author: V. J. Brennan, P.J.

text:
    CHISNELL v CHISNELL
    Docket Nos. 44781, 44821.
    Submitted April 21, 1980, at Detroit.
    Decided August 11, 1980.
    Beatrice M. Chisnell filed for and was granted a divorce from Robert L. Chisnell, Macomb Circuit Court, Hunter D. Stair, J., the judgment providing that neither party receive alimony and that all the marital property be sold and the net proceeds divided equally. Defendant was also ordered to pay one-half of his net monthly military retirement pay as part of the property settlement. Plaintiff was awarded attorney fees. Defendant moved for a new trial, which motion was denied by the trial court, and additional attorney fees were awarded.
    Defendant then appealed to the Court of Appeals challenging the trial court’s categorization of his military retirement pay as a marital asset, properly included in the property settlement. Prior to decision, plaintiff obtained an order to show cause why defendant should not be held in contempt for not complying with the judgment of divorce. The Court of Appeals granted a stay of proceeding pending appeal. Subsequently, the Court of Appeals affirmed the trial court’s judgment, Chisnell v Chisnell, 82 Mich App 699 (1978).
    Thereupon, defendant applied for leave to appeal to the Michigan Supreme Court, which was denied, 403 Mich 844 (1978). Defendant then appealed to the United States Supreme Court which denied certiorari, 442 US 940 (1979), and rehearing, 444 US 887 (1979).
    While defendant’s petition was pending before the United States Supreme Court, plaintiff petitioned the trial court for additional attorney fees, modification of the judgment of di- and for an order to show cause why defendant should not be held in contempt for not complying with the judgment of divorce. The trial court separately ordered additional attorney fees, and modification of the judgment of divorce and appearance by defendant. Upon defendant’s failure to appear, the trial court subsequently issued a bench warrant for his arrest and cited him for contempt.

      References for Points in Headnotes
    [1] 24 Am Jur 2d, Divorce and Separation § 571 et seq.

    [2] 24 Am Jur 2d, Divorce and Separation § 573.
    [3] 24 Am Jur 2d, Divorce and Separation § 941.
    [4, 5] 24 Am Jur 2d, Divorce and Separation § 944.
    [6] 24 Am Jur 2d, Divorce and Separation §§ 308, 309.
    61 Am Jur 2d, Pleading § 344.
    [7] 24 Am Jur 2d, Divorce and Separation § 452.

      Defendant appeals from both orders, which appeals were consolidated, alleging the trial court abused its discretion in awarding plaintiff additional attorney fees, erred in modifying the property settlement in the absence of fraud, and erred in attempting to enforce the property settlement provisions of the judgment of divorce through contempt proceedings. Defendant additionally argues that the trial court had no authority to act upon plaintiff’s petition to modify the judgment of divorce and for an order to show cause since the pleading was not verified as required by court rule. Held:

    1. The award of attorney fees and expenses rests within the sound discretion of the trial court, and additional attorney fees may be awarded where, as in the instant action, they are necessary to enable a party to carry on or defend the litigation. The trial court’s award of attorney fees to plaintiff was not an abuse of discretion.
    2. Property settlement provisions of a judgment of divorce may be modified in the presence of fraud and, additionally, where the substantive rights of the parties are not changed, to rectify mistakes or clarify and interpret ambiguities and to alleviate inequities where necessitated by fairness. Since the trial court’s modification substantively altered defendant’s rights, it was improper.
    3. The trial court did not exceed its contempt authority. Defendant was held in contempt not for his failure to comply with the property settlement provisions of the judgment of divorce but because he failed to present himself to the court when ordered to do so.
    4. Neither plaintiff nor her attorney verified the petition for modification and order to show cause, but such a relatively minor procedural defect does not require reversal in the absence of manifest injustice, and plaintiff may cure this defect by verifying the pleading on remand. Should plaintiff fail to verify the pleading within the time allotted, the order of modification and for appearance of defendant is vacated.
    Affirmed in part, reversed in part, and remanded.
    1. Divorce — Attorney Fees — Judicial Discretion — Necessity.
    The award of attorney fees and expenses in an action for divorce rests within the sound discretion of the trial court, but the trial court does not have unlimited discretion, and such fees should not be awarded as a matter of right but only if necessary to enable a party to carry on or defend litigation.
    2. Divorce — Attorney Fees — Appeal — Abuse of Discretion.
    An award by the trial court of attorney fees in an action for divorce will not be disturbed on appeal absent a showing of an abuse of discretion.
    3. Divorce — Property Settlements — Modification — Grounds.
    Property settlement provisions in a judgment of divorce may be modified in the presence of fraud or mistake, or, where the substantive rights of the parties are not changed, to clarify and interpret ambiguities or to alleviate inequities where necessitated by fairness.
    4. Divorce — Property Settlements — Enforcement — Contempt.
    Property settlement provisions of a judgment of divorce are not enforceable by contempt proceedings.
    5. Divorce — Failure to Pay Settlement — Courts — Contempt Authority — Excess.
    A trial court’s contempt authority is exceeded where it holds a party in contempt for failing to pay over monies awarded as part of a property settlement in a judgment of divorce and issues a bench warrant pursuant thereto.
    6. Infants — Child Custody — Pleadings — Verification — Court Rules.
    A custody pleading may be verified by someone other than a party having knowledge of the facts pleaded, and this knowledge may be acquired upon information and belief (GCR 114.3[1]).
    7. Divorce — Pleadings — Verification — Minor Defect.
    Failure to verify a pleading in an action for divorce is a relatively minor procedural defect and, in the absence of manifest injustice, will not require reversal on appeal.

      Thomas J. McCallum, for plaintiff.

      Freeman, McKenzie, Matthews, Scherer & Stepek, P.C. (by Gary E. Gendernalik), for defendant.

      Before: V. J. Brennan, P.J., and Bronson and H. E. Deming, JJ.

       Circuit judge, sitting on the Court of Appeals by assignment.

   V. J. Brennan, P.J.

This is an appeal from orders modifying a judgment of divorce and allowing plaintiff additional attorney fees entered on April 16, 1979 and April 2, 1979, respectively.

A synopsis of the various judicial determinations involved in this litigation will aid in clarifying what is on the whole a rather confused picture of events. They may be concisely stated as follows:

On January 5, 1977, plaintiff was awarded a judgment of divorce providing that neither party receive alimony and that all of the marital property be sold with the proceeds going first to settle the liens on the property and the remainder to be divided equally between the parties. The judgment also provided that defendant pay plaintiff’s attorney fees in the sum of $500. Subsequent to the entry of the judgment of divorce, defendant filed a motion for a new trial. Following a hearing on May 23, 1977, the trial court denied defendant’s motion and awarded plaintiff an additional $150 in requested attorney fees.

On June 8, 1977, defendant appealed to this Court, raising an issue of first impression in Michigan: the treatment of military retirement pay in a divorce proceeding. While that appeal was pending, plaintiff secured an order to show cause against defendant as to why he should not be held in contempt for not complying with the judgment of divorce. This Court granted a stay of proceeding while the matter was on appeal. Subsequently, this Court affirmed the trial court’s judgment that defendant’s military retirement pay was correctly categorized as a marital asset and properly included within the property settlement. Chisnell v Chisnell, 82 Mich App 699; 267 NW2d 155 (1978).

Defendant, thereupon, filed an application for leave to appeal to the Michigan Supreme Court which was denied. 403 Mich 844 (1978). In the interim, plaintiff filed a brief in opposition and requested additional attorney fees of $10,000. Thereafter, defendant pursued his cause to the United States Supreme Court by way of writ of certiorari. On April 11, 1979, the United States Supreme Court requested that plaintiff’s attorney file a response to defendant’s petition. Plaintiff’s response was filed on May 29, 1979. Subsequently, defendant’s petitions for writ of certiorari, 442 US 940; 99 S Ct 2881; 61 L Ed 2d 310 (1979), and for rehearing, 444 US 887; 100 S Ct 187; 62 L Ed 2d 121 (1979), were denied.

While defendant’s petition was pending in the United States Supreme Court, plaintiff filed a petition in Macomb County Circuit Court for additional attorney fees. Plaintiff also filed a petition for modification of the judgment of divorce and for an order to show cause why defendant should not be held in contempt for not complying with the judgment of divorce.

On April 2, 1979, the trial court entered an order allowing plaintiff additional attorney fees of $3,000. On April 16, 1979, the trial court entered an order modifying the judgment of divorce and ordering defendant to appear. When defendant failed to appear as ordered, the court issued a bench warrant for his arrest and cited him for contempt of court.

Defendant raises several issues on appeal which we address in our order. Defendant first contends that the trial court abused its discretion in awarding plaintiff additional attorney fees in the amount of $3,000.

The award of attorney fees and expenses rests within the sound discretion of the trial court. Schaffer v Schaffer, 37 Mich App 711; 195 NW2d 326 (1972), Schilleman v Schilleman, 61 Mich App 446; 232 NW2d 737 (1975). The trial court does not have unlimited discretion, however. Attorney fees are not awarded as a matter of right but only if necessary to enable a party to carry on or defend the litigation. Gove v Gove, 71 Mich App 431; 248 NW2d 573 (1976), Mixon v Mixon, 51 Mich App 696; 216 NW2d 625 (1974), Radway v Radway, 81 Mich App 328, 333; 265 NW2d 202 (1978), Tigner v Tigner, 90 Mich App 787, 791; 282 NW2d 481 (1979).

In the present case, the Court determined that plaintiff was in need of attorney fees to defend defendant’s suit in the United States Supreme Court. Although the Supreme Court subsequently denied defendant certiorari, plaintiffs attorney was required to file a brief in opposition to defendant’s motion. In Chisnell v Chisnell, supra, another panel of this Court held that the trial court had not abused its discretion in its original award of attorney fees to plaintiff. Subsequently, defendant appealed to the United States Supreme Court twice, the Michigan Supreme Court, and the Court of Appeals. Our review of the record shows that since that time plaintiffs financial condition has certainly not improved and, in all probability, has further deteriorated. Having failed to show an abuse of discretion, we will not disturb the attorney fees awarded here. Abadi v Abadi, 78 Mich App 73, 80; 259 NW2d 244 (1977).

Defendant’s final argument concerns the April 16, 1979, modification of property settlement and issuance of a bench warrant for defendant’s arrest and has both a procedural and substantive basis. We address the latter first.

Defendant correctly argues that property settlements cannot be modified in the absence of fraud, Firnschild v Firnschild, 67 Mich App 327; 240 NW2d 790 (1976). Since plaintiff neither alleged nor proved fraud, defendant contends that the trial court erred by modifying the property settlement provisions of the judgment of divorce.

