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Docket Number

Docket No. 115903.

Attorney(S)

Sinas, Dramis, Brake, Boughton McIntyre (by Timothy J. Donovan), for plaintiff. Foster, Swift, Collins Smith, P.C. (by John L. Collins and Eugene R. Ingrao), for defendant.

Judges

PER CURIAM.

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Smart Summary

Case Summary: Mercer v. Winnick, Docket No. 115903 (Mich. Ct. App. June 7, 1990)

Court: Michigan Court of Appeals. Decision date: June 7, 1990. Panel: GRIBBS, P.J., and HOOD and T.J. LESINSKI, JJ. Counsel noted in opinion: Sinas, Dramis, Brake, Boughton McIntyre (Timothy J. Donovan) for plaintiff; Foster, Swift, Collins Smith, P.C. (John L. Collins and Eugene R. Ingrao) for defendant.

Factual and Procedural Background

On July 1, 1982, the defendant was the driver of a vehicle involved in an accident with a car occupied by the plaintiff and another individual. Michigan Mutual Insurance Company, the defendant's insurer, assessed liability and offered to settle both claims for the full policy limits of $50,000; the offer was rejected by plaintiff and the other claimant.

Michigan Mutual filed an interpleader action and, in a November 8, 1984 order, the Ingham Circuit Court accepted the tender and ordered Michigan Mutual's counsel to place the $50,000 into an insured money market account at First National Bank of Michigan earning nine percent interest.

The other claimant subsequently settled and received $26,289.61, which the parties stipulated represented $25,000 plus nine percent interest accrued to the date of withdrawal. The plaintiff did not settle (asserting she would be adversely affected on dramshop claims) and proceeded to mediation; she sought $25,000 plus twelve percent interest compounded yearly from the date she commenced suit.

On July 21, 1986, the mediation panel rendered an evaluation in the amount of $25,000 plus "appropriate" interest. Both parties accepted the evaluation but stipulated to submit the question of the appropriate interest to the circuit court for determination.

In an order dated November 19, 1986, the circuit court ruled that plaintiff was entitled to $25,000 plus statutory prejudgment interest at twelve percent per year from the date the complaint was filed. The court denied defendant's motion for reconsideration on February 21, 1989. The defendant appealed as of right from both the November 19, 1986 order and the February 21, 1989 opinion and order denying reconsideration. The Court of Appeals reversed.

Legal Issues Presented

Whether, when a judgment is entered pursuant to unanimous acceptance of a mediation panel's evaluation under MCR 2.403(M)(1), the trial court may award statutory prejudgment interest (twelve percent per year under MCL 600.6013(4); MSA 27A.6013(4)) from the date the complaint was filed in addition to any interest included or accrued to the date of judgment.
Whether a stipulation by the parties to submit the question of "appropriate interest" to the circuit court can authorize the circuit court to award prejudgment interest beyond the interest that accrued while the settlement funds were held under the interpleader order.

Arguments of the Parties

Plaintiff's Arguments

Plaintiff asserted she did not settle earlier because settlement would adversely affect her dramshop actions.
Plaintiff argued she was entitled to $25,000 plus twelve percent interest compounded yearly from the date she commenced suit, and the mediation panel's evaluation awarded $25,000 plus "appropriate" interest.

Defendant's Arguments

Defendant's sole argument on appeal was that the trial court erred in awarding plaintiff statutory prejudgment interest of twelve percent per year from the date the complaint was filed pursuant to MCL 600.6013(4); MSA 27A.6013(4), given that the judgment was entered pursuant to mutual acceptance of a mediation evaluation.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Hatt v Cheff, 177 Mich. App. 679; 442 N.W.2d 732 (1989)	Holds that a trial court erred in awarding prejudgment interest on a judgment entered pursuant to mutual acceptance of a mediation evaluation; interprets MCR 2.403(M)(1) to include all fees, costs, and interest to the date of judgment.	The Court of Appeals cited and agreed with Hatt v Cheff, adopting its interpretation that MCR 2.403(M)(1) is plain and unambiguous and that a judgment entered upon unanimous acceptance of a mediation evaluation includes interest only to the date of judgment; therefore prejudgment interest beyond that point cannot be awarded.

Court's Reasoning and Analysis

The court's analysis centers on the plain language of MCR 2.403(M)(1). The rule provides that if all parties accept the mediation panel's evaluation, judgment will be entered in that amount and "includes all fees, costs, and interest to the date of judgment." The Court of Appeals determined this language is clear and unambiguous.

Applying that rule, the court reasoned that when a judgment is entered upon unanimous acceptance of a mediation evaluation, interest is included only up to the date of that judgment. Consequently, any statement in a mediation evaluation awarding an amount "plus appropriate interest" does not preserve a right to additional prejudgment interest beyond interest accrued to the date of judgment; such a statement is "meaningless" in light of the rule's mandate.

The court further held that the parties' stipulation to submit the question of "appropriate interest" to the circuit court did not empower the circuit court to award a dollar amount plus prejudgment interest beyond what the mediation rule provides. Because the interpleader deposit had been placed in an interest-bearing account (First National Bank of Michigan, nine percent), the circuit court's power to award interest was limited to the interest actually earned while the funds were held pursuant to the interpleader; it could not award statutory prejudgment interest from the date of the complaint.

Relying on the prior panel decision in Hatt v Cheff, the court concluded the trial court exceeded its authority by awarding prejudgment interest at twelve percent per year from the filing date and thus reversed that portion of the order.

