text:
    LEWIS v DETROIT AUTOMOBILE INTER-INSURANCE EXCHANGE
    Docket No. 78-136.
    Submitted April 3, 1979, at Grand Rapids.
    Decided May 21, 1979.
    John Lewis was injured in an automobile accident and brought an action against his insurer, Detroit Automobile Inter-Insurance Exchange, for work loss benefits. At the time of the accident Lewis was temporarily laid off from his employment, and he presented evidence that but for his injury he would have been called back to work a few weeks after the accident. He also sought to establish a loss of income from self-employment. In addition to his employment he operates a small grocery store and claimed that he had to hire someone to do heavy work in the store. The jury awarded plaintiff damages of $25,000 and judgment was entered in this amount, Kent Circuit Court, George R. Cook, J. The trial court denied plaintiff attorney fees and 12 percent interest on the judgment. Defendant appeals, alleging that the award of damages was excessive, and plaintiff cross-appeals. Held:

    1. A jury instruction on expenses incurred for personal services should not have been given, because the cost to the plaintiff in hiring help for his store was associated with the generation of income and should have been a factor considered in the plaintiff’s loss of income. The expense provision only applies to expenses incurred "not for income”.
    2. The jury was properly allowed to consider the income, including overtime, that the plaintiff would have earned after his temporary unemployment would have ended.
    3. The verdict was clearly excessive, taking the evidence in the light most favorable to the plaintiff. The defendant is entitled to either a remittitur or a new trial.
    4. The trial court’s denial of attorney fees and 12 percent interest was not error.
    Affirmed in part, reversed in part, and remanded.
    References for Points in Headnotes

       New Topic Service, No-Fault Insurance § 30.

       New Topic Service, No-Fault Insurance § 29.

       58 Am Jur 2d, New Trial § 150.

      1. Automobiles — Insurance — Work Loss Benefits — Expenses — Instructions to Jury — Statutes.
    The provision in the no-fault automobile insurance act which allows benefits for expenses for obtaining services otherwise performed by the injured party applies only to expenses incurred "not for income”; an instruction to a jury regarding expenses was erroneous where the injured party claimed that because of his injury he had to hire someone to do the heavy work in his grocery store, which was not an "expense” under this portion of the statute but was associated with the generation of income and, therefore, was a factor to be considered in calculating "loss of income” (MCL 500.3107[b]; MSA 24.13107[b]).
    2. Automobiles — Insurance — Work Loss Benefits — Temporarily Unemployed Persons — Statutes.
    The no-fault automobile insurance statute provides for work loss benefits for an injured person who is temporarily unemployed based on earned income for the last month employed full time preceding the accident; this provision does not limit work loss benefits for wages the injured person would have earned, but for the injury, after the temporary unemployment would have ended (MCL 500.3107a; MSA 24.13107[1]).
    3. Damages — Excessive Damages — New Trial — Court Rules.
    A new trial may be ordered where an excessive award of damages appears to have been influenced by passion or prejudice or where a sound evaluation of the evidence reveals no basis for a clearly excessive verdict (GCR 1963, 527.1[3], [4]).

      Bernstein & Bernstein (Edward Grebs, of counsel) (by Harvey M. Howitt), for plaintiff.

      Allaben, Massie, Vander Weyden & Timmer (by Sam F. Massie, Jr., and Richard A. Nash), for defendant.
    Before: D. E. Holbrook, Jr., P.J., and R. B. Burns and Bashara, JJ.
   R. B. Burns, J.

In this action to recover no-fault benefits under an automobile insurance policy issued by defendant to plaintiff, a jury returned a verdict for plaintiff of $25,000. The trial court denied plaintiff attorney fees and 12 per cent interest on the judgment. Defendant’s motion for new trial on grounds that the verdict was excessive was denied. Defendant appeals and plaintiff cross-appeals.

Plaintiff was injured in an automobile accident on April 23, 1976. It is undisputed that he was disabled as a result of the accident. Defendant voluntarily paid medical expenses, but denied plaintiff’s claim for work loss benefits as not supported by reasonable proof. This action ensued.

Plaintiff presented evidence at trial indicating that he was temporarily laid off from his employment at American Steel Line Company in December, 1975. Prior to his lay-off he was working 40 hours per week at $3.50 per hour. But for his injury, he would have been called back to work in June, 1976, and up to the date of trial would have worked an additional 10 hours per week overtime at time and a half. Additionally, his base rate of pay would have increased to $3.75 per hour in July, 1976. Defendant sought to prove that plaintiff had actually quit permanently in December, 1976, and would not have returned to work if called back.

Plaintiff also presented evidence tending to establish a loss of income from self-employment. Plaintiff operates a small grocery store. He testified that he had to hire someone at $120 per week to do heavy work, like stocking shelves, which he could no longer do himself. However, he could still do light work, like running the cash register, and spent more hours in the store than he had when working for American Steel Line Company. As a consequence of his increased presence in the store, business had increased. However, plaintiff’s bookkeeping was in disarray. Defendant sought to prove that the store was so unprofitable that plaintiff lost no income from the operation of the store as a result of his disability. Additionally, defendant sought to prove that plaintiff had not actually paid anyone to do heavy work in the store.

The primary issue raised by defendant on appeal is whether the verdict was excessive. Before we may reach that issue, however, we must resolve two related issues concerning the correct method for calculating benefits.

MCL 500.3107(b); MSA 24.13107(b) provides for two categories of work loss benefits. The first consists of "loss of income from work an injured person would have performed during the first 3 years after the date of the accident if he had not been injured”, reduced generally by 15 per cent to reflect the non-taxable status of the benefit, and subject to a maximum, in this instance $1,213 per 30-day period. The second consists of "expenses not exceeding $20.00 per day, reasonably incurred in obtaining ordinary and necessary services in lieu of those that, if he had not been injured, an injured person would have performed during the first 3 years after the date of the accident, not for income but for the benefit of himself or of his dependent”.

The trial court in this case instructed the jury on both types of work loss. Defendant objected to the instruction on expenses because no evidence of expenses was presented. Plaintiff argued to the jury for $120 per week as expenses incurred by plaintiff to hire someone to take over the heavy work in his store.

The. trial court should not have instructed the jury on expenses. The $120 per week expenditure was associated with the generation of income, and was a factor to be considered in the calculation of "loss of income”. The expenses provision applies only to expenses incurred "not for income”, such as lawn maintenance, household cleaning, babysitting and the like. The effect of the instruction was to take some "loss of income” out from under the 15 per cent and maximum provisions associated with "loss of income” work loss.

Under MCL 500.3107(b); MSA 24.13107(b), a person temporarily unemployed would receive no work loss benefit for loss of income during the period of unemployment since he would have performed no work had he not been injured. MCL 500.3107a; MSA 24.13107(1) expands the general work loss provision of MCL 500.3107(b); MSA 24.13107(b) to provide work loss benefits for an injured person who is temporarily unemployed based on earned income for the last month employed full time preceding the accident.

The trial court instructed the jury that, if it found plaintiff was temporarily laid-off from his American Steel Line Company employment, he was entitled to work loss benefits during his disability based on éarned income for the last month employed full time prior to the accident. Additionally, if the jury found plaintiff would have returned to work when called back, the jury could consider any increase in wages and overtime plaintiff would have received but for the injury. Defendant objected to jury consideration of increased wages and overtime, citing MCL 500.3107a; MSA 24.13107(1). However, this statute merely provides for work loss benefits during unemployment, and does not purport to limit benefits after temporary unemployment would have ended. Rather, the statute is expressly made subject to MCL 500.3107(b); MSA 24.13107(b), which allows recovery of work loss based upon what the injured person would have actually earned. The jury was properly allowed to consider what plaintiff would have earned after his temporary unemployment would have ended.

