Court Opinion

ID: 3204868
Source: CourtListenerOpinion
Date Created: 2016-05-19 04:04:38.332964+00
Date Added: 2024-06-11T07:39:20.090017
License: Public Domain

Order                                                                       Michigan Supreme Court
                                                                                  Lansing, Michigan

  May 18, 2016                                                                      Robert P. Young, Jr.,
                                                                                               Chief Justice

  151717                                                                             Stephen J. Markman
                                                                                          Brian K. Zahra
                                                                                  Bridget M. McCormack
                                                                                        David F. Viviano
                                                                                    Richard H. Bernstein
  BOARD OF TRUSTEES OF THE CITY OF                                                        Joan L. Larsen,
  PONTIAC POLICE AND FIRE RETIREE                                                                   Justices
  PREFUNDED GROUP HEALTH &
  INSURANCE TRUST,
            Plaintiff-Appellee,
  v                                                      SC: 151717
                                                         COA: 316418
                                                         Oakland CC: 2012-128625-CZ
  CITY OF PONTIAC,
            Defendant-Appellant.

  _________________________________________/

          On April 6, 2016, the Court heard oral argument on the application for leave to
  appeal the March 17, 2015 judgment of the Court of Appeals. On order of the Court, the
  application is again considered. MCR 7.305(H)(1). The Court of Appeals erred in its
  reading of Executive Order 225 (EO 225). Contrary to the Court of Appeals conclusion,
  EO 225 by its plain language expresses the intent of the emergency manager to
  extinguish the defendant’s 2011-2012 fiscal year contribution.              Although that
  contribution accrued on June 30, 2012, the defendant had not yet paid the obligation
  when EO 225 went into effect. EO 225 clearly states that, as of August 1, 2012, the
  defendant no longer has an obligation “to continue to make contributions” under Article
  III of the Trust Agreement. It does not differentiate between already accrued, but unpaid
  obligations and future obligations, and thus by its terms applies to both. Accordingly, the
  Court of Appeals erred by concluding that the emergency manager did not intend to
  extinguish the defendant’s 2011-2012 fiscal year contribution. Nonetheless, although the
  Court of Appeals determined that the emergency manager could retroactively extinguish
  the 2011-2012 fiscal year contribution through his authority under 2011 PA 14, it did not
  specifically address whether EO 225 was a permissible retroactive modification of the
  plaintiff’s accrued right to the contribution. See LaFontaine Saline, Inc v Chrysler
  Group, LLC, 496 Mich 26 (2014). We therefore REVERSE that part of the Court of
  Appeals judgment which interprets EO 225, VACATE that part of the Court of Appeals
  judgment which discusses the plaintiff’s breach of contract claim, and REMAND this
  case to the Court of Appeals for it to consider: (1) whether the retroactivity analysis
                                                                                                              2

stated in LaFontaine applies to EO 225; (2) if so, whether the extinguishment of the
defendant’s accrued, but unpaid, 2011-2012 fiscal year contribution by EO 225 is
permissible under LaFontaine; and (3) if LaFontaine does not apply, the appropriate
method for determining whether EO 225 constitutes a permissible retroactive
modification of the 2011-2012 fiscal year contribution.

      We do not retain jurisdiction.

                        I, Larry S. Royster, 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.
                        May 18, 2016
       p0511
                                                                            Clerk