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A Better Partnership
April 29, 2016

COA: Judgment interest is not included with a sanctions award

In order to recover judgment interest in a civil action, the party must be granted a civil award that is more than an order directing an act be done, says the Court of Appeals in Lech II v Huntmore Estates Condominium Assoc., No. 320028.  The court held that Defendants, Jacobson Ore Creek Land Development and Scott R. Jacobson, are not entitled to recover judgment interest on their sanctions award under MCL 600.6013, because a money judgment may be treated differently than other civil awards.  MCL 600.6013 provides that “interest is allowed on a money judgment recovered in a civil action,” but the court awarded a sanctions order directing payment of a party’s attorney fees and costs, not an order providing for a money judgment.
Previously, the trial court granted Defendants judgment interest on the sanctions award but the Court of Appeals reversed the decision.  The Michigan Supreme Court vacated a portion of the opinion and remanded the case to the Court of Appeals in light of Ayar v Foodland Distributors.  In Ayar, the Michigan Supreme Court concluded that judgment interest should be calculated from the date of filing the complaint instead of the date of the judgment.  In this case, Defendants did not file a complaint or incur expenses in bringing the action, they only defended against a complaint and obtained summary disposition.  Thus, on remand, the Court of Appeals concluded that MCL 600.6013 does not apply under these circumstances, and Ayar does not command a different result in the case.

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