Title: County Of Ingham v. Michigan County Road Commission Self-Insurance Pool
Citation: N/A
Docket Number: 160186
State: Michigan
Issuer: Michigan Supreme Court
Date: December 21, 2021

COUNTY OF INGHAM v MICHIGAN COUNTY ROAD COMMISSION  
SELF-INSURANCE POOL 
 
Docket No. 160186.  Argued on application for leave to appeal October 7, 2021.  Decided 
December 21, 2021. 
 
 
Ingham County, Jackson County, and Calhoun County (collectively, the Counties) filed an 
action in the Ingham Circuit Court alleging that they had a right to receive a decade’s worth of 
surplus contributions (surplus equity) made to the Michigan County Road Commission Self-
Insurance Pool (the Pool).  The parties filed cross-motions for summary disposition, and the court, 
Rosemarie E. Aquilina, J., granted summary disposition to the Pool and rejected the Counties’ 
claims.  On appeal, the Court of Appeals, TALBOT, C.J., and O’CONNELL and O’BRIEN, JJ., 
reversed, holding that the Counties were successors in interest to their dissolved road commissions.  
321 Mich App 574 (2017) (Ingham Co I).  Additionally, the Court of Appeals held that because 
Jackson County had not signed a withdrawal agreement with the Pool, Jackson County had not 
withdrawn from the Pool and was entitled, as a successor in interest, to receive equity distributions 
from prior-year contributions made by its former road commission.  The Pool sought leave to 
appeal in the Supreme Court, and the Supreme Court, in lieu of granting leave, remanded the case 
to the Court of Appeals.  The Supreme Court directed the Court of Appeals to address on remand 
whether the Pool was permitted to decline to issue refunds of surplus premiums to the Counties of 
contributions from previous years even if the Counties were successors in interest to their former 
road commissions.  503 Mich 917 (2018).  On remand, the Court of Appeals, O’BRIEN, P.J., and 
GLEICHER and STEPHENS, JJ., affirmed its previous decision.  329 Mich App 295 (2019) (Ingham 
Co II).  After reviewing the Pool’s founding document (the Declaration of Trust), the Pool’s By-
Laws, and the Inter-Local Agreements executed between the Pool and each of the Counties’ road 
commissions when they joined the Pool, the Court of Appeals concluded that the Pool’s 
withdrawal policy was clear: a withdrawing member forfeits any and all rights to dividends, 
credits, and/or interest that is or will become payable after the effective date of the member’s 
withdrawal from the Pool.  However, the Court of Appeals reasoned that Jackson County had not 
withdrawn from the Pool because the Jackson County Road Commission had never executed the 
Pool’s withdrawal agreement.  The Court of Appeals further determined that Jackson County was 
in the position of a “county road commission” for purposes of determining the Counties’ eligibility 
for membership under the By-Laws, and that membership in the Pool had been transferred from 
Jackson County’s former road commission to the county itself.  Regarding Ingham and Calhoun 
Counties, the Court of Appeals recognized that they had withdrawn from the Pool, but the Court 
 
 
Michigan Supreme Court 
Lansing, Michigan 
Syllabus 
 
Chief Justice: 
Bridget M. McCormack 
 
 
Justices: 
Brian K. Zahra 
David F. Viviano 
Richard H. Bernstein 
Elizabeth T. Clement 
Megan K. Cavanagh 
Elizabeth M. Welch 
This syllabus constitutes no part of the opinion of the Court but has been  
prepared by the Reporter of Decisions for the convenience of the reader. 
Reporter of Decisions: 
Kathryn L. Loomis 
determined that excluding the Counties from sharing in distributions of surplus equity was 
unenforceable as against public policy, citing MCL 124.5(6) of the intergovernmental contracts 
act, MCL 124.1 et seq.  The Court further stated that when a road commission withdraws from the 
Pool because it was dissolved, excluding a county from any surplus distribution would penalize 
the county for exercising its right to dissolve its road commission.  The Supreme Court ordered 
and heard oral argument on whether to grant the Pool’s application for leave to appeal or take other 
action.  506 Mich 913 (2020). 
 
 
In an opinion by Chief Justice MCCORMACK, joined by Justices ZAHRA, VIVIANO, 
CLEMENT, CAVANAGH, and WELCH, the Supreme Court, in lieu of granting leave to appeal, held: 
 
 
The Counties did not have a contractual right to distributions of surplus equity under the 
Declaration of Trust, Inter-Local Agreements, or the Pool’s By-Laws.  Further, Michigan’s public 
policy did not require the Pool to include its former members in distributions of surplus equity. 
 
 
1.  The Declaration of Trust permitted the Pool to distribute surplus equity to county road 
commissions who were members of the Pool during the fiscal year in which the funds came into 
the Pool’s possession.  Although the Counties interpreted this permissive language as obligating 
the Pool to make distributions, the Declaration of Trust, the Pool’s By-Laws, and the Inter-Local 
Agreements did not mandate the terms of any such distributions.  Rather, the Declaration of Trust 
provided that the Pool was permitted to treat members who withdrew from the Pool differently 
and less favorably than members who continued in the Pool.  This “differently and less favorably” 
language was also referred to in the By-Laws and the Inter-Local Agreements, which provided 
that distributions of surplus equity would be the responsibility of the Pool, as stated in the Pool’s 
founding documents.  Because the road commissions of Ingham and Calhoun Counties withdrew 
from the Pool, their agreements with the Pool allowed the Pool to treat them differently and less 
favorably than continuing members, including by excluding them from any surplus-equity 
distributions.  Although Jackson County did not execute a withdrawal agreement with the Pool, 
under the Pool’s By-Laws, only county road commissions were permitted to be members of the 
Pool, and the By-Laws did not provide any mechanism for transferring membership when a 
member’s successor lacked eligibility under the By-Laws.  Therefore, the dissolution of the 
Jackson County Road Commission did not transfer the road commission’s membership to the 
county itself.  Although the By-Laws did not define the term “county road commissions,” it does 
not follow that because the dissolved road commissions’ powers, duties, and functions were 
transferred to the Counties, the Counties were therefore eligible for Pool membership.  Notably, 
before the 2012 amendment of the County Road Law, the law provided that every county with a 
county road system had to have a board of county road commissioners, i.e., a county road 
commission.  Therefore, even if the By-Laws’ use of the term “county road commission” was 
ambiguous, the law when the By-Laws were drafted, adopted, and last revised made clear that the 
only reasonable interpretation of “county road commission” was a county road commission.  
Under a straightforward reading of the By-Laws, a county that has dissolved its road commission 
would not be eligible for membership in the Pool.  Accordingly, despite the fact that Jackson 
County did not formally withdraw from the Pool, none of the Counties had a contractual right to 
share in any distributions made after the effective date of the dissolution of their respective road 
commissions.  Further, whether the Counties were successors in interest to the road commissions 
was not relevant to determining whether they were entitled to relief.  A successor in interest does 
not acquire greater rights than its predecessor.  The Inter-Local Agreements did not provide the 
dissolved road commissions (and by extension, did not provide the Counties) with the right to 
share in any distribution of surplus equity. 
 
