CARLA WARD V MICHIGAN STATE UNIV
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STATE OF MICHIGAN
COURT OF APPEALS
CARLA WARD and GARY WARD,
UNPUBLISHED
January 27, 2009
Plaintiffs-Appellees/CrossAppellants,
v
No. 281087
Court of Claims
LC No. 05-000187-MZ
MICHIGAN STATE UNIVERSITY,
Defendant-Appellant/CrossAppellee.
Before: Owens, P.J., and Sawyer and Markey, JJ.
PER CURIAM.
Defendant appeals by right the trial court’s denial of its motion for summary disposition
under MCR 2.116(C)(7) and (8) with regard to plaintiff’s claims under the public building
exception to governmental immunity. Plaintiffs cross-appeal, challenging the trial court’s grant
of summary disposition to defendant as to plaintiffs’ claims under the proprietary function
exception to governmental immunity. We affirm the grant of summary disposition to defendant
as to the proprietary function exception claim but reverse the denial of summary disposition to
defendant on the public building exception claim.
Plaintiffs allege that the principal plaintiff was struck in the head and injured by a hockey
puck while she was a spectator during a college hockey game at defendant’s ice arena. Plaintiffs
contend that a defect in defendant’s building caused the incident, specifically the lack of
plexiglass protecting one section of spectators from the ice rink. One of defendant’s employees
apparently assisted plaintiff after she was injured. Critically, plaintiff did not provide formal
notice of the nature of the injuries and defect after the incident as required by MCL 691.1406 in
order to bring a claim under the public building exception to governmental immunity.
We review de novo both a trial court’s grant or denial of a motion for summary
disposition and questions of statutory interpretation. Liptow v State Farm Mut Auto Ins Co, 272
Mich App 544, 549; 726 NW2d 442 (2006).
Defendant argues that the trial court erred by failing to grant its motion for summary
disposition because plaintiffs failed to serve defendant notice of the occurrence of the incident as
required by MCL 691.1406 as a precondition to bringing suit under the public building exception
to governmental immunity. Based on the Michigan Supreme Court’s peremptory order in
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Chambers v Wayne Co Airport Auth, ___ Mich ___; ___ NW2d ___ (Docket No. 136900,
decided December 19, 2008), which was decided after the filing of the parties’ briefs, we must
agree. In that peremptory order, our Supreme Court reversed an opinion of this Court “for the
reasons stated in the Court of Appeals dissenting opinion.” Id. Because a peremptory order of
our Supreme Court is binding precedent in this Court if it can be understood, Evans & Luptak,
PLC v Lizza, 251 Mich App 187, 196; 650 NW2d 364 (2002), our Supreme Court’s adoption of
the dissent in this Court in Chambers constitutes binding precedent.
In that dissent, Judge Murray expressly considered the proper application of the notice
requirement for claims under the public building exception to governmental immunity as
provided by MCL 691.1406. Chambers v Wayne Co Airport Auth, unpublished opinion per
curiam of the Court of Appeals, issued June 5, 2008 (Docket No. 277900) (Murray, J.,
dissenting). In particular, Judge Murray concluded that the plaintiff failed to serve notice as
required by MCL 691.1406 because an internal incident report completed by a person associated
with the defendant did not comply with the plain requirements of the statute. Id. at 2. Judge
Murray reached this conclusion because the plaintiff did not serve the notice on the defendant
and further the plaintiff did not establish that the person who completed the incident report could
lawfully be served with civil process directed at the defendant. Id. Judge Murray further stated
that the failure to provide the required notice under MCL 691.1406 precluded the plaintiff from
recovering for his injuries regardless of whether the defendant was actually prejudiced as a
result. Id.
When we apply MCL 691.1406 to the present case, plaintiffs’ claim under the public
building exception to governmental immunity is barred. First, plaintiffs through counsel
acknowledge that they failed to provide defendant with the notice required by MCL 691.1406.
