*1 437 Mich JohnKAL, SHAY v INC 4). (Calendar 4, Argued No. De- December Docket No. 86016. 2, July cided 1991. Rosemary Shay brought Timothy Shay action in the and an J. Inc., JohnKal, Byars, Circuit Court Charles Kalamazoo others, damages injuries seeking in an auto- for sustained and Shays accepted awards mobile accident. JohnKal, others, Byars, the media- but JohnKal court, J., Foley, judgment John F. entered a tion award. The granted dismissing Byars JohnKal’s motion Charles summary disposition ground intoxi- on required by the dram- not been retained as cated had Sawyer P.J., Appeals, shop Doctoroff, Court of act. The (Docket Jason, JJ., opinion per curiam and R. J. affirmed an 106612). appeal. plaintiffs No. joined by opinion by Boyle, Chief In an Justices Levin Cavanagh Supreme Court Brickley, Justice and Justice held: act did not The name and retain of this action. bar continued maintenance Cavanagh so concluded Justice and Justice Levin

Chief because: discovery generally has is made after A mediation award completed, procedure pursuant over to a court-ordered

been control, by plaintiffs nor the defendants have which neither the supervision persons appointed by under the disinterested particular owner In a if a defendant tavern the court. person poses allegedly intoxicated believes that dismissal of the fraud, sought protective order be a risk collusion and implementation the award and dismissal of to avoid allegedly intoxicated Court, Supreme mandated with Mediation has been application Rigid penalties provided for of mediation. point where it would of the name and retain beyond significantly frustrate court-ordered mediation is evidence, avoiding fraud and collusion. Absent intendment of dismissed, proffered allegedly intoxicated before the if the is a risk of fraud and collusion there justify is dismissed which would court order, entering protective pursuant a dismissal to court- not ordered mediation is a dismissal that should be deemed so far the control of the to be within violative of the *2 provision. name and retain plaintiffs could have the mediation award and risked mediation plaintiffs sanctions. When the award, accepted both the mediation the financial stake eliminated, of the was and to that potential extent there was some risk of collusion and fraud. risk, however, dangers That was so attenuated that same present present collusion and fraud were not as were in earlier Supreme decisions of the Court. Brickley Boyle Justices so concluded because: superior It is not clear mediation is an interest to that preventing potential collusion and fraud. The risk of collu- setting sion and fraud in a mediation is not so attenuated that ignored. Although process very that risk should be under- panels collusion, danger taken diminishes the potential provides for collusion exists. Case still law possibility exists, where the for collusion and fraud the Su- preme legislative Court will not subvert intent and allow the plaintiff beyond to reach to the otherwise, tavern owner. Stated the creation of a blanket exception provision to the name and retain under these circum- directly purpose require- stances would contravene the of that Finally, ment. there is no conflict between the name and retain provision Michigan addressing Court Rules mediation. Compliance possible although admittedly with both is difficult. provisions rules, The sanction of the mediation MCR 2.403(0), unfair, however, applied are when in circumstances reject such as this case where the is forced either to conditionally accept regard a mediation award with person solely preserve the cause of dramshop Blindly assessing action defendant. sanc- penalize complying tions this case would for requirement deprives with the name and retain her of the Thus, 2.403(0) full benefits of mediation. sanctions under MCR are waived in such circumstances unless court finds that was comply not the .result of the need to with the 436.22; name and retain of MCL MSA 18.993. Reversed and remanded. joined by although Griffin, Justice Riley, Justice stated that 2.403(0) opinion

MCR should be amended as set forth in the 437 Mich only. Court, prospective application In this be should be act should of the the name and retain liability created applied act as it is written. remedy at common law. The provided none had existed where remedy carefully was intended liability defined and the exclusive. be part of this case. Mallett took no in the decision

Justice (1989) 400; App reversed. 439 NW2d Amlin, Mazur, Chambers, Steiner, & Ornstein Nicita), plaintiffs. (by Angela J. for P.C. Vlachos), (by Vlachos, Paul T. P.C. Vlachos & the defendant.