 
2.  According to the Counties, public policy required the Pool to include them in any 
distributions of surplus equity.  Generally, competent persons are afforded the utmost liberty of 
contracting, and when their agreements are voluntarily and fairly made, they shall be held valid 
and enforceable in the courts.  However, when there are definite indications in the law of some 
contrary public policy, the contract provision must yield to public policy.  First, contrary to the 
Counties’ argument, excluding the Counties from distributions of surplus equity was not counter 
to MCL 124.5(6).  The statute provides that insurance protection is essential to the proper 
functioning of municipal corporations and that proper risk management requires spreading risk to 
minimize fluctuation in insurance needs.  But excluding the Counties from surplus distributions 
would not deny the Counties essential insurance coverage, nor would it concentrate risk in the 
Counties.  The dissolution of the Counties’ road commissions and corresponding end in Pool 
membership did not prevent the Counties from seeking coverage from the Pool for incidents that 
occurred while the dissolved road commissions were members.  Rather, under the withdrawal 
policy, the Counties simply would not receive payments that their road commissions might have 
received, had they not been dissolved, if the Pool had operated at a surplus during the relevant time 
periods.  Further, this result did not penalize the Counties for dissolving their road commissions.  
The Counties’ dissolution of their road commissions brought about the end of the commissions’ 
memberships in the Pool, but the result was no different than if the road commissions had 
withdrawn from the Pool, as allowed by the Inter-Local Agreements, without dissolving.  In this 
way, the Counties were treated the same as any other former member.  The Counties also argued 
that public policy required the Pool to include them in distributions of surplus equity on the basis 
of legislation in the context of worker’s compensation insurance.  MCL 500.2016(1) restricts a 
self-insurance group from conditioning a refund of surplus equity on a member’s continued 
participation in the group, but this restriction only applies in the context of worker’s compensation 
insurance.  The statute identifies this practice as an unfair method of competition and as an unfair 
or deceptive practice in the “business of insurance.”  But under MCL 124.6 of the 
intergovernmental contracts act, the Pool was not an insurance company or insurer, and its 
provision and administration of group self-insurance did not constitute “doing an insurance 
business” under the statute.  Because the Pool was neither a workers’ compensation insurer nor in 
the insurance business, MCL 500.2016 is not a “definite indication in the law” prohibiting the 
Pool’s exclusion of former members from surplus distributions. 
 
 
Reversed and remanded. 
 
 
Justice VIVIANO, concurring, agreed in full with the majority opinion but wrote separately 
because he questioned whether the Legislature had anticipated or desired the result reached by the 
Court.  When the Pool was formed, the law required every county in Michigan with a county road 
system to have a county road commission, but the 2012 amendment of the law allowed county 
boards of commissioners to dissolve their county road commissions and assume their road 
commissions’ powers, duties, and functions.  However, the Legislature did not also address 
whether counties which had road commissions that had entered into self-insurance pools limiting 
membership to county road commissions would have any right to continued membership in the 
pool or to receive any distributions of surplus equity from the pool to which the road commissions 
would have otherwise been entitled.  It was concerning that by exercising their statutory right to 
dissolve their road commissions, the Counties lost entitlement to funds they had contributed to the 
Pool but which were not used (i.e., the surplus equity).  Because these overpayments were 
ultimately made by the taxpayers of the Counties, Justice VIVIANO questioned whether the 
Legislature intended for such punitive actions to be taken against counties who had exercised their 
statutory right to dissolve their road commissions. 
 
 
Justice BERNSTEIN, dissenting, would have affirmed the Court of Appeals because he 
believed it had reached the right result for the right reasons. 
 
 
 
 
 
 
 
 
 
FILED  December 21, 2021 
 
 
 
S T A T E  O F  M I C H I G A N 
 
SUPREME COURT 
 
 
COUNTY OF INGHAM, COUNTY OF 
JACKSON, and COUNTY OF CALHOUN, 
 
 
Plaintiffs-Appellees, 
 
 
v 
No. 160186 
 
MICHIGAN COUNTY ROAD 
COMMISSION SELF-INSURANCE POOL, 
 
 
 
Defendant-Appellant. 
 
 
 
BEFORE THE ENTIRE BENCH  
 
MCCORMACK, C.J.  
The counties of Ingham, Jackson, and Calhoun (the Counties), the plaintiffs, 
dissolved their county road commissions.  Those commissions had been members of the 
Michigan County Road Commission Self-Insurance Pool (the Pool), the defendant.  The 
Counties sued the Pool, asserting that they have a right to receive a decade’s worth of 
surplus equity (i.e., whatever money remains in a fiscal year after the payment of claims 
 
Michigan Supreme Court 
Lansing, Michigan 
OPINION 
 
Chief Justice: 
Bridget M. McCormack  
 
 
Justices: 
Brian K. Zahra 
David F. Viviano 
Richard H. Bernstein 
Elizabeth T. Clement 
Megan K. Cavanagh 
Elizabeth M. Welch 
 
 
 
