Summary
holding that prejudgment interest may not be granted on an attorney fee award
Summary of this case from Green v. NeversOpinion
Docket Nos. 102835, 105175.
Decided March 6, 1989. Leave to appeal applied for.
Hyman, Gurwin, Nachman, Friedman Winkelman (by J. Leonard Hyman and Eric J. Flessland), for Giannetti Brothers Construction Company.
Simon, Deitch, Tucker Friedman (by Donald F. Tucker and A. William Rolf), for City of Pontiac.
Brimacombe, Ward, Hopper Sorini, P.C. (by Mark A. Hopper), for Dukay Air Limited. Plunkett Cooney, P.C. (by John P. Jacobs and Robert G. Kamenec), for Mitsubishi Aircraft International, Inc.
In these consolidated cases, we consider whether mediation sanctions under GCR 1963, 316.7 and 316.8, now MCR 2.403(O), may properly include (a) postjudgment appellate attorney fees or (b) interest on costs and attorney fees and whether the trial court erred in denying, in part, defendant Pontiac's request for expert witness fees. For the reasons stated below, we hold that they may not and it did not.
I. FACTS
A. GIANNETTI v PONTIAC
In 1977, plaintiff Giannetti Brothers Construction Company, Inc., brought a breach of contract suit against defendant, City of Pontiac. The case was submitted to mediation in 1980. Both parties rejected the mediation award of $350,000 to plaintiff. On October 13, 1982, following a bench trial, the trial court found no cause of action for plaintiff and entered judgment in favor of defendant, awarding defendant "costs and attorney fees as provided by law." Plaintiff appealed from the judgment and, on April 5, 1984, this Court affirmed.
Giannetti Brothers Construction Co v Pontiac, unpublished opinion per curiam of the Court of Appeals, decided April 5, 1984 (Docket No. 67711).
On June 8, 1984, defendant moved for approval of its bill of costs, totalling $101,340.04. On June 22, 1984, defendant amended its bill of costs to request a total of $125,333.29. The trial court denied defendant's motion for costs as untimely. Defendant appealed and this Court reversed the trial court's denial of defendant's motion for actual costs and remanded for a determination of actual costs. The Michigan Supreme Court then denied plaintiff leave to appeal.
Giannetti Brothers Construction Co, Inc v Pontiac, 152 Mich. App. 648; 394 N.W.2d 59 (1986).
426 Mich. 869 (1986).
In preparation for a hearing before the trial court, defendant up-dated its documents to include additional costs and attorney fees incurred on appeal. Both parties submitted briefs at the request of the trial court. On July 6, 1987, the trial court wrote to the parties, stating that an evidentiary hearing was not needed and denying defendant's request for appellate attorney fees, interest, and the majority of the requested expert witness fees. On August 5, 1987, an order was entered by which defendant was awarded a total of $54,621.27. Defendant appeals as of right.
B. DUKAY v MITSUBISHI
In 1982, plaintiff Dukay Air Limited brought suit against defendant, Mitsubishi Aircraft International, Inc., for breach of a commission agreement. Defendant counterclaimed. The case was submitted to mediation in 1983. Plaintiff accepted, but defendant rejected, an award of $186,608 in favor of plaintiff. Following trial, the jury awarded plaintiff $260,000 on its claim and awarded $50,000 to defendant on the counterclaim. On December 9, 1983, the trial court offset the verdicts and entered a judgment of $210,000 in favor of plaintiff.
On December 19, 1983, plaintiff moved for costs and attorney fees. Defendant then filed several postjudgment motions requesting a new trial, judgment notwithstanding the verdict, or amendment of the judgment. The trial court denied defendant's motions and awarded plaintiff costs of $26,669.38.
Defendant appealed from the December 9, 1983, judgment. This Court affirmed. On February 6, 1986, this Court denied defendant's motion for rehearing and, on July 27, 1987, the Michigan Supreme Court denied defendant leave to appeal.
