-1- 

STATE OF MICHIGAN 

COURT OF APPEALS 

JOSEPH G. NICKOLA, Personal Representative 

for the Estate of GEORGE and THELMA 

NICKOLA, 

 Plaintiff-Appellant, 

FOR PUBLICATION 

September 24, 2015 

9:00 a.m. 

v No. 322565 

Genesee Circuit Court 

MIC GENERAL INSURANCE COMPANY, d/b/a 

GMAC INSURANCE, 

LC No. 05-081192-NI 

 Defendant-Appellee. 

Before: GADOLA, P.J., and JANSEN and BECKERING, JJ. 

PER CURIAM. 

 In this action against defendant, MIC General Insurance Company, d/b/a GMAC 

Insurance, concerning underinsured motorist benefits, plaintiff, Joseph G. Nickola, as personal 

representative of the estate of George and Thelma Nickola,1 appeals the June 19, 2014 order 

denying plaintiff’s request for attorney fees and interest.2

 We affirm in part and remand for 

further proceedings. 

 

1

 George and Thelma were originally listed as plaintiffs in this action. However, during the 

pendency of this case, they passed away, requiring the appointment of plaintiff, their son, as 

personal representative. For ease of reference, we will refer to George and Thelma by name, and 

will use the term “plaintiff” to refer to Joseph G. Nickola, the personal representative. 

2

 Although plaintiff’s claim of appeal asserts that this appeal of the June 19, 2014 order is an 

appeal as of right, we do not agree. The order did not dispose of all the claims of the parties, see 

MCR 7.202(6) (describing final orders); notably, as discussed in more detail below, the order did 

not resolve plaintiff’s request for entry of a judgment on the arbitration award. Moreover, 

because there is no judgment, the order appealed does not qualify as a postjudgment order 

awarding or denying attorney fees and costs under MCR 7.202(6)(a)(iv). However, in the 

interest of judicial economy, we exercise our discretion and treat the claim of appeal as an 

application for leave to appeal and grant the application. See In re Beatrice Rottenberg Living 

Trust, 300 Mich App 339, 354; 833 NW2d 384 (2013). 
-2- 

I. PERTINENT FACTS AND PROCEDURAL HISTORY 

 This case involves a protracted procedural history. The matter arose out of a motor 

vehicle accident that occurred on April 13, 2004. George and Thelma, who were insured by 

defendant, were injured3

 when an automobile driven by Roy Smith, who was insured by 

Progressive Insurance Company, struck their automobile. The maximum available coverage on 

Smith’s auto policy with Progressive was $20,000 per individual involved in an accident. 

George and Thelma, with defendant’s consent, settled the tort claim, with Progressive paying its 

client’s policy limits on or about November 21, 2004. Thereafter, they turned to defendant, their 

no-fault insurer, and sought underinsured motorist (UIM) benefits. Defendant’s policy with 

George and Thelma provided UIM coverage in the amount of $100,000 per person and $300,000 

per accident; George and Thelma each sought $80,000, which represented the $100,000 policy 

limit minus the $20,000 already received from Progressive. 

 Defendant denied the claim for UIM coverage in February 2005, alleging that George and 

Thelma could not establish a threshold injury for noneconomic tort recovery under MCL 

500.3135. In response to this denial, George and Thelma sent defendant a written demand for 

arbitration of their UIM claim, consistent with their auto policy. The UIM coverage provision in 

their policy with defendant provided that in the event the insurer and the insureds were unable to 

agree as to either: (1) whether an insured was legally entitled to UIM damages; or (2) the amount 

of UIM damages: 

Either party may make a written demand for arbitration. In this event, each party 

will select an arbitrator. The two arbitrators will select a third. If they cannot 

agree within 30 days, either may request that selection be made by a judge of a 

court having jurisdiction. [Emphasis added.] 

 Despite the fact that the policy stated that either party could demand arbitration, 

defendant responded to the request for arbitration on March 1, 2005, by denying the demand, 

stating that it never agreed to arbitrate and that both parties had to agree to arbitration under the 

policy before a UIM claim could proceed to arbitration. The reasons for defendant’s denial in 

the face of the policy’s arbitration clause are not entirely clear from the record. 

