text:
    ARMSTRONG v ROSS TOWNSHIP
    1. Judgment — Summary Judgment — Motions—Supporting Affidavits — No Genuine Issue — Court Rules.
    The lack of supporting affidavits is fatal to a motion for summary-judgment on the grounds that except as to the amount of damages there is no genuine issue as to any material fact, even absent objection by the nonmoving party at the trial court level (GCR 1963, 117.2[3], 117.3).
    2. Judgment — Summary Judgment — Motions—Failure to State a Claim — Pleadings—Immunity From Suit — Court Rules.
    The Court of Appeals, on review of a motion for summary judgment on the ground that the opposing party has failed to state a claim upon which relief can be granted, accepts as true all of the nonmoving party’s factual allegations as well as any conclusions which can reasonably be drawn therefrom and determines whether the nonmoving party’s claim, on the pleadings, is so clearly unenforceable as a matter of law that no factual development can possibly justify a right to recovery; where immunity from suit is an issue the complaint must plead facts in avoidance of immunity (GCR 1963, 117.2[1]).
    3. Torts — Towns—-Discharge of Governmental Functions — GovernmentalJmmunity — Statutes.
    A township, as a governmental agency engaged in the discharge of governmental functions, is immune from tort liability by statute, subject to several exceptions (MCLA 691.1407; MSA 3.996[107]).

      References for Points in Headnotes

       73 Am Jur 2d, Summary Judgment § 16.

      4 Am Jur 2d, Appeal and Error § 104. 73 Am Jur 2d, Summary Judgment § 13.

       57 Am Jur 2d, Municipal, School, and State Tort Liability § 3.

       57 Am Jur 2d, Municipal, School, and State Tort Liability §§ 53, 55.

       82 Am Jur 2d, Zoning and Planning § 102.

       82 Am Jur 2d, Zoning and Planning § 13.

       57 Am Jur 2d, Municipal, School, and State Tort Liability § 45.

       57 Am Jur 2d, Municipal, School, and State Tort Liability § 85.

       57 Am Jur 2d, Municipal, School, and State Tort Liability §§ 42-44.

      4. Torts — Governmental Immunity — Taking of Private Property —Constitutional Law — Inverse Condemnation.
    The Legislature’s power to grant governmental agencies sovereign immunity is limited by the constitutional provision prohibiting the taking of private property for public use without compensation; a compensatory obligation arises under the constitution, not in tort, for inverse condemnation and sovereign immunity does not insulate the state from liability thereon.
    5. Zoning — Townships—Confiscation of Property — Diminution of Value.
    A township may not so restrictively zone property as to confiscate it; however, property is not confiscated unless a zoning ordinance would preclude its use for any purpose to which it is reasonably adopted; mere disparity in value between uses or depreciation in value caused by rezoning will not justify a finding of confiscation.
    6. Pleading — Complaint—Conclusions—Facts—Confiscation of Property — Zoning—Inverse Condemnation — Governmental Immunity.
    Conclusions are ignored and the facts alleged are examined in evaluating a complaint; therefore, where plaintiffs’ complaint alleges conclusions of confiscation of property because of a rezoning of their property by a township and the facts alleged show that a substantial depreciation in value has occurred, the loss suffered by plaintiffs is not due to inverse condemnation and summary judgment for the defendant township should have been granted because the complaint does not allege facts in avoidance of the defense of governmental immunity.
    7. Municipal Corporations — Governmental Immunity — Negligence — Ministerial Acts — Discretionary Acts.
    Governmental officials may be held liable under state law for negligent performance of ministerial duties but are immune for injuries caused by discretionary acts within the scope of their authority, even if done maliciously; actions of a legislative, executive or judicial character are discretionary acts.
    8. Towns — Township Board — Discretionary Acts — Governmental Immunity — Pleading—Facts Avoiding Immunity.
    The decisions of a township board, planning commission and zoning board of appeals involve discretion, weighing the rights of the individual against the public interest; however, the range of discretion of a building inspector in deciding whether applicants are entitled to a building permit is narrow and the act is ministerial; therefore, where plaintiffs’ complaint alleges that a building inspector intentionally denied building permits to which they were entitled, they have pled facts in avoidance of immunity as to this official.
    ■ 9. Municipal Corporations — Governmental Immunity — Discretionary Acts — Federal Statutes — Qualified Immunity.
    Absolute immunity for government officials from suit under Federal statute has been accorded only to those officials exercising the very widest discretion and with the greatest need to be free of the possible influence of litigation; executive officials enjoy only a qualified immunity, dependant upon the scope of discretion, responsibilities of the office and circumstances as they reasonably appeared at the time of the action; reasonable grounds for action and good faith belief in the propriety of the action are the basis for immunity (42 USC 1983).
    10. Torts — Governmental Immunity — Tort Liability — Good Faith.
    Lower government officials are immune from tort liability for their official actions only if they acted in good faith without malice.
    Appeal from Kalamazoo, Robert L. Borsos, J.
    Submitted February 7, 1978, at Grand Rapids.
    (Docket Nos. 31282, 31283)
    Decided March 20, 1978.
    Complaint by James Armstrong ánd Kathleen Armstrong against Ross Township and others for injunctive relief ordering a rezoning of the plaintiffs’ property and for damages and for mandamus. Complaint by Ross Township against James Armstrong and Kathleen Armstrong for injunctive relief to restrain the Armstrongs from building a restaurant on certain premises. The cases were consolidated. Certain of Ross Township’s motions for summary judgment were denied. Ross Township and Ross Township officials appeal by leave granted.
    Affirmed in part, reversed in part, and remanded.

      Allen, Worth & Hatch, for plaintiffs.

      Bauckham, Reed, Lang, Schaefer & Travis; Early, Starbuck & Lennon; and Ryan, Jamieson & Hubbell, for Ross Township and its officials.
    Before: J. H. Gillis, P. J., and R. B. Burns and Allen, JJ.
   R. B. Burns, J.

In these consolidated cases plaintiffs Armstrong (hereinafter plaintiffs) seek damages and other relief against defendants Ross Township, the township building inspector, and members of the township board, planning commission, and zoning board of appeals, alleging abuse of zoning power and violation of civil rights. Defendants’ motions for summary judgment as to liability for damages were denied, except for Ross Township’s alleged liability under 42 USC 1983. We granted defendants’ applications for leave to appeal, and affirm in part and reverse in part.

In case 31282 plaintiffs allege defendants conspired to harass them and destroy their business. They own a machine shop in Ross Township and applied to the building inspector for a building permit so that they could expand. They further allege that despite their entitlement to the permit it was wrongfully and in bad faith refused. Plaintiffs allege that they applied for a special use exception to the zoning board of appeals, which was biased and predisposed not to grant the exception, and denied the application for reasons not supported by the record, despite having given similar exceptions to other nearby machine shops. Plaintiffs allege that the planning commission met in secret session without notice to plaintiffs and recommended rezoning their property so as to block expansion of the shop and that the township board followed the allegedly unlawful recommendation and rezoned the property. The rezoning is alleged to be arbitrary, capricious, discriminatory, confiscatory, and unrelated to the health, safety, welfare or morals of the community.

In case 31283 plaintiffs Armstrong allege that they asked the building inspector whether a restaurant would be a permitted use on their land, and were advised that it would be. They allege that in reliance upon that representation they filled the property, constructed a fence, and submitted plans in application for a building permit at a cost of over $17,000. They further allege that notwithstanding plaintiffs’ right to a permit, the building inspector stalled the permit while conspiring with the planning commission and township board to rezone the property so as to exclude the intended use and that the planning commission initiated rezoning without a formal petition, and the township board rezoned the property without complying with statutory procedural requirements. The rezoning is alleged to be arbitrary, capricious, discriminatory, and unrelated to the health, safety, welfare or morals of the community. As commercial property, its highest use, plaintiffs allege that the land is worth $50,000; as rezoned, only $10,000.

Defendants moved for summary judgment under GCR 1963, 117.2(3). The motion was based on the deposition of Mr. Armstrong, but no affidavits were submitted by defendants. This lack of affidavits is fatal to the motion even absent objection by plaintiffs at the trial court level. GCR 1963, 117.3, Creech v Consumers Power Co, 59 Mich App 167, 170; 229 NW2d 358, 360 (1975). Consequently we do not reach the merits of the motions on appeal.

Defendants also moved for summary judgment for failure of plaintiffs to state a claim upon which relief can be granted. GCR 1963, 117.2(1). On review of such a motion we "accept as true all of plaintiff [s’] factual allegations as well as any conclusions which can reasonably be drawn therefrom”, Van Liere v State Highway Department, 59 Mich App 133, 137; 229 NW2d 369, 371 (1975), and determine "whether plaintiff [s’] claim, on the pleadings, is so clearly unenforceable as a matter of law that no factual development can possibly justify a right to recovery”, Crowther v Ross Chemical & Manufacturing Co, 42 Mich App 426, 431; 202 NW2d 577, 580 (1972). Where immunity from suit is an issue the complaint must plead facts in avoidance of immunity. Dionne v City of Trenton, 79 Mich App 239, 242; 261 NW2d 273, 275 (1977).

We turn initially to the alleged liability of Ross Township for damages for alleged abuse of zoning power by its officials. As a governmental agency engaged in the discharge of governmental functions the township is immune from tort liability by statute. MCLA 691.1407; MSA 3.996(107). Although the sovereign immunity act provides several exceptions to the immunity doctrine, none apply here.

In Buckeye Union Fire Insurance Co v Michigan, 383 Mich 630, 640-644; 178 NW2d 476, 482-483 (1970), the Supreme Court held that the Legislature’s power to grant governmental agencies sovereign immunity is limited by the constitutional provision prohibiting the taking of private property for public use without compensation. Const 1963, art 10, § 2. In Tamulion v State Waterways Commission, 50 Mich App 60, 66-67; 212 NW2d 828, 831 (1973), this Court recognized that a compensatory obligation arises under the constitution, not in tort, for inverse condemnation, and that sovereign immunity does not insulate the state from liability thereon.

A township may not so restrictively zone property as to confiscate it. Property is not confiscated unless the ordinance "would preclude its use for any purpose to which it is reasonably adapted”. Kirk v Tyrone Twp, 398 Mich 429, 444; 247 NW2d 848, 854-855 (1976), Kropf v Sterling Heights, 391 Mich 139, 163; 215 NW2d 179, 189 (1974). Mere disparity in value between uses, Brae Burn, Inc v Bloomfield Hills, 350 Mich 425, 433; 86 NW2d 166, 170 (1957), Reibel v Birmingham, 23 Mich App 732, 738; 179 NW2d 243, 246 (1970), or depreciation in value caused by rezoning, Lamb v City of Monroe, 358 Mich 136, 144; 99 NW2d 566, 570 (1959), will not justify a finding of confiscation.

