Court Opinion

ID: 9908199
Source: CourtListenerOpinion
Date Created: 2023-12-08 05:05:38.639225+00
Date Added: 2024-06-11T12:48:59.065522
License: Public Domain

If this opinion indicates that it is “FOR PUBLICATION,” it is subject to
                  revision until final publication in the Michigan Appeals Reports.

                            STATE OF MICHIGAN

                             COURT OF APPEALS

KIM T. CAPELLO and JODI A. CAPELLO,                                     UNPUBLISHED
                                                                        December 7, 2023
                Plaintiffs-Appellants,

v                                                                       No. 364006
                                                                        Oakland Circuit Court
KEVIN WALTON and MELISSA WALTON,                                        LC No. 2021-190542-CH

                Defendants-Appellees.

Before: BOONSTRA, P.J., and GADOLA and MALDONADO, JJ.

BOONSTRA, P.J. (concurring in part and dissenting in part).

        I generally concur with the majority except to the extent it holds that remand is required
for the trial court to consider plaintiffs’ interest-of-justice argument. On that issue, I respectfully
dissent.

        Contrary to the majority opinion, I do not believe that the trial court’s statements at the two
motion hearings indicated that it may have been unaware of the interest-of-justice exception. The
initial motion hearing involved extensive discussions of MCR 2.405, the court rule in which the
exception may be found. See MCR 2.405(D)(3)(i). Although plaintiffs did not raise the issue of
the interest-of-justice exception in their initial briefing, or argue it at the first motion hearing, the
trial court, in setting the matter for an evidentiary hearing, specifically told plaintiffs “if you do
have any other arguments you want to bring as to what might protect you from 2.405, the sanctions
imposed there, then you could—you could submit that in advance and argue it at that time.” The
trial court allowed supplemental briefing, and plaintiffs in fact raised an extensive interest-of-
justice argument in that briefing. At the evidentiary hearing, plaintiff Kim Capello, representing
plaintiffs, did not specifically refer to the interest-of-justice argument, but he was given the
opportunity to do so; in fact, when given the opportunity to present additional argument, Capello
stated, “Your Honor, I’m just going to rely on my brief and my supplemental brief. . . . Everything
in there is true and accurate, and I would rely upon that as my testimony.” The trial court
subsequently issued an opinion and order addressing the operation of MCR 2.405 and holding that
plaintiffs had not stipulated to the offers of judgment within 21 days—and had therefore rejected
them—entitling defendants to actual costs and a reasonable attorney fee.

                                                  -1-
         Although the trial court did not specifically state that it had rejected plaintiffs’ interest-of-
justice argument, its opinion displays a thorough understanding of MCR 2.405, under which the
trial court held that defendants were entitled to certain costs and attorney fees. The trial court’s
order therefore, by necessary implication, rejected plaintiffs’ argument concerning the interest-of-
justice exception. It is not unusual for a trial court to deny arguments by reasonable implication—
in fact, MCR 2.119(F)(3) provides that generally “a motion for rehearing or reconsideration which
merely presents the same issues ruled on by the court, either expressly or by reasonable
implication, will not be granted.” MCR 2.119(F)(3) (emphasis added). I would hold that the trial
court’s grant of defendants’ motion for costs and fees under MCR 2.405 necessarily encompassed
a rejection of plaintiffs’ interest-of-justice exception argument.

         The majority concludes otherwise, based on its reading of Simcor Constr, Inc v Trupp, 322
Mich App 508; 912 NW2d 216 (2018). But Simcor does not compel a different result. In that
case, the trial court held that an arbitrator’s award was not a “verdict” for the purposes of
MCR 2.405. Id. at 513-514. This Court held that the trial court erred by doing so and concluded
that remand was appropriate “because the district court did not reach the issue of whether the
‘interest of justice’ exception applies in its order” denying the defendant’s motion. Id. at 522
(quotation marks, citations, and alterations omitted). In other words, because the interest-of-justice
exception is “the exception to a general rule,”1 see AFP Specialties, Inc v Vereyken, 303 Mich App
497, 518; 844 NW2d 470 (2014), the trial court in Simcor had never reached the issue of whether
the exception applied, because it had preliminarily held that the arbitrator’s award did not satisfy
the first necessary element of the general rule—that there be a “verdict” that was more favorable
to the offeror than the average offer. Simcor, 322 Mich app at 513-514. Remand was therefore
appropriate to allow the parties to address the interest-of-justice issue before the trial court in the
first instance. Id. at 522.

        In this case, by contrast, the trial court, after being provided with plaintiffs’ interest-of-
justice argument via supplemental briefing, determined that the general rule of MCR 2.405(D)
applied without exception. I believe the majority reads Simcor too broadly—Simcor did not
establish a bright-line rule that trial courts, in granting a defendant’s motion for costs under MCR
2.405(D), must always explicitly state that they have considered the interest-of-justice exception
and have rejected it. Rather, this Court in Simcor simply recognized that the relevant analysis
under MCR 2.405(D) had not occurred in that case because it had been cut off by the trial court’s
finding that the arbitrator’s award was not a verdict. Because the circumstances of this case are
distinguishable from those in Simcor, I would hold that Simcor does not compel a remand in this
case.