 Defendant’s denial of the request for arbitration prompted George and Thelma to file a 

complaint for declaratory relief on April 8, 2005, in which they asked the trial court to compel 

arbitration. In answering the complaint, defendant “neither admit[ted] nor denie[d] the 

allegations” raised in the complaint concerning whether one party to its insurance contract with 

George and Thelma could unilaterally compel arbitration, but admitted that it had denied George 

and Thelma’s written demand for arbitration. However, in a September 20, 2005 response to a 

request for admissions, defendant admitted that the arbitration language in the policy stated that 

 

3

 As noted, George and Thelma died during the pendency of the instant litigation. According to 

the record, neither death was caused by injuries suffered in the motor vehicle accident that 

sparked this litigation. 
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either party could unilaterally demand arbitration. And in November 2005, defendant stated that 

it had “no objection to the matter being submitted to arbitration . . . .” 

 Because of defendant’s initial denial that arbitration was proper, George and Thelma 

moved the trial court for sanctions against defendant. They claimed that any assertion by 

defendant that arbitration was not required under the policy was a “frivolous defense.” 

Following a hearing on February 14, 2006, the trial court entered an order submitting the matter 

to arbitration, but reserved ruling on George and Thelma’s request for sanctions in relation to the 

few-month delay prompted by defendant’s initial opposition to arbitration. Before it would rule 

on the matter, the court expressly ordered that George and Thelma “shall supply to the Court and 

to counsel for Defendant its list of costs and expenses, as well as attorney fees.” At the motion 

hearing, George and Thelma’s counsel promised to provide the trial court with this information. 

The trial court’s written order, dated March 6, 2006, retained jurisdiction to “enforce compliance 

and/or make any other determination, orders and/or judgments necessary to fully adjudicate the 

rights of the parties herein.” 

 The parties named their respective arbitrators soon after the trial court’s written order, but 

disagreement over the appointment of a third arbitrator brought the proceedings to a grinding 

halt. The chosen arbitrators could not agree to the appointment of a third arbitrator. Neither 

party took action on the matter for over six years, until August 13, 2012, when plaintiff moved 

the trial court to appoint a third arbitrator.4

 It is unclear from the record what caused this lengthy 

delay. During this six-year delay, George and Thelma died, leading to the appointment of 

plaintiff as personal representative of their respective estates. 

 The parties finally proceeded to arbitration in October 2013, and the arbitration panel 

awarded $80,000 to plaintiff for George’s injuries and $33,000 for Thelma’s injuries. The 

awards were to be “inclusive of interest, if any, as an element of damages from the date of injury 

to the date of suit, but not inclusive of other interest, fees, or costs that may otherwise be 

allowable by the Court.” 

 On November 25, 2013, plaintiff moved the trial court for: (1) attorney fees and sanctions 

because of defendant’s frivolous defense to arbitration; (2) penalty interest under MCL 

500.2006, the Michigan Uniform Trade Practices Act (UTPA) for defendant’s failure to 

promptly pay UIM benefits; and (3) to enter judgment against defendant on the arbitration 

award. The trial court denied the motion in all respects, but stated that it “affirmed” the 

arbitration award. With regard to penalty interest, the court found that the UTPA should not 

apply to a claim for UIM benefits. Further, even if the UTPA did apply, MCL 500.2006(4)’s 

“reasonably in dispute” language insulated defendant from having to pay penalty interest. 

Finally, the trial court ruled that the issue of penalty interest should have been heard before the 

arbitration panel. 

 

4

 On appeal, defendant attempts to pin the entirety of the delay on plaintiff. However, the 

arbitration agreement contained in the policy provides that in the event the arbitrators selected by 

the parties were unable to agree on a third arbitrator within 30 days, “either may request that 

selection be made by a judge of a court having jurisdiction.” (Emphasis added). 
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II. SANCTIONS UNDER MCR 2.114 

 Plaintiff argues that the trial court should have granted sanctions against defendant under 

MCR 2.114 for initially asserting in its filings with the court that arbitration could not be 

demanded unilaterally under the insurance policy. The trial court’s 2006 order reserved a ruling 

on attorney fees but required George and Thelma to produce evidence of their attorney fees 

incurred during the delay caused by defendant’s initial refusal to arbitrate. Specifically, the order 

stated that “Plaintiff shall supply to the Court and to counsel for Defendant its list of costs and 

expenses, as well as attorney fees.” Plaintiff never complied with that order. Indeed, even when 

plaintiff made a renewed request for sanctions in 2014, he never complied with the trial court’s 

2006 order to provide proof of his attorney fees incurred during the relevant time period. 