Dukay Air Ltd v Mitsubishi Aircraft International, Inc, unpublished opinion per curiam of the Court of Appeals, decided November 24, 1986 (Docket No. 78249).
428 Mich. 914 (1987).
Meanwhile, on January 13, 1987, plaintiff moved the trial court to award it appellate attorney fees. The trial court denied the motion. Plaintiff appeals from the denial by leave granted February 10, 1988.
II. ANALYSIS
As a general rule, attorney fees are not recoverable, either as an element of costs or as an item of damages, unless allowance of a fee is expressly authorized by statute or court rule. Pontiac's motion for award of appellate fees was brought pursuant to GCR 1963, 316.7 and 316.8. Dukay's motion for award of appellate fees was brought pursuant to MCR 2.403. Both GCR 1963, 316.7 and MCR 2.403(O) state that, in certain situations, a party who rejects a mediation evaluation will be called upon to pay the opposing party's "actual costs." Both GCR 1963, 316.8 and MCR 2.403(O)(3) define actual costs as including
Matras v Amoco Oil Co, 424 Mich. 675, 695; 385 N.W.2d 586 (1986); Baumgardner v Balmer, 157 Mich. App. 159, 160; 403 N.W.2d 525 (1987).
Now MCR 2.403(O)(6).
those costs taxable in any civil action and a reasonable attorney fee as determined by the trial judge for services necessitated by the rejection of the . . . evaluation.
The issue before us is whether "actual costs" under the rules include postjudgment appellate attorney fees. Recently, this Court faced the question and answered it in the negative. In American Casualty Co v Costello, we stated:
174 Mich. App. 1, 13; 435 N.W.2d 760 (1989).
Defendants argue that mediation sanctions apply to appellate activities. We disagree.
We believe that the mediation sanctions provided for in MCR 2.403(O) are only intended to apply through final judgment at the trial court level. The trial court in this case has awarded actual expenses for trial activities as a mediation sanction pursuant to MCR 2.403(O). Sanctions for appellate expenses are specifically set forth in MCR 7.216(C). Said rule does not provide for mediation sanctions for appellate activities. See, e.g., Fisher v Detroit Free Press, Inc, 158 Mich. App. 409, 416-419; 404 N.W.2d 765 (1987) [lv den 428 Mich. 914 (1987), reconsid den 429 Mich. 882 (1987)].
While we are not bound by decisions rendered by other panels of this Court, we are persuaded that American Casualty represents the correct view. Postjudgment appellate attorney fees do not fall within the realm of mediation sanctions awardable under the court rules. Accordingly, neither trial court abused its discretion in denying them.
Barbour v DSS, 172 Mich. App. 275, 278; 431 N.W.2d 482 (1988).
We apply like reasoning to defendant Pontiac's ancillary miscellaneous claims for postjudgment expenses.
Defendant Pontiac also claimed interest on all actual costs and attorney fees under MCL 600.6013; MSA 27A.6013. We note that there is an apparent conflict among panels of this Court on the availability of such interest. In Harvey v Gerber, this Court rejected a claim for interest, under MCL 600.6013; MSA 27A.6013, on taxable attorney fees, stating:
153 Mich. App. 528, 530; 396 N.W.2d 470 (1986), lv den 428 Mich. 881 (1987).
The prejudgment interest statute provides that "interest shall be allowed on a money judgment." MCL 600.6013(1); MSA 27A.6013(1). The objectives of the prejudgment interest statute are to compensate the prevailing party for the loss of use of monies owed to defray the cost of litigation. Osinski v Yowell, 135 Mich. App. 279, 288; 354 N.W.2d 318 (1984). Attorney fees are taxable as costs. MCL 600.2405; MSA 27A.2405. Applying the prejudgment interest statute to attorney fees is illogical in light of these policies. Where a statute or court rule awards attorney fees, the cost is sufficiently defrayed.