Defendant, however, fails to note the exceptions to the general rule. As this Court pointedly stated in Dougherty v Dougherty, 48 Mich App 154, 158; 210 NW2d 151 (1973):

"Defendant relies upon the general rule that property settlements which are judged final may not be modified. Cf, Ritzer v Ritzer, 243 Mich 406; 220 NW 812 (1928). This principle is not without exception. Property settlements may be revised for fraud or like reasons. Lytle v Lytle, 319 Mich 47; 29 NW2d 138 (1947); Greene v Greene, 357 Mich 196; 98 NW2d 519 (1959). Modification may also be permitted to rectify mistakes or clarify and interpret ambiguities. Igrison v Igrison, 369 Mich 314; 119 NW2d 605 (1963); Mitchell v Mitchell, 307 Mich 366; 11 NW2d 22 (1943). Significantly, inequities are alleviated by permitting revision of otherwise final property settlements when such is necessitated by fairness. Paul v Paul, 362 Mich 43; 106 NW2d 384 (1960); Ross v Ross, 24 Mich App 19; 179 NW2d 703 (1970). See generally GCR 1963, 528.”

In the instant case plaintiff contends that the trial court’s modification order was valid because its purpose was to clar!_y and interpret ambiguities which existed in the property settlement. We agree.

The initial property settlement contained a provision requiring the sale of certain real property but failed to state which party was to arrange and consummate the sale. As the property had not been sold as of April 16, 1979, the court modified the judgment to enable plaintiff to carry out the sale. To the extent the court’s order clarified the existing ambiguity as to which party was to sell the property, it was valid. Dougherty, supra.

We are unable, however, to affirm the second portion of the modified provision as to the sale of real property. It states:

"IT IS FURTHER ORDERED that the plaintiff, BEATRICE M. CHISNELL may keep one-half (1/2) of the proceeds from the sale of the above mentioned properties as her sole and separate property and deposit one-half (1/2) of the proceeds from the sale of said properties with this Court for further distribution pursuant to further Order of this Court.”

In Irvin v Irvin, 85 Mich App 576, 578; 272 NW2d 328 (1978), this Court stated:

"In any event this Court will clarify and interpret property settlements only when the substantive rights of the parties are not changed. Mitchell v Mitchell, 307 Mich 366; 11 NW2d 922 (1943), Boucher v Boucher, 34 Mich App 213; 191 NW2d 85 (1971).”

According to the judgment of divorce, plaintiff was to receive one-half of the proceeds of the sale, and defendant was to receive the other half of the proceeds. The question becomes whether, by ordering defendant’s share to be deposited with the court, his rights in the property were substantively changed.

Plaintiff contends that, in light of the surrounding circumstances, equity demanded that defendant’s share of the proceeds be deposited with the court for plaintiff’s protection. At the time of the order, defendant owed plaintiff $8,640 of his military retirement pay and $625 in attorney fees. Therefore, plaintiff intends, fairness required that defendant’s proceeds be deposited with the court. Plaintiff’s claim could be premised upon GCR 1963, 528.3(6), which provides that a party may be relieved from a judgment if "any other reason justifying relief from the operation of the judgment” exists.

In Boucher v Boucher, supra, 222, the trial court accelerated payments provided for in a property settlement to plaintiff’s estate after defendant was convicted of murdering plaintiff. The Court looked to see if GCR 1963, 528.3(6) justified the acceleration and found it did not.

"The fact that the defendant shot and was subsequently convicted of killing the plaintiff is certainly an extraordinary circumstance but does not call for penalizing the defendant under the civil law when the criminal law deals with such transgressions.
"There was no provision in the judgment for acceleration of the installment payments if the defendant was in default or if the plaintiff died a natural death. Although this is apparently a case of first impression and certainly reasonable minds could differ, the scales weigh in the direction that the trial court exceeded its authority in ordering the acceleration of the installment payments not yet due.”

Just as the criminal law dealt with defendant’s transgressions in Boucher, the plaintiff in the present case had other legal means available to enforce those provisions of the property settlement with which defendant had not yet complied. In fact, the court subsequently issued a writ of garnishment against defendant for the amount of his military retirement pay owed plaintiff on November 19, 1979. Since the trial court’s order that defendant’s share of the proceeds of the sale be deposited with the court substantively altered defendant’s rights, it was improper.

Defendant next takes issue with the trial court’s finding him in contempt of court. Defendant correctly states the general rule that the property settlement provisions of a judgment of divorce are not enforceable by contempt proceedings. Thomas v Thomas, 337 Mich 510; 60 NW2d 331 (1953), Sturgis v Sturgis, 300 Mich 438; 2 NW2d 454 (1942), Shafer v Shafer, 257 Mich 372; 241 NW 144 (1932), Belting v Wayne Circuit Judge, 245 Mich 111; 222 NW 137 (1928), Harner v Harner, 255 Mich 515; 238 NW 264 (1931). If the trial court had issued the bench warrant and had held defendant in contempt for failing to pay his debt, the trial court would have exceeded its contempt authority. However, our review of the transcript leaves us with no doubt that defendant was held in contempt not for his failure to comply with the property settlement but because he failed to present himself to the court when ordered to do so.

Our conclusion with respect to the substantive merits of the April 16 order of modification and issuance of a bench warrant are not dispositive, however. Defendant’s procedural argument centers around plaintiff’s petition to modify the judgment and for an order to show cause. Specifically, defendant claims that this pleading was not verified as required by GCR 1963, 725.1 and, since the court had no authority to act upon an unverified complaint, its April 16 order must be reversed.

Our review of the record below reveals that plaintiff’s petition to modify the judgment of divorce and order to show cause was not verified by either plaintiff or her attorney.

GCR 1963, 725.1 provides:

".1 Oath; Verification. All pleadings seeking affirmative relief in actions described in Rule 721 shall be verified by oath.”

In Ayres v Gartner, 90 Mich 380, 380-381; 51 NW 461 (1892), a pertinent statute provided:

" 'No divorce shall be decreed in any case when it shall appear that the petition or bill therefor was founded in or exhibited by collusion between the parties; and the oath or affirmation administered to the complainant in swearing to such petition or bill shall, in addition to all other legal requirements, recite the following: "And you do solemnly swear (or affirm) that there is no collusion, understanding, or agreement whatever between yourself and the defendant herein in relation to your application for divorce”.’ ”

In that case, plaintiff filed a bill for divorce but the oath to the bill did not contain the recitation required by statute. Defendant moved the court to dismiss the bill because of the plaintiff’s failure to comply with the statutory requirement. The Supreme Court held:

"This is a statutory requirement, and is mandatory. Chancery Rule No. 95 requires bills for divorce to be verified by the oath of complainant; and, as was said in People v McCaffrey, 75 Mich 123, the statute gives this rule the force and effect of statute law.
"Nor can this defect be waived by any act of defendant. The policy of the statute is to prevent collusive proceedings between the parties for divorce. If in the power of defendant to waive the provision, the statute may be easily nullified.”

Thus, in 1892, the Court strictly construed the statute and mandated that the complaint be dismissed.

More recently, in White v White, 86 Mich App 98, 101-102; 272 NW2d 202 (1978), defendant asserted that plaintiff’s motion seeking a change of custody and child support was not verified by oath in violation of Rule 725.1. However, the plaintiff’s motion for change of custody was supported by an affidavit of plaintiff’s attorney stating that the reasons and grounds stated therein were true to the best of his knowledge and that he believed the matters stated on information and belief to be true. The Court held:

"A special set of court rules, GCR 1963, 721 to 731, govern domestic relations proceedings, including child custody matters. GCR 1963, 721(6). Unless otherwise specified in these special rules, the procedure in the actions enumerated in GCR 1963, 721, * * * the verification, procedure would be governed by the general rule of procedure, GCR 1963, 114.3, which provides:
" '(1) If a pleading must be verified:
" '(a) it may be verified by the oath or affirmation of the party or of someone having knowledge of the facts pleaded; or
" '(b) it may contain the following signed and dated declaration: "I declare that the statements above are true to the best of my information, knowledge and belief.”
" 'The matters in the pleading must be stated positively or upon information or belief, according to the fact.
" '(2) A person who knowingly makes a false declaration under subrule 114.3(l)(b) is in contempt of court.’
"The foregoing court rule has been effective in its present form since September 3, 1976, and was thus applicable to the case at bar.
"The clear import of this rule is that a custody pleading may be verified by someone, other than a party, having knowledge of the facts pleaded; further knowledge may be acquired upon information and belief.”

Thus in 1978 the Court worked harder to find that it had jurisdiction over the matter than it had in 1892. However, in the instant case, neither plaintiff nor her attorney verified the petition for modification and order to show cause. As in White, supra, this procedural defect was brought to the trial court’s attention at the April 2, hearing.

We decline to reverse, however, in light of the long and arduous path this case has traveled through the various court systems, the relatively minor procedural defect, and the absence of manifest injustice. Accordingly, we remand to the trial court so plaintiff may cure the defect by verifying the pleading within 30 days from the issuance of this opinion, GCR 1963, 820.1. In the event the petition is not verified within 30 days, the trial judge’s April 16 order is vacated.

The April 2 order granting attorney fees is affirmed.

Affirmed in part, reversed in part and remanded.