A new trial may be ordered where an excessive award of damages appears to have been influenced by passion or prejudice, GCR 1963, 527.1(3), or where a sound evaluation of the evidence reveals no basis for a clearly excessive verdict, GCR 1963, 527.1(4), Moyer v Shampo, 357 Mich 391; 98 NW2d 631 (1959).

The verdict in this case was clearly excessive. It is apparent from the size of the verdict that the jury resolved all credibility issues in favor of plaintiff. Having done so, the calculation of damages became a matter of arithmetic, requiring no judgment calls on such near imponderables as pain and suffering. Taking the evidence in the light most favorable to plaintiff, the most that plaintiff was entitled to in work loss benefits was $16,930.81. The instructional error by the trial court was too insignificant to account for the difference. It may be that the jury ignored the trial court’s order of directed verdict in favor of defendant on plaintiffs punitive damages count, or it may be that the jury either did not understand how to calculate damages or was unable to perform the necessary calculations. Whatever the cause, defendant is entitled to either a remittitur of the excess over $16,930.81, or a new trial. See Hartough v Safeway Lines, Inc, 288 Mich 703; 288 NW 307 (1939).

Plaintiff argues that the trial court erred in denying its request for attorney fees, MCL 500.3148; MSA 24.13148, and 12 per cent interest on the judgment, MCL 500.3142; MSA 24.13142. The record supports the trial court’s determination that plaintiff did not submit reasonable proof of loss and that defendant did not unreasonably refuse or delay payment. There was no error.

Affirmed in part, reversed in part, and remanded for further proceedings in accordance with this opinion. Costs to defendant.

       Our calculations are based upon 14.5 30-day periods between disability and trial. We assume a loss of self-employment income of $120 per week on the basis that the jury could infer plaintiff would have received this amount as profit but for his disability, that business would have increased in the store even if plaintiff had not been disabled, and that the store was sufficiently profitable to return at least $120 per week in income. Thus:
      A. Income from self employment:
      $120 per week X 4.3 weeks per month X 14.5 months = $7,482.
      B. Income from American Steel Line Company:
      1) During lay-off: April/May
      $3.50 per hour X 40 hours per week X 5.3 weeks = $7.42.
      2) During June:
      Base rate ($3.50 per hour X 40 hours per week X 4.3 weeks) + overtime ($5.25 per hour X 10 hours per week X 4.3 weeks) = $827.75.
      3) From July to trial:
      (Base rate [$3.75 per hour X 40 hours per week X 4.3 weeks] + overtime [$5.63 per hour X 10 hours-per week X 4.3 weeks]) X 12.25 months = $10,866.85.
      4) Total April to trial: $12,436.60.

        C. Total income: $19,918.60
      D. Less 15%: $16,930.81.
      Since in no 30-day period did plaintiff earn the maximum of $1,213, the total work loss benefit to which he is entitled is $16,930.81.


source: Caselaw Access Project

author: Allen, J.

license: Public Domain

text:
    LAWTON v GORMAN FURNITURE CORPORATION
    Docket No. 78-198.
    Submitted April 9, 1979, at Detroit.
    Decided May 21, 1979.
    Irving Lawton and his wife Kathryn Lawton and Bedland, Inc., brought an action against Gorman Furniture Corp. and Sable Office Furniture, Inc., for breach of a lease agreement. Bedland had showrooms and featured bedroom furniture. The plaintiffs desired to have a general furniture dealer in the area. Bed-land’s owners were agreeable to build a store and lease it to a general furniture dealer. A lease was executed with Gorman with a provision that no bedroom furniture be sold by Gorman unless Gorman referred all of its customers for bedroom furniture to Bedland. Sable was a wholly owned subsidiary of Gorman which sold office furniture. Subsequently, sales of bedroom furniture were made by both Gorman and Sable without consulting Bedland. Plaintiffs sued for damages for violation of the lease. At a bench trial the testimony of an expert accountant witness indicated that Gorman had sold bedroom furniture for a gross profit of $118,759. The expert was unable to reduce the gross profit figure because Gorman’s bookkeeping system did not single out such costs as advertising, rent, heat, and employee wages. Sable made bedroom furniture sales in the gross amount of $40,353.87, but the expert was unable to determine the manufacturer’s charges to Sable for the bedroom furniture or Sable’s net profit from those sales. No evidence was presented showing the profit Bedland would have normally realized had it made the sales. Judgment for plaintiffs, Oakland Circuit Court, William J. Beer, J., in the amounts of $118,759 against Gorman and $40,353.87 against Sable to be charged jointly and severally. The court ordered defendants to refrain from selling or attempting to sell or advertise for sale any bedroom furniture during the duration of the lease. Defendants appeal. Held:

      References for Points in Headnotes

       17 Am Jur 2d, Contracts § 441.
    22 Am Jur 2d, Damages § 304.

       19 Am Jur 2d, Corporations §§ 716, 717.

       18 Am Jur 2d, Corporations § 17.
    19 Am Jur 2d, Corporations § 716.

       22 Am Jur 2d, Damages § 178.

       22 Am Jur 2d, Damages § 46.

       22 Am Jur 2d, Damages § 22.

       22 Am Jur 2d, Damages § 2096.
    29 Am Jur 2d, Evidence § 131.

       22 Am Jur 2d, Damages § 25.

      1. Generally, a wholly owned subsidiary corporation is not chargeable with nor liable for the actions of its parent corporation unless the doctrine of "piercing the corporate veil” is applicable. The separate corporate entity will not be disregarded where there was no fraud, sham, or other misconduct in the creation of the subsidiary which would make the subsidiary liable for the acts of the parent. Trial proofs did not establish that corporate laws or standards were violated in the relationship between Gorman and Sable. It was not wrong for Sable to fill orders for bedroom furniture, the wrong was failure by Gorman, the parent corporation and tenant of the plaintiffs, to first notify Bedland and give plaintiffs an opportunity to fill the orders. Gorman alone is the party to be charged with the breach of contract and for any damages. The judgment and injunction issued against Sable is to be vacated.
    2. Damages for lost profits are based on the loss of net rather than gross profits. In the Sable sales of $40,353.87 no deductions were made. The Gorman gross profits of $118,759 do not include the normal overhead costs which Bedland would have had to pay had it sold the furniture; therefore, if the judgments were allowed to stand, Bedland would receive more than it would have earned had the breach not occurred.
    3. The judgments were based on an erroneous calculation of the damages. Generally, a plaintiff is relieved from establishing net profits where defendant’s bookkeeping prevents computation of overhead costs as deductions from gross profits; however, inadequacy of proof of damages does not excuse a plaintiff from establishing net profits where the information necessary to establish these profits is in the hands of the plaintiff. Bedland’s operating costs rather than Gorman’s niust be deducted from gross sales minus the cost of the furniture sold. All that was necessary was for Bedland to testify as to its normal operating costs and its net profit on sales. It is immaterial that Gorman’s and Sable’s books of account did not reflect such costs.
    4. A new trial on the issue of Bedland’s damages is necessary. It is clear that Gorman breached the contract and Bedland has been damaged. Proof of the amount or degree of damage is inadequate on the record but ascertainable by the trial court on remand.
    Affirmed in part, reversed in part, and remanded for a new trial on the issue of plaintiffs’ damages. The order forbidding Gorman from selling any bedroom furniture is without foundation in the contract and exceeds any reasonable necessity for protecting Bedland during the period of retrial. The injunction against Sable is vacated and the injunction against Gorman should be modified to permit Gorman to make sales of bedroom furniture after fully offering the opportunity to Bedland as contemplated in the lease.
    1. Contracts — Breach of Contract — Damages.
    The conditions of a contract must be breached to support an action for damages for breach of contract; otherwise the question of damages becomes moot.
    2. Corporations — Subsidiary Corporations — Subsidiary Liability.
    Generally, a wholly owned subsidiary corporation is not chargeable with nor liable for the actions of its parent corporation.
    3. Corporations — Subsidiary Corporations — Piercing the Corporate Veil — Fraud — Sham — Corporate Misconduct — Liability.
    A wholly owned subsidiary corporation could become liable for the action of its parent corporation where the doctrine of "piercing the corporate veil” is applicable; however, the doctrine presupposes that the subsidiary was created for the purpose of perpetrating a fraud, sham, or other improper use of corporate laws or standards and where there is no proof of misconduct, the separate corporate entity will not be disregarded so as to make the subsidiary liable for the acts of the parent.
    4. Damages — Contracts — Breach of Contract — Loss of Sales — Net Profits — Gross Profits.
    Damages for lost profits in a breach of contract action, where the breach was the cause of plaintiffs loss of sales and the profits therefrom, are based on the loss of net rather than gross profits.
    5. Damages — Contracts — Breach of Contract — Measure of Damages.
    The measure of damages in a breach of contract suit is to place the injured party in as good a position as he would have been in if the promised performance had been rendered.

