Court Opinion

ID: 6322151
Source: CourtListenerOpinion
Date Created: 2022-03-11 06:07:45.203614+00
Date Added: 2024-06-11T09:20:40.806475
License: Public Domain

If this opinion indicates that it is “FOR PUBLICATION,” it is subject to
                   revision until final publication in the Michigan Appeals Reports.

                           STATE OF MICHIGAN

                            COURT OF APPEALS

PHIL FORNER,                                                        UNPUBLISHED
                                                                    March 10, 2022
                Plaintiff-Appellant,

v                                                                   No. 356526
                                                                    Ottawa Circuit Court
DEPARTMENT OF LICENSING &                                           LC No. 20-006209-AA
REGULATORY AFFAIRS, also known as
DEPARTMENT OF LICENSING AND
REGULATION,

                Defendant-Appellee.

Before: RIORDAN, P.J., and K. F. KELLY and SWARTZLE, JJ.

PER CURIAM.

        Plaintiff Phil Forner appeals by right the trial court’s order affirming the denial by
defendant Michigan Department of Licensing and Regulatory Affairs (“defendant” or “LARA”)
of plaintiff’s request for a declaratory ruling. Finding no errors warranting reversal, we affirm.

                       I. BASIC FACTS AND PROCEDURAL HISTORY

        This case arises from a request from plaintiff and the Michigan Air Conditioning
Contractors Association’s (“MIACCA”)1 that defendant issue a declaratory ruling (1) requiring
that building permit applications be on forms prescribed by the Construction Code Commission
(“Commission”) and (2) instructing the Commission and the Bureau of Construction Codes
(“Bureau”) “to begin that process of having the Commission prescribe the form on which
applications for permit are used in Michigan.” In the request for declaratory ruling, plaintiff and
the MIACCA asserted that different government subdivisions provided different forms for permit
applications. As a result, they stated that it cost “time and money to figure out how to complete
each different application for permit satisfactorily.” They also asserted that the Commission did

1
    The MIACCA is not a party to this appeal.

                                                -1-
not prescribe the permit application as required by the Stille-DeRossett-Hale Single State
Construction Code Act (“SSCCA”), MCL 125.1501 et seq.

        Orlene Hawks, defendant’s director, responded to the request, explaining that the
Administrative Procedure Act (“APA”), MCL 24.201 et seq., states that agencies “may” issue
declaratory rulings, but were not required to do so, as long as a reason is given. Hawks asserted
that the SSCCA combined responsibilities between the director and the Commission, and the
Commission exercised its statutory functions independently of the director. In denying the request,
Hawks wrote:

                 The Director denies this request for a declaratory ruling based on the
         statutory roles and responsibilities of the Commission and LARA outlined above.
         Petitioners’ request is more akin to seeking a prospective change in policy or
         practice, as opposed to a request for LARA to apply a statutory provision to an
         “actual state of facts” for which LARA has sole authority. As noted above, LARA
         does not have exclusive authority to administer the Act, or the provision at issue,
         because the Commission exercises its statutory functions independently. And MCL
         125.1510(1) speaks for itself in providing that the building permit application “be
         on a form prescribed by the commission,” which LARA has determined does not
         demand further interpretation or application by the Director.

        Plaintiff appealed the decision to the trial court, requesting that it set aside defendant’s
denial and order that Hawks provide a declaratory ruling or order that “the Commission shall
prescribe all forms on which an application for a permit is made.” Defendant responded that it
was within its statutory discretion to deny plaintiff’s request for a declaratory ruling, and the
decision was not arbitrary because the statute was unambiguous and because LARA did not
exclusively administer the statutory provision or have the authority to compel the Commission to
act.

        After a hearing, the trial court affirmed defendant’s denial of the request for declaratory
ruling. The trial court concluded that MCL 24.2632 did not require defendant to issue a declaratory
ruling in response to plaintiff’s request and that the decision not to make a declaratory ruling was

2
    MCL 24.263 states:
                 On request of an interested person, an agency may issue a declaratory ruling
         as to the applicability to an actual state of facts of a statute administered by the
         agency or of a rule or order of the agency. An agency shall prescribe by rule the
         form for such a request and procedure for its submission, consideration and
         disposition. A declaratory ruling is binding on the agency and the person requesting
         it unless it is altered or set aside by any court. An agency may not retroactively
         change a declaratory ruling, but nothing in this subsection prevents an agency from
         prospectively changing a declaratory ruling. A declaratory ruling is subject to
         judicial review in the same manner as an agency final decision or order in a
         contested case.

