Court Opinion

ID: 4168937
Source: CourtListenerOpinion
Date Created: 2017-05-17 14:12:18.330185+00
Date Added: 2024-06-11T14:38:43.226083
License: Public Domain

STATE OF MICHIGAN

                            COURT OF APPEALS

THOMAS GOODHUE,                                                      FOR PUBLICATION
                                                                     May 16, 2017
               Plaintiff-Appellant,                                  9:00 a.m.

v                                                                    No. 332467
                                                                     Court of Claims
DEPARTMENT OF TRANSPORTATION,                                        LC No. 15-000224-MD

               Defendant-Appellee.

Before: GADOLA, P.J., and JANSEN and SAAD, JJ.

PER CURIAM.

        Plaintiff appeals the trial court’s order that granted defendant’s motion for summary
disposition pursuant to MCR 2.116(C)(7). For the reasons provided below, we affirm.

                                        I. BASIC FACTS

        Plaintiff was a U.S. Customs and Border Protection Officer who worked at the Blue
Water Bridge. On April 8, 2015, plaintiff stepped into a hole in one of the toll booth lanes and
injured himself.

        On May 18, 2015, plaintiff served defendant with a notice of intent to file a claim. And
on October 5, 2015, plaintiff filed suit in the court of claims. After defendant initially moved for
summary disposition under MCR 2.116(C)(7), plaintiff filed an amended complaint, wherein he
claimed that three exceptions to governmental immunity applied. In Count I, plaintiff alleged
that defendant was not immune from suit based on the roadway exception; in Count II, plaintiff
alleged that defendant was not immune from suit because it was engaging in a proprietary
function at the time of the incident; and in Count III, plaintiff alleged that defendant was not
immune from tort liability because of the public-building exception to governmental immunity.

        Defendant thereafter filed an amended motion for summary disposition. Defendant
argued that Counts I and III were barred because plaintiff failed to file his claim in the court of
claims within 120 days, which violates the notice requirement of MCL 691.1404. Defendant
also argued that Count II was barred because its operation of the Blue Water Bridge was not a
proprietary function. The trial court agreed and ultimately granted defendant’s motion on all
counts.

                                 II. STANDARD OF REVIEW

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        We review a trial court’s decision on a motion for summary disposition de novo.
Moraccini v Sterling Heights, 296 Mich. App. 387, 391; 822 NW2d 799 (2012). Summary
disposition is appropriate under MCR 2.116(C)(7) if a claim is barred because of, among other
things, “immunity granted by law.” When reviewing a motion for summary disposition under
this subrule, a court accepts “all well-pleaded factual allegations as true and construe[s] them in
favor of the plaintiff, unless other evidence contradicts them.” Dextrom v Wexford Co, 287 Mich
App 406, 428; 789 NW2d 211 (2010). Further,

       [i]f any affidavits, depositions, admissions, or other documentary evidence are
       submitted, the court must consider them to determine whether there is a genuine
       issue of material fact. If no facts are in dispute, and if reasonable minds could not
       differ regarding the legal effect of those facts, the question whether the claim is
       barred is an issue for the court. [Id. at 429 (citations omitted).]

       We also review issues of statutory interpretation de novo. City of Riverview v Sibley
Limestone, 270 Mich. App. 627, 630; 716 NW2d 615 (2006).

                                         III. ANALYSIS

        Under Michigan’s governmental tort liability act (GTLA), MCL 691.1401 et seq.,
governmental agencies are immune from tort liability when they are “engaged in the exercise or
discharge of a governmental function.” MCL 691.1407(1). However, the act provides several
exceptions to this broad grant of immunity.1 As noted, plaintiff contends that three exceptions
are relevant: (1) the highway exception, (2) the proprietary-function exception, and (3) the
public-building exception.

                  A. COUNT II—PROPRIETARY FUNCTION EXCEPTION

        In the second count of his amended complaint, plaintiff avers that defendant cannot claim
governmental immunity because its operation of the Blue Water Bridge is a proprietary function.
Plaintiff argues that the trial court erred when it granted summary disposition to defendant on
this count. We disagree.

       The proprietary-function exception to governmental immunity is found in MCL 691.1413
and provides the following:

       The immunity of the governmental agency shall not apply to actions to recover
       for bodily injury or property damage arising out of the performance of a
       proprietary function as defined in this section. Proprietary function shall mean

1
  “The six statutory exceptions are: the highway exception, MCL 691.1402; the motor-vehicle
exception, MCL 691.1405; the public-building exception, MCL 691.1406; the proprietary-
function exception, MCL 691.1413; the governmental-hospital exception, MCL 691.1407(4);
and the sewage-disposal-system-event exception, MCL 691.1417(2) and (3).” Wesche v Mecosta
Co Rd Comm, 480 Mich. 75, 84 n 10; 746 NW2d 847 (2008).

                                                -2-
       any activity which is conducted primarily for the purpose of producing a
       pecuniary profit for the governmental agency, excluding, however, any activity
       normally supported by taxes or fees. . . .