      6. Damages — Contracts — Breach of Contract — Mathematical Certainty.
    Generally, damages in an action for breach of contract need not be established with mathematical certainty.
    7. Damages — Contracts — Breach of Contract — Proof of Damages.
    Inadequacy of proof of damages is not excusable on grounds that proof was made impossible by a defendant’s own acts or omissions where the information necessary to establish the damages is in the hands of the plaintiff.
    8. Damages — Contracts — Breach of Contract — Proof of Damages — Remand.
    A remand for a new trial on the issue of damages is proper in a breach of contract action where it is clear that a plaintiff has been damaged but proof of the amount or degree of damages is inadequate, but ascertainable.

      Levin, Levin, Garvett & Dill (by David A. Goldman and Richard M. Selik), for plaintiffs.

      Joseph S. Radom, P.C., for defendants.
    Before: Beasley, P.J., and Allen and D. C. Riley, JJ.
   Allen, J.

This appeal involves a dispute between two furniture businesses located next to one another in nearly identical buildings on Telegraph Road in Southfield. One store, Bedland, Inc., owned by Irving and Kathryn Lawton and their son, sells bedroom furniture and accessories displayed on the premises. Bedland began operating on Telegraph Road in 1959, and according to Law-ton maintained a large inventory from about a dozen manufacturers so that most of his customers were able to select a bedroom set and take delivery within a week.

Early in 1960, Lawton purchased the adjacent property next to Bedland in contemplation of building a structure thereon to be leased to a general furniture store which would provide a total furniture center where customers could purchase all types of home furnishings. In 1964, Law-ton commenced negotiating with Bernard D. Moray, the owner of a small furniture store on Livernois in Detroit which was destroyed the following year in the Detroit riots. In the negotiations, Law-ton told Moray of his concept of a total furniture center and that if he were to build a store and lease it for such purpose such store could not conflict with the business of Bedland.

Moray was also the sole stockholder of Sable Office Furniture, Inc., (Sable), a corporation dealing in office furniture and located on Seven Mile Road in Detroit.

On March 23, 1965, a lease between the Law-tons, as lessors, and Moray, as nominee for a corporation to be formed (Gorman), as lessee, was signed; whereupon the building was built, Gorman was incorporated and was substituted for Moray as the lessee in a ten-year lease commencing July 1, 1966, with an option to Gorman to renew for a second ten-year period. Unlike Bedland, the newly formed corporation carried little inventory. Instead, it operated as a design service maintaining hundreds of catalogues. Gorman designers worked with the client who made selections from the catalogue. During its first ten years, Gorman employed 30 designers on either a commission or salary basis, and at the time of trial had 12. Orders were sent to the manufacturers from whose catalogue the furniture was selected and in turn the furniture was sent to Gorman where it was inspected and delivered to the customer.

The lease, prepared by an attorney who was Moray’s brother-in-law, contained a provision that restricted Gorman’s sale of bedroom furniture unless Gorman’s decorating department, receiving orders for bedroom furniture, first referred said orders to Bedland to be filled. Pursuant to this provision, Moray personally discussed with Lawton several instances where Gorman designers desired bedroom furniture. In each instance, Lawton replied that Bedland was not interested in the sale because the merchandise was not the kind carried by Bedland. In 1968-1969, Moray asked Lawton if Bedland desired to supply bedroom furniture to several condominium units at discount prices but Lawton declined on grounds that a discount was involved. Sometime following what seemed to be this lack of interest by Bedland, Gorman placed orders for bedroom furniture without consulting Bedland.

Friction between Lawton and Moray concerning the lease terms increased until February 17, 1975, when Bedland demanded that Gorman leave the leased premises, but also suggesting that the dispute could be resolved by negotiation. On June 9, 1975, Gorman exercised its option to renew the lease for a second ten-year period. On June 13, 1975, Bedland sued for damages for violation of § 51, supra, of the lease. At a bench trial, Bedland presented the testimony of Melwin Sewach, a certilled public accountant, that during the six-year period preceding the suit, Gorman had sold bedroom furniture in the sum of $327,923, but after deducting Gorman’s cost of said furniture the gross profit was $118,759. On cross-examination Sewach admitted that he was unable to reduce the gross profit figure of $118,759, because Gorman’s bookkeeping system did not single out such costs as advertising, rent, heat, and employee wages. Sewach also testified that in 1974-1975, Sable made bedroom furniture sales in the gross amount of $40,353.87, but that he was unable to make adjustments therefrom for the manufacturers’ charge or for Sable’s net profits from those sales. No evidence was presented showing the profit Bedland would have normally realized had it made the sales.

Following three days of trial, the trial court rendered a verdict in favor of plaintiffs on October 4, 1977. In so doing, the court adopted carte blanche all the proposed findings of fact and conclusions of law submitted by plaintiffs. Specifically, the trial court awarded damages in the sum of $159,112.87, based on the following:

a) $118,759.00 — as the profit from the total sales of bedroom furniture by Gorman.
b) $40,353.87 — total sales of bedroom furniture by Gorman through Sable to avoid the restrictions of paragraph 51 of the lease.
c) $159,112.87 — Total

The award ran against both Sable and Gorman, jointly and severally. Finally, the court ordered both Sable and Gorman to refrain completely from selling or attempting to sell or advertise for sale any bedroom furniture during the duration of the lease. Defendants appeal of right.

I

In their supplemental brief, defendants for the first time raise what we perceive to be the threshold question, viz. — whether the trial court erred in finding as a fact that the conditions of the lease were breached at all. If there was no breach the question of damages becomes moot. Paragraph 51 of the lease explicitly provides that orders for bedroom furniture from Gorman must be "referred to said adjoining business to be filled” but if the adjoining business (Bedland) refuses or is unable to fill them, then Gorman may fill the order. The record is clear that Gorman placed many orders for bedroom furniture without bothering to first notify Bedland. True, one cannot determine how many of such orders would have been refused by Bedland. But this defect goes to the question of damages rather than the question of breach of contract. On this threshold issue the trial court did not err. The breach is clear and the basic issues on appeal are the amount of damages, if any, and whether Gorman alone or Gorman and Sable should pay.

