Acorn Investment Co v. Michigan Basic Property Insurance Assn
495 Mich. 338
| Mich. | 2014Background
- Acorn insured a Detroit property with Michigan Basic; a 2007 fire followed a disputed cancellation and Michigan Basic denied the claim.
- Case evaluation under MCR 2.403 produced an $11,000 award for Acorn; Acorn accepted, Michigan Basic rejected.
- Acorn then obtained a judicial ruling on coverage; the parties submitted damages to a contractual appraisal panel, which awarded $20,877; Michigan Basic did not pay.
- Acorn moved in circuit court for entry of judgment on the appraisal award, UTPA interest, case-evaluation (actual) costs under MCR 2.403(O)(1), and debris-removal expenses; the court entered judgment and interest but denied costs and debris-removal; Michigan Basic paid.
- The Court of Appeals affirmed; the Michigan Supreme Court granted review limited to whether the post-appraisal judgment qualified as a “verdict” under MCR 2.403(O)(2)(c) and whether Acorn may recover case-evaluation costs and debris-removal expenses.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Acorn may recover actual (case-evaluation) costs under MCR 2.403(O) after Michigan Basic rejected case evaluation and appraisal followed | Rule’s “verdict” definition includes a judgment entered after a motion following rejection; Acorn’s motion for entry of judgment produced such a judgment, so costs are recoverable | Appraisal was effectively arbitration/settlement; no dispositive motion produced the judgment; post-appraisal entry was not the kind of "verdict" the rule covers | Court held MCR 2.403(O)(2)(c) covers a judgment entered as result of a ruling on a motion after case evaluation; Acorn may recover actual costs (court may still refuse in interest of justice) |
| Whether the appraisal award (or the appraisal panel) resolved debris-removal expenses under the policy | Debris-removal is contractually recoverable; appraisal may not have been authorized or able to determine debris costs given the court’s limiting order, so Acorn preserved the claim | Acorn waived debris costs by failing to present evidence to the appraisal panel or raise coverage before appraisal | Court vacated Court of Appeals on this issue and remanded to determine (1) whether appraisal could decide debris costs, (2) if so, whether it erred, and (3) if not, whether Acorn waived or forfeited the claim |
| Whether prior Court of Appeals precedent requires a dispositive motion or treats appraisal like arbitration excluding sanctions | N/A (Acorn relied on plain text of current rule) | Relied on cases treating appraisal as arbitration/settlement and holding resulting orders not "verdicts" for sanctions | Majority rejected that reliance; interpreted amended MCR 2.403 to cover judgments entered after rulings on motions, not only dispositive motions |
| Whether the trial court retains authority after appraisal such that its judgment constitutes a final determination | Acorn: court retained jurisdiction to review appraisal for bad faith/fraud/mistake and to award statutory interest, so the court’s entry was the operative judgment | Michigan Basic: appraisal and award resolved damages and judgment flowed from appraisal, not court ruling | Court found the circuit court entered the judgment (including interest) and so the action ‘‘proceeded to verdict’’ per rule |
Key Cases Cited
- Haliw v. Sterling Heights, 471 Mich 700 (Michigan Supreme Court 2005) (interpreting scope of MCR 2.403 amendments regarding judgments after motions)
- Marketos v. American Employers Ins. Co., 465 Mich 407 (Michigan Supreme Court 2002) (discussing appraisal vs. judicial remedies and valuation determinations)
- Jerico Constr., Inc. v. Quadrants, Inc., 257 Mich App 22 (Court of Appeals 2003) (consent/stipulated dismissals do not constitute a "verdict" under earlier rule)
- Saint George Greek Orthodox Church v. Laupmanis Assoc., 204 Mich App 278 (Court of Appeals 1994) (prior rule interpretation that mediation-to-arbitration did not satisfy "proceeds to trial")
- Auto-Owners Ins. Co. v. Kwaiser, 190 Mich App 482 (Court of Appeals 1991) (characterizing appraisal as akin to arbitration)
- Smith v. Elenges, 156 Mich App 260 (Court of Appeals 1986) (consent judgment not a "verdict" under older local rule)
- Angott v. Chubb Group of Ins. Cos., 270 Mich App 465 (Court of Appeals 2006) (discussing appraisal/award review standards)
- Fisher Sand & Gravel Co. v. Neal A. Sweebe, Inc., 494 Mich 543 (Michigan Supreme Court 2013) (statutory and rule interpretation principles)
- People v. Vaughn, 491 Mich 642 (Michigan Supreme Court 2012) (distinguishing waiver and forfeiture in procedural contexts)