Tahmoures Shekoohfar v. Virginia La Rosa ( 2015 )

STATE OF MICHIGAN
COURT OF APPEALS
TAHMOURES SHEKOOHFAR and UNPUBLISHED
SIYAVOOSH SHEKOOHFAR, a/k/a January 27, 2015
SIYAVOOSH SHEKOOFHAR,
Plaintiffs/Counter-Defendants-
Appellees,
v No. 316702
Wayne Circuit Court
VIRGINIA LA ROSA, individually and as LC No. 09-028480-CZ
Personal Representative of the Estate of JOSEPH
VIVONA,
Defendants/Counter-Plaintiffs-
Appellants.
TAHMOURES SHEKOOHFAR and
SIYAVOOSH SHEKOOHFAR, a/k/a
SIYAVOOSH SHEKOOFHAR,
Plaintiffs/Counter-Defendants-
Appellants,
v No. 319118
Wayne Circuit Court
VIRGINIA LA ROSA, individually and as LC No. 09-028480-CZ
Personal Representative of the Estate of JOSEPH
VIVONA,
Defendants/Counter-Plaintiffs-
Appellees.
Before: BECKERING, P.J., and JANSEN and BOONSTRA, JJ.
PER CURIAM.
In Docket No. 316702, defendants/counter-plaintiffs Virginia La Rosa, in her individual
capacity and as personal representative of the estate of Joseph Vivona (hereinafter collectively
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referred to as “defendants”), appeal as of right the trial court’s May 23, 2013 order denying their
request for prejudgment interest pursuant to MCL 600.6013(7) on a $215,378.24 jury verdict
entered against plaintiffs/counter-defendants, Tahmoures Shekoohfar and Siyavoosh Shekoohfar
(hereinafter “plaintiffs”). In Docket No. 319118, plaintiffs appeal as of right the trial court’s
September 30, 2013 order granting case evaluation sanctions to defendants. These appeals were
consolidated pursuant to this Court’s November 27, 2013 order. Shekoohfar v La Rosa,
unpublished order of the Court of Appeals, entered November 27, 2013 (Docket Nos. 316702;
319118). We affirm in both cases.
I. PERTINENT FACTS AND PROCEDURAL HISTORY
These consolidated appeals arise from a dispute involving the purchase of certain real
property on land contract. Plaintiffs agreed to purchase on land contract commercial property
located at 18510 Moross Road in Detroit from Joseph Vivona, Steve Vivona, Lean Vivona, and
defendant Virginia La Rosa (formerly known as Virginia Vivona).1 The terms of the land
contract provided for a down payment, monthly payments with 9% interest, and a balloon
payment after a term of years. The balloon payment was due in February 2004; however,
plaintiffs did not make the payment and a closing did not take place at that time. Plaintiffs
alleged that La Rosa made no effort to facilitate the completion of the purchase; La Rosa alleged
that plaintiffs failed to make the payment on time despite her requests.
Plaintiffs continued to make monthly payments after the scheduled closing date passed.
According to their complaint, they believed that those payments would be credited toward the
remaining balance due on the land contract. In early 2006, plaintiffs obtained approval for a loan
in order to satisfy the remaining balance on the land contract. The parties scheduled a closing
date in April 2006, but closing did not occur. According to plaintiffs, La Rosa was not ready to
close at that time, and the day before the scheduled closing date, La Rosa contacted the title
company and cancelled the scheduled closing. Plaintiffs alleged that defendants did not have
clear title to the property because the property was subject to an ongoing probate dispute
involving the heirs of Joseph Vivona, one of the original sellers. Plaintiffs alleged that the
disputes regarding title to the property caused La Rosa to cancel the scheduled closing. La Rosa
alleged that plaintiffs were responsible for the failure to close, asserting that despite several
requests for payment, plaintiffs failed to comply.
On November 18, 2009, plaintiffs initiated the instant proceedings by filing a complaint
against defendants for breach of contract. On December 21, 2009, defendants filed a counter-
complaint, alleging breach of contract against plaintiffs for their alleged failure to comply with
the terms of the land contract.
