damages, are entitled to trial on and this jury having entails the determine the amount of Leary, damages. supra at 578. majority alternatively contends that the dam-
ages cap 401(3) in subsection does not violate the by jury cap damages trial to because . . “[t]he . way jury in no removes from the the determination of injured damages facts of and the amount of that the majority incurred.” Ante at 594. The states simply that “subsection limits the amount of damages those that can be from a recovered lessor of again, fatally logic vehicles.” Ante at Once 594. this is Indeed, flawed. ing in a case such one, as the instant hav- jury the . . . “determin[e] [the] facts . . . the injured plaintiff damages of amount that the incurred” arbitrarily reducing pre- but then this amount to statutory jury’s scribed number renders the function illusory.1 purely Sophie, supra noted in As at 655: Respondents damages also contend that the limit affects only judgment court, jury’s the entered as not the argument finding ignores of fact. This the constitutional magnitude jury’s fact-finding province, including its case, plaintiff option, I in the note that instant does not have the as majority suggests, recovering tortfeasors,” damages of from “other negligent plaintiff’s of because the driver the automobile which dece passenger dent was a is not collectible and was uninsured. App by Meter, Dissent essentially say- Respondents damages. are
role to determine by jury invaded if the is not ing that the go unheeded when the facts which allowed to determine lip argument pays judgment. ser- its Such an court issues institution its but robs the vice to the of form of rights will not construe constitutional This court function. [Emphasis a manner. such added.] adopted neighbor was our A similar rationale Trial Academy in State ex rel Ohio state, Ohio, 484-485; 715 86 Ohio St 3d Lawyers Sheward, stated, in which the court stat- NE2d 1062 (1999), “[A] the amount of that allows the to determine ute the liti- to be awarded but denies punitive damages no of that determination stands on the benefit gant precludes than one that footing better constitutional first the determination making from instance.” may jury’s lower a
While it is true that a trial court under the doctrine of determination remittitur, type diminution, this unlike one cap, does occurs as a result of a jury’s illusory. Indeed, in cases of not render the role *14 may jury’s the determination remittitur, a court lower law determin- only of as a matter damages after of unsupported by the evidence ing that the award is 221 Brown, v Szymanski introduced at trial. See By contrast, NW2d 212 App 423, 431; 562 solely a reduction cap mandates damages that a fiat, notwithstanding because of legislative may supported be damages much amount of greater in at trial.2 As noted by the evidence introduced Sophie, supra at 654: case, jury damages in the amount of I in this the found note that $250,000
$900,000, of an reduced to because and this amount was by Meter, Dissent
[Rjemittitur wholly power judge. is within the of the trial doctrine, judge guidelines Within the the makes the legal jury’s damage finding high. the conclusion that is too judicial judicial finding This at with care —is fun- —arrived damentally imposed legislatively different from “remitti- operates automatically. tur” that . . . is, effect, judge’s use of remittitur the result of a
legal jury’s unsup- finding the conclusion that of ported by the evidence. The make cannot such case-by-case Therefore, legislative determinations. the dam- fundamentally ages limit is different from the doctrine of remittitur. required
In the instant the case, statute at issue the arbitrarily trial court to reduce the amount of dam- by any ages awarded the without determination regarding supported by whether the award was the necessary judicial component evidence at trial. The discretion eviscerated, was and the constitutional by right to trial was violated.
In sum, I conclude that because art 14 of our guarantees jury, constitution to trial and right Michigan because this includes the damages, have the determine the amount of see Leary, supra 257.401(3) 578, MCL must be deemed Galayda Hosp unconstitutional. I note that in v Lake Systems, Inc, 427; St 71 Ohio 3d 644 NE2d Supreme (1994), Court of Ohio ruled that a stat- any mandating ute future awards in paid periodic pay- excess of $200,000be a series by jury ments violated the constitutional to trial deprived it because the full value of parties agreement “over/under” into trial. entered before This dimi- acceptable nution of the was it resulted verdict because from an freely parties. voluntarily by agreement entered into *15 586 251 604 by Meter, Dissent on the interest available by reducing jury’s award following: emphasized award. The court right in this that the of trial is well established It guaranteed right substantial a fundamental and state is in that is the . . . Included the Ohio Constitution. fact, including questions determine all to have a plaintiff is entitled. damages to which the [Id. amount of 425.] a plaintiff a similarly guarantees if depriving respect damages,
with violates the constitu- jury’s on a award of interest arbitrary surely then an jury trial, tional violates the $20,000 award to $250,000 of a reduction trial.3 right to
I would affirm.
Products,
Inc,
62, 78-82;
Or