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

• Decision Date: 20 May 2014
• Docket Number: Docket No. 314310.
• Citation: 852 N.W.2d 229,305 Mich. App. 301
• Parties: COALITION PROTECTING AUTO NO–FAULT v. MICHIGAN CATASTROPHIC CLAIMS ASSOCIATION.
• Court: Court of Appeal of Michigan — District of US

305 Mich.App. 301

852 N.W.2d 229

COALITION PROTECTING AUTO NO–FAULT

v.MICHIGAN CATASTROPHIC CLAIMS ASSOCIATION.

Docket No. 314310.

Court of Appeals of Michigan.

Submitted Jan. 8, 2014, at Lansing.

Decided May 20, 2014, at 9:10 a.m.

Kerr, Russell and Weber, PLC, Detroit, (by Joanne Geha Swanson), and Sinas, Dramis, Brake, Boughton & McIntyre, PC, Lansing (by George T. Sinas), for the Coalition Protecting Auto No–Fault and others.

James R. Giddings, for the Brain Injury Association of Michigan and others.

Noah D. Hall, of counsel for plaintiffs.

Dykema Gossett PLLC, Lansing, (by Lori McAllister, Joseph K. Erhardt, and Jill M. Wheaton) for the Michigan Catastrophic Claims Association.

Willingham & Coté, East Lansing, (by John A. Yeager and Kimberlee A. Hillock) for the Insurance Institute of Michigan and the Michigan Insurance Coalition.

Kerr, Russell and Weber, PLC, Detroit (by Daniel J. Schulte and Jacquelyn A. Klima), for the Michigan State Medical Society and others.

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

BORRELLO, J.

Defendant, the Michigan Catastrophic Claims Association(MCCA), appeals by leave granted a December 26, 2012trial court order granting partial summary disposition in favor of plaintiffs, the Coalition Protecting Auto No–Fault and others, pursuant to MCR 2.116(C)(8), and denying the MCCA's motion for summary disposition under MCR 2.116(C)(8)andMCR 2.116(C)(10).Plaintiffs cross-appeal the same order.For the reasons set forth in this opinion, we reverse and remand for entry of an order awarding summary disposition in favor of the MCCA.

I.BACKGROUND

This action involves plaintiffs' requests to inspect certain of the MCCA's records.Plaintiffs advance arguments premised on the Michigan Freedom of Information Act (FOIA),MCL 15.231 et seq., the common law, and the law of trusts.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. Co. v. Mich. Catastrophic Claims Ass'n,435 Mich. 338, 340–341, 458 N.W.2d 632(1990).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).

On November 22, 2011, plaintiff Coalition Protecting Auto No–Fault (CPAN) sent the MCCA a FOIA request, seeking certain information concerning “all” open and closed claims “serviced by” the MCCA.CPAN requested information including the age of claimants, the dates of injuries, when claims were closed, and the total amounts paid.The MCCA refused to disclose the information, claiming in a letter that it was “expressly exempted from FOIA requests” by MCL 500.134, which provides in pertinent part:

(4) A record of an association or facility shall be exempted from disclosure pursuant to section 13 of the freedom of information act ..., [MCL 15.243].

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(6) As used in this section, “association or facility” means ...

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(c) The catastrophic claims association....

On January 23, 2012, CPAN filed suit against the MCCA in the Ingham Circuit Court, seeking to compel the MCCA to disclose the requested information.Meanwhile, plaintiffBrain Injury Association of Michigan(BIAMI) and several individual plaintiffs(the BIAMI plaintiffs) commenced a separate lawsuit against the MCCA after it denied their FOIA request for similar information.On July 5, 2012, CPAN, the MCCA and the BIAMI plaintiffs stipulated to consolidate the cases and to allow CPAN to file an amended complaint.

CPAN alleged four counts in its amended complaint.¹In Count I, CPAN claimed that MCL 500.134 was unconstitutional in that it (1) violated Const. 1963, art. 4, § 25, because the statute amended FOIA by exempting the MCCA from FOIA without reenacting and republishing FOIA, (2) violated the Title–Object Clause of the stateconstitution, Const. 1963, art. 4, § 24, and (3) violated the state and federal constitutional “guarantees of due process and equal protection” as articulated in Shavers v. Attorney General,402 Mich. 554, 267 N.W.2d 72(1978).In Count II, CPAN alleged that it had a common-law right to inspect the MCCA's records, and in Counts III and IV, CPAN claimed a right to inspect the MCCA's records under resulting and constructive trust theories.The BIAMI plaintiffs alleged that they had a right to access the MCCA's records pursuant to Shavers, the common law, and under resulting and constructive trust theories.

