SCHENK BONCHER & PRASHER V ROBERT VANDERLAAN
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STATE OF MICHIGAN
COURT OF APPEALS
SCHENK BONCHER & PRASHER,
UNPUBLISHED
August 28, 2003
Petitioner-Appellant,
v
No. 237690
Kent Circuit Court
LC No. 99-011906-CZ
ROBERT VANDERLAAN,
Respondent-Appellee.
Before: Whitbeck, C.J., and Smolenski and Murray, JJ.
PER CURIAM.
Petitioner appeals as of right from the October 17, 2001, order of the Kent Circuit Court
denying its motion for the surrender of cash values of respondent’s four life insurance policies.
The issues in this case are whether petitioner is entitled to collect part of its judgment against
respondent by either (1) a garnishment of the surrender value of respondent’s life insurance
policies, or (2) by having a court order respondent to request the surrender value of those policies
from the insurance company. We conclude that the court was authorized to order respondent to
obtain the surrender value of the policies. We therefore reverse the circuit court and remand to
the circuit court for it to determine whether respondent, in fact, should be ordered to obtain the
surrender values.
I.
Facts and Procedural History
On February 22, 2000, a judgment of $120,433.76 in favor of petitioner was entered
against respondent in accordance with an arbitration award. The arbitration proceedings
resolved a dispute between the parties that arose as a result of respondent’s employment with
petitioner. During its attempt to collect this judgment, petitioner served a writ of garnishment on
Northwestern Mutual Life Insurance Company (“Northwestern”). Through that writ, petitioner
discovered that respondent had four life insurance policies, each with a surrender value.
However, Northwestern refused to turn over the surrender values to petitioner “unless and until
[respondent] as the owner of the policies, exercises the policy surrender or policy loan
privileges.”
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After several hearings not now relevant, petitioner renewed its motion to compel
Northwestern to release the surrender values on the life insurance policies. At the hearing, the
trial court, relying upon Isaac Van Dyke Co v Moll, 241 Mich 255; 217 NW 29 (1928), held that
because respondent’s policies required respondent himself to first exercise his right to obtain the
surrender values of the life insurance policies before they were due and owing from
Northwestern, Northwestern held no money for respondent and had no debt to him, and could
not be ordered to release the surrender values. However, the trial court left open the possibility
that respondent himself could be ordered to execute a release of the surrender values of the four
policies. In light of the court’s statement, petitioner filed a motion to order respondent to instruct
Northwestern to release the surrender cash values of the life insurance policies. In denying
petitioner’s motion, the trial court held that it continued to be bound by Van Dyke, supra.
II.
Analysis
As we noted in the commencement of this opinion, petitioner has presented two
independent arguments for reversal of the trial court’s order: (1) Northwestern can be compelled
to release the surrender value of respondent’s insurance policies even though respondent has not
requested it to do so, and (2) the trial court can order respondent to demand the surrender values
from Northwestern in order to satisfy part of the judgment. We address the second argument
first, for we believe it is dispositive of this appeal.
MCL 600.6104 sets forth several options for a trial court to utilize in seeking to obtain
satisfaction of an outstanding judgment. Specifically, the applicable subsections provide:
After judgment for money has been rendered in an action in any court of
this state, the judge may, on motion in that action or in a subsequent proceeding:
(3)
Order the satisfaction of the judgment out of property, money, or
other things in action, liquidated or unliquidated, not exempt from execution;
(5)
Make any order as within his discretion seems appropriate in
regard to carrying out the full intent and purpose of these provisions to subject
any nonexempt assets of any judgment debtor to the satisfaction of any judgment
against the judgment debtor.
When applying the above statute, the primary role of this Court is to ascertain and give
effect to the intent of the Legislature. Robertson v DaimlerChrysler Corp, 465 Mich 732, 748;
641 NW2d 567 (2002). Furthermore, unless defined, this Court must apply the plain and
ordinary meaning to words contained in the statute. Id. In this case, applying the plain and
ordinary meaning to MCL 600.6104, it is readily apparent that the statute affords the trial court
the authority to order respondent to obtain the surrender value of the life insurance proceeds
from Northwestern.
The plain and broad language of MCL 600.6104(3) allows for the satisfaction of a
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judgment out of any property, liquidated or unliquidated, that is not exempt.1 The surrender
values are respondent’s personal property, as personal property is defined as everything that is
the subject of ownership that is not land. People v Fox (After Remand), 232 Mich App 541, 554;
591 NW2d 384 (1998). Under respondent’s life insurance policies, he is clearly the owner of
these policies and their surrender values. As petitioner correctly points out in its brief,
respondent retains property rights in the policies, including the right to assign the policy as
collateral security, the right to change policy beneficiaries, the right to borrow against the
policies, and the right to surrender the policies. Furthermore, the affidavit of Northwestern’s
attorney states that respondent may release the surrender values at any time. The surrender
values are, therefore, nonexempt personal property owned by respondent. MCL 600.6104(3).
Additionally, subsection (5) of the statute allows the court to order the collection of any
nonexempt assets it deems necessary to effectuate the intent of the statute. MCL 600.6104(5).
The surrender values of respondent’s life insurance policies are, therefore, collectible under
MCL 600.6104(3) and (5). As such, the trial court was authorized to order respondent to obtain
the surrender values of his insurance policies, if the trial court in its discretion deemed it
appropriate.2
In its ruling, the trial court erroneously relied on Van Dyke, which dealt with the validity
of a garnishment proceeding against an insurance agency under “3 Comp. Laws 1915, §§ 13123
and 13139” when the insured had not requested the surrender value of the policies, and not the
ability of a trial court to order the debtor to request the proceeds. Moreover, MCL 600.6104 was
enacted well after Van Dyke was decided.3 Although Van Dyke was relevant to the first
argument raised by petitioner, it did not address the trial court’s authority under MCL 600.6104
to order respondent to obtain the surrender values of his insurance policies.
Accordingly, we reverse the trial court’s order and remand for further proceedings
consistent with this opinion. We do not retain jurisdiction.
/s/ William C. Whitbeck
/s/ Michael R. Smolenski
/s/ Christopher M. Murray
1
Life insurance proceeds are not exempt under any statute.
2
MCL 600.6104 is stated in discretionary terms, for it states that the trial court “may” order any
of the remedies provided in the statute.
3
See 1961 PA 236. Interestingly, at the time Van Dyke was decided, there was a statutory
provision similar to that found within MCL 600.6104(3), that being 1915 PA 314, § 13381.
However, that provision was neither relied upon nor cited by the Van Dyke Court.
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