Case Name: BUTZER v. CAMELOT HALL CONVALESCENT CENTRE, INC (AFTER REMAND)
Court: Michigan Court of Appeals
Jurisdiction: Michigan
Decision Date: 1993-05-20
Citations: 201 Mich. App. 275
Docket Number: Docket No. 136247
Parties: BUTZER v CAMELOT HALL CONVALESCENT CENTRE, INC (AFTER REMAND)
Judges: Before: Doctoroff, C.J., and Weaver and White, JJ.
Reporter: Michigan appeals reports; cases decided in the Michigan Court of Appeals.
Volume: 201
Pages: 275–284

Head Matter:
BUTZER v CAMELOT HALL CONVALESCENT CENTRE, INC (AFTER REMAND)
Docket No. 136247.
Submitted January 12, 1993, at Detroit.
Decided May 20, 1993;
approved for publication August 18, 1993, at 9:00 A.M.
Grace L. Butzer brought a wrongful discharge action in the Wayne Circuit Court against Camelot Hall Convalescent Centre, Inc., alleging that termination of her employment was in violation of a policy of termination for just cause only. Mediation concluded in an evaluation of $20,000 for the plaintiff, which was accepted by the plaintiff but rejected by the defendant. The court, Harry J. Dingeman, J., granted summary disposition for the defendant on the basis that there was no genuine issue of material fact. The Court of Appeals, Mackenzie, P.J., and Marilyn Kelly and T.M. Burns, JJ., reversed, holding that a genuine issue of material fact existed regarding whether the plaintiff had a reasonable expectation of employment that was terminable for just cause only. 183 Mich App 194 (1989). On remand, the defendant offered to stipulate the entry of a $3,500 judgment for the plaintiff. The plaintiff rejected the offer, and a jury subsequently returned a verdict of no cause of action. The defendant moved for, and the trial court, Edward M. Thomas, J., denied, attorney fees under MCR 2.405(D) for the plaintiff’s rejection of the defendant’s offer to stipulate the entry of a judgment and sanctions under MCR 2.114(E) for the plaintiff’s filing of pleadings for an improper purpose. The defendant appealed.
After remand, the Court of Appeals held:
1. A trial court abuses its discretion by denying a motion for costs and attorney fees under MCR 2.405(D) where, as in this case, the only reason for the denial is that the rejection of the offer of judgment was reasonable.
2. The circumstances of this case do not support a finding that the plaintiffs pleadings were filed for an improper purpose and therefore do not warrant an imposition of sanctions under MCR 2.114(E).
References
Am Jur 2d New Topic Service, Alternate Dispute Resolution § 24; Attorneys at Law §§ 237, 264.
See ALR Index under Attorney or Assistance of Attorney; Attorneys’ Fees; Fines, Penalties, and Forfeitures.
Affirmed in part, reversed in part, and remanded for an award of reasonable attorney fees to the defendant.
White, J., concurring in part and dissenting in part, stated that the denial of sanctions under MCR 2.114(E) was proper, but the case should be remanded to the trial court for reconsideration of the question of attorney fees under MCR 2.405(D) in light of Gudewicz v Matt’s Catering, Inc, 188 Mich App 639 (1991).
Judgments — Offers to Stipulate Entry of Judgment — Rejection — Attorney Fees.
A trial court abuses its discretion by denying a motion for attorney fees as a sanction for the refusal of an offer to stipulate the entry of a judgment where the only reason for the denial is that the rejection of the offer of judgment was reasonable (MCR 2.405[D]).
Daryle Salisbury, for the plaintiff.
Roger H. Leemis, for the defendant.

Opinion:
AFTER REMAND
Before: Doctoroff, C.J., and Weaver and White, JJ.
Per Curiam.
Defendant appeals a December 5, 1990, Wayne Circuit Court order denying its motion for attorney fees and costs pursuant to MCR 2.405 and sanctions pursuant to MCR 2.114(E). On appeal, defendant contends that the trial court abused its discretion when it refused to grant its request for reasonable attorney fees and erred in denying its request for sanctions. We affirm in part, reverse in part, and remand the matter to the trial court.