2 
 
and operating expenses).  The Counties believe they are the successors in interest to their 
dissolved road commissions and, as such, are entitled to the surplus equity that the 
commissions might have received had they not been dissolved and withdrawn from the 
Pool.  Jackson County makes one other argument: because its road commission never 
formally withdrew from the Pool, the county says it has a right to receive surplus equity on 
the same terms as any current member.   
The Pool disagrees.  It says that the Counties have no right to receive surplus equity 
because the documents governing the Pool’s operations and its contracts with its various 
members provide the Pool with discretion in distributing surplus equity.  This includes the 
power to exclude former members should a distribution be made.  
The Court of Appeals sided with the Counties.  The panel held that the Counties are 
the successors in interest to their dissolved road commissions and, as a matter of public 
policy, the Counties have a right to receive surplus equity for fiscal years in which their 
road commissions were members of the Pool.  The Court of Appeals also determined that 
the dissolution of the Jackson County Road Commission did not disqualify Jackson County 
from membership in the Pool, and therefore, the county may receive surplus equity 
regardless of any public-policy considerations.  
We reverse.  We agree with the Pool that the Counties do not have a contractual 
right to receive surplus equity and that such an arrangement is not contrary to public policy.  
And for Jackson County, we hold that the dissolution of its county road commission did 
not transfer membership in the Pool from the road commission to the county itself, so the 
Pool may therefore exclude Jackson County from postdissolution distributions.   
 
3 
 
We reverse the judgment of the Court of Appeals and remand to that Court for 
consideration of the Counties’ remaining arguments.  
I.  FACTS AND PROCEDURAL HISTORY 
In 1982, the Legislature amended the intergovernmental contracts between 
municipal corporations act, MCL 124.1 et seq., to permit “any 2 or more municipal 
corporations,[1] by intergovernmental contract, [to] form a group self-insurance pool to 
provide for joint or cooperative action relative to their financial and administrative 
resources for the purpose of providing to the participating municipal corporations risk 
management and coverage for pool members and employees of pool members[.]”  MCL 
124.5(1), as added by 1982 PA 138. 
Soon after, in April 1984, several county road commissions created the Pool.  
Formed as a trust, the Pool’s founding document (the Declaration of Trust) explains that 
the purpose of the Pool is “to provide for joint and cooperative action relative to Members’ 
financial and administrative resources for the purpose of providing to participating 
Members risk management and [insurance] coverage for pool Members . . . .”   
To do that, the Declaration of Trust provides that a member of the Pool “shall 
promptly pay all premiums and assessments as required by the Board of Directors” and 
limits how the Pool can spend these funds.  For any given fiscal year, the Pool must set 
aside a “reasonable sum” for operational and administrative expenses.  Any remaining 
funds “shall be used only” for certain expenditures, including the payment of claims and 
                                              
1 As used in the intergovernmental contracts act, the term “municipal corporation” includes 
“a county, charter county, [or] county road commission.”  MCL 124.1(a). 
 
4 
 
judgments.  Among these permitted uses is the following language, found at Article VI, 
Section 9 of the Declaration of Trust: 
Distribution among the members during that fiscal year [in which the 
premiums were collected by the Pool] 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 of 
Directors may treat members who withdraw from future Trust Years 
differently and less favorably than they treat members who continue in 
the Trust for future years.  [Emphasis added.] 
The Declaration of Trust further provides, at Section 6 of Article X, that  
[t]here will be no disbursement out of this Trust for any fiscal year by way 
of dividends or distribution of accumulated reserve to Members until (a) after 
provision has been made for all known obligations and (b) the Board of 
Directors shall deem the distribution to be proper. 
The Counties’ road commissions joined the Pool in 1984 or 1985.  At that time, 
each of their road commissions executed an “Inter-Local Agreement” with the Pool.  These 
agreements provided that “[t]he responsibility of the Pool with regard to . . . disposing of 
surpluses . . . shall be as set forth in the Trust creating the Pool, the Pool By-Laws, rules, 
regulations, coverage agreements and Inter-Local Agreements entered into between the 
Pool and participating county road commissions.”  The agreements also contained 
language like that found in the Declaration of Trust at Section 9 of Article VI, describing 
how the Pool can use its funds. 
 
5 
 
In February 2012, about 30 years after the Pool was established, the Legislature 
amended the County Road Law, MCL 224.1 et seq., and the county boards of 
commissioners act, MCL 46.1 et seq.  See 2012 PA 14 and 2012 PA 15.  These amendments 
allowed county boards of commissioners to dissolve their road commissions and thereby 
“transfer[]” the “powers, duties, and functions” of the dissolved road commission to the 
county’s board of commissioners.  MCL 224.6(7), as amended by 2012 PA 14.  The 
changes marked a break from the requirement, first established in 1909, that almost every 
county in Michigan having a county road system (including these plaintiffs) must also have 
a “board of county road commissioners” (that is, a county road commission).  See MCL 
224.6, as enacted by 1909 PA 283.   
Following these amendments, the boards of commissioners of each of the Counties 
adopted resolutions that dissolved their appointed county road commissions.  
The board of commissioners for Ingham County adopted its resolution in April 2012 
dissolving the Ingham County Road Commission effective June 1, 2012.  On May 31, 
2012, one day before the resolution’s effective date, the Pool and the Ingham County Road 
Commission entered into an “Agreement In Recognition Of Termination From Michigan 
County Road Commission Self-Insurance Pool.”  This withdrawal agreement provided that 
“[b]y operation of the action taken by the Ingham County Board of Commissioners,” i.e., 
the dissolution resolution, “the Commission’s membership in [the Pool] shall be and is 
hereby terminated concurrent with the termination of the Ingham County Road 
Commission as of 12:01 a.m. on June 1, 2012 . . . .”  The agreement also provided that the 
Pool would keep servicing any claims (pending or future) that “occur or arise from 
incidents or events occurring prior in time to June 1, 2012.”  The agreement provided for 
 