Each of the complaints alleges in conclusional terms confiscation, but in evaluating the complaint we ignore conclusions and look to the facts alleged. Binder v Consumers Power Co, 77 Mich App 343, 346-347; 258 NW2d 221, 224 (1977). In each case we find plaintiffs have pled depreciation in value, not confiscation. In case 31282 plaintiffs indicate that the property has a working machine shop. In case 31283 plaintiffs admit the property has value as rezoned, albeit a substantial depreciation has occurred. Plaintiffs’ loss suffered in reliance upon the building inspector’s representation sounds in tort, not inverse condemnation. Since neither complaint alleges facts in avoidance of immunity, Ross Township’s motion for summary judgment should have been granted.

We next turn to the alleged liability of the township officials for damages, first under state law, then under 42 USC 1983.

Under state law government officials may be held liable for negligent performance of ministerial duties, but are immune from suit for injuries caused by discretionary acts within the scope of their authority, even if done maliciously. Sherbutte v Marine City, 374 Mich 48, 54; 130 NW2d 920, 923 (1964), Walkowski v Macomb County Sheriff, 64 Mich App 460; 236 NW2d 516 (1975). The justification for immunity for discretionary acts is that the exercise of discretion should not be influenced by even the possibility of unsuccessful litigation against the official. Sherbutte v Marine City, supra.

Since almost any act involves some discretion, the distinction between ministerial and discretionary acts is one of degree. Prosser, Torts (4th ed), § 132, p 990. By discretionary is meant actions of a legislative, executive or judicial character. Sherbutte v Marine City, supra, see Pawlowski v Jenks, 115 Mich 275; 73 NW 238 (1897), Amperse v Winslow, 75 Mich 234; 42 NW 823 (1889), Walkowski v Macomb County Sheriff, supra. The decision of a drain commissioner to issue partial payments for drain construction, People, for use of Lapeer County Bank v O’Connell, 214 Mich 410; 183 NW 195 (1921), and a police officer to arrest, Sherbutte v Marine City, supra, are considered ministerial.

The decisions of the township board, planning commission, and zoning board of appeals involve discretion, weighing the rights of the individual against the public interest. If such officials were subjected to the worry of defending themselves against suit for damages by individuals against whose interest they decide, the exercise of discretion might well be influenced. These officials are immune from suit under state law. However, the range of discretion of a building inspector in deciding whether applicants are entitled to a building permit is narrow, akin to that of a drain commissioner or police officer. The act is ministerial. Plaintiffs allege the building inspector in each case intentionally denied building permits to which they were entitled. Plaintiffs have pled facts in avoidance of immunity as to this official under state law.

Immunity from suit under 42 USC 1983 turns upon the existence of an analogous immunity provision at common law coupled with a weighing of the need for immunity as against the need to compensate plaintiffs for violation of civil rights. See, e.g., Imbler v Pachtman, 424 US 409; 96 S Ct 984; 47 L Ed 2d 128 (1976), Wood v Strickland, 420 US 308; 95 S Ct 992; 43 L Ed 2d 214 (1975), Scheuer v Rhoades, 416 US 232; 94 S Ct 1683; 40 L Ed 2d 90 (1974). Absolute immunity from suit has been accorded only to those officials exercising the very widest discretion and with the greatest need to be free of the possible influence of litigation. See Imbler v Pachtman, supra (prosecuting attorneys), Pierson v Ray, 386 US 547; 87 S Ct 1213; 18 L Ed 2d 288 (1967) (judges), Tenney v Brandhove, 341 US 367; 71 S Ct 783; 95 L Ed 1019 (1951) (state legislators). Executive officials enjoy only a qualified immunity, dependent upon the scope of discretion, responsibilities of the office, and circumstances as they reasonably appeared at the time of the action. Reasonable grounds for action and good faith belief in the propriety of the action are the basis for immunity. Scheuer v Rhoades, supra. In Woods v Strickland, supra, the Supreme Court found only a qualified immunity available to school board members in the exercise of legislative and judicial powers. State law generally accorded such officials immunity from tort liability for actions taken in good faith without malice. The Supreme Court adapted this immunity doctrine to the Federal context and held that school board members were not immune if they knew or reasonably should have known that the action they took would violate constitutional rights, or if they took the action with malicious intention to cause a deprivation of constitutional rights. The same test was held applicable in a suit against a hospital superintendent who allegedly wrongfully refused to release a patient from a mental hospital. O’Connor v Donaldson, 422 US 563; 95 S Ct 2486; 45 L Ed 2d 396 (1975).

The majority rule as to tort liability of lower governmental officials is that they are immune from liability only if they act in good faith without malice. Prosser, Torts (4th ed), § 132, p 989. This is the same test of immunity applicable to school board members from which the Supreme Court fashioned an immunity doctrine for such officials under 42 USC 1983. Woods v Strickland, supra. The discretion exercised by a township board, planning commission, and zoning board of appeals is more closely akin to that of school board members than that of state legislators. Thus, we find those officials had only a qualified immunity from suit, the scope of which is that set forth by the Supreme Court in Woods.

In each complaint plaintiffs allege the above officials acted unlawfully, in bad faith and with malice to deprive them of unrestricted enjoyment of their property. Plaintiffs have pled facts in avoidance of immunity for violation of civil rights under 42 USC 1983.

The Michigan rule that officials are not immune from liability for ministerial acts is in accord with that of other states. Prosser, Torts (4th ed), § 132, pp 989-990. Consequently there is no immunity under 42 USC 1983 for such acts. Cf. Pierson v Ray, supra (police officers). Therefore, the building inspector enjoys no immunity under 42 USC 1983.

We express no opinion on the merits of plaintiffs’ claims and remand without prejudice to defendant’s ability to bring a proper motion for summary judgment under GCR 1963, 117.2(3).

Reversed in part, affirmed in part, and remanded for proceedings consistent with this opinion.

No costs, neither side prevailing in full.


source: Caselaw Access Project

author: V. J. Brennan, J.

license: Public Domain

text:
    McNEAL v HENRY
    1. Judgment — Summary Judgment — Pleading—Failure to State Claim — Court Rules.
    A motion for summary judgment for failure to state a claim upon which relief can be granted requires the court to accept as true all factual allegations well pleaded by the plaintiff (GCR 1963, 117.2[1]).
    2. Negligence — Wrongful Death — Summary Judgment — Duty of Care — Business Invitees — Question of Law — Assailant’s Unforeseeable Behavior.
    Summary judgment in a wrongful death action for failure to state a cause of action on the ground that no duty arose on the part of a defendant store to a business invitee where a fight broke out in the store and the conduct of decedent’s assailant was so extraordinary that defendant store as a matter of law could not be held responsible for providing the kind of protection which would have avoided her death was appropriate; consequently, though defendant may have owed a duty of reasonable care to plaintiff as a business invitee, that duty did not extend to the extreme and totally unforeseeable behavior decedent’s assailant demonstrated by his act of shooting her.
    3. Negligence — Business Invitees — Duty of Care — Assailant’s Unforeseeable Behavior.
    Commercial businesses assume the duty of reasonable care to business invitees but, as a matter of policy, this duty should not extend to the extreme and totally unforeseeable behavior of an assailant who during a commotion resulting from a fight in a store shoots and kills a customer.
    Appeal from Genesee, Harry B. McAra, J.
    Submitted November 8, 1977, at Lansing.
    (Docket No. 77-314.)
    Decided March 20, 1978.
    References for Points in Headnotes

       73 Am Jur 2d, Summary Judgment § 26 et seq.

       73 Am Jur 2d, Summary Judgment § 4.

       62 Am Jur 2d, Premises Liability §§ 46, 47.

      Complaint by Bennie L. McNeal against Jessee Henry, Dorothy M. Gordon, the Kroger Company and Sterling Secret Service, Inc., for damages for the wrongful death of plaintiffs wife. Motion for summary judgment by defendant Kroger Company. Granted. Plaintiff appeals.
    Affirmed.

      Súber & Leavitt, for plaintiff.

      Smith & Brooker, P. C. (by Patrick M. Kirby), for defendants.
    Before: Quinn, P. J., and V. J. Brennan and C. L. Bosman, JJ.

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

   V. J. Brennan, J.

The wife of plaintiff Bennie L. McNeal was killed during a fight which occurred inside the Kroger Food Store in Flint, Michigan. Plaintiff filed a wrongful death action in the circuit court of Genesee County. On January 6, 1977, the trial court granted defendant Kroger Company’s motion for summary judgment pursuant to GCR 1963, 117.2(1) on grounds that Kroger did not owe the decedent a duty to protect against the kind of sudden and unforeseeable injury occurring here.

Defendant based its motion on GCR 1963, 117.2(1), failure to state a claim upon which relief can be granted. Such a motion accepts as true all factual allegations well pleaded by the plaintiff. Sanders v Clark Oil Refining Corp, 57 Mich App 687; 226 NW2d 695 (1975), Martin v Fowler, 36 Mich App 725; 194 NW2d 524 (1971).

Plaintiff alleged that defendant Kroger failed to prevent the death of decedent by failing to react in time to commotion which resulted from the fight preceding decedent’s death. However, this position depends upon the fact that defendant actually owed plaintiff a duty relative to this kind of occurrence and harm. We agree with the trial court that the conduct of decedent’s assailant was so extraordinary that defendant as a matter of law could not be held responsible for providing the kind of protection which would have avoided her death. Consequently, though defendant may have owed a duty of reasonable care to plaintiff as a business invitee, that duty did not extend to the extreme and totally unforeseeable behavior decedent’s assailant demonstrated by the act of his shooting her. See Holloway v Martin Oil Service Inc, 79 Mich App 475; 262 NW2d 858 (1977).

The trial court was justified in determining as a matter of law that no duty arose on the part of defendant Kroger and consequently that granting summary judgment was appropriate for failure to state a cause of action. GCR 1963, 117.2(1). As a matter of policy, we do not believe that commercial businesses should be required to answer for the type of bizarre consequence faced by defendant in this case, even though plaintiff’s complaint clearly and correctly characterized plaintiff herself as a business invitee. Defendant assumed a duty of reasonable care as to her. Defendant did not assume a dúty to protect her against the kind of behavior her assailant demonstrated and the consequences of that behavior. We see a real line between the duty to plaintiff and the unforeseeable consequences of her assailant’s behavior. We take this opportunity to draw that line.