Plaintiff’s failure to comply with that order, despite having years to do so, is tantamount to 

waiver of this issue.5

 “The usual manner of waiving a right is by acts which indicate an intention 

to relinquish it, or by so neglecting and failing to act as to induce a belief that it was the intention 

and purpose to waive.” The Cadle Co v Kentwood, 285 Mich App 240, 254-255; 776 NW2d 240 

(2009) (citation and quotation marks omitted; emphasis added). Where plaintiff repeatedly 

failed to comply with the trial court’s order to provide documentation of his attorney fees for the 

pertinent time period, it is difficult to fault the trial court for failing to award those fees as a 

sanction under MCR 2.114. Indeed, plaintiff had over eight years to supply the requested fees, 

but never did so. See Reed Estate v Reed, 293 Mich App 168, 177-178; 810 NW2d 284 (2011) 

(waiver may be shown by a course of conduct, including neglecting and failing to act in such a 

manner as to induce the belief that the party failing or neglecting to act has the intent to waive). 

Plaintiff’s failure to act and neglect of the trial court’s mandate is tantamount to waiver. See The 

Cadle Co, 285 Mich App at 254-255. 

 Plaintiff argues that it was “impossible” for him to determine the amount of attorney fees 

to which he was allegedly entitled without waiting for arbitration to conclude. This ignores that 

the trial court, at the February 14, 2006 motion hearing, asked for the fees to which plaintiff 

believed he was entitled at that time. Plaintiff’s counsel expressly promised to provide that 

figure. Plaintiff was to submit costs and fees incurred during the time between when defendant 

answered the complaint and admitted the mistake. There was never an invitation by the trial 

court to include in the amount of fees requested those fees incurred even after the matter went to 

arbitration. Any attempt by plaintiff to obtain additional fees ignored the court’s order. 

Moreover, the argument ignores the fact that, even when arbitration was over, plaintiff still failed 

to provide the trial court with his requested fees. 

 We also note that plaintiff seeks attorney fees for defendant’s conduct that occurred 

before George and Thelma filed their complaint in 2005. That is, plaintiff appears to seek 

sanctions under MCR 2.114 for defendant’s conduct in initially denying the UIM claim. Any 

argument by plaintiff in this regard is without merit. MCR 2.114(A), applies to “all pleadings, 

motions, affidavits, and other papers provided for by” the Court Rules. Defendant’s initial 

 

5

 On appeal plaintiff makes no effort to comply with the 2006 order and has yet to produce 

evidence of his claimed attorney fees. 
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decision to deny arbitration was not a pleading, motion, affidavit, or other paper filed under the 

Court Rules. Rather, it was simply a response to plaintiff’s request for arbitration. Nothing 

about that response brings it within the ambit of materials that could subject defendant to 

sanctions under MCR 2.114. 

III. PENALTY INTEREST UNDER THE UTPA 

 Plaintiff argues that the trial court erred by concluding that defendant was not required to 

pay penalty interest under the UTPA for its failure to timely pay UIM benefits. This Court 

reviews de novo the trial court’s ruling on a motion for penalty interest pursuant to MCL 

500.2006(4). Angott v Chubb Group Ins, 270 Mich App 465, 474-475; 717 NW2d 341 (2006). 

Resolution of this issue also requires examination and interpretation of MCL 500.2006(4), which 

is an issue of law this Court reviews de novo. Id. at 475. 