                                                 -2-
not arbitrary or capricious and “fell within the range of principled outcomes prescribed in MCL
24.263.” The trial court explained that under Mich Admin Code, R 338.81(8),3 defendant could
deny a request for a declaratory ruling for any stated reason. The reasons given by defendant—
(1) the request was akin to a change in policy, and (2) LARA did not have exclusive authority to
administer the SSCCA—were sufficient to satisfy the regulation.

         The trial court also determined that any declaratory ruling issued by defendant would not
apply to the Commission because “[t]he Commission exercises its statutory functions
independently of the LARA director” and “the LARA director is powerless to compel the
Commission to prescribe the form if the Commission chooses not to do so.” Thus, according to
the trial court, defendant properly exercised its discretion when it denied plaintiff’s request. After
the trial court denied plaintiff’s motion for reconsideration, this appeal followed.

                                   II. STANDARDS OF REVIEW

       “This Court’s review of a circuit court’s ruling on an appeal from an administrative
decision is limited.” Buckley v Professional Plaza Clinic Corp, 281 Mich App 224, 231; 761
NW2d 284 (2008). “This Court must determine whether the lower court applied correct legal
principals and whether it misapprehended or grossly misapplied the substantial evidence test to
the agency’s factual findings.” Id. (quotation marks and citation omitted). This Court will only
overturn the trial court’s decision if it is left with a definite and firm conviction that the trial court
made a mistake. Id.

        Questions of statutory construction are reviewed de novo. Kemp v Farm Bureau Gen Ins
Co of Mich, 500 Mich 245, 252; 901 NW2d 534 (2017). An administrative agency’s interpretation
of a statute is entitled to “respectful consideration, but [it is] not binding on courts and cannot
conflict with the plain meaning of the statute.” In re Rovas Complaint, 482 Mich 90, 117-118;
754 NW2d 259 (2008).

        In circumstances when the trial court does not fully address a properly raised issue, but
“the lower court record provides the necessary facts,” this Court reviews the record de novo. Hines
v Volkswagen of America, Inc, 265 Mich App 432, 443-444; 695 NW2d 84 (2005). We give “great
deference to a circuit court’s review of the factual findings made by an administrative agency, but
substantially less deference, if any, is afforded to the circuit court’s decisions on matters of law.”
Brang, Inc v Liquor Control Comm, 320 Mich App 652, 660-661; 901 NW2d 309 (2017).

3
    Mich Admin Code, R 338.81(8) states:
                 In the discretion of the agency, a request for declaratory ruling may be
         denied if the applicant fails to follow the procedure for submission set forth in this
         rule, if the statement of facts is incomplete or inaccurate, if the facts or
         circumstances relate to a changing situation, if the ruling would not be in the public
         interest or in furtherance of statutory objectives, or for any other stated reason. The
         agency shall set forth the reason or reasons for denial of the request in its written
         notification to the applicant.

                                                   -3-
                                       III. JURISDICTION

        As a preliminary matter, we address defendant’s contention that this Court lacks
jurisdiction over the appeal because plaintiff did not have an appeal by right from the trial court’s
order. Defendant asserts that because plaintiff’s appeal to the trial court was from a decision in
which defendant was acting as a tribunal under MCR 7.203(A)(1)(a), plaintiff did not have an
appeal by right. We disagree.

        MCR 7.203(A)(1)(a) provides that an aggrieved party may appeal by right to this Court
from a final judgment or order of a trial court except when the trial court judgment or order is “on
appeal of any court or tribunal.” In Natural Resources Defense Council v Dep’t of Environmental
Quality, 300 Mich App 79, 86; 832 NW2d 288 (2013), this Court explained that “[t]ribunals
include administrative agencies acting in a judicial or quasi-judicial capacity.” (Quotation marks
and citation omitted.) However, not all agency action is judicial or quasi-judicial in nature. See
id. “Quasi-judicial proceedings include procedural characteristics common to courts, such as a
right to a hearing, a right to be represented by counsel, the right to submit exhibits, and the
authority to subpoena witnesses and require parties to produce documents.” Id.4

        In this case, defendant was not acting as a “tribunal” when it denied plaintiff’s request.
Plaintiff was not afforded a right to a hearing and, in fact, no such hearing was held. Plaintiff was
not afforded the right to be represented by counsel and, without a hearing, no opportunity to
subpoena or call witnesses. Id.; see also William Beaumont Hosp v Wass, 315 Mich App 392, 400;
889 NW2d 745 (2016) (agency’s decision was not “adjudicatory in nature because no level of the
proceedings provided for an evidentiary hearing”). There is no evidence demonstrating defendant
acted as a tribunal when it denied plaintiff’s request for a declaratory ruling because the
proceedings were not judicial or quasi-judicial in nature. Therefore, this Court has jurisdiction
over plaintiff’s appeal under MCR 7.203(A)(1).