Further, while it appears undisputed that one or more employees or other agents of defendant
responded to assist plaintiff after the incident, this fact is simply immaterial under Chambers
because plaintiffs’ claim under the public building exception is plainly barred by their failure to
serve defendant with the requisite notice regardless of whether this failure actually prejudiced
defendant. Thus, the trial court’s denial of defendant’s motion for summary disposition must be
reversed and this case remanded for entry of summary disposition in favor of defendant on that
claim.1
Plaintiffs assert on cross-appeal that defendant is not immune from tort liability because
the principal plaintiff’s injury resulted from a proprietary function. We disagree.
The governmental tort liability act (GTLA) provides that, in general, governmental
agencies engaged in governmental functions are immune from tort liability. MCL 691.1407(1).
The GTLA defines “governmental function” as being “an activity that is expressly or impliedly
mandated or authorized by constitution, statute, local charter or ordinance, or other law.” MCL
691.1401(f).
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Because defendant is entitled to summary disposition on the public building exception claim,
there is no need to consider whether defendant was also entitled to summary disposition on the
basis of plaintiffs’ failure to provide the required notice under the Court of Claims Act.
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In Harris v Univ of Michigan Bd of Regents, 219 Mich App 679; 716 NW2d 1 (1996), we
held that according to well-established case law “this definition is to be broadly applied and
requires only that ‘there be some constitutional, statutory or other legal basis for the activity in
which the governmental agency was engaged.’” Harris, supra at 684 (citation omitted; emphasis
in original). Also, we look to the general activity being performed, rather than the specific
conduct involved when the alleged injury occurred. Smith v Dep’t of Pub Health, 428 Mich 540,
609-610; 410 NW2d 749 (1987).
The GTLA provides an exception to governmental immunity when an agency is engaged
in proprietary functions. MCL 691.1413 states as follows:
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
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. No action shall be brought against the
governmental agency for injury or property damage arising out of the operation of
proprietary function, except for injury or loss suffered on or after July 1, 1965.
To constitute a proprietary function requires an activity “(1) must be conducted primarily
for the purpose of producing a pecuniary profit, and (2) it cannot be normally supported by taxes
and fees.” Coleman v Kootsilas, 456 Mich 615, 621; 575 NW2d 527 (1998). That the activity
consistently generates a profit may evidence an intent to produce a profit. Id. But, that “is not
sufficient to make the activity proprietary because generating a profit must be the primary
motive.” Harris, supra at 690 n 2 (citation omitted); (emphasis in original). Where the profit is
deposited and how it is spent are relevant factors to determining the primary purpose of the
activity as well. Coleman, supra at 621. “[U]se of profits to defray the expenses of the activity
itself indicates a nonpecuniary purpose.” Harris, supra at 690 n 2 (citation omitted).
In Harris, we found that the University of Michigan was engaged in a governmental
function under the GTLA in its operations of its athletic department and intercollegiate
gymnastics team. We stated,
Given the broad definition of a governmental function, and in light of the history
of intercollegiate athletics at Michigan universities and colleges that has historic
support from the Michigan Legislature, we find that intercollegiate athletics is a
governmental function for purposes of immunity. [Harris, supra at 685].
Plaintiffs contend that times have changed since Harris and indicates that expansion of
athletic facilities, firing and hiring of specific coaches, and concern with team success show that
defendant intends to financially profit from its athletics department. In short, plaintiffs make
factual allegations about defendant’s athletic program without making a meaningful legal
argument. Plaintiff alleges that the department is profitable and claims that it receives
$3,829,293 in revenue above its expenses, but defendant has offered an affidavit stating the ice
hockey program specifically has been operating at a loss for the last 20 years. Plaintiffs also
assert that the profits are used to sustain defendant, failing to recognize that “[a] governmental
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agency may conduct activity on a self-sustaining basis without being subject to the proprietary
function exception.” Harris, supra, at 690 (citation omitted).
We conclude that we are bound by Harris to hold that defendant’s operation of its ice
hockey program did not constitute a proprietary function. Further, regardless of Harris,
plaintiffs have failed to show defendant operated its ice hockey program primarily to generate a
profit.
We affirm as to the proprietary function claim but reverse the denial of summary
disposition to defendant on the public building exception claim. Defendant, being the prevailing
party, may tax costs pursuant to MCR 7.219.
/s/ Donald S. Owens
/s/ David H. Sawyer
/s/ Jane E. Markey
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