 UIM benefits are not statutorily mandated; they are an agreement for benefits voluntarily 

entered into between an insured and an insurer. Dawson v Farm Bureau Mut Ins Co, 293 Mich 

App 563, 568; 810 NW2d 106 (2011). The UTPA provides a mechanism to help insureds obtain 

payment for these and other types of benefits in a timely manner. Griswold Props, LLC v 

Lexington Ins Co, 276 Mich App 551, 554; 741 NW2d 549 (2007). “MCL 500.2006 provides 

for imposition of penalty interest for the late payment of a claim[.]” Id. The statute provides, in 

pertinent part: 

(1) A person must pay on a timely basis to its insured, an individual or entity 

directly entitled to benefits under its insured’s contract of insurance, or a third 

party tort claimant the benefits provided under the terms of its policy, or, in the 

alternative, the person must pay to its insured, an individual or entity directly 

entitled to benefits under its insured’s contract of insurance, or a third party tort 

claimant 12% interest, as provided in subsection (4), on claims not paid on a 

timely basis. Failure to pay claims on a timely basis or to pay interest on claims 

as provided in subsection (4) is an unfair trade practice unless the claim is 

reasonably in dispute. 

* * * 

(4) If benefits are not paid on a timely basis the benefits paid shall bear simple 

interest from a date 60 days after satisfactory proof of loss was received by the 

insurer at the rate of 12% per annum, if the claimant is the insured or an 

individual or entity directly entitled to benefits under the insured’s contract of 

insurance. If the claimant is a third party tort claimant, then the benefits paid 

shall bear interest from a date 60 days after satisfactory proof of loss was received 

by the insurer at the rate of 12% per annum if the liability of the insurer for the 

claim is not reasonably in dispute, the insurer has refused payment in bad faith 

and the bad faith was determined by a court of law. [MCL 500.2006(1), (4).] 

 MCL 500.2006(4), the penalty-interest provision, draws a distinction between a claimant 

who is the insured or who is an individual directly entitled to benefits under an insurance 

contract (a first-party insured), and a claimant who is a third-party tort claimant. The first 
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sentence of § 2006(4) simply states that a first-party insured is entitled to penalty interest if 

benefits are not paid within 60 days after the insurer obtains satisfactory proof of loss. Griswold, 

276 Mich App at 565-566. As explained by this Court in Griswold, “if the claimant is the 

insured or an individual or entity directly entitled to benefits under the insured’s contract of 

insurance, and benefits are not paid on a timely basis, the claimant is entitled to 12 percent 

interest, irrespective of whether the claim is reasonably in dispute.” Id. at 566 (citation and 

quotation marks omitted). By comparison, the second sentence of § 2006(4), which applies to 

third-party tort claimants, imposes penalty interest on the insurer only if the claim “is not 

reasonably in dispute.” Id. at 565-566. Central to plaintiff’s argument on appeal is the notion 

that the “not reasonably in dispute” language of § 2006(4) does not apply to claims by a firstparty insured. Defendant, meanwhile, likens plaintiff to a third-party tort claimant in this claim 

for UIM benefits, meaning that the “not reasonably in dispute” language of MCL 500.2006(4) 

applies. 

 A brief examination of the facts at issue in Griswold is illustrative in resolving this issue. 

In deciding Griswold, this Court convened a special panel to resolve a conflict over the 

application of MCL 500.2006(4) and the types of claims to which “reasonably in dispute” 

applied. The case involved a consolidation of three cases. See Griswold, 276 Mich App at 559-

560. Two cases involved insureds who sought benefits from their respective insurers for water 

damage. Id. at 559-560. In the third case, the insured’s building was destroyed by a fire, and the 

insured sought benefits from its insurer for the damage caused by the fire. Id. at 560. In other 

words, each of the three consolidated cases involved insureds seeking benefits from their own 

insurers for losses that were directly covered under the respective policies. 

 Plaintiff contends that he, as the personal representative for George and Thelma, is 

seeking payment of benefits that were owed directly to insureds under an insurance policy. As 

noted, UIM benefits arise solely from the policy. See McDonald v Farm Bureau Ins Co, 480 

Mich 191, 194; 747 NW2d 811 (2008) (explaining that “[w]hen an insured is injured by a 

tortfeasor motorist whose own policy is insufficient to cover all of the insured’s damages, the 

insured can seek coverage from his or her UIM policy for damages that exceed the tortfeasor’s 

policy limits.”) (emphasis added). At first glance, plaintiff’s argument—that he is entitled to 

penalty interest because he sought benefits that were owed directly to an insured by an insurer 

and that the “reasonably in dispute” language of § 2006(4) does not apply—has some appeal in 

light of Griswold. 

