Ballog v. Knight Newspapers, Inc.

• Decision Date: 03 February 1969
• Docket Number: No. 7,7
• Citation: 164 N.W.2d 19,381 Mich. 527
• Parties: Richard BALLOG, by Joseph Ballog, his next friend, Plaintiff and Appellant, v. KNIGHT NEWSPAPERS, INC., an Ohio corporation, Defendant and Appellee.
• Court: Michigan Supreme Court

Page 19

164 N.W.2d 19

381 Mich. 527

Richard BALLOG, by Joseph Ballog, his next friend, Plaintiff and Appellant, v. KNIGHT NEWSPAPERS, INC., an Ohio corporation, Defendant and Appellee.

No. 7.

Supreme Court of Michigan.

Feb. 3, 1969.

Zeff & Zeff by A. Robert Zeff, Detroit, for plaintiff and appellant.

Vandeveer, Doelle, Garzia, Tonkin & Kerr, by Lee R. Franklin, Detroit, for defendant and appellee.

Before the Entire Bench.

KELLY, Justice.

On August 31, 1960, Richard Ballog, a minor, who was riding a bicycle, suffered severe personal injuries when struck by When plaintiff's complaint was filed, February 3, 1965, the statute (C.L.S.1961, § 600.6013; Stat.Ann.1962 Rev. § 27A.6013) which controlled the right to interest on a money judgment read:

a 1600 pound roll of paper falling from a truck operated by defendant's agent, servant, or employee. Through his next friend he instituted suit in the Wayne circuit court on February 3, 1965. Defendant filed an answer denying liability and damages. These issues were contested before a jury with a verdict being returned in favor of plaintiff in the amount of $50,000, on December 1, 1965.

'Execution may be levied for interest on any money judgment recovered in a civil action, such interest to be calculated from the date of judgment at the rate of 5% Per year unless the judgment is rendered on a written instrument having a higher rate of interest in which case interest shall be computed at the rate specified in the instrument if such rate was legal at the time the instrument was executed. In no case shall the rate exceed 7% Per year.'

This statute was amended and given immediate effect on July 21, 1965, by P.A.1965, No. 240, the amended statute reading as follows:

'Execution may be levied for interest on any money judgment recovered in a civil action, such interest to be calculated from the date of Filing the complaint at the rate of 5% Per year unless the judgment is rendered on a written instrument having a higher rate of interest in which case interest shall be computed at the rate specified in the instrument if such rate was legal at the time the instrument was executed. In no case shall the rate exceed 7% Per year After the date judgment is entered. In the discretion of the judge, if a bona fide written offer of settlement in a civil action based on tort is made by the party against whom the judgment is subsequently rendered and the offer of settlement is substantially identical or substantially more favorable to the prevailing party than the judgment, then no interest shall be allowed beyond the date the written offer of settlement is made.' (Amended portion italicized)

Denying plaintiff's motion to award interest of 5% From the date of filing the complaint, as provided for in the amended statute, the trial court stated:

'This court does hereby determine that the amended statute in question be applied prospectively only as to complaints filed on and after July 21, 1965, the effective date of the amended act,'

and the judgment (filed April 29, 1966) read:

'IT IS ORDERED AND ADJUDGED that the said plaintiff recover of the defendant the sum of $50,000 as and for damages herein together with costs of $697.50.

'IT IS FURTHER ORDERED AND ADJUDGED pursuant to a written opinion of this court of April 22, 1966 which is incorporated herein by reference that no interest be awarded.'

In affirming the trial court, the Court of Appeals ¹ relied upon their decision in Swift v. Dodson (1967), 6 Mich.App. 480, 484, 149 N.W.2d 476, 478, wherein they said:

'We view the amendment changing the date for the computation of interest as either creating a new right or enlarging one previously granted in derogation of the common law and accord it prospective application only since no contrary legislative intent appears from the statute.'