       The modified order provided as follows:
      "IT IS HEREBY ORDERED that the plaintiff, BEATRICE M. CHISNELL, be and hereby is authorized to sell, without the consent, cooperation or requirement that defendant, ROBERT LLOYD CHIS-NELL, join in said sale, and for whatever price that the plaintiff, BEATRICE M. CHISNELL, shall deem advisable, certain real property owned by the parties hereto as joint tenants and more particularly described as: * *

       The following colloquy between court and defendant’s counsel took place on April 16, 1979:
      "MR. GENDERNALIK: Your Honor, in response, Gary Gendernalik on behalf of the Defendant, Robert Lloyd Chisnell. I would once again submit that this contempt proceeding is not the proper proceeding pursuant to Michigan law with reference to the enforcement of the property settlement provisions of the judgment of divorce. The Michigan Supreme Court in the past has twice ruled on this particular type of proceeding and held that it is not proper to hold an individual in contempt for not complying with the property settlement provisions of a judgment of divorce. The two cases are McFarland v McFarland [sic], 298 Mich--

        "THE COURT: That’s not why I am going to hold him in contempt. I am going to hold him in contempt for not showing up here today when he was directed to show up. Because we want to find out why he is not complying. If he wants to go into hiding while he’s playing games and not even come to the Court that’s why he’s in contempt of the Court. I’d like to talk to him. I’d like to be face to face with him and find out why he is ignoring the orders of this court but he doesn’t deem it wise to show up evidently and that’s the reason I am doing it.
      "THE COURT: All I want to do is be face to face with your client and ask him some questions. Now, if he doesn’t want to obey, that’s why he’s in contempt. It’s as simple as that and, therefore, a bench warrant may issue.”


source: Caselaw Access Project

author:
D. C. Riley, J.
      Bashara, P.J.

license: Public Domain

text:
    CITIZENS INSURANCE COMPANY OF AMERICA v LEMASTER
    Docket No. 45122.
    Submitted June 9, 1980, at Detroit.
    Decided August 11, 1980.
    Leave to appeal applied for.
    Citizens Insurance Company of America, as subrogee of Elmer J. Dunlap and Elizabeth Dunlap, brought suit against Robert L. Lemaster for injuries sustained by Elizabeth Dunlap in an automobile accident involving her and Lemaster. Lemaster filed a third-party complaint against his insurer Old Reliable Fire Insurance Company and its agent Autoworkers Insurance Underwriters Inc., following a refusal to honor his policy. Lemaster subsequently moved for summary judgment against third-party defendant Old Reliable which motion was granted, Oakland Circuit Court, James S. Thorburn, J. Old Reliable appeals. Held:

    The cancellation of defendant-third-party plaintiffs policy of automobile insurance was not effective in that he did not receive ten days actual notice prior to calcellation as required by statute. Thus, the trial court properly granted his motion for summary judgment.
    Affirmed.
    Bashara, P.J., dissented. He would hold that notice to defendant of the policy cancellation by certified mail, return receipt requested, satisfied the statutory requirement of actual notice, and that personal service by actual hand delivery is unnecessary. Since defendant asserted he did not receive notice, a genuine question of material fact was presented. He would reverse and remand for trial.
    Opinion of the Court
    1. Insurance — Cancellation of Policy — Casualty Insurance — Actual Notice — Statutes.
    An insured must receive actual notice of cancellation of a policy of casualty insurance for such cancellation to be effective (MCL 500.3020; MSA 24.13020).

      References for Points in Headnotes
    [1] 43 Am Jur 2d, Insurance § 407.
    Actual receipt of cancellation notice mailed by insurer as prerequistite to cancellation of insurance. 64 ALR2d 982.
    [2] 43 Am Jur 2d, Insurance § 408.
    [3] 43 Am Jur 2d, Insurance §§ 408, 410.

      2. Insurance — Cancellation op Policy — Casualty Insurance — Mailing op Notice — Statutes — Prima Facie Proof — Rebuttable Presumption.
    The mailing of a notice of cancellation of a policy of casualty insurance is prima facie proof of notice to an insured, which presumption may be rebutted by the facts in a given case (MCL 500.3020; MSA 24.13020).
    Dissent by Bashara, P.J.
    3. Insurance — Cancellation of Policy — Casualty Insurance — Notice — Statutes.

      Actual hand delivery of notice of cancellation of a policy of casualty insurance is not required by statute to be effective, and the sending of notice of cancellation by certiñed mail, return receipt requested, satisñes the statute, creating a rebut-table presumption of actual notice (MCL 500.3020; MSA 24.13020).

      Carl D. Macpherson, III, for third-party plaintiff.

      Barbier, Goulet, Petersmarck & McFarland, PC. (by Daniel C. Symonds), for third-party defendant.
    Before: Bashara, P.J., and D. C. Riley and E. A. Quinnell, JJ.

       Circuit judge, sitting on the Court of Appeals by assignment.

   D. C. Riley, J.

We are asked here to decide whether actual receipt of a notice of cancellation by an insured is required to effectuate cancellation of an insurance contract.

The pertinent facts are essentially undisputed. Robert Lee Lemaster, third-party plaintiff, purchased a three-month automobile insurance policy on March 5, 1977. On March 28, 1977, third-party defendant Old Reliable Fire Insurance Company sent a notice of cancellation by certified mail, return receipt requested. This action was taken because Lemaster failed to submit certain required information. The insurer’s notice was received and signed for on March 29, 1977, by Lemaster’s mother who lived at the same address. The effective cancellation date was April 19, 1977.

A second notice of cancellation, also by certified mail, return receipt requested, followed on April 1, 1977. This notice was received and signed for by Lemaster’s sister, also of the same address. Cancellation pursuant to this notice was to be effective April 23, 1977.

Two days later, on April 25, 1977, Lemaster was involved in an automobile accident. Lemaster was sued by the injured party, and he, in turn, sued Old Reliable when they refused to honor his policy.

Subsequently, Lemaster filed a motion for summary judgment with supporting affidavits based on GCR 1963, 117.2(2) and (3) to determine his rights under the policy issued by Old Reliable. The parties stipulated that the sole issue was whether the policy was effectively cancelled prior to the date of the accident, April 25, 1977. The affidavits indicated that two notices of cancellation were mailed by certified mail, return receipt requested, to the residence of Lemaster. Both notices were signed for by relatives (mother and sister) of Lemaster and were never actually known to him until after the accident. Based on these affidavits, following oral argument, the trial court granted Lemaster’s summary judgment motion.

MCL 500.3020; MSA 24.13020, in pertinent part, states as follows:

"No policy of casualty insurance, excepting workmens’ compensation, but including all classes of motor vehicle coverage, shall be insured or delivered in this state by any insurer authorized to do business in this state for which a premium or advance assessment is charged, unless there shall be contained within such policy a provision * * * whereby the policy may be cancelled at any time by the insurer by mailing to the insured at his address last known to the insurer or its authorized agent, with postage fully prepaid, a 10 days’ written notice of cancellation * * *. The mailing of notice shall be prima facie proof of notice. Delivery of such written notice shall be equivalent to mailing.”

We are persuaded that this statutory language mandates that an insured receive actual notice of cancellation. This determination is consistent with Phillips v Detroit Automobile Inter-Insurance Exchange, 69 Mich App 512; 245 NW2d 114 (1976), in which the sole issue, as here, was whether plaintiff had received notice prior to cancellation in accordance with MCL 500.3020; MSA 24.13020. Our Court held that the statutory language requires that the insured receive ten days actual notice before cancellation can be effective. See also Good v Detroit Automobile Inter-Insurance Exchange, 67 Mich App 270; 241 NW2d 71 (1976).

The statute makes the mailing of a notice of cancellation prima facie proof of notice — a presumption that may be rebutted by the facts. Celina Mutual Ins Co v Falls, 72 Mich App 130; 249 NW2d 323 (1976), Gooden v Camden Fire Ins Ass’n, 11 Mich App 695; 162 NW2d 147 (1968). Such, however, was not the case here.

We affirm, therefore, the trial court’s determination that no valid defense has been made to Le-master’s claim that there was no genuine issue of any material fact and that he was entitled, therefore, to a judgment as a matter of law.

Costs to appellee.

E. A. Quinnell, J., concurred.

Bashara, P.J.

(dissenting). I respectfully disagree with the majority conclusion that summary judgment was properly granted in this case.

A review of the cases cited in the majority reveals that there was no return receipt in either case to indicate that another adult living in the household had received the communication from the insurance company. In both Phillips v Detroit Automobile Inter-Insurance Exchange, 69 Mich App 512; 245 NW2d 114 (1976), and Good v Detroit Automobile Inter-Insurance Exchange, 67 Mich App 270; 241 NW2d 71 (1976), the notices were mailed by general delivery. I perceive this to be a significant distinction.

In the case at bar, two receipts came to defendant from plaintiffs residence, indicating that the mail was received. It is my belief that the statute in question was satisfied by this method of service. The majority opinion, in effect, requires personal service beyond that required in the General Court Rules — actual hand delivery. See Raptis v Safeguard Ins Co, 13 Mich App 193, 199; 163 NW2d 835 (1968).

Even if no presumption arises from the fact that the receipts were returned to the defendant, I believe that a genuine question of material fact was presented. The plaintiff asserts he did not receive notice. The defendant asserts that he did. A trier of fact should have had the opportunity to decide whether actual notice was received.

I would reverse and remand for trial.


author: M. E. Clements, J.

text:
    PEOPLE v SOLOMON WASHINGTON
    Docket No. 45439.
    Submitted May 12, 1980, at Detroit.
    Decided August 12, 1980.
    Leave to appeal granted, 410 Mich 868.
    Defendant, Solomon Washington, was arrested on October 3, 1977. Police Sergeant Richard Davies had ordered that defendant be arrested because he wanted to question defendant and take his fingerprints in connection with a homicide investigation. Davies acknowledged at an evidentiary hearing that he did not seek to obtain an arrest warrant because he knew he did not have enough information to secure one. The arrest was based on information that defendant had been attempting to sell a television which matched the description of a television allegedly taken from the scene of the homicide. This attempted sale, however, may have occurred prior to the homicide. Defendant was first questioned two hours after his arrest and denied culpability, stating that he had met another man on the street, the man had a television he wanted to sell, and that defendant was merely trying to help him sell it. Sgt. Davies, not believing defendant’s statement, had defendant’s sister, Sharon Washington, brought to the police station for questioning. Ms. Washington gave a statement indicating that defendant had confessed to her that he had been involved in the homicide. Defendant was then brought into the interrogation room and confronted by his sister and the statement she had given. Defendant then admitted to being a party to a plan to steal the victim’s money and to being in the house when the homicide occurred. This admission was made approximately six hours after defendant’s arrest. A preliminary examination was held on October 12, 1977, and defendant was bound over for trial on a charge of felony-murder. Motions were subsequently filed to quash the information and to suppress statements made by defendant after his allegedly illegal arrest. Following an evidentiary hearing, the Recorder’s Court of Detroit, Donald L. Hobson, J., denied defendant’s motions but found that defendant’s arrest was illegal. Defendant was then granted a stay of proceedings and filed a delayed application for leave to appeal. Leave to appeal was denied because there was no showing of a need for immediate appellate review. The Supreme Court vacated that order and remanded to the Court of Appeals as on leave granted, 406 Mich 952 (1979). The issue on appeal is whether the lower court erred in failing to suppress defendant’s confession made some six hours after his illegal arrest. Held:

      References for Points in Headnotes
    [1] 5 Am Jur 2d, Appeal and Error § 881.
    [2] 29 Am Jur 2d, Evidence § 546.