After case evaluation and negotiations failed to yield a settlement, the matter proceeded
to a jury trial on October 30, 2012. Following trial, the jury found that both plaintiffs and
defendants breached the land contract. The jury determined that plaintiffs were not entitled to
damages because defendants’ breach was “not substantial.” The jury determined that defendants
1
La Rosa is the only surviving seller of the property.
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were entitled to $215,378.24 in damages for plaintiffs’ breach. The verdict form asked the jury
to determine “the amount of damages incurred through today [November 14, 2012] . . . as a
result of the [plaintiffs’] breach[.]” In the corresponding blank where the jury was to write in a
damage award was a handwritten figure, $215,378.24, along with the note, “closing as of
4/2006.”
Following the jury’s verdict, defendants moved for entry of judgment, contending that in
addition to the $215,378.24 award, they were entitled to interest on the judgment pursuant to
MCL 600.6013(7). They argued that they were entitled to interest on the judgment that began to
accrue from the date the case was filed—November 18, 2009—at the rate provided for in the
land contract—9% per annum.
At a hearing held on April 5, 2013, defense counsel argued that, pursuant to MCL
600.6013(7), the trial court was required to award interest on the judgment from the date the
instant proceedings began at the rate of 9% per annum, as this was the rate set forth in the
parties’ land contract. At a rate of 9%, defendants calculated the amount of interest owed at
$76,315.63.
The trial court expressed concern over whether the jury’s verdict accounted for such
interest, noting that defendants asked the jury, both during their case-in-chief and closing
argument, to award interest from the date of the breach of the contract until the date of the
verdict. In addition, the verdict form indicates that the jury awarded damages for plaintiffs’
breach of contract “through today,” meaning November 14, 2012. Defense counsel explained
that “[t]here was a closing that took place in 2006 and then we got the trial and my client asked
for interest all the way up to 2006 and until the date of trial. The jury didn’t award that.” The
trial court asked defense counsel how he knew the jury’s award did not include interest, and
counsel explained his reasoning:
Well the verdict that the jury came back with, it’s pretty clear that the
numbers they awarded my client is [sic] the number that was always [sic] 2006,
very specific number. $215,000 and some change. I had asked for late fees and
interest of $400,000-plus. So the jury awarded some contractual interest up to
2006 and that award included interest but nothing beyond that. And I know the
jury didn’t receive any instruction about judgment interest because judgment
interest is statutory; it shall be applied on our judgment.
Plaintiffs’ counsel argued that the jury considered and rejected defendants’ request for
interest beyond April 2006. Plaintiffs’ counsel noted that at trial they had presented testimony
and a report from an expert witness who explained the amount of interest that defendants had
requested in the case. Plaintiffs’ counsel contended that to allow defendants to make a renewed
request for that same interest would give defendants “a second bite at the apple” and would
prejudice plaintiffs. Counsel argued that, had he known defendants were also going to request
statutory prejudgment interest, plaintiffs would have addressed the interest issue differently with
the jury and the jurors may have reduced their award even further so as to effectuate the award
they deemed appropriate.
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The trial court found that defendants, by asking the jury to consider and award interest on
the contract from the date of the breach until the date it entered its verdict, the defendants had
allowed the jury to determine whether enforcement of the nine percent interest clause in the
contract was warranted under the circumstances presented, and that by seeking that same
percentage rate from the trial court pursuant to MCL 600.6013(7), they were attempting to have
a “second bite” at the apple. The court explained:
Ms. La Rosa asked for the contract interest as part of [defendants’]
damages in their closing argument. The jury heard that argument, came back with
an award of x-number of dollars, which means that the verdict took into account
the request for that interest and basically said, [“]no[”] or reduced it down
somewhat. So we are in a situation now where I think he is asking the court to
second-guess the award of the jury and award interest where they chose not to.
***
. . . The jury has already considered the nine percent and they said,
[“]no[”] or at least reduced it down. The judgment reflects whatever they believe
that was appropriate in terms of the nine percent.
The trial court concluded that awarding statutory pre-judgment interest at the rate set
forth in the parties’ contract was inappropriate, but that defendants were nonetheless entitled to
some interest on the judgment award. In response, defense counsel conceded that if the jury had
actually awarded his clients the nine percent interest rate, requesting statutory interest on top of
that would be “double-dipping,” and although he alleged it would be proper, he would not do so.
