Coal. Protecting Auto No-Fault v. Mich. Catastrophic Claims Ass'n

• Decision Date: 25 August 2016
• Docket Number: Docket No. 314310.
• Parties: COALITION PROTECTING AUTO NO–FAULT v. MICHIGAN CATASTROPHIC CLAIMS ASSOCIATION (ON REMAND).
• Court: Court of Appeal of Michigan — District of US

317 Mich.App. 1

894 N.W.2d 758

COALITION PROTECTING AUTO NO–FAULT

v.MICHIGAN CATASTROPHIC CLAIMS ASSOCIATION (ON REMAND).

Docket No. 314310.

Court of Appeals of Michigan.

Submitted Nov. 9, 2015, at Lansing.

Decided Aug. 25, 2016.

Kerr, Russell and Weber, PLC, Detroit (by Joanne Geha Swanson ), Sinas, Dramis, Brake, Boughton & McIntyre, PC, Lansing (by George T. Sinas ), and Noah D. Hall for plaintiffs.

Dykema Gossett PLLC (by Lori McAllister, Lansing, Joseph K. Erhardt, Jill M. Wheaton, Ann Arbor and Courtney F. Kissel, Bloomfield Hills) for defendant.

Before: OWENS, P.J., and BORRELLO and GLEICHER, JJ.

BORRELLO, J.

ON REMAND

Following oral argument, on October 16, 2015, our Supreme Court, in lieu of granting leave to appeal, vacated in part this panel's decision in Coalition Protecting Auto No–Fault v. Mich. Catastrophic Claims Ass'n., 305 Mich.App. 301, 852 N.W.2d 229 (2014). The Supreme Court vacated that portion of this Court's opinion "holding that MCL 500.134(4) does not violate art. 4, § 25 of the Michigan Constitution." Coalition Protecting Auto No– Fault v. Mich. Catastrophic Claims Ass'n.,

498 Mich. 896, 870 N.W.2d 70 (2015). The Court remanded the matter to this Court for "reconsideration of this issue," and further directed this Court, on remand, "to decide the issue whether the [Michigan Catastrophic Claims Association (MCCA) ] is a 'public body' subject to the Freedom of Information Act [FOIA], MCL 15.231 et seq., under MCL 15.232(d)." Id. Specifically, our Supreme Court instructed this Court on remand to

[c]ompare MCL 15.232(d)(iv ) (a "public body" includes "[a]ny other body which is created by state or local authority") and League Gen. Ins. Co. v. Mich. Catastrophic Claims Ass'n., 435 Mich. 338, 351, 458 N.W.2d 632 (1990) (holding that the MCCA is not a "state agency" but a "private association"); see also 1988 PA 349, § 2 (providing "legislative intent" pertaining to the status of the MCCA). The Court of Appeals shall then reconsider whether MCL 500.134(4) violates art. 4, § 25 in light of its resolution of that issue. [Id. ]

Our Supreme Court denied leave to appeal in all other respects. Id. For the reasons set forth in this opinion, we hold that the MCCA is a public body for purposes of FOIA, that the enactment of MCL 500.134(4) did not violate Const. 1963, art. 4 § 25, and that the MCCA's records are exempt from disclosure under MCL 500.134(4) and (6)(c).

I. BACKGROUND

As discussed in this Court's prior opinion, the appeal in this matter arose from the request of plaintiffs—the Coalition Protecting Auto No–Fault (CPAN), the Brain Injury Association of Michigan, Inc. (BIAMI), and several individual plaintiffs—to inspect certain records of defendant, the MCCA, under FOIA.

Explaining the origins of the MCCA, this Court noted:

The MCCA was created by the Legislature to protect no-fault automobile insurers from catastrophic losses arising from their obligation to pay or reimburse no-fault policyholders' lifetime medical expenses. [League Gen. Ins., 435 Mich. at 340–341, 458 N.W.2d 632 ]. As a precondition to writing no-fault insurance in Michigan, every insurer must be a member of the MCCA. MCL 500.3104(1). Member insurers are required to pay annual premiums to the MCCA, MCL 500.3104(7), and in turn, the MCCA indemnifies its members for their "ultimate loss sustained under personal protection insurance coverage in excess [of a fixed statutory amount,]" MCL 500.3104(2). [Coalition Protecting Auto No–Fault, 305 Mich.App. at 304, 852 N.W.2d 229 (second alteration in original).]

The factual underpinnings of this appeal began in 2011 with CPAN initiating a FOIA request, asking the MCCA for "information concerning 'all' open and closed claims 'serviced by' the MCCA." Id. Included within the information requested by CPAN were "the ages of claimants, the dates of injuries, when claims were closed, and the total amounts paid." Id. The MCCA declined CPAN's request, asserting that it was " 'expressly exempted from FOIA requests' by MCL 500.134," specifically citing MCL 500.134(4) and (6)(c). Id. at 304–305, 852 N.W.2d 229.

Shortly thereafter, CPAN initiated a lawsuit against the MCCA seeking to compel the disclosure of the previously requested and denied information. Concurrently, BIAMI and the named individual plaintiffs filed a separate lawsuit against the MCCA after the MCCA denied a request for information similar to that of CPAN. The cases were consolidated pursuant to a stipulation by the parties, and CPAN was permitted to file an amended complaint. Id. at 305, 852 N.W.2d 229.