“Therefore, to be a proprietary function, an activity ‘(1) must be conducted primarily for the
purpose of producing a pecuniary profit; and (2) it cannot normally be supported by taxes and
fees.’” Herman v Detroit, 261 Mich. App. 141, 145; 680 NW2d 71 (2004), quoting Coleman v
Kootsillas, 456 Mich. 615, 621; 575 NW2d 527 (1998).

        “The first prong of the proprietary function test has two relevant considerations. First,
whether an activity actually generates a profit is not dispositive, but the existence of profit is
relevant to the governmental agency’s intent.” Id. Importantly, “[a]n agency may conduct an
activity on a self-sustaining basis without being subject to the proprietary function exemption.”
Id.; see also Hyde v Univ of Mich Bd of Regents, 426 Mich. 223, 258-259; 393 NW2d 847 (1986).
“Second, where the profit is deposited and where it is spent indicate intent. If profit is deposited
in the general fund or used on unrelated events, the use indicates a pecuniary motive, but use to
defray expenses of the activity indicates a nonpecuniary purpose.” Herman, 261 Mich. App. at
145.

        Here, Myron Frierson, defendant’s Bureau Director of Finance Administration, testified
that the Blue Water Bridge receives income from a variety of sources, but the primary source is
from tolls. Frierson explained that regardless of the source of the income, all monies are placed
in the same Blue Water Bridge sub-fund, which is part of the state’s trunk line fund.
Importantly, none of the money generated ends up in the state’s general fund. He also explained
that the money is used solely “for the operation of the Blue Water Bridge.” Frierson testified
that in addition to daily operations, money from the sub-fund is used for capital projects and to
pay debt service on bonds that were issued for projects associated with the Blue Water Bridge.
We agree with the trial court that “[t]hese facts clearly demonstrate that the operation of the Blue
Water Bridge is not to produce a pecuniary profit, but rather, to operate the bridge on a self-
sustaining basis.”

        Plaintiff’s reliance on the fact that the amount of income defendant has received in
conjunction with the Blue Water Bridge in the last several years has exceeded its expenses is
misplaced. As Frierson noted, these excess or surplus funds were planned “in anticipation of the
capital needs,” i.e. “anticipated future costs.” This evidence shows that defendant operates the
Blue Water Bridge on a self-sustaining basis and uses the money for the Blue Water Bridge.
This is why the generation of a profit is not dispositive. See id. Indeed, as the Michigan
Supreme Court has noted, “If the availability of immunity turned solely upon an examination of
the ledgers and budgets of a particular activity, a fiscally responsible governmental agency
would be ‘rewarded’ with tort liability for its sound management decisions. Such a rule would
discourage implementation of cost-efficient measures and encourage deficit spending.” Hyde,
426 Mich. at 258.

        We also reject plaintiff’s assertion that the operation of the Blue Water Bridge has a real
purpose to increase the “profit” of the state because any Blue Water Bridge expansion project
will generate significant tax revenue for the state. While Frierson did opine that the state and the
city of Port Huron would benefit financially from a future expansion project, the record shows

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that any such benefits would be ancillary to defendant’s operation of the bridge. In sum, there is
no evidentiary support for the contention that the primary purpose in running an efficient
international bridge crossing is to improve the financial bottom line of any other government.

       Accordingly, because the evidence conclusively shows that defendant operates the Blue
Water Bridge on a self-sustaining basis instead of with a pecuniary intent, the trial court properly
granted summary disposition in favor of defendant on plaintiff’s Count II.

            B. COUNTS I & III—ROADWAY & PUBLIC-BUILDING EXCEPTIONS

       Plaintiff argues that the trial court erred when it granted summary disposition to
defendant on Counts I and III. Plaintiff asserts, incorrectly, that his claims were not barred
because he was not required to file notice in the court of claims within 120 days of the accident.

        In Count I, plaintiff alleges a defect in the highway, which is governed by the GTLA’s
notice requirements of MCL 691.1404. See Plunkett v Dep’t of Transp, 286 Mich. App. 168, 176;
779 NW2d 263 (2009). Plaintiff alleges in Count III that the public-building exception to
governmental immunity is implicated. Under MCL 691.1406, if a claim related to the public-
building exception is against the state, then notice “shall be given as provided in [MCL
691.1404].” Therefore, the notice provisions of MCL 691.1404 control for both Counts I and III
and provide as follows:

          (1) As a condition to any recovery for injuries sustained by reason of any
          defective highway, the injured person, within 120 days from the time the injury
          occurred, except as otherwise provided in subsection (3)[2] shall serve a notice on
          the governmental agency of the occurrence of the injury and the defect. The
          notice shall specify the exact location and nature of the defect, the injury
          sustained and the names of the witnesses known at the time by the claimant.

