McCann v. State Dept. of Mental Health

• Citation: 247 N.W.2d 521,398 Mich. 65
• Decision Date: 23 November 1976
• Docket Number: No. 6,6
• Parties: John F. McCANN, Individually and d/b/a The Weekender, Plaintiff- Appellant, v. STATE of Michigan, DEPARTMENT OF MENTAL HEALTH and Traverse City State Hospital, Defendants-Appellees. 398 Mich. 65, 247 N.W.2d 521
• Court: Supreme Court of Michigan

Page 521

247 N.W.2d 521

398 Mich. 65 John F. McCANN, Individually and d/b/a The Weekender, Plaintiff- Appellant, v. STATE of Michigan, DEPARTMENT OF MENTAL HEALTH and Traverse City State Hospital, Defendants-Appellees.

No. 6.

398 Mich. 65, 247 N.W.2d 521

Supreme Court of Michigan.

Nov. 23, 1976.

Albert L. Holtz, Southfield, for plaintiff-appellant.

Milton I. Firestone, Thomas R. Wheeker, Lansing, for defendant-appellee.

RYAN, Justice (for reversal).

Plaintiff, John F. McCann, challenges the pretrial dismissal of his complaint against the State of Michigan and certain state agencies by the Court of Claims and affirmance by the Court of Appeals.

McCann was the owner of a weekly newspaper called The Weekender. In September 1970, the newspaper began publishing a series of articles and editorials questioning alleged unusual circumstances surrounding the death of a mental patient at Traverse City State Hospital. The articles, the complaint alleges, purported to raise the question of whether the patient expired through some sort of criminal activity, from gross negligence or negligent conduct by certain parties, or from natural causes.

Plaintiff alleges that, in response to these articles, certain hospital officials and employees engaged in a course of action in which they persuaded various business concerns to withdraw advertisement revenues from The Weekender, causing its financial ruin. The complaint alleges that the hospital officials and numerous lesser employees joined together and 'wilfully, wantonly, and maliciously, by persuasion, economic and social pressure, threats and innuendoes directed at claimant's customers, advertisers, and claimant himself, did attempt to cause the demise and destruction of The Weekender, and did request that said customers and advertisers refuse to do business with plaintiff's publication.' Plaintiff charges specifically that these hospital officials and employees did 'openly and covertly, by conversation, letter, telephone, and by any means available, attempt to cause almost every existing advertiser and customer to withdraw from The Weekender.' According to plaintiff, the campaign was successful, plaintiff's publishing concern was ultimately destroyed, and he experienced extreme anxiety, mental suffering and strain.

Plaintiff's complaint asserted claims based on interference with contractual relations, interference with prospective economic advantage, libel and slander, and prayed for compensatory and exemplary damages. The Attorney General filed a pleading entitled 'motion to dismiss' on behalf of all the defendants based on GCR 1963, 117.2(1), asserting that the plaintiff failed to state a claim on which relief could be granted, because the State and its agencies are immune from liability under the doctrine of governmental immunity. The Court of Claims granted the motion, stating in part:

'The Michigan Court of Claims is a court of limited jurisdiction and the State of Michigan having clearly retained its defense of sovereign immunity in this particular action assertion against it by the plaintiff this Court is simply without any power to afford plaintiff any relief by way of damages on the claim or claims asserted.'

The Court of Appeals affirmed the summary judgment stating:

'* * * By its terms, 1970 P.A. 155 immunizes the state and lesser political subdivisions from tort liability, subject to certain statutory exceptions, i.e., defective maintenance of roads and public buildings, negligent operation of motor vehicles, and actions which arise out of the government's engagement in a proprietary function. We would add to this list of legislative exceptions, two judicial exceptions which have continuing vitality: Actions grounded in nuisance, Buckeye Union Fire Insurance Co. v. Michigan, 383 Mich. 630, 178 N.W.2d 476 (1970), and actions which allege an uncompensated taking of property, Geftos v. Lincoln Park, 39 Mich.App. 644, 656, 198 N.W.2d 169 (1972).

'Plaintiff, however, has failed to fit himself within any of the exceptions to the doctrine of governmental immunity enumerated above. * * *'

The Court of Appeals apparently concluded that, because plaintiff had failed to plead facts which would constitute one of the exceptions it enumerated, he failed to state the elements of a cause of action in tort against the State or its agencies.

We reverse the summary judgment of dismissal and remand the matter to the Court of Claims for further proceedings.

