IN RE TODD STEINER
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STATE OF MICHIGAN
COURT OF APPEALS
In re TODD STEINER.
ANN STEINER, Conservator for TODD
STEINER,
UNPUBLISHED
November 16, 2006
Petitioner-Appellee,
v
No. 262855
Antrim Circuit Court
LC No. 04-008088-AV
AUTO-OWNERS LIFE INSURANCE,
Respondent-Appellant.
Before: Murphy, P.J., and Meter and Davis, JJ.
PER CURIAM.
Respondent Auto-Owners appeals by leave granted the circuit court order reversing the
probate court’s order and granting petitioner’s motion to compel respondent to recognize the
annuity payments disclaimer on behalf of Todd Steiner. We affirm.
This case arises out of respondent’s refusal to recognize and abide by petitioner’s
disclaimer of Todd’s property interest in future annuity payments that he was scheduled to begin
receiving in 2003 as a result of a 1993 settlement in a civil suit that grew out of injuries he
sustained in a motor vehicle accident. Petitioner’s asserted motivation in doing a disclaimer and
seeking recognition of the disclaimer was to maintain Todd’s eligibility for Supplemental
Security Income (SSI) and health insurance under Medicaid that he had been receiving as a result
of a developmental disability. The issues posed to this panel are whether the disclaimer is
permissible under the former Structured Settlement Protection Act (SSPA), MCL 691.1191 et
seq.,1 and the Disclaimer of Property Interests Law (DPIL), MCL 700.2901, et seq. We hold that
the disclaimer is permissible and does not violate either the SSPA or the DPIL regardless of
respondent’s failure to consent.
1
The SSPA was repealed in favor of the Revised Structured Settlement Protection Act, MCL
691.1301 et seq., which became effective September 1, 2006. MCL 691.1309; 2006 PA 296
(repealer effective October 1, 2006).
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First, with respect to the SSPA, respondent argues that the disclaimer acts as a “transfer”
under the act, where petitioner and her husband, as primary beneficiaries relative to the annuity,
would receive the monthly payments originally destined for Todd. Therefore, according to
respondent, the disclaimer required respondent’s consent, which was not given.
An issue of statutory construction is a question of law that is reviewed de novo by this
Court. Griffith v State Farm Mut Automobile Ins Co, 472 Mich 521, 525-526; 697 NW2d 895
(2005). The primary goal of statutory interpretation is to ascertain and give effect to the intent of
the Legislature, and the Legislature is presumed to have intended the meaning it plainly
expressed. Linsell v Applied Handling, Inc, 266 Mich App 1, 15; 697 NW2d 913 (2005). If
statutory language is clear and unambiguous, then a court is required to apply the statute as
written. Id. Judicial construction of a statute is only appropriate when statutory language is
ambiguous and reasonable minds can differ with regard to its meaning. Yaldo v North Pointe Ins
Co, 457 Mich 341, 346; 578 NW2d 274 (1998). In construing a statute, a court must give effect
to every word, phrase, and clause and avoid a construction that would render any part of the
statute surplusage or nugatory. Griffith, supra at 533-534.
Former MCL 691.1193 provided, in part, as follows:
(1) If a structured settlement payment right is subject to a contractual
assignment restriction, a transfer of the structured settlement payment right is not
effective and a structured settlement obligor or annuity issuer is not required to
make payment directly or indirectly to a transferee of the structured settlement
payment right transfer unless all of the following conditions are satisfied:
***
(b) Each protected party has given all of the following in writing:
(i) The protected party’s irrevocable consent to the transfer.
Because respondent is a “protected party” as defined in former MCL 691.1192(h), and
because the settlement agreement contained assignment restrictions, respondent’s consent was
required if indeed the disclaimer qualified as a “transfer.” Former MCL 691.1192(o) defined
“transfer” as a “sale, transfer, assignment, pledge, hypothecation, or other form of disposition,
alienation, or encumbrance made for consideration.” (Emphasis added.) Assuming that the
disclaimer constituted a “form of disposition,” we conclude that the disclaimer was not made for
“consideration,” as that term is legally defined.2 Respondent and the probate court are of the
opinion that petitioner’s and her husband’s intention or contemplation to put the monthly
proceeds into a special needs trust for Todd, thereby possibility allowing him to maintain his SSI
and Medicaid benefits, constituted consideration in exchange for the disclaimer. We disagree.
