Great Lakes Gas Transmission Ltd. Partnership v. Markel, Docket No. 192458

• Decision Date: 24 October 1997
• Docket Number: Docket No. 192458
• Citation: 573 N.W.2d 61,226 Mich.App. 127
• Parties: GREAT LAKES GAS TRANSMISSION LIMITED PARTNERSHIP, Plaintiff-Appellant, v. Thomas MARKEL and Catherine Markel, Defendants-Appellees, and Keith Burrows, Ruth M. Burrows, Alan R. Hazelton, Linda L. Hannon, Charlie F. Rodzos, Rita C. Rodzos, Marie Szyska, Richard M. Gritschuk, Rose Gritschuk, St. Clair Tunnell Company, Woodrow W. Penrod, Fern Penrod, First of America Bank, Walter Decker, First Security Savings Bank, Duane R. Young, Mary Jane Young, Rose Gralewski, Gerald Gralewski, PHH U.S. Mortgage Corporation, John Ankrapp, Judith K. Ankrapp, Brinker's Dairy Farm, Carl J. Brinker, Kelly Marie Brinker, Mary Ann Brinker, Paul C. Brinker, Edison Illuminating Company, Leon Vantroostenberghe, Donald J. Holzhauer, Rosemary Holzhauer, Marcel Vantroostenberghe, Nancy Vantroostenberghe, Leon V. Vantroostenberghe, Carol M. Vantroostenberghe, Raymond E. Govaere and Dorothy Govaere, Defendants.
• Court: Court of Appeal of Michigan — District of US

Page 61

573 N.W.2d 61

226 Mich.App. 127

GREAT LAKES GAS TRANSMISSION LIMITED PARTNERSHIP, Plaintiff-Appellant, v. Thomas MARKEL and Catherine Markel, Defendants-Appellees and Keith Burrows, Ruth M. Burrows, Alan R. Hazelton, Linda L Hannon, Charlie F. Rodzos, Rita C. Rodzos, Marie Szyska Richard M. Gritschuk, Rose Gritschuk, St. Clair Tunnell Company, Woodrow W. Penrod, Fern Penrod, First of America Bank, Walter Decker, First Security Savings Bank, Duane R Young, Mary Jane Young, Rose Gralewski, Gerald Gralewski, PHH U.S. Mortgage Corporation, John Ankrapp, Judith K. Ankrapp, Brinker's Dairy Farm, Carl J. Brinker, Kelly Marie Brinker, Mary Ann Brinker, Paul C. Brinker, Edison Illuminating Company, Leon Vantroostenberghe, Donald J. Holzhauer, Rosemary Holzhauer, Marcel Vantroostenberghe, Nancy Vantroostenberghe, Leon V. Vantroostenberghe, Carol M. Vantroostenberghe, Raymond E. Govaere and Dorothy Govaere, Defendants.

Docket No. 192458.

Court of Appeals of Michigan.

Submitted June 3, 1997, at Lansing.

Decided Oct. 24, 1997, at 9:00.

Released for Publication Jan. 22, 1998.

Mika, Meyers, Beckett & Jones, P.L.C. by Steven L. Dykema and Neil P. Jansen, Grand Rapids, for Great Lakes Gas Transmission Limited Partnership.

Durant & Associates, P.C. by Richard Durant, Detroit, for Thomas and Catherine Markel.

Before CORRIGAN, C.J., and MICHAEL J. KELLY and HOEKSTRA, JJ.

CORRIGAN, Chief Judge.

In this condemnation action, plaintiff appeals by right the order denying its motion for mediation sanctions. This case presents an issue of first impression regarding whether the mediation court rule, MCR 2.403, applies to condemnation proceedings. We hold that it does and therefore reverse and remand for further proceedings consistent with this opinion.

Plaintiff commenced this action under the Uniform Condemnation Procedures Act (UCPA), M.C.L. § 213.51 et seq.; M.S.A. § 8.265(1) et seq., to condemn property for a natural gas pipeline. Plaintiff deposited its estimate of just compensation for defendants Markels' property ($3,650) with the county treasurer's office. The parties eventually stipulated that plaintiff needed the Markels' property for the project. The trial court then referred the case to mediation. The Markels did not object. The mediation panel awarded the Markels $25,000 as just compensation. Plaintiff accepted the award, while the Markels rejected it. Plaintiff eventually settled with the other defendants, and the case proceeded to trial on the question of just compensation for the Markels' property. The jury returned a verdict in the amount of $8,000. Plaintiff then moved for mediation sanctions. The court denied the motion, reasoning that sanctions are not appropriate in condemnation actions.