 However, the instant case is not as simple as Griswold. As noted, Griswold involved a 

consolidation of cases in which each of the insurers was directly liable to their first-party 

insureds for covered losses. Here, while plaintiff is seeking UIM benefits that are provided in 

the policy, he is doing more than merely making a simple, first-party claim as was involved in 

Griswold. In order for plaintiff to succeed on his UIM claim, he has to essentially allege a thirdparty tort claim against his own insurer—or, in this case, against the insurer of George and 

Thelma, of whom plaintiff is the personal representative. Defendant, the insurer, stands in the 

shoes of the alleged tortfeasor and plaintiff seeks benefits from defendant that arose from the 

alleged tortfeasor’s liability. See Auto Club Ins Ass’n v Hill, 431 Mich 449, 464-466; 430 NW2d 

636 (1988) (explaining UIM coverage). See also Rory v Continental Ins Co, 473 Mich 457, 465; 

703 NW2d 23 (2005) (explaining that “[u]ninsured motorist insurance” which is substantially 

similar to UIM insurance, “permits an injured motorist to obtain coverage from his or her own 
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insurance company to the extent that a third-party claim would be permitted against the [ ] atfault driver.”). This third-party tort claim is different in nature from a typical claim for firstparty benefits, as it will “often require proof of the nature and extent of the injured person’s 

injuries, the injured person’s prognosis over time, and proof that the injuries have had an adverse 

effect on the injured person’s ability to lead his or her normal life.” Adam v Bell, __ Mich App 

__; __ NW2d __ (Docket No. 319778, issued August 11, 2015) (citation and quotation omitted), 

slip op at 4. In addition, such a third-party tort claim is designed to compensate a claimant “for 

past and future pain and suffering and other economic and noneconomic losses rather than 

compensation for immediate expenses” that are generally associated with a first-party claim. Id. 

(citation and quotation omitted). In other words, plaintiff’s UIM claim is tied to a third-party tort 

claim for damages that, in many respects, is “fundamentally different” than a typical first-party 

claim. See id. (citation and quotation omitted). 

 In Auto-Owners Ins Co v Ferwerda Enterprises, Inc (On Remand), 287 Mich App 248; 

797 NW2d 168 (2010), judgment vacated in part on other grounds 488 Mich 917 (2010),6

 this 

Court recognized that not all claims for penalty interest under MCL 500.2006(4) fit neatly into 

the Griswold analysis. In that case, the insurer sought a declaratory judgment stating that it had 

no duty to defend and indemnify its insureds in a third-party tort action based on an exclusion in 

the insurance policy. Id. at 252. The insureds filed a counterclaim, alleging breach of contract, 

estoppel, and waiver, and they requested penalty interest under MCL 500.2006(4). Id. The trial 

court found that there was coverage for the underlying third-party tort claim and awarded penalty 

interest under MCL 500.2006(4). Id. at 253-254. On appeal, the insureds defended the trial 

court’s award of penalty interest on the ground that the insurer breached its contract by failing to 

pay benefits under the insurance policy. Id. at 258. The insureds argued that pursuant to 

Griswold, the issue of penalty interest turned only on the failure to pay benefits, and not whether 

those benefits were reasonably in dispute. Id. at 259. This Court disagreed with the insureds’ 

argument that the case involved a simple breach of the insurance policy. Rather, in that case, 

“the breach of contract claim [was] specifically tied to the underlying third-party tort claim.” Id.

at 259. This scenario, reasoned the Court, was “a wholly different situation than that found” in 

Griswold and other cases that awarded penalty interest for the failure of an insurer to pay firstparty claims. Id. at 259-260. As such, this Court held that the “reasonably in dispute” language 

found in the second section of MCL 500.2006(4) applied and precluded an award of penalty 

interest because the benefits in that case were reasonably in dispute. Id. at 260. 