II

We next turn to deciding whether the trial court erred in finding Sable liable. We first note that Sable was not a party to the contract with Bed-land. Therefore, it has no liability on its own. Plaintiffs argue that Sable may be held liable under the doctrine of "piercing the corporate veil”. That doctrine presupposes that the corporation was created for the purpose of perpetrating a fraud. Gottlieb v Arrow Door Co, 364 Mich 450, 452; 110 NW2d 767 (1961), Elliott v Smith, 47 Mich App 236; 209 NW2d 425 (1973). In the instant case Sable was incorporated some 50 years before Gorman was incorporated. The only testimony in the record relating to the control by Gorman over Sable was that Sable was a wholly owned subsidiary of Gorman and that Moray, the sole stockholder of Gorman, was president of Sable. But such relationship is not uncommon and, by itself, is insufficient to pierce the corporate veil. Gottlieb, supra; Elliott, supra. It was not wrong for Sable to fill orders for bedroom furniture. The wrong was the failure by the parent corporation, Gorman, to first notify plaintiffs and give plaintiffs the opportunity to fill the order. Liability for the wrong falls on the parent rather than on the subsidiary. We agree with defendants that to support the trial court’s conclusion that a dominated and wholly owned subsidiary corporation is chargeable with the actions of its parent is to stand the doctrine of piercing the corporate veil "on its head”. Accordingly, the award against Sable is vacated and set aside. For like reasons, the injunction issued against Sable is vacated. The activities of Sable may be properly restrained by entry of an appropriate order against the offending parent corporation, Gorman.

Ill

Having determined that defendant Gorman, and Gorman alone, is the party to be charged for the breach of contract, we must now decide whether the award of damages of $159,112.87 is sustainable. That figure was the composite of Sable’s gross sales of $40,353.87, and Gorman’s gross profit (gross sales minus cost of furniture sold) of $118,-759. We find the award seriously flawed in three respects. First, from the figure of $40,153.87, no deduction is made for the cost of the furniture paid the manufacturer. Therefore the award gives plaintiffs a much higher sum than they are entitled to. Second, the figure of $118,759, although computed after deducting the cost of the furniture, does not include the normal overhead costs which Bedland would necessarily have had to pay had it sold the furniture. Damages for lost profits are based on the loss of net rather than gross profits. Benfield v H K Porter Co, Inc, 1 Mich App 543; 137 NW2d 273 (1965), The Vogue v Shopping Centers, Inc, 402 Mich 546; 266 NW2d 148 (1978). Any other rule would obviously grant the offended litigant a greater sum than he would have earned had the breach not occurred.

The third, and we believe the most telling, reason for our disallowance of the award is that it is based on a consideration of the profits of Gorman and Sable rather than on a consideration of the loss of profits of the plaintiffs. As was stated in Allen v Michigan Bell Telephone Co, 61 Mich App 62, 68; 232 NW2d 302 (1975).

"[T]he measure of damages in a breach of contract suit is to place the injured party in as good a position as he would have been in if the promised performance had been rendered.”

Had Bedland been allowed to sell, it would have had to pay commissions to its designers as well as costs of delivery. None of these costs were subtracted from the gross costs awarded by the trial court.

Plaintiffs argue that they are excused from failing to show loss of net profits as distinguished from loss of gross profits because Gorman’s and Sable’s books of account were kept in such a manner that plaintiffs’ accountant was unable to ascertain what , costs to deduct. In support of this claim plaintiffs cite cases holding that damages need not be established with mathematical certainty and decisions holding that where the aggrieved party is prevented from computing overhead costs which should be deducted from gross profits, the aggrieved party is relieved from establishing net costs. We do not quarrel with the rules of law cited but disagree with their applicability to the case at hand. Since it is Bedland’s operating costs rather than Gorman’s which must be deducted from gross sales minus cost of furniture sold, it is immaterial that Gorman’s and Sable’s books of account did not reflect such costs. All that was necessary was for plaintiffs to testify as to plaintiffs’ normal operating costs and its normal net profit on sales. This information was in the hands of plaintiffs. Therefore, the inadequacy of proof of damages is not excusable on grounds that proof was made impossible by defendants’ own acts or omissions. Clearly, plaintiffs were prevented from earning a profit on sales of bedroom furniture which might have been made had Gorman given plaintiffs notice as required in § 51 of the contract. Unfortunately, the amount of the loss of profit was improperly established and, if left unchanged on appeal, will give plaintiffs an award unconscionably greater than that to which they are entitled.

IV

This brings us to the question of what disposition should be made on appeal where proof that plaintiffs have been damaged is clear but proof of the amount or degree of damage is inadequate. On this question our Court has taken diverse positions. In Benfield v H K Porter, Inc, 1 Mich App 543; 137 NW2d 273 (1965), this Court reversed a judgment in favor of plaintiff on grounds that plaintiff failed to offer any proof of expenses which should have been deducted from the commissions to which he was entitled. The case was not remanded for further proofs. However, in two subsequent cases the Court remanded for further proofs. Thornton Construction Co, Inc v Mackinac Aggregates Corp, 9 Mich App 467; 157 NW2d 456 (1968), Brillhart v Danneffel, 36 Mich App 359; 194 NW2d 63 (1971). In Thornton the Court found plaintiff’s proof of damages "inadequate to establish any certainty upon which a judgment could be based * * * and unduly speculative” and remanded for a new trial on the issue of plaintiff’s damages. Neither case mentioned Benñeld. Given the circumstances of this case we opt to follow the procedure used in Thornton and Brillhart and remand to the trial court for a new trial on the issue of plaintiffs’ damages against Gorman. Contrary to defendants’ contention this is not a case where, because there is no certainty that Bedland would have made the sales that Gorman and Sable made, proof of net profits would be conjectural and speculative no matter what proof was offered. Obviously, plaintiffs cannot prove they could reasonably have filled an order placed with Gorman since plaintiffs have no knowledge of the order. Here, unlike the question of proof of net profits previously discussed, the proofs are all in the possession of the defendants. In such a situation the. aggrieved party is relieved from making proofs but the offending party may mitigate damages by presenting proof that the orders were of such a type or at such low discount prices that plaintiffs would not have attempted to fill them. See Seaboard Music Co, Inc v Germano, 24 Cal App 3d 618; 101 Cal Rptr 255 (1972), Hendrickson v Grengs, supra, fn 3.

While not addressed in any Michigan case, our decision to remand on the question of damages is soundly supported by case law from Minnesota. In Miller v Reiter, 155 Minn 110; 192 NW 740 (1923), plaintiff sued for loss of profits when his bar was wrongfully closed down for three and one-half months. Though plaintiff introduced some evidence of what his net profits would reasonably have been during the period, the court found that "the amount of damages, reached in the manner indicated, is so unsatisfactory that a verdict of so large a sum cannot be sustained”. Rather than dismissing the case the court ordered a new trial "confined to the amount of damages sustained”, Id. at 113. In Bryngelson v Minnesota Valley Breeders Ass’n, 262 Minn 275; 114 NW2d 748 (1962), the court found plaintiffs’ proof of profit "far too speculative and conjectural to be sustained” but concluded that that issue and other issues "should be determined at any retrial of this litigation”. Id. at 283.

We further observe that Benñeld and Thornton may not be as contradictory as first appears. Benñeld came to this Court on appeal from the trial court’s denial of defendant’s motion for a directed verdict at the close of plaintiffs proofs. In ruling in defendant’s favor that the motion should have been granted, our Court never reached the issue of remanding for additional proofs of damage. In Thornton, and in the instant case, a motion for directed verdict was not made. Since the judgment entered by the trial court must be vacated because it is patently too high, it makes no sense to prohibit a retrial on damages and thereby force a judgment patently too low. As we stated before— plaintiffs have been wronged and obviously are entitled to damages, the extent and amount of which are within the realm of proof. Remand for that purpose is ordered.

The order forbidding Gorman from selling any bedroom furniture is without foundation in the contract and exceeds any reasonable necessity for protecting Bedland during the period of retrial. The injunction against Sable, as noted earlier, is vacated and the injunction against Gorman should be modified to permit Gorman to make sales of bedroom furniture after fully offering the opportunity of sale to Bedland as contemplated in § 51 of the lease.

Affirmed in part, reversed in part, and remanded for a new trial on the issue of plaintiffs’ damages and for modification of judgment as provided in this opinion. Costs to Sable only.