Amici Curiae: (by Lower, Treado, P.C. Constan-

Kallas, Henk & *3 Kallas), Beverage Michigan Licensed tine N. Beverage Michigan Association, Associa- Licensed Bowling Liability Pool, Asso- Centers Limited tion Proprietors Michigan, Bowling of Michi- ciation Liability gan Pool, Insur- North Pointe Limited Company, Security Company, Insurance First ance Company. Insurance and Sourceone Michigan Lawyers Trial A. Braden for John Association. question presented JJ. The and Boyle, Levin provision of the retain”

whether the "name and dramshop of a continued maintenance act bars "allegedly where the action person” the action be- from has been dismissed and the cause the person accepted award. a court-ordered retain” the "name and hold that We Shay JohnKal, not, a does such bar continued mainte- of a nance action.

i Timothy Rosemary Shay injured were when driving an automobile which she riding passenger by was being as a was struck a vehicle by Miles,

driven James which in turn had being been struck a vehicle driven Charles Byars, Shays against

The commenced an action James operator Miles, and Thomas owner opera- Byars, vehicle, one Charles and Robert vehicle, tor and owner second Kris Ann Phelps, the driver a third vehicle that struck Big Daddy’s rear, West, vehicle in the Byars where Charles had alco- consumed beverages, doing Inc., JohnKal, holic business East, Gables, as Coral another tavern where Byars Charles had consumed alcoholic beverages. Shays accepted $35,000 mediation awards of

against Byars, against Phelps, $1,000 against Big accepted, Daddy’s They $1,000 West. rejected, but Miles $13,000; mediation award of subsequently the claim Miles was settled. Shays accepted $15,000 also awarded Inc., but JohnKal judgment dismissing When award. was entered Byars, Charles ground

JohnKal moved for dismissal on the *4 person the had not been required by retained as the act. The granted Ap- trial court the motion. The Court peals affirmed.1

1 (1989). Shay Byars, App 400; v 176 Mich 439 360 NW2d Mich 394 the Court

II in 19722 to act was amended The provide or no be commenced action alleged intoxi- the minor or the maintained unless person violation of law a sale in cated whom and in action made "is a named defendant was litigation until is is in the action retained by or trial settlement.”3 concluded 103; Clements, 247 NW2d In Salas they plaintiffs alleged that were injured in the defendant’s while assaulted and person by who had been an unknown tavern beverages intoxi- while he served alcoholic plaintiffs were not This held that the cated. obliged by Court "name and retain” amendment name and retain they identity.4 The reasoned knew his Court

unless PA 196. 2 1972 provides: pertinent provision of act The this a retail licensee shall An action under section alleged intoxicated unless the minor or the not be commenced in the retained in is a defendant action is named litigation by settle- trial or the action until the concluded 436.22(6); 18.993(6).] MSA ment. [MCL 4The Court said: injured plaintiff identity knows the of the Whether not an

alleged judge at shall be determined not, hearing. injured must did in show fact, identity alleged of the know the diligence attempting to due ascertain the that he exercised alleged person. [Id., p identity of the 110.] observed, holding, Appeals in so had object "accurately as” elimina- of this amendment characterized " practice whereby tion 'the the intoxicated enters common sum, injured plaintiff token into a settlement with thereafter ’ ” prosecuting energetically assists " owner, 'possible discouraging the tavern action collusion and tion inherent tempta- perjury too weak to resist obvious those dramshop act, original now which has been in the *5 v identity that where the not does know of the intoxicated there is no basis for concern such in that collusion with the plaintiff, prosecuting would assist the in the action the tavern owner. Putney Haskins, 181,

In 184; plaintiffs NW2d 729 allegedly with settled $40,000 in ex- change for a covenant not to sue. The formally was not dismissed. The judge trial found that there had no been collusion plaintiffs between the intoxi- cated although This Court held nevertheless that had been party continued aas nominal he not had been in the action. retained

The Court said person "should have been retained an inter- party litigation ested defendant until the was con- ways cluded. One the 'name and retain’ provision prevents fraud and collusion ensur- ing that the defendant have will a direct financial personally testifying, examining stake in wit- arguing nesses, and did not act in a negligent manner.”5 object

The Court reiterated of the reducing "name retain” recognized Legislature through corrected this ” Id., pp amendment.’ 108-109. 5Id., p 188.