      1. The trial judge did not err in finding that probable cause for the arrest was lacking.
    2. The mere fact that the defendant was arrested illegally does not per se require the suppression of his subsequent confession.
    3. Intervening circumstances sufficiently attenuated any causal connection between the illegal arrest and defendant’s subsequent inculpatory statement so that there was no error in denying the motion to suppress.
    4. It was not improper for the police, in questioning defendant, to confront him with the evidence against him.
    Affirmed.
    1. Appeal — Criminal Law — Evidence — Motion to Suppress — Clear Error.
    A trial court’s ruling at a suppression hearing will not be overturned by the Court of Appeals unless that ruling is found to be clearly erroneous.
    2. Criminal Law — Constitutional Law — Illegal Arrest — Motion to Suppress — Attenuating Circumstances — Admissibility of Evidence.
    The mere fact that a defendant is arrested illegally does not per se require the suppression of a subsequent confession; the confession must be excluded from evidence, under the Fourth Amendment, only if it was obtained by exploitation of the illegal arrest, i.e., if it was the product of the illegal arrest, and the focus is on the causal nexus between the illegality and the confession; intervening circumstances may sufficiently attenuate any causal connection between the illegal arrest and the subsequent inculpatory statement so that there is no error in denying a motion to suppress.

      Frank J. Kelley, Attorney General, Robert A. Derengoski, Solicitor General, William L. Cahalan, Prosecuting Attorney, Edward Reilly Wilson, Principal Attorney, Appeals, and Andrea L. Solak, Assistant Prosecuting Attorney, for the people.

      John C. Mouradian, for defendant on appeal.
    Before: T. M. Burns, P.J., and R. M. Maher and M. E. Clements, JJ.

       Circuit judge, sitting on the Court of Appeals by assignment.

   M. E. Clements, J.

The defendant, Solomon Washington, was arrested on October 3, 1977. A preliminary examination was held on October 12, 1977, and the defendant was bound over for trial on a charge of felony murder. Motions were subsequently filed to quash the information and to suppress statements made by the defendant after his allegedly illegal arrest. Following an evidentiary hearing, the trial judge issued opinions and orders denying the defendant’s motions even though he found that the defendant’s arrest was illegal. The defendant was then granted a stay of proceedings and he filed a delayed application for leave to appeal which was denied by this Court on August 21, 1978, because there was no showing of a need for immediate appellate review. On May 3, 1979, the Supreme Court vacated this Court’s order and remanded to this Court as on leave granted. People v Washington, 406 Mich 952 (1979).

On September 29, 1977, the corpse of Leon Vicinski was discovered in the deceased’s apartment by his nephew, Norbert Wierszewski. The death was caused by three gunshot wounds. Homicide detectives called to investigate learned from another nephew, Michael Dwormick, the last person to see the deceased alive on September 26, 1977, that the deceased’s television set was in the apartment on September 26, but not on September 29. The police learned from one John Epps that the defendant and another man, known as "Money”, had approached Epps with a television set they were trying to sell which matched the description of the set missing from Vicinski’s apartment. However, Epps stated that he was approached on September 24 or 25, which was prior to the time when the set in Vicinski’s apartment was taken and when the murder occurred. Based on this information, the defendant was arrested on October 3, 1977, at about 4 p.m.

Police Sergeant Richard Davies first questioned the defendant around 6 p.m., two hours after his arrest. According to Davies’ preliminary examination testimony, the defendant, after being informed of his Miranda rights, Miranda v Arizona, 384 US 436; 86 S Ct 1602; 16 L Ed 2d 694; 10 ALR3d 974 (1966), made an exculpatory statement to the effect that he had met Money on the street and that Money had a television he was trying to sell. The defendant stated that he had only tried to help Money sell the television set to John Epps.

Disbelieving the defendant’s denial of culpability, Davies had the defendant’s sister, Sharon Washington, brought to the police station for questioning. Ms. Washington gave Davies a statement indicating that her brother had confessed to her his complicity in the murder of Vicinski. Within a few minutes after acquiring this information, Davies had the defendant brought into the interrogation room where another officer and Sharon Washington were already waiting. The defendant was again provided with the appropriate Miranda warnings and was then confronted with his sister’s allegation. At this point the defendant made a statement in which he admitted that he and Money had planned to steal Vicinski’s money. The defendant admitted to being in the house when Vicinski was killed. This admission occurred at approximately 9:50 p.m.

The prosecution does not contest on appeal the fact that the defendant’s arrest was illegal. Our review of the evidence available to Sgt. Davies, who ordered the defendant’s arrest, convinces us that the trial judge did not err in finding that probable cause for the arrest was lacking. At the evidentiary hearing Davies acknowledged that he did not seek to obtain an arrest warrant because he knew he did not have enough information to secure one. Davies ordered the defendant arrested because he wanted to question him and take his fingerprints.

The issue in this case is whether the lower court erred in failing to suppress the defendant’s confession made some six hours after his illegal arrest. The trial judge denied the motion to suppress, finding that the illegal detention did not negate the voluntary character of the defendant’s confession. The Court will not overturn a trial court’s ruling at a suppression hearing unless that ruling is found to be clearly erroneous. People v Erskin, 92 Mich App 630; 285 NW2d 396 (1979).

The mere fact that a defendant is arrested illegally does not per se require the suppression of a subsequent confession. In People v Emanuel, 98 Mich App 163, 176; 295 NW2d 875 (1980), this Court discussed the applicability of the "fruit of the poisonous tree” doctrine under Brown v Illinois, 422 US 590; 95 S Ct 2254; 45 L Ed 2d 416 (1975), and Dunaway v New York, 442 US 200; 99 S Ct 2248; 60 L Ed 2d 824 (1979):

"Under Fourth Amendment rubric, the confession must be excluded from evidence only if it was obtained by exploitation of the illegal arrest, i.e., if it was the product of the illegal arrest. Brown v Illinois, supra, 603, Dunaway v New York, supra, 216-218. The focus is on the causal nexus between the illegality and the confession, or, to put it another way, the question is whether the connection was sufficiently attenuated to permit the use at trial of the evidence obtained during the period of illegal detention: whether the statement was purged of its primary taint. Brown, supra, 602-604, Dunaway, supra, 217-218, and the cases cited therein.
"Brown sets out a number of factors which are relevant in determining the admissibility of a confession obtained while a defendant is illegally detained:
" 'The question whether a confession is the product of a free will under Wong Sun [v United States, 371 US 471; 83 S Ct 407; 9 L Ed 2d 441 (1963)], must be answered on the facts of each case. No single fact is dispositive. The workings of the human mind are too complex, and the possibilities of misconduct too diverse, to permit protection of the Fourth Amendment to turn on such a talismanic test. The Miranda warnings are an important factor, to be sure, in determining whether the confession is obtained by exploitation of an illegal arrest. But they are not the only factor to be considered. The temporal proximity of the arrest and the confession, the presence of intervening circumstances, and, particularly, the purpose and flagrancy of the official misconduct are all relevant. The voluntariness of the statement is a threshold requirement. And the burden of showing admissibility rests, of course, on the prosecution.’ (Footnotes and citations omitted.) Brown, supra, 603-604.”

Weighing against admissibility in this case is the police conduct in arresting the defendant for the acknowledged purpose of aiding their investigation of the crime. The Brown Court condemned this type of investigatory detention and we add our emphatic disapproval of the police conduct in this case. However, we find that intervening circumstances sufficiently attenuated any causal connection between the illegal arrest and the defendant’s subsequent inculpatory statement so that there was no error in denying the motion to suppress.

After the defendant’s arrest, the defendant’s sister informed the police that the defendant had admitted his complicity in the murder to her. After the defendant’s sister gave her statement, there was sufficient probable cause to justify the defendant’s arrest. It was not until the defendant had been confronted with his sister’s statement that he confessed. Up until this point, the defendant had made one statement in which he had denied any wrongdoing. It is not improper for the police, in questioning a suspect, to confront him with the evidence against him. People v Emanuel, supra. Under these circumstances, the primary taint of the unlawful arrest was sufficiently attenuated by the subsequent evidence establishing probable cause so that the defendant’s confession is properly admissible.

It was the influence of the defendant’s sister’s statement that precipitated the defendant’s confession and not his illegal arrest. We therefore find no error in the denial of the defendant’s motions to quash the information and to suppress his confession.

The trial court’s rulings are affirmed.

      We are constrained to add that not every confession obtained following an illegal arrest will be saved by the presence of intervening circumstances. E.g., People v Martin, 94 Mich App 649; 290 NW2d 48 (1980).

       In Brown, the defendant also did not give an inculpatory statement until after the police confronted him with certain evidence, yet the Supreme Court found the defendant’s statement to be the product of his illegal arrest. However, unlike the present case, the evidence Brown was confronted with did not establish probable cause. See Johnson v Louisiana, 406 US 356, 365; 92 S Ct 1620; 32 L Ed 2d 152 (1972), cited by the Brown Court as a case involving the presence of intervening circumstances, in which the Supreme Court found that a lineup identification was not the fruit of an arguably illegal warrant-less arrest when the lineup identification occurred after the defendant had been properly brought before the committing magistrate.

      Certain language in the trial court’s opinion indicates that the trial court was of the view that the "causal connection” test established in Brown was no different from the traditional test for voluntariness under the Fifth Amendment. That interpretation is incorrect. Even if a confession is voluntary under the Fifth Amendment, that confession must be suppressed if it is the product of an unlawful arrest or detention. See Dunaway v New York, 442 US 200, 216-218. However, this Court will not reverse a lower court ruling when the correct result is reached for the wrong reason. People v Perryman, 89 Mich App 516; 280 NW2d 579 (1979). See also People v Erskin, 92 Mich App 630; 285 NW2d 396 (1979).


author: N. J. Kaufman, P.J.

text:
    STANDARD FEDERAL SAVINGS AND LOAN ASSOCIATION v CITIZENS INSURANCE COMPANY OF AMERICA
    Docket No. 45724.
    Submitted June 16, 1980, at Detroit.
    Decided August 12, 1980.
    Leave to appeal applied for.
    Plaintiff, Standard Federal Savings and Loan Association, filed suit against Citizens Insurance Company of America alleging it was entitled to payment from defendant on an instrument drawn on defendant’s bank and containing on its face the language "Upon acceptance pay to the order of’. The instrument was transferred to plaintiff and later dishonored by defendant who contended this language made payment conditional upon acceptance of the drawee bank and that the instrument was not negotiable. Plaintiff asserted that the language referred to acceptance by the insured claimant and payee-transferor, that the instrument was negotiable, and that it took the instrument free of any personal defenses available to defendant. Plaintiff subsequently moved for summary judgment, which motion was granted. 46th District Court, Norman W. Feder, J., and affirmed, Oakland Circuit Court, James S. Thor-burn, J. Defendant appeals by leave granted alleging that the trial court erred in finding that an instrument issued by defendant was negotiable. Held:

    The instrument, when read as a whole and with any ambiguity construed against the defendant-maker, was negotiable, and the trial court properly granted summary judgment in favor of plaintiff.
    Affirmed.
    1. Bills, Notes, and Checks — Negotiable Instruments — Definition — Statutes.
    A writing must be signed by the maker or drawer, contain an unconditional promise or order to pay a sum certain in money and no other promise, order, obligation, or power given by the maker or drawer except as authorized by statute, be payable on demand or at a definite time, and be payable to order or to bearer to be a negotiable instrument (MCL 440.3104[1]; MSA 19.3104[1]).