The grant of summary judgment to defendant by the trial court is sustained.

Affirmed.

Judge Quinn did not participate.

       In the majority of urban communities, both large and small businesses could not bear the heavy insurance burden which would be required to protect against this extraordinary kind of liability. Some of our big cities have more than their share of destructive and violent persons, young and old, who roam through downtown department stores and other small retail businesses stealing and physically abusing legitimate patrons. Guards are placed in the stores but those activities continue. We fear that to hold businessmen liable for the clearly unforeseeable third-party torts and crimes incident to these activities would eventually drive them out of business.


author:
Bronson, J.
      M. J. Kelly, J.

text:
    PEOPLE v MARSHALL
    Opinion of the Court
    1. Constitutional Law — Due Process — Paternity—Indigents— Jury Fees — Blood Test Fees — Counsel—Waiver of Fees.
    Due process of law is not denied to a defendant in a paternity action by requiring him to show indigency or inability to pay as a precondition to a waiver of fees, and the fact that a defendant has demonstrated indigency for purposes of obtaining a court-appointed counsel does not preclude the necessity for such a determination regarding the payment of a jury fee or a blood test fee because the inability to pay for counsel involves different considerations than the inability to pay such fees.
    2. Constitutional Law — Right to Trial by Jury — Paternity— Court Rules.
    A defendant in a paternity action is not entitled to the constitutional guarantee of a jury trial which applies to criminal proceedings because (1) paternity actions are both civil and criminal in nature, and it cannot be said that a paternity action is a "criminal prosecution” for purposes of the jury trial guarantee, and (2) imprisonment is not a direct result of a paternity action (US Const, Am VI; Const 1963, art 1, § 20; GCR 1963, 120.3).
    Dissent by M. J. Kelly, J.
    3. Courts — Procedures—Paternity—Indigents—Fees. A defendant in a paternity action who has demonstrated his

      indigency for purposes of obtaining court-appointed counsel should not be required to again show his indigency in order to obtain a waiver of the fees imposed for a blood test and for a jury trial.

      References for Points in Headnotes
    [1, 3] 16 Am Jur 2d, Constitutional Law § 383.
    20 Am Jur 2d, Costs § 47 et seq.

    Right to sue or appeal in forma pauperis as dependent on showing of financial disability of attorney or other non-party or non-applicant. 11 ALR2d 607.
    What costs or fees are contemplated by statute authorizing proceeding in forma pauperis. 98 ALR2d 292.

       47 Am Jur 2d, Jury § 51 et seq.

    Jury trial in bastardy proceedings, right to. 94 ALR2d 1128.

      Appeal from Muskegon, Fredric A. Grimm, J.
    Submitted October 4, 1977, at Grand Rapids.
    (Docket No. 77-655.)
    Decided March 20, 1978.
    A complaint was brought against Harold J. Marshall in a paternity action. Defendant moved to have a blood test and a jury trial at county expense. Motion denied. Defendant appeals by leave granted.
    Affirmed, and remanded for further proceedings.

      Frank J. Kelley, Attorney General, Robert A. Derengoski, Solicitor General, Gerald D. Warner, Prosecuting Attorney, and Janet M. Koehn, Assistant Prosecuting Attorney, for the people.

      Robert S. Engel, for defendant on appeal.
    Before: M. F. Cavanagh, P. J., and Bronson and M. J. Kelly, JJ.
   Bronson, J.

Defendant appeals by leave granted a January 10, 1977, order denying his motion for a blood test and jury trial at county expense in a paternity action.

Defendant’s motion was phrased in constitutional terms. He asserted that he was entitled to a blood test and jury trial at county expense because he had shown indigency for purposes of obtaining appointed counsel and that denying an indigent the requested fee waivers violated the due process and equal protection clauses of the United States and Michigan Constitutions.

The trial court denied defendant’s motion on two grounds. First, the trial court denied the motion because defendant had "failed to request said jury trial and blood tests under the Michigan Paternity Act and under the Michigan statute dealing with indigency”. The second basis for the trial court’s denial of defendant’s motion was that Artibee v Cheboygan Circuit Judge, 397 Mich 54; 243 NW2d 248 (1976), did not mandate a jury trial or blood test as a matter of constitutional law.

We hold that the trial court correctly denied defendant’s motion for a jury trial and blood test at county expense.

First, denial of the motion was proper because defendant had failed to demonstrate indigency for the purpose of obtaining a jury trial or blood test fee waiver. Defendant argues that once he has demonstrated indigency for the purpose of obtaining appointed counsel, he should not be forced to demonstrate inability to pay again for the purpose of a jury trial or blood test fee waiver. Inability to pay for counsel, however, necessarily involves different considerations than inability to pay a $30 jury fee or a blood test fee. It is not a denial of due process to require a showing of indigency or inability to pay as a precondition to a fee waiver. See Artibee v Cheboygan Circuit Judge, supra. As defendant has not demonstrated an inability to pay required costs, it is not a denial of due process or equal protection to deny his motion for a fee waiver. Cf. Boddie v Connecticut, 401 US 371; 91 S Ct 780; 28 L Ed 2d 113 (1971).

Furthermore, GCR 1963, 120.3 provides:

"In instances where the person is not receiving public assistance, the court shall order waiver of the payment of all fees and costs as to a person in the action, required to be paid by law or court rule, or shall order the suspension of the payment of those fees or costs until the conclusion of the litigation upon that person submitting to a judge of the court an ex parte affidavit stating facts showing that person’s inability to pay those fees and costs because of indigency.”

As a procedure insuring defendant’s due process rights is available, it was not unconstitutional to deny a fee waiver where defendant has deliberately avoided utilizing that procedure.

Defendant’s second argument is that as a paternity action is "quasi-criminal” and, as a defendant could be imprisoned for up to one year for default of payment after being adjudged the father of a child, MCLA 722.719(c); MSA 25.499(c), the criminal jury trial guarantees of Const 1963, art 1, § 20, and US Const, Am VI apply. Implicit in this argument is the assumption that no fee may be imposed for exercise of the criminal jury trial right. See People v Hope, 297 Mich 115; 297 NW 206 (1941). This argument is faulty in two respects. First, even though some criminal procedural protections have been held applicable to paternity actions, it is generally accepted in Michigan that paternity actions are both civil and criminal in nature. People v Martin, 256 Mich 33; 239 NW 341 (1931), McDaniel v Jackson, 78 Mich App 218; 259 NW2d 563 (1977). Unlike a criminal prosecution, the purpose of a paternity action is not to punish a defendant. People v Stoeckl, 347 Mich 1, 8-11; 78 NW2d 640 (1956) (Smith, J., dissenting), Romain v Peters, 9 Mich App 60; 155 NW2d 700 (1967). We cannot say that a paternity action is a "criminal prosecution” for purposes of the constitutional jury trial guarantee. See, also, Romain v Peters, supra.

Second, a paternity action does not result in imprisonment, but an order of filiation and liability for support. Thus, even if a paternity action is viewed as a criminal prosecution, a criminal jury trial is not constitutionally required; imprisonment is not a direct result of the action. See Frank v United States, 395 US 147; 89 S Ct 1503; 23 L Ed 2d 162 (1969), Duncan v Louisiana, 391 US 145; 88 S Ct 1444; 20 L Ed 2d 491 (1968), Cahill v 15th District Judge, 70 Mich App 1; 245 NW2d 381 (1976). We hold that a defendant in a paternity action is not entitled to the criminal jury trial guarantee under the Sixth Amendment or Const 1963, art 1, § 20. Also, GCR 1963, 120.3 insures a defendant’s rights under the due process clauses of the United States and Michigan Constitutions.

We need not reach the issue of whether an indigent defendant in a paternity action has a constitutional right to a blood test at county expense. Under Michigan law, a defendant has a statutory right to a blood test, MCLA 722.716(a); MSA 25.496(a), and the required fee must be waived if defendant demonstrates indigency. GCR 1963, 120.3. Defendant in the case at bar has not waived his right to demand a blood test, as the trial has not yet begun. See MCLA 722.716(a); MSA 25.496(a). Thus, he may still request a fee waiver under GCR 1963, 120.3.

Defendant in the case at bar has not demonstrated indigency for the purpose of obtaining a fee waiver for a jury trial and blood test. For this reason and also for the reason that GCR 120.3 provides for fee waiver or suspension for all indigent parties upon a showing of inability to pay, we dismiss defendant’s constitutional claims. We also note that the jury trial aspect of paternity proceedings is not criminal in nature. We therefore affirm the trial court’s denial of defendant’s motion for a jury trial and blood test at county expense and remand this case for further proceedings. Defendant may demand a jury trial under MCLA 722.715(a); MSA 25.495(a), and may move for a fee waiver or suspension under GCR 1963, 120.3 on remand, but must comply with the requirement that he show inability to pay the required costs.

The trial court’s denial of defendant’s motion is affirmed and this case is remanded for further proceedings.

M. F. Cavanagh, P. J., concurs in the result.

M. J. Kelly, J.

(dissenting). I would reverse the trial court’s denial of defendant’s motion for a jury trial and blood test at county expense and remand this case for trial forthwith ordering the trial court to grant defendant’s motions as to blood test and jury trial at county expense. It seems to me uselessly redundant to require two indigency showings; one for appointment of counsel, and another for receiving a blood test at county expense in the same proceeding. I would likewise find the refusal to grant a jury trial in this quasi-criminal proceeding an abuse of discretion. I do not find a constitutional right to a jury trial nor that this is a criminal proceeding. Appellant is entitled to a civil jury but the fee should be at public expense for the same reasons that he’s entitled to an attorney and a blood test at public expense.

I would reverse.

        See Artibee v Cheboygan Circuit Judge, 397 Mich 54; 243 NW2d 248 (1976), which guaranteed a due process right to appointed counsel in a paternity action to an indigent defendant.

       The parties have stipulated the grounds upon which the motion was denied.

       We also hold that defendant has not waived his right to demand a jury trial in the case at bar. See MCLA 722.715(a); MSA 25.495(a). GCR 1963, 508.4 provides in part:
      "The failure of a party to file a demand as required by this rule or to deposit the jury fee by the close of the pretrial conference constitutes waiver by him of trial by jury.”
      In this case, defense counsel made an oral demand for a jury trial and fee waiver at the pretrial conference and the trial judge expressly allowed him two weeks to file written motions. Defense counsel did so. Filing the written motions within the time specified by the trial judge satisfied GCR 1963, 508.4. Defendant may therefore still demand a jury trial under MCLA 722.715(a); MSA 25.495(a), and a jury trial fee waiver under GCR 1963, 120.3 on remand.

