Shavers v. Attorney General of Mich.

• Decision Date: 05 November 1975
• Docket Number: Docket Nos. 21238,21239,22918
• Citation: 237 N.W.2d 325,65 Mich.App. 355
• Parties: Catherine SHAVERS et al., Plaintiffs, Appellees and Cross-Appellants, v. ATTORNEY GENERAL OF the State of MICHIGAN et al., Defendants, Appellants and Cross-Appellees, and State Farm Mutual Automobile Insurance Company and Allstate Insurance Company, Defendants, Appellees and Cross-Appellants, and League General Insurance Company et al., Defendants-Appellees, and Aetna Casualty & Surety Company et al., Defendants, Appellants and Cross-Appellees.
• Court: Court of Appeal of Michigan — District of US

Page 325

237 N.W.2d 325

65 Mich.App. 355

Catherine SHAVERS et al., Plaintiffs, Appellees and Cross-Appellants, v. ATTORNEY GENERAL OF the State of MICHIGAN et al Defendants, Appellants and Cross-Appellees and State Farm Mutual Automobile Insurance Company and Allstate Insurance Company, Defendants, Appellees and Cross-Appellants and League General Insurance Company et al., Defendants-Appellees and Aetna Casualty & Surety Company et al., Defendants, Appellants and Cross-Appellees.

Docket Nos. 21238, 21239, 22918.

Court of Appeals of Michigan.

Nov. 5, 1975.

Rehearing Denied Dec. 1, 1975.

Released for Publication Jan. 23, 1976.

Lopatin, Miller, Bindes & Freedman and Philo, Maki, Cockrel, Robb, Spearman & Cooper, Detroit, for plaintiffs.

Frank J. Kelley, Atty. Gen., Robert A. Derengoski, Sol. Gen., and Harry G. Iwasko, Jr., Asst. Atty. Gen., for defendants Attorney General, Secretary of State and Commissioner of Insurance.

Bodman, Longley, Bogle, Armstrong & Dahling by Theodore Souris, Carson C. Grunewald and James R. Buschmann, Detroit, for defendant State Farm Mut. Auto. Ins. Co.

Dickinson, Wright, McKean & Cudlip by W. Gerald Warren, Dawn L. Phillips, Richard J. Meyers and Robert L. Schwartz, Detroit, for defendant Allstate Ins. Co.

Downs & Edwards, Lansing, for defendant League Gen. Ins. Co.

Dykema, Gossett, Spencer, Goodnow & Trigg by James D. Tracy, Michael J. McGuigan and Nancy C. Kurtz, Detroit, for defendants Detroit Auto. Inter-Insurance Exchange and Riverside Ins. Co.

Honigman, Miller, Schwartz & Cohn by Avern Cohn and Stanley Siegel, Detroit, for defendants Aetna Casualty & Surety Co., Home Indem. Co., Hartford Accident & Indem. Co., Travelers Indem. Co. and Continental Cas. Co.

Foster, Lindemer, Swift & Collins, P.C., Lawrence B. Lindemer and David W. McKeague, Lansing, for American Mut. Ins. Alliance, amicus curiae.

Plunkett, Cooney, Rutt, Watters, Stanczyk & Pedersen, D. J. Watters and Charles A. Huckabay, Detroit, Central Nat. Ins. Co., Universal Underwriters, Midwest Mut. Ins. Co., Balboa Ins. Co., Northland Ins. Co., Reserve Ins. Co., Progressive Cas. Co. and Nat. Indem. Ins. Co., amicus curiae.

Elijah G. Poxson, Jr., and James L. Schueler, Detroit, for Mich. Mut. Liability Co., amicus curiae.

Warner, Norcross & Judd, Wallson G. Knack and Peter L. Gustafson, Grand Rapids, for KMW, Inc., amicus curiae.

Before LESINSKI, C. J., and T. M. BURNS and QUINN, JJ.

LESINSKI, Chief Judge.

Plaintiffs, to test the constitutionality of 1972 P.A. 294; M.C.L.A. § 500.3101 Et seq.; M.S.A. § 24.13101 Et seq., ('No Fault') brought an action for a declaratory judgment in Wayne County Circuit Court. Defendants are three state officials and various insurance companies, some of whom filed cross-complaints challenging certain provisions of the no fault act. After complicated pretrial proceedings and a lengthy trial, the court issued its judgment. The holdings of the trial court in the declaratory judgment that was entered below are as follows:

'NOW, THEREFORE, IT HEREBY IS ORDERED, ADJUDGED AND DECLARED that the following are the rights and legal relationships of the interested parties herein:

'A. Insofar as raised by the issues delineated in the Court's Pretrial Statement and by those permitted to be raised during the course of trial, The Act, including Section 3109a thereof, does not violate any provision of the United States and Michigan Constitutions except as hereinafter specifically declared.

'B. Section 3101(2) of The Act, to the extent that it excludes from The Act vehicles which have two wheels or less violates the Equal Protection Clauses of the United States and Michigan Constitutions and, therefore, is declared to be void and of no force and effect.

