DESSART v. BURAK

RICHARD ALLEN GRIFFIN, P.J.

Plaintiffs appeal as of right from an order entered by the trial court denying their motion for mediation sanctions under MCR 2.403(O). We affirm. In so doing, we hold that in adjusting a verdict for purposes of MCR 2.403(O)(3), the term "assessable costs" set forth therein includes only those costs taxable in a civil action incurred from the filing of the complaint to the date of mediation; "assessable costs" do not encompass postmediation costs or attorney fees.

I

This is a third-party automobile negligence action arising from a collision between vehicles driven by plaintiff William Dessart and defendant Lynn Burak that left Dessart with a neck injury and associated shoulder and arm pain. In 1999, a mediation panel evaluated the case at $120,000. Plaintiffs, husband and wife, accepted the evaluation, but defendants1 rejected it. The case then proceeded to trial, and the jury awarded plaintiffs past noneconomic damages totaling $100,000.2

On November 7, 2000, after entry of judgment, plaintiffs filed a motion for mediation sanctions under MCR 2.403.3 That rule provides in pertinent part:

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(6) For the purpose of this rule, actual costs are

In the instant case, the parties agree that plaintiffs are entitled to mediation sanctions pursuant to MCR 2.403(O) if the adjusted verdict exceeds $108,000. The parties disagree, however, regarding the computation of the adjusted verdict under MCR 2.403(O)(3); specifically, the scope of "assessable costs" is contested in this case.

II

Relying on Beach v. State Farm Mut. Automobile Ins. Co., 216 Mich.App. 612, 550 N.W.2d 580 (1996), plaintiffs argued to the trial court that "assessable costs" should include statutory taxable costs from the date the complaint was filed through verdict and reasonable attorney fees from the date of mediation through verdict necessitated by defendants' rejection of the mediation award. Plaintiffs in essence contended that the terms "assessable costs" and "actual costs" contained in MCR 2.403(O) are synonymous. Defendants, on the other hand, maintained that under the plain language of MCR 2.403(O)(3), "assessable costs" should include only those taxable costs incurred from the date the complaint was filed through the time of the mediation evaluation.4 The trial court agreed with defendants and declined to follow Beach, supra. The court determined that "assessable costs" for purposes of adjusting the verdict pursuant to MCR 2.403(O)(3) include only taxable costs from the date the complaint is filed to the date of the mediation award, as well as interest for the same period. Because this computation resulted in an adjusted verdict less than $108,000, the trial court denied plaintiffs' request for mediation sanctions.

On appeal, plaintiffs reiterate their argument made to the trial court and contend that in light of this Court's decisions in Beach, supra, and Grow v. W.A. Thomas Co., 236 Mich.App. 696, 718-719, 601 N.W.2d 426 (1999), the trial court erred as a matter of law in refusing to award mediation sanctions. We disagree.

III

We review de novo a trial court's decision to grant or deny a motion for mediation sanctions. Cheron, Inc. v. Don Jones, Inc., 244 Mich.App. 212, 218, 625 N.W.2d 93 (2000); Meyer v. Center Line, 242 Mich.App. 560, 577, 619 N.W.2d 182 (2000). Further, interpretation of a court rule, like matters of statutory interpretation, presents a question of law that is reviewed de novo on appeal. Marketos v. American Employers Ins. Co., 465 Mich. 407, 413, 633 N.W.2d 371 (2001).

In Beach, supra at 626, 550 N.W.2d 580, this Court vacated a mediation award in light of other errors in determining taxable costs and interest and remanded the case with the following instructions to the trial court when recalculating the adjusted verdict for purposes of MCR 2.403(O):

In Grow, supra at 718-719, 601 N.W.2d 426, this Court expressed its approval of a similar calculation, taking into account the assessable costs for the entire action rather than to the date of the mediation evaluation:

In light of our holding, we find moot defendant's alternative argument that, pursuant to MCR 2.403(O)(3), the "adjusted verdict" was more favorable to defendants than the mediation evaluation. We note briefly, however, that the trial court properly interpreted this subrule, and added to the verdict all assessable costs, including attorney fees, rather than only those costs for the period between the filing of the complaint and the date of the mediation evaluation. See Dale v. Beta-C, Inc., 227 Mich.App. 57, 69, 574 N.W.2d 697 (1997) ("[I]t is a general rule of statutory, as well as grammatical, construction that a modifying clause is confined to the last antecedent unless a contrary intention appears."). [Emphasis added.]

