City of Bad Axe v. Pamar Enterprises Inc ( 2022 )

If this opinion indicates that it is “FOR PUBLICATION,” it is subject to
revision until final publication in the Michigan Appeals Reports.
STATE OF MICHIGAN
COURT OF APPEALS
CITY OF BAD AXE, CITY OF BAD AXE UNPUBLISHED
DEPARTMENT OF PUBLIC WORKS, and July 21, 2022
CITY OF BAD AXE WASTE WATER
TREATMENT FACILITY,
Plaintiffs-Appellees,
v No. 357206
Huron Circuit Court
PAMAR ENTERPRISES, INC. and SECURA LC No. 16-105392-CK
SUPREME INSURANCE COMPANY,
Defendants-Appellants.
Before: SHAPIRO, P.J., and RICK and GARRETT, JJ.
PER CURIAM.
Defendants appeal as of right the trial court’s order granting plaintiffs’ motion to enter an
amended judgment in the amount of $164,965.62, including interest under MCL 600.6013(8). We
reverse the trial court’s order and remand for proper calculation of interest.
I. BACKGROUND
This case arises from an indemnification and duty to defend action against defendants.
Following lengthy litigation, the trial court ruled in favor of plaintiffs and entered a judgment in
the amount of $124,777.94 in attorney fees and costs. Defendants appealed, and this Court
affirmed the order granting summary disposition and the order of judgment awarding fees and
costs.1 After defendants’ application for leave to appeal was denied by the Supreme Court,2
plaintiffs moved the trial court to amend the judgment to include interest accrued up to that date
under MCL 600.6013(8). In response, defendants argued that plaintiffs were improperly
1
City of Bad Axe v Pamar Enterprises, Inc, unpublished per curiam opinion of the Court of
Appeals, issued January 14, 2020 (Docket No. 345810).
2
City of Bad Axe v Pamar Enterprises, Inc, 507 Mich 881 (2021).
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calculating interest, resulting in almost double the interest award defendants were responsible for.
The trial court agreed with plaintiffs and entered an amended judgment in the amount requested,
$164,965.62.
In the present appeal, plaintiffs change their position and no longer stand by the award of
$164,965.62. The parties now agree that the trial court incorrectly calculated judgment interest by
following plaintiffs’ motion. The parties dispute, however, whether interest should run from the
date of judgment or the date of the complaint. Defendants argue that interest should only be
calculated from the date of the initial judgment (September 18, 2018), resulting in an amended
judgment of $134,072.83. Plaintiffs, on the other hand, contend that the calculation of interest
should run from the date the complaint was filed (February 5, 2016), with a corrected judgment of
$143,067.95.3
II. ANALYSIS
MCL 600.6013 permits an award of interest on a money judgment. Chelsea Investment
Group, LLC v Chelsea, 288 Mich App 239, 258; 792 NW2d 781 (2010). MCL 600.6013(8)
provides in relevant part:
Except as otherwise provided in subsections (5) and (7) and subject to
subsection (13), for 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. [MCL 600.6013(8) (emphasis added).]
As we explained in Chelsea Investment Group, LLC, 288 Mich App at 259: “MCL 600.6013(8)
simply requires that interest on a judgment be recalculated every six months from the date of the
filing of the complaint using the interest rates announced on July 1 or January 1, whichever is
‘immediately preceding’ the complaint’s six-month calculation date.”
MCL 600.6013(8) “plainly states that interest on a money judgment is calculated from the
date of filing the complaint.” Ayar v Foodland Distrib, 472 Mich 713, 716; 698 NW2d 875 (2005).
In this case, the complaint was filed on February 5, 2016, and judgment was entered in favor of
plaintiffs on September 18, 2018, awarding $124,777.94 in attorney fees and costs. In response to
plaintiffs’ motion for interest, defendants admitted in their response brief that plaintiffs were
“entitled to interest dating back to the filing of the complaint.” Additionally, at the motion hearing
before the trial court, defendants’ counsel stated: “[T]he interest runs in the beginning when the
complaint is filed. We all agree on that.”
3
This issue involves a question of statutory interpretation, which we review de novo. Chelsea
Investment Group, LLC v Chelsea, 288 Mich App 239, 258-259; 792 NW2d 781 (2010).
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Defendants now argue that the starting date for interest to accrue is the September 18, 2018
judgment date. They do not dispute that under MCL 600.6013(8) interest is calculated from the
date the complaint is filed. Rather, they argue that the original judgment entered in September
2018 already incorporated prejudgment interest dating back to the filing of the complaint, and that
plaintiffs are attempting to “double dip” by seeking to add that same amount to the amended
judgment. The record, however, does not support defendants’ contention that the original
judgment included prejudgment interest. In the trial court’s July 31, 2018 order determining legal
fees, the court awarded plaintiffs $115,052.00 in attorney fees and $9,725.94 in costs. The
combined total of the fees and costs, $124,777,94, was the judgment amount contained in the
September 2018 order. And there is no mention of interest in either the order determining fees or
the order of judgment. Accordingly, there is no basis in the record to conclude that plaintiffs have
already been awarded prejudgment interest.
In sum, the trial court erred by granting plaintiffs’ request for an amended judgment in the
amount of $164,965.62 because that amount was based on incorrectly calculated interest. On
remand, the trial court shall calculate interest as required by MCL 600.6013(8), with interest
running from date the complaint was filed.
Reversed and remanded for proceedings consistent with this opinion. No costs are
awarded, neither party prevailing in full. MCR 7.219(A). We do not retain jurisdiction.
/s/ Douglas B. Shapiro
/s/ Michelle M. Rick
/s/ Kristina Robinson Garrett
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