Title: RAAD AYAR V FOODLAND DISTRIBUTORS

State: michigan

Issuer: Michigan Supreme Court

Document:

Michigan Supreme Court 
Lansing, Michigan 
Chief Justice:  
Justices: 
Clifford W. Taylor  
Michael F. Cavanagh 
Elizabeth A. Weaver 
Marilyn Kelly 
Opinion 
Maura D. Corrigan 
Robert P. Young, Jr. 
Stephen J. Markman 
FILED JULY 6, 2005 
RAAD AYAR, VINCENT, INC.,
JOLIET, INC., and R & D
WHOLESALE, INC., 
Plaintiffs-Appellants, 
v 
No. 126870 
FOODLAND DISTRIBUTORS and 
LIVONIA HOLDING COMPANY,
INC., jointly and severally, 
Defendants, 
and 
THE KROGER COMPANY, 
Defendant-Appellee. 
_______________________________ 
PER CURIAM. 
At issue in this case is when interest begins to 
accrue, pursuant to MCL 600.6013(8), on costs and attorney 
fees imposed for rejecting a mediation evaluation, MCR 
2.403(O)(1), (6).1
 The clear language of this statute 
1 By an amendment in 2000, the rule was amended to
refer to "case evaluation" rather than "mediation." 
The 
(continued…) 
 
 
 
 
                                                 
 
 
indicates that it accrues from the date of the filing of 
the complaint. 
The Court of Appeals, in reversing the 
order of the trial court, incorrectly concluded that 
accrual did not begin on that date. 
This was error, and 
accordingly, pursuant to MCR 7.302(G)(1), we reverse the 
judgment of the Court of Appeals2 and reinstate the order of 
the circuit court. 
I 
In October 1993 plaintiffs filed a complaint against 
defendants for damages arising from aspects of the parties' 
commercial relationships. Mediation was conducted in 1995. 
The case then proceeded to trial, and plaintiffs eventually 
were awarded a substantial verdict in a final judgment 
dated June 21, 2002. 
This judgment included prejudgment 
interest and "costs and attorney fees to be assessed, if 
any." 
In an order dated June 24, 2002, the circuit court 
granted plaintiffs' motion for assessment of costs and 
mediation sanctions, MCR 2.403(O), and determined the 
(continued…) 
mediation in this case occurred in 1995. 
Consequently, we 
will refer to "mediation" in this opinion.  
2 Ayar v Foodland Distributors, 263 Mich App 105; 687
NW2d 365 (2004). 
2  
 
 
 
 
 
                                                 
 
 
 
specific amounts applicable to the various defendants.3  An 
issue then arose concerning interest on these amounts. 
In 
an order dated November 14, 2002, the trial court ordered 
that interest on the costs and mediation sanctions awarded 
in its June 24 order was to be calculated from the date the 
complaint was filed. 
The Court of Appeals reversed that order and remanded 
the matter for a redetermination of the amount of interest. 
It recognized that judgment interest is allowed on an award 
of mediation sanctions,4 but determined that interest should 
be calculated from the date of the judgment awarding 
mediation sanctions, June 24, 2002. 
The Court of Appeals 
reasoned that, before that date, no mediation award existed 
upon which interest could be calculated. 
II 
Questions of statutory interpretation are reviewed de 
novo. Burton v Reed City Hosp Corp, 471 Mich 745, 751; 691 
NW2d 424 (2005); Morales v Auto-Owners Ins Co (After 
Remand), 469 Mich 487, 490; 672 NW2d 849 (2003). Clear and 
unambiguous statutory language is given its plain meaning, 
3 Defendant-appellant Kroger Company was ordered to pay
$381,752. 
4 Defendant Kroger's argument pertains to the date
interest commences, not to whether interest can be awarded
on mediation sanctions. 
3  
 
 
 
 
 
 
 