Shortly thereafter, the MCCA moved for summary disposition pursuant to MCR 2.116(C)(8)andMCR 2.116(C)(10), and CPAN filed a cross-motion for summary disposition pursuant to MCR 2.116(I)(2), which the trial court construed as a motion brought under MCR 2.116(C)(8).The BIAMI plaintiffs moved for summary disposition under MCR 2.116(C)(9)andMCR 2.116(C)(10), then later withdrew their (C)(10) motion.Despite the differences in plaintiffs' motions, the trial court ultimately granted partial summary disposition in favor of all plaintiffs under MCR 2.116(C)(8), denying plaintiffs' motions to the extent they sought disclosure of information concerning individual claimants.The court denied the MCCA's motion in its entirety.

The trial court ruled 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:²

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.[Emphasis in original.]

The trial court also held that plaintiffs were entitled to the MCCA's records under Shavers,402 Mich. at 554, 267 N.W.2d 72, the common law, and trust theories, explaining:

In addition, the Court agrees with CPAN's argument regarding the decision in [ Shavers ] that Michigan citizens have a right to know how the insurance premium they pay is calculated to ensure that no-fault insurance is provided on a fair and equitable basis.This concept intertwines with the theories asserted by BIAMI regarding the common law right to information and resulting trusts.Because the MCCA rate charged to insurers is passed on to the insured individuals as part of the premium they pay, it is reasonable to conclude that citizens essentially fund the MCCA reserves by paying that premium; thus, individual citizens have a financial interest in the rate calculation process and how it is conducted.

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... Specifically, pursuant to the constitutional principles articulated in Shavers, the MCCA must disclose general rate calculation information such as amount of funds contained in MCCA reserves, number of claimants, administrative costs, nature and type of investments of the reserves, amount currently paid by insurers and specific accounting as to increase/decrease in yearly rate calculated, etc.However ... MCCA is not required to disclose personal information regarding individual claims or information that could reasonably lead to extrapolation of individual claimants' names.

On January 16, 2013, the MCCA moved for leave to appeal the trial court's order in this Court and moved this Court to stay the proceedings pending its appeal.On March 8, 2013, this Court granted the MCCA leave to appeal and stayed the proceedings pending resolution of the appeal.³Thereafter, plaintiffs filed a claim of cross-appeal.

II.STANDARDS OF REVIEW

We review de novo a trial court's ruling on a motion for summary disposition.Maiden v. Rozwood,461 Mich. 109, 118, 597 N.W.2d 817(1999).“A motion under MCR 2.116(C)(8) tests the legal sufficiency of the complaint.”Id. at 119, 597 N.W.2d 817.In deciding the motion, a trial court may only consider the pleadings and “[a]ll well-pleaded factual allegations are accepted as true and construed in a light most favorable to the nonmovant.”Id.Summary disposition is appropriate if the claims alleged are “so clearly unenforceable as a matter of law that no factual development could possibly justify recovery.”Wade v. Dep't of Corrections,439 Mich. 158, 163, 483 N.W.2d 26(1992).To the extent that we must interpret and apply relevant statutory provisions, “[i]ssues of statutory construction involve questions of law that we review de novo.”Cuddington v. United Health Servs., Inc.,298 Mich.App. 264, 271, 826 N.W.2d 519(2012).Similarly, we review de novo constitutional issues and the proper interpretation and application of the common law.Great Lakes Society v. Georgetown Charter Twp.,281 Mich.App. 396, 425, 761 N.W.2d 371(2008);Brecht v. Hendry,297 Mich.App. 732, 736, 825 N.W.2d 110(2012).

III.ANALYSIS

A. FOIA

The MCCA contends that the trial court erred by holding that its records were not exempt from FOIA.

“Under FOIA, a public body must disclose all public records that are not specifically exempt under the act.”Hopkins v. Duncan Twp.,294 Mich.App. 401, 409, 812 N.W.2d 27(2011), citingMCL 15.233(1).In this case, even assuming that the MCCA is a public body for purposes of FOIA, the...