       MCLA 600.2529(4); MSA 27A.2529(4).

       The trial court fixes the compensation of the expert who conducts the blood test and may apportion the cost between the parties. MCLA 722.716(c); MSA 25.496(c).

         See, also, MCLA 600.2529(12); MSA 27A.2529(12), giving the presiding judge discretionary authority to waive or suspend required fees.

         See, e.g., People v McFadden, 347 Mich 357; 79 NW2d 869 (1956) (notice of alibi required); People v Stoeckl, 347 Mich 1; 78 NW2d 640 (1956) (comment on defendant’s failure to testify held reversible error); McDaniel v Jackson, 78 Mich App 218; 259 NW2d 563 (1977) (double jeopardy applies to paternity action). But see Romain v Peters, 9 Mich App 60; 155 NW2d 700 (1967) (unanimous jury verdict not required in paternity action).

       An action for contempt for violation of a filiation and support order may result in imprisonment, but not the paternity action itself. We express no opinion on the right to a jury trial at a contempt hearing under MCLA 722.719(c); MSA 25.499(c), an issue not raised in the case at bar.


author: R. B. Burns, P. J.

text:
    GENERAL MOTORS CORPORATION v MICHIGAN EMPLOYMENT SECURITY COMMISSION
    1. Unemployment Compensation — Benefits—Protest or Appeal— Suspense Account — Rating Account — Statutes.
    Contested unemployment compensation benefits paid prior to June 30 of any year but on which final disposition has not been made by August 31 of such year should be charged to a suspense account with credits issued to the appropriate employer’s account; a final disposition of a protest or appeal requires that such benefit payments be transferred from the suspense account to the employer’s rating account, which is the basis upon which employer’s assessments for unemployment compensation are determined, if the final disposition allows benefits (MCLA 421.20a; MSA 17.521[1]).
    2. Unemployment Compensation — Benefits—Immediate Payment of Benefits — Eligibility—Continuation of Payments — Separation from Employment — Statutes.
    A determination, redetermination or decision that unemployment benefits are due to an unemployed individual requires that such benefits become payable immediately and continue as long as he remains unemployed, is able to file claims for benefits, maintains his eligibility and does not obtain subsequent work (MCLA 421.27[a] [1]; MSA 17.529[a] [1]).
    3. Unemployment Compensation — Application for Benefits — Redetermination of Benefits — Statutes.
    A claimant or any other interested party, according to statute, may file an application with an office of the Michigan Employment Security Commission for a redetermination of unemployment benefits (MCLA 421.32[a] [c]; MSA 17.534[a] [c]).
    4. Unemployment Compensation — Application for Benefits — Eli-
    gibility — Employer’s Appeal — Continuation of Benefits— Suspense Account — Rating Account — Contribution Rates. Unemployment benefits commence immediately when the Michigan Employment Security Commission finds an applicant eligible for benefits; thereafter, the employer may appeal the award but benefit payments continue uninterrupted; accrued charges for contested benefits paid on or prior to June 30 of any year-but without a final decision on the protest or appeal until August 31 of such year are placed in a suspense account and it is only upon final disposition of the contest that an addition will be made to the employer’s rating account thereby affecting his contribution rate for that year.

      References for Points in Headnotes
    [1] 76 Am Jur 2d, Unemployment Compensation § 15.

       76 Am Jur 2d, Unemployment Compensation § 32.

       76 Am Jur 2d, Unemployment Compensation §§ 91, 92.

       73 Am Jur 2d, Statutes §§ 272-276.

      5. Statutes — Construction—Intention of Legislature — Court’s Responsibility — Liberal Construction — Suppression of Mischief — Correction of Defects.
    The primary rule governing the interpretation of statutes is to ascertain and give effect to the intention of the Legislature; it is the responsibility of the courts to discern the legislative intent where it is not expressly stated, to construe statutes liberally for the advancement of the remedy and suppression of the mischief against which they are directed and to give amending legislation liberal construction so as to correct defects in previous statutes.
    Appeal from Ingham, Michael G. Harrison, J.
    Submitted March 8, 1978, at Detroit.
    (Docket No. 77-2413.)
    Decided March 20, 1978.
    Petition by General Motors Corporation to the Michigan Employment Security Commission Appeal Board for removal of certain contested unemployment benefit funds on deposit with the state as required by statute from a rate charging account to a non-rate charging suspense account. Petition denied. General Motors appealed to circuit court. Reversed. The Security Commission appeals.
    Affirmed.

      Otis M. Smith, General Counsel and Eugene L. Hartwig, J. R. Wheatley, Louis H. Lindeman, Jr., Wallett B. Rogers, Wendell B. Rogers and M. Alice McCann, of counsel (by Michael J. Connolly), for General Motors Corporation.

      Frank J. Kelley, Attorney General, Robert A. Derengoski, Solicitor General, and E. J. Setlock, Assistant Attorney General, for defendant.
    Before: R. B. Burns, P. J., and Bronson and D. F. Walsh, JJ.
   R. B. Burns, P. J.

This appeal involves the interpretation of the Michigan Employment Security Act, MCLA 421.1 et seq.; MSA 17.501 et seq.

I do not think I can improve on the opinion written by the Circuit Judge, Michael G. Harrison, and we hereby adopt his opinion.

"This matter is brought as an appeal by Plaintiff, General Motors Corporation (GM), from a decision of the Appeal Board (Board) of Defendant Michigan Employment Security Commission (MESC).
"At issue is the applicability of 1971 PA 231, ' § [1] [MCLA 421.20a; MSA 17.521(1)] which became effective January 3, 1972, to certain contested unemployment benefits chargeable to GM. These benefits, totaling $1,571,647.00, were paid between 1968 and 1971 and appropriate appeals taken with respect thereto. All payments at issue were made prior to June 30, 1972, and not finally adjudicated as of August 31, 1972.
"GM maintains that the provisions of 1971 PA 231, § [1], should be applied to these contested benefits. The Board, in its decision of May 6, 1975, liability appeal No. L73-2434-1435, concluded to the contrary. If GM’s contention is correct, the above sum would be placed in the 'suspense account’ created by 1971 PA 231, § [1], rather than GM’s 'rating account.’ The rating account, created by 1971 PA 231 [MCLA 421.20(a); MSA 17.521(1)] is the basis upon which employer assessments for unemployment compensation are determined. The effect is a substantial reduction in GM’s 1973 unemployment compensation assessment.
"The Board’s decision rests on the theory that subsection 20(a) [MCLA 421.20(a); MSA 17.521(a)] controlled all benefit payments up until the effective date of section 20a [MCLA 421.20a; MSA 17.521(1)]. The Board concluded that to decide otherwise would amount to retroactive application of [s]ection 20a without a clear indication of such legislative intent. This lack of intent, according to the Board, was demonstrated through the Legislature’s failure to modify or repeal subsection 20(a), when 1971 PA 231 was enacted.
"The Court concludes that the benefit payments at issue in this matter should be charged to the section 20a suspense account for the calculation of GM’s 1973 contribution rate rather than the subsection 20(a) rating account. The basis of this decision rests on the operation of Michigan law prior to California Department of Human Resources [Development] v Java, 402 US 121; 91 S Ct 1347; 28 L Ed 2d 666 (1971) and the legislative response to that decision. The Court is of the opinion that the intent of the Legislature requires full application of section 20a to all contested benefits as of June 30, 1972.
"Prior to Java, supra, the statutory scheme as to the calculation of an employer’s contribution rate substantially revolved around subsections 20(a) and 32(c) [MCLA 421.32(c); MSA 17.534(c)]. Subsection 20(a) provided for paid benefit charges against the contributing employer’s rating account in the quarter paid and the procedure to be applied when these charges were determined by MESC to have been improperly levied. That subsection read:
" 'Benefits paid shall be charged against the employer’s rating account as of the quarter in which such payments are made. If the [commission determines that any benefits paid and charged against an employer’s rating account were improperly paid, an amount equal to the charge based on such benefits shall be credited to the employer’s rating account and correspondingly charged to the solvency account as to the current period or, in the discretion of the [c]ommission, the credit to the employer’s rating account may be made as of the date of the charge. Any such benefits paid to an individual as a result of an employer’s failure to provide the [commission with separation, employment and wage data as required by Section 32 shall be considered as benefits properly paid to the extent that such benefits are chargeable to such noncomplying employer.’ [MCLA 421.20(a); MSA 17.521(a)]. "Subsection 32(c) provided:
" 'The claimant or any other interested party may file an application with [an] office of the [commission for a redetermination in accordance with the provisions of [s]ection 32a * * * . In the event that such an application for redetermination is filed, [the] payment of beneñts * * * shall be withheld pending the [ñnal] disposition of such matter on redetermination or [o]n appeal therefrom.’ (Emphasis added) [MCLA 421.32(c); MSA 17.534(c)],
"The last sentence of subsection 32(c) was of particular significance as it protected the employer against inflated charges made upon the rating account by suspending payment of benefits in instances where the employer challenged MESC determinations. So long as no benefits were being paid, no additions were made to the rating account as provided for in subsection 20(a). Consequently, the employer’s contribution rate for any year reflected only those payments which were finally determined. Subsections 20(a) and 32(c) were not to be read independently of one another, but in concert and served a specific function.
"In Java, supra, the California statute providing for a stay in payments pending appeal, similar to subsection 32(c), was successfully challenged on the ground that the statute violated § 303(a)(1) of the Federal Social Security Act, in that it failed to deliver unemployment benefits into the hands of the unemployed 'when due.’ The United States Supreme Court ruled that benefits must commence immediately following any affirmative determination of eligibility so long as both the employer and employee had the opportunity to participate in the determination. Java was limited to the issue of the commencement of payments and did not address the means of calculating the contribution made by the employer. The result was that the last sentence of subsection 32(c) was clearly contrary to § 303(a)(1) of the Social Security Act. Michigan law was thus left with an unenforceable provision which had served as the employer’s safeguard against excessive contribution charges on the employer’s rating account.
"The Michigan Legislature responded immediately with the passage of 1971 PA 231 which, among other provisions, included the addition to 1936 PA 1 (ex sess) of section 20a and subsection 27(a)(1) and the repeal of the last sentence of subsection 32(c).
"The added section 20a read:
" 'Benefits paid on or prior to June 30 of any year, under a determination, redetermination or decision which is the subject of timely protest or appeal under this act, on which final disposition has not been made by August 31 of such year, shall be charged to a suspense account within the fund as of the immediately preceding June 30 and credits issued to the appropriate employer’s account as of that date. As of the date of final disposition of the protest or appeal, such benefit payments shall be transferred from the suspense account as a charge to the appropriate employer’s rating account if the final disposition allows benefits, or otherwise to the solvency account as benefit overpayments. [MCLA 421.20a; MSA 17.521(1)]’
"The new subsection 27(a)(1) provided:
" 'Whenever] a determination, redetermination, or decision is made that benefits are due an unemployed individual, [such] benefits shall immediately become payable from the fund, and continue to be payable to the unemployed individual, subject to the limitations imposed by his monetary entitlement, as long as he continues to be unemployed and to file claims for benefits, until [: (i)] the determination, redetermination or decision is reversed, [or (ii)] a determination, redetermination [or decision] on a new issue holding the individual disqualified or ineligible is made, or [iii] a new separation issue arises resulting from subsequent work. [MCLA 421.27(a)(1); MSA 17.529(a)(1)]’
"Subsection 32(c), as revised, read:
" 'The claimant or any other interested party may file an application with an office of the [commission for a redetermination in accordance with the provisions of [section 32a. [MCLA 421.32(c); MSA 17.534(c)]’
"Under the revised statutory scheme the procedure and sequence of events became as follows: The employee applies for benefits with MESC and an initial determination of eligibility is made pursuant to subsection 32(a). If it is found that the applicant is eligible, subsection 27(a)(1) provides that the benefit payments commence immediately. Subsection 32(c) allows the employer to take an appeal from the determination made pursuant to subsection 32a, but benefit payments continue uninterrupted. This brings into operation section 20a which established the suspense account in which accrued charges for contested benefits 'paid on or prior to June 30 of any year’ have been paid but 'which final disposition has not been made by August 31 of such year.’ Only upon final disposition of the particular matter in favor of the employee will an addition be made to the employer’s rating account, thereby affecting his contribution rate for that year. The effect of an appeal, therefore, is to place the rating account in the identical posture it had under pre Java subsection 32(c). By use of the suspense account technique, the substance of the law remained unchanged with regard to a pending appeal.
"In General Motors Corporation v Unemployment Compensation Commission, 321 Mich 724, 727; 34 NW2d 497 [, 498] (1948), the Supreme Court stated:
"' The primary rule governing the interpretation of statutes is to ascertain and give effect to the intention of the [legislature.’
Clearly, legislative intent is not always expressly stated. It then becomes the responsibility of the courts to discern such intent. It is apparent to the Court that in the instant situation the legislative intent was manifested in its expeditious reaction to Java by passage of the amendatory provisions for contested benefits. This evidences an intent to maintain to the greatest degree possible a system of unemployment compensation whereby an employer is taxed only on those benefits finally determined to be properly charged to the employer. In People v Gould, 237 Mich 156, 163; 211 NW 346 [348] (1926), the Michigan Supreme Court stated:
" 'It is an old and well recognized rule that, when omissions, defects or imperfections in a previously existing law have been supplied or corrected in subsequent legislation, they should be liberally construed for the advancement of the remedy and suppression of the mischief against which they are directed.’
The Michigan Court of Appeals recently reiterated this rule in [The E.F. MacDonald Co v Department of] Treasury, 62 Mich App [626, 632]; 233 NW2d 678 [682] (1975):
" '[I]t is a rule of statutory construction that amending legislation should be liberally construed so as to correct defects in previous statutes.’
"MESC contends that subsection 20(a) and section 20a are mutually [exclusive and that subsection 20(a) is applicable only up until the effective date of section 20a, January 3, 1972. It is the opinion of the Court, however, that this is not the reason subsection 20(a) was not repealed or modified by 1971 PA 231 as maintained by MESC. Each provision serves a distinct purpose. Subsection 20(a) provides for the charging of the rating account in the quarter paid so long as charges are attributable to that account, i.e., where no appeal is pending. Section 20a provides for the establishment and charging of such benefits upon final disposition.
"A patent inequity will result if section 20a is not applied to the payments in issue. GM does not seek to have its prior year’s contribution rates recalculated. Rather it seeks to have its 1973 contribution rate calculated under the statutory provisions in effect for the year 1973. Section 20a provides that’ [b]enefits paid on or prior to June 30 of any year, under a determination, redetermination or decision which is the subject of timely protest or appeal under this act, on which final disposition has not been made by August 31 of such year, shall be charged to a suspense account * * * .’ As of June 30, 1972, $1,571,647.00 in benefits had been paid chargeable to GM, for which as of August 31, 1972, there had not been a final disposition. Such payments clearly fit into a liberal construction of section 20a.
"The Court concludes that the 1973 contribution of GM should be calculated only as to those charges not under appeal as of June 30, 1972, and not finally decided as of August 31, 1972.
"Appropriate adjustments shall be made for subsequent years.”