 
                                                 
 
and is enforced as written. Roberts v Mecosta Co Gen Hosp, 
466 Mich 57, 63; 642 NW2d 663 (2002). 
III 
At issue here is MCL 600.6013(8), which provides, in 
pertinent part: 
[F]or 
complaints 
filed 
on 
or 
after 
January 1, 1987, interest on a money judgment 
recovered in a civil action is calculated at 6­
month intervals from the date of filing the 
complaint at a rate of interest equal to 1% plus
the average interest rate paid at auctions of 5­
year United States treasury notes during the 6 
months immediately preceding July 1 and January
1, as certified by the state treasurer, and 
compounded annually, according to this section.
Interest under this subsection is calculated on 
the 
entire 
amount 
of 
the 
money 
judgment,
including attorney fees and other costs. The 
amount of interest attributable to that part of
the money judgment from which attorney fees are
paid is retained by the plaintiff, and not paid
to the plaintiff's attorney. [Emphasis added.][5] 
The statute plainly states that interest on a money 
judgment is calculated from the date of filing the 
complaint. 
We find this language to be clear and 
unambiguous, as we did in Morales, supra. 
In Morales, we 
concluded that the statute makes no exception for periods 
of prejudgment appellate delay, and that interest on a 
judgment following such a delay is calculated, without 
5 This is the wording of the statute as amended by 2002
PA 77, effective March 21, 2002, that applies to the
June 24, 2002, judgment in this case. 
4  
 
 
 
 
 
 
 
 
 
 
interruption, from the date the complaint is filed. 
Similarly, the statute makes no exception for attorney fees 
and 
costs 
ordered 
as 
mediation 
sanctions 
under 
MCR 
2.403(O). 
The Court of Appeals was correct in applying the 
judgment 
interest 
statute 
to 
mediation 
sanctions. 
Defendant Kroger does not dispute this point, and the 
statute expressly applies to "attorney fees and other 
costs." 
The Court of Appeals was mistaken, however, in 
considering mediation sanctions to be in the nature of an 
additional claim for damages that did not arise until long 
after the complaint was filed. The mediation process is an 
integral part of the proceeding commenced when plaintiffs 
filed their complaint. 
The realization of mediation 
sanctions is tied directly to the amount of the verdict 
rendered with regard to that complaint. 
MCR 2.403(O)(1). 
Indeed, the award of prejudgment interest on mediation 
sanctions is part of the final judgment against defendants. 
At 
all 
times 
during 
which 
interest 
was 
assessed, 
plaintiffs' claim against defendants was in dispute. 
Therefore, the Court of Appeals was incorrect to suggest 
that Rittenhouse v Erhart, 424 Mich 166, 217-218; 380 NW2d 
5  
 
 
 
 
 
                                                 
 
 
440 (1985) (Riley, J.), dictated a different result in this 
case.6 
IV 
We conclude that, under MCL 600.6013(8), judgment 
interest is applied to attorney fees and costs ordered as 
mediation sanctions under MCR 2.403(O) from the filing of 
the complaint against the liable defendant. 
This results 
from a plain reading of the statute. 
The statute provides 
no special treatment for judgment interest on mediation 
sanctions. Therefore, we reverse the judgment of the Court 
of Appeals, reinstate the order of the circuit court, and 
remand to the circuit court for further proceedings 
consistent with this opinion. 
We acknowledge that there are meaningful policy 
reasons for a statute that would provide for interest on 
mediation sanctions from a date later than when the 
complaint is filed. 
Costs imposed under MCR 2.403(O) are 
6 In Rittenhouse, we held that prejudgment interest
owed by a party accrued from the date of the complaint
adding that party. 
The case at bar does not involve an 
added party, but, consistent with Rittenhouse, the circuit
court ordered interest from the filing of the complaint
against the defendant liable for the judgment. 
Because this case does not involve an added party,
Justice 
Cavanagh’s 
continuing 
disagreement 
with 
the 
Rittenhouse decision is irrelevant to the disposition of
this case. 
6  
 
 
 
 
in the nature of sanctions, and a successful plaintiff will 
otherwise receive interest on the judgment itself, in 
addition to costs and attorney fees that can be ordered 
under 
MCR 
2.403(O). 
We 
invite 
our 
Legislature 
to 
reconsider whether interest should be imposed on mediation 
sanctions from the date a complaint is filed. As this case 
shows, the amount of mediation sanctions might not be 
determined until several years after the filing date. 
It 
would not be unreasonable to amend the statute to provide a 
result similar to that reached by the Court of Appeals. 
However, that result does not follow from the statute as it 
is currently written. 
Clifford W. Taylor
Elizabeth A. Weaver 
Maura D. Corrigan
Robert P. Young, Jr.
Stephen J. Markman 
7  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
_______________________________ 
 