The Court continued: limited, liability Once the defendant’s is fixed and he has no produce testimony tending prove

incentive to or witnesses "visibly question. that he was not intoxicated” on the date difficulty defendant have much more identifying, locating, obtaining testimony favorable from acquaintances the relevant friends defendant’s who him observed at [Id., p times. 188.] 437 Mich Opinion of the Court p "danger 189. Id., . . . fraud and collusion plaintiffs’ failure that in Salas "the The Court said and retain’ to 'name person knowledge their lack of

was due their entirely identity, be- a circumstance assailant’s (Empha- p Putney, supra, yond 190. their control.” added.) *6 sis Havlik, 350, 359; 343 NW2d 418 Mich In v Tebo (1984), in rule stated the Court held only Putney applied actions where be to would Putney into the date entered after settlement was Adverting Putney, it was observed to was decided. requiring allegedly "[o]nly by intoxicated and remain at risk could name to preventing provision’s purpose and fraud retain completely fulfilled.” collusion be Riley 198, Richards, 200; 404 In v "name Court held that this NW2d complied not with when retain” and "in return liability, plaintiff’s agreement in- to limit admits negligence, causation, waives toxication, and and objections privileges evidence, to while contin- and damages.” uing The on issue of to defend Putney that, "a defen- said Court adverted dant must ” stake,’ have 'direct financial "[although in this case that the defendant the settlement participation from the of the defendant differ dangers Putney, the same we believe present. There be no and fraud are can of collusion degrees provision.” Riley, supra, compliance 'name retain’ with the p 211.

hi majority concludes, on The of the Court different analyses, does that the name and retain Shays maintenance not bar continued this action.

A The Chief Justice and Justice Levin so conclude following for the reasons: Shays did indeed have measure control. They could have the mediation award and risked Shays mediation sanctions. When the accepted both the me- diation award did, indeed, eliminate the financial

stake of the extent, To that potential there is some risk of collusion opinion risk, however, and fraud. That in our is so attenuated [do that "we not] believe the same dangers present” (Riley, of collusion and fraud are 211) supra, p present Putney, Tebo, were Riley. attorneys ample for the tavern owners had develop

opportunity deposition a testimonial record largely protect against per- that would *7 jurious testimony provided by or false evidence the person. generally

A mediation made, award is after discovery completed, pursuant has been to a court- procedure6 plaintiffs ordered over which neither nor defendants have control. The award is made by persons appointed by disinterested or under the supervision particular If, of the court. in a a defendant tavern owner believes that dismissal of person poses the a risk of protective fraud, collusion and a seek avoiding implementation order of the award and dismissal of the

This Court has mandated mediation and has provided penalties of mediation. "Be-

6 MCR 2.403. Mich Court parame- Legislature not define the did cause duty 'retained,’ it of this is ters of 'named’ guidance provide within to definitional supra, p Riley, legislative intent.” boundaries Rigid application retain to the of name and 204. point significantly court- frustrate

where it would beyond is the intendment mediation ordered avoiding legislative fraud and collusion intent. proffered evidence, before

Absent dismissed, a risk is that there is if of fraud and collusion person entering justifying the is court dismissed pursuant protective order, to court- a dismissal not that should be ordered mediation is a dismissal deemed so far within control of provision. of the "name and retain” to be violative B Brickley Boyle so conclude for the Justices following reasons: weigh colleagues the considerations to be

Our requirement by the name and retain advanced advanced the mediation rules and those strike be that balance in favor of those facilitate Regarding persons position mediation. the same Shay’s there are several reasons that we do as not strike the same balance.

First, it is not clear superior that an interest preventing Second, fraud. we dis- collusion and agree potential risk of with the conclusion that the setting in mediation is so collusion and fraud ignored.7 that risk We attenuated agree should be process very media- undertaken panels danger collusion, diminishes the tion *8 potential however, the for collusion still exists. For p 401. Ante, alleged example, plaintiff per- intoxicated agree exchange allegedly son could that in for the person’s intoxicated assistance its trial dramshop plaintiff defendant, would not judgment execute the to its fullest ex- Riley Putney tent. This Court in clarified that possibility exists, where the for collusion and fraud legislative the Court will not subvert intent and beyond allow the to reach to the tavern owner. Stated exception otherwise, the creation of a blanket the name and retain under these circum- directly purpose stances would contravene the requirement.8 Finally, we see no conflict between the name Michigan and retain addressing Court Rules Compliance

