Court Opinion

ID: 9736801
Source: CourtListenerOpinion
Date Created: 2023-08-26 19:06:55.246933+00
Date Added: 2024-06-11T07:23:54.764482
License: Public Domain

Levin, J.
(concurring). The question presented is whether the circuit court erred in entering a judgment confirming an arbitration award for an amount, $300,000, plus statutory interest computed from the date the complaint in this action was filed in the circuit court.
I would hold that the arbitrators did not exceed their authority when they included in the award interest, computed as provided in the statute, from the date the complaint was filed. I therefore agree with the majority that this Court should reverse the decision of the Court of Appeals, which held that the circuit court should not have confirmed an award that included prejudgment interest and should have allowed interest only from the date of entry of the award.
*266I
Hamilton Mutual Insurance Company was the surety of a bankrupt general contractor that had constructed a multifamily housing complex for Old Orchard by the Bay Associates. The surety bond provided protection for defects in materials and workmanship. Old Orchard claimed that there were defects in an amount exceeding the $390,000 amount of the bond. Three years after this action was commenced by Old Orchard, the parties stipulated that the matter was to be submitted for resolution by arbitration in accordance with the Construction Industry Rules of the American Arbitration Association of Michigan. An order was entered by the circuit court pursuant to the stipulation "remanding case to arbitration” and providing that any award "may be entered as a judgment in this Court and this Court has retained jurisdiction for the purpose of enforcing any such award.”
The arbitrators filed an award1 providing that Hamilton should pay Old Orchard $300,000 plus statutory interest to be computed on the $300,000 pursuant to § 6013 of the Revised Judicature Act2 from the date the action was commenced in the circuit court. The award concluded with the statement that it was in "full settlement of all claims submitted to this arbitration.”
Old Orchard moved to confirm, and, after hearing objections, the circuit judge entered a judgment on the award of $300,000 plus interest of over $366,000 computed pursuant to § 6013.
The Court of Appeals reversed,3 holding that *267interest should have been awarded pursuant to a statute4 that provides for interest at five percent per annum only after entry of an award.
ii
The majority holds as a matter of law that where the parties have not agreed to arbitrate before a complaint is filed, but thereafter stipulate to arbitrate and the original action is not dismissed, prejudgment interest should be added pursuant to § 6013.
The majority states that prejudgment interest need not be added pursuant to § 6013 where the parties stipulate or otherwise "agree on the matter of interest,” but that where, as in the instant case, the parties do not agree on the matter of interest, the statute governs.5
While the parties did not specifically agree on whether interest pursuant to §6013 was to be added to the award, they agreed, in submitting the dispute to arbitration, to confer on the arbitrators the power to decide whether, as a matter of con*268tract rather than statutory interpretation, interest would be added to an award.
In holding that the failure of the parties specifically to agree on the matter of interest meant, as a question of interpretation of the contract, that they had "never agreed on the matter of interest,”6 the majority substitutes its interpretation for the interpretation of the arbitrators. In the instant case, the result is the same because the arbitrators added interest pursuant to § 6013. But, in another case, the majority’s approach would mean that interest must be added to an award although the arbitrators had not included or provided for interest as part of the award.
hi
In arbitration cases, questions of contract interpretation often concern arbitrability — whether a dispute is arbitrable or excluded from arbitration. In the arbitrability context, the United States Supreme Court ruled that arbitration "should not be denied unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute.”7 This Court adopted the approach of the United States Supreme Court when it said that a court should not weigh competing claims of contract interpretation because to do so would give "to the court the task assigned to the arbitrator— namely, the interpretation and application of the contract.”8_
*269While the question of contract interpretation presented in the instant case does not concern arbitrability, but rather whether awarding interest was within the scope of the powers conferred on the arbitrators, the question whether it was within their powers to award or deny interest is nevertheless, because it concerns contract interpretation, confided to the arbitrators unless it can be said with "positive assurance” that the submission to arbitration is "not susceptible of an interpretation” that would permit the arbitrators to decide whether to award interest.
This Court cannot state with positive assurance that the submission to arbitration in this case is susceptible of only one interpretation on the ques*270tion whether interest may or must be awarded pursuant to §6013. This Court should not, therefore, impose its interpretation and declare that, because the parties did not specifically agree on the matter of interest, it would be beyond the power of the arbitrators to decline to award interest pursuant to §6013.9 The question whether interest should be awarded pursuant to § 6013 is one for the arbitrators, and not this Court, to decide.10

 Almost five years later.

