Goodhue v. Dep't of Transp., 332467
| Decision Date | 16 May 2017 |
| Docket Number | No. 332467,332467 |
| Citation | 319 Mich.App. 526,904 N.W.2d 203 |
| Parties | Thomas GOODHUE, Plaintiff–Appellant, v. DEPARTMENT OF TRANSPORTATION, Defendant–Appellee. |
| Court | Court of Appeal of Michigan — District of US |
Law Office of Kevin R. Lynch, PLC (by Kevin R. Lynch ), for Thomas Goodhue.
Bill Schuette, Attorney General, Aaron D. Lindstrom, Solicitor General, Matthew Schneider, Chief Legal Counsel, and Amy M. Patterson, Assistant Attorney General, for the Department of Transportation.
Before: Gadola, P.J., and Jansen and Saad, JJ.
Plaintiff appeals the trial court's order that granted defendant's motion for summary disposition pursuant to MCR 2.116(C)(7). For the reasons provided below, we affirm.
Plaintiff was a United States Customs and Border Protection Officer who worked at the Blue Water Bridge in Port Huron. On April 8, 2015, plaintiff stepped into a hole in one of the tollbooth lanes and injured himself.
On May 18, 2015, plaintiff served defendant with a notice of intent to file a claim. And on October 5, 2015, plaintiff filed suit in the Court of Claims. After defendant initially moved for summary disposition under MCR 2.116(C)(7), plaintiff filed an amended complaint, wherein he claimed that three exceptions to governmental immunity applied. In Count I, plaintiff alleged that defendant was not immune from suit on the basis of the roadway exception; in Count II, plaintiff alleged that defendant was not immune from suit because defendant was engaging in a proprietary function at the time of the incident; and in Count III, plaintiff alleged that defendant was not immune from tort liability because of the public-building exception to governmental immunity.
Defendant thereafter filed an amended motion for summary disposition. Defendant argued that Counts I and III were barred because plaintiff failed to file his claim in the Court of Claims within 120 days, which violates the notice requirement of MCL 691.1404. Defendant also argued that Count II was barred because its operation of the Blue Water Bridge was not a proprietary function. The trial court agreed and ultimately granted defendant's motion on all counts.
We also review issues of statutory interpretation de novo. City of Riverview v. Sibley Limestone, 270 Mich.App. 627, 630, 716 N.W.2d 615 (2006).
Under Michigan's governmental tort liability act (GTLA), MCL 691.1401 et seq., governmental agencies are immune from tort liability when they are "engaged in the exercise or discharge of a governmental function." MCL 691.1407(1). However, the act provides several exceptions to this broad grant of immunity.1 As noted, plaintiff contends that three exceptions are relevant: (1) the highway exception, (2) the proprietary-function exception, and (3) the public-building exception.
In the second count of his amended complaint, plaintiff avers that defendant cannot claim governmental immunity because defendant's operation of the Blue Water Bridge is a proprietary function. Plaintiff argues that the trial court erred when it granted summary disposition to defendant on this count. We disagree.
The proprietary-function exception to governmental immunity is found in MCL 691.1413 and provides, in pertinent part, the following:
The immunity of the governmental agency shall not apply to actions to recover for bodily injury or property damage arising out of the performance of a proprietary function as defined in this section. Proprietary function shall mean any activity which is conducted primarily for the purpose of producing a pecuniary profit for the governmental agency, excluding, however, any activity normally supported by taxes or fees. ...
"Therefore, to be a proprietary function, an activity: ‘(1) must be conducted primarily for the purpose of producing a pecuniary profit; and (2) it cannot be normally supported by taxes and fees.’ " Herman v. Detroit, 261 Mich.App. 141, 145, 680 N.W.2d 71 (2004), quoting Coleman v. Kootsillas, 456 Mich. 615, 621, 575 N.W.2d 527 (1998).
Herman, 261 Mich.App. at 145, 680 N.W.2d 71. Importantly, "[a]n agency may conduct an activity on a self-sustaining basis without being subject to the proprietary function exemption." Id. ; see also Hyde v. Univ. of Mich. Bd. of Regents, 426 Mich. 223, 258–259, 393 N.W.2d 847 (1986). Herman, 261 Mich.App. at 145, 680 N.W.2d 71.
Here, Myron Frierson, defendant's Bureau Director of Finance Administration, testified that the Blue Water Bridge receives income from a variety of sources but that the primary source is from tolls. Frierson explained that regardless of the source of the income, all monies are placed in the same Blue Water Bridge subfund, which is part of the state's trunk-line fund. Importantly, none of the money generated ends up in the state's general fund. He also explained that the money is used solely "for the operation of the Blue Water Bridge." Frierson testified that in addition to daily operations, money from the subfund is used for capital projects and to pay debt service on bonds that were issued for projects associated with the Blue Water Bridge. We agree with the trial court that "[t]hese facts clearly demonstrate that the operation of the Blue Water Bridge is not to produce a pecuniary profit, but rather, to operate the bridge on a self-sustaining basis."
Plaintiff's reliance on the fact that the amount of income defendant has received in conjunction with the Blue Water Bridge in the last several years has exceeded its expenses is misplaced. As Frierson noted, these excess or surplus funds were planned "in anticipation of the capital needs," i.e., "anticipated future costs." This evidence shows that defendant operates the Blue Water Bridge on a self-sustaining basis and uses the money for the Blue Water Bridge. This is why the generation of a profit is not dispositive. See id. Indeed, as the Michigan Supreme Court has noted: Hyde, 426 Mich. at 258, 393 N.W.2d 847.
We also reject plaintiff's assertion that the operation of the Blue Water Bridge has a real purpose to increase the "profit" of the state because any Blue Water Bridge expansion project will generate significant tax revenue for the state. While Frierson did opine that the state and the city of Port Huron would benefit financially from a future expansion project, the record shows that any such benefits would be ancillary to defendant's operation of the bridge. In sum, there is no evidentiary support for the contention that the primary purpose in running an efficient international bridge crossing is to improve the financial bottom line of any other government.
Accordingly, because the evidence conclusively shows that defendant operates the Blue Water Bridge on a self-sustaining basis instead of with a pecuniary intent, the trial court properly granted summary disposition in favor of defendant on plaintiff's Count II.
Plaintiff argues that the trial court erred when it granted summary disposition to defendant on Counts I and III. Plaintiff asserts, incorrectly, that his claims were not barred because he was not required to file notice in the Court of Claims within 120 days of the accident.
In Count I, plaintiff alleges a defect in the highway, which is governed by the GTLA's notice requirements of MCL 691.1404. See Plunkett v. Dep't of Transp., 286 Mich.App. 168, 176, 779 N.W.2d 263 (2009). Plaintiff alleges in Count III that the public-building exception to governmental immunity is implicated. Under MCL 691.1406, if a claim related to the public-building exception is against the state, then notice "shall be given as provided in [ MCL 691.1404 ]." Therefore, the notice provisions of MCL 691.1404 control for both Counts I and III and provide, in pertinent part, as follows:
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