      References for Points in Headnotes
    [1] 11 Am Jur 2d, Bills and Notes § 56.
    What constitutes unconditional promise to pay under Uniform Commercial Code § 3-104(a)(b). 88 ALR3d 1100.
    [2] 11 Am Jur 2d, Bills and Notes § 507.
    [3, 6-8] 11 Am Jur 2d, Bills and Notes § 62.
    [4] 11 Am Jur 2d, Bills and Notes §§ 139, 141,143.
    [5] 1 Am Jur 2d, Accord and Satisfaction § 18.
    11 Am Jur 2d, Bills and Notes §§ 139,141.

      2. Bills, Notes, and Checks — Acceptance — Definition — Statutes.
    Acceptance is the drawee’s signed engagement to honor a draft as presented; it must be written on the draft and may consist of his signature alone, and becomes operative when completed by delivery or notification (MCL 440.3410[1]; MSA 19.3410[1]).
    3. Bills, Notes, and Checks — Negotiable Instruments — Strict Construction.
    Strict construction of negotiable instrument law should not be favored.
    4. Bills, Notes, and Checks — Negotiability — Statutes.
    A promise or order otherwise unconditional is not made conditional by the fact that the instrument states the transaction which gave rise to the instrument, and the negotiability of an instrument is not affected by a term in a draft providing that the payee, by indorsing or cashing it, acknowledges full satisfaction of an obligation of the drawer (MCL 440.3105, 440.3112[1]; MSA 19.3105,19.3112[1]).
    5. Bills, Notes, and Checks — Indorsement — Satisfaction of Underlying Obligation.
    A provision in an instrument which treats indorsing or cashing the instrument as full satisfaction of an underlying obligation of the drawer is valid.
    6. Bills, Notes, and Checks — Construction — Intention of the Parties.
    The intention of the parties is to control in the construction of a note if it can be legally ascertained by a study of the entire contents of the instrument, and anything written or printed on the note prior to its issuance relating to its subject matter must be regarded as a part of the contract and given due weight in the construction.
    7. Bills, Notes, and Checks — Construction — Patent Ambiguities.
    The actual intention of the parties shall be determined by the court from the instrument itself in light of the circumstances in which it was given where there is a patent ambiguity in the instrument.
    8. Bills, Notes, and Checks — Construction — Against Maker or Drafter.
    It is proper to construe the terms of an instrument against its maker or drafter where there exist two possible constructions of its language.

      Dykema, Gossett, Spencer, Goodnow & Trigg (by Dennis M. Haffey), for plaintiff.

      Petrulis, Lickty & Mellon, P.C. (by Daniel J. McCarthy), for defendant.
    Before: N. J. Kaufman, P.J., and Cynar and J. E. Townsend, JJ.

      Circuit judge, sitting on the Court of Appeals by assignment.

   N. J. Kaufman, P.J.

On November 19, 1977, plaintiff, Standard Federal Savings & Loan Association (hereinafter Standard), filed a complaint in the 46th Judicial District Court alleging that it was entitled to payment in the amount of $4,450 from the defendant. Plaintiff’s subsequent motion for summary judgment was granted on September 18, 1978, and affirmed by Oakland County Circuit Court by an order issued April 24, 1979. Application for leave to appeal was granted by this Court on November 8, 1979.

On September 8, 1977, Citizens Insurance Company of America (hereinafter Citizens), issued a check for $4,450 payable to its named insured, Ann Moss, following a report that her automobile had been stolen. The instrument was drawn on the First National Bank of Howell (hereinafter First National). Appearing on the face of the instrument was the following language, the interpretation of which forms the basis of this controversy: "Upon acceptance pay to the order of’. On September 9, 1977, Ms. Moss endorsed the instrument and transferred it to Standard who paid full value and in so doing acted in good faith. Thereafter, the instrument was presented by Standard to First National for payment.

Subsequent to issuing this draft, Citizens became aware that Ms. Moss’ report of a stolen automobile was fraudulent. Based on that fact, Citizens requested First National to stop payment on the draft in question. The draft, which had been forwarded to First National by Standard, was returned to Standard stamped "stop payment”. This "stop payment” order was received by Standard after it had paid the money to Ms. Moss. Standard then instituted this action in the 46th Judicial District Court to recover payment on the instrument.

Standard contended that since it was a holder in due course, it took the draft free of any personal defenses Citizens asserted. Citizens responded that the draft in question was not a negotiable instrument, and, therefore, Standard was precluded from becoming holder in due course. The focal point of the controversy revolved around the language on the face of the instrument: "Upon acceptance pay to the order of’. Citizens asserted that the language was not an unconditional promise or order to pay as required by MCL 440.3104(l)(b); MSA 19.3104(l)(b). Citizens argued that the language on the instrument made payment conditional upon acceptance of the drawee bank, First National. Standard urged that the instrument was negotiable under the UCC, as the quoted language referred only to acceptance by the payee — claimant, Ann Moss — in settlement of her insurance claim against Citizens. The trial court agreed with Standard and granted summary judgment in its favor.

The question raised upon appeal is whether the trial court erred in finding that an instrument bearing the phrase, "Upon acceptance pay to the order of * * *” is negotiable. Citizens argues that the word "acceptance” is a term of art which is specifically defined in the Uniform Commercial Code. MCL 440.3410; MSA 19.3410. In light of that definition, acceptance may only be consummated by the drawee, and, consequently, payment of the note was conditional, precluding negotiability and, thus, precluding Standard from becoming a holder in due course. If Standard was not a holder in due course, the defense of fraud in the inducement would be available against Standard. Citizens further argues that Standard could have avoided any loss had it withheld payment to Ann Moss until the instrument had been accepted by First National.

In opposition, Standard argues that the "upon acceptance” language on the face of the instrument refers to acceptance by Ann Moss as the insured claimant and payee. Her acceptance of the instrument from Citizens was in settlement of a prior claim, and, therefore, MCL 440.3410; MSA 19.3410 is inapplicable, in that it relates only to acceptance by a drawee bank. Since the "upon acceptance” language referred to the underlying transaction which gave rise to the instrument, Standard contends that the negotiability of the instrument is not affected by this language.

Our analysis must begin with the concept of negotiability. To be a negotiable instrument, a writing must:

"(a) be signed by the maker or drawer; and
"(b) contain an unconditional promise or order to pay a sum certain in money and no other promise, order, obligation or power given by the maker or drawer except as authorized by this article; and
"(c) be payable on demand or at a definite time; and
"(d) be payable to order or to bearer.” MCL 440.3104(1); MSA 19.3104(1). (Emphasis supplied.)

The issue of first impression of the instant action concerns (b) above. The question is whether the language on the face of the instrument ("Upon acceptance pay to the order of’) renders the instrument conditional and, thus, nonnegotiable.

Defendant claims that the use of the word "acceptance” automatically triggers MCL 440.3410(1); MSA 19.3410(1):

"Acceptance is the drawee’s signed engagement to honor the draft as presented. It must be written on the draft, and may consist of his signature alone. It becomes operative when completed by delivery or notification.”

Defendant contends that, by definition, the only entity capable of satisfying the "upon acceptance” language is drawee bank, First National. In support of this position, defendant cites Jerome v Eastern Finance Corp, 317 Mass 364, 368; 58 NE2d 122 (1944), which quoted Berenson v London & Lancashire Fire Ins Co of Liverpool, England, 201 Mass 172; 87 NE 687 (1909). We feel defendant’s reliance on these cases is misplaced. The draft at issue in the Jerome case bore a specific location for the drawee to indicate its acceptance. The completion of this space by the drawee rendered such note fully negotiable. Agricultural Insurance Co of Watertown NY v Andrade, 146 F Supp 893 (D Mass, 1956). Therefore, the drafts at issue in the cases relied on by defendant are distinguishable on their face from the draft at issue in this action.

Defendant’s contention that the term "acceptance” must be construed within the narrow parameters of the UCC is not persuasive. Recognition that "[technical construction of negotiable instrument law should not be favored”, was the standard before the adoption of the UCC. Peoples National Bank of Ypsilanti v Dicks, 258 Mich 441, 444; 242 NW 825 (1932). In view of the policy of the UCC "to encourage the free circulation of negotiable paper”, Official Comment 1 to MCL 440.3118; MSA 19.3118, we feel this strict construction is still disfavored.

In analyzing the conditional nature of the language in question, it is instructive to refer again to the UCC. MCL 440.3105; MSA 19.3105 explains the unconditional status of a promise or order. It states in pertinent part:

"A promise or order otherwise unconditional is not made conditional by the fact that the instrument * * * (b) states * * * the transaction which gave rise to the instrument * * *.” (Emphasis added.)

Furthermore, MCL 440.3112(1); MSA 19.3112(1) dictates that:

"The negotiability of an instrument is not affected by * * * (f) a term in a draft providing that the payee by indorsing or cashing it acknowledges full satisfaction of an obligation of the drawer[.]”

The foregoing provisions indicate that the UCC recognizes that certain language on the face of an instrument does not derogate from its negotiable nature. The facts in this action suggest that the draft was made payable to Ann Moss in full settlement and satisfaction of any claim she had regarding her allegedly stolen automobile. From this context, it is justifiable to conclude that the language "upon acceptance” was an explicit reference to the transaction which resulted in the making of this draft. Michigan courts have continuously recognized the validity of a provision in an instrument which treats endorsing or cashing the instrument as full satisfaction of an underlying obligation of the drawer. Board of County Road Comm’rs v Midland Contracting Co, 247 Mich 222; 225 NW 539 (1929), Cochran v National Casualty Co, 261 Mich 273; 246 NW 87 (1933).