 
 
 
v 
S T A T E O F M I C H I G A N  
SUPREME COURT  
RAAD AYAR, VINCENT, INC.,
JOLIET, INC., AND R & D
WHOLESALE, INC., 
Plaintiffs-Appellants, 
No. 126780 
FOODLAND DISTRIBUTORS AND 
LIVONIA HOLDING COMPANY,
INC., JOINTLY AND SEVERALLY, 
Defendants, 
and 
THE KROGER COMPANY, 
Defendant-Appellee. 
CAVANAGH, J. (concurring). 
I concur with the majority’s holding that interest on 
an award of mediation sanctions should be calculated from 
the date the complaint was filed. 
However, I write 
separately for two reasons. 
First, I disagree with the majority’s discussion of 
Rittenhouse v Erhart, 424 Mich 166; 380 NW2d 440 (1985). 
See ante at 5, n 6. 
In the present case, the majority 
 
 
 
                                                 
 
 
correctly concludes that MCL 600.6013(8)1 is an unambiguous 
statute that must be applied as written. 
As such, it 
accurately determines that because the statute contains no 
exception pertaining to mediation sanctions, interest on 
mediation sanctions is calculated from the time the 
complaint 
was 
filed. 
What 
the 
majority 
fails 
to 
acknowledge, however, is that under these same rules of 
construction, no exception that allows for changing the 
time of calculation when a party has been added after the 
initial complaint was filed can be found either, contrary 
to the majority position in Rittenhouse, supra at 217-218 
(Riley, J.). 
In Rittenhouse, the majority undertook to interpret 
and rewrite this plain statutory provision to hold that 
when a party is added to a lawsuit that is already in 
progress, interest on the money judgment accrues not from 
1 In pertinent part, the statute in force at the
relevant time instructed: 
[F]or 
complaints 
filed 
on 
or 
after 
January 1, 1987, interest on a money judgment 
recovered in a civil action is calculated at 6­
month intervals from the date of filing the 
complaint . . . . Interest under this subsection 
is calculated on the entire amount of the money
judgment, 
including 
attorney 
fees 
and 
other 
costs. 
2  
 
 
“the date of filing the complaint,” as instructed by MCL 
600.6013(8), but from “the date of the filing of the 
complaint upon the defendant against whom the judgment has 
been entered.” 
Rittenhouse, supra at 218 (Riley, J.) 
(emphasis added). 
But, just like the statute contains no 
exceptions for periods of prejudgment appellate delay, 
Morales v Auto-Owners Ins Co (After Remand), 469 Mich 487, 
490-492; 672 NW2d 849 (2003), interest on claims added in 
amended complaints, Phinney v Perlmutter, 222 Mich App 513, 
539-543; 564 NW2d 532 (1997), or interest on mediation 
sanctions, ante at 5, it likewise contains no exception for 
interest on a judgment against a particular defendant. See 
Rittenhouse, supra at 190-191 (Brickley, J.). 
These four conclusions are consistent, and all are 
reached by recognizing that MCL 600.6013 is clear and 
unambiguous and must be applied as written. 
Thus, I find 
the majority’s attempt to distinguish this Court’s holding 
in Rittenhouse, which was reached by rewriting the statute, 
disingenuous in light of the majority’s recognition in this 
case 
that 
the 
statute 
is 
“plain[]”, 
“clear[,] 
and 
unambiguous.” Ante at 4. 
Second, I disagree that the majority should engage in 
a patent imploration to the Legislature, see ante at 6-7, 
to change a law to comport with the majority’s policy 
3  
 
 
 
 
 
views. 
The majority’s entreaty is not only inappropriate, 
but it contravenes the central purpose of the statute it 
seeks to change. 
MCL 600.6013 is a remedial statute 
designed 
to 
“compensate 
the 
claimant 
for 
delays 
in 
recovering money damages,” Yaldo v North Pointe Ins Co, 457 
Mich 341, 350; 578 NW2d 274 (1998), offset costs incurred 
in bringing the action, encourage prompt settlement, and 
discourage 
defendants 
from 
unnecessarily 
delaying 
litigation. 
Old Orchard by The Bay Assoc v Hamilton Mut 
Ins Co, 434 Mich 244, 252-253; 454 NW2d 73 (1990), 
disavowed in part on other grounds Holloway Constr Co v 
Oakland Co Bd of Co Rd Comm’rs, 450 Mich 608 (1996). 
The 
majority should not, on the basis of what it considers 
“meaningful policy reasons,” ante at 6, engage in the 
business of “inviting” the Legislature to revisit a policy 
that the Legislature has clearly already deemed meaningful 
by virtue of enacting the statute that furthers it. 
Michael F. Cavanagh
Marilyn Kelly 
4