McAuley v. General Motors Corp.

• Decision Date: 02 June 1998
• Docket Number: Docket No. 106915,No. 13,13
• Citation: 578 N.W.2d 282,457 Mich. 513
• Parties: Thomas E. McAULEY, Plaintiff-Appellee, v. GENERAL MOTORS CORPORATION, Defendant, and Michigan Employment Security Commission, Defendant-Appellant. Calendar
• Court: Michigan Supreme Court

Page 282

578 N.W.2d 282

457 Mich. 513

Thomas E. McAULEY, Plaintiff-Appellee, v. GENERAL MOTORS CORPORATION, Defendant, and Michigan Employment Security Commission, Defendant-Appellant.

Docket No. 106915.

Calendar No. 13.

Supreme Court of Michigan.

Argued Jan. 8, 1998.

Decided June 2, 1998.

Robert L. Segar, Flint, for plaintiff-appellee.

Frank J. Kelley, Attorney General, Thomas L. Casey, Solicitor General, and Martin J. Vittands, Assistant Attorney General, for defendant-appellant.

Opinion

MICHAEL F. CAVANAGH, Justice.

In this case, we are presented with the question whether a prevailing party is entitled to recover a second award of attorney fees under the mediation rule, MCR 2.403(O) ¹, where he has already been compensated for his reasonable attorney fees pursuant to a statutory provision. The Court of Appeals held that multiple awards in excess of a reasonable attorney fee are permissible where independent purposes are served by the provisions authorizing such awards. We agree; however, we find that the Court did not intend double recovery under the circumstances of this case when it enacted MCR 2.403. Therefore, we reverse the decision of the Court of Appeals.

I

The Michigan Employment Security Commission ² and General Motors Corporation had an agreement under which the MESC administered standardized aptitude tests to unemployed persons and referred those individuals who scored over fifty percent to GMC. When plaintiff was tested, he scored poorly on the manual dexterity portion of the test because of nerve damage in his hand and was not referred to GMC. This setback proved to be only temporary, because plaintiff obtained a job at GMC a short time later. There is no dispute that he is fully capable of doing the work.

Plaintiff then filed suit against GMC and the MESC under the Handicappers' Civil Rights Act, M.C.L. § 37.1101 et seq.; M.S.A. § 3.550(101) et seq., ³ alleging that the use of the standardized test as the determining factor for making referrals discriminated against handicapped persons because it evaluated skills that were unrelated to the individual's ability to perform the requirements of the job. A mediation evaluation of $12,500 in plaintiff's favor and against both defendants jointly and severally was rejected by all parties.

Following a trial on the matter, the jury returned a verdict of no cause of action against GMC, ⁴ but found the MESC liable for damages in the amount of $15,000. Plaintiff was also awarded $25,281.25 in attorney fees, as permitted by M.C.L. § 37.1606(3); M.S.A. § 3.550(606)(3) to a prevailing plaintiff under the Handicappers' Civil Rights Act. The award was substantially reduced from the $64,746.25 plaintiff sought because the trial court ruled that the MESC should not have to pay fees for attorney services incurred in the pursuit of plaintiff's claim against GMC or for duplicative work that was necessitated by substitution of plaintiff's counsel.

After a judgment for a total of $40,281.25 was entered, plaintiff moved for mediation sanctions pursuant to MCR 2.403(O). The MESC argued in part that plaintiff should not be entitled to recover double attorney fees. The trial court denied the motion because it concluded that plaintiff had already been fully compensated and that "[t]o compound the award further would be punitive."

The Court of Appeals reversed in an unpublished per curiam opinion, ⁵ relying on its previous decision in Howard v. Canteen Corp., 192 Mich.App. 427, 481 N.W.2d 718 (1991). The panel held that attorney fees may be awarded under both the Handicappers' Civil Rights Act and the court rule regarding mediation sanctions, even if the awards amount to a double recovery, because each provision serves an independent policy. While acknowledging that a court has discretion with regard to whether attorney fees should be awarded under the Handicappers' Civil Rights Act, the Court of Appeals stated that the trial court had no discretion to refuse to award attorney fees under MCR 2.403 because the court rule provides that an award of attorney fees as mediation sanctions is mandatory if the criteria are met. We granted leave to appeal. ⁶

