Court Opinion

ID: 9678813
Source: CourtListenerOpinion
Date Created: 2023-08-24 06:33:05.993119+00
Date Added: 2024-06-11T18:17:08.087793
License: Public Domain

Bronson, P.J.
(dissenting). I respectfully dissent. First, I do not share the majority’s view that § 61 must be characterized as a penalty provision. Interest under § 6 is intended to compensate the claimant for the value which she is deprived of while the insurer withholds money due her. Its purpose is essentially the same as that of prejudg*750ment interest statutes and rules allowing precomplaint interest as an element of damages. The fact that interest paid pursuant to § 6 must be offset by interest paid by the insurer pursuant to an award convinces me that the §6 interest is primarily compensatory, not punitive.
Having decided that interest under § 6 is compensatory rather than punitive in nature, I am guided by certain canons of legislative interpretation. The statute need not be construed narrowly, as when a penalty is imposed. Goetz v Black, 256 Mich 564, 572-573; 240 NW 94 (1932). Instead, § 6 must be viewed as a remedial provision, designed to redress existing grievances and introduce regulation conducive to the public good. See In re School Dist #6, Paris & Wyoming Twps, Kent County, 284 Mich 132, 144; 278 NW 792 (1938). While penalties are available for violations of the Uniform Trade Practices Act, the penal provisions of the act are not at issue here. Where a statute has penalty provisions but also grants a private right to be enforced by private civil action, it is remedial as well as penal; a liberal construction must be applied to the remedial provisions. Robinson v Harmon (On Rehearing No 2), 157 Mich 276, 278; 122 NW 106 (1909). Finally, a remedial statute must be construed liberally in order to effectuate its purpose.
I am not convinced that the trial court made a mistake in finding that Motorland’s refusal to pay was in bad faith. Although the term "bad faith” is not defined in § 6, I believe that the term should be construed broadly to effectuate the remedial purposes underlying that section. In the present context, the term "bad faith” means simply the lack of a "good faith” excuse. See Hogerheide v Hickey, 2 Mich App 580, 584; 141 NW2d 357 *751(1966). The wilful or negligent failure to inquire where the law imposes a duty to inquire constitutes bad faith. Twitchell v Glenwood-Inglewood Co, 131 Minn 375; 155 NW 621 (1915). The language of the opinion in Wakeñeld, supra, is consistent with a definition of "bad faith” which is far more flexible than the narrow, strained one applied by the majority. The Court in Wakeñeld observed:
"[T]he insurer does not act in bad faith if it refuses settlement in the honest belief that it has a fair chance of victory, or of keeping the verdict within the policy limit, or * * * that the compromise amount is excessive, or if it has legal defenses * * *. On the other hand, arbitrary refusal to settle for a reasonable amount, where it is apparent that suit would result in a judgment in excess of the policy limit, indifference to the effect of refusal on the insured, failure to fairly consider a compromise and facts presented and pass honest judgment thereon, or refusal upon grounds which depart from the contract and the purpose of the grant of power, would tend to show bad faith.” 246 Mich 652-653.
The foregoing language does not contain any requirement that the plaintiff show "active” and "conscious” wrongdoing, "ill will” or "fraud” in order to demonstrate an insurer’s bad faith for purposes of § 6. Furthermore, given that the Wakeñeld opinion sets forth guidelines which are relatively clear and complete, I do not believe that it is necessary to resort to out-of-state authority to import any such requirement.
I believe that Motorland’s course of conduct fell within the ambit of the Court’s standard of "bad faith” in Wakeñeld. There was no reasonable dispute over Motorland’s liability on the claim. The police report revealed that the insured had driven *752his car into the rear of plaintiffs car and that the former had been cited for careless driving. At least one witness stated that the insured had been driving at speeds up to 85 miles per hour, weaving in and out of traffic. Motorland placed a note in its file stating, "We have an open B.I.R.” Under these circumstances, Motorland could not have reasonably believed that it had a "fair chance” of either escaping liability or keeping the verdict within the policy limits. Certainly, it could not have believed that the proposed settlement amounts were excessive, given the far higher verdict which resulted at trial. There was no showing that Motorland reasonably relied on any legal defenses in prolonging its refusal to pay. The trial court found that Motorland neither investigated the case after receiving the complaint nor offered to pay policy limits after receiving interrogatories. The court also found that Motorland failed to investigate the extent of plaintiffs injuries, misplaced files, failed to respond to plaintiffs demand letter and failed to consult with its in-house committee for approval of paying plaintiffs demand. I believe that this is precisely the sort of "arbitrary” and "indifferent” conduct which the Wakeñeld Court condemned as "bad faith”.
Finally, I cannot overlook what I believe to be an important aspect of the Wakeñeld opinion, namely, that the issue of an insurer’s bad faith should be left to the trier of fact. The Court in Wakeñeld admonished:
"Where there is any evidence whatever of bad faith, the issue is for the jury. Mr. Burritt’s testimony and Mr. Campbell’s silence were evidence that the defendants acted in bad faith and required submission of the issue to the jury.” 246 Mich 655.
*753It is my belief that under Wakefield, the issue of Motorland’s bad faith should have been left to the trial court which served as trier of fact below.
I would affirm the trial court’s award of interest under § 6.

 MCL 500.2006; MSA 24.12006.