Court Opinion

ID: 8908562
Source: CourtListenerOpinion
Date Created: 2022-11-27 02:17:21.068483+00
Date Added: 2024-06-11T17:08:22.325122
License: Public Domain

LIVELY, Circuit Judge,
dissenting.
I respectfully dissent. The majority opinion seeks to avoid the impact of this court’s decision in General Insurance Company of America v. Lamar Corporation, 482 F.2d 856 (6th Cir. 1973), by stating that the language in that opinion which holds the builders’ trust act inapplicable to public projects was unnecessary to the decision. As I read General Insurance Company v. Lamar Corporation, its specific holding is the very language which the majority opinion treats as unnecessary.
The opening paragraph in General Insurance Company of America v. Lamar Corporation is:
This appeal presents primarily the question whether under the Michigan Building Contract Fund Act of 1931, M.C. L.A. §§ 570.151-570.153, money paid to a contractor performing a public project constitutes a trust fund for the payment of subcontractors and materialmen for labor and material furnished on that *654project. We determine that it does not and reverse the judgment of the district court. .
482 F.2d at 856-57.
After setting forth the facts of the case and noting that Michigan law applies, the court stated the issue as follows:
The principal issue of Michigan law for our consideration is whether the Michigan Building Contract Fund Act applies to public as well as to private projects. 482 F.2d at 858.
The second issue in General Insurance Company (constructive trust), which the majority now says was sufficient basis for the decision, was never reached by this court. Indeed, the court stated, “Appellee does not press this theory on appeal, with good reason in our opinion, . . 482 F.2d 861. This court decided but one question in General Insurance Company — that the Michigan builders’ trust act does not apply to public projects. This decision was based upon a careful analysis of Michigan law which I consider sound.
The majority opinion states, “Michigan courts have not been called upon to rule upon the question of the applicability of the statute in the context of a public construction project.” This may be literally true. However, in National Bank of Detroit v. Eames & Brown, Inc., 396 Mich. 611, 242 N.W.2d 412 (1976), the Supreme Court of Michigan quoted Judge McCree’s language from General Insurance Company in describing the purpose of the builders’ trust fund act. 396 Mich, at 619-20, 242 N.W.2d at 415-16. The Michigan court, after summarizing several of its own holdings then stated:
The purpose of the Act is to create a trust fund for the benefit of materialmen and others under private construction contracts.'
396 Mich, at 622, 242 N.W.2d at 417. (emphasis added).
I can perceive no valid reason or authority for departing from a holding of this court subsequently approved by the highest court of Michigan in a matter clearly controlled by Michigan law. I would affirm the judgment of the district court insofar as it holds that the Michigan builders’ trust fund act has no application to public construction projects.