 MCL 600.6013; MSA 27A.6013.

 Old Orchard by the Bay Associates v Hamilton Mutual Ins Co, unpublished opinion per curiam of the Court of Appeals, decided January 11,1988 (Docket No. 93161).

 MCL 438.7; MSA 19.4. MCL 438.31; MSA 19.15(1).

 The majority states:
The statutory interest provision that applies in a given action is a purely legal question to be resolved by means of statutory interpretation, except where the parties stipulate to an interest schedule or otherwise agree on the matter of interest as part of their arbitration agreement.10 The parties in the instant dispute, however, never agreed upon the matter of interest.

 Where there is a contractual agreement by the parties regarding the entitlement to interest, or the rate of interest to be awarded, in a dispute founded on a contract, the question of interest is one of the intent of the parties. Therefore, since arbitration is primarily a matter of contract, a stipulation entered by the parties, before or after the complaint is filed, specifying the applicable rate of prejudgment or postcomplaint interest, is normally binding. [Ante, p 251.]

 See n 5.

 United Steelworkers of America v Warrior & Gulf Navigation Co, 363 US 574, 582-583; 80 S Ct 1347; 4 L Ed 2d 1409 (1960).

 Kaleva-Norman-Dickson School Dist v Kaleva-Norman-Dickson Teachers’ Ass’n, 393 Mich 583, 594-595; 227 NW2d 500 (1975).
The Court continued:
*269In deciding whether a dispute involving an issue of contract interpretation is arbitrable, a court should guard against the temptation to make its own interpretation of the substantive provisions of the contract encompassing the merits of the dispute. If the parties have agreed that an arbitrator shall decide questions of contract interpretation, the merits of the dispute are for the arbitrator.
Where a court finds itself weighing the pros and cons of each party’s interpretation of substantive provisions of the contract, it is likely that the court has gone astray. The question for the court is not whether one interpretation or another is correct, but whether the parties have agreed that an arbitrator shall decide which of the competing interpretations is correct.
Similarly, see St Clair Prosecutor v AFSCME, 425 Mich 204; 388 NW2d 231 (1986); Port Huron Area School Dist v Port Huron Ed Ass’n, 426 Mich 143; 393 NW2d 811 (1986).
Arbitration is a matter of contract. In contracting for arbitration, parties generally agree to substitute an arbitrator for a judge and jury as factfinder and decision maker on all questions, factual and legal. Whether questions of law are "primarily or even ordinarily within the province of arbitration” is a question of contract and not of law. It is well within the province of parties to a commercial arbitration to allow the arbitrator to decide questions of law as well as of fact, and agreements to arbitrate have generally been construed as contracts for deciding questions of law as well as of fact. [DAIIE v Gavin, 416 Mich 407, 446-447; 331 NW2d 418 (1982) (Levin, J., concurring).]

 To the extent that the reasoning in Waldrop v Rodery, 34 Mich App 1; 190 NW2d 691 (1971), is inconsistent with the reasoning in this opinion, I would no longer follow Waldrop.

 See Tobacco Workers Int’l Union, Local 317 v Lorillard Corp, 448 F2d 949, 956 (CA 4, 1971), where the United States Court of Appeals for the Fourth Circuit declared in a union’s action against an employer for specific performance of a collective bargaining clause providing for arbitration of employee grievances:
While a contract may contain provisions detailing what remedies should be applied to compensate for a particular breach, labor contracts, like other contracts, commonly do not. Part of what the parties bargain for when they include an arbitration provision in a labor agreement is the "informed judgment” that the arbitrator can bring to bear on a grievance, especially as to the formulation of remedies. . . . Therefore, we conclude that, although the agreement is silent as to remedies, the fashioning of an appropriate remedy is not an addition to the obligations imposed by the contract. In deciding that the agreement did not provide for retroactive pay in promotion cases, the District Court usurped the function of the arbitrator.