King v. State

• Decision Date: 29 December 2010
• Docket Number: Docket No. 140684.
• Citation: 793 N.W.2d 673,488 Mich. 208
• Parties: Steven KING, Plaintiff-Appellee, v. STATE of Michigan, Michigan Department of Labor and Economic Growth, and Commissioner of the Office of Financial and Insurance Regulation, Defendants-Appellants.
• Court: Michigan Supreme Court

488 Mich. 208 793 N.W.2d 673 Steven KING, Plaintiff-Appellee, v. STATE of Michigan, Michigan Department of Labor and Economic Growth, and Commissioner of the Office of Financial and Insurance Regulation, Defendants-Appellants. Docket No. 140684. Supreme Court of Michigan. Dec. 29, 2010.

Kelley Cawthorne, PLLC (by Frank J. Kelley, Dennis O. Cawthorne, and Steven D. Weyhing), Lansing, for plaintiff.

Michael A. Cox, Attorney General, B. Eric Restuccia, Solicitor General, and Michael P. Farrell, Assistant Attorney General, for defendants.

Opinion

DAVIS, J.

Defendants appeal a Court of Appeals judgment affirming the trial court's grant of summary disposition in favor of plaintiff, which enjoined defendants from revoking plaintiff's resident insurance producer ¹ license. We affirm.

The issues in this case are (1) whether in 2004 the Commissioner of the Office of Financial and Insurance Services ² was required by statute to deny plaintiff'sapplication for a resident insurance producer license on the basis of plaintiff's fully disclosed prior felony conviction, (2) whether the commissioner is now required by statute to affirmatively revoke plaintiff's license on the basis of the same prior felony, and (3) whether the commissioner is now permitted to revoke plaintiff's license on the basis of the same prior felony. We answer all three questions in the negative.

I. FACTS AND PROCEEDINGS

In 2000, plaintiff was convicted of operating a motor vehicle under the influence of liquor (OUIL), a felony. MCL 257.625. In 2004, he applied to the Michigan Office of Financial and Insurance Services (OFIS) ³ for a resident insurance producer license. Plaintiff fully disclosed his conviction. Plaintiff applied for a waiver pursuant to 18 U.S.C. § 1033. ⁴ The director of OFIS's licensing division sent plaintiff a letter that read in part:

Please be apprised that pursuant to 18 U.S.C. Section 1033 and 1034, specifically Section 1033(3)(2), permission to engage in the business of insurance is hereby granted to you by the Commissioner of the Office of Financial and Insurance Services under this federal statute in response to your application for such waiver. OFIS reviewed your 3^rd OUIL felony conviction.

Please note that it is highly recommended that this letter be safeguarded and kept together with your license as proof of this waiver under 18 U.S.C. §§ 1033/1034 in case your record and/or ability to engage in the business of insurance is ever challenged by someone in the industry, state government, or federal government.

Thus, defendants unquestionably had been made aware of plaintiff's felony. The commissioner granted plaintiff's license.

Plaintiff then pursued a career as an insurance agent for a number of years. Inthe meantime, he has not been convicted of any other felonies or provided any new grounds for revocation of his license that we are aware of. In 2008, defendants began proceedings to revoke plaintiff's license, and plaintiff initiated the instant suit. The gravamen of defendants' argument is that a change to the Insurance Code in 2002 had required the commissioner to deny plaintiff's application, that failing to do so was a mistake, and that the current provisions of the Insurance Code require the commissioner to correct that mistake. The trial court ruled that even if the commissioner had made a mistake in granting plaintiff's license, equity precluded defendants from revoking it now, and the Court of Appeals affirmed.

II. STANDARD OF REVIEW

The trial court's decision on a motion for summary disposition is reviewed de novo. Coblentz v. City of Novi, 475 Mich. 558, 567, 719 N.W.2d 73 (2006). This Court reviews de novo questions of statutory interpretation. Id. The trial court's exercise of its equitable authority is discretionary within the confines of equity jurisprudence and the facts of the particular case, Youngs v. West, 317 Mich. 538, 545, 27 N.W.2d 88 (1947), and this Court reviews a trial court's grant of injunctive relieffor an abuse of that discretion, Pontiac Fire Fighters Union Local 376 v. City of Pontiac, 482 Mich. 1, 8, 753 N.W.2d 595 (2008). The trial court's findings of fact are reviewed for clear error. Beason v. Beason, 435 Mich. 791, 801-803, 460 N.W.2d 207 (1990), citing MCR 2.613(C).