 Applying Ferwerda in the case at bar, the trial court did not err in employing the 

“reasonably in dispute” language found in the second sentence of MCL 500.2006(4) and denying 

 

6

 In Ferwerda, 287 Mich App 248, this Court decided two issues: (1) whether an award of 

attorney fees was appropriate; and (2) whether the imposition of penalty interest was warranted. 

Our Supreme Court denied leave to appeal with regard to the penalty interest issue, but remanded 

with regard to the attorney fee issue. Auto-Owners Ins Co v Ferwerda Enterprises, Inc, __ Mich 

__; 784 NW2d 44 (2010). Subsequently, the Court vacated this Court’s ruling as to attorney 

fees. Auto-Owners Ins Co v Ferwerda Enterprises, Inc, 488 Mich 917; 789 NW2d 491 (2010). 

Thus, this Court’s holding as to penalty interest remains good law. 
-8- 

penalty interest to plaintiff. This case does not involve a claim where the insured simply sought 

the payment of benefits due directly under an insurance policy. As in Ferwerda, 287 Mich App 

at 259, the situation in this case “is a wholly different situation than that found” in cases such as 

Griswold. Rather, the claim for benefits under UIM coverage was “specifically tied to the 

underlying third-party tort claim.” See id. Indeed, in the UIM context, defendant was standing 

in the shoes of the alleged tortfeasor. The fact that the claim for UIM benefits was specifically 

tied to the underlying third-party tort claim warrants applicability of the “reasonably in dispute” 

language found in the second sentence of MCL 500.2006(4). See id. The trial court did not err 

in applying this standard to plaintiff’s claim for penalty interest. 

 Moreover, contrary to plaintiff’s alternative contention on appeal, the claim in this case 

was reasonably in dispute. Even assuming plaintiff could establish a threshold injury, plaintiff’s 

UIM claim needed to show that the injuries suffered by George and Thelma exceeded the 

amount of the settlement with Smith.7

 See McDonald, 480 Mich at 194 (explaining UIM 

coverage). Given George and Thelma’s respective ages, preexisting conditions, and the nature of 

the injuries alleged in this case, the amount of damages, if any, that they were entitled to beyond 

that received from Smith was a matter of reasonable dispute.8 Thus, the trial court did not err by 

denying penalty interest under MCL 500.2006(4). 

IV. PREJUDGMENT INTEREST 

 Lastly, plaintiff seeks prejudgment interest under MCL 600.6013 from the date of the 

filing of the complaint until payment of the arbitration award. “MCL 600.6013 [ ] entitles a 

prevailing party in a civil action to prejudgment interest from the date the complaint was filed to 

the entry of judgment.” Beach v State Farm Mut Auto Ins Co, 216 Mich App 612, 624; 550 

NW2d 580 (1996). “The purpose of this statute is to compensate the prevailing party for loss of 

use of the funds awarded as a money judgment and to offset the costs of litigation.” Farmers Ins 

Exch v Titan Ins Co, 251 Mich App 454, 460; 651 NW2d 428 (2002). Plaintiff seeks interest 

under MCL 600.6013(8), which provides: 

Except as otherwise provided in subsections (5) and (7) and subject to subsection 

(13), for 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 

 

7

 The policy’s UIM coverage provision states that “We [the insurer] will pay under this coverage 

only after the limits of liability under any applicable bodily injury liability bonds or policies have 

been exhausted by payment of judgments or settlements.” 

8

 This is not to say that UIM benefits will in all cases be subject to reasonable dispute. For 

instance, in a scenario where an accident renders an otherwise healthy insured a quadriplegic and 

the tortfeasor’s insurance policy provided only $20,000 in recovery, there could likely be no 

dispute that the insured was entitled to UIM coverage. 
-9- 

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. In an action for medical malpractice, interest under 

this subsection on costs or attorney fees awarded under a statute or court rule is 

not calculated for any period before the entry of the judgment. 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. 

