COUNTY OF INGHAM, COUNTY OF JACKSON, and COUNTY OF CALHOUN, Plaintiffs-Appellants,
v.
MICHIGAN COUNTY ROAD COMMISSION SELF-INSURANCE POOL, Defendant-Appellee.
Ingham
Circuit Court LC No. 15-000432-NZ
Before: O'Brien, P.J., and Gleicher and Stephens, JJ.
ON REMAND
PER
CURIAM.
This
case returns to this Court on remand from the Michigan
Supreme Court. Co of Ingham v Mich. Co Rd Comm Self-Ins
Pool, 503 Mich. 917 (2018) (Co of Ingham II).
For the reasons explained in this opinion, we continue to
hold that plaintiffs-Ingham County, Jackson County, and
Calhoun County (collectively, the counties)-are entitled to
refunds of their surplus premiums from prior-year
contributions made by the counties' former road
commissions to defendant, Michigan County Road Commission
Self-Insurance Pool (the Pool).
I.
BACKGROUND
The
facts of this case were outlined in this Court's previous
opinion as follows:
A 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.
Members 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.
In 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 . . . MCL 46.11." MCL
224.6(7), as amended by 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 the road
commission's "powers, duties, and functions" to
the county board of commissioners. MCL 46.11(s), as amended
by 2012 PA 15. Pursuant to these amendments, the Ingham
County, Jackson County, and Calhoun County Boards of
Commissioners adopted resolutions to dissolve their county
road commissions and take over their roles.
Ingham 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 30 and 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.
Calhoun County signed a similar withdrawal agreement on
October 23, 2012, effective November 1, 2012. It appears that
Jackson County did not sign a withdrawal agreement.
At 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 in the Pool. [Co of Ingham v
Mich. Co Rd Comm Self-Ins Pool, 321 Mich.App. 574,
577-578; 909 N.W.2d 533 (2017) (Co of Ingham I).]
The
counties brought suit against the Pool, alleging that they
were eligible for 10 years' worth of refunds because the
Pool was still refunding contributions from 2002 premiums.
The parties filed cross-motions for summary disposition, and
the trial court granted summary disposition to the Pool and
rejected the counties' claims. The trial court reasoned
that the counties were not entitled to refunds possibly owed
to their former road commissions because the counties were
not successors in interest to their former road commissions.
On
appeal, this Court disagreed and held that the counties were
successors in interest to their former road commissions.
Id. at 580-584. This Court then addressed
"whether the counties could be members of the Pool and
thereby be eligible for surplus refunds of prior-year
contributions," and concluded "that the successor
counties are eligible for Pool membership . . . ."
Id. at 584.
This
Court lastly addressed whether the counties were entitled to
refunds because, even though they were successors in
interest, they withdrew from the Pool. Id. The Court
first acknowledged that Jackson County was situated
differently from the other counties because it did not sign a
withdrawal agreement with the Pool. Id. at 585. This
Court concluded that without a withdrawal agreement, Jackson
County "did not withdraw from the Pool."
Id. This Court also concluded that Jackson
County's "dissolution of its road commission did not
automatically result in withdrawal from the Pool."
Id. This Court then held that, because Jackson
County (1) did not withdraw from the Pool and (2)
"succeeded its dissolved road commission," it was
"eligible for refunds from prior-year contributions made
by its road commission." Id.
Turning
to the other counties that did sign withdrawal
agreements with the Pool, this Court looked to the language
of the withdrawal agreements to determine their scopes. After
reviewing the agreements' relevant language, this Court
concluded:
Accordingly, reading the withdrawal agreements as a whole and
in light of the limitation on their scope, the withdrawal
agreements did not alter eligibility for the refund of
surplus premiums from prior-year contributions. Having
determined that the counties are successors in interest to
their former road commissions, we conclude that the counties
are entitled to refunds of surplus premiums reflecting their
former road commissions' prior-year contributions through
the date listed in each withdrawal agreement. [Id.]
The
Pool appealed this Court's decision, and our Supreme
Court issued the following order:
Pursuant to MCR 7.305(H)(1), in lieu of granting leave to
appeal, we REMAND this case to the Court of Appeals for
consideration of the issue raised by the defendant but not
addressed by that court during its initial review of this
case: Whether, even if the plaintiff counties are successors
in interest to their road commissions, the defendant Michigan
County Road Commission Self-Insurance Pool nevertheless may,
in accordance with its governing documents, decline to issue
to the counties refunds of surplus premiums from prior-year
contributions. In addressing this question, the Court of
Appeals shall consider, among other things, the following
documents: the Declaration of Trust, By-Laws, Inter-Local
Agreements, MCRCSIP Refund Overview, and the July 19, 1990
memorandum to the Pool members. The court shall address
whether these documents are binding on the parties, and, if
so, what effect they have on the plaintiffs' entitlement
to refunds. [Co of Ingham II, 503 Mich. at 917.]
II.
STANDARD OF REVIEW
A trial
court's decision on summary disposition is reviewed de
novo. Heaton v Benton Constr Co, 286 Mich.App. 528,
531; 780 N.W.2d 618 (2009). Because the trial court
considered evidence outside the pleadings, we treat the trial
court's grant of summary disposition as having been under
MCR 2.116(C)(10). See Sisk-Rathburn v Farm Bureau Gen Ins
Co of Mich, 279 Mich.App. 425, 427; 760 N.W.2d 878
(2008).
