Christie v. BD. OF REGENTS UNIVERSITY REGENTS , 364 Mich. 202 ( 1961 )

Black, J.

Comes the intruder spoilsport as the legislative and judicial branches continue their gambol o’er the field of sovereign immunity. Here the recurrent problem — -what to do with another aspect of such immunity — cannot be buck-lateraled to the legislature. By the Constitution that august body has been rendered ineligible to receive, in today’s game, any kind of a pass from the judicial branch.

Plaintiff, at 7 years of age, sues for personal injury said to have been negligently inflicted while he was a patient — during early infancy — in the university hospital. The asserted negligence consists of permitting him to fall “from an unattended crib from which all restraints had been removed.”

Suit was commenced by summons. With commencement of suit plaintiff filed a petition for discovery, asking among other things that the defendant board of regents be compelled “to produce its policy of liability insurance for the inspection and examination by the plaintiff.” The circuit judge entered an order for production and inspection of the policy, doing so on theory that the policy should be ordered in as possibly admissible evidence tending to establish that the defendant board had waived its immunity from liability, to the plaintiff, to the extent of the insurer’s monetary obligation.

On application of defendant and grant of leave we review such order for production and inspection. Plaintiff’s statement of the reviewable question is comprehensive and fully explanatory:

“In civil action against board of regents of university of Michigan for personal injuries suffered by infant patient of university hospital through negligence of defendants’ servants, agents and employees, did circuit judge abuse his discretion on plaintiff’s amended petition for discovery filed prior to declaration when he ordered defendants to produce for plaintiff’s examination the contract of insurance existing between them and their liability insurance-carrier when the cause of action arose?”

I would affirm on ground that the questioned order is well within the discretionary authority Court Rule No 40 (1945) provides. The relevantly sole requirement of that rule is that there be fair showing that the petitioning plaintiff needs such production and inspection in order to declare properly the cause his petition supposedly portrays.

Does this plaintiff need the policy in order to declare? Prom the face of his untraversed petition I conclude he does. McNair v. State Highway Department, 305 Mich 181, has made it abundantly clear that when an apparently immune public body is sued on allegation of tort liability the plaintiff must allege facts which, if true, overcome the standard posture of such body that “no court can hold us liable.” In a word, a part of this plaintiff’s burden is that of' duty to plead and prove some status which legally impairs or destroys the defendant, board’s seeming exemption. No waiver by neglect to raise the question can exist (McNair, supra), and so it is necessary to explore the ultimate and decisive question:Whether the resolution of the defendant board to-acquire and maintain such liability insurance operates as a matter of law to waive its immunity to the extent of the insurer’s obligation.

I agree with the statement of the annotator of a recent and exhaustive appraisal of this question who says (annotation headed “Liability or indemnity insurance carried by governmental unit as affecting immunity from'tort liability”; 68 ALR2d 1437, 1448):

“In a few jurisdictions the courts have taken the view (which is worthy of characterization as enlightened) that to the extent that a liability insurance policy protects a governmental unit against tort liability, the otherwise-existing immunity of the unit is removed.”

In this case there are 2 good reasons for concurrence with the annotator’s conclusion that such is the “enlightened” view. The first is that the fact of such insurance has eliminated the classically suave reason for immunity of the defendant board from liability (if proven) to this plaintiff.^* The other and specially distinctive reason is that the defendant board is so far autonomous and constitutionally independent as to clothe it with plenary as well as exclusive power of waiver of such immunity and that it has already exercised such power so far as concerns this case.

The first point — that the board’s determination to acquire and carry liability insurance removes the historic reason for immunity — requires no extended analysis. We are yet free to pick and choose among authorities extant. My choice, if it were presently necessary to choose, would be with the “enlightened” —and visibly growing — minority. As the cited annotation shows, the more numerous authorities adhere to position that public bodies, having spent public money for liability protection thereby incur no liability; a game which in fact if not by design unjustly enriches the insurer for carrying a risk where there is no risk.^* Other authorities, “enlightened” I repeat, pursue the opposite and more explicable view.

Whatever view one may take of this diversity, the' majority rule becomes irrelevant when it is shown that the critical bastion thereof (that the legislature only may waive) is nonexistent. Such is the case-here. If the defendant board is by the Constitution given the exclusive power to waive, then it would surely seem that the reasoning of such minority is best for the specific case at bar.

The board of regents is a separate and self-governing body corporate, made so by the Constitution (Const 1908, art 11, § 4). By our decisions it is “a constitutional corporation of independent authority, which, within the scope of its functions, is co-ordinate with and equal to that of the legislature.” It has “independent control of the affairs of the university by authority of these constitutional provisions” (quotations from Board of Regents of the University of Michigan v. Auditor General, 167 Mich 444, 450), and so its counsel are right when they insist in their-brief that the legislature (as in the case of the State proper and its statutory agencies) cannot waive the immunity of the board without consent of the board.^* .But this is a knife with 2 edges. If the board by the Constitution stands separate from and declaredly equal to the legislature, then it alone has a right to waive and, by the same token, a right to reject any .legislative act of waiver in its behalf. By the past .and tried reasoning of this Court the board is, ■“within the scope of its functions,” its own legislator .and may legislate that which I find implicit in its ■decision to carry the insurance that this plaintiff would unearth for the purposes of pleading.

