Giannetti Bros. Const. Co., Inc. v. City of Pontiac

• Decision Date: 27 October 1986
• Docket Number: Docket No. 82782
• Citation: 152 Mich.App. 648,394 N.W.2d 59
• Parties: GIANNETTI BROTHERS CONSTRUCTION COMPANY, INC., Plaintiff-Appellee, v. CITY OF PONTIAC, Defendant-Appellant.
• Court: Court of Appeal of Michigan — District of US

Page 59

394 N.W.2d 59

152 Mich.App. 648

GIANNETTI BROTHERS CONSTRUCTION COMPANY, INC., Plaintiff-Appellee, v. CITY OF PONTIAC, Defendant-Appellant.

Docket No. 82782.

Court of Appeals of Michigan.

Submitted Oct. 9, 1985.

Decided June 17, 1986.

Released for Publication Oct. 16, 1986.

Leave to Appeal Denied Oct. 27, 1986.

Hyman, Gurwin, Nachman, Friedman & Winkelman by Abba I. Friedman and Eric J. Flessland, Southfield, for plaintiff-appellee.

Simon, Deitch, Tucker, Weisman, Friedman and Trogan by Donald F. Tucker and Richard T. Urbis, Southfield, for defendant-appellant.

Before J.H. GILLIS, P.J., and CYNAR and EVANS ^*, JJ.

PER CURIAM.

Defendant, City of Pontiac, appeals as of right from the trial court's denial of its motion for actual costs, including attorney fees, and denial of its motion for reconsideration and clarification. We reverse and remand for a determination of costs and attorney fees.

I

The underlying action was commenced in 1977 and involved a complaint for contract nonperformance. The case was submitted to mediation on December 19, 1980. Both parties rejected the mediation award of $350,000 to plaintiff. Following a bench trial, the trial court found no cause of action for plaintiff, Giannetti Brothers Construction Company, Inc., and entered judgment in defendant's favor on October 13, 1982. The judgment also awarded defendant "costs and attorney fees as provided by law".

Plaintiff appealed to this Court on November 5, 1982. This Court affirmed in an unpublished per curiam opinion on April 5, 1984. Defendant then began what it has described as the "arduous task of gathering the substantial body of data necessary to support and substantiate" its request for actual costs, pursuant to GCR 1963, 316.7(b)(3).

On May 30, 1984, defendant moved for approval of its bill of costs, totaling $101,340.04, some 19 months after the judgment and 55 days after this Court's opinion. Defendant amended its bill of costs on June 22, 1984, to request a total of $125,333.29. A controversy ensued. Plaintiff, insisting that defendant's motion was untimely, requested that the trial court bifurcate the proceeding into a hearing on the issue of defendant's entitlement to costs and an evidentiary hearing on the amount.

At arguments held on December 5, 1984, plaintiff urged that defendant had failed to follow the procedure for taxing costs specified in GCR 1963, 526.10(2). Specifically, defendant did not present its bill of costs within 30 days of the initial judgment as required by that rule. Plaintiff concluded that defendant had thereby waived any right to mediation sanctions. The trial court, agreeing with plaintiff that 30 days is the time limit for presenting a bill of costs, denied defendant's motion to approve costs as being untimely.

Defendant moved on January 4, 1985, for reconsideration and clarification. Defendant requested that the trial court clarify whether it was referring to the 19-month interval between the initial judgment and defendant's motion for costs, or the 55-day interval between this Court's opinion and defendant's motion, when it denied the motion as untimely. Defense counsel also asked if the court was referring to GCR 1963, 526.10(2). The court denied defendant's motion for reconsideration and clarification, ruling only that a 30-day time period for filing a bill of costs was reasonable.

II

Defendant's first claim on appeal is that GCR 1963, 526.10 does not govern the imposition of actual costs after a mediation evaluation has been rejected. Plaintiff counters that the 30-day time limit specified in GCR 1963, 526.10 applies where costs are imposed after a mediation evaluation has been rejected.

Resolution of this issue requires us to determine whether the time limit for imposition of actual costs awarded pursuant to GCR 1963, 316.8 ought to be governed by GCR 1963, 526.10(2). At the outset of our analysis, we review the pertinent statutes and court rules governing costs. Chapter 24 of the Revised Judicature Act (RJA) governs costs. M.C.L. Sec. 600.2401; M.S.A. Sec. 27A.2401 provides that the Supreme Court must promulgate rules to regulate the taxation of costs:

"Except as otherwise provided by statute, the supreme court shall by rule regulate the taxation of costs. When costs are allowed in any action or proceeding in the supreme court, the circuit court or the district court the items and amount thereof shall be governed by this chapter except as otherwise provided in this act."

M.C.L. Sec. 600.2405; M.S.A. Sec. 27A.2405 specifies the items taxable as costs, and provides in pertinent part:

"The following items may be taxed and awarded as costs unless otherwise directed:

* * *

* * *

"(2) Matters specially made taxable elsewhere in the statutes or rules."