       "51. Tenant agrees that it will not, in the demised premises, engage in the sale of bedroom furniture so long as Landlord, his successors or assigns, or any corporation partially or wholly owned by him, or Bedland, Inc., or its successors, operate a bedroom furniture business in the adjoining premises located at 29111 Telegraph Road; provided, however, that this shall not prevent Tenant selling accessories, chairs to be used in bedrooms, lamps or sofas which are convertible to beds. Tenant shall refer all customers requests for bedroom furniture to said adjoining business. Notwithstanding the provisions of this paragraph, in the event Tenant’s decorating department receives orders for bedroom furniture, the same shall be referred to said adjoining business to be filled. If said adjoining business refuses or is unable to fill such special orders, then Tenant may have such special orders filled elsewhere. Said decorator’s special order bedroom furniture shall in no event be displayed on the sales floor of Tenant.”

       Testimony was given that the designer was normally paid 10% of the sale price.

        McCullagh v Goodyear Tire & Rubber Co, 342 Mich 244; 69 NW2d 731 (1955), Fera v Village Plaza, Inc, 396 Mich 639; 242 NW2d 372 (1976).

        Brady v Central Excavators, Inc, 316 Mich 594; 25 NW2d 630 (1947), Hendrickson v Grengs, 237 Minn 196; 54 NW2d 105 (1952).

       Much of the confusion on proof of damages in this case seems to stem from plaintiffs’ complaint which claimed an "accounting” of defendants’ profits earned in the six years preceding suit but also asked for damages. There is a difference between a claim that profits of a defendant be turned over to the plaintiff and a claim that a breach of contract prevented plaintiff from earning profits which plaintiff would have earned had the breach not occurred. In this opinion we treat plaintiffs’ action as one properly in damages.

       An example of a case where proof of profits would be speculative and conjectural no matter what proof is offered is Village of Elbow Lake v Otter Tail Power Co, 281 Minn 43; 160 NW2d 571 (1968), and Mississippi Power Co v Harrison, 247 Miss 400; 152 So 2d 892, 908 (1963). The instant case is more like The Vogue v Shopping Centers, Inc, 402 Mich 546; 266 NW2d 148 (1978), and Thornton, supra, where proof of lost profit, though difficult and to some degree speculative, is still allowable.

       The parties have not addressed the court’s disposition of the lease. The court ordered that the lease continue on a day-to-day basis as long as Gorman complies with the terms of the covenant. In view of our remand for retrial on damages, we conclude that the order of the trial court as to the lease should be vacated and the lease allowed to continue for the duration of its term.


author: D. E. Holbrook, P.J. Cynar, J.

text:
    PEOPLE v POWELL
    Docket No. 78-322.
    Submitted December 7, 1978, at Lansing.
    Decided May 21, 1979.
    Defendant, Kelvin D. Powell, was convicted, on his plea of guilty, of armed robbery and felony-firearm in the Genesee Circuit Court, Donald R. Freeman, J. The facts are that, while he participated in the robbery, he did not have possession of a firearm but that his codefendant did. Defendant appeals. Held:

    1. To be convicted of felony-firearm, a defendant must have had personal possession of a firearm.
    2. Under the facts, conviction of both felony-firearm and armed robbery violates the double jeopardy provisions of the Federal and state constitutions.
    Affirmed as to the armed robbery conviction and reversed as to the felony-firearm conviction.
    Cynar, J., dissented. He would hold that conviction of felony-firearm does not require proof of personal possession of a firearm and that an aider and abettor of an armed robbery without personal possession may be properly convicted of both. He would affirm.
    Opinion of the Court
    1. Criminal Law — Statutes — Felony-Firearm — Personal Liability — Aiders and Abettors.
    The felony-firearm statute, which makes carrying a firearm during the commission of a felony not excepted by the statute a separate punishable offense, requires for a finding of guilt that a defendant personally carry or have in his possession a firearm; an aider and abettor in an armed robbery, who was not armed, may not be convicted of violation of the felony-firearm statute (MCL 750.227b; MSA 28.424[2]).
    References for Points in Headnotes

       67 Am Jur 2d, Robbery §§ 4, 8, 9.

       21 Am Jur 2d, Criminal Law § 182 et seq.

    67 Am Jur 2d, Robbery § 48.

       21 Am Jur 2d, Criminal Law §§ 115, 119, 123, 182 et seq.

      2. Criminal Law — Double Jeopardy — Armed Robbery — Felony-Firearm.
    Conviction of both armed robbery and possession of a firearm during the commission of the armed robbery constitutes double • conviction and punishment for the same offense and is prohibited by the Federal and state constitutions.
    Dissent by Cynar, J.
    3. Criminal Law — Aiding and Abetting — Felony-Firearm — Possession of a Firearm.

      One not in possession of a ñrearm may be punished as an aider and abettor to a felony-ñrearm offense; one who, along with another, intended to and did commit a robbery in which the other used a ñrearm may properly be convicted as an aider and abettor of both armed robbery and felony-ñrearm.

      Frank J. Kelley, Attorney General, Robert A. Derengoski, Solicitor General, Robert F. Leonard, Prosecuting Attorney, and Donald A. Kuebler, Chief, Appellate Division, for the people.

      Jon T. Warren, for defendant on appeal.
    Before: D. E. Holbrook, P.J., and D. E. Holbrook, Jr., and Cynar, JJ.
   D. E. Holbrook, P.J.

Defendant pled guilty May 24, 1977, to charges of armed robbery, MCL 750.529; MSA 28.797, and possession of a firearm during the commission of a felony, MCL 750.227b; MSA 28.424(2). He was sentenced to from 20 to 39 years on the robbery charge and to the mandatory consecutive two-year possession term. The defendant appeals of right, alleging that the factual basis elicited during his plea proceedings does not support his conviction for possession of a firearm and that his conviction on both counts violates the constitutional prohibition of double jeopardy.

The testimony elicited in support of the defendant’s plea indicates that he was sentenced under MCL 750.227b as a result of his codefendant’s possession of a firearm. We agree with the holding of People v Walter Johnson, 85 Mich App 654; 272 NW2d 605 (1978), that the language of the felony-firearm statute clearly contemplates "personal” possession of a firearm by the defendant.

Further, we find that it would be necessary to prove the same facts to convict defendant under the armed robbery charge and to convict defendant under the possession of a firearm during the commission of a felony charge. Conviction of both offenses offends the double jeopardy provision of the Federal and state constitutions prohibiting being twice convicted and punished for the same offense. See People v Walter Johnson, supra (dissent by Kaufman, J.) and People v Chamblis, 88 Mich App 734; 279 NW2d 541 (1978).

For these' reasons, defendant’s conviction under MCL 750.227b is reversed. Defendant’s conviction for armed robbery under MCL 750.529 is affirmed.

D. E. Holbrook, Jr., J., concurred.

Cynar, J.

(dissenting). I do not believe that MCL 750.227b; MSA 28.424(2) requires proof of personal possession of the firearm. See my opinion in People v Tavolacci, 88 Mich App 470; 276 NW2d 919 (1979). I believe that one can be convicted as an aider and abettor to the offense of felony firearm. See MCL 767.39; MSA 28.979 and People v Doemer, 35 Mich App 149, 151-152; 192 NW2d 330 (1971). See also Judge Kaufman’s opinion in People v Walter Johnson, 85 Mich App 654; 272 NW2d 605 (1978).

To be convicted as an aider and abettor one must assist another in the commission of a crime with knowledge that a criminal act is contemplated. People v Spry, 74 Mich App 584, 594; 254 NW2d 782 (1977), People v Penn, 70 Mich App 638, 649; 247 NW2d 575 (1976). When one pleads guilty to aiding and abetting an offense, there must be a substantial factual basis for the plea and the plea must represent a well-considered and well-advised choice by the defendant. People v Haack, 396 Mich 367, 376-377; 240 NW2d 704 (1976).