Consider these interpretations we have made of the eleventh article and its predecessor:

“But the people, who are the corporators of this institution of learning, have, by their Constitution, conferred the entire control and management of its affairs and property upon the corporation designated as ‘the Regents of the University of Michigan,’ and have thereby excluded all departments of the State government from any interference therewith. The fact that it is State property does not bring the regents within the purview of the statute. The people may, by their Constitution, place any of its institutions or property beyond the control of the legislature.” Weinberg v. Regents of the University of Michigan, 97 Mich 246, 254, 255.

“The board of regents and the legislature derive their power from the same supreme authority, namely, the Constitution. Insofar as the powers of •each are defined by that instrument, limitations are imposed, and a direct power conferred upon one necessarily excludes its existence in the other, in the absence of language showing the contrary intent. Neither the university nor the board of regents is mentioned in article 4 (Const 1850), which defines the powers and duties of the legislature; nor in the article relating to the university and the hoard of regents is there any language which can be construed into conferring upon or reserving any control over that institution in the legislature. They are separate and distinct constitutional bodies, with the powers of the regents defined. By no rule of construction can it be held that either can encroach upon or exercise the powers conferred upon the other.” Sterling v. Regents of the University of Michigan, 110 Mich 369, 382 (34 LRA 150).

“By the provisions of the Constitution of 1850r repeated in the new Constitution of 1909, the board of regents is made the highest form of juristic person known to the law, a constitutional corporation of independent authority, which, within the scope of its functions, is co-ordinate with and equal to that of the legislature. By the old Constitution it is given ‘direction and control of all expenditures from the-university interest fund’ (section 8, art 13); and by the new Constitution ‘general supervision of the university, and the direction and control of all expenditures from the university funds.’ Section 5,. art 11. That the board of regents has independent control of the affairs of the university by authority of these constitutional provisions is well settled by former decisions of this court. (Citing and quoting cases.)” Board of Regents of the University of Michigan v. Auditor General, 167 Mich 444, 450, 451.

“They [the people] have made of them [board of regents and State board of agriculture] the most unique organizations known to the law, in this, that they are constitutional corporations created for the-purpose of independently discharging State functions.” Prevailing opinion of McDonald, J., in State Board of Agriculture v. Auditor General, 226 Mich 417, 423.

Relying on Weinberg and Sterling, the author of Charters and Basic Laws of Selected American Universities and Colleges (published by the Carnegie Foundation, New York, 1934) concludes rightly (p 350 under heading “Constitutional Independence”):

“The board of regents and the legislature derive their power from the same supreme authority, namely, the Constitution. They are separate and distinct constitutional bodies. No other conclusion is possible than that the intention was to place the university in the direct and exclusive control of the people themselves, through a constitutional body elected by them.”

And Chambers’ “The Colleges and the Courts” (Columbia Univ. Press, New York, 1952) describes the constitutional position of the university this way (P 63):

“The State universities in Michigan, Minnesota, California, Idaho, Colorado, and Utah continue to have the dignity of fourth co-ordinate arms of the State government, as do the separate land-grant colleges in Michigan, Oklahoma, and Utah.”

Summary: The board of regents has exclusive power to waive the immunity our decisions have bestowed on it.^* Such may be done by implication from action of the board as well as by express resolution thereof. Here the board has solemnly resolved to carry and pay for, out of funds of the university committed to its discretion, such insurance against liability as is quite inconsistent with an immunity from such liability. Originally there was no liability. Now, by voluntary and lawful action of the board, there is liability and insurance against loss occasioned by such liability. If this is not true, then we must instead attribute to an unusually exalted group of constitutional officers tlie intent solely of awarding some politically influential insurance agency a fat and steady premium account for insuring tlie board and the university against risks which do not exist. That I am unwilling to do. The board does not sit and govern in the midst of partisan pressures'- and it should be accorded the presumption that each determination of its members to spend university funds imports a consideration; something for something which is valuable to the university.

It requires no Churchillian-worded resolution of the board of regents — adorned say with red ribbon and blue seal — to waive a status which at best stands precariously at bay before the developing impact of judicial authority (see discussion and exhaustive examination of authorities in Parker v. Port Huron Hospital, 361 Mich 1, and the most recent case in point, Muskopf, supra). In the law as elsewhere' actions sometimes speak louder than words. Here, by force of contemplative action of the board, we must either by our decision tacitly approve dissipation of university funds to no useful end or draw from that action whatever liability the judicial process may decide is a reasonable incident thereof. I prefer the latter and accordingly agree with the reasoning of Chief Justice Dethmers, recorded in Peters v. Michigan State College, 320 Mich 243, 251.

