Cain v. Lansing Housing Commission

599 N.W.2d 516, 235 Mich. App. 566

• Court: Michigan Court of Appeals
• Decided: August 30, 1999
• Docket: Docket 204228
• Status: Published

Opinions

Bandstra, J.

Plaintiff appeals as of right an order granting defendant’s motion for summary disposition pursuant to MCR 2.116(C)(7) (claim is barred because of immunity granted by law). Plaintiff’s cause of action stems from a November 17, 1995, slip and fall on an ice- and snow-covered sidewalk in front of apartments owned and operated by defendant. Defendant moved for summary disposition, alleging that it was immune from suit on the basis of MCL 691.1407(1); MSA 3.996(107)(1). Plaintiff argued that defendant was precluded from raising a governmental immunity defense. The trial court ruled that defendant was entitled to raise this defense and granted its motion for summary disposition. We affirm.

In 1969, defendant entered into an annual contributions contract with the federal Department of Housing and Urban Development (hud). The contract prohibited defendant from raising the defense of governmental immunity when sued in tort.¹ In June of 1994, defendant’s insurer received a memorandum from hud, which removed that prohibition and which was “effective immediately.”²

On appeal, plaintiff asserts that the trial court erred in interpreting the annual contributions contract and the subsequent hud memorandum. The issue plaintiff raises is whether the 1969 contract was legally modified by the 1994 HUD memorandum. Plaintiff argues that defendant failed to properly assent to the 1994 memorandum, meaning there was no contract modification. The applicability of governmental immunity is a question of law that is reviewed de novo on appeal. Baker v Waste Management of Michigan, Inc, 208 Mich App 602, 605; 528 NW2d 835 (1995). For the reasons stated below, we conclude that, in determining the applicability of governmental immunity to this case, we need not address the issue whether the contract was modified through the actions of defendant and hud.

“The law is . . . well settled . . . that the sovereign immunity of the state will obtain unless there is an express statutory waiver thereof.” Bennett v Attorney General, 65 Mich App 203, 206; 237 NW2d 250 (1975). A state officer or agent has no authority to waive sovereign immunity where such a waiver is not authorized by the Legislature. McNair v State Hwy Dep’t, 305 Mich 181, 187; 9 NW2d 52 (1943). These rules apply to municipal agencies as well as to the state itself. Butler v Grand Rapids, 273 Mich 674, 676; 263 NW 767 (1935). A waiver of immunity may also be valid, however, when the authority to contractually waive governmental immunity is necessarily inferred from the language of a statute. Mead v Public Service Comm, 303 Mich 168, 173; 5 NW2d 740 (1942).

MCL 125.696; MSA 5.3056 authorizes municipal housing commissions like defendant to do any and all things necessary or desirable to secure the financial aid or cooperation of the federal government in the purchasing, acquiring, constructing, maintaining, operating, improving, extending, or repairing of housing facilities or the elimination of housing conditions that are detrimental to the public peace, health, safety, morals, or welfare.

One of the “things necessary” for defendant to secure hud funds is the acceptance of all contract terms that HUD deems appropriate in order to provide federal financial assistance. From 1969 until June of 1994, the hud prohibition of the use of governmental immunity as a defense, a contract term that defendant was authorized to accept by the statute, constituted a valid waiver of that defense. The validity of that waiver was “necessarily inferred” from the statute’s language, in conjunction with the HUD requirement. Mead, supra.

However, once hud stated “[effective immediately” that a waiver of the governmental immunity defense was no longer required in order to receive funds, defendant no longer had any statutory authority to waive that defense. By issuing the 1994 memorandum, HUD freed defendant from the constraint of the governmental immunity waiver; defendant’s promise to waive this defense was no longer necessary for the receipt of federal housing funds. Therefore, MCL 125.696; MSA 5.3056 no longer authorized defendant to continue to waive the immunity defense. Defendant could no longer validly waive the immunity defense and thereby expose the government to liability.

We further conclude that, if an official or agent of the state cannot waive immunity by failing to plead it, McNair, supra, defendant could not waive immunity even if, as plaintiff argues, defendant failed to assent to the contract modification. The results of a contrary rule would be the same in either case: a governmental official or agent would expose the state or a political subdivision of the state to liability where none would otherwise exist. See id.

We affirm.

Saad, P.J., concurred.

1 Article III, Section 305(F) of the contract reads:

The Local Authority [i.e., defendant] shall require that each liability insurance policy prohibit the insurer from defending any tort claim on the ground of immunity of the Local Authority from suit.

2 The memorandum provides:

Effective immediately, the Department of Housing and Urban Development will no longer require PHA-owned insurance entities to attach the Governmental Immunity Waiver Endorsement to general liability and automoble [sic] policies, as required by Insurance Handbook 7401.5. This will allow your organization to take advantage of any state statute granting limited immunity in defense of any claim.

You will soon be receiving revised pages for the Handbook, reflecting this change.