Appellant stated he and his codefendant intended to commit a robbery to "get some money”. They entered the car and said: "This is a stick up.” Powell had a knife in his hand and the victim gave them a dollar. Powell, while in the car, observed Reynolds with a gun. He described in detail Reynolds’ use of the gun during the robbery, but he said he had not seen the gun until they were in the victim’s automobile. Powell stated he kept the money taken in the robbery and indicated that he had a vivid memory of the robbery and that he combined with the codefendant in the use of the gun in perpetration of the robbery.

On the basis of these facts, the defendant’s guilty plea to the charge of armed robbery and felony-firearm is supported by his testimony and should be affirmed.


author: Bashara, J.

text:
    GREENLEAF v DEPARTMENT OF STATE HIGHWAYS & TRANSPORTATION
    Docket Nos. 78-370, 78-371.
    Submitted March 7, 1979, at Lansing.
    Decided May 22, 1979.
    Leota A. Greenleaf, as the administratrix of the estate of Rosa Klaus, deceased, brought an action in the Court of Claims against the Department of State Highways and Transportation and against the State of Michigan for damages for the wrongful death of Rosa Klaus. Leota Greenleaf and Hiram M. Greenleaf, her husband, also commenced an action in the Court of Claims against the Highway Department and the State of Michigan for damages for personal injuries suffered by Mrs. Greenleaf. The injuries suffered by Mrs. Greenleaf and the wrongful death of Rosa Klaus resulted from an automobile accident caused when Mrs. Greenleaf lost control of her automobile upon suddenly encountering a glare ice condition that covered the entire bridge of the Silver Lake overpass on U.S. 23 near Fenton. Rosa Klaus was rendered a quadriplegic as a result of the accident and remained so until her death 13 months later. The Court of Claims tried the cases together.
    Judgment for the plaintiffs, Wade Van Valkenburg, J. The defendants appeal, raising the issue of whether a highway authority can be held liable for an accident caused by ice on a highway bridge where there is no defect in the bridge itself. Leota Greenleaf, as administratrix of the estate, cross-appeals and claims that prejudgment interest on the award of damages for wrongful death should have been awarded. Held:

      References for Points in Headnotes

       39 Am Jur 2d, Highways, Streets, and Bridges § 506 et seq.

    Municipal liability for injuries from snow and ice on sidewalk. 81 ALR2d 519.

       39 Am Jur 2d, Highways, Streets, and Bridges § 397 et seq.

    Duty of public authorities to erect and maintain warning signs or devices for curves in highway. 55 ALR2d 1000.

       81 Am Jur 2d, Witnesses § 658.
    Credibility of witness giving uncontradicted testimony as matter for court or jury. 62 ALR2d 1191.

       22 Am Jur 2d, Death § 275.
    Recovery of prejudgment interest on wrongful death damages. 96 ALR2d 1104.

      1. The ice on the bridge on the day of the accident was a natural accumulation of ice which all the expert witnesses at the trial agreed could have occurred suddenly and almost instantaneously. There is no assured method for immediate detection of this condition, known as preferential icing, short of full-time human surveillance of a bridge or overpass from early fall to late spring. The Highway Department cannot be held to so strict a standard. The finding of the Court of Claims that the defendants were negligent due to inadequate methods of handling such icing conditions was clearly erroneous.
    2. The findings of the Court of Claims that the defendants knew of the propensities of the bridge for preferential icing and that the "Watch For Ice On Bridge” sign posted as a warning to motorists approaching the bridge was not properly placed so as to be visible to passing motorists were not clearly erroneous.
    3. The Court of Claims properly denied prejudgment interest on the award of damages for wrongful death. The Court of Claims is precluded by statute from awarding prejudgment interest on damages.
    Affirmed.
    1. Municipal Corporations — Negligence — Highways — Ice and Snow — Natural Accumulations.
    A municipality is not liable for an accident that is caused by traveling on a natural accumulation of ice and snow.
    2. Municipal Corporations — Negligence — Protection of Pedestrians — Sidewalks — Ice and Snow.
    A municipality is not negligent if it omits to protect pedestrians from dangers to life and health which are caused by the accumulation of ice and snow on sidewalks from natural causes, however, where the accumulation of ice and snow is the result of unnatural causes, the municipality may be liable; in order to render a municipality liable, the interference with travel must be unusual or exceptional, that is, different in character from conditions ordinarily and generally brought about by winter weather in a given locality.
    3. Highways — Preferential Icing — Bridges — Overpasses — Surveillance — Highway Department.
    There is no assured method for the immediate detection of preferential icing (icing which occurs on the surface of a bridge or overpass but not on the adjacent pavement) short of full-time human surveillance of highway surfaces from early fall to late spring; the Department of State Highways and Transportation cannot be held to so stringent a surveillance.
    4. Municipal Corporations — Highways — Safe Streets — Warnings of Danger Areas.
    The duty of a municipality to make its streets reasonably safe includes placing signs or other safeguards at points of special danger or giving other proper warnings.
    5. Witnesses — Credibility of Witnesses — Issue of Fact — Bench Trial.
    The credibility of witnesses is a question for the trier of fact, and, in a bench trial, special regard is given to the findings of the trial court.
    6. Damages — Interest — Wrongful Death.
    Interest on an award of damages in a wrongful death action is computed from the time of death.
    7. Courts — Court of Claims — Torts — Interest — Prejudgment Interest on Damages.
    Prejudgment interest on an award of damages is generally not recoverable in a tort action before the Court of Claims.

      Cicinelli, Mossner, Majoros & Alexander, P.C., for plaintiffs.

      Frank J. Kelley, Attorney General, Robert A. Derengoski, Solicitor General, and Louis J. Caruso and Myron A. McMillan, Assistants Attorney General, for defendants.
    Before: M. F. Cavanagh, P.J., and Bashara and D. E. Holbrook, Jr., JJ.
   Bashara, J.

Defendants appeal from a Court of Claims judgment in favor of plaintiffs arising out of a wrongful death action and a personal injury action.

Plaintiffs allege that the Michigan Department of State Highways and Transportation failed to keep a public highway "reasonably safe and fit for travel” as required by MCL 691.1402; MSA 3.996(102).

On November 8, 1971, at approximately 9 a.m., plaintiff Leota Greenleaf and her mother Rosa Klaus sustained serious injuries in an automobile accident on the Silver Lake overpass bridge located on U.S. 23 near Fenton.

The accident was caused when Mrs. Greenleaf lost control of her automobile upon encountering a glare ice condition that covered the entire bridge. The weather was bright, sunny and very cold. Mrs. Greenleaf testified that the highway had been clear and dry all the way from her home near Bay City to the scene of the accident, and that she had crossed at least six other overpasses enroute.

Mrs. Klaus was rendered a quadriplegic as a result of the accident and remained so until her death 13 months later. Mrs. Greenleaf also suffered personal injuries from the accident.

The Court of Claims found the defendants negligent as envisioned by the statute because of the method of road maintenance and surveillance.

Although exceedingly high and long, there is no claim that the bridge was defectively designed or constructed. The primary issue on appeal is whether a highway authority can be held liable for an accident caused by ice on a highway bridge where there is no defect in the bridge itself.

Plaintiffs claim that the defendants had knowledge of the bridge’s propensities to ice under certain climatic conditions. They allege defendants failed to take appropriate maintenance actions to remedy the ice condition when it occurred and to warn of its existence.

The duty owed by defendants is set forth in MCL 691.1402; MSA 3.996(102):

"Each governmental agency having jurisdiction over any highway shall maintain the highway in reasonable repair so that it is reasonably safe and convenient for public travel. Any person sustaining bodily injury or damage to his property by reason of failure of any governmental agency to keep any highway under its jurisdiction in reasonable repair, and in condition reasonably safe and fit for travel, may recover the damages suffered by him from such governmental agency.”