In support of the foregoing theory, plaintiff contends that in the face of a patent ambiguity, it is incumbent that the Court read the "whole” note as well as scrutinize the entire transaction. Collateral Liquidation Inc v Renshaw, 301 Mich 437, 442; 3 NW2d 834 (1942), summarizes this principle:

"It is a well-established rule that in the construction of a note the intention of the parties is to control if it can be legally ascertained by a study of the entire contents of the. instrument * * * and anything written or printed on the note prior to its issuance relating to its subject matter must be regarded as a part of the contract and given due weight in its construction * * *. When there is a patent ambiguity in the instrument, it is competent for the court to determine from the paper itself, in the light of the circumstances in which it was given, what was the actual intention of the parties.”

Applying these principles to the case in issue indicates that the instrument made explicit references to various facts surrounding the claim: date of loss, claim number, agency, insured, claimant, kind of loss, and policy number. In addition, the record discloses that the instrument was accepted by Ann Moss simultaneously with the execution of a release. Thus, it is logical to conclude that in the document in question, the words "upon acceptance” refer to the payee agreeing to the conditions precedent rather than to the liability of the drawee. The language of MCL 440.3410; MSA 19.3410 does not relate to the facts of the case. Here, "upon acceptance” refers to someone other than the drawee, and, this being true, the foregoing section is inapplicable.

Furthermore, in regard to a patent ambiguity, this Court has noted that where there exist two possible constructions of the language in an instrument, it is proper to construe the terms most strongly against the maker or drafter. Tweddle v Tweddle Litho Co, 80 Mich App 418, 424; 264 NW2d 9 (1978).

In support of plaintiffs position, it cites Glosser Stores Inc v Nationwide Mutual Ins Co, 46 Pa D & C 2d 16, 17; 6 UCC Rep Serv 168 (1968). Just as in the instant case, here an insurance company issued a check which stated "upon acceptance pay to the order of’ the insurance claimant. The insurance company stopped payment and later refused to pay upon demand on the ground that the check was not a negotiable instrument since the language made the instrument conditional upon acceptance by the drawee bank. The face of the instrument indicated that it was given in settlement of a claim under an insurance policy. On the back of the document was stated: " 'When this is "full payment”, endorsement hereon is a release of all claims the payee has for loss or damage, including all known or unknown personal injuries’ ”. That check was also payable through a third-party drawee bank.

The court concluded that the language on the face of the instrument did not deprive it of its negotiable status, reasoning that:

"The check in question does not state, 'upon acceptance by Nationwide Mutual Insurance Company.’ Further, it is quite obvious that 'Upon acceptance pay to the order of being opposite the name of the insured, and from the nature of the instrument itself, the acceptance refers to Paul E. Thornburg, and was in fact accepted by his endorsement and presentation to plaintiff for payment in plaintiffs course of business.” Glosser, supra, 17.

Although the back of the instrument in Glosser contained an explicit release provision, the case is strikingly similar to the situation at bar. The lower courts in this action recognized that the opinion in Glosser was consistent with the principles of negotiability. Although that case is of no precedential value in this jurisdiction, its rationale finds support in the public policy "* * * to encourage the free circulation of negotiable paper”. Official Comment 1 to MCL 440.3118; MSA 19.3118.

We, therefore, find that the document in question was not made conditional by the insertion of the language "Upon acceptance pay to the order of’. The technical construction of the term "acceptance” argued by defendant is not reasonable in light of the factual situation. The principles that the instrument is to be read as a whole, the entire fact situation surrounding its execution scrutinized, and any ambiguity construed against the maker, lead to the conclusion that this instrument was negotiable. Summary judgment was properly granted in plaintiffs favor. GCR 1963, 117.2(3). We affirm.


author: T. Gillespie, J.

text:
    PEOPLE v WILSON
    Docket No. 45850.
    Submitted May 6, 1980, at Lansing.
    Decided August 12, 1980.
    Marcia J. Wilson was charged with possession of stolen property over $100 on December 11, 1978. At a pretrial conference on January 25, 1979, she was told that a supplemental information would be filed against her charging her with being a habitual offender. She pled guilty to the possession charge on March 19, 1979. The supplemental information was filed on April 12, 1979, and, on April 19, 1979, she . pled guilty in the Washtenaw Circuit Court and was convicted, Edward D. Deake, J. Defendant appeals, alleging that it was improper to delay the filing of the supplemental information until after she pled guilty to the principal charge. Held:

      A supplemental information charging a defendant with being a habitual criminal must be filed promptly, if at all, unless a delay is necessary to verify out-of-state felony convictions. The rule was announced August 28, 1979, by the Supreme Court and should not apply retroactively.
    Affirmed.
    1. Courts — Rules op Law — Retroactive .Application.
    A court must consider, in deciding whether to give retroactive application to a new rule of law, the purpose of the new rule, the general reliance upon the old rule and the effect of retroactivity upon the administration of justice.
    2. Criminal Law — Supplemental Informations — Habitual Criminals.
    The rule of law established by a case precedent that a supplemental information charging a defendant with being a habitual criminal be filed promptly, if at all, unless delay is necessary to verify out-of-state felony convictions has prospective application only.
    References for Points in Headnotes
    [1, 2] 20 Am Jur 2d, Courts § 85.
    Prospective or retroactive operation of overruling decision. 10 ALR3d 1371.

      Frank J. Kelley, Attorney General, Robert A. Derengoski, Solicitor General, William F. Delhey, Prosecuting Attorney, and Robert L. Cooper, Assistant Prosecuting Attorney, for the people.

      Kitchen, Stringer & Schmerberg, J.D., for defendant.
    Before: Cynar, P.J., and M. J. Kelly and T. Gillespie, JJ.

       Circuit judge, sitting on the Court of Appeals by assignment.

   T. Gillespie, J.

The defendant was arrested on December 11, 1978, and charged with possession of stolen property over $100 in violation of MCL 750.535; MSA 28.803. She pled guilty on March 19, 1979. She was told at pretrial on January 25, 1979, that a supplemental information would be filed against her charging her as a habitual offender. This was done on April 12, 1979. On April 19, 1979, she pled guilty to the charge of being a habitual offender, fourth or subsequent conviction (MCL 769.12; MSA 28.1084). She appeals from her sentence of three to five years at the Michigan Department of Corrections contending that, under the holding of the Supreme Court in People v Fountain, 407 Mich 96; 282 NW2d 168 (1979), it was improper to delay the filing of the supplemental information until after the defendant had pled guilty to the principal charge against her.

The prosecutor contends that the bases for the holding in People v Fountain do not apply in this case as the defendant had fair notice and there was no prosecutorial impropriety. People v Fountain however is quite specific:

"A prosecutor who knows a person has a prior felony record must promptly proceed, if at all, against the person as an habitual offender. People v Hatt, 384 Mich 302; 181 NW2d 912 (1970), People v Stratton, 13 Mich App 350; 164 NW2d 555 (1968). The prosecutor is not foreclosed from proceeding against a person as an habitual offender after conviction on the current offense provided he is unaware of a prior felony record until after the conviction. MCL 769.13; MSA 28.1085. The only recognized exception to this rule is when the delay is due to the need to verify out-of-state felony convictions based on the 'rap sheet’. People v Hendrick, 398 Mich 410; 247 NW2d 840 (1976).” Id., 98-99.

The supplementation in this case does not fall within the exception and therefore could not at the present time be sustained.

The other question is whether the rule announced in Fountain is retrospective. The date of the sentence was April 19, 1979. The Supreme Court decision was August 28, 1979. The Supreme Court did not announce whether the rule of Fountain was to be applied retrospectively or prospectively and is considering the determination of that question. People v Ronald Brown, 407 Mich 913 (1979).

In a number of cases the Court recently has decided the question of retroactivity of decisions which change an established rule of law.

In People v Hampton, 384 Mich 669; 187 NW2d 404 (1971), the Court did apply retroactively a requirement that instructions be given to the jury that a finding of not guilty by reason of insanity does not result in release of a defendant.

In People v Auer, 393 Mich 667; 227 NW2d 528 (1975), the Court applied the "objective” test to evidence of entrapment dictated by People v Turner, 390 Mich 7; 210 NW2d 336 (1973), prospectivély only.

In People v Rich, 397 Mich 399; 245 NW2d 24 (1976), the Court applied prospectively only the rule of People v Crittle, 390 Mich 367; 212 NW2d 196 (1973), which overruled the capacity standard of intoxication in specific intent crimes which had been firmly established for many years.

In People v Markham, 397 Mich 530; 245 NW2d 41 (1976), reh den 398 Mich 952 (1976), the "same transaction” test in double jeopardy cases decided by People v White, 390 Mich 245; 212 NW2d 222 (1973), was applied prospectively.

In People v Mauch, 397 Mich 646; 247 NW2d 5 (1976), reh den 400 Mich 951 (1977), the rule requiring a presentence report mandated by People v Brown, 393 Mich 174; 224 NW2d 38 (1974), prior to sentencing was limited further by including only cases on direct appeal at the date of the Brown decision.

In People v Garcia, 398 Mich 250; 247 NW2d 547 (1976), reh den 399 Mich 1041 (1977), the Court refused retroactive effect to the rule that it is not permissible for a trial judge sitting without a jury to read the transcript taken at preliminary examination.

In People v Kamin, 405 Mich 482, 494, 504-505; 275 NW2d 777 (1979), the Court did allow retroactive effect to the rule in People v Ora Jones, 395 Mich 379; 236 NW2d 461 (1975), and People v Chamblis, 395 Mich 408; 236 NW2d 473 (1975), requiring jury instructions on lesser included and cognate offenses .

In all of these cases the Supreme Court used the three-pronged test for retroactivity set out in Link-letter v Walker, 381 US 618; 85 S Ct 1731; 14 L Ed 2d 601 (1965): (1) the purpose of the new rule, (2) general reliance on the old rule, and (3) the effect on the administration of justice.

The Courts have usually followed the pattern that rules which assist in ascertainment of guilt or innocence or involve constitutional rights are applied retroactively. Procedural rules are applied prospectively. People v Hampton, supra, Tehan v United States ex rel Shott, 382 US 406; 86 S Ct 459; 15 L Ed 2d 453 (1966).

The procedural rule of Fountain was for the purposes of giving the accused fair notice at the time of filing of the information that supplementation would be sought and avoidance of appearance of prosecutorial impropriety by enhanced punishment of one who has exercised his or her right to trial.

The purpose is salutory; however, there had been general reliance by prosecutors for many years on the practice that supplementation should take place after a plea of guilty is entered or a verdict of guilt is found by a jury.