We acknowledge that in both Beach and Grow, this Court construed "assessable costs" in a broad manner to include postmediation costs and attorney fees. However, we decline to adopt the rationale of these cases for several reasons. First, in both cases, the statements regarding assessable costs are merely obiter dicta5 and, therefore, do not constitute binding precedent under MCR 7.215(I)(1). The Grow Court noted that this "alternative argument" was moot in light of its disposition of other issues in the case. Likewise, the Beach Court's conclusion in this regard was based on certain contingencies ("[a]ssuming that plaintiff raised the same issues at mediation and at trial.... "[Beach, supra at 626, 550 N.W.2d 580]) and was not essential to the disposition of the case. "It is a well settled rule that obiter dicta lacks the force of an adjudication and is not binding under the principle of stare decisis." People v. Borchard-Ruhland, 460 Mich. 278, 286, n. 4, 597 N.W.2d 1 (1999). See also Edelberg v. Leco Corp., 236 Mich.App. 177, 183, 599 N.W.2d 785 (1999).

Further, Beach can be distinguished from the present action because it entailed a first-party no-fault insurance claim in which attorney fees can, under certain circumstances, be an element of a plaintiff's damages. See Beach, supra at 628, 550 N.W.2d 580; MCL 500.3148(1). Thus, the propriety of attorney fees in the context of a verdict adjustment is unique to Beach; in assessing the mediation evaluation, a court in such circumstances could examine whether an attorney fee was an intrinsic part of the proposed worth of the case.

In any event, we ultimately conclude that plaintiffs' interpretation of "assessable costs," based on the cited portions of the Beach and Grow cases, contradicts the underlying purpose of the court rule. "The rules governing the interpretation of statutes apply with equal force to the interpretation of court rules." Yudashkin v. Holden, 247 Mich.App. 642, 649, 637 N.W.2d 257 (2001). "A court rule should be construed in accordance with the ordinary and approved usage of the language." St. George Greek Orthodox Church v. Laupmanis Associates, PC, 204 Mich.App. 278, 282, 514 N.W.2d 516 (1994). "It should also be construed in light of its purpose and the object to be accomplished by its operation." Id.

At the time of the mediation evaluation in this case, MCR 2.403(O)(3) provided, in pertinent part, that a verdict "must be adjusted by adding to it assessable costs and interest on the amount of the verdict from the filing of the complaint to the date of the mediation evaluation." (Emphasis added.)6 Although the Grow Court accurately noted the well-established principle of statutory construction that a modifying clause or phrase will be construed to modify only the last antecedent unless a contrary intention appears,7 and thereby interpreted the phrase "from the filing of the complaint to the date of the mediation evaluation" as modifying only "interest on the amount of the verdict" and not "assessable costs," we conclude that such a reading of the court rule skews its dominant purpose.

MCR 2.403(O)(3) does not expressly or impliedly allow for the inclusion of postmediation costs or any attorney fees, for reasons that are well founded. The overall purpose of the mediation rule is to encourage settlement, deter protracted litigation, and expedite and simplify the final settlement of cases. Neal v. Neal, 219 Mich.App. 490, 493, 557 N.W.2d 133 (1996); Detroit v. Kallow Corp., 195 Mich.App. 227, 230, 489 N.W.2d 500 (1992). The sanction provision of the rule places the burden of litigation costs on the party who demands a trial by rejecting a proposed mediation award. Id. However, as noted above, the purpose of the mediation sanction provisions is not to act as a punitive measure but rather is intended to foster settlement. In order to do so, a trial court must review the mediation evaluation in light of the circumstances that existed at the time of the mediation itself. If, as plaintiffs propose, postmediation litigation costs and attorney fees are included in the amount of the adjusted verdict, the risk of going to trial would be minimized, thereby undermining the court rule's purpose of discouraging litigation.

Plaintiffs' suggested interpretation of MCR 2.403(O)(3) defies its underpinnings. As authors Dean and Longhofer note in their commentary in Michigan Court Rules Practice (4th ed.), 2001 pocket part, § 2403.20, p. 34, the Grow Court's interpretation of MCR 2.403(O)(3)

We therefore hold that in determining the propriety of sanctions pursuant to MCR 2.403(O)(3), if a party has rejected a mediation award and the case proceeds to trial, the verdict must be adjusted by adding to it "assessable costs," not "actual costs," incurred from the filing of the action to the date of the mediation evaluation, as well as interest for the same period. Only after this calculation is made and it is determined that sanctions are appropriate under the ten percent calculation of subrule O(3) is the payment of "actual costs," as defined in subrule O(6), implicated.

Applying these principles to the present case, we conclude that the trial court did not err in denying plaintiffs' motion for mediation sanctions. In adjusting the verdict, the court calculated "assessable costs" and interest for the appropriate period— from the filing of the action to the date of the mediation evaluation. Because plaintiffs have not reached the threshold level of an adjusted verdict of $108,000, they are not entitled to sanctions under MCR 2.403(O)(3).

Affirmed.