6 
 
a “contribution adjustment” of the road commission’s annual contribution for the current 
(2012-2013) fiscal year, but it did not provide for any refund of any surplus equity flowing 
from prior-year contributions. 
The board of commissioners for Calhoun County adopted its own dissolution 
resolution in September 2012.  About a week before the resolution’s effective date of 
November 1, 2012, the Pool and the Calhoun County Road Commission entered into a 
withdrawal agreement similar to that entered into by the Ingham County Road Commission 
and the Pool. 
The board of commissioners for Jackson County adopted its dissolution resolution 
in early January 2013, with an effective date of January 16, 2013.  The Counties allege that 
before the resolution became effective, the Pool provided Jackson County with a proposed 
withdrawal agreement.  This document stated that, as of January 16, 2013, the Jackson 
County Road Commission “is dissolved and by operation of law cannot and is not eligible 
to be a Member of the [Pool] as provided in the applicable By-Laws and the Inter-Local 
Agreement that govern membership in the [Pool].”  The parties agree that the Jackson 
County Road Commission did not execute this proposed withdrawal agreement, and the 
parties have not identified any other agreement reached between the Pool and Jackson 
County concerning the dissolution of the Jackson County Road Commission and the 
county’s status as a member of the Pool. 
The Counties sued in 2015.  The complaint stated four claims: (1) that the Pool’s 
refusal to refund the dissolved road commissions’ “aliquod [sic] shares” amounted to 
unconstitutional lending in violation of Const 1963, art 9, § 18; (2) extortion; 
(3) conversion or embezzlement in violation of MCL 600.2919a; and (4) breach of 
 
7 
 
contract.  The complaint alleged that the Pool “had a longstanding pattern and practice of 
refunding unused premiums to Members, based on unused reserves remaining at the 
actuarial closing of a fiscal year, usually many years later.”  The complaint then alleged 
that the Pool had refused the Counties’ demand that it pay to the respective county boards 
of commissioners “their aliquod [sic] share of any surplus then held by or improperly 
distributed to the remaining Members of the [Pool] for actuarial years going back to 2002 
and recognized by [the Pool] as being funds in excess of reserve requirements” that the 
Pool must maintain under the intergovernmental contracts act, see MCL 124.7a.   
The circuit court granted summary disposition in favor of the Pool.  The court found 
that the Pool hadn’t engaged in unconstitutional lending because “neither Plaintiffs nor 
[their] 
former 
road 
commission[s] 
loaned 
their 
credit 
to 
Defendant[; 
rather,] . . . Plaintiffs[’] former road commissions made contributions to Defendant to 
obtain insurance coverage—which constituted a fair exchange of value for value[.]”  The 
Counties’ claims of extortion were summarily dismissed for lack of factual support.  There 
was no conversion or embezzlement because the money at issue was the property of the 
Pool.  And, finally, the court determined that the Counties did not have a contractual right 
to receive surplus equity because such distributions are in the Pool’s discretion and former 
members may be excluded from any such distributions.  
The Court of Appeals reversed the circuit court in Ingham Co v Mich Co Rd Comm 
Self-Ins Pool, 321 Mich App 574; 909 NW2d 533 (2017) (Ingham Co I).  The panel 
departed from the circuit court’s claim-by-claim analysis and instead framed the case as 
implicating two questions: whether the Counties are the “successors in interest” of their 
dissolved road commissions, and whether the Counties could be members of the Pool so 
 
8 
 
as to be eligible to receive distributions of surplus equity.  See Ingham Co I, 321 Mich App 
at 580-585.  The panel answered “yes” to both questions; it reasoned that when MCL 224.6 
is read “as a whole,” it compels the conclusion that “when a county dissolves its road 
commission, the county board of commissioners becomes the successor in interest to the 
former road commission.”  Id. at 581-582.  The Court of Appeals acknowledged that the 
Pool’s By-Laws limit membership in the Pool to “county road commissions.”  Id. at 584.  
Although this membership criteria would seem to exclude the Counties, the panel noted 
that the By-Laws do not define “county road commission” but do refer to “the statutory 
authority of county road commissions.”  Id. 
The panel continued: “[b]ecause we conclude that the counties were successors in 
interest to their dissolved road commissions as a matter of statutory interpretation, we 
likewise conclude that the successor counties are eligible for Pool membership by virtue 
of the statutory reference to county road commissions in the Pool’s bylaws.”  Id.  The panel 
then concluded, with no reference to the Declaration of Trust, By-Laws, or Inter-Local 
Agreements and without identifying any specific cause of action pleaded by the Counties, 
that the Counties are “entitled to receive refunds of surplus premiums from prior-year 
contributions made by the former road commissions.”  Id. at 586. 
In response to the Pool’s application for leave in this Court, we remanded the case 
to the Court of Appeals to consider arguments that the Pool had raised in that Court but 
were never addressed.  We directed the Court of Appeals to consider 
[w]hether, 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.  [Ingham Co v Mich Co Rd Comm Self-Ins Pool, 
503 Mich 917 (2018).] 
 
9 
 
On remand, the Court of Appeals again held that the Counties are entitled to refunds 
of surplus premiums from prior-year contributions.  Ingham Co v Mich Co Rd Comm Self-
Ins Pool (On Remand), 329 Mich App 295; 942 NW2d 85 (2019) (Ingham Co II).  The 
panel reviewed the Declaration of Trust, the Pool’s By-Laws, the Inter-Local Agreements, 
and a memorandum outlining the Pool’s policy for returning surplus equity to its members.  
This memorandum, dated July 19, 1990, provides, in relevant part, “A withdrawing 
member forfeits any and all rights to dividend, credits and/or accumulated interest that is 
to be paid or shall become payable after the effective date of the Member’s withdrawal 
from the Pool.”  
The panel recognized that these documents did not favor the Counties’ position in 
this litigation: “the [Pool’s] withdrawal policy is clear—‘[a] withdrawing member forfeits 
any and all rights to dividend, credits, and/or accumulated interest that is to be paid or shall 
become payable after the effective date of the Member’s withdrawal from the Pool.’ ” 
Ingham Co II, 329 Mich App at 317 (emphasis omitted).  Yet the Court of Appeals gave 
two reasons for affirming its previous decision.   
For Jackson County, the Court of Appeals reasoned that the county was not a 
“withdrawing” member because the Jackson County Road Commission never executed the 
Pool’s proposed withdrawal agreement.  Id. at 316.  The Court of Appeals also indicated 
that because Jackson County was (per the Court’s opinion in Ingham Co I) in the position 
of a “county road commission” for purposes of determining the Counties’ eligibility for 
membership under the By-Laws, membership in the Pool had been transferred from 
Jackson County’s dissolved road commission to the county itself.  Id. at 316-317. 
 
