One Court of Justice

On September 7, 2010, the Court of Appeals approved its May 27, 2010 opinion in Butler v. Wayne County, No. 290361, for publication.  Here, Wayne County retirees asserted a class action based on the fact that their supplemental life insurance program through the County changed from its historical flat-rate structure, to an age-based based premium where older individuals paid more than younger people.  The Court of Appeals reversed the lower court, and remanded the matter for entry of an order permitting the change in the rate structure.  The Court of Appeals found the the collective bargaining agreement between the County and its employees incorporated the County’s benefit plan which unambiguously provided for an age-based premium structure.  Thus, the Court of Appeals concluded that the historical practice could only trump that language if plaintiffs showed a meeting of the minds on the flat-rate structure.  Reviewing the evidence, the Court of Appeals found that while the plaintiffs might have believed there was an agreement for a flat-fee premium, there was no evidence that the defendants held that belief.  Indeed, the Court concluded that the evidence established that the agreement was that the County’s insurer set the premiums and determined how they would be calculated, and that the retirees would pay those rates as accepted by the County; so when the insurer determined that the flat-rate structure was inadequate, the change to the age-based premium was permissible.

On November 3, 2009, the Court of Appeals published its per curiam opinion in In re Estate of Lager, No. 276843, reversing the probate court’s order awarding the decedent’s personal savings plan (“PSP”) proceeds to his son.  In 1992, the decedent, who at the time was unmarried, designated his son as the primary beneficiary of his PSP.  The decedent married his surviving spouse in 1997, and died intestate in 2005.  On appeal, the Court of Appeals agreed with the surviving spouse’s argument that under ERISA, the decedent required her consent to uphold his election of his son as the beneficiary of the decedent’s PSP.  Further, because she never provided that consent, she is entitled to the PSP proceeds as a surviving spouse.  The Court of Appeals concluded that an election by an unmarried participant is not effective following a subsequent marriage if the new spouse does not provide consent to the election.

On June 4, 2009, the Court of Appeals held, in State Treasurer v. Sprague, No. 281961 (published opinion), that a court can order a prisoner to direct his pension plan to send his benefits to his prison address (where they will be deposited in his prison account) without running afoul of the anti-alienation provision of the federal Employee Retirement Income Security Act (“ERISA”).  Judge Bandstra, joined by Judge Whitbeck, wrote the majority opinion, and Judge Shapiro dissented.

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Today, the Michigan Supreme Court granted eleven applications for leave to appeal and denied one such application.  Below are the cases in which the court granted applications:

• Holman v. Rasak, Case No. 137993.  The court directed that the parties brief whether the Health Insurance Portability and Accountability Act of 1996 (HIPAA) permits ex parte interviews by defense counsel with treating physicians pursuant to a qualified protective order and also invited the Michigan Association for Justice and Michigan Defense Trial Counsel, Inc. to submit amicus briefs.
• Dept. of Agriculture v. Appletree Marketing, LLC, Case No. 137552.  The court directed that the parties brief (1) whether the plaintiffs may simultaneously pursue claims against Appletree Marketing, LLC for alleged violations of the Agricultural Commodities Marketing Act, MCL 290.651 et seq., and for common law and statutory conversion under MCL 600.2919a; and (2) whether, under the circumstances of this case, the plaintiffs may pursue claims for common law and statutory conversion against Appletree’s principal, Steven Kropf.
• Woodman v. Kera, LLC, Case No. 137347.  The court granted the application for leave to appeal solely on the issue of the enforceability of the parental pre-injury liability waiver.
• First National Bank of Chicago v. Dept. of Treasury, Case No. 137527.  The court directed that the parties brief (1) whether the plaintiff assignee of the mortgage on the property in question had standing to assert the due process rights of its assignor, which was formerly known as BankBoston, NA; and, if so, (2) whether BankBoston’s due process rights were violated by the defendants’ mailing of notice to FNB – the entity into which BankBoston had merged and to which it had changed its name – at FNB’s address, rather than to the Boston address listed on BankBoston’s mortgage assignment. Read more »

On Friday, March 13, 2009, the Michigan Supreme Court denied leave to appeal in three cases.  Notably, one of those cases was Selflube Inc. v. JJMT Inc. No. 136377, an ERISA dispute, which was argued as a calendar case on March 4, 2009.  The Court reconsidered its decision to grant leave, vacated the September 24, 2008 order granting leave, and denied the application for leave to appeal.  The order denying leave can be found here.  The oral argument summary is here.

On February 24, 2009, the Michigan Court of Appeals in Bandeen v. Public School Employees Retirement Board, No. 279363, affirmed the lower court’s finding that a substitute teacher, who refused further assignments five months before giving birth with no evidence of being medically unable to teach, did not leave service for purposes of maternity and was not a “public service employee” on leave of absence, making her ineligible to purchase public service credits during any part of her continuous twelve-year absence. Read more »

On March 4, 2009, the Michigan Supreme Court will hear oral argument in Selflube, Inc. v. JJMT, Inc., No. 136377, on whether the trial court could permanently enjoin an employee, who allegedly defrauded his employer, from taking a distribution from his 401(k) plan account, without running afoul of ERISA’s anti-alienation provision, 29 U.S.C.  § 1056(d)(1).  The order granting the application for leave to appeal can be found here.  The briefs of the parties and amici curiae can be found here. Read more »