Michigan authority has long maintained that a municipality is not liable for an accident that is caused by traveling on a natural accumulation of ice and snow. Johnson v Marquette, 154 Mich 50, 53; 117 NW 658 (1908), Lubbers v Manlius Twp, 172 Mich 387, 391; 137 NW 804 (1912).

In Gerrie v Port Huron, 226 Mich 630, 635; 198 NW 236 (1924), a creosoted wooden pavement approach to a bridge became slippery because of a sleet storm and an accident resulted. The Court held that, when bare, the pavement was not slippery or in any sense defective, and that the city was not required to guard against the climatic incident of sleet or rain freezing on the pavement and rendering it slippery.

There are also numerous cases involving ice and snow on sidewalks which can be analogized to the present situation since the standard of care required is the same.

In Woodworth v Brenner, 69 Mich App 277, 281; 244 NW2d 446 (1976), a panel of this Court held that the mere presence of ice and snow would not support an action against the city, unless there was some defect in the sidewalk itself. Whenever ice or snow is the sole proximate cause of an accident, there is no liability. See also Mayo v Village of Baraga, 178 Mich 171, 175; 144 NW 517 (1913), Hopson v Detroit, 235 Mich 248, 252; 209 NW 161 (1926).

The criterion most often adopted by the courts has been whether the danger was caused by natural or unnatural and artificial conditions. Perl v Cohodas, Peterson, Paoli, Nast Co, 295 Mich 325; 294 NW 697 (1940).

As noted in Hampton v Master Products, Inc, 84 Mich App 767, 770; 270 NW2d 514 (1978):

"The mere presence of snow or ice on a highway, street, or walk in wintertime, which causes travelers difficulty, does not constitute negligence on the part of the public authorities. A municipality in Michigan is not negligent if it omits to protect pedestrians from dangers to life and health which are caused by the accumulations of ice and snow on sidewalks from natural causes. * * *.
"When, however, the accumulation of ice and snow is the result of unnatural causes, the municipality may be liable. In order to render a municipality liable, the interference with travel must be unusual or exceptional, that is, different in character from conditions ordinarily and generally brought about by winter weather in a given locality.”

The type of icing involved in this case is known as preferential icing and factually presents a case of first impression.

Preferential icing describes a situation in which there will be ice on the surface of a structure but not on the adjacent pavement. This phenomenon occurs because of the combination of the design of the structure, the properties of the earth and the pavement, and the local weather conditions, particularly, the temperature, the local humidity as it is reflected in the dew point and the radiation properties of the bridge.

Testimony indicated that the occurrence is unpredictable but is more likely to occur in the early spring or late fall, around sunset or sunrise. A way to construct or design bridges to eliminate the possibility of the occurrence of this type of icing has not yet been found.

The facts of this case convince us that a physical phenomenon which constitutes a natural accumulation of ice has occurred here.

In the instant case, testimony elicited from witnesses for both parties indicated that it was impossible to predict when preferential icing would occur. Although temperature was one indicator, there are numerous other relevant factors.

All the expert witnesses agreed that the icing could occur suddenly and almost instantaneously.

A maintenance engineer for the Highway Department indicated that an observer could drive over a bridge and find it clear, but that it could ice up immediately afterward. It was also established that salting the highway in anticipation of this problem would be of no value since the salt would be blown off a dry road within minutes by traffic.

The fact that the Highway Department program of highway surveillance was not in operation on November 8, 1971, does not clearly mandate a finding of negligence. The icing phenomenon is of a highly unpredictable and rapid nature. Short of full-time human surveillance of the bridge from early fall to late spring, there is no assured method for immediate detection of this condition.

The Highway Department cannot be held to so stringent a standard. Based upon the evidence, the finding of the Court of Claims that the defendants were negligent due to inadequate methods of handling the icing conditions is clearly erroneous. Tuttle v Dep’t of State Highways, 397 Mich 44, 46; 243 NW2d 244 (1976).

Defendants also question the court’s ruling that it did not adequately warn the traveling public of the possibility of icing occurring on the bridge.

The duty resting upon a municipality to make its streets reasonably safe includes placing signs or other safeguards at points of special danger or giving other proper warning. Tuttle, supra, at 52, Joslyn v Detroit, 74 Mich 458, 461; 42 NW 50 (1889), Mullins v Wayne County, 16 Mich App 365, 373, 378; 168 NW2d 246 (1969).

There is no question that defendant had knowledge of the propensities of the bridge for preferential icing. Accident statistics indicated that in 1970, ten accidents caused by ice on clear days took place near or on the bridge, and in 1971, six similar accidents were recorded.

Conflicting testimony was presented at trial whether a "Watch For Ice On Bridge” sign was visible on the date in question. The Court of Claims chose to believe plaintiffs’ witnesses and found the sign was not visible to passing motorists.

After reviewing the evidence, we cannot say the finding of the Court of Claims is clearly erroneous. The credibility of witnesses is a question for the trier of fact, and, in a bench trial, special regard is given to the findings of the trial court. Ross v Richardson, 29 Mich App 110, 111; 185 NW2d 106 (1970), GCR 1963, 517.1.

The final issue raised is whether the lower court erred in failing to award plaintiff prejudgment interest from the date of death.

In a wrongful death action, interest is computed from the date of death. Vannoy v City of Warren, 26 Mich App 283; 182 NW2d 65 (1970).

However, opposing the awarding of such interest is MCL 600.6455; MSA 27A.6455, which pertains to actions in the Court of Claims.

"No interest shall be allowed upon any claim up to the date of the rendition of judgment by the court, unless upon a contract expressly stipulating for the payment of interest. All judgments from the date of the rendition thereof shall carry interest at the rate of 5% per annum, except that judgment upon a contract expressly providing for interest shall carry interest at the rate provided by said contract in which case provision to that effect shall be incorporated in the judgment entered.”

Prejudgment interest on an award of damages is generally not recoverable in tort actions before the Court of Claims. Williams v Dep’t of State Highways, 44 Mich App 51; 205 NW2d 200 (1972), Reich v State Highway Comm, 43 Mich App 284; 204 NW2d 226 (1972). We agree with the lower court that the statute bars recovery of prejudgment interest in this case. See Larkey v Dep’t of Military Affairs, 88 Mich App 657; 278 NW2d 711 (1979).

Affirmed.

       Testimony indicated that a part of normal winter maintenance procedure was to have inspectors and observers actually drive various highway systems. This program was not implemented until after November 15th of each year. Maintenance forces and equipment are also ready for routine winter maintenance by November 15th. Prior to this date, maintenance personnel would still act promptly if an ice or snow condition is brought to their attention.