Counsel acknowledged the judge’s conclusion that some type of interest under the statute was
appropriate, and said that “we just have to figure out what it is. The statute says it’s the interest
that’s in the land contract but you are saying—,” at which point the trial court interrupted and
concluded:
The jury has already considered and said [“]no[”] or at least given you part
of it. For all we know that $200-some-thousand dollars could have reflected the
nine percent and they discounted the substance of the amount of damages by
whatever and they have already given you the nine percent. How do we know
they didn’t give . [sic] You the nine percent?
***
Just to summarize. The judgment interest issue was resolved or
considered by the jury at that nine percent rate that was requested. They came up
with a number. Either they awarded part interest; something reduced; they
considered it. The number that we have, we can’t say for a fact what portion of
that award was interest, what portion of it was the actual payments that were due
and owing apart from the interest, we don’t know. But, the jury considered it in
light of the argument of the plaintiff [sic] to them requesting it. So we are not
going to second-guess the jury’s call as to their consideration of the nine percent,
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which is basically what the plaintiff is asking that the court do. So we are not
going to set that in addition to what they have already ruled on.
Thereafter, the trial court ruled that defendants would be entitled to “regular judgment
interest” pursuant to MCL 600.6013(8). On May 23, 2013, the trial court entered an order
stating that prejudgment interest would be calculated pursuant to MCL 600.6013(8) from
November 18, 2009—the date plaintiffs’ complaint was filed—until the date of the entry of the
judgment. The trial court determined that the prejudgment interest to which defendants were
entitled was $20,127.21 as of April 19, 2013, plus “$10.83 per day until this judgment is entered
by the Court.” Concerning post-judgment interest, the trial court ordered that the interest rate to
which defendants were entitled was the 9% rate set forth in the land contract. It is from this
order that defendants now appeal as of right in Docket No. 316702.
II. DOCKET NO. 316702—INTEREST
Defendants argue that the trial court erred by awarding prejudgment interest pursuant to
MCL 600.6013(8) rather than MCL 600.6013(7). “We review de novo the award of
prejudgment interest pursuant to MCL 600.6013[.]” Beach v State Farm Mut Auto Ins Co, 216
Mich. App. 612, 623-624; 550 NW2d 580 (1996).
“MCL 600.6013 . . . entitles a prevailing party in a civil action to prejudgment interest
from the date the complaint was filed to the entry of judgment.” Id. at 624. See also MCL
600.6013(1) (“Interest is allowed on a money judgment recovered in a civil action, as provided
in this section.”). “The purpose of this statue is to compensate the prevailing party for loss of use
of the funds awarded as a money judgment and to offset the costs of litigation.” Farmers Ins
Exch v Titan Ins Co, 251 Mich. App. 454, 460; 651 NW2d 428 (2002). “ MCL 600.6013 is
remedial in nature and thus should be liberally construed in favor of the prevailing party.”
Markley v Oak Health Care Investors of Coldwater, Inc, 255 Mich. App. 245, 258; 660 NW2d
344 (2003).
Defendants contend that prejudgment interest should be awarded pursuant to MCL
600.6013(7), which provides:
For a complaint filed on or after July 1, 2002, if a judgment is rendered on a
written instrument evidencing indebtedness with a specified interest rate, interest
is calculated from the date of filing the complaint to the date of satisfaction of the
judgment at the rate specified in the instrument if the rate was legal at the time the
instrument was executed. If the rate in the written instrument is a variable rate,
interest shall be fixed at the rate in effect under the instrument at the time the
complaint is filed. The rate under this subsection shall not exceed 13% per year
compounded annually.
As used in the statute, the term “written instrument” refers to formal written documents, such as
contracts. See Yaldo v North Pointe Ins Co, 217 Mich. App. 617, 621; 552 NW2d 657 (1996),
aff’d 457 Mich. 341 (1998).
