Court Opinion

ID: 9577297
Source: CourtListenerOpinion
Date Created: 2023-08-21 21:33:41.805041+00
Date Added: 2024-06-11T13:20:18.910419
License: Public Domain

Bronson, J.
The two-part issue for our consideration is:

Whether the Motor Vehicle Accident Claims Fund Act grants the Secretary of State the power to, either administratively or judicially, set off an 
*80
unrelated judgment paid on behalf of an uninsured motorist against a prior consent judgment entered against the fund in favor of the same uninsured motorist.

Separate claims against the fund created by the Motor Vehicle Accident Claims Act (MCLA 257.1101 et seq.; MSA 9.2801 et seq.) have created this unique issue not previously considered. In this action plaintiff Castro and the Secretary of State, who was acting for the fund, consented to judgment in plaintiff’s favor. The judgment was compensation for damages incurred when plaintiff was injured in a collision with an uninsured motorist. Subsequently, plaintiff, also an uninsured motorist, having lent his automobile to his brother, had judgment rendered against him as a result of an independent accident. The fund apparently satisfied this judgment on plaintiff’s behalf.
Having paid a judgment against plaintiff, the Secretary then informed plaintiff by letter that his debt to the fund would be set off against the fund’s consented liability to the plaintiff. A check was tendered for the difference. Plaintiff returned the draft and responded by filing a "petition” (motion? GCR 1963, 528.3), in circuit court seeking to have the consent judgment set aside. This petition was ultimately denied. We granted plaintiff’s delayed application for leave to appeal this order of denial.
The Secretary argues, and we agree, that there is nothing in the act which speciñcally prohibits the Secretary from setting off the judgments. In the absence of an express grant of power the question becomes whether the power is to be implied from the provisions of the act. It is fundamental administrative law that administrative agencies are the creatures of statute. The power they exercise is dependent on the grant in the *81statute. "[TJhey must find within the statute warrant for the exercise of any authority which they claim.” 1 Am Jur 2d, Administrative Law, § 70, p 866.
The Michigan Supreme Court quoted American Jurisprudence with approval1 in Coffman v State Board of Examiners and declared:2 "Their [agencies] powers are limited by the statutes creating them to those conferred expressly or by necessary or fair implication”. We consider, first, § 7(2) of the act, which provides:
"Where an application is made under this section, the secretary, at any time within 30 days of the receipt of the application, may give written notice to the applicant of any objection to payment of such judgment or any part of it. Where the secretary gives the notice the applicant may apply to the court entering judgment for a finding or determination in respect of any matter in connection with the application for payment out of the fund.” MCLA 257.1107(2); MSA 9.2807(2).
The Secretary argues that this section grants him the implied authority to exercise administrative setoff. However, this section would be inapplicable, where, as here, the Secretary has already consented to the judgment and the amount. Moreover, implying the right of setoff would defeat the policy inherent in the installment payment provision of § 10.3 In § 7(1) of the act, the Secretary is obligated to pay in directory, not permissive, terms. This section reads:
"[W]here a person recovers in any court in this state a judgment for damages * * * occasioned * * * by ah uninsured motor vehicle * * * the secretary shall pay *82the amount of the judgment * * * .” MCLA 257.1107(1); MSA 9.2807(1).
Other administrative agencies and acts have the express power of setoff;4 thus the absence of an express grant in the Motor Vehicle Accident Claims Act is not insignificant. Finding neither the express nor implied power within the act we conclude that the Secretary was not granted the power by the Legislature to administratively set off competing judgments.
These arguments apply with similar force to the problem of whether the Secretary can compel judicial setoff of the competing claims. Consideration of §§ 10, 11, and 12 of the act reinforces the conclusion that the power of setoff was not intended by the Legislature. In § 105 the only express sanction within the power of the Secretary is suspension of the operation and registration privileges of the party on whose behalf payment was made. This power expires upon repayment in full or until the commencement of an installment payment agreement. Even if the debtor defaults in the repayment schedule the only express sanction is the requirement that the Secretary suspend the operation and registration privileges.6 The Secretary’s obligation is even clearer when the following language from § 19 is considered. It reads:
"Where judgment is obtained against the secretary upon the determination of all proceedings, including *83appeals, the secretary, subject to the limitations provided in this act, shall pay out of the fund to the plaintiff in the action, the entire amount of the judgment * * * MCLA 257.1119; MSA 9.2819. (Emphasis supplied.)
With no express provision and no implied power the right to set off cannot be read into the act.
The circuit judge properly denied plaintiff’s petition to set aside the consent judgment but improperly determined that the act permitted the setoff of competing claims. Accordingly the order denying the petition to set aside the consent judgment must be modified in accordance with this opinion and otherwise affirmed.
Affirmed as modified. No costs, a public question being involved.
O’Hara, J., concurred.

 42 Am Jur, Administrative Law, § 26, p 316.

 331 Mich 582, 590; 50 NW2d 322 (1951).

 MCLA 257.1110(b); MSA 9.2810(b).

 See MCLA 19.44; MSA 3.451, granting such authority to the Board of State Auditors; MCLA 421.27(m); MSA 17.529(m), providing for the reduction of unemployment compensation payments by amounts received under workmen’s compensation; and the Public Securities Validation Act, MCLA 600.2942; MSA 27A.2942, authorizing counterclaims. See, also, MCLA 14.134; MSA 3.234, granting the Collection Department the power to compromise claims.

 MCLA 257.1110; MSA 9.2810.

 MCLA 257.1111; MSA 9.2811.