'C. That portion of Section 3107(b) of The Act, insofar as it requires that the cost of replacement services be incurred and subsequently be reimbursed, is void and of no force and effect as violative of the Equal Protection Clauses of the United States and Michigan Constitutions. The cost of such replacement services must be paid, therefore, in the same manner as other personal protection insurance benefits are paid.

'D. The last sentence of Section 3109(3) of The Act, empowering the Commissioner of Insurance to approve deductible provisions in excess of $300.00 per accident for inclusion in insurance policies issued under The Act, violates Article III, Section 2 of the Michigan Constitution of 1963 as a delegation of legislative power without any standards whatever and, therefore, such sentence is void and of no force or effect.

'E. Section 3109(1) of The Act violates the Equal Protection Clauses of the United States and Michigan Constitutions and, therefore, is void and of no force and effect.

'F. Notwithstanding the provisions of Section 3135 of The Act, non-resident owners and occupants of a motor vehicle not registered in this State retain all tort rights of action possessed by them under Michigan law without regard to The Act unless such motor vehicle has been operated in this State for an aggregate of more than 30 days in any calendar year or unless such owners or occupants are entitled to personal injury protection benefits provided by an insurance policy or other security providing such benefits under The Act.

'G. Property protection insurance required by The Act violates the Due Process and Equal Protection Clauses of the United States and Michigan Constitutions and, therefore, Sections 3121, 3123, 3125 and 3127 are void and of no force and effect in their entirety and, in addition, all other references to property protection insurance contained in Sections 3101(1), 3145(2), 3148(1) and (2) and 3163(1) and (3), hereby are declared to be legally ineffectual. Such property protection insurance, therefore, shall not be deemed to be security required by Sections 3101(3) and (4) or 3135(2) of The Act and, consequently, tort liability for property damage is not abolished by Section 3135(2) of The Act. As a further consequence, the residual liability insurance coverage required by Section 3131 of The Act includes property damage liability.

'H. Section 3116 of The Act is construed to require subtraction from personal protection insurance benefits paid or payable under The Act only when like benefits have been recovered upon tort claims.

'I. Cross-Plaintiff State Farm's proposed interpretation of Section 3135, first submitted in its Motion for Partial Summary Judgment, and thereafter included as an issue for determination at the conclusion of this case, be and the same hereby is rejected and its Motion is denied.

'IT IS ORDERED, ADJUDGED AND DECLARED, further, that the provisions of The Act declared to be unconstitutional in the foregoing paragraphs are severable; that all such provisions are declared to be unconstitutional as of October 1, 1973 (the effective date of The Act); and that the balance of The Act is consonant with the original legislative intent.'

Plaintiffs filed a motion for a new trial and for a partial rehearing. This motion was denied. The state officials and some of the insurance companies appealed. Plaintiffs and other insurance companies cross-appealed.

Defendants argued before the trial court that plaintiffs' action raised certain issues that were not properly before the court and that a ruling on these issues would be an advisory opinion.

The trial court viewed the question as one of standing. It found that the no fault act 'has required and continues to require the expenditure of state funds', and therefore concluded that GCR 1963, 201.2(3) authorized plaintiffs to raise all possible infirmities in the Act. GCR 1963, 201.2(3) deals with real parties in interest ¹ and states:

'(A)n action to prevent the illegal expenditure of state funds or to test the constitutionality of a statute relating thereto may be brought in the name of a domestic non-profit corporation organized for civic, protective, or improvement purposes, or in the names of at least 5 residents of this state who own property assessed for direct taxation by the county wherein they reside.'

We disagree with the trial court's ruling that the court rule provides a basis for plaintiffs' suit. Plaintiffs are not concerned with the illegal expenditure of state funds. The court rule allows taxpayers aggrieved by the outlay of state funds to handle the traditional standing obstacle in taxpayers suits. We do not read it as permitting a group to challenge any legislation merely because of an incidental expenditure of state funds; almost all legislation involves some public spending. GCR 1963, 201.2(3) is inapplicable to this litigation.

We must determine whether GCR 1963, 521, Declaratory Judgments, authorized plaintiff's action. Even though the court rule was intended to provide 'the broadest type of declaratory judgment procedure,' GCR 1963, 521, Official Committee Comment, the first subsection of the rule requires that there be 'a case of actual controversy' before a court may issue a declaratory judgment. GCR 1963, 521.1 Kuhn v. East Detroit, 50 Mich.App. 502, 213 N.W.2d 599 (1973), Welfare Employees Union v. Civil Service Comm., 28 Mich.App. 343, 184 N.W.2d 247 (1970). A person seeking a declaratory judgment must show that the issues he raises have more than hypothetical importance to him. 'It is familiar law that a party to whom a statute is inapplicable cannot question its constitutionality by seeking a declaration of rights.' 1 Anderson, Declaratory Judgments, § 159, p. 303. Plaintiffs have made no showing that the provisions of the no fault act dealt with in paragraphs C, D, E, F, and H of the court's judgment have or are likely to work to their disadvantage. A decision on the issues decided in those paragraphs was not 'necessary to guide plaintiffs' future conduct in order to preserve (their) legal rights.' Welfare Employees Union v. Civil Service Comm., supra, 28 Mich.App. at 350, 184 N.W.2d at 251. It was, therefore, inappropriate...