Hensley v. Investors Four, Inc

580 N.W.2d 5 (1998) 228 Mich. App. 701

Anthony HENSLEY and Vicki Hensley, Plaintiffs-Appellants,
v.
Cassandra Siegrist and Judith A. Siegrist, Defendants, and
INVESTORS FOUR, INC. d/b/a Churchill's of Flint, Defendant-Appellee.

Docket No. 197196.

Court of Appeals of Michigan.

Submitted February 10, 1998, at Detroit. Decided March 20, 1998, at 9:05 a.m. Released for Publication June 29, 1998.

Law Offices of James J. Zimmer, P.C. by Mark N. Clement, Flint, for Anthony and Vicki Hensley.

Mark F. Pimlott, Southfield, for Investors Four, Inc.

Before DOCTOROFF, P.J., and REILLY and G.S. ALLEN,^[*] JJ.

PER CURIAM.

In this negligence and dramshop action, plaintiffs appeal as of right from the trial court order granting summary disposition to defendant Investors Four, Inc., doing business as Churchill's of Flint (the dramshop defendant). We affirm.

This action arose out of an August 1994 accident in which a vehicle driven by defendant Cassandra Siegrist collided with a vehicle driven by plaintiff Anthony Hensley and in which plaintiff Vicki Hensley was a passenger. Plaintiffs brought suit against Cassandra Siegrist, alleging negligence, and against Judith Siegrist as the owner of the vehicle. They also sought to recover against Investors Four, Inc., pursuant to M.C.L. § 436.22; M.S.A. § 18.993, commonly known as the dramshop act, alleging that Churchill's had furnished alcohol to Cassandra Siegrist, a minor. The matter was mediated, and plaintiffs accepted an award against all defendants. Cassandra Siegrist and Judith Siegrist also accepted the mediation award and judgment was entered against them pursuant to MCR 2.403(M)(2), leaving only plaintiffs and the dramshop defendant as parties to the action. The dramshop defendant consequently moved for summary disposition, arguing that plaintiffs had violated the "name and retain" provision of the Liquor Control Act, M.C.L. § 436.22(6); M.S.A. § 18.993(6), when they accepted the mediation award with respect to the allegedly intoxicated person because the resulting judgment disposed of all claims between plaintiffs and the allegedly intoxicated person pursuant to MCR 2.403(M)(2).

This Court reviews summary disposition decisions de novo and must examine the record in order to determine whether the prevailing party was entitled to judgment as a matter of law. Pinckney Community Schools v. Continental Casualty Co., 213 Mich.App. 521, 525, 540 N.W.2d 748 (1995). Whether the name and retain provision of M.C.L. § 436.22(6); M.S.A. § 18.993(6) applies where the allegedly intoxicated person is not retained because of the acceptance of a mediation award involves the interpretation of a statute, which is also reviewed de novo as a question of law. First of America Bank v. Thompson, 217 Mich.App. 581, 583, 552 N.W.2d 516 (1996).

M.C.L. § 436.22(6); M.S.A. § 18.993(6) provides:

An action under this section against a retail licensee shall not be commenced unless the minor or the alleged intoxicated person is a named defendant in the action and is retained in the action until the litigation is concluded by trial or settlement.

As a remedial statute, the dramshop act should be strictly construed. Millross v. Plum Hollow Golf Club, 429 Mich. 178, 184, 413 N.W.2d 17 (1987); Turnley v. Rocky's Teakwood Lounge, Inc., 215 Mich.App. 371, 375, 547 N.W.2d 33 (1996).

The present case involves facts identical to those in Shay v. JohnKal, Inc., 437 Mich. 394, 396, 471 N.W.2d 551 (1991). In that case, the Michigan Supreme Court recognized the potential conflict between the name and retain provision of the dramshop act and mediation sanction rules of MCR 2.403(O). Shay, supraat 396, 471 N.W.2d 551. The key issue was whether the name and retain provision prevented the continuation of a dramshop action after the allegedly intoxicated person had been dismissed as a result of mediation. Id. In a four-to-two plurality decision,^[1] the Michigan Supreme Court held that the name and retain provision of the dramshop act did not bar the continuance of the dramshop lawsuit. Id. at 400, 471 N.W.2d 551.

Plaintiffs rely on language in Shay that "a dismissal pursuant to court-ordered mediation is not a dismissal that should be deemed so far within the control of plaintiff as to be violative of the name and retain provision." Id. at 402, 471 N.W.2d 551. However, this is clearly not the holding in Shay. Although Justices Cavanagh and Levin's reasoning would support plaintiffs' argument, the plurality opinion in Shay presented differing views about exactly how much danger of fraud and collusion remained after the mediation process. Indeed, Justices Brickley and Boyle were concerned that a blanket exception for dismissals pursuant to mediation would virtually eliminate the name and retain requirement. Id. at 403 and n. 8, 471 N.W.2d 551. As a result, the holding in Shay was more limited and merely eliminated a conflict between mediation sanctions and the name and retain provisions of the dramshop act. Shay did not change the name and retain provision, nor did it announce an exception to the name and retain requirement. Instead, Shay amended the court rule that created the conflict to allow a waiver of sanctions where a plaintiff was forced to reject or conditionally accept a mediation award because of the need to comply with the name and retain provisions. Id. at 405, 471 N.W.2d 551. The amended court rule continues to impose mediation sanctions where the plaintiff's rejection of a mediation award was not due to the need to comply with the name and retain provision. MCR 2.403(O)(9).

The plaintiffs in Shay were allowed to continue their dramshop action because, under the old court rule, they were subjected to being "forced into" an unconditional acceptance in order to avoid mediation sanctions. Shay, supra at 403-404, n. 9, 471 N.W.2d 551. This is not the situation in the present case. While it is true that plaintiffs had no control over the mediation award, they did maintain a measure of control of their acceptance of the award not available to the plaintiffs in Shay. Under the new court rule, no sanctions are imposed where a party is deemed to reject an award under subrule (L)(3)(c), the situation facing the plaintiffs in Shay, where the rejection was motivated by the need to comply with the name and retain provision. MCR 2.403(O)(9). In the present case, plaintiffs could have chosen to accept the mediation award conditionally with respect to all opposing parties. MCR 2.403(L)(3)(b). This conditional acceptance would have been effective only if all opposing parties also accepted the mediation award. MCR 2.403(L)(3)(b). The court rule specifically states:

If such a limitation is not included in the acceptance, an accepting party is deemed to have agreed to entry of judgment ... as to that party and those of the opposing parties who accept, with the action to continue between the accepting party and those opposing parties who reject. [MCR 2.403(L)(3)(b).]

There being no possibility of sanctions because of the holding in Shay and MCR 2.403(O)(9), plaintiffs cannot argue that they were forced into an unconditional acceptance by the threat of sanctions. Plaintiffs could have completely avoided violating the name and retain provision and still promoted their settlement interests by filing a conditional acceptance of the mediation award.

Because the dismissal of the allegedly intoxicated person in the present case was within plaintiffs' control and violated the name and retain provision, the trial court was required to dismiss the action as a matter of law, and summary disposition was proper.

Affirmed.

NOTES

[*] Former Court of Appeals judge, sitting on the Court of Appeals by assignment.

[1] Justice Mallett did not take part in the decision.