Court Opinion

ID: 7954667
Source: CourtListenerOpinion
Date Created: 2022-09-08 23:48:28.313645+00
Date Added: 2024-06-11T16:34:16.072324
License: Public Domain

Cavanagh, C.J.
(dissenting). Michigan’s State Accident Fund appears to be similar to funds throughout the nation. The status of all these funds are determined by the statutes that create *796them. Several common principles seem to govern the analysis: (1) whether the state has any liability beyond the assets of the fund;1 (2) whether the assets of the fund are exclusively generated by premiums;2 (3) whether the fund was intended to be run as a for-profit business;3 and (4) a consideration of for what purposes the funds may be used.4
Applying these principles to Michigan’s act, it is clear that: (1) the state has no liability beyond the assets of the fund;5 (2) the assets of the fund are generated exclusively through premiums and the investment thereof;6 (3) the fund was not originally intended to be run as a for-profit business; and (4) the assets of the fund are to be used exclusively to implement the policies underlying the worker’s compensation act.
On review of decisions from our sister states, we conclude that the repeal by 1990 PA 157 of MCL 418.711; MSA 17.237(711), which provided that the fund shall be neither more nor less than self-sufficient, should not change the interest of the insured employers.
The fund was not intended by the Legislature of 1912 to be a for-profit business. It was intended to implement the worker’s compensation act. The Legislature did not intend for the state to obtain a profit from operation of the fund, or gain by *797reason of an unexpected windfall, at the expense of the premium-paying employers in a declared nonprofit business. It is also significant that the premiums collected by the fund are to be used exclusively for the purposes stated in MCL 418.746; MSA 17.237(746). Those named purposes include, among others, "[dividends and similar payments to policyholders.”7
The assets of the State Accident Fund are held in trust for the insured employers.8 They have a vested interest in the funds held in trust for their benefit. The insured employers were always, at least theoretically, "on the risk,” while the state never had any risk. If those funds were squandered, they still must provide benefits to any employee who suffers a compensable injury. These vested rights may not be deprived without just compensation.
We conclude that 1993 PA 198, amending the worker’s compensation act by adding MCL 417.701a; MSA 17.237(701a), providing that the consideration for the sale of the fund is the property of the State of Michigan, is unconstitutional because it violates US Const, Am V; Const 1963, art 10, § 2, and art 1, § 17._
*798Levin, J., concurred with Cavanagh, C.J.
Riley, J., took no part in the decision of this case.

 Moran v State ex rel Derryberry, 534 P2d 1282, 1286 (Okla, 1975).

 Chez v Utah Industrial Comm, 90 Utah 447, 449-451; 62 P2d 549 (1936).

 Moran, n 1 supra at 1286.

 Chez, n 2 supra at 449-451.

 See MCL 418.701(1); MSA 17.237(701X1) ("The state shall not be liable or responsible for the payment of claims for compensation”), and MCL 418.725; MSA 17.237(725) ("neither the state nor the association is liable if the state accident fund is declared insolvent”).

 See MCL 418.705; MSA 17.237(705), and MCL 418.746(1); MSA 17.237(746X1).

 1993 PA 198, amending the Worker’s Compensation Act by adding § 701a, MCL 418.701a; MSA 17.237(701a), which provides that the consideration for the transfer of the assets of the State Accident Fund to a permitted transferee "shall be the property of the state of Michigan,” is tie-barred to the repeal of §746, MCL 418.746; MSA 17.237(746), and of other sections of the Worker’s Compensation Act. Section 746 provides that the executive director of the State Accident Fund shall maintain a revolving fund derived from premiums collected from members of the fund, and that the revolving fund shall be used exclusively for among other purposes "[dividends and similar payments to policyholders.”

 A vested right has been defined by this Court as "implying a vested interest which it is right and equitable that the government should recognize and protect, and of which the individual could not be deprived without injustice.” Wylie v City Comm, 293 Mich 571, 587; 292 NW 668 (1940).