“To have consideration there must be a bargained-for exchange.” Gen Motors Corp v Dep’t of
2
The term “consideration” was not defined in the SSPA.
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Treasury, 466 Mich 231, 238; 644 NW2d 734 (2002), citing Higgins v Monroe Evening News,
404 Mich 1, 20-21; 272 NW2d 537 (1978). The Higgins Court explained:
The essence of consideration . . . is legal detriment that has been bargained
for and exchanged for the promise. The two parties must have agreed and
intended that the benefits each derived be the consideration for a contract.
Thus, to reach the conclusion that a contract of hire existed, we must be
able to state that each of the two parties . . . intended to suffer a detriment to
receive a benefit, and that they agreed to exchange those detriments and benefits.
[Id. at 20-21 (citation omitted).]
Here, there is no bargained-for exchange, no contract between parties, no binding
promise or agreement, and no legal obligation relative to the disclaimer and the contemplated
funding of a special needs trust. Monthly annuity payments made to Todd’s parents instead of
Todd belong to them, and they are free to do with them as they see fit. Todd would have no
legal recourse should his parents choose not to fund the trust. Moreover, if annuity payments are
placed directly in a special needs trust, Todd’s parents do not actually receive any benefit of
personal use of the annuity payments. Further, Todd’s parents incur no detriment by simply
receiving the monthly payments and then passing them on to the trust. Additionally, assuming
that Todd actually receives any benefit from the disclaimer in the form of continued SSI and
Medicaid coverage, which is contingent on governmental approval, the benefit is conferred by
the mere fact that he would not directly receive annuity payments, and not as the result of any
legal detriment incurred by his parents. In sum, this is not the type of situation or event that the
Legislature intended to address and prevent when it enacted the SSPA. See House Legislative
Analysis, HB 5066, January 10, 2001. Accordingly, because the disclaimer was not made for
legally recognizable consideration, there was no “transfer” under the former SSPA and
respondent’s consent was not required.
Next, we hold that the disclaimer does not offend the DPIL. The DPIL abolished the
common law right of disclaimer or renunciation, but “does not abridge the right of a person to
waive, release, disclaim, or renounce property or an interest in property under another statute.”
MCL 700.2911. Thus, because petitioner had a right to disclaim the annuity interest under the
SSPA because it was not made for consideration, the DPIL cannot be utilized to preclude the
disclaimer. No more analysis need be undertaken; however, even were we required to address
other provisions contained in the DPIL, they would not serve as a basis for reversal.
MCL 700.2909(2) provides that “[a] disclaimer acts as a nonacceptance of the disclaimed
interest, rather than as a transfer of the disclaimed interest. The disclaimant is treated as never
having received the disclaimed interest.” MCL 700.2902(1) allows a fiduciary who represents a
person to whom a disclaimable interest devolves, such as petitioner, to “disclaim a disclaimable
interest in whole or in part.” Under MCL 700.2902(1), a “disclaimable interest” is required, and
MCL 700.2901(2)(b) defines the term “disclaimable interest” as follows:
“Disclaimable interest” includes, but is not limited to, property, the right
to receive or control property, and a power of appointment. Disclaimable interest
does not include an interest retained by or conferred upon the disclaimant by the
disclaimant at the creation of the interest. For purposes of this definition, the
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survivorship interest in joint property is not considered to be an interest retained
or conferred upon the disclaimant even if the disclaimant created the joint
property. [Emphasis added.]
Respondent relies on the emphasized language above in support of its proposition that
Todd did not have a disclaimable interest. However, Todd, as the disclaimant, did not retain an
interest when the annuity or settlement agreement interest was created as he had no prior interest,
nor did Todd confer upon himself such an interest when it was created. Under MCL
700.2901(2)(b), Todd plainly held a “right to receive . . . property.” Finally, respondent’s
arguments under MCL 700.2910 are rejected as either unpreserved, contrary to the facts and
events that transpired, or both.
Affirmed.
/s/ William B. Murphy
/s/ Patrick M. Meter
/s/ Alton T. Davis
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