 Plaintiff is seeking prejudgment interest from the date of its complaint in April 2005 until 

the date of payment. Plaintiff never raised the issue of prejudgment interest before the trial 

court. In addition, it does not appear from the record that the arbitration award was ever reduced 

to a judgment, or that the arbitration award has been paid. Under the Michigan Arbitration Act,9

circuit courts have jurisdiction to enforce and render judgment on an arbitration award. MCL 

600.5025. Here, despite the fact that plaintiff’s motion expressly sought entry of a judgment on 

the arbitration award, the trial court did not honor that request. Instead, the court simply 

“affirmed” the arbitration award, and to that extent, the trial court erred. Because it does not 

appear that the arbitration award was ever reduced to a judgment, and this case has not otherwise 

been dismissed, plaintiff remains entitled to obtain a judgment on the award. And, when seeking 

that judgment, because the issue of prejudgment interest was never decided, plaintiff can raise 

the issue of prejudgment interest at that time. As such, we decline to address the prejudgment 

interest issue, without prejudice to plaintiff raising it when he moves for entry of a judgment 

enforcing the arbitration award. Indeed, at this point, neither the arbitration panel10 nor the trial 

 

9

 Effective July 1, 2013, the Legislature repealed the Michigan Arbitration Act and replaced it 

with the Uniform Arbitration Act, MCL 691.1681 et seq. See Fette v Peters Constr Co, __ Mich 

App __; __ NW2d __ (Docket No. 320803, issued May 21, 2015), slip op at 4. The Uniform 

Arbitration Act “does not affect an action or proceeding commenced or right accrued before this 

act takes effect.” MCL 691.1713. See also Fette, __ Mich App at __, slip op at 4. Because 

George and Thelma filed a complaint for arbitration in 2005, the Uniform Arbitration Act does 

not apply, and the Michigan Arbitration Act governs. See id.

10 In this regard, we note that ordinarily, preaward, prejudgment interest would be deemed to 

have been submitted to the arbitration panel. See Holloway Const Co v Oakland Co Bd of Rd 

Comm’rs, 450 Mich 608, 618; 543 NW2d 923 (1996) (“The decision whether to award 

preaward, prejudgment interest as an element of damages is reserved as a matter of the 

arbitrator’s discretion.”). In this case, there was nothing in the arbitration agreement reserving 

the issue of preaward, prejudgment interest. However, the arbitration award expressly stated that 

the arbitration panel awarded interest as an element of damages from the time of the injury to the 

time the complaint was filed, but it was not deciding matters pertaining to “other interest.” 

Prejudgment interest after the filing of the complaint fits into the broad category of “other 

interest.” Thus, the arbitration panel expressly declined to address the prejudgment interest 

plaintiff is now seeking. The record contains no indication as to why the arbitration panel did 

not consider any “other interest,” nor is there any indication that the parties objected to the 

arbitration panel’s decision in this regard. 
-10- 

court has decided the issue of plaintiff’s entitlement to statutory prejudgment interest under MCL 

600.6013. 

 Lastly, on the issue of prejudgment interest, we note that defendant contends that plaintiff 

should not be entitled to any prejudgment interest because of his—and George and Thelma’s—

delays in this case. “[A] court may disallow prejudgment interest for periods of delay where the 

delay was not the fault of, or caused by, the debtor.” Eley v Turner, 193 Mich App 244, 247; 

483 NW2d 421 (1992). Here, however, it is not apparent that the entirety of the delays in this 

case can be assigned to plaintiff. With regard to the six-year delay caused by disagreement over 

the third arbitrator, defendant is incorrect in stating that the arbitration agreement required the 

insured, and only the insured, to petition the circuit court to select a third arbitrator in the event 

of disagreement. Rather, the agreement as contained in the policy states “either may request that 

selection” of a third mediator “be made by a judge of a court having jurisdiction.” (Emphasis 

added). If plaintiff raises the issue of prejudgment interest at the time he seeks a judgment on the 

arbitration award, the delays in this case can be a consideration for the trial court, but should not 

at the outset deny plaintiff any claim to prejudgment interest under MCL 600.6013. 

Affirmed in part and remanded to the trial court for further proceedings not inconsistent 

with this opinion. We do not retain jurisdiction. 

/s/ Michael F. Gadola 

/s/ Kathleen Jansen 

/s/ Jane M. Beckering