The trial court rejected the application of MCL 600.6013(7), concluding that the jury had
already considered the issue of prejudgment interest, at the rate specified in the instrument, from
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the date of the filing of the complaint to the date of the judgment because defendants’ counsel
asked for such interest during his case-in-chief and during closing argument. After rejecting an
award of prejudgment interest pursuant to MCL 600.6013(7), the trial court concluded that
prejudgment interest should be awarded pursuant to MCL 600.6013(8), which provides, in
pertinent part:
Except as otherwise provided in subsections (5) and (7) and subject to subsection
(13), for complaints filed on or after January 1, 1987, interest on a money
judgment recovered in a civil action is calculated at 6-month intervals from the
date of filing the complaint at a rate of interest equal to 1% plus the average
interest rate paid at auctions of 5-year United States treasury notes during the 6
months immediately preceding July 1 and January 1, as certified by the state
treasurer, and compounded annually, according to this section. Interest under this
subsection is calculated on the entire amount of the money judgment, including
attorney fees and other costs.
The issue in this case involves an analysis of judgment interest, which is statutory
pursuant to MCL 600.6013, and interest as an element on damages. As explained by this Court
in Vannoy v City of Warren, 26 Mich. App. 283, 288; 182 NW2d 65 (1970), aff’d 386 Mich. 686
(1972), interest as an element of damages “is awarded by the jury as part of the general verdict.
[Statutory interest] is computed on and added to the general verdict. Yet, both types of interest
serve the same basic function: to compensate the plaintiff for the loss of the use of funds.”
Generally, the prejudgment interest statute should not be applied in a manner that would permit a
double recovery. See Holloway Constr Co v Oakland Co Bd of Co Rd Comm’rs, 450 Mich. 608,
618; 543 NW2d 923 (1996) (disallowing an award of statutory interest where it appeared that an
arbitration panel already considered such interest). The purpose of prejudgment interest is only
to make the injured party whole; it is not intended to provide a double recovery to the injured
party. See id; Vannoy, 26 Mich. App. at 288.
We find that in this case, where defendants’ trial counsel expressly asked the jury to
calculate and award interest at the contractual 9% rate from the date of the breach through the
date of the verdict as an element of damages, a portion of which would have included the same
interest awardable under MCL 600.6013(7), the trial court correctly ruled that defendants were
not entitled to statutory interest at the rate specified in the contract pursuant to MCL
600.6013(7). Defendants’ entitlement to the 9% contractual interest rate was clearly before the
jury. It is undisputed that defendants asked for interest on the contract through the date of the
jury’s verdict and presented the jury with an exhibit that calculated interest due on the balloon
payment through the date of the jury’s verdict. In addition, the verdict form asked the jury to
award defendants damages “through today,” meaning through the date of the jury’s verdict on
November 14, 2012. Therefore, it appears the jury considered and rejected the clause of the
parties’ contract that provided for 9% interest on overdue payments.2 This was the same interest
2
Or, rather than rejecting the interest clause, the jury may have reached a compromise verdict
and awarded a lesser amount than what was requested by defendants, then added 9% interest to
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rate that defendants sought to impose on the judgment pursuant to MCL 600.6013(7). Implicit in
the jury’s verdict was that it either rejected the clause of the land contract concerning 9% interest
or that it granted an award and then added 9% interest on that amount. Where the jury already
considered such interest, defendants should not be given the opportunity to take a second bite at
the apple by asking the trial court for the very interest the jury already considered. See Auto
Club Ins Ass’n v Williams, 179 Mich. App. 401, 408; 446 NW2d 321 (1989) (a party “is not
entitled to a second bite at the apple.”). See also Holloway Constr Co, 450 Mich. at 618
(prohibiting a double recovery). Because defendant asked the jury to consider and incorporate in
its verdict defendants’ entitlement to interest at the 9% contractual rate, to award defendants
statutory pre-judgment interest pursuant to MCL 600.6013(7) would risk running afoul of the
prohibition against awarding double interest. See id. The purpose of MCL 600.6013(7) is to
award the prevailing party interest for the loss of use of funds. Farmers Ins Exch, 251 Mich. App.
at 460. Here, the jury was asked to award damages that would have accomplished this very
purpose.
Moreover, defendants should not now be heard to protest this matter when, as noted
above, they expressly requested the jury’s determination of both the pre-complaint interest and
the interest due from the date of filing of the complaint to the date of the verdict at the rate set
forth in the contract. See Moody v Homes Owners Inc Co, 304 Mich. App. 415, 438; 849 NW2d
31 (2014), quoting People v Jones, 468 Mich. 345, 352 n 6; 662 NW2d 376 (2003) (“Under
the invited-error doctrine, appellate relief is generally not available because ‘when a party invites
the error, he waives his right to seek appellate review, and any error is extinguished.’ ”).