II

As a preliminary matter, we note that the rules governing the construction of statutes apply with equal force to the interpretation of court rules. Smith v. Henry Ford Hosp., 219 Mich.App. 555, 558, 557 N.W.2d 154 (1996). When we are called upon to construe a court rule and a statute that relate to the same substantive issue, we must read both "according to the plain language of each, giving effect to the meaning of the words as they ought to have been understood by those who adopted them." Buscaino v. Rhodes, 385 Mich. 474, 481, 189 N.W.2d 202 (1971). Every word or phrase of a statute or court rule should be given its commonly accepted meaning; however, where a word or phrase is expressly defined, courts must apply it in accordance with that definition. M.C.L. § 8.3a; M.S.A. § 2.212(1); Western Michigan Univ. Bd. of Control v. Michigan, 455 Mich. 531, 539, 565 N.W.2d 828 (1997); Tryc v. Michigan Veterans' Facility, 451 Mich. 129, 136, 545 N.W.2d 642 (1996). Statutes should be construed so as to prevent absurd results, injustice, or prejudice to the public interest. Franges v. General Motors Corp., 404 Mich. 590, 612, 274 N.W.2d 392 (1979). The interpretation and application of court rules and statutes presents a question of law that is reviewed de novo. Cardinal Mooney High School v. Michigan High School Athletic Ass'n, 437 Mich. 75, 80, 467 N.W.2d 21 (1991); Szymanski v. Brown, 221 Mich.App. 423, 433, 562 N.W.2d 212 (1997).

III

The MESC contends that the Court of Appeals erred in holding that plaintiff could recover duplicative attorney fees under the mediation rule after he had already been fully reimbursed for his reasonable attorney fees in connection with his claim against the agency. We agree. The language of the statute and the court rule demonstrate that those provisions were intended to relieve prevailing parties or plaintiffs of the reasonable costs of all or part of the litigation. There is no support in either provision for the conclusion that attorney fees may be imposed as a penalty or that a party may recover an amount in excess of a reasonable attorney fee as determined by the trial court.

As a background to our discussion, we begin by noting that Michigan follows what is commonly termed the "American rule" with regard to payment of attorney fees. Popma v. Auto Club Ins. Ass'n, 446 Mich. 460, 474, 521 N.W.2d 831 (1994). Under this rule, attorney fees generally are not recoverable from the losing party as costs in the absence of an exception set forth in a statute or court rule expressly authorizing such an award. Id.; see also M.C.L. § 600.2405(6); M.S.A. § 27A.2405(6) and 20 Am.Jur.2d, Costs, § 57, p. 52. ⁷

It is well established that generally only compensatory damages are available in Michigan and that punitive sanctions may not be imposed. ⁸ See Hayes-Albion Corp. v. Kuberski, 421 Mich. 170, 187, 364 N.W.2d 609 (1984), Kewin v. Massachusetts Mut. Life Ins. Co., 409 Mich. 401, 419, 295 N.W.2d 50 (1980), Hicks v. Ottewell, 174 Mich.App. 750, 755, 436 N.W.2d 453 (1989), and In re Disaster at Detroit Metropolitan Airport on August 16, 1987, 750 F.Supp. 793, 805 (E.D.Mich., 1989). Because the purpose of compensatory damages is to make the injured party whole for the losses actually suffered, the amount of recovery for such damages is inherently limited by the amount of the loss; the party may not make a profit or obtain more than one recovery. Stilson v. Gibbs, 53 Mich. 280, 284, 18 N.W. 815 (1884); 22 Am.Jur.2d, Damages, § 27, pp. 54-56; 4 Restatement Torts, 2d, §§ 903, 906, 908, pp. 453, 460, 464. That an award of attorney fees is typically compensatory in nature is illustrated by the well-established body of law holding that a litigant representing himself may not recover attorney fees as an element of costs or damages under either a statute or a court rule because no attorney fees were incurred. See, e.g., Kay v. Ehrler, 499 U.S. 432, 437-438, 111 S.Ct. 1435, 1437- 1438, 113 L.Ed.2d 486 (1991), Watkins v. Manchester, 220 Mich.App. 337, 343-344, 559 N.W.2d 81 (1996), and Laracey v. Financial Institutions Bureau, 163 Mich.App. 437, 444-445, 414 N.W.2d 909 (1987); see also Brown v. Blanchard, 40 Mich. 61 (1879). Thus, in order for a party to recover attorney fees under the mediation rule, he must show that he has incurred such fees. Watkins, supra at 343-344, 559 N.W.2d 81. Obviously, if the prevailing party has already been fully reimbursed for reasonable attorney fees through the operation of a statutory provision, in this case the attorney fee provision of the HCRA, there are no "actual costs" remaining to be reimbursed under the court rule. On the other hand, if the applicable statute limits the recovery of attorney fees to something less than a reasonable attorney fee and there are actual costs remaining, an additional award may be appropriate in some cases. For example, in Dep't of Transportation v. Dyl, 177 Mich.App. 33, 35, 441 N.W.2d 18 (1989), the Uniform Condemnation Procedures Act limited recovery of attorney fees to one-third of the amount by which the award exceeded the agency's written offer. The plaintiff in that case contended that he was also entitled to sanctions under MCR 2.405(D), which provides, similar to MCR 2.403(O), that a plaintiff may recover the "actual costs" made necessary by the other party's rejection of an offer of judgment. To the extent that the statutory remedy may have only partially compensated the plaintiff for the reasonable attorney fees that would ordinarily be recoverable under MCR 2.405, an additional award under the court rule would be appropriate in the amount by which the attorney fees recoverable under the statute were less than the amount recoverable under the court rule. Conversely, if a party moved for partial attorney fees pursuant to...