10 
 
As for Ingham and Calhoun Counties, the panel explained that these counties had 
withdrawn from the Pool (as evidenced by the withdrawal agreements).  Id. at 317.  But it 
determined that excluding the Counties from sharing in distributions of surplus equity is 
“unenforceable as against public policy.”  Id. at 321. 
In support of this public-policy holding, the Court of Appeals cited MCL 124.5(6), 
which contains the Legislature’s findings and statement of purpose about the 1982 
amendment of the intergovernmental contracts act.  In the statute, the Legislature declared 
that “insurance protection is essential to the proper functioning of municipal corporations” 
and that municipal self-insurance pools, like the defendant, further a governmental interest 
because they provide an alternative to standard carriers.  MCL 124.5(6), as added by 1982 
PA 138.  Addressing this language, the Court of Appeals stated that permitting the Pool to 
exclude the Counties from any distribution would “directly undermine the public purposes 
that the Pool is required to serve under MCL 124.5(6)” because it would allow the Pool’s 
remaining members to retain the portion of any surplus that might otherwise be paid to the 
Counties.  Id. at 319-320.  This result, the panel concluded, would “undercut[] the basic 
principles of predictability and stability that the Legislature intended such self-insurance 
pools to promote.”  Id. at 320.  The Court of Appeals also reasoned that, in the context of 
a member road commission leaving the Pool because of the commission’s dissolution, 
excluding the Counties from any surplus distribution would “penalize the counties for 
exercising their rights to dissolve their road commissions.”  Id. at 319.   
As for remedy, the panel concluded that the Pool’s “withdrawal policy” (of 
excluding former members from distributions) could be “severed” because it was not 
central to the parties’ agreement and because applying a more drastic remedy, such as 
 
11 
 
declaring the parties’ contractual relationship void ab initio, “would do greater damage to 
the policies set forth in MCL 124.5(6), effectively upending the entire Pool.”  Id. at 321-
323. 
We ordered oral argument on the Pool’s application for leave to appeal and 
instructed the parties to address three issues: 
(1) whether the Court of Appeals properly held that the plaintiff Counties are 
successors in interest to their respective road commissions, which were 
dissolved pursuant to MCL 46.1 et seq., and MCL 224.1 et seq.; (2) whether 
the Court of Appeals properly held that plaintiff Jackson County was a 
member of defendant Michigan County Road Commission Self-Insurance 
Pool (Pool) despite having dissolved its road commission; and (3) whether 
the Court of Appeals properly held that the plaintiff Counties are entitled to 
refunds of surplus premiums paid to the Pool because the forfeiture 
provisions in the defendant Pool’s governing documents, which comprise the 
parties’ binding contractual agreement, are unenforceable as against public 
policy and must be severed, and whether this issue was properly preserved 
by the plaintiff Counties.  [Ingham Co v Mich Co Rd Comm Self-Ins Pool, 
506 Mich 913 (2020).] 
II.  STANDARD OF REVIEW 
A trial court’s decision to grant or deny summary disposition is subject to de novo 
review, as are “questions involving the proper interpretation of a contract or the legal effect 
of a contractual clause.”  Rory v Continental Ins Co, 473 Mich 457, 464; 703 NW2d 23 
(2005).  Similarly, a lower court’s determination of the public policy of this state is a 
question of law that we review de novo.  See Bronner v Detroit, 507 Mich ___, ___; ___ 
NW2d ___ (2021) (Docket No. 160242); slip op at 4 (“Whether a contract is invalid on 
[public policy] grounds is a question of law subject to de novo review.”).  When we review 
a question de novo, we review the issue independently, without deference to the lower 
court.  Millar v Constr Code Auth, 501 Mich 233, 237; 912 NW2d 521 (2018). 
 
12 
 
III.  ANALYSIS 
A.  THE COUNTIES DO NOT HAVE A CONTRACTUAL RIGHT TO RECEIVE 
SURPLUS EQUITY 
The parties’ agreements answer the question of whether the Counties have a right 
to share in any distribution of surplus equity after their respective withdrawals from the 
Pool (or in Jackson County, after the dissolution of its road commission).   
“Absent an ambiguity or internal inconsistency, contractual interpretation begins 
and ends with the actual words of a written agreement.  When interpreting a contract, our 
primary obligation is to give effect to the parties’ intention at the time they entered into the 
contract.  To do so, we examine the language of the contract according to its plain and 
ordinary meaning.”  Innovation Ventures v Liquid Mfg, 499 Mich 491, 507; 885 NW2d 
861 (2016) (cleaned up).  
Here, the Inter-Local Agreements are the written contracts between the Pool and its 
members.  But as the Court of Appeals explained in Ingham Co II, those agreements refer 
to and incorporate the Declaration of Trust and the By-Laws.  See Ingham Co II, 329 Mich 
App at 313-314.  Thus, we look at all of these documents to determine the parties’ rights 
and obligations.  Id.; see also Whittlesey v Herbrand Co, 217 Mich 625, 627; 187 NW 279 
(1922) (“Where one writing refers to another, the intention of the parties is to be gathered 
from the two instruments taken together.”) (quotation marks and citation omitted).  As 
explained below, these documents support the Pool’s position that former members do not 
have a right to share in any distribution of surplus equity.    
Section 9 of Article VI of the Declaration of Trust permits the Pool to distribute 
“excess monies” to those county road commissions who were members of the Pool during 
 
13 
 
the fiscal year in which the funds came into the Pool’s possession.  The Counties interpret 
this permissive language as obligating the Pool to make distributions, given that Section 9 
of Article VI is an exhaustive list of the ways the Pool can use funds received in a given 
fiscal year and there will be years in which returning excess funds is the only expenditure 
the Pool is allowed to make.  But even if this permissive use-of-funds language can be 
interpreted as imposing an affirmative obligation, the Declaration of Trust, the By-Laws, 
and the Inter-Local Agreements do not mandate the terms of any such distribution.  Rather, 
the Declaration of Trust states that the Pool “may treat members who withdraw from future 
Trust Years differently and less favorably than they treat members who continue in the 
Trust for future years.”   
This “differently and less favorably” language is also found in the Inter-Local 
Agreements.  Those agreements state that “[t]he responsibility of the Pool with regard 
to . . . disposing of surpluses . . . shall be as set forth in the Trust creating the Pool, the Pool 
By-Laws, rules, regulations, coverage agreements and Inter-Local Agreements entered into 
between the Pool and participating county road commissions.”  There’s more, too: the 1990 
policy memorandum about the manner of distributions states that a member who withdraws 
from the Pool “forfeits” any right to receive future distributions. 
Here, the county road commissions for Ingham and Calhoun Counties withdrew 
from the Pool before the effective date of the resolutions dissolving those commissions.  
As withdrawing members, those road commissions’ agreements with the Pool allowed the 
Pool to treat them “differently and less favorably than [the Pool] treat[s] members who 
continue in the Trust for future years.”  Such unfavorable treatment might include 
exclusion from surplus-equity distributions altogether.  The Counties have not identified 
 