Plaintiffs contend that defendants are not entitled to any statutory prejudgment interest
pursuant to either MCL 600.6013(7) or MCL 600.6013(8). As an alternative, they contend that,
to the extent defendants are entitled to prejudgment interest, the amount to which they are
entitled should be reduced by the amount of interest that accrued during periods of delay that
were not caused by plaintiffs. Plaintiffs have not filed a cross-appeal. Where an appellee seeks
“a decision more favorable than that rendered by the lower tribunal” the appellee is required to
file a cross appeal in order for the issue to properly be before this Court. Cheron, Inc v Don
Jones, Inc, 244 Mich. App. 212, 221; 625 NW2d 93 (2000). “Generally, failure to file a cross
appeal precludes an appellee from raising an issue not appealed by the appellant.” Kosmyna v
Botsford Comm Hosp, 238 Mich. App. 694, 696; 607 NW2d 134 (1999). Here, plaintiffs seek a
decision more favorable than that rendered by the trial court. As such, they were required to file
a cross appeal, and their failure to do so means that we need not consider these issues. Cheron,
Inc, 244 Mich. App. at 221; Kosmyna, 238 Mich. App. at 696.
III. DOCKET NO. 319118—CASE EVALUATION SANCTIONS
In Docket No. 319118, plaintiffs appeal as of right from the trial court’s September 30,
2013 order granting $35,539.98 in case evaluation sanctions to defendants.
that amount through the date of its verdict. We note that the jury found both plaintiffs and
defendants had breached the contract.
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Before this matter proceeded to trial, the parties participated in case evaluation. On
December 20, 2010, a case evaluation panel issued an award of $100,000 for plaintiffs on their
complaint against defendants. On the counterclaim, the case evaluation panel awarded $200,000
to defendants against plaintiffs. Defendants rejected the awards. Plaintiffs filed what they
termed a “limited acceptance” to the award, subject to the following two conditions: (1) “Free
and clear title to the subject property commonly known as 18150 Moross Road, Detroit,
Michigan 48224 is conveyed to the Plaintiffs by all opposing parties”; and” (2) “All opposing
parties accept the Case Evaluation Award in its entirety.” The trial court found that plaintiffs’
purported limited acceptance was not in conformity with the court rules; thus, the trial court
deemed the limited acceptance a rejection of the case evaluation award. The trial court, finding
that the jury’s verdict, when combined with interest and costs, was more favorable to defendants
by at least 10%, awarded sanctions to defendants.
The decision whether to award case-evaluation sanctions is a question of law that this
Court reviews de novo. Van Elslander v Thomas Sebold & Assoc, Inc, 297 Mich. App. 204, 211;
823 NW2d 843 (2012). Within 28 days of the panel’s evaluation, each party “shall file a written
acceptance or rejection of the panel’s evaluation . . . .” MCR 2.403(L)(1). A party who rejects
the panel’s evaluation is subject to sanctions if he or she fails to improve upon his or her position
at trial. Van Elslander, 297 Mich. App. at 212. MCR 2.403(O)(1) provides that:
If a party has rejected an evaluation and the action proceeds to verdict, that party
must pay the opposing party’s actual costs unless the verdict is more favorable to
the rejecting party than the case evaluation. However, if the opposing party has
also rejected the evaluation, a party is entitled to costs only if the verdict is more
favorable to that party than the case evaluation.
In determining whether a verdict is “more favorable” for purposes of MCR 2.403(O)(1), a
verdict “must be adjusted by adding to it assessable costs and interest on the amount of the
verdict from the filing of the complaint to the date of the case evaluation . . . .” MCR
2.403(O)(3). “After this adjustment, the verdict is considered more favorable to a defendant if it
is more than 10 percent below the evaluation, and is considered more favorable to the plaintiff if
it is more than 10 percent above the evaluation.” MCR 2.403(O)(3). The purpose of case
evaluation sanctions “is to shift or impose the burden of litigation costs upon the party who
insists upon trial by rejecting a mediation award. This is consistent with the intent behind
requiring litigants to engage in case evaluation in an effort to encourage settlement and deter
protracted litigation.” Van Elslander, 297 Mich. App. at 212-213 (citation and quotation marks
omitted).