Plaintiff contends that the trial court erred in denying its motion for mediation sanctions. We agree. We review the court's decision whether to grant mediation sanctions de novo because it involves a question of law, not a discretionary matter. St George Greek Orthodox Church v. Laupmanis Associates, PC, 204 Mich.App. 278, 282, 514 N.W.2d 516 (1994). MCR 2.403(O)(1) provides:

If a party has rejected an evaluation and the action proceeds to trial, that party must pay the opposing party's actual costs unless the verdict is more favorable to the rejecting party than the mediation evaluation. However, if the opposing party has also rejected the evaluation, a party is entitled to costs only if the verdict is more favorable to that party than the mediation evaluation.

This Court must apply the clear language of the court rule as written. Bruwer v. Oaks (On Remand), 218 Mich.App. 392, 397, 554 N.W.2d 345 (1996). Our Supreme Court's use of the word "must" indicates that the award of costs is mandatory, not discretionary.

MCR 2.403 identifies three narrow circumstances under which the court is not required to grant sanctions. ¹ First, in cases involving equitable relief, the court may decline to award costs if, considering both the equitable and monetary relief, the verdict is more favorable to the rejecting party than the mediation evaluation. MCR 2.403(O)(5). Second, the court may not award costs against a plaintiff in a dramshop action who rejects an award against the minor or alleged intoxicated person unless the court finds that the plaintiff was not motivated by the need to comply with the name and retain provision of the dramshop act. MCR 2.403(O)(9). Third, the court may, in the interest of justice, refuse to award costs in cases where the "verdict" is a judgment entered as a result of a ruling on a motion after the party rejected the mediation evaluation. MCR 2.403(O)(1). ² None of these exceptions govern this case.

This Court erroneously stated in Dean v. Tucker, 205 Mich.App. 547, 551, 517 N.W.2d 835 (1994), that the trial court generally may determine whether a party is entitled to mediation sanctions. ³ The statement is dicta because the issue in Dean was not whether mediation sanctions were proper, but whether the court or the jury should decide the question. Moreover, the Dean opinion erred in citing Michigan Basic Property Ins. Ass'n v. Hackert Furniture Distributing Co., 194 Mich.App. 230, 234, 486 N.W.2d 68 (1992), in support of the misstatement of law. In that case, this Court considered a challenge to the court's award of attorney fees and whether the plaintiff's rejection of the mediation evaluation necessitated the legal services. We therefore decline to follow this Court's dicta, and we review the court's decision de novo.

Defendants argue that a court should not award sanctions in a condemnation action because it infringes on a landowner's constitutional right to a jury determination of just compensation. The trial court adopted this reasoning, stating as follows:

Well, gentlemen, I frankly have a great deal of trouble with imposing mediation sanctions in a case of this--this type. The transmission company enjoys the awesome power of the state in these proceedings. And it is an absolute constitutional right, in my opinion, for the property owner to resist to the utmost the claims and the suit filed in behalf of the condemner, even though at times the defenses may appear inappropriate and perhaps without merit.

Obviously the jury in this case sided principally with the condemner, in view of the relatively low return as compared with the mediation figure, and the good-faith offer that was made to the Markels. Still I do not think that they should be penalized in terms of thousands upon thousands of dollars in attorney fees and costs that the condemner should bear in this kind of case.

* * * * * *

I will not award any mediation sanctions because of the nature of these proceedings.

The trial court erred in declining to grant mediation sanctions in this case.

The right to a jury trial in a condemnation action is granted by statute, M.C.L. § 213.62(1); M.S.A. § 8.265(12)(1), not by the United States Constitution or the Michigan Constitution of 1963. Backus v. Fort St. Union Depot Co., 169 U.S. 557, 568-569, 18 S.Ct. 445, 450, 42 L.Ed. 853 (1897); Hill v. State Hwy. Comm., 382 Mich. 398, 405-406, 170 N.W.2d 18 (1969); Chamberlin v. Detroit Edison Co., 14 Mich.App. 565, 573, 165 N.W.2d 845 (1968). Nevertheless, the core element of the right--to present a claim to a jury and have the jury determine issues of fact--is the same, no matter its origins. Compare Rhea v. Massey-Ferguson, Inc., 767 F.2d 266, 268 (C.A.6, 1985), with Rouse v. Gross, 357 Mich. 475, 481, 98 N.W.2d 562 (1959). Thus, while the Seventh Amendment does not confer a right to trial by jury in state-court civil cases, McKinstry v. Valley Obstetrics-Gynecology Clinic, PC, 428 Mich. 167, 183, 405 N.W.2d 88 (1987), we still look to federal precedent in determining whether the mediation rule infringes on a party's right to a jury trial. Walling v. Allstate Ins. Co., 183 Mich.App. 731, 737, 455 N.W.2d 736 (1990).

In Rhea, the Sixth Circuit Court of Appeals considered a constitutional challenge to former Eastern District of Michigan LCR 32.10(d), which provided that the court could refer a diversity case involving only monetary damages to mediation and a rejecting party would then be liable for actual costs unless the rejecting party improved its position by ten percent at trial. The court noted that the Seventh Amendment preserves the right to a jury trial in only its most fundamental elements, and the core of the right is the right to have a " 'jury...