Plaintiff was employed by defendant as a nursing supervisor beginning on May 10, 1982. On September 20, 1983, defendant terminated plaintiffs employment on the basis of what it claimed was her failure to provide adequate care for her patients. Plaintiff subsequently filed this wrongful discharge action alleging breach of contract, termination without just cause, and age discrimination. Plaintiff sought damages for loss of wages and loss of employee benefits, and also requested injunctive relief in the form of immediate reinstatement. The case was mediated at $20,000, which plaintiff accepted and defendant rejected.
Thereafter, defendant moved for summary disposition pursuant to MCR 2.116(0(10), claiming that there was no genuine issue of material fact. The trial court granted defendant's motion for summary disposition, but this Court reversed the order on appeal, concluding that there existed a genuine issue of material fact whether plaintiff had a reasonable expectation of employment terminable for just cause only. See Butzer v Camelot Hall Convalescent Centre, Inc, 183 Mich App 194; 454 NW2d 122 (1989). On April 23, 1990, the case having been remanded, defendant submitted an offer to stipulate the entry of a judgment for plaintiff in the amount of $3,500. Plaintiff rejected the offer without filing a counteroffer. Following a seven-day jury trial, a verdict was returned for defendant, the jury concluding that plaintiff had no cause of action.
Defendant filed a motion for costs and attorney fees as permitted under MCR 2.405(D)(1) and also requested sanctions under MCR 2.114. Following a hearing, the trial court stated:
Recalling this case very well and remembering the facts of it, the emotion that was involved in it, the Court is of the opinion that both parties proceeded to trial and made their rejections in good faith and this Court is of the opinion that Ms. Butzer should not be penalized to a point of having to pay over ten thousand dollars in attorney fees for seeking her day in court.
The trial court awarded defendant $1,216.98 in costs, to which plaintiff did not object, but denied the request for attorney fees and sanctions.
The purpose of imposing costs under MCR 2.405 is to encourage the parties to settle before trial. Freysinger v Taylor Supply Co, 197 Mich App 349, 353; 494 NW2d 870 (1992); Brooks v Gough, 189 Mich App 623, 625; 473 NW2d 771 (1991). MCR 2.405(D)(3) states that the court may, in the interest of justice, refuse to award a fee under the rule. In Gudewicz v Matt's Catering, Inc, 188 Mich App 639, 645; 470 NW2d 654 (1991), this Court expressly rejected the trial court's denial of fees under MCR 2.405 based solely upon an offeree's "reasonable rejection" of a counteroffer of judgment. This Court concluded that the public policy behind the rule would not be served by denying fees on the basis of an offeree's reasonable rejection. Id.
As in Gudewicz, supra, we conclude that the trial court's denial of defendant's motion for reasonable attorney fees in this case was an abuse of discretion. The fact that plaintiff may have proceeded to trial in good faith does not excuse liability for fees when she knowingly denied the offer at the risk of having to pay those fees. See Sanders v Monical Machinery Co, 163 Mich App 689, 693; 415 NW2d 276 (1987). The better position is that a grant of fees under MCR 2.405 should be the rule rather than the exception. Gudewicz, supra at 644-645; Stamp v Hagerman, 181 Mich App 332, 338-339; 448 NW2d 849 (1989). To conclude otherwise would be to expand the "interest of justice" excep tion to the point where it would render the rule ineffective. See Gudewicz, supra at 644 (quoting 2 Martin, Dean & Webster, Michigan Court Rules Practice [3d ed], pp 455-456).
Regarding defendant's argument that it is entitled to sanctions under MCR 2.114(E), we disagree. The signature requirement under this rule seeks to ensure that pleadings are verified and filed in conformity with MCR 2.114(D). Warden v Fenton Lanes, Inc, 197 Mich App 618, 626; 495 NW2d 849 (1992). Although it is true that the rule provides that the signature is a certification that the pleadings are not filed for an improper purpose, we are not convinced that the pleadings in this case were in violation of this rule. A mediation panel recommended a $20,000 award in favor of plaintiff, and this Court previously determined that plaintiff's pleadings and other evidence were sufficient to raise a genuine issue of material fact. See Butzer, supra. Under these circumstances, we find unpersuasive defendant's contention that it is entitled to sanctions under MCR 2.114.
Affirmed in part, reversed in part, and remanded for a determination of reasonable attorney fees. We do not retain jurisdiction. No costs are taxable, neither party having prevailed in full.