Court Opinion

ID: 9669785
Source: CourtListenerOpinion
Date Created: 2023-08-24 03:09:26.084318+00
Date Added: 2024-06-11T18:16:00.288929
License: Public Domain

Cavanagh, J.
(concurring in part and dissenting in part). I join Justice Kelly’s dissenting opinion regarding the breach of contract issue. 1 While I concur in the result reached by the majority regarding the mcpa claim, I am in disagreement with the majority’s analysis of subsections 4(l)(a) and 4(2). Confusion in analyzing MCPA claims has resulted from: construing the exemptions too broadly, rendering the vast majority *476of private suits exempt under subsection 4(l)(a),2 construing the exemptions too narrowly so as to remove all exemptions,3 or construing the transaction or conduct at issue overly broad4 or narrow,5 rendering the MCPA or its exemptions meaningless. It is my opinion that a proper inquiry should be first to determine whether the specific transaction or conduct at issue, as opposed to the general transaction, is “specifically authorized under laws administered by a regulatory board or officer acting under statutory authority of this state . . . .” MCL 445.904(l)(a); MSA 19.418(4)(l)(a). The next inquiry should characterize the party filing suit and the act or practice at issue to determine whether the act should apply to the method, act, or practice.
MCPA SUBSECTION 4(l)(a)
Subsection 4(1) provides:
*477This 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(l)(a) is applicable.
The majority correctly notes that Attorney General v Diamond Mortgage Co, 414 Mich 603; 327 NW2d 805 (1982), controls the resolution of this case, and that this Court cautioned that the exemption provided in subsection 4(l)(a) will continue to apply where a party seeks to attach labels to a transaction or conduct that is specifically authorized. 414 Mich 617. 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(l)(a) because it is specifically authorized. Ante at 465. The majority then revokes this exemption by reading an exception in subsection 4(2) to the exemption in subsection 4(l)(a). In effect, this allows the court to ignore the exemption provided in subsection 4(l)(a) every time a private action is filed against an insurer under § ll.6 Because § 11 is the only section in which a private party may file suit, under the majority view, *478we 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(l)(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(l)(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. Instead, we must ask whether defendant was specifically authorized to use separate *479insurance 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 MCL 550.612; MSA 24.568(12), and that the insurance commissioner implicitly approves them by. failing to object within thirty days under MCL 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(l)(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 NW2d 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 *480third 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. The Court held that if plaintiff’s evidence was believed, the jury could find violations of the mcpa. Id. at 598. 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(l)(a) because the sale of automobiles is specifically authorized by the Secretary of State, MCL 257.248; MSA 9.1948. Ante at 465.
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. TheKekel 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 NW2d 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 *481would not be blocked by subsection 4(l)(a) under its reading of the terms “specifically authorized.”
Under MCL 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 *482most, defendant has shown that when used separately, the forms are implicitly allowed. This is insufficient.
MCPA SUBSECTION 4(2)
This section provides:
Except for the purposes of an action filed by a person under section 11, this act shall not apply to an unfair, unconscionable, or deceptive method, act, or practice that is made unlawful by [various specified public acts.]
In this case, plaintiff, daughter of the deceased insured, is “a person” as defined by MCL 445.902(c); MSA 19.418(2)(c), which includes a natural person.
Furthermore, plaintiff filed under subsection 11(2) which provides:
Except in a class action, a person who suffers loss as a result of a violation of this act may bring an action to recover actual damages or $250.00, whichever is greater, together with reasonable attorneys’ fees.
The court in Robertson v State Farm Fire & Casualty Co, 890 F Supp 671, 674-675 (ED Mich, 1995), correctly explained the organization of the different sections of the MCPA:
Thus, section 11 is the section regarding private causes of action brought by consumers. The only other sections addressing who may bring actions under the act (and under what circumstances) are sections 10 and 15. Section 10 applies to class actions brought by the attorney general on behalf of citizens of the state, and § 15 extends to county prosecutors the power of the attorney general to bring suit. [Citations omitted.]
*483Section 11 allows private actions to be brought and § 4(2) excepts actions brought under § 11 from exemption from the Michigan Consumer Protection Act. Therefore, plaintiffs’ action is not exempted from the act’s purview. The act allows private party suits where state-initiated prosecution would be precluded under [MCL 445.904(2)(a)-(g); MSA 19.418(4)(2)(a)-(g)].
Plaintiff’s complaint alleged violations of the mcpa. Specifically, she alleged violations of MCL 445.903(l)(a)-(e); MSA 19.418(3)(l)(a)-(e), and requested actual damages and attorney fees pursuant to § 11. Therefore, plaintiff’s suit is not barred by the exemption provided in subsection 4(2).
I disagree with the conclusion that we should ignore subsection 4(l)(a) when a private suit is filed against an insurer, yet utilize it to bar most consumer claims that do not fall under the exception listed in subsections 4(2)(a)-(e). However, I agree that defendant was not entitled to summary disposition on its mcpa claim. I would hold that because defendant has failed to provide evidence that its conduct, using inconsistent insurance eligibility forms in a single transaction, is specifically authorized, it is not exempt from suit under subsection 4(l)(a) of the MCPA. I would also hold that because plaintiff is a person filing under § 11, defendant is not exempt under subsection 4(2).

 However, I do not join in footnote 1 of her opinion.

 See Kekel v Allstate Ins Co, 144 Mich App 379, 383; 375 NW2d 455 (1985), determining whether the transaction or conduct is the subject of regulatory control.

 The plaintiff in Attorney General v Diamond Mortgage Co, 414 Mich 603, 616; 327 NW2d 805 (1982), argued that deceptive practices are not specifically authorized.

 The defendant in Diamond asserted that because he was a licensed real estate broker, he was specifically authorized to negotiate the mortgage of real estate and perform all the acts of a broker. 414 Mich 616. The majority in the instant case similarly attaches a very general label, the sale of insurance, to the transaction at issue.

 The plaintiff in Diamond characterized the conduct as deceptive practices. 414 Mich 616. The majority in the instant case states that plaintiff argued that the statute does not specifically authorize the fraudulent insurance practices that she claims were committed. Ante at 462-463. I could find no support for the statement that plaintiff characterized the transaction as “fraudulent insurance practices.” This, however, would be an example of too narrow a characterization of the transaction or conduct.

 MCL 445.911; MSA 19.418(11) allows a person to recover actual damages and attorney fees for a violation of the mcpa.

 See also Robertson v State Farm Fire & Casualty Co, 890 F Supp 671, 676 (ED Mich, 1995), stating that the inquiry under subsection 4(l)(a) is not whether the conduct is subject to regulation, but rather whether the conduct is “specifically authorized.”