14 
 
any contractual language limiting the Pool’s discretion or otherwise barring the Pool from 
treating a withdrawing member less favorably (i.e., by declining to refund surplus-equity 
distributions to that withdrawing member).   
The analysis is different for Jackson County, which did not execute a withdrawal 
agreement with the Pool.  In Ingham Co I, 321 Mich App at 585, the Court of Appeals held 
that Jackson County, as the successor in interest to its dissolved county road commission, 
may share in distributions because “Jackson County’s dissolution of its road commission 
did not automatically result in withdrawal from the Pool.”  In essence, the Court of Appeals 
determined that upon dissolution of the Jackson County Road Commission, the road 
commission’s membership in the Pool passed without interruption from the commission to 
the county itself.  Thus, Jackson County remained (and apparently still remains, under the 
Court of Appeals’ logic) a member of the Pool and could not be subject to any different 
and less favorable treatment.  Id. at 584-586.   
To reach that result, the Court of Appeals observed that while the By-Laws limit 
membership in the Pool to “county road commissions,” the By-Laws do not define this 
term.  Id. at 584.  The only interpretive clue identified by the panel was the By-Laws’ 
reference to the “statutory authority of county road commissions.”  Id.  Because the former 
road commissions’ “powers, duties, and functions” were transferred to the Counties upon 
their respective dissolutions, the Court of Appeals reasoned that the reference in the By-
Laws to the road commissions’ statutory authority compelled the conclusion that “the 
successor counties are eligible for Pool membership.”  Id. at 583-584. 
We disagree.  The By-Laws state in relevant part: “The Pool shall be comprised of 
county road commissions of the State of Michigan which are authorized and approved 
 
15 
 
under Section 1 of Act 138, PA 1982, as amended . . . , to enter into an agreement to pool 
their loss exposures and which have executed the Pool Trust Agreement.”  This statutory 
authority cited by the By-Laws, Public Act 138 of 1982, is the public act that allowed 
“municipal corporations” to form group self-insurance pools.  See MCL 124.5(1), as added 
by 1982 PA 138.  This reference does not support the Court of Appeals’ interpretation of 
the By-Laws as permitting membership by a county that has dissolved its county road 
commission.  Rather, the language merely reinforces that county road commissions have 
been granted, by statute, the power to enter into contracts for group self-insurance.  That 
the By-Laws broadly refer to this authority when describing the Pool’s membership does 
not suggest that any “municipal corporation” is eligible for membership.  And though the 
term “county road commission” is not defined in the By-Laws, its meaning is sufficiently 
clear—it refers to a “board of county road commissioners” as described in MCL 224.6.  
This meaning is especially plain given the history of the County Road Law.  Recall 
that before the enactment of 2012 PA 14, the County Road Law provided (with limited 
exceptions not applicable here) that every county with a county road system must also have 
a “board of county road commissioners” (i.e., a county road commission), an entity apart 
from the county’s board of commissioners.  See MCL 224.6, as enacted by 1909 PA 283.  
Thus, even if the By-Laws’ use of the term “county road commission” can be characterized 
as unclear today, when the By-Laws were drafted, adopted, and last revised, the only 
reasonable interpretation of “county road commission” was a county road commission.  
See Innovation Ventures, 499 Mich at 507 (“When interpreting a contract, our primary 
obligation is to give effect to the parties’ intention at the time they entered into the 
contract.”) (emphasis added; quotation marks and citation omitted).   
 
16 
 
A review of the Counties’ allegations solidifies our understanding of the By-Laws.  
The Declaration of Trust permits amendment of the By-Laws by two-thirds votes of both 
the Pool’s board of directors and its members.  The Counties’ complaint alleges that at the 
Pool’s annual meeting in July 2012, its members considered a board-approved resolution 
that would have amended the By-Laws to allow “counties that have assumed the powers 
and duties provided by law to county road commissions” to become members of the Pool.  
According to the complaint, this resolution was offered at a time when the Pool’s 
membership was considering the effects of then-recent changes to the County Road Law 
and the county board of commissioners act (i.e., the changes that allowed counties to 
dissolve their county road commissions).  Had the Pool and its members understood the 
By-Laws’ reference to a “county road commission” as including a county that had 
dissolved its road commission, no such change would be necessary.  The resolution was 
rejected by vote of the members, leaving intact the requirement that a member of the Pool 
be a “county road commission.”  The board of commissioners for Jackson County resolved 
to dissolve the Jackson County Road Commission about six months later. 
In short, the Court of Appeals’ determination that the By-Laws allow for 
membership in the Pool by a county that has dissolved its county road commission 
contradicts the plain language of the By-Laws as that language would have been 
understood when the By-Laws were adopted and last revised.  And the Counties 
acknowledge that, as late as July 2012, the Pool’s membership considered and rejected a 
proposed amendment that would have specifically allowed for membership in the Pool by 
counties that have dissolved their county road commissions.  We agree with the Pool that, 
 
