Opinion
Docket No. 60257.
Decided February 10, 1983.
Rubenstein, Pruchnicki Chittle Smith (by Alan M. Smith), for plaintiff.
Before: BRONSON, P.J., and T.M. BURNS and ALLEN, JJ.
On July 28, 1981, the trial judge entered an order granting a $42,040.67 judgment for plaintiff but refused to grant attorney fees. Plaintiff appeals by leave granted from this refusal.
This is the second time this case is before this Court. The facts are found in our first opinion:
"On May 23, 1977, a motor vehicle accident involving a car owned and driven by defendant, Michael Stanley Biddis, and the second vehicle driven by Manuel Mello resulted in serious injuries to defendant's passenger, Diedre Ann Biddis. Because defendant's motor vehicle was uninsured, Diedre Biddis filed an application with the Assigned Claims Facility pursuant to § 3172 of the no-fault automobile insurance act. MCL 500.3172; MSA 24.13137. The claim was assigned to plaintiff, Auto-Owners Insurance Company, which paid Diedre Biddis benefits totalling $34,098.98. Plaintiff, seeking to recover this money plus costs in handling the assigned claim pursuant to § 3177 of the no-fault automobile insurance act, MCL 500.3177; MSA 24.13177, commenced this suit against defendant as owner and operator of the uninsured vehicle." Auto-Owners Ins Co v Biddis, 107 Mich. App. 173, 174; 309 N.W.2d 192 (1981).
At that time, this Court ruled that plaintiff was entitled to recover against defendant even without establishing defendant's fault. On remand, the trial judge entered a judgment in favor of plaintiff but refused to award attorney fees.
MCL 500.3177; MSA 24.13177 states:
"An insurer obligated to pay personal protection insurance benefits for accidental bodily injury to a person occupying an uninsured motor vehicle or to the spouse or relative resident in the household of the owner or registrant of an uninsured motor vehicle may recover such benefits paid and appropriate loss adjustment costs incurred from the owner or registrant of the uninsured motor vehicle or from his estate." (Emphasis added.)
The question before us is whether the words "loss adjustment costs" in this statute allow the trial judge to award attorney fees.
"Loss adjustment costs" include litigation costs. OAG, 1981, No 6016, p 491 (December 1, 1981).
Generally in Michigan, attorney fees may not be awarded unless expressly authorized by either statute or court rule. Davis v Koch, 118 Mich. App. 529; 325 N.W.2d 482 (1982); State Farm Mutual Automobile Ins Co v Allen, 50 Mich. App. 71; 212 N.W.2d 821 (1973). In fact, "[t]he general rule in Michigan prohibits the awarding of attorney's fees as an element of cost of damages". H L Heating Co v Bryn Mawr Apartments of Ypsilanti, Ltd, 97 Mich. App. 496, 506; 296 N.W.2d 354 (1980).
This Court, however, has found exceptions in two analogous situations. MCL 691.1203(3); MSA 14.528(203)(3) (§ 3 of the Thomas J. Anderson, Gordon Rockwell Environmental Protection Act) states:
"Costs may be apportioned to the parties if the interests of justice require." Even though this section does not expressly use the words "attorney fees", this Court has held that it gives the trial judge discretion to award them. Three Lakes Ass'n v Kessler, 101 Mich. App. 170; 300 N.W.2d 485 (1980), lv den 411 Mich. 1056 (1981); Superior Public Rights, Inc v Dep't of Natural Resources, 80 Mich. App. 72; 263 N.W.2d 290 (1977), lv den 406 Mich. 926 (1979); Taxpayers Citizens in the Public Interest v Dep't of State Highways, 70 Mich. App. 385; 245 N.W.2d 761 (1976).
We do realize that Superior has been criticized in Oscoda Chapter of PBB Action Committee, Inc v Dep't of Natural Resources, 115 Mich. App. 356; 320 N.W.2d 376 (1982).
Section 2715 of the Uniform Commercial Code, MCL 440.2715(1); MSA 19.2715(1), states:
"Incidental damages resulting from the seller's breach include expenses reasonably incurred in inspection, receipt, transportation and care and custody of goods rightfully rejected, any commercially reasonable charges, expenses or commissions in connection with effecting cover and any other reasonable expense incidental to the delay of other breach."
Relying on Superior and Taxpayers, this Court ruled in Cady v Dick Loehr's, Inc, 100 Mich. App. 543; 299 N.W.2d 69 (1980), that this statute confers discretion on the trial judge to award attorney fees as an element of damages for breach of warranty.
The assigned claims provisions of the no-fault act clearly indicate that uninsured motorists are to be penalized by personally bearing all economic costs, without regard to fault, which might have been avoided if they had complied with the act's mandatory insurance provisions. Therefore, the insurer assigned to the claim should be able to reach a break-even point. To deny the insurer recovery of reasonable attorney fees would impose on the system costs which we believe the Legislature has directed uninsured motorists to bear. As such, we believe that the phrase "loss adjustment costs" in this act includes reasonable attorney fees, and such fees should be awarded in this case.
Reversed and remanded with instructions to proceed consistent with this opinion.