Opinion ID: 1693300
Heading Depth: 1
Heading Rank: 2

Heading: MCPA subsection (4)(1)(a)

Text: Subsection 4(1) provides: This act does not apply to either of the following: (a) A transaction or conduct specifically authorized under laws administered by a regulatory board or officer acting under statutory authority of this state or the United States. (b) An act done by a publisher, owner, agent.... It appears that the Legislature intended to provide defendants with a very narrow exemption for transactions or conduct specifically authorized, and for specific acts done by the media. Under this statute, we must examine the specific transaction or conduct at issue to determine whether the narrow exemption provided in subsection 4(1)(a) is applicable. The majority correctly notes that Attorney General v. Diamond Mtg. Co., 414 Mich. 603, 327 N.W.2d 805 (1982), controls the resolution of this case, and that this Court cautioned that the exemption provided in subsection 4(1)(a) will continue to apply where a party seeks to attach labels to a transaction or conduct that is specifically authorized. 414 Mich. at 617, 327 N.W.2d 805. The majority then characterizes the transaction or conduct at issue as the sale of credit life insurance, which it asserts is exempt from subsection 4(1)(a) because it is specifically authorized. Op. at 38. The majority then revokes this exemption by reading an exception in subsection 4(2) to the exemption in subsection 4(1)(a). In effect, this allows the court to ignore the exemption provided in subsection 4(1)(a) every time a private action is filed against an insurer under  11. [6] Because  11 is the only section in which a private party may file suit, under the majority view, we should never examine the exemptions section when a private action has been filed against an entity encompassed by subsections 4(2)(a)-(e). As stated in Diamond, I disagree that subsection 4(1)(a) is meaningless. Id. The Legislature provided an exception to the exemption within subsection 4(2) for private actions by placing qualifying language in front of the exemption for acts already made unlawful by specified public acts. If it had intended such a result, it seems that the Legislature would have placed a similar limiting clause in subsection 4(1)(a) providing: Except for the purposes of an action filed by a person under section 11, this act shall not apply to a transaction or conduct specifically authorized.... It did not. Alternatively, the Legislature could have placed such language preceding both exemptions 1 and 2, thus mandating that the exception for private suits applies to all subsections of  4. Without analysis, the majority reads subsection 2 as an exception to subsection 1. I cannot agree. Thus, I would not remove the exemption for conduct specifically authorized in these cases. In this case, plaintiff complains that defendant utilized both a certificate of insurance and an application for insurance, and that these documents provided inconsistent eligibility requirements. Thus, plaintiff does not complain that defendant sold insurance, as characterized by defendant and the majority. Alternatively, as noted in Diamond, this conduct should not be characterized as misrepresentations or false promises, as this would never be specifically authorized. Id. at 617, 327 N.W.2d 805. Instead, we must ask whether defendant was specifically authorized to use separate insurance eligibility forms, for a single transaction, that contain inconsistent or differing conditions for coverage eligibility. Defendant argued that an insurer is not required to attach an insurance application to the certificate of insurance. However, it has not asserted that it is specifically authorized to utilize separate forms with inconsistent eligibility requirements. Defendant does not provide an explanation regarding the inconsistent requirements. Defendant informs us that credit insurers are required to submit all policies, certificates, applications, notices, etc., under M.C.L.  550.612; MSA 24.568(12), and that the insurance commissioner implicitly approves them by failing to object within thirty days under M.C.L.  550.613; MSA 24.568(13). However, defendant has not argued that it has submitted the forms at issue. Even assuming that these forms were submitted and implicitly approved, there is no indication that the commissioner was aware that the forms were being used together for a single insurance sale transaction. Furthermore, I question whether the insurance commissioner's silence may be construed as a specific authorization under subsection 4(1)(a). Defendant would have us hold that conduct generally or implicitly allowed is exempt. Such a broad interpretation of such narrow language would result in all MCPA claims being barred. Businesses are generally allowed to transact business. The MCPA protects consumers from the unfair transaction of business. To illustrate, in Temborius v. Slatkin, 157 Mich.App. 587, 403 N.W.2d 821 (1986), the plaintiff filed suit against a car dealership and salesman under the MCPA. She alleged that the dealer represented that an automobile would be delivered to her upon payment to a third party, when the dealer knew that the third party would be unable to complete the transaction because of the third party's financial difficulties. Id. at 593, 403 N.W.2d 821. The Court held that if plaintiff's evidence was believed, the jury could find violations of the MCPA. Id. at 598, 403 N.W.2d 821. This is a good example of the unfair trade practice that is barred by the MCPA. However, under the majority's interpretation of transaction or conduct, the defendant's conduct would be exempt under subsection 4(1)(a) because the sale of automobiles is specifically authorized by the Secretary of State, M.C.L.  257.248; MSA 9.1948. Op. at 39. Under the majority view, any activity that is regulated by a regulatory board or officer acting under statutory authority of this state or the United States, is specifically authorized. The majority effectively adopts the Kekel interpretation of the statute. The Kekel Court provided: We first look to the exemption language of  4(1)(a) to determine if plaintiffs' complaint speaks to a transaction or conduct which would be the subject of regulatory control under laws administered by a regulatory board or officer acting under statutory authority of this state or the United States. [ Kekel v. Allstate Ins. Co., 144 Mich.App. 379, 383, 375 N.W.2d 455 (1985) (citation omitted).] The majority does not direct us to a law administered by the insurance commissioner that provides that sale of insurance is authorized. Like most businesses, it is merely regulated. Under this broad labeling, all MCPA claims will be blocked by subsection 4(1)(a) unless they fall within the exceptions listed in subsections 4(2)(a)(e). I suggest the majority cannot provide meaningful examples where a consumer would not be blocked by subsection 4(1)(a) under its reading of the terms specifically authorized. Under M.C.L.  445.903; MSA 19.418(3), the MCPA protects consumers from unfair, unconscionable, or deceptive methods, acts, or practices in the conduct of trade or commerce. Trade or commerce is defined, in part, as: [T]he conduct of a business providing goods, property, or service primarily for personal, family, or household purposes and includes the advertising, solicitation, offering for sale or rent, sale, lease, or distribution of a service or property, tangible or intangible, real, personal, or mixed, or any other article, or a business opportunity. [MCL 445.902(d); MSA 19.418(2)(d).] In simple terms, the MCPA protects consumers from unfair business practices regarding the sale of personal, family, or household goods or services. Because such businesses are regulated, the consumer has little or no redress under the provisions of the MCPA according to the majority. Instead, I read the statute consistent with our determination in Diamond that general transactions or conduct subject to licensing are not necessarily exempt from the MCPA. Plaintiff correctly notes that subject to regulation is not the same as specifically authorized. [7] In the instant case the transaction or conduct at issue is defendant's use of inconsistent insurance eligibility forms. Defendant has failed to show that this conduct is specifically authorized. At most, defendant has shown that when used separately, the forms are implicitly allowed. This is insufficient.