Cosby v. Pool
| Decision Date | 26 October 1971 |
| Docket Number | No. 3,Docket No. 11096,3 |
| Citation | 36 Mich.App. 571,194 N.W.2d 142 |
| Parties | Kenneth W. COSBY and Cecilia V. Cosby, Plaintiffs-Appellants, v. John D. POOL and St. Paul Insurance Company, Defendants-Appellees |
| Court | Court of Appeal of Michigan — District of US |
Sherman H. Cone, Cholette, Perkins & Buchanan, Grand Rapids, for plaintiffs-appellants.
John D. Peacock, Plunkett, Cooney, Rutt & Peacock, Detroit, for defendants-appellees.
Before FITZGERALD, P.J., and BRONSON and T. M. BURNS, JJ.
Defendants stipulate that the facts presented in plaintiffs' brief are accurate except for a few exceptions. This Court therefore adopts those facts, taking notice of the exceptions and clarifications stated in defendants' brief.
A jury awarded plaintiffs a negligence judgment against John D. Pool in the amount of $200,000 on behalf of plaintiff Kenneth W. Cosby and in the amount of $6,000 on behalf of plaintiff Cecilia V. Cosby, his wife, with the judgment further providing for interest in the total sum of $33,333 on behalf of Mr. Cosby and $1,000 on behalf of Mrs. Cosby. This represented interest at the rate of 5% Per year from the date that plaintiffs filed their complaint until the day of judgment as provided by the provisions of M.C.L.A. § 600.6013 (Stat.Ann.1971 Cum.Supp. § 27A.6013). This judgment was settled between the parties except for the matter of interest from the date of the filing of the complaint to the date of judgment.
St. Paul Insurance Company carried a policy of insurance covering the liability of defendant Pool. Among the provisions of the policy was a section entitled 'Special Conditions'. Paragraph 2(b) of that section provides, in pertinent part, as follows:
'(b) pay in addition to the applicable limits of the insuring Agreement (1) all costs taxed against the Insured in any legal proceeding defended by the Company according to the foregoing paragraph, And interest accruing on verdict or after judgment up to the date of payment or tender to the judgment creditor, or his attorney of record, by the Company upon the Company's share of such verdict or judgment rendered in connection therewith, (2) all premium charges on release of attachment or expenses incurred by the Company for investigation, negotiation, and defense; and * * *.' (Emphasis supplied.)
This insurance contract, issued in 1963, complied with the statute in effect at that time. The statute was, however, later amended by M.C.L.A. § 600.6013 (P.A.1965, No. 240).
Following settlement of the judgment, except for the interest provided for therein from the date of the filing of plaintiffs' complaint to the date of judgment, supplementary proceedings were instituted by plaintiffs against St. Paul Insurance Company seekign to recover the amount of said interest from St. Paul Insurance Company. St. Paul denied liability therefor and plaintiffs filed a motion for summary judgment with respect thereto, it being the contention of plaintiffs that the St. Paul Insurance Company under the specific provisions of the above noted portion of the insurance policy, was liable to plaintiffs for said interest as a matter of law since the interest represented sums which accrued on the verdicts pursuant to statute.
The trial court entered a written opinion holding that although there was little doubt from the wording set forth in section 2 of the policy that St. Paul Insurance Company would be liable for interest under normal conditions, that, nevertheless, they could not be held liable for interest accruing on the judgment from the date of the filing of the complaint to the date of the judgment because the policy in question was made effective on March 15, 1963, when the applicable statute relating to interest allowed interest to be computed only from the time of entry of judgment. To so hold St. Paul Insurance Company liable would be in direct violation not only of the provisions of Article 1, § 10, of the United States Constitution, which provides that 'no State shall * * * pass any * * * Law impairing the Obligation of Contracts', but also Article 1, § 10, of the 1963 Michigan Constitution, which provides that 'no bill of attainder, Ex post facto law or law impairing the obligation of contract shall be enacted.' The reasoning of the court was that the statute relating to interest on judgments, as written on the date the policy was issued, became an integral part of the contract, fixing forever defendant St. Paul's liability for interest under its policy. It was therefore an unconstitutional impairment of contract rights to hold St. Paul Insurance Company liable for the greater interest allowed as the result of amendments made to the interest statute after the policy was issued.
Pursuant to the court's opinion, summary judgment was entered in favor of St. Paul Insurance Company on January 14, 1971.
On appeal, the sole issue to be determined is whether the enactment of an amendment to M.C.L.A. § 600.6013 (Stat.Ann.1971 Cum.Supp. 27A.6013), which provides interest to be calculated from 'the date of filing the complaint' becomes a part of an insurance contract which was signed prior to the amendment. If so, it effectively amends the contract clause which provides that the insurer will pay 'interest accruing on verdict or after judgment up to the date of payment'.
Plaintiffs contend that the statute is a remedial statute which, when amended, is deemed retroactive and becomes a part of an insurance contract, thereby amending the insurance clause.
Defendant insurance company does not deny that plaintiffs are entitled to interest from the date of the filing of the complaint until the date of judgment. It simply disclaims responsibility for this sum, contending that it is only responsible for paying interest on the judgment as per its contractual agreement and that laws written subsequent to the contractual agreement cannot be incorporated into the contract without violating the constitutions of Michigan and of the United States.
It was recently determined that the statute in issue, P.A.1961, No. 236, § 600.6013, P.A.1965, No. 240, is an amendment which relates to remedies or modes of procedure. Ballog v. Knight Newspapers, Inc. (1969), 381 Mich. 527, 164 N.W.2d 19.
In Hansen-Snyder Company v. General Motors Corporation (1963), 371 Mich. 480, 124 N.W.2d 286, it was 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...
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