The same result was reached in City of Warren v Dannis, wherein this Court held:
136 Mich. App. 651, 662-663; 357 N.W.2d 731 (1984), lv den 422 Mich. 932 (1985).
A money judgment is one which adjudges the payment of a sum of money as distinguished from directing an act to be done. Oliver v Dep't of State Police, 132 Mich. App. 558; 349 N.W.2d 211 (1984); Moore v Carney, 84 Mich. App. 399; 269 N.W.2d 614 (1978). This type of action for indemnification [of attorney fees] has been characterized as an equitable action for reimbursement. . . . It was not an abuse of discretion for the trial court to find that the defendant really lost no use of the money as basically it was money due her attorneys for their fees and not money due the defendant. [Citations omitted.][]
See also Moore v Carney, 84 Mich. App. 399; 269 N.W.2d 614 (1978) (trial court order compelling defendant corporation to repurchase plaintiff stockholder's shares was not a "money judgment" upon which interest could be awarded under MCL 600.6013; MSA 27A.6013, but rather was essentially an equitable remedy placing the plaintiff in statu quo; while the judgment involved money, it was not a "money judgment").
On the other hand, in The Wayne-Oakland Bank v Brown Valley Farms, Inc, the Court declined to follow Harvey and Dannis, supra, and found no abuse of discretion in the trial court's award of interest on costs and attorney fees.
170 Mich. App. 16, 22-23; 428 N.W.2d 13 (1988).
We elect to follow the reasoning of Harvey and Dannis. Interest, under MCL 600.6013; MSA 27A.6013, may not be granted on an award of costs and attorney fees. Accordingly, we find no abuse of discretion in the trial court's denial of Pontiac's claim for interest.
Finally, Pontiac also requested an award for expert witness fees prior to mediation of $23,125.25, after mediation through trial of $48,802.70, as well as certain postjudgment expert witness fees. The trial court awarded $10,844.27. Pontiac claims that it has no clue as to the basis on which the claimed expert witness fees were allowed or denied and that it was error for the trial court to refuse an evidentiary hearing on the issue. We disagree. While it is true that the trial court did not expressly state which expert witness fees had been disallowed, we think it of some significance that the figure awarded ($10,844.27) was, apparently, precisely the figure proposed by plaintiff Giannetti in its brief to the trial court.
Pontiac bore the burden of proving its fees and costs. Giannetti challenged portions of the costs submitted. After considering the briefs of both parties, the trial court, in the exercise of its discretion, sided with Giannetti and disallowed the bulk of Pontiac's claimed expert witness fees. In view of the parties' briefing of the issue, the voluminous record before the trial court, and the trial court's familiarity with the circumstances of the case, we find no abuse of discretion in the trial court's limited award of expert witness fees nor in its having made the award without having held an evidentiary hearing on the matter. The issue of costs in this matter had been before the trial court off and on for nearly three years. The cost issues were extensively briefed by both parties. We do not view as unreasonable the trial court's unwillingness to needlessly drag this case out any longer.
See Petterman v Haverhill Farms, Inc, 125 Mich. App. 30, 33; 335 N.W.2d 710 (1983) (regarding attorney fees).
We distinguish Petterman, supra, wherein we remanded for an evidentiary hearing as to the reasonableness of the attorney fee sought since, in that case, the trial court had failed to give due consideration to the opposing party's challenge to the reasonableness of the figure.
III. CONCLUSION
Postjudgment appellate attorney fees do not fall within the realm of mediation sanctions available under the court rules, GCR 1963, 316.7 and 316.8 and MCR 2.403(O). There was no abuse of discretion in rejecting plaintiff Dukay's and defendant Pontiac's respective requests for such fees.
Interest, under MCL 600.6013; MSA 27A.6013, could not properly have been granted on the award of costs and attorney fees. There was no abuse of discretion in rejecting defendant Pontiac's request for such interest.
The trial court did not abuse its discretion in rejecting, in part, defendant Pontiac's request for expert witness fees nor in its having done so without conducting an additional evidentiary hearing on the matter.
Affirmed.