1
  MCR 2.405(D) provides for the imposition of costs following rejection of an offer of judgment,
and MCR 2.405(D)(1) states that “[i]f the adjusted verdict is more favorable to the offeror than the
average offer, the offeree must pay to the offeror the offeror’s actual costs incurred in the
prosecution or defense of the action.” If the adjusted verdict is more favorable to the offeror than
the average offer, the trial court “shall determine the actual costs incurred” but “may, in the interest
of justice, refuse to award an attorney fee under this rule.” MCR 2.405(D)(3).

                                                   -2-
        Having determined that the case need not be remanded, I would affirm the trial court’s
grant of defendants’ motion. The interest-of-justice exception “should not be applied absent
unusual circumstances.” AFP Specialties, 303 Mich App at 518-519 (quotation marks and citation
omitted). “The unusual circumstances necessary to invoke the ‘interest of justice’ exception may
occur where a legal issue of first impression is presented, or ‘where the law is unsettled and
substantial damages are at issue, where a party is indigent and an issue merits decision by a trier
of fact, or where the effect on third persons may be significant.” Simcor, 322 Mich App at 521-
522 (quotation marks, citation, and alterations omitted). “Factors such as the reasonableness of
the offeree’s refusal of the offer, the party’s ability to pay, and the fact that the claim was not
frivolous are too common to constitute the unusual circumstances encompassed by the ‘interest of
justice’ exception.” Derderian v Genesys Health Care Sys, 263 Mich App 364, 391; 689 NW2d
145 (2004).

        This case did not present an issue of first impression. Although plaintiffs argue that a novel
issue was raised in the post-summary disposition arguments concerning the effect of recent
amendments to MCR 2.403 on potential case evaluation sanctions, the actual litigation that resulted
in the offers of judgment and the rejection of those offers was a breach of contract and fraud case
involving a real estate deal gone wrong. The case was resolvable using long-standing principles
of the law of contracts, fraud, and summary disposition, and there was no issue of first impression
presented. Further, no party has argued that plaintiffs were indigent, or that the issue merited
decision by a trier of fact, or that the effects of the case on third persons would be significant.
Simcor, 322 Mich App at 521-522.

         Additionally, defendants’ offers were made at a time when it seemed quite possible, even
likely, that they would prevail at summary disposition. Plaintiffs had failed to identify any
evidence that they had suffered any damages as a result of defendants’ alleged breach of contract.
Defendant Melissa Walton was further protected from liability by a provision in the purchase
agreement releasing brokers from liability arising from a failure to close the sale. Plaintiffs have
therefore not established that defendants’ offers of judgment were de minimis or the result of
gamesmanship. See AFP Specialties, 303 Mich App at 519-520. Accordingly, I would hold that
the trial court did not abuse its discretion by granting defendants’ motion for costs and attorney
fees under MCR 2.405(D). Id. at 516.

        Although I conclude that the trial court impliedly rejected plaintiffs’ interest-of-justice
argument,2 I note that even if the trial court improperly failed to address this argument, a remand
is not necessarily required. Under the general rules of issue preservation, plaintiffs did not preserve
the issue of the trial court’s alleged failure to consider their interest-of-justice argument by raising
it before the trial court. See Richard v Schneiderman & Sherman, PC (On Remand), 297 Mich
App 271, 273; 824 NW2d 573 (2012) (holding that the plaintiff’s argument that the trial court
failed to rule on his motion to amend his complaint was not preserved for appellate review because
the plaintiff “did not raise these claims of error before the trial court”). Plaintiffs have therefore
waived appellate review of this issue. Tolas Oil & Gas Exploration Co v Bach Serv &

2
 As I have discussed, I do not believe that Simcor established a rule mandating that trial courts
expressly address such arguments.

                                                  -3-
Manufacturing, LLC, ___ Mich App ___; ___ NW2d ___ (2023) (Docket No. 359090), slip op at
2-3 (noting that, in civil cases, Michigan follows the “raise or waive” rule of appellate review, and
that a party seeking appellate review of a claim of error must generally “show that the same basis
for the error claimed on appeal was brought to the trial court’s attention”) (citations omitted). And
even if this Court were to disregard its issue preservation requirements, see id. at ___, slip op at 3,
the record shows, as I have stated, that the interest-of-justice exception does not apply in this case,
and plaintiffs accordingly cannot show any error requiring reversal.

        For these reasons, I concur in part and respectfully dissent in part, and would affirm the
trial court’s order granting costs and attorney fees under MCR 2.405(D).

                                                               /s/ Mark T. Boonstra

                                                 -4-