Discretion to Apply Former Court Rules Under MCR 1.102: Reinstating Case-Evaluation Sanctions

Introduction

In Giorgio Webster v. Dr. Jeffrey Osguthorpe, the Michigan Supreme Court addressed whether a trial court may invoke a now-eliminated sanction provision (former MCR 2.403(O)) when the rule change occurs mid-litigation. Plaintiff Webster had accepted a case-evaluation award of $199,000, defendants rejected it, and after extensive settlement efforts the case went to trial. The jury returned a verdict substantially exceeding the evaluation, but the trial court nevertheless imposed attorney fees and costs as sanctions under the former case-evaluation rule. On appeal, the Court of Appeals vacated those sanctions, but the Supreme Court reversed and reinstated them, announcing a clear framework for applying—or declining to apply—newly amended court rules to pending cases under MCR 1.102 and the factors outlined in Reitmeyer v. Schultz Equipment & Parts Co.

Summary of the Judgment

The Supreme Court unanimously held that:

MCR 1.102 governs whether a court may apply former or current court rules to pending actions.
Under MCR 1.102, a trial court has discretion to apply a former rule if applying the current rule “would not be feasible or would work injustice.”
The Court formally adopts the Reitmeyer framework—a set of non-exhaustive factors—to guide that discretion: timing of events, parties’ reliance, purpose of the amendment, and lack of gamesmanship.
Review of a trial court’s decision under MCR 1.102 is for abuse of discretion, not de novo.
Applying these principles, the trial court did not abuse its discretion by awarding case-evaluation sanctions under former MCR 2.403(O) because (1) the case-evaluation and settlement efforts predated the amendment by over a year, (2) plaintiff relied on the availability of sanctions when strategizing, and (3) the amendment’s purposes (leveling the playing field and reducing forced settlements) would not be advanced by retroactive application in these circumstances.

Analysis

Precedents Cited

MCR 1.102: Authorizes the court to apply former rules to pending cases if applying current rules would be infeasible or unjust.
Reitmeyer v. Schultz Equipment & Parts Co. (237 Mich App 332, 1999): Established the “Reitmeyer analysis” of timing, reliance, gamesmanship, and purpose when deciding under MCR 1.102 which rule to apply.
Former MCR 2.403(O): Provided case-evaluation sanctions (attorney fees and costs) against the party rejecting an evaluation unless the verdict was more favorable to that party.
RAD Constr, Inc. v. Davis (347 Mich App 716, 2023): Court of Appeals decision holding no authority to award sanctions after elimination of MCR 2.403(O), which the Supreme Court in this case implicitly overruled in its narrow reasoning.
Sabbagh v. Hamilton Psychological Services (329 Mich App 324, 2019) and Cole v. Eckstein (202 Mich App 111, 1993): Examples of abuse-of-discretion review for “interest of justice” exceptions under former ADR rules.

Legal Reasoning

The Court’s reasoning unfolded in several steps:

Identify the Governing Rule on Rule Changes: MCR 1.102 explicitly addresses application of amended rules to pending litigation—priority over general retrospective/prospective principles.
Adopt the Reitmeyer Framework: Courts must perform an individualized inquiry into whether applying the new rule would “work injustice.” Factors include:
- Timing of key events (case evaluation, settlement conferences, trial preparation) relative to the amendment’s effective date.
- Parties’ reliance on the old rule when making strategic decisions.
- Evidence of gamesmanship or unfair advantage.
- Purpose of the amendment and whether applying it retroactively advances that purpose.
Determine the Standard of Review: Because MCR 1.102 grants discretion, appellate review is for abuse of discretion. The decision must fall within the range of reasonable and principled outcomes.
Apply to Webster:
- Case evaluation and multiple ADR efforts occurred more than a year before the amendment.
- Plaintiff’s trial strategy was grounded in the availability of sanctions under the old rule.
- Application of the amendment would not further its goals—ADR volumes were already mostly complete—and would undermine reliance interests.
- The trial court’s decision to reinstate sanctions was a reasonable, principled outcome under these facts.

Impact

This decision carries significant consequences for Michigan civil practice:

Clear Guidance on Rule Changes: All trial courts and litigants now have a formalized, factor-based roadmap when a court rule is amended mid-case.
Protection of Reliance Interests: Litigants who structure strategy and incur expenses based on existing rules can seek protection where amendment would inflict injustice.
Limitation on Retroactivity: Encourages prompt strategic analysis before and after rule amendments to minimize disputes.
Reaffirmation of Discretion: Trial courts retain substantial leeway, subject to abuse-of-discretion review, in deciding whether to apply prior sanction regimes or other procedural provisions.
Modification of ADR Dynamics: While case-evaluation sanctions were broadly eliminated for future cases, existing cases may still carry the old regime under appropriate circumstances, potentially affecting settlement leverage.

Complex Concepts Simplified

MCR 1.102 “Interest of Justice” Exception: Think of it as a safety valve—if a new procedural rule takes effect during your lawsuit and applying it would unfairly harm one side because they relied on the old rule, the judge can keep using the old rule for that case.
Reitmeyer Factors: A checklist to decide if rule changes should bend for fairness:
- When did you act? (Timing)
- Did you count on the old rule? (Reliance)
- Are you just playing games? (Gamesmanship)
- Why was the rule changed? (Purpose)
Abuse-of-Discretion vs. De Novo Review: “Abuse of discretion” means the judge’s choice has to be outside the reasonable range—there can be more than one right answer. “De novo” means the appellate court makes the call from scratch, with no deference to the trial court.

Conclusion

Webster v. Osguthorpe establishes that trial courts in Michigan have the authority—and, under appropriate circumstances, the duty—to apply former court rules to pending cases when applying newly amended rules would work injustice. By adopting the Reitmeyer factors and clarifying that such decisions are reviewed for abuse of discretion, the Supreme Court has provided the bench and bar with a structured, principled approach to navigating mid-case rule changes. In doing so, it preserves fair reliance interests, maintains procedural stability, and ensures that amendments serve their intended purpose without unfairly penalizing litigants who played by the rules in effect at the time.