Ayar v. Foodland Distributors

Michigan Supreme Court
Lansing, Michigan
Chief Justice: Justices:

Opinion Clifford W. Taylor Michael F. Cavanagh
Elizabeth A. Weaver
Marilyn Kelly
Maura D. Corrigan
Robert P. Young, Jr.
Stephen J. Markman

FILED JULY 6, 2005

RAAD AYAR, VINCENT, INC.,
JOLIET, INC., and R & D
WHOLESALE, INC.,

Plaintiffs-Appellants,

v No. 126870

FOODLAND DISTRIBUTORS and
LIVONIA HOLDING COMPANY,
INC., jointly and severally,

Defendants,

and

THE KROGER COMPANY,

Defendant-Appellee.
_______________________________

PER CURIAM.

At issue in this case is when interest begins to

accrue, pursuant to MCL 600.6013(8), on costs and attorney

fees imposed for rejecting a mediation evaluation, MCR

2.403(O)(1), (6).1 The clear language of this statute

1
By an amendment in 2000, the rule was amended to
refer to "case evaluation" rather than "mediation." The
(continued…)
indicates that it accrues from the date of the filing of

the complaint. The Court of Appeals, in reversing the

order of the trial court, incorrectly concluded that

accrual did not begin on that date. This was error, and

accordingly, pursuant to MCR 7.302(G)(1), we reverse the

judgment of the Court of Appeals2 and reinstate the order of

the circuit court.

In October 1993 plaintiffs filed a complaint against

defendants for damages arising from aspects of the parties'

commercial relationships. Mediation was conducted in 1995.

The case then proceeded to trial, and plaintiffs eventually

were awarded a substantial verdict in a final judgment

dated June 21, 2002. This judgment included prejudgment

interest and "costs and attorney fees to be assessed, if

any." In an order dated June 24, 2002, the circuit court

granted plaintiffs' motion for assessment of costs and

mediation sanctions, MCR 2.403(O), and determined the

(continued…)

mediation in this case occurred in 1995. Consequently, we

will refer to "mediation" in this opinion.

2
Ayar v Foodland Distributors, 263 Mich App 105; 687
NW2d 365 (2004).

specific amounts applicable to the various defendants.3 An

issue then arose concerning interest on these amounts. In

an order dated November 14, 2002, the trial court ordered

that interest on the costs and mediation sanctions awarded

in its June 24 order was to be calculated from the date the

complaint was filed.

The Court of Appeals reversed that order and remanded

the matter for a redetermination of the amount of interest.

It recognized that judgment interest is allowed on an award

of mediation sanctions,4 but determined that interest should

be calculated from the date of the judgment awarding

mediation sanctions, June 24, 2002. The Court of Appeals

reasoned that, before that date, no mediation award existed

upon which interest could be calculated.

Questions of statutory interpretation are reviewed de

novo. Burton v Reed City Hosp Corp, 471 Mich 745, 751; 691

NW2d 424 (2005); Morales v Auto-Owners Ins Co (After

Remand), 469 Mich 487, 490; 672 NW2d 849 (2003). Clear and

unambiguous statutory language is given its plain meaning,

3
Defendant-appellant Kroger Company was ordered to pay
$381,752.
4
Defendant Kroger's argument pertains to the date
interest commences, not to whether interest can be awarded
on mediation sanctions.

and is enforced as written. Roberts v Mecosta Co Gen Hosp,

466 Mich 57, 63; 642 NW2d 663 (2002).

III

At issue here is MCL 600.6013(8), which provides, in

pertinent part:

[F]or complaints filed on or after
January 1, 1987, interest on a money judgment
recovered in a civil action is calculated at 6-
month intervals from the date of filing the
complaint at a rate of interest equal to 1% plus
the average interest rate paid at auctions of 5-
year United States treasury notes during the 6
months immediately preceding July 1 and January
1, as certified by the state treasurer, and
compounded annually, according to this section.
Interest under this subsection is calculated on
the entire amount of the money judgment,
including attorney fees and other costs. The
amount of interest attributable to that part of
the money judgment from which attorney fees are
paid is retained by the plaintiff, and not paid
to the plaintiff's attorney. [Emphasis added.][5]

The statute plainly states that interest on a money

judgment is calculated from the date of filing the

complaint. We find this language to be clear and

unambiguous, as we did in Morales, supra. In Morales, we

concluded that the statute makes no exception for periods

of prejudgment appellate delay, and that interest on a

judgment following such a delay is calculated, without

5
This is the wording of the statute as amended by 2002
PA 77, effective March 21, 2002, that applies to the
June 24, 2002, judgment in this case.

interruption, from the date the complaint is filed.

Similarly, the statute makes no exception for attorney fees

and costs ordered as mediation sanctions under MCR

2.403(O).

The Court of Appeals was correct in applying the

judgment interest statute to mediation sanctions.

Defendant Kroger does not dispute this point, and the

statute expressly applies to "attorney fees and other

costs."

The Court of Appeals was mistaken, however, in

considering mediation sanctions to be in the nature of an

additional claim for damages that did not arise until long

after the complaint was filed. The mediation process is an

integral part of the proceeding commenced when plaintiffs

filed their complaint. The realization of mediation

sanctions is tied directly to the amount of the verdict

rendered with regard to that complaint. MCR 2.403(O)(1).

Indeed, the award of prejudgment interest on mediation

sanctions is part of the final judgment against defendants.

At all times during which interest was assessed,

plaintiffs' claim against defendants was in dispute.