The only dispute in this case is whether plaintiffs accepted or rejected the case evaluation
award. As noted above, plaintiffs purported to file a “limited acceptance” to the case evaluation
award. In cases such as this where there are multiple parties, additional rules apply to the
acceptance and rejection of case evaluation awards. See MCR 2.403(L)(3). Where there are
multiple parties, each party has the option of accepting all of the awards covering the claims by
or against the party, or of accepting some of the awards and rejecting others. MCR
2.403(L)(3)(a). Pertinent to this case, MCR 2.403(L)(3)(b) provides for a limited acceptance as
follows:
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A party who accepts all of the awards may specifically indicate that he or she
intends the acceptance to be effective only if
(i) all opposing parties accept, and/or
(ii) the opposing parties accept as to specified coparties.
If a party makes a “limited acceptance” under MCR 2.403(L)(3)(b) “and some of the opposing
parties accept and others reject, for the purposes of the cost provision of subrule (O) the party
who made the limited acceptance is deemed to have rejected as to those opposing parties who
accept.” MCR 2.403(L)(3)(c).
In construing MCR 2.403(L)(3)(c), this Court has observed that:
MCR 2.403(L)(3)(c) specifies that “the party who made the limited acceptance is
deemed to have rejected as to those opposing parties who accept” (emphasis
added). This part of the court rule would be rendered nugatory, contrary to the
rules of construction, if the limited acceptance party was also deemed a rejecting
party with respect to opposing parties who reject. Further, the purpose of the
mediation sanction rule is to encourage settlement and deter protracted litigation
by placing the burden of litigation costs upon the party that required that the case
proceed toward trial by rejecting the mediator’s evaluation. . . . [U]nder the
language of MCR 2.403(L)(3)(c), a party who makes a limited acceptance of an
award is deemed to have rejected it only with respect to those opposing parties
who accepted, but not with respect to those who rejected, the award. [Dykes v
William Beaumont Hosp, 246 Mich. App. 471, 484-485; 633 NW2d 440 (2001).]
We find that the trial court correctly ruled that plaintiffs’ purported “limited acceptance”
did not conform with the court rules and therefore constituted a rejection of the panel’s case
evaluation award. “When a party’s response [to a case evaluation award] does not conform to
the court rules, the trial court should deem it a rejection.” Merc Bank Mtg Co, LLC v
NGPCP/BRYS Centre, LLC, 305 Mich. App. 215, 224; 852 NW2d 210 (2014). See also Bush v
Mobil Oil Corp, 223 Mich. App. 222, 227; 565 NW2d 921 (1997), overruled on other grounds
CAM Constr v Lake Edgewood Condo Ass’n, 465 Mich. 549, 557; 640 NW2d 256 (2002)
(holding that a conditional response that does not comply with the court rules is deemed a
rejection of the case evaluation award). Plaintiffs’ response to the case evaluation award placed
two conditions on acceptance: (1) free and clear title to the property was conveyed to plaintiffs;
and (2) all opposing parties accept the case evaluation award in its entirety. Pursuant to MCR
2.403(L)(3)(b), the second condition imposed by plaintiff, i.e., that all opposing parties accept,
was an appropriate condition under the court rules in a case, such as this one, involving multiple
parties. However, plaintiffs have not cited, nor does there exist, a provision of the court rules
that would permit plaintiffs’ first condition, i.e., that free and clear title to the property pass to
plaintiffs. Such a conditional acceptance was invalid under the court rules and constituted a
rejection of the case evaluation award. See Bush, 223 Mich. App. at 226 (“The court rules do not
provide for conditional acceptance.”). See also Mercantile Bank Mtg Co, 305 Mich. App. at 224
(explaining that an improper response to a case evaluation award constitutes a rejection of the
award). Because plaintiffs’ response was appropriately deemed a rejection of the case evaluation
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award, and because there is no dispute that defendants received a more favorable result at trial,
the trial court was required to impose case evaluation sanctions. See MCR 2.403(O)(1).
Affirmed.
/s/ Jane M. Beckering
/s/ Kathleen Jansen
/s/ Mark T. Boonstra
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