          (2) The notice may be served upon any individual, either personally, or by
          certified mail, return receipt requested, who may lawfully be served with civil
          process directed against the governmental agency, anything to the contrary in the
          charter of any municipal corporation notwithstanding. In the case of the state,
          such notice shall be filed in triplicate with the clerk of the court of claims. Filing
          of such notice shall constitute compliance with [MCL 600.6431], requiring the
          filing of notice of intention to file a claim against the state. . . .

       At issue is whether plaintiff satisfied these statutory notice requirements. Subsection (1)
provides that notice of the injury, defect, and known witnesses must be filed “within 120 days
from the time the injury occurred.” Subsection (2) then details how that notice is to be
effectuated. Specifically, the first sentence of subsection (2) provides that the notice may be
served upon an appropriate individual. However, the very next sentence clarifies that when the

2
    Subsection (3) deals with injured persons under the age of 18 and is not implicated here.

                                                   -4-
“state”3 is a defendant, “such notice shall be filed in triplicate with the clerk of the court of
claims.” Here, plaintiff filed his complaint4 with the clerk of the court of claims on October 5,
2015, which was more than 120 days after the injury occurred. Therefore, plaintiff’s filing of the
notice is deficient, which is “fatal to a plaintiff’s claim against a government agency.” McLean v
City of Dearborn, 302 Mich. App. 68, 74; 836 NW2d 916 (2013).

        Plaintiff claims that his filing with the court of claims was timely because he had six
months from the time of his injury to file his notice instead of 120 days. Plaintiff relies on MCL
691.1404(2)’s reference of MCL 600.64315 as incorporating MCL 600.6431(3)’s timing
requirements. We are not persuaded. MCL 691.1404(2) provides, “Filing of such notice shall
constitute compliance with [MCL 600.6431] . . . .” As the trial court aptly noted, this language
merely provides that compliance with MCL 691.1404 shall be treated as compliance with MCL
600.6431, irrespective of the fact that MCL 600.6431’s enumerated requirements may not have
been satisfied. Nothing in the language of MCL 691.1404(2) shows that it actually incorporates
any of MCL 600.6431’s requirements.

      We also reject plaintiff’s view that MCL 691.1404(2)’s use of the language “such notice”
does not refer to the notice referenced in MCL 691.1404(1). The first sentence of MCL

3
 The GTLA defines “state” to include the state of Michigan along with, in pertinent part, “its
agencies” and “departments.” MCL 691.1401(g). Thus, there is no question that defendant, the
Michigan Department of Transportation, is a “state” under the statute.
4
    For our purposes, we assume, without deciding, that the complaint qualifies as a proper notice.
5
    MCL 600.6431 provides:
          (1) No claim may be maintained against the state unless the claimant, within 1
          year after such claim has accrued, files in the office of the clerk of the court of
          claims either a written claim or a written notice of intention to file a claim against
          the state or any of its departments, commissions, boards, institutions, arms or
          agencies, stating the time when and the place where such claim arose and in detail
          the nature of the same and of the items of damage alleged or claimed to have been
          sustained, which claim or notice shall be signed and verified by the claimant
          before an officer authorized to administer oaths.

          (2) Such claim or notice shall designate any department, commission, board,
          institution, arm or agency of the state involved in connection with such claim, and
          a copy of such claim or notice shall be furnished to the clerk at the time of the
          filing of the original for transmittal to the attorney general and to each of the
          departments, commissions, boards, institutions, arms or agencies designated.

          (3) In all actions for property damage or personal injuries, claimant shall file with
          the clerk of the court of claims a notice of intention to file a claim or the claim
          itself within 6 months following the happening of the event giving rise to the
          cause of action.

                                                   -5-
691.1404(2) states, “The notice may be served . . . .” (Emphasis added.) The second sentence
then provides, “In the case of the state, such notice must be filed . . . .” (Emphasis added.)
Unquestionably, the reference in the second sentence refers back to the notice in the first
sentence. Plaintiff claims that a dictionary definition of “such” shows that it is referring to a
“similar” or “like” notice. But the most relevant definition of “such” is “of the character, quality,
or extent previously indicated or implied.” Merriam-Webster’s Collegiate Dictionary (11th ed)
(emphasis added).6

        Consequently, because plaintiff failed to effectuate the statutorily mandated notice, his
claims were barred, and the trial court properly granted defendant’s motion for summary
disposition with respect to plaintiff’s Counts I and III.

       Affirmed. Defendant, as the prevailing party, may tax costs pursuant to MCR 7.219.

                                                              /s/ Michael F. Gadola
                                                              /s/ Kathleen Jansen
                                                              /s/ Henry William Saad

6
 The example the dictionary gives for plaintiff’s preferred definition is “a bag [such] as a doctor
carries.” It is easy to see that the use of “such” in that instance is not consistent with the use we
are presented with. On the contrary, the pertinent definition uses the example, “in the past few
years many [such] women have shifted to full-time jobs,” which is more in line with the statute’s
usage, as it implies a previously mentioned noun.

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