17 
 
under a straightforward reading of the By-Laws, Jackson County is not eligible for 
membership because it is not a “county road commission.” 
The lack of a formal withdrawal by the Jackson County Road Commission is 
immaterial.  The Declaration of Trust, the By-Laws, and the Inter-Local Agreements do 
not provide any mechanism for transfer of membership when a member’s successor lacks 
eligibility under the By-Laws.  Nor do these documents contemplate the “dissolution” of a 
member.  Rather, the Declaration of Trust, the By-Laws, and the Inter-Local Agreements 
provide only two ways in which a member road commission might leave the Pool: 
withdrawal by the member, or termination by “two-thirds vote of the Members present at 
an annual or special meeting of the Members.”  These documents do not provide the former 
member with a contractual right to receive future distributions in either situation 
(withdrawal or termination).  Therefore, absent a change in the By-Laws that would allow 
membership in the Pool by a county that has dissolved its road commission, we see no 
reason for a different result where a member road commission has been dissolved.  
We therefore conclude that the dissolution of the Jackson County Road Commission 
did not transfer the road commission’s membership to the county itself.  Accordingly, 
Jackson County, like Ingham and Calhoun Counties, does not have a contractual right to 
share in any distributions made after the effective date of the dissolution of its road 
commission. 
Whether the Counties are “successors in interest” is not relevant to our decision that 
the Counties are not entitled to relief.  A successor in interest acquires no greater rights 
than its predecessor.  Upon their dissolution, the “powers, duties, and functions” of the 
Counties’ road commissions were transferred to the Counties themselves.  Had those 
 
18 
 
dissolved commissions had a right to receive future distributions of surplus equity, the 
Counties might be well-positioned to assert such a right.  Likewise, the Counties may be 
able to seek insurance coverage from the Pool for claims arising from incidents that 
occurred when their now-dissolved road commissions were members.  For today, however, 
we simply conclude that, even if the Pool experiences a surplus for any fiscal year between 
2002 and 2012 and makes distributions accordingly, the Inter-Local Agreements did not 
provide the dissolved county road commissions (and by extension, do not provide the 
Counties) with the right to share in any such distribution.  The circuit court correctly 
rejected the Counties’ argument to the contrary. 
B.  THE POOL’S WITHDRAWAL POLICY IS PERMISSIBLE 
Finally, we hold that the public policy of this state does not require the Pool to 
include its former members when distributing surplus equity.  
In general, “competent persons shall have the utmost liberty of contracting,” and 
“their agreements voluntarily and fairly made shall be held valid and enforced in the 
courts.”  Bronner, 507 Mich at ___; slip op at 4 (cleaned up).  But “where there are definite 
indications in the law of some contrary public policy, the contract provision must yield to 
public policy.”  Id. at ___; slip op at 5 (cleaned up).  Such “definite indications” may be 
found in “our state and federal constitutions, our statutes, and the common law.”  Terrien 
v Zwit, 467 Mich 56, 66-68; 648 NW2d 602 (2002). 
The Counties advance three reasons why public policy requires the Pool to include 
them in any distributions of surplus equity.  First, the Counties argue that their exclusion 
contradicts the findings-and-purpose language found in MCL 124.5(6).  Second, the 
 
19 
 
Counties assert that 2012 PA 14 and 2012 PA 15 provide counties with the right to dissolve 
their county road commissions, see MCL 46.11(s) and MCL 224.6, and exclusion amounts 
to penalizing the Counties for exercising this right.  Third, the Counties observe that the 
Legislature has, in the context of worker’s compensation insurance, specifically prohibited 
an insurer (including a self-insurance group) from conditioning the receipt of any dividend 
(e.g., surplus equity) on the insured “renew[ing] or maintain[ing] worker’s compensation 
insurance with the insurer beyond the current policy’s expiration date or requiring a 
member [of a self-insurance group] to continue participation with . . . [the] group.”  MCL 
500.2016(1)(a).  In making this claim, the Counties generally endorse the Court of 
Appeals’ reasoning.  See Ingham Co II, 329 Mich App at 317-321. 
We disagree.  The Legislature has made clear that “insurance protection is essential 
to the proper functioning of municipal corporations,” and “proper risk management 
requires spreading risk to minimize fluctuation in insurance needs.”  MCL 124.5(6).  But 
excluding the Counties from surplus distributions does not deny the Counties the 
“essential” insurance coverage that the Pool provides to its members, nor does it 
concentrate the risk in the Counties themselves.  As explained, we do not suggest that the 
dissolution of their county road commissions and the corresponding end in membership in 
the Pool prevents the Counties from seeking coverage from the Pool for incidents that 
occurred while the dissolved commissions were members.  The Pool’s withdrawal policy 
simply means the Counties will not receive payments that the dissolved commissions might 
have received (had their membership in the Pool not ended) if the Pool operates at a 
surplus—an outcome that was never guaranteed.   
 
20 
 
While the Counties may have believed that the Pool would amend its By-Laws or 
change its withdrawal policy to the Counties’ benefit, those changes never happened.  
Unlike the Court of Appeals, we see no reason why the Counties’ expectation of a different 
result should be a relevant consideration in assessing whether the withdrawal policy is 
contrary to public policy.  See Ingham Co II, 329 Mich App at 320 (describing the 
“withdrawal policy” as “affording the remaining members of the Pool a comparatively 
small windfall . . . while imposing a large, unexpected forfeiture on the three withdrawing 
counties”) (emphasis added).  The doctrine of promissory estoppel already provides a 
remedy for parties who reasonably rely on a “clear and definite” promise.  See, e.g., State 
Bank of Standish v Curry, 442 Mich 76; 500 NW2d 104 (1993).  The Counties have not 
alleged promissory estoppel, and we see no reason why an otherwise valid arrangement 
between the parties is contrary to public policy because the Counties hoped that the 
arrangement would change. 
We disagree with the Court of Appeals’ characterization of the withdrawal policy 
as a “penalty.”  See Ingham Co II, 329 Mich App at 319 (“To permit the Pool to enforce 
the withdrawal policy against the counties would be to permit the Pool to penalize the 
counties for exercising their rights to dissolve their road commissions under MCL 46.11(s) 
and MCL 224.6(7).”).  The dissolution of the Counties’ road commissions may have 
brought about the end of the road commissions’ memberships, but the result here is no 
different than had those road commissions withdrawn from the Pool (as the Inter-Local 
Agreements allowed) and endured.  That is, the Counties are being treated the same as any 
other former member.  And describing that result as a “penalty” overlooks the reciprocal 
obligations that come with membership in the Pool.  There is no guarantee that a surplus 
 