Affirmed. No costs, a public question involved.


author: D. E. Holbrook, J. R. B. Martin, J.

text:
    DENHAM v BEDFORD (GILLISPIE v BEDFORD)
    Opinion of the Court
    1. Costs — Prejudgment Interest — Insurance.
    Prejudgment interest on a money judgment is not deemed a cost or expense of a lawsuit; therefore, an insurer is not liable for such interest as a cost or expense of a lawsuit under a provision of an insurance contract providing that the insurer shall pay all costs lawfully taxed against the insured in any such suit and all expenses pertaining thereto incurred by the insurer.
    2. Judgment — Interest—Prejudgment Interest — Insurance—Contracts — Statutes.
    Prejudgment interest from the date of the complaint is required by statute to be paid on a judgment; such statute becomes part of an insurance contract which provides that the insurer shall pay all interest which shall accrue after the entry of judgment and until the insurer has paid its portion of the judgment, thus amending the clause as written and mandating that the interest be calculated from the date of filing the complaint (MCLA 600.6013; MSA 27A.6013).
    3. Insurance — Insurer’s Liability — Prejudgment Interest — Statutes.
    An insurer may be held liable for the amount of its policy limits plus prejudgment interest on that amount where a money judgment equal to or exceeding the policy limits is awarded against its insured; the insurer is not injured thereby since the amount in excess of the policy limits represents the interest the insurer receives from investing the money representing plaintiffs damages during the lawsuit; since the purpose of the statute providing prejudgment interest is to compensate the prevailing party for the delay in the payment of money damages it would be unfair and illogical to require that such prejudgment interest come from the insured who never had the use of the money representing the plaintiffs damages (MCLA 600.6013; MSA 27A.6013).

      References for Points in Headnotes

       44 Am Jur 2d, Insurance § 1685 et seq.

    Liability insurer’s liability for interest and costs on excess of judgment over policy limit. 76 ALR2d 983.

      Dissent by R. B. Martin, J.
    4. Insurance — Insured—Insurer—Policy Limits — Interest.

      An insurer may be held liable only to the extent of its policy limits where a money judgment equal to or exceeding its policy limits is awarded against its insured; the insurer is not liable for the payment of interest above the policy limits.

    5. Insurance — Insurer—Insured—Prejudgment Interest — Contracts — Statutes.

      The statute which requires the payment of prejudgment interest by a defendant in a lawsuit does not amend a contract of insurance that does not provide for the payment, of prejudgment interest by the insurer (MCLA 600.6013; MSA 27A.6013).

    Appeal from Washtenaw, William F. Ager, Jr., J.
    Submitted January 5, 1978, at Lansing.
    (Docket Nos. 77-2596, 77-2597.)
    Decided March 20, 1978.
    Leave to appeal applied for.
    Complaint by Edna Denham, and others, against Thomas Bedford, Jr., and R. C. S., Incorporated for damages for injuries sustained in an automobile accident. Complaint by Allen B. Gillispie against the same defendants and against Edna Denham and the State of Michigan. A judgment was entered dismissing the State of Michigan. The cases were consolidated for trial. Judgment of no cause of action against R. C. S., Incorporated and for plaintiffs against defendant Bedford only. Transamerica Insurance Group, Bedford’s insurer, was added as a party defendant and filed a motion for a determination of its liability for prejudgment interest on the insured portion of the judgment. The trial court ordered that Transamerica was not liable for prejudgment interest. Plaintiffs appeal.
    Reversed and remanded.

      Calder & Kirkendall, P. C. (by Robert E. Loge-man), for plaintiffs.

      Moore, Sills, Poling, Wooster, Sinn & Taylor, P. C., for Transamerica Insurance Group.
    Before: V. J. Brennan, P. J., and D. E. Holbrook and R. B. Martin, JJ.

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

   D. E. Holbrook, J.

Plaintiffs appeal a March 14, 1977, order issued by the Washtenaw County Circuit Court, which denied them the right to recover prejudgment interest from Transamerica Insurance Group.

On March 30, 1973, a vehicle, containing six of the plaintiffs and driven by plaintiff Edna Den-ham, was involved in an accident with defendant Thomas Bedford. Plaintiffs were traveling in a southeasterly direction on Washtenaw Avenue when a vehicle driven by Bedford veered across the centerline and struck the vehicle in which plaintiffs were riding. Bedford had been drinking at a bar operated by R. C. S., Incorporated, known as "Bimbo’s On The Hill” prior to the accident.

A negligence action was instituted against Bed-ford and a dramshop complaint was brought against the bar. After a two-week trial, a jury verdict of no cause of action was entered in favor of the defendant bar and a verdict for plaintiffs was entered against Bedford for $108,025, plus $15,403.18 in prejudgment interest.

Bedford’s insurance policy provided $40,000 maximum coverage for multiple claims arising out of one accident. The policy was issued by a subsidiary of Transamerica Insurance Group.

After the verdict, Transamerica paid plaintiffs $40,000 which represented the policy limits. Transamerica was added as a defendant and filed a motion requesting that the court determine whether it was required to pay prejudgment interest on its portion of the judgment $40,000. The prejudgment interest on the $40,000 portion of the judgment was $5,695.47. Transamerica claimed that it was not responsible for the $5,695.47 because payment of the prejudgment interest would exceed the policy limits of $40,000 already paid by Transamerica. The trial court agreed. Plaintiffs appeal as of right seeking a reversal of the trial court and a holding that Transamerica is responsible for prejudgment interest on the portion of the judgment which represented the policy limits.

The issue raised on appeal is whether the defendant’s insurer, Transamerica Insurance Group, is responsible for prejudgment interest on the portion of the judgment which represents the policy limits of the insurer.