A motion under MCR 2.116(C)(10) tests the factual support of
a plaintiff's claim. Summary disposition is appropriate
under MCR 2.116(C)(10) if there is no genuine issue regarding
any material fact and the moving party is entitled to
judgment as a matter of law. In reviewing a motion under MCR
2.116(C)(10), this Court considers the pleadings, admissions,
affidavits, and other relevant documentary evidence of record
in the light most favorable to the nonmoving party to
determine whether any genuine issue of material fact exists
to warrant a trial. A genuine issue of material fact exists
when the record, giving the benefit of reasonable doubt to
the opposing party, leaves open an issue upon which
reasonable minds might differ. [Zaher v Miotke, 300
Mich.App. 132, 139-140; 832 N.W.2d 266 (2013) (quotations
marks and citations omitted).]
"Only
the substantively admissible evidence actually proffered may
be considered." 1300 LaFayette East Coop, Inc v
Savoy, 284 Mich.App. 522, 525; 773 N.W.2d 57 (2009)
(quotation marks and citation omitted).
III.
ANALYSIS
On
remand, we are tasked with deciding a single question:
"Whether, even if the plaintiff counties are successors
in interest to their road commissions, [the Pool]
nevertheless may, in accordance with its governing documents,
decline to issue to the counties refunds of surplus premiums
from prior-year contributions." Co of Ingham
II, 503 Mich. at 917. While this directive is relatively
straightforward, the parties argue over to what extent, if
any, this Court can disregard its earlier opinion. We address
this dispute before turning to our task on remand.
A..
LAW-OF-THE-CASE DOCTRINE
As
explained by this Court,
Under the doctrine of the law of the case, if an appellate
court has passed on a legal question and remanded the case
for further proceedings, the legal question will not be
differently determined in a subsequent appeal in the same
case where the facts remain materially the same. The primary
purpose of the law-of-the-case doctrine is to maintain
consistency and avoid reconsideration of matters once decided
during the course of a single continuing lawsuit.
[Bennett v Bennett, 197 Mich.App. 497, 499-500; 496
N.W.2d 353 (1992) (citation omitted).]
The
Pool contends that we are not bound by the law-of-the-case
doctrine because that doctrine is discretionary. The Pool is
correct that courts have some discretion when applying the
law-of-the-case doctrine under certain circumstances. See,
e.g., Locricchio v Evening News Ass'n, 438 Mich.
84, 109-110; 476 N.W.2d 112 (1991) (explaining that there are
instances where "the law of the case doctrine must yield
to a competing doctrine"); People v Spinks, 206
Mich.App. 488, 491; 522 N.W.2d 875 (1994) (refusing to apply
the law-of-the-case doctrine because there had been an
intervening change in the law); People v Phillips,
227 Mich.App. 28, 34; 575 N.W.2d 784 (1997) ("[W]e
decline to apply a doctrine designed for judicial convenience
in fairly administering the obligation to do justice so as to
work an injustice."). Yet the Pool's only argument
for not applying the law-of-the-case doctrine is that,
according to the Pool, our previous decision was wrong. As
this Court has explained, such a reason is not sufficient to
justify ignoring the law-of-the-case doctrine:
[W]e do not believe that a conclusion that the prior decision
was erroneous is sufficient by itself to justify ignoring the
law-of-the-case doctrine. To do so would vitiate that
doctrine because it would allow this Court to ignore a prior
decision in a case merely because one panel concluded that
the earlier panel had wrongly decided the matter. It would,
therefore, reopen every case to relitigation of every issue
previously decided in hopes that a subsequent panel of the
Court would decide the issue differently than did the prior
panel. Clearly, the law-of-the-case doctrine has no
usefulness if it is only applied when a panel of this Court
agrees with the decision reached by a prior panel.
[Bennett, 197 Mich.App. at 500.]
We
therefore conclude that, to the extent that our Supreme
Court's remand order left intact this Court's earlier
legal conclusions, we are bound by those conclusions under
the doctrine of the law of the case. This includes this
Court's previous holdings that the counties are
successors in interest to their former road commissions and
that Jackson County did not withdraw from the Pool.
B.
DOCUMENTS TO CONSIDER ON REMAND
Our
Supreme Court directed us to consider, among other things,
five documents on remand: the Declaration of Trust, By-Laws,
Inter-Local Agreements, MCRCSIP Refund Overview, and the July
19, 1990 memorandum to the Pool members. Co of Ingham
II, 503 Mich. at 917.
1.
DECLARATION OF TRUST
The
Declaration of Trust created the Pool in 1984. As relevant
here, the Declaration of Trust provides:
ARTICLE
VI
POWERS
AND DUTIES OF THE BOARD OF DIRECTORS
* * *
SECTION 9. Use of Funds. The Board of Directors
shall set aside from the premiums collected during each
fiscal year a reasonable sum for the operating expenses or
administrative expenses of the Trust for that year. All
remaining funds coming into its possession or under its
control with respect to that fiscal year of the Trust shall
be set aside and shall be used only for the following
purposes:
* * *
(f) Distribution among the members during that fiscal year in
such manner as the Members and the Board of Directors shall
deem to be equitable, of any excess monies remaining after
payment of claims and claims expenses and after provision has
been made for open claims and outstanding reserves and a
reserve for claims incurred but not reported; provided,
however, that no such distributions shall be made earlier
than twelve (12) months after the end of each Trust Year; and
provided further, that undistributed funds from previous
Trust Years may be distributed at any time if not required
for loss funding and if approved for distribution by the
Board of Directors. The Board ...