Background
Douglas and Diana Lancaster bought a Taylor, Michigan, home from Cosmopolitan Homes, Inc., for their granddaughter. After the basement leaked, they sued Cosmopolitan Homes, Dan Wicker, and others on claims including fraud, innocent misrepresentation, and violations of Michigan’s Seller’s Disclosure Act. Before the first trial, a case-evaluation panel entered a $6,000 evaluation against Wicker but no evaluation against Cosmopolitan Homes. The Lancasters rejected the evaluation.
The first trial ended in a directed verdict for the defendants, followed by an award of case-evaluation sanctions. Under a stipulated order, the Lancasters paid $48,000 to defense counsel, subject to reimbursement if an appellate court reversed and remanded for trial and the Lancasters were later deemed the prevailing parties. The Court of Appeals reversed the directed verdict and ordered a new trial. At the retrial, the jury awarded the Lancasters $4,344 against Cosmopolitan Homes and $4,344.05 against Wicker, for a total of $8,688.05. The trial court denied Wicker’s request for additional sanctions and ordered defense counsel to return the $48,000.
The Court’s Holding
The Court of Appeals affirmed. Applying former MCR 2.403(O), the court held that the Lancasters’ aggregate verdict of $8,688.05 was more than 10% greater than the aggregate case evaluation of $6,000. The rule therefore barred case-evaluation sanctions even though the $4,344.05 verdict against Wicker alone was less favorable to the Lancasters than the $6,000 evaluation against him. The absence of a separate evaluation against Cosmopolitan Homes did not prevent use of the aggregate-verdict comparison.
The stipulated reimbursement condition was satisfied because the earlier directed verdict had been reversed, the case had been remanded for a new trial, and the Lancasters obtained an aggregate verdict sufficiently favorable to avoid sanctions. The court also held that the Lancasters’ motion adequately identified its factual and legal grounds, was not frivolous, and did not justify sanctions under MCR 1.109(E). Because defendants identified no palpable error requiring a different result, the trial court also acted within its discretion in denying reconsideration.
Key Takeaways
- Under former MCR 2.403(O), a sufficiently favorable aggregate verdict protects a plaintiff from case-evaluation sanctions even when a pair-by-pair comparison would favor one defendant.
- A zero or absent evaluation for one defendant does not, without supporting authority or limiting language in the rule, exclude that defendant’s damages from the aggregate comparison.
- A concise motion is not sanctionable when it identifies the governing rule, relevant order, procedural history, and factual basis for relief.
Why It Matters
The decision clarifies how Michigan courts should compare evaluations and verdicts in older, multiparty cases still governed by the former case-evaluation-sanctions rule. The aggregate-verdict protection can control even when the plaintiff’s recovery against the evaluated defendant, considered separately, would not clear the rule’s 10% threshold.
The opinion also underscores that stipulated payment arrangements will be enforced according to their stated conditions. Once the Lancasters obtained the appellate reversal, retrial, and favorable aggregate result contemplated by the parties’ order, the holder of the funds was required to return the full $48,000.