In order to have an understanding of this issue a review of the applicable sections of defendant’s insurance policy is necessary. The policy provides in part as follows:

"I. Coverage A. Bodily Injury Liability
"To pay on behalf of the Insured all sums which the Insured shall become legally obligated to pay as damages because of bodily or personal injury, sickness or disease, including death at any time resulting therefrom, and including damages for care and loss of services, sustained by any person or persons, and arising out of the ownership, maintenance, or use of the insured automobile, including the loading and unloading thereof.
"II. Defense, Settlement, Supplementary Pa yments
"1. As respects such insurance as is afforded by the other terms of this Policy under Coverages A and B, the Company shall:
"A. Defend in his name and behalf any suit against the Insured arising from any alleged claim for bodily injury or property damage, whether such suit is groundless, false, fraudulent, or otherwise, but the Company shall have the right to conduct investigations as to any such claim, negotiate for adjustment or settlement thereof, and to enter upon and conduct the defense of the Insured against the same as it may deem expedient without waiving any of the provisions of this Policy or subjecting the Company to any liability beyond the limits provided in this Policy, and
"B. (a) Pay all costs lawfully taxed against the Insured in any such suit and all expenses pertaining thereto incurred by the Company; and
"(b) Pay all interest which shall accrue after the entry of judgment and until the Company has paid, tendered, or deposited in Court such portion of any judgment not exceeding the limit of the liability of the Company; and
"(c) Reimburse the Insured for any expense, including loss of wages or salary not to exceed $25. per day, but not for loss of other income, incurred at the request of the Company.” (Emphasis supplied.)

First, plaintiffs maintain that prejudgment interest as provided by MCLA 600.6013; MSA 27A.6013 may be recovered as a cost or expense of the lawsuit. This argument is based on defendant’s insurance contract which provides as follows: "B. (a) Pay all costs lawfully taxed against the Insured in any such suit and all expenses pertaining thereto incurred by the Company”. Thus, plaintiffs reason that Transamerica is responsible for prejudgment interest under the provision in the insurance policy which provides for costs and expenses. We do not agree. We are in accord with that portion of Dittus v Geyman, 68 Mich App 433; 242 NW2d 800 (1976), lv den, 397 Mich 837 (1976), wherein the Court disallowed prejudgment interest based on it being a cost or expense of the lawsuit.

Next, plaintiffs assert that even though an insurance company can limit its risks, public policy dictates that the prejudgment interest statute should be incorporated into this insurance policy. In their brief, defendants quote a portion of the policy which provides:

"(b) Pay all interest which shall accrue after the entry of judgment and. until the Company has paid, tendered, or deposited in Court such portion of any judgment not exceeding the limit of the liability of the Company.” (Emphasis supplied.)

Defendants maintain that this provision subjects the insurance company to pay only "post-judgment” interest, thus it is not liable for prejudgment interest. We do not agree.

In Cosby v Pool, 36 Mich App 571, 578-579; 194 NW2d 142 (1971), lv den 386 Mich 782, 783 (1972), this Court was construing an insurance contract which was made prior to the prejudgment insurance statute and complied with the statute then in effect which allowed only post-judgment interest. The Court in Cosby stated at 575, 578:

"On appeal, the sole issue to be determined is whether the enactment of an amendment to MCLA 600.6013 * * * [MSA 27A.6013], which provides interest to be calculated from 'the date of filing the complaint’ becomes a part of an insurance contract which was signed prior to the amendment. If so, it effectively amends the contract clause which provides that the insurer will pay 'interest accruing on verdict or after judgment up to the date of payment’.
"Therefore, the amendment has the effect of becoming a part of the contract and replaces the clause as written. Therefore, the interest must be calculated from the date of fíling the complaint. This, however, is applicable only to that interest which accrues upon the defendant insurance company’s portion of the verdict.” (Emphasis supplied.)

In accord with Cosby, this Court holds that MCLA 600.6013; MSA 27A.6013 has the effect of becoming a part of the instant contract, thus replacing the clause as' written and mandating that the interest be calculated from the date of filing the complaint.

As to whether or not prejudgment interest would be allowed in excess of the policy limits, the Court in Cosby stated as follows at 578-579:

"It follows that the insurer should be liable only for the interest that accrues on the amount of risk it has assumed. Otherwise, it would be paying interest on a risk it did not assume and for which it did not charge premiums. In this case, the judgment was for $200,000, while the insurer’s liability was limited to $100,000.
"Therefore, the case is remanded and the plaintiffs are granted the total interest of $34,333. However, the defendant insurer is liable only for the interest on its share of the judgment which is in the amount of $17,167.”

The Court upheld the granting of prejudgment interest in excess of the $100,000 policy limit.

Also, in Stone v Fawcett, 63 Mich App 487, 489; 234 NW2d 577 (1975), an insurance policy provision similar to the provision in the instant case was construed by our Court as follows at pp 489-490:

"Recently, the Supreme Court modified the decision of the Court of Appeals in Cates v Moyses, 394 Mich 762 [228 NW2d 380] (1975), altering the basis to be used for computing prejudgment interest from the entire judgment to the policy limit amount but affirming, the remainder of the decision, including the determination of when interest begins to accrue. Hence, this Court is bound to hold the garnishee defendant liable for interest from the date of the filing of the complaint.
"Unlike Cates v Moyses, supra, garnishee defendant conceded, in its brief, liability for interest on the entire $30,500 award. However, since the Supreme Court held that DAIIE’s policy provision does not create liability on the full award prior to judgment, it would be unjust not to apply such a standard in the same situation. Therefore, DAIIE is obligated for interest on the amount of its policy limit ($10,000) beginning March 22, 1972, the date of the filing of the complaint, until October 15, 1973, the date of judgment.”

We feel it is important to deal at some length with the reasons why the statute and public policy require prejudgment interest and why the allowance of prejudgment interest in excess of the policy limits is proper.

We have ruled that MCLA 600.6013; MSA 27A.6013 required the payment of prejudgment interest. We have done so on the authority of Cosby, supra. As in Cosby, the defendant in the instant case asserts that a literal reading of the insurance contract limits payment of interest from the date of judgment. The Court in Cosby did not adopt this reasoning and neither do we. In fact, when the insurance contract in Cosby was signed, the law only required post-judgment interest. The Court amended the insurance contract to conform to the new statute.

In the instant case, the prejudgment interest statute was in effect on the date of the contract, and we are constrained to rule in accord with Cosby that the contract be amended to conform with the statute.

The statute, MCLA 600.6013; MSA 27A.6013, reads as follows:

"Interest shall be allowed on any money judgment recovered in a civil action, such interest to be calculated from the date of fling the complaint at the rate of 6% per year unless the judgment is rendered on a written instrument having a higher rate of interest in which case interest shall be computed at the rate specified in the instrument if such rate was legal at the time the instrument was executed. In no case shall the rate exceed 7% per year after the date judgment is entered. In the discretion of the judge, if a bona fide written offer of settlement in a civil action based on tort is made by the party against whom the judgment is subsequently rendered and the offer of settlement is substantially identical or substantially more favorable to the prevailing party than the judgment, then no interest shall be allowed beyond the date the written offer of settlement is made.” (Emphasis supplied.)

The purpose of this statute is to compensate the prevailing party for the delay in the payment of money damages. Waldrop v Rodery, 34 Mich App 1, 4; 190 NW2d 691 (1971). We agree with plaintiffs that it is illogical and unfair to require that the prejudgment interest come from the insured who never had the use of the money representing plaintiffs’ damages. In the instant case, Transamerica Insurance Group had full use of the $40,000 during the lawsuit and should be responsible for the prejudgment interest. The statute and public policy dictates this result, otherwise, Transamerica would receive a windfall of $5,695.47 which represents prejudgment interest on the $40,000.

The insurance company is not injured by our holding. The complaint for damages was filed in April of 1974 and had it been paid immediately, the insurance company would have paid only $40,-000. However, defendant did not pay until after entry of judgment on September 9, 1976, and then paid only the damages in the amount of $40,000 without interest. It must be noted, however, that the insurance company had the use of the $40,000 for a two-year five-month period. This money, controlled by the insurance company, is not left standing idle, but is invested. If the insurance company invests the money at 6 percent, then it loses nothing when it pays prejudgment interest at 6 percent. This is because the insurance company is only paying that which it received by holding the money. According to Best’s, Aggregates and Averages, Property-Casualty (A. M. Best Company, 1976), pp 52-53, the average rate of return in 1975 on investment assets for a casualty insurer was II. 1 percent. Thus, by holding the $40,000 for that one-year period, the insurance company would realize interest earnings of 5.1 percent in addition to the statutory prejudgment interest of 6 percent. This high rate of return on investment assets was also found in 1976 when the average rate of return was 9.6 percent.

For us to hold otherwise, an insurer would have no motivation to settle a meritorious claim. By refusing to settle, the insurer not only has a chance to wear a plaintiff down, thereby possibly settling a meritorious claim for less than its actual value, but it also knows that even if plaintiff is successful in litigation, it [the insurance company] will still be able to retain all the income made from the use of a plaintiff’s money. Such a policy is contrary to the sound administration of the judicial system and repugnant to the public policy behind the insurance laws of this state.

We are cognizant of the fact that plaintiffs do not file a complaint immediately after an accident. There are talks of settlement, investigations as to the facts, and other time-consuming procedures, all of which usually take place before a lawsuit is commenced. The Legislature, in its wisdom, has declared the public policy of this state to be that prejudgment interest shall be paid from the date of the filing of a complaint. The Legislature could have provided for prejudgment interest from the date of the injury. This they did not do. Thus, we are constrained to enforce the Legislature’s intent in this opinion and grant prejudgment interest.

Defendant insurance company states in its brief that it offered to settle the claim for. the total amount of the policy limits. There is no documentation, however, as to if and when this took place and what the terms of the offer were, nor was the money placed in the court’s hands. The offer may have been rejected by plaintiffs because of the name and retain requirement of the dramshop act, MCLA 436.22; MSA 18.993. [The dramshop act was later construed so as not to prevent settlements with the individual defendant, but merely meant that the individual defendant must be named and retained in the lawsuit], Buxton v Alexander, 69 Mich App 507; 245 NW2d 111 (1976), lv den 399 Mich 827 (1977).

This case is remanded to the trial court for entry of judgment allowing prejudgment interest.

Reversed, costs to plaintiffs.

V. J. Brennan, P. J., concurred.

R. B. Martin, J.

(dissenting). I respectfully dissent.

The majority opinion arrives at an equitable conclusion but not one which coincides with the legal rights of the parties under contract law.

I agree that prejudgment interest cannot be recovered as part of the costs or expenses of the lawsuit.

At oral argument it was agreed that the defendant offered the maximum of its policy to plaintiff before suit was started. This may go to the equities but is really immaterial as far as the contract between the parties is concerned. The contract limited liability for damages to a total of $40,000.