If rétroactivity were ordered it would have a significant impact on the administration of justice. The enhanced sentences imposed upon many habitual criminals would have to be vacated. New sentence hearings, with the attendant problem of stale presentence information, would be required in some cases, while in others, sentences imposed after conviction of the principal offense would be reinstated resulting in disproportionately light penalties. A review would be required of all cases of habitual offenders sentenced prior to August 28, 1979, who could obtain an ingenious lawyer to process a delayed appeal. The result would be a clogging of appellate pipelines with many technical claims and there would be released into society many of the very people the Legislature saw fit to longer detain.

The sentence of the circuit court is affirmed.


author: T. M. Burns, P. J.

text:
    PEOPLE v BOOMER
    Docket No. 45869.
    Submitted December 13, 1979, at Lansing.
    Decided August 12, 1980.
    Robert W. Boomer was convicted, on his plea of guilty, of armed robbery in Oakland Circuit Court, Richard D. Kuhn, J. On the date of sentencing but before sentence was imposed, the defendant moved to withdraw his guilty plea. The judge summarily denied the defendant’s motion without any inquiry as to why the defendant wished to withdraw his guilty plea. Defendant appeals. Held:

    1. Requests for withdrawal of guilty pleas should be granted with great liberality if made prior to sentencing, although there is no absolute right to withdraw a guilty plea.
    2. The trial judge must inquire in some detail why a criminal defendant wishes to withdraw a guilty plea when a motion to withdraw his plea is made by a defendant.
    3. If, in the discretion of the trial judge, the defendant’s motion to withdraw his guilty plea is based on nonfrivolous reasons the defendant should be permitted to withdraw such plea and be tried on the original charge. If, however, there was no valid reason for such a motion, the conviction should be affirmed.
    Remanded with instructions.
    1. Criminal Law — Guilty Pleas — Withdrawal.
    Requests for withdrawal of guilty pleas should be granted with great liberality if made prior to sentencing, although there is no absolute right to withdraw a guilty plea.
    2. Criminal Law — Judges — Guilty Pleas — Withdrawal.
    The trial judge must inquire in some detail why a criminal defendant wishes to withdraw a guilty plea when a motion to withdraw his plea is made by a defendant.
    Reference for Points in Headnotes
    [1,2] 21 Am Jur 2d, Criminal Law § 503 et seq.

      Frank J. Kelley, Attorney General, Robert A.

      Derengoski, Solicitor General, L. Brooks Patterson, Prosecuting Attorney, Robert C. Williams, Chief Appellate Counsel, and Thomas S. Richards, Assistant Prosecuting Attorney, for the people.

      Young & Kaluzny, for defendant on appeal.
    Before: T. M. Burns, P.J., and J. H. Gillis and Bashara, JJ.
   T. M. Burns, P. J.

Defendant appeals of right his May 15, 1979, plea of guilty to armed robbery. MCL 750.529; MSA 28.797. On May 16, 1979, he was sentenced to a term of 8 to 20 years imprisonment. Defendant raises one issue for our consideration. On the date of sentencing, but before sentence was imposed by the Court, defendant indicated that he wished to withdraw his guilty plea. Defendant’s request was summarily denied without any inquiry by the sentencing judge as to why defendant wished to withdraw his plea:

"Defendant: I would like to withdraw my plea to not guilty (sic).
"The Court: Your motion is denied. Anything further?
"Defendant: No.”

Although there is no absolute right to withdraw a guilty plea, requests for withdrawal should be granted with "great liberality” if made prior to sentencing. People v Price, 85 Mich App 57; 270 NW2d 707 (1978), lv den 405 Mich 819 (1979), People v Winegar, 78 Mich App 764; 261 NW2d 45 (1977).

In People v Moore, 74 Mich App 195, 198; 253 NW2d 708 (1977), this Court held that when a defendant moves to withdraw a guilty plea, the judge must "inquire in some detail why the defendant wishes to do so”. We find no evidence of such an inquiry in the instant case. Therefore, we would adopt the remedy approved of in Moore and remand this case to the lower court with instruction to conduct an evidentiary hearing on whether defendant’s desire to withdraw his guilty plea was motivated by a sufficiently nonfrivolous reason. If, in the discretion of the trial judge, it was, the defendant should be permitted to withdraw his plea and should be tried on the original charge in accordance with People v Moore, supra. If, on the other hand, the trial judge should determine that the defendant has no valid reason for withdrawing his guilty plea, the conviction should be affirmed. We retain no further jurisdiction.


author: D. C. Riley, J.

text:
    LOGAN v EDWARD C LEVY COMPANY
    Docket No. 45979.
    Submitted June 13, 1980, at Detroit.
    Decided August 12, 1980.
    Leave to appeal applied for.
    Doshia Logan, guardian of the children of Sept B. Logan, deceased, appeals the decision of the Worker’s Compensation Appeal Board which held that the Edward C. Levy Company and Maryland Casualty Company, defendants, were entitled to credit the entire amount of a third-party wrongful death recovery. Plaintiffs husband was killed as a result of a tire explosion at Edward C. Levy Company, his place of employment. The Maryland Casualty Company, the Levy Company’s insurer, voluntarily commenced paying death benefits to plaintiff and her nine children. Subsequently, plaintiff and her children obtained a judgment against the tire vendor and manufacturer in United States District Court for the Eastern District of Michigan.
    Thereafter, plaintiff sought further workers’ compensation benefits on behalf of the children, and acknowledged credit for the amount voluntarily paid, calculating the date when payments should start for all children who had not attained the age of majority. Defendants refused to make any payments, arguing that they were entitled to credit the entire judgment against past and future compensation regardless of the apportionment of benefits between the wife and the children by the Federal trial court. The administrative law judge decided that the defendants’ credit for benefits paid pursuant to the third-party judgment was limited to the extent of the recovery by each individual dependent. Defendants made payments and appealed the decision. The Worker’s Compensation Appeal Board reversed the referee’s decision and payments were discontinued. The board found that the defendants were entitled to credit the entire recovery awarded in the wrongful death action. Plaintiff appeals. Held:

    1. The Workmen’s Compensation Bureau is a quasi-judicial agency vested with the authority to determine compensation issues; among its power is the authority to allocate credit from a third-party tortfeasor judgment to an insurer who has paid workers’ compensation benefits.

      References for Points in Headnotes
    [1] 81 Am Jur 2d, Workmen’s Compensation §§ 77, 79 et seq.

    [2, 3] 81 Am Jur 2d, Workmen’s Compensation § 77.

      2. An insurer who pays workers’ compensation benefits to an injured party may recoup monies paid if the injured party successfully sues the third-party tortfeasor, but any amounts reimbursed must be those paid or payable under the worker’s compensation act and must be for "damages resulting from personal injuries or death only”, and must not be for noneconomic losses including loss of consortium.
    3. The trial court as well as the Workmen’s Compensation Bureau may determine the insurer’s credit for reimbursement from the injured party where that injured party recovers money from a third-party tortfeasor.
    4. Any reimbursement to the defendant insurer should be apportioned in order that the insurer will receive reimbursement solely from the economic compensation it actually paid the plaintiff.
    Reversed and remanded with instructions.
    1. Workers’ Compensation — Bureau of Workmen’s Compensation — Functions.
    The Workmen’s Compensation Bureau is a quasi-judicial agency vested with the authority to determine compensation issues; among its powers is the authority to allocate credit from a third-party tortfeasor judgment to an insurer who has paid workers’ compensation benefits.
    2. Workers’ Compensation — Insurers — Reimbursement — Third-Party Judgments.
    An insurer who pays workers’ compensation benefits to an injured party may recoup monies paid if the injured party successfully sues the third-party tortfeasor, but any amounts reimbursed must be those "paid or payable” under the worker’s compensation act and must be for "damages resulting from personal injuries or death only”, and must not be for noneconomic losses including loss of consortium (MCL 418.827[5]; MSA 17.237[827][5]).
    3. Workers’ Compensation — Courts — Insurers — Credit.
    The trial court as well as the Workmen’s Compensation Bureau may determine the insurer’s credit for reimbursement from the injured party where that injured party recovers money from a third-party tortfeasor.

      Blum, Brady, Fischel & Rosenberg (by Mark J. Spielman), for plaintiff.

      LeVasseur, Werner, Mitseff & Brown, for defendant.
    Before: Bashara, P.J., and D. C. Riley and E. A. Quinnell, JJ.

       Circuit judge, sitting on the Court of Appeals by assignment.

   D. C. Riley, J.

Plaintiff appeals the decision of the Worker’s Compensation Appeal Board, which reversed the administrative law judge’s determination and held that defendants were entitled to credit the entire amount of a third-party wrongful death recovery. The effect of this decision is to effectively extinguish any future worker’s compensation liability. Plaintiff appeals by leave granted.

Plaintiff’s husband was killed in 1971, as a result of a tire explosion at the Edward C. Levy Company, his place of employment. Defendant Maryland Casualty Company, the Levy Company’s insurer, voluntarily commenced paying death benefits to plaintiff, Mr. Logan’s widow, and their nine children. In 1971, plaintiff and her children obtained a $142,500 judgment in the United States District Court for the Eastern District of Michigan against the tire vendor, Sears Roebuck and Company, and the tire manufacturer, the Wertenberger Tire Company. Pursuant to the wrongful death act, MCL 600.2922(2); MSA 27A.2922(2), certification was made to the probate court by the Federal District Court. Under this certification, the Federal District judge determined that each of the nine children suffered a $2,000 loss while Mrs. Logan suffered a $124,500 loss. Maryland Casualty Company, joined as a party-plaintiff in the Federal suit, waived recovery of any worker’s compensation payments already made by them in exchange for payment of $2,500 in attorney fees.

Subsequently, plaintiff sought further worker’s compensation benefits on behalf of the children. Plaintiff acknowledged that of the $2,000 paid each child pursuant to the wrongful death judgment, Maryland Casualty should be credited with $1,333 for worker’s compensation benefits voluntarily paid. Plaintiff calculated that each child’s pro rata share of the decedent’s worker’s compensation benefits would reach $1,333 on December 20, 1974. Plaintiff sought a resumption of the payment of benefits from that date onward for all children who had not attained the age of majority. Defendants refused to make any payments, arguing that they were entitled to credit the entire $142,500 judgment against past and future compensation regardless of the apportionment of benefits between the wife and the children by the Federal trial court.

On December 17, 1976, the administrative law judge decided that the defendants’ credit for benefits paid pursuant to the third-party judgment was limited to the extent of the recovery by each individual dependent. Defendants were accorded credit for the amount of the recovery, decreased by prorated attorney fees and expenses. The administrative law judge ordered payment retroactive from March 1, 1973. Pursuant to MCL 418.862; MSA 17.237(862), payments of seventy percent of the compensation benefits were paid by the defendants, who appealed the decision..

