In Genesee Cnty. Drain Comm’r v. Genesee Cnty., No. 312450, the Court of Appeals held that there is no statutory or judicially-created intentional tort exception to the Governmental Tort Liability Act (GTLA), and therefore plaintiffs’ intentional tort claims are barred by the GTLA in this case because the governmental defendant administered group health insurance for public employees, which is a basic governmental function.
Genesee County’s Drain Commissioner contracted with defendant Genesee County to purchase group health insurance for its employees. The County was responsible for administering the plan for the parties under the agreement. In 2007, the Drain Commissioner learned that Genesee County received significant refunds from its insurance agency for premium overpayments made by employees of the group plan. Instead of returning the refunds, Genesee County deposited the money into its general fund. The Drain Commissioner demanded that the county pay back the reimbursements, but the county’s board of commissioners refused.
The Drain Commissioner and several covered employees alleged that the county committed intentional torts, including fraud and conversion. The county moved for summary disposition on the basis that it is immune from their claims under the GTLA. The Act protects governmental entities from tort liability so long as the agency is engaged in the discharge of a governmental function. MCL 691.1407. The GTLA is subject to very limited statutory exceptions. Plaintiffs assert that since the torts were intentional, the county was not engaged in the discharge of a governmental function and therefore the county is not immune from liability.
The Court of Appeals held that the county is immune from tort liability because the administration of health benefits to public employees is a governmental function. The court explained that the intentional torts committed were specific acts that occurred as part of the “general activity” of its governmental function. The court also reasoned that if it held otherwise, all intentional tort claims against a governmental agency would become a judicially-created exception to the GTLA, which is contrary to what the legislature intended. The court stated that the legislature had the authority to provide an intentional tort exception to this Act and they did not. Therefore, the Court of Appeals held that plaintiffs are barred from asserting intentional tort claims in this case. The Court also held that plaintiffs did not have a strong enough claim for equitable estoppel to negate the statute of limitations and may not seek breach of contract damages that accrued before October 24, 2005.