The policy further provided the defendant had to "[p]ay all interest which shall accrue after the entry of judgment and until the Company has paid, tendered, or deposited in Court such portion of any judgment not exceeding the limit of the liability of the Company”.

Cosby v Pool, 36 Mich App 571; 194 NW2d 142 (1971), and Stone v Fawcett, 63 Mich App 487; 234 NW2d 577 (1975), do not control as in each of those cases the company admitted or stipulated to liability for some prejudgment interest. In our case the company stands foursquare on the words of the policy. I agree with the majority in Dittus v Geyman, 68 Mich App 433; 242 NW2d 800 (1976), lv den, 397 Mich 837 (1976), that neither the contract nor public policy necessitates payments of interest above the damage limits. If public policy is to require payment of interest over the contract maximum for damages, the Legislature, by statute, should definitely require it. MCLA 600.6013, MSA 27A.6013 requires payment of interest by the defendant in a lawsuit, but does not amend a contract of insurance not already providing for prejudgment interest.

       MCLA 600.6013; MSA 27A.6013.

       The jury had awarded plaintiffs $200,000 against defendant who had an insurance policy with a $100,000 limit. Also, plaintiffs were granted $34,333 prejudgment interest as provided by MCLA 600.6013; MSA 27A.6013.

       MCLA 600.6013; MSA 27A.6013.

       The policy language in Stone at 489 was:
      "[A]ll interest accruing after entry of judgment until the company has paid or tendered or deposited in court such part of such judgment as does not exceed the limit of the company’s liability thereon.” (Emphasis deleted.)
      The language of the policy in this case is:
      "II B.(b) Pay all interest which shall accrue after the entry of judgment and until the Company has paid, tendered, or deposited in Court such portion of any judgment not exceeding the limit of the liability of the Company.”

       Best’s, Aggregates and Averages, Property-Casualty (A. M. Best Company, 1977), pp 58-59.

       We note that the trial judge desired to dispose of this case in the same manner as our opinion requires. But the trial court was reluctant to do the same because of the ruling in Dittos v Geyman, 68 Mich App 433; 242 NW2d 800 (1976), lv den, 397 Mich 837 (1976).


author: Danhof, C. J.

text:
    MILLER v CITY BANK & TRUST COMPANY
    1. Appeal and Error — Judges—Findings of Fact — Burden of Proof — New Trial — Clear Error Rule — Court Rules.
    A claim that a trial court’s finding that plaintiff had not carried her burden of proof is clearly erroneous does not require that plaintiff request a new trial in order to raise this issue on appeal.
    2. Partnership — Existence—Findings of Fact.
    The determination of whether a partnership exists is a question of fact (GCR 1963, 517.1).
    3. - Partnership — Existence—Burden of Proof.
    The one alleging a partnership has the burden of proving its existence; this burden is stricter when relatives are the alleged partners and the fact that an alleged partner is deceased further raises the burden of proof.
    4. Partnership — Elements—Co-Ownership—Profit Sharing—
    Joint Control.
    The elements of a partnership are generally considered to include a voluntary association of two or more people with legal capacity in order to carry on, via co-ownership, a business for profit; co-ownership of the business requires more than merely joint ownership of the property and is usually evidenced by joint control and the sharing of profits and losses.
    5. Partnership — Profit Sharing — Prima Facie Evidence.
    Profit sharing is prima facie evidence of a partnership.
    References for Points in Headnotes

       58 Am Jur 2d, New Trial § 213.

       59 Am Jur 2d, Partnership § 81.

       59 Am Jur 2d, Partnership § 80.

       59 Am Jur 2d, Partnership §§ 4, 5.

       59 Am Jur 2d, Partnership § 47 et seq.

       59 Am Jur 2d, Partnership § 44.

       59 Am Jur 2d, Partnership §§ 27, 42, 80.

       59 Am Jur 2d, Partnership § 66.

      6. Partnership — Co-Ownership—Mutual Control — Mutual Agency.
    Mutual agency and control is an indicia of co-ownership and is evidence of a partnership.
    7. Partnership — Business Registration Papers — Presumptions— Competent Evidence.
    The filing of business registration papers listing a business as a partnership raises a presumption of partnership for as long as the registration is effective, but this presumption can be overcome by competent evidence.
    8. Partnership — Existence—Use of Term Partner.
    The use of the term “partner”, although not controlling, is a factor to be considered in analyzing whether a partnership exists.
    Appeal from Jackson, Gordon W. Britten, J.
    Submitted February 14, 1978, at Lansing.
    (Docket No. 77-2611.)
    Decided March 20, 1978.
    Complaint by Isabelle Miller against City Bank & Trust Company, as executor of the Estate of Philip Miller, her deceased husband, for a declaratory judgment that there was a business partnership between plaintiff and her deceased husband while he lived. Judgment for defendant. Plaintiff appeals.
    Affirmed.

      Kelly, Kelly & Kelly, for plaintiff.

      Curtis, Davidson, Curtis & Nichols, P. C, for defendant.
    Before: Danhof, C. J., and Bronson and N. J. Lambros, JJ.

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

   Danhof, C. J.

After a nonjury trial based on stipulated facts, the trial court found that plaintiff had failed to carry her burden of proof in establishing the existence of a partnership between herself and her late husband. On appeal, plaintiff claims that the trial court’s decision was clearly erroneous. We affirm.

In 1959, plaintiff met Philip Miller. Later, Mr. Miller asked plaintiff to marry him, to move to Jackson and to help him run his nursery business. They were married in Baltimore, and plaintiff gave up her well-paying job to move to Jackson. Although Mr. Miller had been operating the business for some time, it was close to failing at the time of their marriage. However, by 1974, the time of Mr. Miller’s death, the business was prosperous.

Although plaintiff did not make any capital contributions to the partnership, she held a management position in the nursery business and did physical labor. She kept all the books (although an accountant did the taxes) and hired and fired employees. She received periodic payments (usually monthly) of $50 or $100. Whenever plaintiff received a check, Mr. Miller also received one for the same amount. Money for household expenses was also taken out of the business account.

Along with the nursery business, Mr. Miller was engaged in subdividing some of his land around the nursery. All the lots sold were owned by him prior to his marriage. The sold lots were conveyed by a deed from the Millers as husband and wife. Shortly before his death, Mr. Miller conveyed their homestead from himself to the couple as tenants by the entireties. No land was ever conveyed to the partnership. Both parties devoted time and effort in the operation of both businesses.

In 1960, a business registration certificate was filed for the nursery, which indicated that the business was operated as a partnership. A similar certificate was filed with respect to the subdividing project in 1966, but this expired in 1971. Checking accounts, vehicles, and other equipment were bought and held under the assumed business name. On the other hand, annual tax forms and schedules listed the business as a sole proprietorship and plaintiffs occupation as a housewife. Michigan business activity forms also indicated a sole proprietorship. In 1968, in applying for a self-employed pension and profit sharing plan, Mr. Miller stated that his business was a sole proprietorship.

It is also stipulated that there was never any formal written partnership agreement. Plaintiff, however, states that Mr. Miller had described the relationship, when he asked her to marry him and at all times since, as that of partners and she was under the impression that they were business partners. Furthermore, she says, Mr. Miller told her that she was "the best partner he ever had”.

On the basis of these facts, the trial court found that the plaintiff had not carried her burden of proof. Since plaintiff is claiming that this finding is clearly erroneous, she does not have to request a new trial in order to raise this issue on appeal, GCR 1963, 517.1, Arnsteen v U S Equipment Co, 52 Mich App 177; 217 NW2d 61 (1974).

The determination of whether a partnership exists is a question of fact and so the clearly erroneous standard of GCR 1963, 517.1 applies. The burden of proof to show a partnership is on the one alleging the partnership, Falkner v Falkner, 24 Mich App 633; 180 NW2d 491 (1970), Fletcher v Fletcher, 197 Mich 68; 163 NW 488 (1917), and the burden is stricter when relatives are the alleged partners, Falkner, supra, Lobato v Paulino, 304 Mich 668; 8 NW2d 873 (1943), Cole v Cole, 289 Mich 202; 286 NW 212 (1939). Also the fact that the alleged partner is deceased further raises the burden of proof, Fletcher, supra.

The Uniform Partnership Act, § 7, MCLA 449.7; MSA 20.7, provides some guidelines for determining the existence of a partnership. In Barnes v Barnes, 355 Mich 458 at 461; 94 NW2d 829 (1959), the Court addressed § 7 and stated:

"At the present time no test is conclusive, though in modern law the factor of the intent of the parties, gauged by the legal effect of their agreement, bulks large. Beecher v Bush, 45 Mich 188 (40 Am Rep 465).”

In Beecher v Bush, supra, at 200, Justice Cooley stated that "except when one allows the public or individual dealers to be deceived by the appearances of partnership when none exists, he is never to be charged as a partner unless by contract and with intent he has formed a relation in which the elements of partnership are to be found”. The elements of a partnership are generally considered to include a voluntary association of two or more people with legal capacity in order to carry on, via co-ownership, a business for profit. Co-ownership of the business requires more than merely joint ownership of the property and is usually evidenced by joint control and the sharing of profits and losses. With the intentions of the party to form a partnership as our polestar we will review the trial court’s finding.

It is not disputed that the parties were involved in a business venture for profit and had the legal capacity to form a partnership. However, the evidence relating to co-ownership does not indicate that a legal partnership was contemplated. Prior to the marriage, Mr. Miller operated the business and owned all the property. Mrs. Miller made no capital contributions except her services. Even though plaintiff worked long and hard hours, this does not establish that the parties had an agreement to form a partnership. This evidence could also be viewed as consistent with an employee-employer relationship or that of a helpful wife who assisted her husband without their intending a legal partnership.

Co-ownership is also indicated by profit sharing. In fact, profit sharing is prima facie evidence of a partnership, Falkner, supra. However, the court did not find an agreement to share profits and we cannot say that this was clearly erroneous. That Mr. and Mrs. Miller each received monthly payments from the nursery checking account does not necessarily establish profit sharing. The payments could also be reasonably viewed as salary or wages. Another possible interpretation would be that Mr. Miller was withdrawing money from his sole proprietorship and was dividing it equally because he felt an obligation to share equally with his wife, as a wife rather than a business partner.

Another indicium of co-ownership is mutual agency and control. That Mrs. Miller kept the books, wrote checks, and hired and fired does not necessarily establish any control other than that which might be given to a trusted employee. However, it is not necessary that this control be exercised as long as it exists. In view of the absence of the exercise of control or mutual agency, evidence of an agreement in respect to the division of control is about the only way to prove mutual agency and control. However, no evidence of an agreement with respect to mutual control was presented.

