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Warner Norcross + Judd LLP is a corporate law firm with over 230 attorneys serving clients in nine offices throughout Michigan. Among the largest law firms in Michigan, Warner works in virtually all areas of business law.

Michigan Law Firm - Warner Norcross + Judd LLP

On December 15, 2009, the Court of Appeals published a decision in <a href="http://coa.courts.mi.gov/documents/OPINIONS/FINAL/COA/20091215_C285795_36_285795.OPN.PDF" target="_blank" rel="noopener">Kopf v. Estate of Dobias, No. 285795</a>, holding that the trial court properly denied the estate offer-of-judgment sanctions against the plaintiff because its motion for sanctions was filed more than 28 days after entry of the final judgment as required by MCR 2.405(D)(5). The 28-day limitation is "explicit and mandatory" and runs from the moment the last claim is resolved, not the moment the adjusted verdict with costs and interest is entered. However, a bill of costs is not required within 28 days, only a motion. The interesting implication is that, where the adjusted verdict for costs and interest is not entered within 28 days and it is a close call whether the adjusted verdict would exceed the average offer, it will be standard for the court to receive protective motions from both parties for offer-of-settlement sanctions against the other.

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The plaintiff sued the decedent for negliently striking him with her vehicle and received a non-unanimous case-evaluation award of $60,000 in his favor. The plaintiff accepted it but the defendant did not. The defendant later served an offer of judgment for $7,500. The plaintiff filed a counteroffer for $70,000, making the average offer $38,750. The plaintiff received a verdict of $20,000, entered on August 9, 2007, in the judge's order of judgment. It was adjusted to $28,300.16 with costs and interest, in the stipulated order entered October 10, 2007. The defendant did not file his motion for offer-of-settlement sanctions until October 17, 2007.

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The estate raised two arguments as to why its motion was timely. First, the estate argued a "reasonable time" standard applied under a line of decisions discussing MCR 2.403. The court distinguished the cases he relied on because they were decided before the 28-day deadline was inserted into the rule. Those decisions declined to apply the 28-day limitation under MCR 2.625 concerning motions for taxation of costs in lieu of a "reasonable time" standard. The rationale from those decisions was that taxation of costs was a simple exercise for the clerk while calculating attorney fees was not, so a reasonable time standard was, well, more reasonable. But this rationale was not frustrated by the addition of the 28-day limitation to MCR 2.405 because the rule does not require a bill of costs in 28 days as MCR 2.625(F)(2)(a) does.

The Court also rejected the defendant's argument that the "judgment" for purposes of the rule should be the order that determines the amount of the adjusted verdict. It instead extended to MCR 2.405 its holding in Braun v. York Properties, Inc., 230 Mich. App. 138, 150, 583 N.W.2d 503 (1998), that "judgment" for purposes of the time limit for motions for case evaluation costs under MCR 2.403. Braun held that "judgment" means the judgment adjudicating the rights and liabilities of the parties, the one resolving all claims, i.e., causes of action. The amount of taxable costs and interest yet to be determined was not a cause of action.

COA Opinion: 28-day cutoff for offer-of-settlement sanctions is “explicit and mandatory.”

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