III. THE INSURANCE CODE

A. INSURANCE CODE LICENSURE PROVISIONS IN 2004

Before 2002, the Insurance Code's licensure provisions had required applicants to have "good moral character." See former MCL 500.1204(4), as amended by 1986 PA 173. It remains the law today that no licensing agency may make a finding as to an applicant's moral character on the sole basis of a criminal conviction. MCL 338.42. It also remains the law that "[o]rders, decisions, findings, rulings, determinations, opinions, actions, and inactions of the commissioner in [the Insurance Code] shall be made or reached in the reasonable exercise of discretion." MCL 500.205.

The "good moral character" requirement in the Insurance Code's licensure provisions was replaced by 2001 PA 228. When plaintiff applied for his license, MCL 500.1205(1)(b) provided that an application "shall not be approved" if the applicant had "committed any act that is a ground for denial, suspension, or revocation under [MCL 500.1239]." While this seems mandatory when read in isolation, MCL 500.1239(1) provided that "the commissioner may place on probation, suspend, revoke, or refuse to issue" a license for a list of possible reasons, including an applicant's "having been convicted of a felony." MCL 500.1239(1)(f) (emphasis added). Consistent with MCL 500.205, the licensure requirement mandates that the commissioner make a discretionary judgment call when reviewing an applicationand deny the application if he or she concludes—in the exercise of that discretion—that denial, suspension, or revocation would be appropriate.

In other words, 2001 PA 228 replaced the ambiguous judgment call of "good moral character" with a more rigorously defined judgment call that entailed consideration of enumerated scenarios under which adverse action may be found appropriate. When the applicable versions of MCL 500.1205, MCL 500.1239, and MCL 500.205 are read together, they set forth a licensure procedure that requires the commissionerto exercise judgment within a framework, rather than exercising judgment in a more nebulous environment. We reject defendants' contention that the Insurance Code in effect in 2004 required the commissioner to deny plaintiff's application. The Insurance Code did not, and the commissioner's exercise of discretion in granting plaintiff a license was therefore permissible.

We recognize that shortly before plaintiff applied for his license, the commissioner rendered a decision ⁵ concluding that 2001 PA 228 removed the discretion to permit felons to receive licenses. An agency's interpretation of a statute is entitled to deference, but generally only if that interpretation has been relied on for a long time, and in any event no such interpretation may overcome the plain meaning of the statute itself. Ludington Serv. Corp. v. Acting Ins. Comm'r, 444 Mich. 481, 505 & n. 35, 511 N.W.2d 661 (1994). Defendants acknowledge that this unpublished decision has not been extensively relied on or applied consistently, and our review of the record indicates that the opinion was not even widely circulated internally. Furthermore, it was clearlynot relied on when the commissioner considered plaintiff's application and granted his license. Finally, the decision was incorrect.

Therefore, we answer the first question, whether in 2004 the commissioner had been required by statute to deny plaintiff's application, in the negative.

B. INSURANCE CODE LICENSURE PROVISIONS IN 2008 AND TODAY

Subsequently, 2008 PA 422 and 2008 PA 423 amended MCL 500.1205 and MCL 500.1239. MCL 500.1205 now provides in relevant part that "[a]n application for a resident insurer [sic] producer license shall not be approved unless the commissioner finds that the individual ... [h]as not committed any act listed in [MCL 500.1239(1) ]." And MCL 500.1239(1)(f) provides that "the commissioner shall refuse to issue a license" for "[h]aving been convicted of a felony."

These two statutes are now consistent, and were a convicted felon to apply for an insurance producer license today, the commissioner would be required to deny it. Indeed, plaintiff concedes as much. But no language in these statutes rebuts the general rule of construction that changes to a statute should only apply prospectively. Even if we were to engage in a speculation that the amendment was intended to clarify the Legislature's prior intent, amendments may not be applied retrospectively if doing so would impair a vested right. Brewer v. A.D. Transp. Express, Inc., 486 Mich. 50, 56-57, 782 N.W.2d 475 (2010). The fact that an applicant like plaintiff would necessarily be denied a license today does not automatically invalidate defendant's decision to exercise its discretion to grant him a license in 2004.

Although the current statutes require denial of a license, they do not require an existing license to be revoked. The first clause of MCL 500.1239(1) states infull: "In addition to any other powers under this act, the commissioner may place on probation, suspend, or revoke an insurance producer's license or may levy a civil fine under [MCL 500.1244] or any combination of actions, and the commissioner shall refuse to issue a license under [MCL 500.1205 or 500.1206a], for any 1 or more of the following causes [.]" Denial is mandatory if any of a number of enumeratedconditions is satisfied; however, revocation is still as discretionary as it was in 2004.

Therefore, we answer the second question, whether defendant is currently required by statute to revoke plaintiff's license, in the negative.

IV. REVOCATION

We observe initially that the plain language of the present Insurance Code gives the commissioner the discretion to pursue revocation of plaintiff's resident insurance...