21 
 
will occur.  Should a deficiency arise instead, the documents forming the Pool’s contract 
with its member-commissions permit the Pool to assess those members.  That is, members 
may be required to contribute additional funds to cover the shortfall.   
Nor are we persuaded that MCL 500.2016 helps the Counties.  While the statute 
does restrict a self-insurance group from conditioning a refund of surplus equity on a 
member’s continued participation in the group, this restriction only applies in the context 
of worker’s compensation insurance.  See MCL 500.2016(1) (“[T]he following practices 
as applied to worker’s compensation insurance including worker’s compensation coverage 
provided through a self-insurer’s group are defined as unfair methods of competition and 
unfair and deceptive acts or practices in the business of insurance . . . .”) (emphasis added).  
The Court of Appeals found it “telling” that the Legislature has classified this as an “unfair 
and deceptive” business practice when done by an insurer.  Ingham Co II, 329 Mich App 
at 320, discussing MCL 500.2016; see also MCL 500.2003(1) (“A person shall not engage 
in a trade practice that is defined or described in this chapter or is determined under this 
chapter to be an unfair method of competition or an unfair or deceptive act or practice in 
the business of insurance.”).  But the intergovernmental contracts act provides that the Pool 
“is not an insurance company or insurer under the laws of this state,” and its “development, 
administration, and provision of group self-insurance . . . does not constitute doing an 
insurance business.”  MCL 124.6.  Because the Pool is not a workers’ compensation 
insurer, nor even in the insurance business, we decline to read MCL 500.2016 as a “definite 
indication in the law” prohibiting the withdrawal policy.  Terrien, 467 Mich at 66-68.  
 
22 
 
IV.  CONCLUSION  
The Counties’ position is that they should have the benefit of continuing 
membership in the Pool (to share in distributions if a surplus occurs) but none of the risks 
(another contribution or assessment for a deficiency).  The Counties do not, however, have 
any such right as a matter of contract.  Nor have the Counties identified any “definite 
indications in the law” that would compel such a result as a matter of public policy.  
Terrien, 467 Mich at 66-68.  We conclude, therefore, that the Pool’s limitation of 
membership to “county road commissions” and its chosen method of distributing surplus 
equity reflect the documents forming the parties’ agreement and are not contrary to the 
public policy of this state.   
In their claim of appeal from the circuit court’s order, the Counties argued that the 
circuit court erred by dismissing the Counties’ claims of unconstitutional lending, 
extortion, and conversion.  The Court of Appeals did not address these arguments in 
Ingham Co I.  We reverse the Court of Appeals’ judgment that the Pool’s withdrawal policy 
is contrary to public policy and that Jackson County became a member of the Pool upon 
the dissolution of its county road commission, and we remand to that Court for 
consideration of those arguments raised by the Counties but not addressed in Ingham Co I.  
We do not retain jurisdiction. 
 
 
Bridget M. McCormack 
 
Brian K. Zahra 
 
David F. Viviano 
 
Elizabeth T. Clement 
 
Megan K. Cavanagh 
 
Elizabeth M. Welch 
S T A T E  O F  M I C H I G A N 
 
SUPREME COURT 
 
 
COUNTY OF INGHAM, COUNTY OF 
JACKSON, and COUNTY OF CALHOUN, 
 
 
Plaintiffs-Appellees, 
 
 
v 
No. 160186 
 
MICHIGAN COUNTY ROAD 
COMMISSION SELF-INSURANCE POOL, 
 
 
 
Defendant-Appellant. 
 
 
 
VIVIANO, J. (concurring).  
I concur in full with the majority but write separately because I question whether 
the result reached today was one the Legislature anticipated or desired.  Defendant, the 
Michigan County Road Commission Self-Insurance Pool, is, as its name suggests, a self-
insurance pool that was formed by agreement of its member county road commissions.  
Those road commissions are local governmental entities that could enter into such an 
arrangement by virtue of MCL 124.5(a), which expressly authorizes these pools.  As the 
majority explains, at the time the Pool was created and its terms agreed upon, “every county 
in Michigan [with] a county road system” was required to have a “ ‘board of county road 
commissioners’ (that is, a county road commission).”  Ante at 5.  Thus, the terms of the 
Pool naturally provided for a membership comprised of county road commissions. 
In 2012, the Legislature for the first time allowed county boards of commissioners 
to dissolve their county road commissions and assume the road commissions’ “powers, 
duties, and functions.”  See 2012 PA 14 and 2012 PA 15.  But the Legislature did not 
 
2 
 
address whether those counties, like plaintiffs here—which had road commissions that had 
entered into self-insurance pools limiting membership to county road commissions—
would have any right to continue membership in the pool or to receive any distributions of 
surplus equity from the pool to which the road commissions would have otherwise been 
entitled.  Because plaintiffs no longer have separate road commissions and, in two cases, 
have withdrawn from the Pool, I agree with the majority that plaintiffs here no longer 
qualify under the Pool agreement for membership or distributions of surplus equity.  
Perhaps most concerning, by exercising their statutory right to dissolve their road 
commissions, these counties thus lost entitlement to funds they contributed to the Pool but 
which were not used, i.e., the surplus equity.   
This may seem like a technical matter involving complex insurance arrangements 
between municipal corporations.  But the funds plaintiffs have lost out on represent 
overpayments made, ultimately, by the taxpayers of those counties.  They are the real losers 
today.  It is not clear to me that the Legislature in 2012 would have wanted to allow such 
punitive actions to be taken against counties for exercising their statutory right to dissolve 
their road commissions.  As a court, we cannot fill this possible gap in the 2012 legislation, 
and therefore, I agree with the majority’s analysis and the result it reaches.  See People v 
Pinkney, 501 Mich 259, 286; 912 NW2d 535 (2018).  The Legislature, however, may wish 
to reexamine this issue in light of the Court’s opinion today.   
 
 
David F. Viviano 
 
S T A T E  O F  M I C H I G A N 
 
SUPREME COURT 
 
 
COUNTY OF INGHAM, COUNTY OF 
JACKSON, and COUNTY OF CALHOUN, 
 
 
Plaintiffs-Appellees, 
 
 
v 
No. 160186 
 
MICHIGAN COUNTY ROAD 
COMMISSION SELF-INSURANCE POOL, 
 
 
 
Defendant-Appellant. 
 
 
 
BERNSTEIN, J. (dissenting). 
I would affirm for the reasons stated in the Court of Appeals opinion, as I believe 
the Court of Appeals reached the right result for the right reasons. 
 
 
Richard H. Bernstein