Although CPAN alleged four counts in its complaint, for purposes of this remand we need only address CPAN's assertion that MCL 500.134"violated Const. 1963, art. 4, § 25, because the statute amended FOIA by exempting the MCCA from FOIA without reenacting and republishing FOIA." Coalition Protecting Auto No–Fault, 305 Mich.App. at 305, 852 N.W.2d 229. The MCCA filed a motion for summary disposition pursuant to MCR 2.116(C)(8) and (10). CPAN filed a cross-motion for summary disposition under MCR 2.116(I)(2).¹ The trial court granted partial summary disposition in favor of CPAN, BIAMI, and the individual plaintiffs under MCR 2.116(C)(8), denying the motions "to the extent they sought disclosure of information concerning individual claimants."

Coalition Protecting Auto No–Fault, 305 Mich.App. at 306, 852 N.W.2d 229. The trial court denied the MCCA's motion for summary disposition. Specifically, the trial court held

that the MCCA was a "public body" for purposes of FOIA because the MCCA was "created entirely by statute." The court concluded that MCL 500.134 did not exempt the MCCA's records from FOIA, stating:

MCL 500.134 does not contain any specific references regarding information exempt from disclosure.

Secondly, the plain language of section (4) ... does not indicate that the legislature intended for a "whole sale" carve out exemption of all MCCA records because there is a general cross reference to MCL 15.243 (A record of an association or facility shall be exempted from disclosure pursuant to section 13 of the freedom of information act ....[ ) ] The fact that the Legislature used the phrase "pursuant to section 13" of FOIA, rather than specifically indicating that all MCCA records are exempt under 15.243(d) ... tends to show that the Legislature intended for information to be exempt from FOIA only if such information came within one of the specified exemptions in MCL 15.243. [Id. at 306–307, 852 N.W.2d 229.]

The trial court also found that the MCCA's records were subject to disclosure pursuant to alternate theories raised by CPAN and BIAMI, which we need not address in this opinion given the specificity of our Supreme Court's remand order. Coalition Protecting Auto No–Fault, 498 Mich. at 896, 870 N.W.2d 70.

On March 8, 2013, this Court granted the MCCA's application for leave to appeal and request for a stay of proceedings.² CPAN, BIAMI, and the individual plaintiffs also filed a cross-appeal.

On May 20, 2014, this Court issued an opinion that reversed the ruling of the trial court and remanded "for entry of an order awarding summary disposition in favor of the MCCA." Coalition Protecting Auto No–Fault, 305 Mich.App. at 304, 852 N.W.2d 229. In reversing the trial court, this Court assumed that the MCCA "is a public body for purposes of FOIA" and held that "the MCCA is not required to disclose any of its records because the records are expressly exempted from FOIA [by MCL 500.134(4) and (6) (c) ]." Id. at 309, 852 N.W.2d 229. Citing MCL 15.243(1)(d), this Court noted that FOIA "lists various types of records and information that a public body may exempt from the act's disclosure requirements." Id. In addition, as part of the Insurance Code, MCL 500.100 et seq., MCL 500.134" specifically describes and exempts the MCCA's records from FOIA disclosure." Id. at 309, 852 N.W.2d 229. In reversing the trial court's ruling, this Court explained:

Applying the plain language of MCL 500.134(4) and (6), we conclude that the trial court erred as a matter of law by holding that the MCCA's records were not exempt from FOIA. Subsection (4) unambiguously exempts "[a] record of an association or facility" from disclosure, and subsection (6)(c) defines an "association or facility" to include the MCCA. When read together, the subsections provide that "a record of [the MCCA] shall be exempted from disclosure pursuant to section 13 of [FOIA]," thus specifically describing and exempting the MCCA's records from disclosure. These provisions work in accordance with § 13 of FOIA, which permits a public body to exempt from disclosure "[r]ecords or information specifically described and exempted ... by statute." MCL 15.243(1)(d). There is no ambiguity in these provisions: subsections (4) and (6) clearly mandate that if "a record" of the MCCA is at issue, it "shall be exempted from disclosure pursuant to section 13 of [FOIA]." See Old Kent Bank v. Kal Kustom Enterprises, 255 Mich.App. 524, 532, 660 N.W.2d 384 (2003) ("The word 'shall' is generally used to designate a mandatory provision...."). [Id. at 310–311, 852 N.W.2d 229.]

This Court also examined the contention on cross-appeal that MCL 500.134(4) could not exempt the records of the MCCA from disclosure because the cited statutory provision violated Article 4, § 25 of the Constitution by amending FOIA without the requisite republication. Const. 1963, art. 4, § 25 states:

No law shall be revised, altered or amended by reference to its title only. The section or sections of the act altered or amended shall be re-enacted and published at length.

In rejecting CPAN's argument, this Court explained:

MCL 500.134(4) did not revise, alter, or amend FOIA. Rather, FOIA contemplates statutory exemptions. Specifically, § 13(1)(d) provides in pertinent part that "[a] public body may exempt from disclosure as a public record under this act ... [r]ecords or information specifically described and exempted from disclosure by statute." MCL

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