Holding and Implications

HOLDING: The Court of Appeals reversed the portion of the Ingham Circuit Court's November 19, 1986 order that awarded the plaintiff prejudgment interest at the rate of twelve percent per year from the date the complaint was filed. The matter was remanded for entry of judgment consistent with this opinion.

Implications:

The immediate effect is that the plaintiff may not receive statutory prejudgment interest from the date the complaint was filed where the judgment results from unanimous acceptance of a mediation panel's evaluation; the judgment includes interest only to the date of judgment pursuant to MCR 2.403(M)(1).
The circuit court was limited to interest actually earned while the funds were held under the interpleader and could not, by stipulation or otherwise, award prejudgment interest beyond that amount in the circumstances of this case.
The opinion follows and adopts the reasoning of Hatt v Cheff regarding the scope of interest included in judgments entered on mutual acceptance of mediation evaluations; the Court did not indicate it was announcing a novel rule beyond that interpretation and did not retain jurisdiction.

Disposition: Reversed and remanded for entry of a judgment consistent with the Court of Appeals' opinion. The Court of Appeals did not retain jurisdiction.

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MERCER v WINNICK

PER CURIAM.

Defendant appeals as of right from a November 19, 1986, order of the Ingham Circuit Court ruling that plaintiff was entitled to twelve percent interest per year on a $25,000 mediation evaluation award. Defendant also appeals as of right the court's February 21, 1989, opinion and order denying his motion for reconsideration of the court's order granting plaintiff twelve percent interest. We reverse.

On July 1, 1982, defendant was the driver of a vehicle involved in an accident with a car occupied by plaintiff and another individual. Defendant was insured by Michigan Mutual Insurance Company. As a result of the accident, plaintiff and the other occupant filed separate civil suits against defendant seeking damages for injuries they sustained. Plaintiff's suit was filed on January 25, 1983.

After an assessment of defendant's liability and the injuries incurred, Michigan Mutual offered to settle both claims by payment of the full policy limits of $50,000. Plaintiff and the other claimant rejected the offer and Michigan Mutual then filed an interpleader action in the Ingham Circuit Court seeking to tender the $50,000 with the court, pending resolution of both suits. In a November 8, 1984, order, the court accepted Michigan Mutual's tender and ordered its counsel to act as an officer of the court and place the $50,000 into a federally insured financial institution. The money was deposited with First National Bank of Michigan in an insured money market account with a nine percent interest rate.

Thereafter, the other claimant involved in the accident entered into a settlement with defendant and accepted one half of the $50,000 in First National Bank of Michigan. All parties stipulated to the release of $26,289.61 to the claimant, which amount represented $25,000 plus nine percent interest accumulated to the date of withdrawal.

Plaintiff contends that she did not settle with defendant because such action would have adversely affected her pending dramshop actions. In any event, plaintiff's suit against defendant proceeded to mediation. Plaintiff argued that she was entitled to $25,000 plus twelve percent interest compounded yearly from the date she commenced suit. On July 21, 1986, the mediation panel rendered an award in favor of plaintiff in the amount of $25,000 plus "appropriate" interest. Plaintiff and defendant accepted the award but stipulated to submit the question of appropriate interest to the circuit court for determination.

Subsequently, defendant filed a motion for determination of interest and in an order dated November 19, 1986, the court ordered that plaintiff was entitled to $25,000 plus twelve percent interest per year from the date plaintiff's complaint was filed. Defendant's motion for reconsideration was denied.

Defendant's sole argument on appeal is that the trial court erred in ruling that plaintiff was entitled to statutory prejudgment interest of twelve percent per year from the date the complaint was filed pursuant to MCL 600.6013(4); MSA 27A.6013(4). We agree.

In the instant case, plaintiff's $25,000 award resulted from the parties' acceptance of the mediation panel's evaluation. MCR 2.403(M)(1) provides:

If all the parties accept the panel's evaluation, judgment will be entered in that amount. The judgment shall be deemed to dispose of all claims in the action and includes all fees, costs, and interest to the date of judgment. [Emphasis added.]

A panel of this Court, in Hatt v Cheff, 177 Mich. App. 679; 442 N.W.2d 732 (1989), held that the trial court in that case went against the clear language of MCR 2.403(M)(1) by erroneously awarding the plaintiff prejudgment interest on a $45,000 judgment entered pursuant to mutual acceptance of a mediation evaluation. Id., p 681. We are in complete agreement with the Cheff Court and find that the language of this court rule is plain and unambiguous. Thus, a judgment entered upon unanimous acceptance of a mediation evaluation shall include interest to the date of the judgment. The statement of the mediation award regarding interest is meaningless. The award does not preserve the question of prejudgment interest by indicating that plaintiff is awarded $25,000 plus "appropriate interest." The stipulation to submit the question to the circuit court cannot empower that court to award a dollar amount plus prejudgment interest. The mediation rule governs and, as previously indicated, interest is included in the mediation award. The circuit court was therefore powerless to award interest beyond the interest earned while the money was held by the court pursuant to the interpleader. Accordingly, we reverse that portion of the court's November 19, 1986, order providing that plaintiff was entitled to prejudgment interest at the rate of twelve percent per year from the date the complaint was filed.

Reversed and remanded for entry of a judgment consistent with this opinion. We do not retain jurisdiction.

MERCER v. WINNICK