Plaintiff’s undenied petition for discovery discloses good reason for exercise of the discretion Court Rule No 40 (1945) confers. The defendant board should be required to bare its policy — insurance policy, that is. Further, and if the inspected policy fairly suggests additional inquiry, the minutes or other evidences of corporate action by which the-insurance was acquired should be discovered under the rule.

I vote to affirm, without an award of costs.

Supplement (September 1,1961).

This case of Christie was duly assigned to the writer prior to commencement of onr April term. In pursuance of such assignment the foregoing opinion was prepared and delivered to other members of the Court under date of June 6, 1961. Since then Mr. Justice Carr, writing under date of August 30, 1961, for reversal, has called attention to an affidavit, “executed by 1 of the attorneys for defendant, indicating that a search of the files and records of the university had not disclosed any copy of such a policy, and such had not been otherwise discovered or made known to defendant.”

The affidavit to which my Brother refers was prepared (and included in defendant’s appendix) long after Judge Breakey’s presently reviewed order for discovery was entered, and long after we had granted (July 11, 1960) defendant’s application for leave to appeal. No one claims that it or the thrust thereof — that no policy can be produced — was ever brought to the trial judge’s attention, and no motion designed to include same in the record on appeal (see Court Rule No 72, § l[d], [e] [1945]) has been made at any time.

In order that the exact content of this “unable to find” affidavit may be read by the profession with verbated accuracy, same is quoted in full as follows:

“1. That on December 18, 1959, the circuit court ordered the production of the defendant’s liability insurance policy which was in force in September of 1953, for the purpose of permitting the plaintiff to inspect the same.

“2. That from said order application for leave to appeal to the Supreme Court was taken and said application was granted on July 11,1960.

“3. That at the time the matter was being considered by the circuit court and during all of the time that appeal proceedings were pending the defendant did not know that the said policy was not capable of being produced.

“4. That upon request of your deponent, a search was made of the files and records of the University of Michigan for the policy, which could not be found, and on information and belief a search was made of the files and records of the defendant’s insurance carrier, both in the Detroit office and in the New York office, and no copy of such policy was discovered. That as of this date, a continuing search of the company’s New York office is being made.

“5. That this fact was not known conclusively by the defendant or by this deponent until on or about October 28, 1960.”

It will be noted that the affiant carefully refrains from saying that no policy was ever existent or in effect, and the fact that an instrument once at hand has since been lost provides no way for evasion of discovery. In such case the law employs its tried rules of best and secondary evidence.

I do not care to encourage the growing practice of bolstering circuit court records by post-appeal eos parte affidavits of fact (see Chircop v. City of Pontiac, 363 Mich 693). Such affidavits usually — as here —set forth facts which have never been brought to the attention of the trial judge or chancellor. It is suggested instead that we have no right to consider instruments of that nature unless and until they have been made a part of the record pursuant to said Court Rule No 72 (1945).

If in this case it is shown — ultimately—that the defendant at no time acquired a policy such as Judge Breakey ordered produced, the judge will surely modify his order. Until such showing is made we should proceed to review upon the circuit court record as it stood when the order of discovery was made and our order granting leave to review that order was entered.

My vote to affirm, without costs, is cast again.

* See, for recent exposition and repudiation of the doctrine that immunity is required to protect publie revenues from dissipation on aecount of torts of public servants, Molitor v. Kaneland Community Unit District No. 302, 18 Ill2d 11 (163 NE2d 89), and Muskopf v. Corning Hospital District, 55 Cal2d 211 (11 Cal Rptr 89, 359 P2d 457).

* The majority rule, and the reasoning submitted in support of it,, was comprehensively summarized in the recent case of Maffei v. Incorporated Town of Kemmerer, 80 Wyo 33 (338 P2d 808, 817) :

“There are many decisions from other jurisdictions which hold' there can be no waiver of a municipality’s immunity unless by specific legislative authority, and they are persuasive. [Citing cases.] We,, therefore, hold it is beyond the power of a municipality to waive an immunity which it possesses by virtue of its being an arm of the-State’s government and that any waiver of such an immunity must come by direct action of the legislature or through the clear and unmistakable implication of its legislative acts.”

* Counsel for the board do not stop with assertion that the legislature cannot waive the board’s immunity. They take a 7-league step farther by this bold ipse dixit: The people only, by constitutional amendment, may waive in behalf of the board. With the latter I ■cannot agree. By force of the broad construction' this Court has placed on article 11 the board may lawfully waive its own immunity from tort liability.

* Robinson v. Washtenaw Circuit Judge, 228 Mich 225, is not opposed to these conclusions. The effect of acquisition of liability or indemnity insurance was not considered on that occasion and we may assume from the Court’s opinion that the board did not carry such protection at the time.