Case Name: SINGLETON v. DAVIS
Court: Michigan Court of Appeals
Jurisdiction: Michigan
Decision Date: 1980-01-23
Citations: 95 Mich. App. 182
Docket Number: Docket No. 78-4830
Parties: SINGLETON v DAVIS
Judges: Before: T. M. Burns, P.J., and Bronson and R. M. Maher, JJ.
Reporter: Michigan appeals reports; cases decided in the Michigan Court of Appeals.
Volume: 95
Pages: 182–187

Head Matter:
SINGLETON v DAVIS
Docket No. 78-4830.
Submitted October 4, 1979, at Detroit.
Decided January 23, 1980.
Leave to appeal applied for.
Penny Singleton was injured in a collision with an automobile which was owned by Everett B. Davis and which was operated by Ricky E. Davis. On October 31, 1974, Singleton filed a complaint seeking damages for injuries she received in that collision. On October 4, 1978, defendants’ insurer made an offer of judgment in the amount of $11,'500. The offer of judgment contained no provisions with respect to the award of costs or interest. Plaintiff accepted the offer of judgment. After a hearing concerning the judgment order, the Wayne Circuit Court, Neal E. Fitzgerald, J., entered a judgment in the amount of $11,500 plus costs and prejudgment interest allowable by law. Defendants, through their insurer, payed the $11,500 judgment and the $168.30 court costs, however, defendants appeal from the award of prejudgment interest. Held:
Prejudgment interest as provided by statute is properly awarded on a judgment entered pursuant to an offer of judgment made and accepted in accordance with the provisions of the general court rules. The fact that the addition of such prejudgment interest to the amount of the offer of judgment brings the total recovery to more than the limits of the policy issued by the defendants’ insurer does not affect the operation of the statutory provision providing for prejudgment interest.
Affirmed.
R. M. Maher, J., dissented. He would hold that an offer of judgment was intended to encompass prejudgment interest. He would hold that the judgment entered should not include the statutory prejudgment interest. He would reverse.
Opinion of the Court
1. Judgment — Offer of Judgment — Interest on Judgment — Statutes —■ Court Rules.
Prejudgment interest, as provided by statute, is properly awarded on a judgment entered pursuant to an offer of judgment made and accepted in accordance with the applicable court rule, notwithstanding the fact that the addition of the prejudgment interest increases the total recovery to an amount which exceeds the limits of the insurance policy issued by the defendant’s insurer (MCL 600.6013; MSA 27A.6013, GCR 1963, 519.1).
Reference for Points in Headnotes
[1, 2] 22 Am Jur 2d, Damages § 179 et seq.
Dissent by R. M. Maher, J.
2. Judgment — Offer of Judgment — Interest on Judgment — Statutes — Court Rules.
An offer of a judgment which is made in accordance with the provisions of the general court rules is by statute and court rule intended to include any statutory prejudgment interest so that settlements are encouraged and protracted litigation is avoided; accordingly, it is error to enter judgment in the amount of the offer of judgment plus the statutory prejudgment interest (MCL 600.6013; MSA 27A.6013, GCR 1963, 519.1).
Raymond L. Krell, P.C., for plaintiff.
Selby, Dickinson, Pike, Mourad & Brandt (by David R. TufHey) (Gromek, Bendure & Thomas, of counsel), for defendants.
Before: T. M. Burns, P.J., and Bronson and R. M. Maher, JJ.

Opinion:
Per Curiam.
On October 31, 1974, plaintiff filed a complaint in Wayne County Circuit Court seeking damages for injuries she sustained in an automobile collision with defendants. On October 4, 1978, defendants, through their insurer, Detroit Automobile Inter-Insurance Exchange, made an offer of judgment to plaintiff pursuant to GCR 1963, 519.1. The offer of judgment was in the amount of $11,500. However, it contained no terms relating to an award of interest or costs. Subsequently, on October 12, 1978, plaintiff filed her acceptance of the offer of judgment with the Wayne County Circuit Court.
Following a hearing on October 27, 1978, judgment was entered in favor of pláintiff in the amount of $11,500 "together with costs and interest allowable by law." In accordance with the provisions of MCL 600.6013; MSA 27A.6013, the lower court awarded plaintiff prejudgment interest from the date that she filed her complaint. Defendants, through DAIIE, paid the $11,500 judgment plus costs, but have appealed the award of interest.
Defendants argue that because the prejudgment interest assessment brought the total amount of plaintiffs recovery above the stated policy limits of $11,500, the lower cqurt erred in making the interest award. A similar argument was considered and rejected by this Court in Denham v Bedford, 82 Mich App 107; 266 NW2d 682 (1978), lv gtd 403 Mich 846 (1978). In Denham this Court held that an insurer may be held liable for the amount of its policy limits plus prejudgment interest on that amount, where a money judgment equal to or exceeding the policy limits is awarded. The fact that plaintiffs award arose out of an offer of judgment and not a jury verdict does not alter this result. McGrath v Clark, 89 Mich App 194; 280 NW2d 480 (1979).
Affirmed. Plaintiff may assess costs.