mediation. with both is possible although admittedly difficult. To illus- plaintiff accepts trate, hand, on the one if the what she considers to be a fair mediation award with regard person, to the it is inevitable that her action comply defendant will be dismissed for failure to requirement. with the act’s name and retain On rejects hand, the other if either conditionally accepts9 a mediation award with re- 2.403(AX2) especially light requires This is true in of MCR which 1, 1986, showing good that after October why absent cause inappropriate, mediation is all tort actions must be mediated. If this adopt excepted dramshop plaintiffs were a rule that all from naming retaining in the tort action, exception essentially would devour the name and retain requirement. 2.403(L)(3)(b), acceptance option Under MCR the conditional is plaintiff only accept available to the if she chooses to the mediation regard opposing parties. Furthermore, plain award with to all if the conditionally accepts regard tiff the award with 2.403(L)(3)(c) person, acceptance MCR indicates that only opposing parties accept all effective if also the award. If some of opposing parties i.e., accept, the defendant, i.e., reject, purposes, others for sanction *9 394 Mich Opinion person solely gard to intoxicated to the dramshop preserve the her cause of action 2.403(0) must defendant, pay following that she mandates MCR not receive an award sanctions if she does greater percent than least trial at ten plaintiff Thus, have the does the mediation award. the person retaining option the of dramshop at action, but she so does her being MCR under risk of assessed sanctions the 2.403(0). facing Acknowledging the difficult dilemma adopt plaintiffs approach Shays, the the would we such Appeals by in Baker the of utilized Kalanj, App 565; 452 NW2d 818 v provide under for the waiver of sanctions 2.403(0) unless under similar circumstances MCR rejection the that was not court finds the the comply the of to with name result retain the need 436.22; MCL MSA 18.993.10 Baker, Court found no cause of action In the alleg- plaintiff dramshop action, the in a the edly sought sanctions. Appeals trial court’s denial affirmed the Court of language Despite the for sanctions. the motion 2.403(0), persuaded MCR the Baker Court was by plaintiff’s argument to that was forced the have subject to plaintiff parties difficult to ment, shop would mediation. rejection not because of the reject For motivated defendant an practical be where the who situation and example, is deemed to have combination was the mediation award. sanctions In be so low have because with award effect of this the name accepted. unfair regard under MCR name and plaintiff has award with with with gives advantage. there is no respect In rejected the rule other court can mediation court 2.403(0). retain Thus, dramshop retain respect settled is that considered words, with possibility provision. the name and provision. say with the it defendant regard the places with assurance that plaintiff rule, award to those Another the dramshop gives every retain plaintiff is deemed to inadequate, the dram- plaintiff’s incentive opposing example require- and is before in a Dissenting Griffin, J. reject acceptance the mediation award because an preclude satisfying dramshop would him from requirement act’s name and retain and thus would jeopardize his case defen- dant. provisions The sanction rules, of the mediation 2.403(0), applied

MCR are unfair when in circum- stances where the in a action is reject conditionally accept forced to either *10 regard mediation award with in- person solely preserve toxicated action its cause of Blindly defendant. assessing penalize plain- sanctions here would complying tiff for with the name and retain re- quirement deprives her of the full benefits of Thus, mediation. MCR we hold that sanctions under 2.403(0) are waived in these circumstances unless the court finds that was not comply the result of the need to with the name and retain 436.22; MCL MSA 18.993. approach purpose This ing serves the dual of facilitat- legislative underlying intent act’s name and retain and alleviates the plaintiff complies threat of sanctions when with requirement. Reversed and remanded to the circuit court. C.J., J., Cavanagh, Brickley, concurred JJ. Boyle, with Levin and (dissenting). J. For reasons set forth in Griffin, Spalo Enterprises, today, v A & G decided 406; Mich 471 NW2d 546 I I dissent. favor 2.403(0), adopted today; the amendment of MCR apply prospectively. however, I would it Riley, J., concurred J. Griffin, with part J., no Mallett, took in the decision this case.