At the time of events pertinent to the present dispute, when both parties rejected a mediation evaluation, as here, actual costs were provided by GCR 1963, 316.7(b)(3):

"(b) If any party rejects the panel's evaluation, the case proceeds to trial in the normal fashion.

* * *

* * *

"(3) If both parties reject the panel's evaluation and the amount of the verdict, when interest on the amount and assessable costs from the date of the filing of the complaint to the date of the mediation evaluation are added, is no more than 10 percent greater or less than the panel's evaluation, each party is responsible for his own costs from the mediation date. If the verdict is in an amount which, when interest on the amount and assessable costs from the date of filing of the complaint to the date of the mediation evaluation are added, is more than 10 percent greater than the panel's evaluation, the defendant must pay actual costs. If the verdict is in an amount which, when interest and assessable costs from the date of filing the complaint to the date of the mediation evaluation are added, is more than 10 percent below the panel's evaluation, the plaintiff must pay actual costs."

Actual costs were defined in GCR 1963, 316.8:

"Actual costs include those costs taxable in any civil action and a reasonable attorney fee as determined by the trial judge for services necessitated by the rejection of the panel's evaluation."

Here, the question is whether imposition of actual costs after both parties have rejected a mediation evaluation was governed by GCR 1963, 526.10, which provided:

"(2) When costs are to be taxed by the clerk the party entitled to costs shall, within 30 days after the judgment is signed, or within 30 days after the entry of an order denying a motion for new trial or to set aside the judgment, present to the clerk a bill of costs certified or verified as required by subrule 526.11. The clerk shall, within 10 days thereafter, examine the bill and allow only those items which appear to be correct and shall strike out all charges for services which in his judgment were not necessary to be performed. Failure to present a bill of costs within the time prescribed shall constitute a waiver of the right to such costs."

This is an issue of first impression in Michigan. We hold that the 30-day time limit found in GCR 1963, 526.10(2) should not be applied to actual costs awarded under the mediation rules.

Interpretations of the court rules governing costs are not always clear and are often seemingly contradictory. ¹ Defendant relies primarily on Cope v. St. Clair, 28 Mich.App. 380, 184 N.W.2d 464 (1970), a condemnation case. Plaintiffs moved for taxable costs, attorney fees, expert witness fees, photographer fees and interest, but defendant's motion to dismiss pursuant to GCR 1963, 526.10(2) was granted on the ground that it was not timely filed. The Court cited DeCorte v. New York Central R. Co., 377 Mich. 317, 140 N.W.2d 479 (1966), for the proposition that costs not filed within the 30-day period are waived unless they are not the sort of costs which have historically and statutorily been taxed by the court clerk. Because expert witness fees require judicial determination of the amount, the Cope Court held that the time limits of GCR 1963, 526.10(2) do not apply. 28 Mich.App. 382, 184 N.W.2d 464.

In Oscoda Chapter of PBB Action Committee, Inc. v. Dep't of Natural Resources, 115 Mich.App. 356, 361-362, 320 N.W.2d 376 (1982), lv. den. 417 Mich. 905, 341 N.W.2d 776 (1983), this Court again faced the claim that plaintiffs waived the right to apportionment of costs because their motion for such apportionment was not brought within the time limits of GCR 1963, 526.10(2). The Court, in harmony with Cope v. St. Clair, supra, noted that the subrule did not apply to costs which are not typically apportioned by the court clerk.

We think the reasoning employed by the Cope Court applies here. The 30-day strictures of GCR 1963, 526.10(2) should not apply to actual costs awarded under the mediation rules. Actual costs include reasonable attorney fees, GCR 1963, 316.8, which are not typically determined by a court clerk. Reasonable attorney fees, where authorized by statute or court rule, are determined by judicial application of the guidelines set forth in Crawley v. Schick, 48 Mich.App. 728, 737, 211 N.W.2d 217 (1973). See Petterman v. Haverhill Farms, 125 Mich.App. 30, 335 N.W.2d 710 (1983), Johnston v. Detroit Hoist & Crane Co., 142 Mich.App. 597, 370 N.W.2d 1 (1985), and Burke v. Angies, Inc., 143 Mich.App. 683, 373 N.W.2d 187 (1985), lv. den. 422 Mich. 966 (1985), where the Crawley factors were applied in the context of GCR 1963, 316.8. While the 30-day time limit is sensible in a situation involving simple calculation of statutory costs, actual costs involved in mediation differ from simple court costs because they involve calculation of a reasonable attorney fee.

In conclusion, we hold that, because the reasonable attorney fee portion of actual costs awarded under GCR 1963, 316.8 often requires judicial determination of the amount, the 30-day time limit in GCR 1963, 526.10(2) does not apply. Plaintiff's assertion that de...