COUNTY OF INGHAM, COUNTY OF JACKSON, and COUNTY OF CALHOUN, Plaintiffs-Appellants,
MICHIGAN COUNTY ROAD COMMISSION SELF-INSURANCE POOL, Defendant-Appellee.
Circuit Court LC No. 15-000432-NZ
Before: Talbot, C.J., and O'Connell and O'Brien, JJ.
Ingham County, Jackson County, and Calhoun County
(collectively, "the counties"), appeal as of right
the trial court's order granting summary disposition in
favor of defendant, Michigan County Road Commission
Self-Insurance Pool ("Pool"), under MCR 2.116(I)(2)
(opposing party, rather than moving party, entitled to
judgment). Because we agree with the counties that they are
successors in interest to their respective counties'
former road commissions, we reverse and remand.
FACTUAL AND PROCEDURAL BACKGROUND
Declaration of Trust created the Pool in April 1984. The
Pool's bylaws limit membership to county road commissions
located in the State of Michigan and require each member to
sign an inter-local agreement. The appointed road commissions
for Ingham County, Jackson County, and Calhoun County joined
the Pool soon after its formation.
of the Pool made annual premium contributions to cover the
payment of claims and the Pool's operating and
administrative expenses. The Pool's bylaws and the
inter-local agreements permitted the refund of surplus funds
more than one year after payment of a member's premium
contribution. The counties alleged that the Pool had a
longstanding practice of refunding excess contributions to
members out of unused reserves in proportion to premiums
paid, typically calculated and refunded several years later.
February 2012, the Legislature amended MCL 224.6 to permit
transfer of "the powers, duties and functions that are
otherwise provided by law for an appointed board of county
road commissioners . . . to the county board of commissioners
by resolution as allowed under section 11 of 1851 PA 156, MCL
46.11." 2012 PA 14. At the same time, the Legislature
amended MCL 46.11 to give a county board of commissioners the
authority to pass a resolution dissolving an appointed road
commission and transferring its "powers, duties, and
functions" to the county board of commissioners. 2012 PA
15. Pursuant to these amendments, the Boards of Commissioners
of Ingham County, Jackson County, and Calhoun County adopted
resolutions to dissolve their county road commissions and
take over their roles.
County adopted the dissolution resolution on April 24, 2012,
effective June 1, 2012. About two weeks before adopting the
resolution, Ingham County paid its contribution to the Pool
for the fiscal year beginning April 1, 2012, apparently with
the understanding that the Pool intended to amend its rules
to permit the county successors to the dissolved road
commissions to participate in the Pool. Ingham County
maintained that it only learned later in May that the Pool
would not allow the county to remain a member of the Pool. On
May 31, 2012, the Ingham County road commission signed two
agreements, one to withdraw from the Pool and one to cancel
insurance through the Pool, effective June 1, 2012.
County signed a similar withdrawal agreement, effective
November 1, 2012. It appears that Jackson County did not sign
a withdrawal agreement.
Ingham County's request, the Pool agreed to refund the
unused pro-rata portion of the former road commission's
annual contribution for the 2012-2013 fiscal year. The Pool
declined, however, to refund surplus equity flowing from
prior year contributions because of the road commission's
withdrawal from membership.
counties brought a four-count complaint. The counties alleged
that they were eligible for ten years' worth of refunds
because the Pool was still refunding contributions from 2002
premiums. The Pool refused to issue these refunds to the
counties. Consequently, the counties maintained, the
Pool's refusal reflected unconstitutional lending under
Const 1963, art 9, § 18, extortion, conversion, and
breach of contract. The Pool denied the counties'
allegations and disputed their claims.
counties filed a partial motion for summary disposition as to
liability under MCR 2.116(C)(9) and (10). The Pool filed a
cross-motion for summary disposition under MCR 2.116(I)(2).
The trial court granted summary disposition under MCR