Court Opinion

ID: 9575041
Source: CourtListenerOpinion
Date Created: 2023-08-21 21:10:52.127167+00
Date Added: 2024-06-11T12:47:50.321582
License: Public Domain

Bandstra, J.
(dissenting). I respectfully dissent.
Plaintiffs allege that, in early 1987, the parties entered into a contract under which defendant would pay five percent commissions on sales procured by plaintiffs. Plaintiffs procured sales for defendant resulting in commission payments averaging $125,000 a year for the next three years. In August of 1990, defendant terminated the agreement and discontinued making commission payments. About a year later, plaintiffs filed this lawsuit alleging that, notwithstanding the termination of the agreement, defendant was still obligated to pay commissions on later sales. Defendant took the position that sales after the termination were not subject to the commission agreement.
After this lawsuit was commenced and long after defendant discontinued making commission payments, the sales representatives’ commissions act (SRCA), MCL 600.2961; MSA 27A.2961, was passed by the Legislature in the summer of 1992. It became effective on June 29, 1992. On that date, according to the majority, defendant became potentially liable to pay up to an additional $100,000, beyond normal damages allowable under contract law principles, because of its alleged intentional failure to pay commissions within forty-five days of their becoming due.1 Clearly, neither side contemplated that potential liability when they entered into their agreement in 1987. It is also *640clear that defendant could not have contemplated this potential liability when it first failed to make a commission payment to plaintiffs following termination of the agreement in 1990. Plaintiffs argue that, nonetheless, defendant’s failure to make commission payments was sufficient to impose the new liability created by the Legislature two years later. The majority agrees.
I find this to be fundamentally unfair to defendant. I also conclude that this result is not required or authorized by the precedents cited by the majority.
None of the cases the majority relies on considered a statute that, applied retrospectively, would substantially change the rights established by parties through a contract. In re Certified Questions (Karl v Bryant Air Conditioning Co), 416 Mich 558; 331 NW2d 456 (1982) (question was whether the products liability statute adopting comparative negligence could be applied to a common-law cause of action); Ballog v Knight Newspapers, Inc, 381 Mich 527; 164 NW2d 19 (1969) (considered amendments of the judgment interest statute); Hansen-Snyder Co v General Motors Corp, 371 Mich 480; 124 NW2d 286 (1963) (considered amendments of the mechanics’ hen statute); Rook-ledge v Garwood, 340 Mich 444; 65 NW2d 785 (1954) (worker’s compensation act amendments affected common-law action against third-party tortfeasor).2 This is an important difference. In In re Certified Questions, supra at 573, the Supreme Court recognized “a distinct cleavage” between contract cases *641and cases where the retrospective application of a statute would affect some other kind of right. When retrospective application of a statute would affect contract rights, constitutional “impairment of contract” concerns are implicated. Campbell v Judges’ Retirement Bd, 378 Mich 169, 180; 143 NW2d 755 (1966); see, also, Byjelich v John Hancock Mut Life Ins Co, 324 Mich 54, 61; 36 NW2d 212 (1949). Accordingly, our Supreme Court has stated the general rule that “[a] statute cannot be retroactive so as to change the substance of a contract previously entered into.” Id., quoting Guardian Depositors Corp v Brown, 290 Mich 433, 439; 287 NW 798 (1939). Similarly, the Supreme Court cited with apparent approval “the general proposition that absent a clearly expressed legislative intent to the contrary, it is to be presumed that the legislature intended an enactment to have prospective effect only,” a proposition “especially true when giving a statute retroactive operation will interfere with an existing contract, destroy a vested right, create a new liability in connection with a past transaction, or invalidate a defense which was good when the statute was passed.” Hansen-Snyder Co, supra at 484.
The statute applied retrospectively here will certainly “change the substance” of the parties’ agreement. It will “interfere with” their contract by “creating] a new liability in connection with a past transaction.”3 Accordingly, the provisions of the srca should not be available to plaintiffs in this lawsuit.
*642This approach would be consistent with legislative intent. “The question whether a statute operates retrospectively, or prospectively only, is one of legislative intent.” 73 Am Jur 2d, Statutes, § 350, p 487. Thus, “the general rule against retrospective operation of statutes,” Hansen-Snyder Co, supra at 485, is based on a judicial presumption “that the legislature intended an enactment to have prospective effect only,” id. at 484. The opposite presumption applies with respect to statutes considered to be procedural or remedial. Id. at 484-485. However, regardless of these usual rules of statutory construction, legislative intent is the governing principle. A statute that would ordinarily be applied prospectively only will be applied retrospectively if that is the “clearly expressed legislative intent.” Id. at 484. Conversely, with respect to the issue before us, procedural or remedial statutes are applied retrospectively but only where there is no legislative action showing a contrary intent. Id. at 485. See, also, e.g.: People v Russo, 439 Mich 584, 594; 487 NW2d 698 (1992) (“Statutes that operate in furtherance of a remedy . . . are held to operate retrospectively unless a different intention is clear.”) (emphasis added); Franks v White Pine Copper Division, 422 Mich 636, 672; 375 NW2d 715 (1985) (“statutes which operate in furtherance of a remedy or mode of procedure . . . are generally held to operate retrospectively unless a contrary legisla*643tive intention is'manifested”) (emphasis added); Selk, v Detroit Plastic Products, 419 Mich 1, 10; 345 NW2d 184 (1984) (“Statutes which operate in furtherance of a remedy . . . are held to operate retrospectively, unless a contrary legislative intention is manifested”) (emphasis added). We must be “reluctant to apply” the remedial/procedural exception to the rule against retrospectivity “without extensive exploration of legislative intent.” Franks, supra at 673.
Retrospective application of the srca is inconsistent with legislative intent as that intent was evidenced upon the passage of the act. The Legislature was not content to let the new law take effect ninety days after the end of the 1991-92 legislative session. Instead, the Legislature voted by a two-thirds majority to make the SRCA effective immediately on June 29, 1992. Const 1963, art 4, § 27. This would have been an unnecessary exercise if the legislators intended that the new law would be applied retrospectively. With retrospective application, regardless of the effective date, the new act, was applicable to all sales representative agreement contracts, no matter when they were entered into. The legislative action in giving the srca immediate effect clearly evidenced an intent that the new law was to have only prospective application. “The fact that a statute [is made] effective immediately, which would be unnecessary if its operation were retrospective, is an indication that the statute was intended to operate prospectively only.” 73 Am Jur 2d, statutes, § 352, p 489.
I would affirm.

 One hundred thousand dollars is the statutory maximum penalty provided by MCL 600.2961(5)(b); MSA 27A.2961(5)(b). Plaintiffs’ brief argues that the total commissions at issue to date are about $600,000, making defendant’s potential liability $700,000, plus interest.

 The majority also cited Hughes v Judges’ Retirement Bd, 407 Mich 75; 282 NW2d 160 (1979),but the Supreme Court did not reach the retrospectivity question, determining instead that “plaintiffs seek only prospective application of the amendment.” Hughes, supra at 87.

 Even if tins were not a contract case, I find the majority’s analysis problematic. Under normal contract principles, plaintiffs would be entitled only to actual damages flowing from even an intentional failure to make commission payments. The statute allows for an additional and sig*642nificant penalty to be imposed. I find it difficult to conceive how this does not “create[] a new obligation and impose[] a new duty” but, instead, “only operate[s] in furtherance of a remedy . . . already existing” under the rules enunciated in the precedents on which the majority relies. Ante at 636-637. The statute, in effect, creates a new cause of action to recover a penalty that is unavailable under common-law contract damages principles.