Court Opinion

ID: 3198516
Source: CourtListenerOpinion
Date Created: 2016-04-27 19:04:49.825456+00
Date Added: 2024-06-11T07:39:09.298434
License: Public Domain

STATE OF MICHIGAN

                          COURT OF APPEALS

RONALD W. LECH II,                                                FOR PUBLICATION
                                                                  April 26, 2016
              Plaintiff/Counter-Defendant-                        9:05 a.m.
              Appellee/Cross-Appellant,

v                                                                 No. 320028
                                                                  Livingston Circuit Court
HUNTMORE ESTATES CONDOMINIUM                                      LC No. 08-024045-CH
ASSOCIATION,

              Defendant/Counter-Plaintiff,

and

JACOBSON ORE CREEK LAND
DEVELOPMENT, L.L.C., and SCOTT R.
JACOBSON, d/b/a S. R. JACOBSON LAND
DEVELOPMENT, L.L.C.,

              Defendants-Appellants/Cross-
              Appellees.

                                        ON REMAND

Before: O’CONNELL, P.J., and FORT HOOD and GADOLA, JJ.

O’CONNELL, P.J.

        This appeal concerns whether defendants, Jacobson Ore Creek Land Development,
L.L.C., and Scott R. Jacobson, (collectively “the developers”) are entitled to judgment interest
under MCL 600.6013 on costs awarded as offer of judgment sanctions under MCR 2.405. This
Court previously reversed the trial court’s award of judgment interest on the sanctions award.
Lech v Huntmore Estates Condo Ass’n, 310 Mich App 258, 259; 871 NW2d 551 (2015), vacated
in part, 498 Mich 968 (2016). Our Supreme Court vacated the portion of this Court’s opinion
holding that the developers were not entitled to judgment interest on the sanctions award and
remanded the case to this Court for reconsideration of this issue in light of Ayar v Foodland
Distributors, 472 Mich 713, 717; 698 NW2d 875 (2005). Lech v Huntmore Estates Condo
Ass’n, 498 Mich 968 (2016). Because we conclude that Ayar does not mandate a different result,

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we again reverse the trial court’s award of judgment interest on the sanctions award under MCL
600.6013.

                                  I. STANDARD OF REVIEW

               This Court reviews de novo the interpretation and application of statutes.
       McCormick v Carrier, 487 Mich 180, 188; 795 NW2d 517 (2010). We also
       review de novo the interpretation and application of our court rules. In re
       McCarrick/Lamoreaux Minors, 307 Mich App 436, 445; 861 NW2d 303 (2014).
       We use the same rules of interpretation to interpret statutes and court rules. Id. at
       446. We give the words of rules and statutes their plain and ordinary meanings.
       Id. See also McCormick, 487 Mich at 192. We construe legal terms according to
       their legal meanings. See Feyz v Mercy Mem Hosp, 475 Mich 663, 673; 719
       NW2d 1 (2006). We determine the intent of the court rule “from an examination
       of the court rule itself and its place within the structure of the Michigan Court
       Rules as a whole.” Haliw [v Sterling Hts], 471 Mich [700,] 706[; 691 NW2d 753
       (2005)]. [Lech, 310 Mich App at 259.]

                                         II. ANALYSIS

        We again conclude that the developers are not entitled to recover judgment interest on
their sanctions award under MCL 600.6013. Ayar does not require a contrary holding.

         MCL 600.6013(1) provides that “[i]nterest is allowed on a money judgment recovered in
a civil action, as provided in this section.” The purpose of MCL 600.6013 is “to compensate the
prevailing party for the expenses incurred in bringing an action and for the delay in receiving
money damages.” In re Forfeiture of $176,598, 465 Mich 382, 386 n 9; 633 NW2d 367 (2001).
A money judgment in a civil action is a judgment “that orders the payment of a sum of money, as
distinguished from an order directing an act to be done or property to be restored or transferred.”
Id. at 386. There are several types of civil awards that are not a money judgment in a civil
action, including money awards in drug forfeitures, divorce judgments, awards of back pay for
wrongful discharge, and awards reflecting payment of a forced share in an estate. Id. at 388.

        Ayar concerned “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).” Ayar,
472 Mich at 714.1 In Ayar, the plaintiffs filed a complaint against the defendants for damages
arising out of a commercial relationship. Id. at 715. After the case proceeded to trial, the
plaintiffs attained a substantial verdict. Id. The trial court entered a judgment that included
prejudgment interest, as well as “costs and attorney fees to be assessed, if any.” Id. The trial
court later entered an order assessing costs and mediation sanctions under MCR 2.403(O),
calculated from the date that the complaint was filed. Id.

1
 The Supreme Court noted in Ayar that the court rule was amended in 2000 to refer to “case
evaluation” rather than “mediation,” but because the mediation in Ayar occurred in 1995, the
Supreme Court used the term “mediation” in its opinion in that case. Ayar, 472 Mich at 714 n 1.

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         This Court reversed and remanded for a redetermination of the amount of interest. Id.
We concluded that judgment interest was allowed on mediation sanctions, but determined that
the trial court should calculate interest from the date of the judgment because, “before that date,
no mediation award existed upon which interest could be calculated.” Id.

        Our Supreme Court reversed this Court’s judgment and reinstated the trial court’s order.
Id. at 714. It reasoned that MCL 600.6013(8) calculates interest from the date of filing the
complaint on the entire judgment amount, including attorney fees and costs. Id. at 716. Thus,
“[t]he statute plainly states that interest on a money judgment is calculated from the date of filing
the complaint.” Id. While this Court was correct in applying the judgment interest statute to the
mediation sanctions, we erred by treating them as an additional claim for damages:

       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. [Id.]

The Supreme Court ultimately concluded that courts properly apply judgment interest under
MCL 600.6013(8) to “attorney fees and costs ordered as mediation sanctions under MCR
2.403(O) from the filing of the complaint against the liable defendant.” Id. at 717-718.

        This case is distinguishable from Ayar, which concerned whether a plaintiff can recover
prejudgment interest on a money judgement under MCL 600.6013(8) from the date of filing the
complaint. The developers in this case did not file a complaint. They did not attain a money
judgment. Instead, they defended against a complaint and obtained summary disposition. The
trial court’s sanctions order was an order directing an action to be done—payment of the other
party’s attorney fees and costs—not an order providing for a money judgment in a civil action.
Because the developer in this case did not “incur expenses in bringing an action” and “suffered
no delay in receiving money damages,” an award of prejudgment interest would not serve the
purpose of the statute. We conclude that, by its plain language, MCL 600.6013 does not apply in
such circumstances, and Ayar does not mandate a different result.

       We reverse and remand. We do not retain jurisdiction.

                                                              /s/ Peter D. O’Connell
                                                              /s/ Karen M. Fort Hood
                                                              /s/ Michael F. Gadola

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