Quoting from appellant's brief:

'In the present case, certainly the legislature knew the difference between 'In the case of Wilson v. Doehler-Jarvis, 358 Mich. 510, at page 515 (100 N.W.2d 226), the Court said:

a judgment, a complaint, and a cause of action. It would have been a simple matter to word the amendment so that it applied only to causes of action arising subsequently to actions to which complaints were subsequently filed; or to actions commenced subsequently. The legislature chose to make the amendment applicable to Judgments and not only was this within their power but there were sound reasons for their decision. * * *

"In the Fowler Case (Fowler v. Muskegon County, 340 Mich. 522, 65 N.W.2d 801) we said that interest is purely statutory, yet the fact is that we have consistently allowed interest in many cases in which no express statute could be invoked. * * *'

'And in the very recent case of Currie v. Fiting, 375 Mich. 440 (134 N.W.2d 611), the court awarded interest from the date of death on the damages subsequently determined by the jury. In so doing the court commented on the justice of such an award. Justice should not be limited to future causes of action. We believe the cases quoted and cited establish a trend or policy in Michigan which was carried out by the legislature, and when the legislature spoke only of judgments and gave the statutes immediate effect we believe it could only have intended that such statutes would apply to all judgments entered thereafter.'

Quoting appellee:

'The trial court in our case correctly held that the amended statute 'covers substantive rights and not procedural rights, and should be applied prospectively.' * * *

'The right to interest generally, in a tort claim is a statutory, not a common-law right. Prior to the amendment here before the Court, it was not available until after a judgment was rendered. Thus the statutory change created a right in the plaintiff and a liability in the defendant which did not exist prior to July 21, 1965.

'However, this was not the full extent of the change wrought by the amendment. It created another right and another liability. It allows the defendant to avoid the new penalty of interest from the date of filing the complaint by making a bona fide written offer of settlement prior to the judgment which is 'substantially identical' to the subsequent judgment. At first blush this appears to mitigate the potential penalty applied by the first change. However, further scrutiny shows that this is not the complete answer.

'Where a jury trial is involved, this statutory pressure to make a settlement offer can dilute the defendant's constitutional right to have his liability determined by a jury. Prior to the amendment, settlements were encouraged by court and Court Rule (GCR 1963, 519). However, the failure to make a settlement offer inherent in a bona fide denial of liability carried with it no greater penalty than the damages determined to be the monetary compensation due by the jury when it found a breach of a legal duty chargeable to defendant. Prompt satisfaction of the judgment entered on the jury's verdict constituted full satisfaction of the liability. Now, a defendant whose liability has yet to be decided, must, as a result of this statute, relinquish his right to a jury trial if he wishes to avoid the new penalty of interest from the day of filing the complaint in Any civil action where liability is in dispute. The settlement offer must be generous in order to 'second guess' the jury and thus to preclude payment of this interest. To thus circumscribe defendant's right to a jury trial and grant every plaintiff with an unliquidated claim a right to interest from the date of the

filing of his complaint is to deal with substantive rights.'

I. DID THE AMENDMENT RELATE TO REMEDIES OR MODES OF PROCEDURE, OR DID IT RELATE TO SUBSTANTIVE RIGHTS?

In Hansen-Snyder Co. v. General Motors Corp. (1963), 371 Mich. 480, 124 N.W.2d 286, we held (syllabus 1):

'Statutes related to remedies or modes of procedure which do not create new or take away vested rights, but only operate in furtherance of a remedy or confirmation of rights already existing will, In the absence of language clearly showing a contrary intention, be held to operate retrospectively and apply to all actions accrued, pending or future, there being no vested right to keep a statutory procedural law unchanged and free from amendment.' (Emphasis ours)

An analogy is presented in the allowance of costs and attorney fees. Under the heading 'Statute relating to costs or attorneys' fees at commencement or at termination of action as controlling,' 96 A.L.R. 1428, we find the following:

'It is well settled that the question whether costs may be allowed in an action or suit, as well as the determination of the method of their computation, is governed by the law as it exists at the time of the judgment which terminates the action or suit, rather than by the law as it existed at the time when the action or suit was commenced,--where there is no provision in connection with the new legislation which clearly saves or excepts therefrom costs in pending actions.'

The law in existence at the time costs are determined has, for a long period of time, been the rule in Michigan, as evidenced by Sawyer v. Studley (1843), Walker's Chancery Reports, 153, 154, where it is stated:

'It is the termination of the suit that entitles one party to recover costs against the other, and, consequently, the law then in existence, is the rule by which they are to be ascertained.'

The question before us in this appeal was recently presented and decided by the Supreme Court of Rhode Island in Foster v. Quigley (April 4, 1962), 94 R.I. 217, 179 A.2d 494. Here, subsequent to the commencement of the action, the legislature changed the interest statute so as to provide that interest should run from the commencement of the action. The trial court refused to order the addition to the judgment of interest from the commencement of action, and in reversing the trial court, the Supreme Court stated (pp. 218, 219, 179 A.2d p. 495):

'The plaintiff...