Matich v. Modern Research Corp.
Decision Date | 07 March 1988 |
Docket Number | No. 77702,77702 |
Citation | 420 N.W.2d 67,430 Mich. 1 |
Parties | Steven P. MATICH, Plaintiff-Appellee, Cross Appellant and Cross Appellee, v. MODERN RESEARCH CORPORATION, A Michigan Corporation, Not Participating, Canadian Universal Insurance Company, Ltd., Defendant-Appellee, Cross Appellant and Cross Appellee, and Insurance Company of North America, Defendant-Appellant and Cross Appellee. 430 Mich. 1, 420 N.W.2d 67 |
Court | Michigan Supreme Court |
Zeff and Zeff & Materna by Michael T. Materna, Gromek, Bendure & Thomas by Nancy L. Bosh, Neal C. Villhauer, Detroit, for plaintiff-appellee, cross-appellant and cross appellee.
Rutledge, Manion, Rabaut, Terry & Thomas, P.C. by Christopher L. Terry, Detroit, for defendant-appellee, cross appellee and cross appellant.
James N. Martin, Stuart A. Fraser, Mt. Clemens, for defendant-appellant, Ins. Co. of North America.
MacArthur, Cheatham, Acker & Smith, P.C. by James G. Gross, Detroit, for amici curiae.
In the products liability action which underlies this appeal the jury's award substantially exceeded the combined policy limits of the defendant's primary and excess liability insurance carriers. The issues now before us relate solely to liability for interest on the judgment. We are required to examine the extent of the obligation of, and the relative responsibilities as between, the two insurance carriers for prejudgment and postjudgment interest. Our review affirms the decision of the Court of Appeals.
With supplementation as provided in the course of our discussion, we adopt the statement of facts set forth in the opinion of the Court of Appeals:
146 Mich.App. 813, 817-818, 381 N.W.2d 834 (1985).
Affirming in part and reversing in part, the Court of Appeals determined that each carrier was responsible for prejudgment interest only on its policy limits; that the obligation of INA, the excess carrier, for prejudgment interest was not relieved because Canadian, the primary carrier, controlled the underlying litigation; and that, in addition to postjudgment interest on its policy limits, each carrier was liable on a pro-rata basis for postjudgment interest on the amount by which the judgment exceeded the combined policy limits. We granted leave to appeal. 425 Mich. 871 (1986).
Absent a statutory or contractual obligation, it was the rule at common law that a judgment did not bear interest. 2 In Michigan a statutory basis for allowing postjudgment interest has been in place for many years; 3 however, there was no statutory provision for prejudgment interest until 1965. Since then, interest on a money judgment has been allowed by statute, M.C.L. Sec. 600.6013; M.S.A. Sec. 27A.6013, "from the date of filing the complaint" to "the date of satisfaction of the judgment." 4 See Ballog v. Knight Newspapers, Inc., 381 Mich. 527, 164 N.W.2d 19 (1969).
Although a prevailing party is entitled by statute to judgment interest, the question "who ultimately pays?" has stirred considerable controversy in situations where the defendant has liability insurance, but the insurance contract does not expressly place responsibility for interest upon the insurer, or where the judgment amount plus interest exceeds the policy limits. 5
We are required in this case to address questions of first impression including a dispute between the primary and excess insurance carriers concerning prejudgment interest. Purchase by an insured of two insurance policies establishes contractual rights and obligations as between the insured and each of the insurers. However, there being no privity of contract, such a purchase does not create a contractual relationship between the two carriers.
In dealing with differences which inevitably arise between primary and excess carriers, courts have been forced to look beyond contract law to public policy considerations and principles of equity to determine respective rights and liabilities as between two carriers. 6 At the same time, a court must harmonize the relationship between the two insurers with the responsibilities which each insurer owes to the insured.
As one commentator has counseled:
8A Appleman, Insurance Law & Practice, Sec. 4894.25, p. 103.
In the instant case the tripartite relationship which otherwise would exist is affected by the fact that the insured (Modern), the primary carrier (Canadian), and the excess carrier (INA) joined with plaintiff in approving and subscribing to a consent judgment which was entered by the trial court. The consent judgment served to resolve all differences among the parties except those relating to plaintiff's entitlement to judgment interest.
Each of the courts below based its decision in part upon the construction of language in the consent judgment, which reads in pertinent part:
"IT IS FURTHER HEREBY ORDERED that Canadian Universal Insurance Company, Ltd., and Insurance Company of North America, shall pay to the said Steven P. Matich, and his attorneys, Zeff and Zeff, interest owed if any, on the amount of their policy limits from the date of filing of the Complaint in this action until the date of Judgment, along with interest owed, if any, on the entire amount of Judgment ($2,250,000.00) from the date of entry of said Judgment until the date of payment of said insurer's policy limits, under the terms of its insurance policy or otherwise to be paid by such insurance carrier under the laws of the State of Michigan; it being ordered and understood between the parties that the alleged liability of Canadian Universal Insurance Company, Ltd., and Insurance Company of North America for any interest claimed owing on the Judgment by either carrier shall be litigated in this action before the Honorable James A. Hathaway and it is further understood between the parties and ordered that neither the Canadian Universal Insurance Company, Ltd., nor the Insurance Company of North America shall be relieved of its liability to the Plaintiff for the payment of such interest by reason of the release of Modern Research Corporation from liability under the Judgment." (Emphasis supplied.)
In this appeal, the plaintiff maintains that the italicized language, when read in light of the record of hearings held by the trial court, "makes crystal clear that ... any and all questions relating to liability of either insurer for any interest ... would be litigated" and resolved "under the terms of [the] insurance polic[ies] or ... under the laws of the State of Michigan...." As plaintiff points out, in commenting upon the meaning of the consent judgment language, counsel for Canadian, the primary insurer, at the ...
To continue reading
Request your trial-
Kovacs v. Comm'r of Internal Revenue, s. 5617–90 to 5620–90.
...became final. The question can have substantive law significance, e.g., for insurance law purposes. Compare Matich v. Modern Research Corp., 420 N.W.2d 67, 75 n. 15 (Mich.1988) with Incollingo v. Ewing, 379 A.2d 79 (Pa.1977). In any event, I think this question should be decided by referenc......
-
Hi-Mill Mfg. Co. v. Aetna Cas. & Sur. Co.
...engaging in litigation solely to delay making payment. Old Orchard, supra at 253, 454 N.W.2d 73 (citing Matich v. Modern Research Corp., 430 Mich. 1, 12-15, 420 N.W.2d 67 (1988)). It is plaintiff's position that it is entitled to prejudgment interest. Plaintiff argues that section 6013 is u......
-
Amerisure Mut. Ins. Co. v. Carey Transp., Inc.
...alia, Ruddock v. Detroit Life Ins. Co., 209 Mich. 638, 177 N.W. 242, 248 (1920)). See, e.g., Matich v. Modern Research Corp., 430 Mich. 1, 420 N.W.2d 67, 75 (1988) (Robert P. Griffin, J.) (in context of prejudgment interest following judgment for the insured, "the insurer should be liable o......
-
Am. Safety Cas. Ins. Co. v. City of Waukegan, Case No. 07 C 1990.
...Illinois Supreme Court to follow a Michigan case where the court applied pro rata sharing. See id. (citing Matich v. Modern Research Corp., 430 Mich. 1, 420 N.W.2d 67, 77 (Mich.1988).) The court noted that in the Michigan case, the primary and excess carriers had overlapping obligations to ......