I

It is axiomatic that the purpose of a motion for summary judgment based on GCR 1963, 117.2(1) is to test the complaint to see if the plaintiff has pled facts which support the elements of a cause of action. The scope of the examination is confined to the pleadings. See Pompey v. General Motors, 385 Mich. 537, 563, 189 N.W.2d 243 (1971); Professional Facilities Corp. v. Marks, 373 Mich. 673, 679, 131 N.W.2d 60 (1964).

To state an actionable claim against the state, a pleader must plead facts in the complaint, in Avoidance of immunity. ¹ This can be accomplished by stating a claim which fits within one of the legislatively or judicially created exceptions to governmental immunity, as enumerated in the Court of Appeals' opinion in this case, quoted above, or simply by pleading facts which otherwise demonstrate that the activity alleged is not activity 'in the exercise or discharge of a governmental function' under M.C.L.A. § 691.1407; M.S.A. § 3.996(107). Simply put, it must be demonstrated that the activity attributed to the state or its agencies does not fall within the ambit of immunity established by the Legislature in 1970 P.A. 155. ²

In the case at bar, in order for the courts below to grant the State's motion based on GCR 1963, 117.2(1), they would have had to find that the complaint, taken in the light most favorable to the plaintiff, failed to state facts in avoidance of immunity. We agree with the Court of Appeals that plaintiff 'has failed to fit himself within any of the exceptions to the doctrine of governmental immunity'. However, we find that the complaint alleges facts which, if proved, would justify a factfinder in concluding that the activity attributed to the defendants is not 'in the exercise or discharge of a governmental function' under the statute and for which the state and its agencies are not immune from liability.

II

The Legislature enacted the governmental immunity statute in response to the partial abrogation of the judicial version of that doctrine by the decision in Williams v. City of Detroit, 364 Mich. 231, 111 N.W.2d 1 (1961). See Thomas v. Department of State Highways, 398 Mich. 1, 10 fn. 4, 247 N.W.2d 530, 536 (1976). The statute, M.C.L.A. § 691.1407; M.S.A. § 3.996(107), reads:

'Except as in this act otherwise provided, all governmental agencies shall be immune from tort liability in all cases wherein the government agency is engaged in the exercise or discharge of a governmental function. Except as otherwise provided herein, this act shall not be construed as modifying or restricting the immunity of the state from tort liability as it existed heretofore, which immunity is affirmed.'

We held today in Thomas v. Department of State Highway, supra, that this statute requires us to resort to the common law for a definition of the phrase 'engaged in the exercise or discharge of a governmental function'.

Historically, the cases have tended to separate state activity into two categories: governmental functions and proprietary functions. E.g., Richards v. Birmingham School District, 348 Mich. 490, 83 N.W.2d 643 (1957); Martinson v. City of Alpena, 328 Mich. 595, 44 N.W.2d 148 (1950). These decisions, however, do not control the scope of our inquiry in every case because there are certain activities which do not fit into either category.

The Legislature has defined 'proprietary function', M.C.L.A. § 691.1413; M.S.A. § 3.996(113):

'* * * Proprietary function shall mean any activity which is conducted primarily for the purpose of producing a pecuniary profit for the state, excluding, however, any activity normally supported by taxes or fees. * * *'

The definition of 'governmental function' most frequently cited by Michigan courts is found in Gunther v. Cheboygan County Road Commissioners, 225 Mich. 619, 196 N.W. 386 (1923). Therein, this Court approved the following formulation of the test from Bolster v. City of Lawrence, 225 Mass. 387, 114 N.E. 722 (1912):

'The underlying test is whether the act is for the common good of all without the element of special corporate benefit or pecuniary profit. If it is, there is no liability, if it is not, there may be liability. That it may be undertaken voluntarily and not under compulsion of statute is not of consequence.'

See also Martinson v. City of Alpena, supra; Daszkiewicz v. Detroit Board of Education, 301 Mich. 212, 3 N.W.2d 71 (1942); Johnson v. Ontonagon County Road Commissioners, 253 Mich. 465, 235 N.W. 221 (1931).

The defendants in this case assert that because the operation of Traverse City State Hospital constitutes the exercise or discharge of a governmental function, plaintiff has failed to state a cause of action against the State. Although it is true that we have held generally that hospitals operated by the State or its political subdivisions are engaged in a governmental function, see, e.g., Martinson v. City of Alpena, supra, this does not decide the question at bar. It is not true, of course, that a lawsuit against the state will not lie simply because the defendant is a state agency. We look to the facts pleaded in the complaint to determine whether the specific tortious activity alleged against the state or its agencies is within the protection of the immunity doctrine.

We turn now to the specifics of the complaint here in question.

In passing on a motion for summary judgment, we are obliged to examine the pleadings in the light most favorable to the party opposing the motion. In this case, plaintiff has...