       In reaching its decision, the Court of Claims relied heavily on the recent case of Peters v Dep’t of State Highways, 400 Mich 50; 252 NW2d 799 (1977).
      In that case, the decedent was a passenger in a car that the driver lost control of upon encountering an area of flooded highway. The Court found that the flooding occurred because of an inadequate drainage system, and that such inadequacy was a defect in the highway. The Court then addressed the issue of notice and found the Highway Department liable because there was evidence tending to show they knew or should have known of the defective nature of the drainage system.
      This case is clearly distinguishable from the present case, in which there has been no claim made that the bridge was defective and since natural accumulations of ice and snow do not constitute defects.


author: Bronson, J.

text:
    DETROIT AUTOMOBILE INTER-INSURANCE EXCHANGE v RECK
    Docket No. 78-513.
    Submitted February 5, 1979, at Detroit.
    Decided May 22, 1979.
    Leave to appeal applied for.
    Donald A. Reck was injured when a motorcycle which he was operating in a race collided with a motorcycle operated by Daniel Baranowski, whose policy of insurance excluded any periods when the motorcycle is used in a race. Mr. Reck sued Mr. Baranowski. Cavalier Insurance Company, Baranowski’s insurer, defended and denied coverage, whereupon Mr. Reck sought uninsured motorist benefits under his policy with the Detroit Automobile Inter-Insurance Exchange (DAIIE). DAIIE denied coverage and Mr. Reck sought arbitration pursuant to an insurance contract provision and obtained an award. DAIIE moved to vacate the award and the Wayne Circuit Court, Andrew DiMaggio, J., denied the motion. DAIIE appeals. Held:

    1. The arbitrability of an issue in a contract is ascertained through a three-stage inquiry: (1) is there an arbitration agreement in a contract between the parties; (2) is the insured’s claim on its face or arguably related to the contract; and (3) is the dispute expressly exempt by the terms of the contract.
    2. The determination of whether the insured was injured by an uninsured motorist is an issue arguably within the policy’s provision that matters upon which the parties don’t agree shall be settled by arbitration.
    Affirmed.
    1. Arbitration and Award — Public Policy — Arbitrable Issues — Liberal Construction — Arbitration Clause.
    Public policy in Michigan favors arbitration in the resolution of disputes; arbitration clauses contained in contracts are to be liberally construed, resolving any doubts about the arbitrability of an issue in favor of arbitration.

      References for Points in Headnotes

       5 Am Jur 2d, Arbitration and Award §§ 7, 14.

       5 Am Jur 2d, Arbitration and Award § 11 ef seq.

    7 Am Jur 2d, Automobile Insurance § 138.
    Rights and liabilities under "uninsured motorists” coverage. 79 ALR2d 1252.

      2. Arbitration and Award — Contracts — Arbitrable Issues — Three-Stage Inquiry.
    The arbitrability of an issue in a contract is ascertained through a three-stage inquiry: (1) is there an arbitration agreement in a contract between the parties; (2) is the insured’s claim on its face or arguably related to the contract; and (3) is the dispute expressly exempt by the terms of the contract.

      Selby, Dickinson, Pike, Mourad & Brandt (by Charles T. McCutcheon, Jr.), for plaintiff.

      Lopatin, Miller, Bindes, Freedman & Bluestone, for defendant.
    Before: Danhof, C.J., and Bronson and Beasley, JJ.
   Bronson, J.

Plaintiff insurer appeals an order denying its motion to vacate the arbitration award entered in favor of defendant insured.

Defendant, who was insured by plaintiff, was operating a motorcycle when he collided with another motorcyclist, Daniel Baranowski, who was insured by Cavalier Insurance Company. The accident between defendant and Baranowski occurred at the end of a race. The insurance policy between Cavalier and Baranowski provided that coverage was excluded "during such periods as the motorcycle is used in, or in preparation for any race, speed contest, hill climbing exhibition, or a contest of any nature”.

Defendant sued Baranowski. Cavalier defended under a reservation of rights clause, and denied liability coverage for the accident on the basis of the racing exclusion. Upon notification of the denial of coverage, defendant filed a claim for uninsured motorist benefits under his policy with plaintiff. Plaintiff denied coverage and defendant sought arbitration pursuant to the arbitration clause in the insurance contract. Plaintiff objected to the arbitration on the grounds that the arbitrators lacked authority to determine what coverage existed between Baranowski and Cavalier, and therefore the arbitrators could not make a determination on whether defendant was entitled to uninsured motorist benefits. The arbitrators overruled plaintiff’s objections and entered an award in favor of defendant. Plaintiff moved to vacate the award in circuit court, the motion was denied and plaintiff now appeals by right.

The question of what issues are arbitrable under an insurance policy’s uninsured motorist arbitration clause has not been answered uniformly by the courts in this country. See Anno: What issues are arbitrable under arbitration provision of uninsured motorist insurance, 29 ALR3d 328. The New York Court of Appeals, taking a narrow view of the scope of arbitration, held that such clauses afford arbitration on the issues of who was at fault for the accident and the amount of damages that the insured is entitled to recover, but do not subject to arbitration issues involving matters of insurance coverage, such as whether the other driver was an uninsured motorist. In re Rosen baum, 11 NY2d 310; 229 NYS2d 375; 183 NE2d 667 (1962). This Court in Western Casualty & Surety Co v Strange, 3 Mich App 733; 143 NW2d 572 (1966), adopted the reasoning in the Rosenbaum case. Somewhat surprisingly, plaintiff insurer did not cite this case even though it supported its position and was on point. The possible explanation for this omission is that the rationale and rule announced in Western has been specifically rejected by this Court in subsequent decisions. See, e.g., Detroit Automobile Inter-Insurance Exchange v Spafford, 62 Mich App 365; 233 NW2d 283 (1975), Maryland Casualty Co v McGee, 32 Mich App 539; 189 NW2d 44 (1971).

The reason for this change in position has been the strong public policy in this state in favor of arbitration as a simple expeditious means of resolving disputes without necessitating resort to the court system. MCL 600.5001(2); MSA 27A.500K2), Maryland Casualty Co v McGee, supra, P R Post Corp v Maryland Casualty Co, 68 Mich App 182, 186-187; 242 NW2d 62 (1976), modiñed on other grounds 403 Mich 543; 271 NW2d 521 (1978). The policy in favor of this expeditious alternative to the judicial system is thwarted if all disputed issues in an arbitration proceeding must be segregated into categories of "arbitrable sheep and judicially-triable goats”. McGee, supra, 545.

"[A]n interpretation of an arbitration agreement which would have the effect of chopping up a dispute between an insured and his insurer and requiring separate determinations of each portion thereof in different forums militates against the very benefits sought by arbitration and which benefits tend to make arbitration a reasonable remedy under the insurance code.” McGee, supra, 546.

It is to prevent this dissection of claims that we liberally construe arbitration clauses resolving all doubts about the arbitrability of an issue in favor of arbitration. Detroit Automobile Inter-Insurance Exchange v Kurak, 81 Mich App 217; 265 NW2d 86 (1978), Campbell v Community Service Ins Co, 73 Mich App 416, 419; 251 NW2d 609 (1977).

This state has adopted a three-part test for ascertaining the arbitrability of a particular issue: 1) is there an arbitration agreement in a contract between the parties; 2) is the disputed issue on its face or arguably within the contract’s arbitration clause; and 3) is the dispute expressly exempted from arbitration by the terms of the contract. See Kaleva-Norman-Dickson School District No 6 v Kaleva-Norman-Dickson School Teachers’ Ass’n, 393 Mich 583; 227 NW2d 500 (1975), American Fidelity Fire Ins Co v Barry, 80 Mich App 670; 264 NW2d 92 (1978).

There can be no question in the present case that there was an arbitration clause in the contract. Similarly, the determination of whether the insured was injured by an uninsured motorist is an issue arguably within the insurance contract’s general declaration that "matter or matters upon which the insured and Exchange do not agree shall be settled by arbitration”. Finally, plaintiff insurer made no attempt to exempt the matter from arbitration by excluding disagreements as to policy coverage from arbitration.

Since all three of the arbitrability requirements have been satisfied in the present case, the issue was arbitrable and the trial court was correct in denying plaintiff insurer’s motion to vacate the award.

Affirmed.

       Determination of Legal Liability and Amount of Damages. The determination as to whether the insured shall be legally entitled to recover damages and if so entitled the amount thereof, shall be made by agreement between the insured and the Exchange.
      "In the event of disagreement and upon the written demand of either, the matter or matters upon which the insured and Exchange do not agree shall be settled by arbitration in accordance with the rules of the American Arbitration Association and judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction thereof. The insured and the Exchange each agrees to consider itself bound and to be bound by any award made by the arbitrators pursuant to this coverage. Such an award shall be a condition precedent to any action against the Exchange by reason of the insurance afforded by this coverage.”