                                   IV. PLAINTIFF’S APPEAL

        In his first point of error, plaintiff asserts that the trial court erred by not answering a
question presented in his appeal to that court. Plaintiff asserts that he asked the trial court to
determine whether defendant abused its discretion by denying plaintiff’s request for a declaratory
ruling when defendant determined that MCL 125.1510(1) did not require further interpretation or
application and when defendant continued to use forms that the Commission did not prescribe.
Plaintiff asserts that the trial court, instead, addressed whether defendant abused its discretion by

4
  Defendant suggests we rely on Forner v Dep’t of Licensing and Regulatory Affairs, unpublished
per curiam opinion of the Court of Appeals, issued August 20, 2019 (Docket No. 345617), p 5, in
which we stated that MCL 24.263 “suggests that we must treat the proceedings applicable to
requests for declaratory rulings as quasi-judicial proceedings, as would be the situation in a
contested case.” In addition to the fact that Forner is unpublished and, therefore, not binding, see
MCR 7.215(C)(1), the statement relied on by defendant in that case is dictum. See Allison v AEW
Capital Management LLP, 481 Mich 419, 436-437; 751 NW2d 8 (2008). This Court provided the
framework for determining whether proceedings were judicial or quasi-judicial in Natural
Resources Defense Council, which we have followed in this opinion.

                                                -4-
declining to issue a declaratory ruling requiring defendant or the Commission to develop a single,
statewide permit application. We disagree.

        Although it is clear that in its opinion, the trial court did not copy plaintiff’s first question
presented verbatim, the trial court asked plaintiff during the hearing on the issue whether he was
requesting a statewide permit from defendant. Plaintiff answered that such an outcome would be
“ideal,” but explained that he wanted the Commission to ensure that each jurisdiction’s forms were
“proper and complete and adequate.” The trial court responded that it understood plaintiff’s
argument, but explained that the legal issue was whether plaintiff had the authority to force the
Commission to act.

         In its opinion, the trial court accurately quoted plaintiff’s request to defendant for a
declaratory ruling. The trial court’s analysis focused on the term “may” in MCL 24.263 and
defendant’s resulting discretion in determining whether to issue a declaratory ruling. The trial
court explained that, consistent with Mich Admin Code, R 338.81(8), defendant provided
justification for denying plaintiff’s request for a declaratory ruling, including that plaintiff’s
request was “more akin to seeking a prospective change in policy or practice” and because LARA
did not have exclusive authority to administer the SSCCA. Accordingly, we reject the argument
that the trial court did not adequately address the issue whether defendant properly exercised its
discretion when it denied plaintiff’s request.

       Plaintiff argues next that defendant erred when it denied his request for a declaratory ruling
on the basis that the statute did not require further interpretation when LARA continued to act in
opposition to the SSCCA’s plain meaning. We disagree.

        When a trial court reviews an agency’s decision, it must “determine whether the agency’s
decision was contrary to law, was supported by competent, material, and substantial evidence on
the whole record, was arbitrary or capricious, was clearly an abuse of discretion, or was otherwise
affected by a substantial and material error of law.” Polania v State Employees’ Retirement Sys,
299 Mich App 322, 328; 830 NW2d 773 (2013) (quotation marks and citation omitted). The trial
court must affirm the agency’s decision if it was not contrary to law and was otherwise supported
by competent, material, and substantial evidence on the whole record. Id. This Court’s role is to
determine whether the trial court “applied correct legal principles and whether it misapprehended
or grossly applied the substantial evidence test to the agency’s findings.” Id.