On June 19, 1979, the Worker’s Compensation Appeal Board reversed the referee’s decision and payments of the defendants were discontinued. The board found that the defendants were entitled to credit the entire recovery awarded in the wrongful death action. After reviewing the applicable statutory provisions, the board decided that the amount recovered in the wrongful death action was to be applied to compensation paid or payable by the insurer. The board noted that the large size of the widow’s share, $124,500, out of a total' award of $142,500, was clearly disproportionate and should be credited toward any future liability by the defendants.

The Workmen’s Compensation Bureau is a quasi-judicial agency vested with the authority to determine compensation issues. Jesionowski v Allied Products Corp, 329 Mich 209; 45 NW2d 39 (1950). Among its power is the authority to allocate credit from a third-party tortfeasor judgment to an insurer who has paid worker’s compensation benefits. See Hakkinen v Lake Superior District Power Co, 54 Mich App 451; 221 NW2d 202 (1974).

The pertinent statute provides:

"In an action to enforce the liability of a third party, the plaintiff may recover any amount which the employee or his dependents or personal representative would be entitled to recover in an action in tort. Any recovery against the third party for damages resulting from personal injuries or death only, after deducting expenses of recovery, shall first reimburse the employer or carrier for any amounts paid or payable under this act to date of recovery and the balance shall forthwith be paid to the employee or his dependents or personal representative and shall be treated as an advance payment by the employer on account of any future payments of compensation bénefits.” (Emphasis added.) MCL 418.827(5); MSA 17.237(827X5).

Thus, where an insurer pays worker’s compensation benefits to an injured party, he may recoup monies paid if the injured party successfully sues the third-party tortfeasor. The appeal board focused on the language "any amounts” and held that the entire $142,500 judgment should be credited to the insurer. It assumed that the settlement only included payments for injuries compensable under the Worker’s Disability Compensation Act. This is not necessarily true. "Any amounts” reimbursed must be those "paid or payable” under the act and must be for "damages resulting from personal injuries or death only”. MCL 418.827(5); MSA 17.237(827X5).

In Lone v Esco Elevators, Inc, 78 Mich App 97; 259 NW2d 869 (1977), this Court interpreted that latter phrase to exclude any award for loss of consortium. In Great American Ins Co v Queen, 86 Mich App 362; 272 NW2d 659 (1978), this Court held that a worker’s compensation carrier is not entitled to reimbursement from third-party tortfeasors for noneconomic losses under the no-fault automobile insurance statute.

We believe that a similar bar should apply here. It is clear that of the amounts awarded both the wife and children, a portion of the judgment was for noneconomic damages such as loss of love, companionship and affection. These injuries were never compensated by the worker’s compensation insurer, so they cannot be recovered now. See Griggs v The Budd Co, 90 Mich App 649; 282 NW2d 431 (1979). The insurer can obtain reimbursement for economic loss only.

It is impossible to determine how much of the judgment award was for noneconomic and how much was for economic loss. The Federal court did not apportion the $142,500 nor did the appeal board which adopted the judgment sum as the proper amount for reimbursement.

In Hakkinen, supra, this Court stated that it is the sole province of the Workmen’s Compensation Bureau to determine the insurer’s credit for reimbursement. This position was implicitly repudiated by Franges v General Motors Corp, 404 Mich 590; 274 NW2d 392 (1979), and Manninen v Warner & Swasey Co, 80 Mich App 253; 263 NW2d 341 (1977), as both cases recognize that the trial court can perform this function.

In the instant case, neither the Federal District Court nor the Worker’s Compensation Appeal Board made an adequate allocation. This apportionment is necessary so that the insurer will simply receive reimbursement for the economic compensation which it actually paid the plaintiff. Since our jurisdiction only extends to the appeal board, we will reverse and remand to allow that body to make the appropriate apportionment. Any adjustments made by the board on remand, with respect to sums awarded, should reflect this apportionment and a modification of the credit that the insurer should receive.

Reversed and remanded for proceedings consistent with this opinion.

We retain no jurisdiction. Costs to await final outcome of proceedings._

       An adjustment might be advisable due to the lopsided amount allocated to the wife, $124,500 out of the total $142,500 awarded. The $142,500 figure may also require alteration if the board acted under the misapprehension that the children’s benefits end at age 18. The statute in effect at the time of decedent’s death, and as yet unamended, continues to specify 21 as the maximum age for nondisabled children to receive death benefits. See MCL 418.335; MSA 17.237(335).
      We take this opportunity to refute defendant’s position that the dependent children have no interest in the death benefits that is distinct from that of the spouse. The fact that benefits are paid through the mother rather than directly to the children does not undermine the severability of the award. See MCL 418.331; MSA 17.237(331), Cichecki v City of Hamtramck, 382 Mich 428, 433; 170 NW2d 58 (1969).


author: D. F. Walsh, J.

text:
    FITCH v CRIME VICTIMS COMPENSATION BOARD
    Docket No. 46619.
    Submitted June 10, 1980, at Grand Rapids.
    Decided August 12, 1980.
    Jerome T. Fitch filed a claim for compensation with the Crime Victims Compensation Board, which claim was denied by the board chairman, whose decision was aflirmed by the full Board. No hearing was held. Plaintiff appeals by leave granted. Held:

    A hearing was necessary before plaintiffs claim for compensation under the compensation of crime victims act could be denied, and the claimant had a right to an evidentiary hearing if he so desired.
    Reversed and remanded.
    1. Administrative Law — Crime Victims Compensation Board — Denial of Claim — Statutes.
    A hearing before the Crime Victims Compensation Board is necessary prior to the denial of a claim for compensation under the compensation of crime victims act if the, claimant desires a hearing (MCL 18.356[4], [5]; MSA 3.372[6][4], [5]).
    2. Administrative Law — Crime Victims Compensation Board — Hearing — Statutes.
    On a claim for compensation under the compensation of crime victims act, a hearing is not required where the Crime Victims Compensation Board rules in favor of a defendant (MCL 18.356[5]; MSA 3.372[6][5]).
    3. Statutes — Construction of Statutes — Legislative Intent.
    The intention of the Legislature must be ascertained and given effect in the construction of a statute, and no phrase, clause, or word may be ignored in determining a provision; one part of a statute must not be so construed as to render another part nugatory.
    References for Points in Headnotes
    [1] 2 Am Jur 2d, Administrative Law §§ 398, 400.
    [2] 2 Am Jur 2d, Administrative Law § 403.
    [3] 73 Am Jur 2d, Statutes §§ 145, 146, 213 et seq.

      McCroskey, Libner, Van Leuven, Feldman, Cochrane & Brock, P.C. (by Robert O. Chessman), for plaintiff.

      Frank J. Kelley, Attorney General, Robert A. Derengoski, Solicitor General, and Michael J. Mo-quin, Assistant Attorney General, for defendant on appeal.
    Before: Allen, P.J., and D. F. Walsh and G. R. McDonald, JJ.

       Circuit judge, sitting on the Court of Appeals by assignment.

   D. F. Walsh, J.

Plaintiff appeals the denial of a claim by the Crime Victims Compensation Board.

Plaintiff was the apparent victim of an assault which occurred in the early morning hours of November 11, 1978. While hitchhiking along M-20 in Hart, Michigan, plaintiff accepted a ride with two strangers. They rode to Ludington in search of a party, and, on the return trip to Hart, the two men demanded some money from plaintiff as payment for the ride. When plaintiff told them he could not pay, they displayed knives, and one individual stated that he would fight plaintiff. The automobile was stopped, and, once outside the car, the three men were involved in a struggle. Plaintiff sustained multiple stab wounds in the abdomen and incurred approximately $5,000 in medical bills.

Plaintiff filed a claim with the Crime Victims Compensation Board. The board’s chairman denied the claim on the grounds that the crime was not reported to the police within 48 hours of its occurrence and that the victim contributed substantially to the infliction of the injury. Plaintiff appealed to the full board, which affirmed the decision of the chairman.

The issue on appeal is whether a hearing was required before plaintiffs claim could be denied. We hold that a hearing was necessary under the provisions of the statute.

After a claim for compensation has been filed with the Crime Victims Compensation Board, it is assigned to a board member who examines the papers and conducts an investigation. MCL 18.356(1), (2); MSA 3.372(6X1), (2). The statute provides for the disposition of a claim as follows:

"(4) The board member may decide the claim in favor of a claimant on the basis of the papers filed in support thereof and the report of the investigation of the claim. If a board member is unable to decide the claim upon the basis of the papers and the report, he shall order a hearing. At the hearing any relevant evidence, not legally privileged, is admissible.” MCL 18.356(4); MSA 3.372(6)(4). (Emphasis supplied.)
"(5) After examining the papers filed in support of a claim and the report of investigation, and after a hearing, if any, the board member shall make a decision granting or denying the award.” MCL 18.356(5); MSA 3.372(6X5).

A reading of the statute indicates that a hearing is not required when the board’s ruling is in favor of a claimant. However, the act is less clear concerning the necessity of a hearing where a claim is denied. While subsection 5 of the above quoted provision can be read as support for the contention that a hearing is optional, we decline to construe the statute in this manner.

In Melia v Employment Security Commission, 346 Mich 544, 562; 78 NW2d 273 (1956), the Supreme Court expressed the following guidelines:

"The cardinal rule of statutory construction is to ascertain and give effect to the intention of the legislature. If the language of a statutory provision is unambiguous, the intent must be determined accordingly. It is requisite that pertinent provisions of the act be considered together, to the end that the general plan and purpose of the law-making body may be ascertained. All parts of the specific provision to be construed must be given force and effect. This means that no phrase, or clause, or word, may be ignored in determining the construction of such provision. In the early case of People v Burns, 5 Mich 114, 117, it was said:
" 'No rule is better settled than, in construing a statute, effect must be given to every part of it. One part must not be so construed as to render another part nugatory, or of no effect. The same rule applies to words, in construing a sentence.’ ”

In the case at bar, the relevant provision of the statute clearly states that a claim may be decided "on the basis of the papers filed in support thereof and the report of the investigation” when a claim is decided in favor of a claimant. In other words, the Legislature limited the cases where the board was not required to conduct a hearing to those decided "in favor of a claimant”. Any other reading of the statute would render the phrase "in favor of a claimant” nugatory. We conclude that where a claim is denied, the claimant has a right to an evidentiary hearing if he desires one.

The decision of the board is reversed and the case is remanded for proceedings consistent with this opinion.