Court Opinion

ID: 828798
Source: CourtListenerOpinion
Date Created: 2013-03-01 20:08:24.968406+00
Date Added: 2024-06-11T11:02:19.813048
License: Public Domain

Order                                                                         Michigan Supreme Court
                                                                                    Lansing, Michigan

  April 8, 2011                                                                      Robert P. Young, Jr.,
                                                                                               Chief Justice

  Rehearing No. 575                                                                   Michael F. Cavanagh
                                                                                            Marilyn Kelly
                                                                                      Stephen J. Markman
  140684                                                                              Diane M. Hathaway
                                                                                          Mary Beth Kelly
                                                                                          Brian K. Zahra,
                                                                                                    Justices
  STEVEN EDWARD KING,
           Plaintiff-Appellee,
  v                                                        SC: 140684
                                                           COA: 288290
                                                           Ingham CC: 08-000814-CZ
  STATE OF MICHIGAN, MICHIGAN
  DEPARTMENT OF LABOR AND ECONOMIC
  GROWTH, and COMMISSIONER OF THE
  OFFICE OF FINANCIAL AND INSURANCE
  REGULATION,
             Defendants-Appellants.

  _________________________________________/

         On order of the Court, the motion for rehearing is considered, and it is DENIED.

         YOUNG, C.J. (dissenting).

         I respectfully dissent from the decision to deny rehearing in this case. This case
  called upon this Court to interpret the relevant licensing provisions of the amended
  Insurance Code, which preclude persons who have been convicted of a felony from
  receiving a resident insurance producer license. The Office of Financial and Insurance
  Services (OFIS) failed to discharge its statutory duties and enforce relevant statutory
  mandates when it granted plaintiff an insurance license in 2004, despite plaintiff’s
  previous conviction of a felony. The decision by OFIS to seek revocation of that license,
  while unfortunate for the improperly licensed plaintiff, was nonetheless proper because
  the original licensure was invalid. Governmental administrators, like those in OFIS,
  cannot act in derogation or contravention of their statutory authority when issuing
  licenses. The original opinion in this case failed to render meaning to all relevant
  provisions of the Insurance Code by holding to the contrary, and thereby avoided the
  application of a valid statute. To correct those errors, I would grant rehearing, vacate this
  Court’s prior opinion, and reverse the Court of Appeals.
                                                                                           2

        I would hold that OFIS correctly resolved the apparent conflict between MCL
500.1205 and MCL 500.1239 in the way that most closely adheres to the Legislature’s
stated intent. In coming to this conclusion, it is necessary to consider the entire statutory
structure of the licensing provisions in the Insurance Code. MCL 500.1205 governs the
licensing of resident insurance producers for individuals who reside in Michigan. The
licensing of nonresident insurance producers who are licensed in another state but
transact business in Michigan, is separately governed by MCL 500.1206a. MCL
500.1239, which specifies the grounds for refusal to grant a license, applies both to
resident and nonresident insurance producers.

       The Legislature has chosen to apply differing licensing standards to resident and
nonresident insurance producers. While MCL 500.1205 provides that a resident
applicant “shall not” be licensed if he has committed an act described in MCL 500.1239,
MCL 500.1206a(1) provides that “[u]nless denied licensure under [MCL 500.1239], a
nonresident person shall receive a nonresident insurance producer license . . . .” Thus,
the Legislature specifically used discretionary language in MCL 500.1239 to permit the
commissioner to determine, in his discretion, whether to “refuse to issue an insurance
producer’s license” to a nonresident applicant who has been convicted of a felony. At the
same time, the Legislature prohibited such issuance to resident applicants by using
mandatory language in MCL 500.1205. Plaintiff in this case, as a resident applicant, was
subject to the more stringent standard, and OFIS thus had no discretion to deny his
application. The original opinions by the majority justices in this case simply failed to
consider this structure of the Insurance Code when coming to their respective conclusions
that the code allows a discretionary standard to be applied to nonresident applicants, and
that the code is ambiguous. Indeed, those opinions did not even respond to the
alternative construction offered in the original dissent. This Court has long held in cases
involving similar licensing decisions that revocation procedures must be invoked if a
license was granted in excess of an agency’s statutory authority.1

        This Court’s duty to account for the entire structure of the Insurance Code and
enforce those statutory provisions as written is particularly important because of the
structure of our government, which provides for a separation of powers among the three
branches. This system requires that the Legislature and Governor make policy choices
and that the courts enforce those policy decisions as written. In this case, because the
statute as written at the time of plaintiff’s licensing in 2004 mandated that OFIS decline
to license anyone who had been convicted of a felony, OFIS should not have licensed
plaintiff, and this Court cannot use equity to displace the statutory mandate or otherwise

1
  See, e.g., Big Bear Markets of Mich, Inc v Mich Liquor Control Comm, 345 Mich 569,
576 (1956); Elliott v Liquor Control Comm, 339 Mich 78, 82-83 (1954); Gamble v
Liquor Control Comm, 323 Mich 576, 578 (1949); George v Travis, 185 Mich 597
(1915); Kassab v Acho, 150 Mich App 104, 112-113 (1986).
                                                                                                                 3

validate that improper decision.2 It would indeed be a strange system of government if
every administrator or bureaucrat had the power to make decisions in derogation of the
limited statutory powers provided by the Legislature. This Court cannot allow agency
decisions to be the ultimate authority in licensing when those decisions are made in a
manner contrary to a legislative mandate.

       The inflexibility purposely built into this statute by the Legislature and approved
by the Governor is the result of policy determinations made by those political branches of
government. Save those statutes that are an affront to the constitution, no court can
legitimately employ its limited judicial power to overcome a valid statutory mandate.
Nor can the rule of law, as prescribed by MCL 500.1205(1)(b) when read in the context
of MCL 500.1239(1) and MCL 500.1206a, be displaced by the actions of OFIS
administrators. An administrative agency may exercise only the powers provided to it
and must act within the parameters conferred upon it by statutory law.3 Action in excess
of these powers or outside these parameters in situations in which the Legislature has
mandated a specific outcome is not valid.

       For these reasons and those otherwise stated in my original dissenting opinion in
this case,4 I respectfully dissent from the Court’s decision to deny rehearing.

         MARKMAN, J., joins the statement of YOUNG, C.J.

2
  See, e.g., Martin v Secretary of State, 482 Mich 956 (2008), adopting the opinion in
relevant part of Judge O’CONNELL, in Martin v Secretary of State, 280 Mich App 417,
430 (2008) (O’CONNELL, P.J., dissenting); Stokes v Millen Roofing Co, 466 Mich 660,
671-672 (2002); Bilt-More Homes, Inc v French, 373 Mich 693, 699 (1964), quoted and
reaffirmed in Stokes, 466 Mich at 672.
3
 See, e.g., Union Carbide Corp v Pub Serv Comm, 431 Mich 135, 146(1988); Mason Co
Civic Research Council v Mason Co, 343 Mich 313, 326-327 (1955); Taylor v Pub
Utilities Comm, 217 Mich 400, 402-403 (1922).
4
    See King v State of Michigan, 488 Mich 208, 221-241 (2010) (YOUNG, J., dissenting).

                           I, Corbin R. Davis, Clerk of the Michigan Supreme Court, certify that the
                     foregoing is a true and complete copy of the order entered at the direction of the Court.
                           April 8, 2011                       _________________________________________
          0405                                                                 Clerk