        The primary purpose of statutory interpretation is to “ascertain and effectuate legislative
intent.” Omne Fin Inc v Shacks, Inc, 460 Mich 305, 311; 596 NW2d 591 (1999). “Courts may
not speculate regarding legislative intent beyond the words expressed in a statute.” Id. Further,
courts may not read anything into a statute “that is not within the manifest intent of the Legislature
as derived from the act itself.” Id. When statutory language is unambiguous, “further construction
is neither required nor permitted.” Joseph v Auto Club Ins Ass’n, 491 Mich 200, 206; 815 NW2d
412 (2012).

         MCL 125.1510(1) states that an application for a building permit “shall be on a form
prescribed by the [C]ommission.” MCL 125.1508b(1) provides that “[e]xcept as otherwise
provided in this section, the director [of LARA] is responsible for administration and enforcement
of this act and the code.” Under MCL 125.1507, the director may take a number of actions “[a]fter

                                                  -5-
consultation and with the approval of the [C]ommission.” Further, MCL 125.1505(1) provides
that the Commission “has all powers necessary or convenient to carry out and effectuate the
purposes and provisions of this act.”

        Moreover, MCL 24.263 states that an agency “may issue a declaratory ruling as to the
applicability to an actual state of facts of a statute administered by the agency or of a rule or order
of the agency.” “The use of the word ‘shall’ constitutes clear language designating a mandatory
course of conduct; whereas, the term ‘may’ presupposes discretion and does not mandate an
action.” In re Weber Estate, 257 Mich App 558, 562; 669 NW2d 288 (2003) (citations omitted).

        MCL 125.1508b(1) plainly states that the director of LARA “is responsible for
administration and enforcement of” the SSCCA “[e]xcept as otherwise provided in this section.”
As relevant here, MCL 125.1503a(4) states that the Commission “is within the department but
shall exercise its statutory functions independently of the director, except that budgeting,
personnel, and procurement functions of the commission shall be performed under the direction
and supervision of the director.” Although the SSCCA may not include an enforcement
mechanism to challenge the Commission’s apparent failure to prescribe the forms, we may not
read into the SSCCA language that does not appear on the page, i.e., that the director of LARA
has the authority to order the Commission to prescribe applications and forms. See Omne Fin,
Inc, 460 Mich at 305.

       In further argument, plaintiff questions why interpretation or application is not warranted
when defendant continued to use forms that the Commission did not prescribe. However, the
question of whether the Commission is abiding by the SSCCA is a separate question not before
us. The language in the SSCCA is plain and, therefore, further interpretation is “neither required
nor permitted.” Joseph, 491 Mich at 206.

       Lastly, plaintiff argues that the LARA director abused her discretion by denying plaintiff’s
request for a declaratory ruling that would have applied to the Bureau. Relying on MCL
125.1507,5 plaintiff argues that “it is up to the director or her subordinates, the Bureau, to consult

5
    MCL 125.1507 states:
       (1) After consultation and with the approval of the [C]ommission, the director may do the
following:
     (a) Subject to civil service requirements, appoint subordinate officers and employees of the
[C]ommission, including legal counsel, and prescribe their duties and fix their compensation.
        (b) Appoint or use experts, consultants, technical advisers, and advisory committees for
assistance and recommendations relative to preparation and promulgation of the code and to assist
the [C]ommission and the director in carrying out this act.
        (c) Subject to the advice of the [C]ommission, do those things necessary or desirable to
effectuate the general purposes and specific objectives of this act.

                                                 -6-
with the Commission and seek the approval from the Commission.” However, this argument
incorrectly interprets that statute, which in fact supports defendant’s contention that it cannot order
the Commission to act since MCL 125.1507 requires that the director of LARA seek approval
from the Commission. The SSCCA is clear that the Commission shall prescribe the forms, see
MCL 125.1510(1), and the trial court properly affirmed defendant’s denial of plaintiff’s request
for a declaratory ruling on the basis of the plain language of the statute and defendant’s lack of
authority over the Commission.

        Plaintiff has not demonstrated that defendant had the authority to order the Commission to
act, even to prescribe the forms that the Bureau used. Therefore, the LARA director did not abuse
her discretion, and the trial court did not err when it affirmed defendant’s denial of plaintiff’s
request. See Polania, 299 Mich App at 328.

       Affirmed. Defendant, as the prevailing party, may tax costs.

                                                               /s/ Michael J. Riordan
                                                               /s/ Kirsten Frank Kelly
                                                               /s/ Brock A. Swartzle

       (2) The director shall cooperate with agencies of the federal government, may enter into
contracts to receive funds, and may receive grants from the federal government to carry out the
purposes of this act.

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