Wayne County Circuit Court Case No. 15-001637-NF; Michigan Court of Appeals Case No. 341712
Michigan Court of Appeals (Appeal from Wayne Circuit Court)
Judges Kirsten Frank Kelly, Stephen Borrello, and Deborah Servitto
Published or Unpublished Decision:
September 19, 2019
Defendant Home-Owners—Hewson & Van Hellemont: Lynn Sholander
Intervening Plaintiff American Anesthesia Associates—Anthony & Paulovich, PLLC: Gerald Paulovich (primary); Susan Boonenberg (appeared for oral argument)
[The Plaintiff Lindsey Mackenzie and the other intervening plaintiffs were not parties to the appeal.]
Type of Action:
The underlying case is an action for no-fault benefits. The order appealed by Intervening Plaintiff American Anesthesia was the trial court’s order awarding $16,848.53 in prevailing party costs to Home Owners, payable jointly and severally by the intervening plaintiffs.
Issue on Appeal:
Whether the trial court’s decision was within the principled range of outcomes when it awarded prevailing party costs to Home-Owners, to be paid jointly and severally by the intervening plaintiffs without any setoff or deduction, knowing that Home Owners did not receive compensation for any of its taxable costs under its post-trial settlement agreement with Plaintiff Lindsey Mackenzie.
Summary of Trial:
This appeal arose from an action for no-fault benefits for injuries allegedly sustained by Plaintiff Lindsey Mackenzie in a July 2, 2014 motor vehicle accident. Plaintiff initiated this case in February 2015, and several medical service providers subsequently intervened. In total, Plaintiff and her providers sought the payment of nearly $300,000 in no-fault benefits. After many months of proceedings involving Plaintiff as well as the four Intervening Plaintiffs, a six-day jury trial was held in February 2017. Ultimately, the jury found that Plaintiff did, in fact, sustain an accidental bodily injury, but the accidental bodily injury did not arise out of the July 2, 2014 motor vehicle accident. Accordingly, on March 14, 2017, a judgment of no cause of action was entered in favor of Home-Owners.
After the judgment was entered, Plaintiff agreed to dismiss her third-party suit in Macomb Circuit Court against Home-Owners’ insured and waive her right to appeal in the instant suit in exchange for Home-Owners’ promise that it would not seek sanctions against her in the instant case. Shortly thereafter, Home-Owners filed a motion for prevailing party costs under MCR 2.625(A)(1) and attorney fees pursuant to MCL 500.3148(2), as to Intervening Plaintiffs only. On June 20, 2017, the trial court entered an order granting in part and denying in part Home-Owners’ motion for costs and attorney fees. Most significantly for purposes of the appeal, the trial court awarded Home-Owners taxable costs in the amount of $16,848.53, payable jointly and severally by the Intervening Plaintiffs.
American Anesthesia claimed an appeal from the trial court’s order awarding taxable costs payable jointly and severally by Intervening Plaintiffs.
Outcome of Appeal:
The Court of Appeals held that (1) Lindsey Mackenzie’s settlement with Home-Owners “did not…compensate defendant for its litigation costs incurred in this case” and, therefore, “did not fulfill the goal of…compensating defendant for its litigation costs under MCR 2.625(A)(1)”; (2) “there was and could be no double recovery in this case”; and (3) “even absent the settlement agreement, the trial court still had the discretion to apportion all taxable costs only to intervening plaintiffs if it felt such action was warranted.” Accordingly, the Court of Appeals concluded, “American Anesthesia has failed to show that the trial court’s decision to apportion taxable costs among intervening plaintiffs only was outside the range of principled outcomes and that the trial court thus abused its discretion by choosing to apportion costs accordingly.”