Therefore, the Court of Appeals was incorrect to suggest

that Rittenhouse v Erhart, 424 Mich 166, 217-218; 380 NW2d

440 (1985) (Riley, J.), dictated a different result in this

case.6

We conclude that, under MCL 600.6013(8), judgment

interest is applied to attorney fees and costs ordered as

mediation sanctions under MCR 2.403(O) from the filing of

the complaint against the liable defendant. This results

from a plain reading of the statute. The statute provides

no special treatment for judgment interest on mediation

sanctions. Therefore, we reverse the judgment of the Court

of Appeals, reinstate the order of the circuit court, and

remand to the circuit court for further proceedings

consistent with this opinion.

We acknowledge that there are meaningful policy

reasons for a statute that would provide for interest on

mediation sanctions from a date later than when the

complaint is filed. Costs imposed under MCR 2.403(O) are

6
In Rittenhouse, we held that prejudgment interest
owed by a party accrued from the date of the complaint
adding that party. The case at bar does not involve an
added party, but, consistent with Rittenhouse, the circuit
court ordered interest from the filing of the complaint
against the defendant liable for the judgment.

Because this case does not involve an added party,
Justice Cavanagh’s continuing disagreement with the
Rittenhouse decision is irrelevant to the disposition of
this case.

in the nature of sanctions, and a successful plaintiff will

otherwise receive interest on the judgment itself, in

addition to costs and attorney fees that can be ordered

under MCR 2.403(O). We invite our Legislature to

reconsider whether interest should be imposed on mediation

sanctions from the date a complaint is filed. As this case

shows, the amount of mediation sanctions might not be

determined until several years after the filing date. It

would not be unreasonable to amend the statute to provide a

result similar to that reached by the Court of Appeals.

However, that result does not follow from the statute as it

is currently written.

Clifford W. Taylor
Elizabeth A. Weaver
Maura D. Corrigan
Robert P. Young, Jr.
Stephen J. Markman

S T A T E O F M I C H I G A N

SUPREME COURT

RAAD AYAR, VINCENT, INC.,
JOLIET, INC., AND R & D
WHOLESALE, INC.,

Plaintiffs-Appellants,

v No. 126780

FOODLAND DISTRIBUTORS AND
LIVONIA HOLDING COMPANY,
INC., JOINTLY AND SEVERALLY,

Defendants,

and

THE KROGER COMPANY,

Defendant-Appellee.
_______________________________

CAVANAGH, J. (concurring).

I concur with the majority’s holding that interest on

an award of mediation sanctions should be calculated from

the date the complaint was filed. However, I write

separately for two reasons.

First, I disagree with the majority’s discussion of

Rittenhouse v Erhart, 424 Mich 166; 380 NW2d 440 (1985).

See ante at 5, n 6. In the present case, the majority
correctly concludes that MCL 600.6013(8)1 is an unambiguous

statute that must be applied as written. As such, it

accurately determines that because the statute contains no

exception pertaining to mediation sanctions, interest on

mediation sanctions is calculated from the time the

complaint was filed. What the majority fails to

acknowledge, however, is that under these same rules of

construction, no exception that allows for changing the

time of calculation when a party has been added after the

initial complaint was filed can be found either, contrary

to the majority position in Rittenhouse, supra at 217-218

(Riley, J.).

In Rittenhouse, the majority undertook to interpret

and rewrite this plain statutory provision to hold that

when a party is added to a lawsuit that is already in

progress, interest on the money judgment accrues not from

1
In pertinent part, the statute in force at the
relevant time instructed:

“the date of filing the complaint,” as instructed by MCL

600.6013(8), but from “the date of the filing of the

complaint upon the defendant against whom the judgment has

been entered.” Rittenhouse, supra at 218 (Riley, J.)

(emphasis added). But, just like the statute contains no

exceptions for periods of prejudgment appellate delay,

Morales v Auto-Owners Ins Co (After Remand), 469 Mich 487,

490-492; 672 NW2d 849 (2003), interest on claims added in

amended complaints, Phinney v Perlmutter, 222 Mich App 513,

539-543; 564 NW2d 532 (1997), or interest on mediation

sanctions, ante at 5, it likewise contains no exception for

interest on a judgment against a particular defendant. See

Rittenhouse, supra at 190-191 (Brickley, J.).

These four conclusions are consistent, and all are

reached by recognizing that MCL 600.6013 is clear and

unambiguous and must be applied as written. Thus, I find

the majority’s attempt to distinguish this Court’s holding

in Rittenhouse, which was reached by rewriting the statute,

disingenuous in light of the majority’s recognition in this

case that the statute is “plain[]”, “clear[,] and

unambiguous.” Ante at 4.

Second, I disagree that the majority should engage in

a patent imploration to the Legislature, see ante at 6-7,

to change a law to comport with the majority’s policy

views. The majority’s entreaty is not only inappropriate,

but it contravenes the central purpose of the statute it

seeks to change. MCL 600.6013 is a remedial statute

designed to “compensate the claimant for delays in

recovering money damages,” Yaldo v North Pointe Ins Co, 457

Mich 341, 350; 578 NW2d 274 (1998), offset costs incurred

in bringing the action, encourage prompt settlement, and

discourage defendants from unnecessarily delaying

litigation. Old Orchard by The Bay Assoc v Hamilton Mut

Ins Co, 434 Mich 244, 252-253; 454 NW2d 73 (1990),

disavowed in part on other grounds Holloway Constr Co v

Oakland Co Bd of Co Rd Comm’rs, 450 Mich 608 (1996). The

majority should not, on the basis of what it considers

“meaningful policy reasons,” ante at 6, engage in the

business of “inviting” the Legislature to revisit a policy

that the Legislature has clearly already deemed meaningful

by virtue of enacting the statute that furthers it.

Michael F. Cavanagh
Marilyn Kelly

Ayar v. Foodland Distributors

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