Opinion ID: 848910
Heading Depth: 3
Heading Rank: 2

Heading: The Meaning of Liquidation

Text: Because M.C.L. § 421.27(f)(5) does not apply here, [5] the question remains whether M.C.L. § 421.27(f)(1) required coordination of plaintiff's benefits. The Court of Appeals stated in dictum that even if M.C.L. § 421.27(f)(1) governed, it did not require an offset because plaintiff did not receive a retirement benefit within the meaning of M.C.L. § 421.27(f)(4)(a). That subdivision provides: (4)(a) As used in this subdivision, retirement benefit mean a benefit, annuity, or pension of any type ... that is: ( i ) Provided as an incident of employment under an established retirement plan, policy, or agreement, including federal social security if subdivision (5) is in effect. ( ii ) Payable to an individual because the individual has qualified on the basis of attained age, length of service, or disability, whether or not the individual retired or was retired from employment. Amounts paid to individuals in the course of liquidation of a private pension or retirement fund because of termination of the business or of a plant or department of the business of the employer involved shall not be considered to be retirement benefits. [Emphasis added.] The Court of Appeals determined that plaintiff's pension was not a retirement benefit within the meaning of M.C.L. § 421.27(f)(4)(a) because the fund was liquidated upon plaintiff's termination when Ameritech closed its Traverse City office. This factual conclusion was erroneous. Although the Ameritech Traverse City office was closed, the record does not reflect that the pension fund was liquidated. Random House Webster's College Dictionary (2000) defines liquidate as to settle or pay (a debt), to reduce (accounts) to order, to dissolve (a business or estate) by apportioning the assets to offset the liabilities, to convert (inventory, securities, or other assets) into cash, to get rid of, esp. by killing, to break up or do away with, and to liquidate debts or accounts. The more pertinent of these definitions contemplate the elimination of an entire entity or the abolition of all assets or accounts within an entity. As such, liquidation would involve the Ameritech pension fund distributing all its assets. The distribution of a single employee's vested interest is not a liquidation of the pension fund. In addition, plaintiff could have elected to accept her pension benefits as a monthly annuity, which clearly refutes the Court of Appeals conclusion that the fund had been liquidated. Our dissenting colleague maintains that we misconstrue the meaning of M.C.L. § 421.27(f)(4)(a) by failing to consider the entire sentence in which liquidation appears. She attempts to generate an ambiguity in the phrase liquidation of a private pension or retirement fund by asserting that the phrase could refer either to an individual's personal account or fund or to the collective pension fund. We reject the dissent's view. The meaning of the phrase in M.C.L. § 421.27(f)(4)(a)(ii) hinges on the word liquidation. As discussed, the plain meaning of that term requires distribution of all assets held in the pension fund for all employees. The dissent contends that the term liquidate has many definitions, some of which may be interpreted to apply to a sole pension account, such as that belonging to plaintiff. A word is not rendered ambiguous, however, merely because a dictionary defines it in a variety of ways. Upjohn Co. v. New Hampshire Ins. Co., 438 Mich. 197, 208-209, n. 8, 476 N.W.2d 392 (1991). Rather, the doctrine of noscitur a sociis requires that the term liquidation be viewed in light of the words surrounding it. Herald Co. v. Bay City, 463 Mich. 111, 130, n. 10, 614 N.W.2d 873 (2000). Contextual understanding of statutes is generally grounded in the doctrine of noscitur a sociis: `[i]t is known from its associates,' see Black's Law Dictionary (6th ed.), p. 1060. This doctrine stands for the principle that a word or phrase is given meaning by its context or setting. Brown v. Genesee Co. Bd. of Comm'rs (After Remand), 464 Mich. 430, 437, 628 N.W.2d 471 (2001), quoting Tyler v. Livonia Schs, 459 Mich. 382, 390-391, 590 N.W.2d 560 (1999). In the context of the statute, the term liquidation pertains to multiple accounts rather than to an individual account. The statute exempts from the category of retirement benefits those amounts paid to individuals in the course of liquidation of a private pension or retirement fund. Therefore, the text contemplates that liquidation pertains to multiple accounts and not merely the single account of an individual pensioner. In addition, the liquidation must occur because of termination of the business or of a plant or department of the business. Such a termination would involve all employees within the business, plant, or department, and not merely a single employee. Therefore, in accordance with the doctrine of noscitur a sociis, the phrase liquidation of a private pension or retirement fund is not ambiguous; the language clearly refers to the distribution of all assets within the fund. Moreover, the dissent does not explain how the fund was liquidated where, as discussed above, plaintiff could have chosen to collect her pension benefits as a monthly annuity. Further, the dissent asserts that M.C.L. § 421.27(f)(4)(a) is a remedial statute that we should construe liberally in favor of plaintiff. We do not apply preferential rules of statutory interpretation, however, without first discovering an ambiguity and attempting to discern the legislative intent underlying the ambiguous words. Crowe v. Detroit, 465 Mich. 1, 13, 631 N.W.2d 293 (2001). Only if that inquiry is fruitless, or produces no clear demonstration of intent, do we resort to a preferential or dice-loading rule. [6] Because no ambiguity exists, the remedial rule of preference does not apply. Id. The dissent also asserts that our interpretation of the statute produces unconscionable results. It is not the role of the judiciary, however, to second-guess the wisdom of a legislative policy choice. Our constitutional obligation is to interpret, not to rewrite, the law. The Legislature apparently determined that the same result should obtain regardless of whether an employee opts for a monthly annuity or for a lump-sum payment. Here, if plaintiff had elected a monthly annuity in lieu of the lump-sum payment, no question would exist that she would have been ineligible to receive unemployment benefits. Moreover, plaintiff chose to accept her pension benefits instead of relocating to another Ameritech office. Ameritech had offered plaintiff the opportunity to continue her employment in another location, but she declined to do so. The payout followed plaintiff's decision to retire rather than relocate. While the dissent contends that plaintiff had no choice but to accept her pension benefits, the record does not support this assertion. Accordingly, the condition set forth in M.C.L. § 421.27(f)(4)(ii), providing an exception to the term retirement benefit, does not apply in this case. Thus, whether Ameritech's payment to plaintiff was a retirement benefit depends on whether it was a benefit, annuity, or pension of any type payable to her because [she] has qualified on the basis of attained age [or] length of service.... In defining a retirement benefit, the Legislature has used words of common and ordinary meaning, and we apply them accordingly. Donajkowski, supra at 248-249, 596 N.W.2d 574; Oakland Co Rd Comm'rs, supra at 604, 575 N.W.2d 751. It is undisputed that plaintiff received a pension benefit on the basis of her age and years of service. Thus, she received a retirement benefit as contemplated in M.C.L. § 421.27(f)(4)(a).