The intention of the parties to enter into a partnership comprising the above-mentioned elements is the controlling issue in this case. The filing of the business registration papers listing the business as a partnership gives support to plaintiffs claim. As long as the registration was effective, it raised a presumption of a partnership, but this can be overcome by competent evidence, Harrington v Havey, 238 Mich 108; 213 NW 145 (1927). Since the registration certificate filed for the subdivision operation expired in 1971, it does not raise a presumption of a partnership. The trial court found that there was sufficient, competent evidence to rebut the presumption concerning the nursery business.

The other evidence supporting plaintiffs claim is that plaintiff testified that the parties entered into an oral agreement and that Mr. Miller told her "she was the best partner he ever had”. The use of the term partner is one factor to be considered in analyzing whether a partnership exists, Falkner, supra, but it is not controlling. How heavily that factor weighs varies with the circumstances and the circumstances in this case make the use of that term ambiguous. Mrs. Miller seemed to consider the whole marriage as a partnership and Mr. Miller could have meant that she was the best partner in marriage rather than in business. Also, Mrs. Miller is an interested party and the trial judge is not bound to accept as true her testimony and the inferences she draws from it.

The evidence introduced against these claims indicated that the deceased did not intend to form a legal partnership with his wife. First, there is no written agreement and there is only plaintiffs testimony in support of an oral one. The income tax returns and schedules listed the business as a sole proprietorship, listed Mr. Miller’s income as wages and Mrs. Miller’s occupation as a housewife. In 1964, Mr. Miller applied for a self-employee retirement deduction plan as a sole proprietorship. Mr. Miller’s social security forms listed the business as a sole proprietorship. All the capital contributions came from Mr. Miller and the property remained in his name (or his and his wife’s name), and none was transferred to the partnership. Shortly before his death, Mr. Miller deeded his homestead to his wife and himself as tenants by the entirety and this would seem needless if they already owned it as partners. Although none of these facts is conclusive, they are all factors to be weighed in the decision, Moore v DuBard, 318 Mich 578; 29 NW2d 94 (1947) (absence of a written agreement), Falkner, supra (that no capital was invested by the one alleging a partnership, whether the income tax returns listed the business as a partnership, and whether title to the property involved was transferred to the partnership).

After reviewing the entire record, we cannot say that the trial court’s findings that the presumption established by the filing of business registration papers was rebutted by competent evidence and that plaintiff failed to carry her burden of proof were clearly erroneous.

Affirmed. Costs to defendant.


author: N. J. Lambros, J.

text:
    GARDNER v INSURANCE COMPANY OF NORTH AMERICA
    1. Automobiles — Insurance—Uninsured Motorists — Set-Off Provision.
    An uninsured motorist provision, in a no-fault automobile insurance policy, which allows the insurer to reduce the amounts payable under the uninsured motorist provision by the amounts paid for personal protection benefits is not contrary to public policy and is valid.
    2. Automobiles — Insurance—Uninsured Motorists — Set-Off Provision.
    Amounts paid for personal protection benefits under an automobile insurance policy may be set off against amounts payable under an uninsured motorist provision of the policy where the insurance contract contains a clear and unambiguous provision ■allowing such a set off.
    Appeal from Oakland, Alice L. Gilbert, J.
    Submitted February 14, 1978, at Lansing.
    (Docket No. 77-2793.)
    Decided March 20, 1978.
    Complaint by Joseph C. Gardner and Barbara M. Gardner against the Insurance Company of North America for a declaratory judgment that a set off of amounts paid for personal protection benefits against amounts payable under an uninsured motorist provision in a no-fault insurance policy could only occur after plaintiffs had recovered damages from an uninsured motorist. Summary judgment for defendant. Plaintiffs appeal.
    Affirmed.
    References for Points in Headnotes

       New Topic Service Am Jur 2d, No-fault Insurance § 3.

       7 Am Jur 2d, Automobile Insurance § 135 et seq.

      Hutson & Hutson, for plaintiffs.

      Harvey, Kruse & Westen, P. C. (by Dane A. Lupo), for defendant.
    Before: Danhof, C. J., and Bronson and N. J. Lambros, JJ.

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

   N. J. Lambros, J.

On February 7, 1974, plaintiffs suffered injuries in an automobile accident with an uninsured motorist. They were insured by defendant under a no-fault insurance policy. They paid an additional premium of $2 for uninsured motorist coverage. A policy provision allowed the insurance company to reduce the amounts payable under the uninsured motorist provision by the amounts paid for personal protection benefits. Plaintiffs sought a declaratory judgment that this set off could occur only after plaintiffs had recovered damages from the uninsured motorist, see MCLA 500.3116; MSA 24.13116, but the trial court granted defendant’s motion for summary judgment. On appeal, plaintiffs argue that they are entitled to payment of the uninsured motorist benefits without a set off and that the policy provision providing for a set off is contrary to the public policy of this state.

In American Fidelity Fire Insurance Co v Wil liams, 80 Mich App 125; 263 NW2d 311 (1977), this issue was discussed and the Court held that an essentially identical policy provision allowing set off was valid and not contrary to public policy. We find their reasoning persuasive. Since the repeal of MCLA 500.3010; MSA 24.13010, by 1972 PA 345, an insurer is not required to provide (or a motorist to have) a statutorily mandated minimum amount of uninsured motorist coverage.

The insurer, in this case, is liable only for payment of benefits on the basis of the contract. The contract provisions are clear and unambiguous in authorizing a deduction of personal protection benefits from uninsured motorist benefits. A set off provision is not restricted to "similar” benefits, see Royal Globe Insurance Co v Connolly, 54 App Div 2d 1117; 389 NYS2d 207 (1976), and does not contain ambiguities which are capable of being strictly construed against the insurer, Arrigo’s Fleet Service, Inc v Aetna Life & Casualty Co, 54 Mich App 482, 487, n 5; 221 NW2d 206 (1974), lv den, 392 Mich 812 (1974), so as not to permit set off.

If the policy provision does call for a set off, plaintiffs claim that it cannot be given effect since it is contrary to public policy. Plaintiffs contend that such a provision might, in some circumstances, render the uninsured motorist coverage totally worthless where personal protection benefits exceed the uninsured motorist policy limits. However, the insurer is no longer required to provide uninsured motorist coverage. Although the policy does not offer as much protection as plaintiffs would like, in retrospect, it does offer some limited protection. There are accidents in which people incur minimal economic losses but suffer greatly from noneconomic injuries. On the facts of this case, we cannot say that the policy provisions were against the public policy of this state.

Affirmed. Costs to defendant.

       Joseph Gardner suíféred a broken neck and lost his right kneecap with a permanent loss of mobility. Barbara Gardner broke her arm, jaw and other facial bones. They were paid about $13,000 for economic losses of wages and medical bills (PIP); they are now claiming for $40,000 in noneconomic losses.

       Plaintiffs’ reliance on this statute to void the set-off provision is misplaced. This section deals with the set off of tort recoveries from statutorily required personal protection benefits while the instant case involves deducting personal protection benefits from uninsured motorist benefits, which are not required by law.

       See also, Schigur v West Bend Mutual Ins Co, 80 Mich App 640; 264 NW2d 83 (1978).

       As the Court noted in American Fidelity Fire Ins Co, supra, a search for assistance from other jurisdictions is not very fruitful, see Anno: Uninsured Motorist Insurance: Reduction of Coverage By Amounts Payable Under Medical Expense Insurance, 24 ALR3d 1353. These cases involve different factual and legal settings (i.e., whether there was an applicable policy provision providing for set off, whether the damages were above or below the policy limits, whether there was a potential for double recovery, whether the statute required, forbade, or was silent about set offs, whether no-fault was in effect in that state and whether a certain minimum level of uninsured motorist coverage was required by statute) which makes the analysis of their holdings difficult and inconclusive as applied to the facts of this case.


author: Per Curiam.

text:
    PEOPLE v SMITH
    Drugs and Narcotics — Witnesses—Instructions to Jury — Addict-Informants — Case Precedent — Special Scrutiny of Testimony.
    It was not error for a trial court at a defendant’s trial for delivery of heroin to refuse to give a defendant’s requested instruction that an addict-informer’s testimony deserved special scrutiny by the jury where at the time of the defendant’s trial the law was that such an instruction was unnecessary; because subsequent to the defendant’s trial the Supreme Court, in another case, noted that "it would not be adverse” to such an instruction, an instruction concerning special scrutiny of the testimony of addict-informants should be given upon request in trials subsequent to that case where the testimony of the informant is the only evidence linking the defendant to the offense.
    Appeal from Kent, John T. Letts, J.
    Submitted February 7, 1978, at Grand Rapids.
    (Docket No. 29679.)
    Decided February 24, 1978,
    opinion amended March 21, 1978.
    Phillip J. Smith was convicted of delivery of heroin and of being a second offender. Defendant appeals.
    Affirmed.

      Frank J. Kelley, Attorney General, Robert A. Derengoski, Solicitor General, David H. Sawyer, Prosecuting Attorney, and Donald A. Johnston III, Chief Appellate Attorney, for the people.

      Buth & Riley, for defendant on appeal.
    References for Points in Headnote
    75 Am Jur 2d, Trial §§ 583, 865.
    81 Am Jur 2d, Witnesses §§ 497, 546, 667.

      Before: J. H. Gillis, P. J., and R. B. Burns and Allen, JJ.
   Per Curiam.

On May 11, 1976, defendant was convicted of delivery of heroin, contrary to MCLA 335.341(l)(a); MSA 18.1070(41)(l)(a), following a jury trial in Kent County Circuit Court. Defendant was also convicted of being a second offender under MCLA 335.348; MSA 18.1070(48). Defendant was sentenced May 26, 1976, to a prison term of from 5 to 40 years. He appeals as of right.

An addict-informer allegedly made a heroin purchase from defendant with money obtained from police officers. The prosecution’s case rested on the testimony of the addict-informer. The possible personal interests, biases and prejudices of the addict-informer were brought out during the trial. The only issue on appeal raised by defendant concerns the trial court’s refusal to give a requested instruction that an addict-informer’s testimony deserved special scrutiny by the jury.

At the time of defendant’s trial the law in Michigan was that an instruction such as that requested by defendant was unnecessary. People v Foster, 68 Mich App 276, 278-279; 242 NW2d 553 (1976), People v Martin, 53 Mich App 321; 220 NW2d 186 (1974), People v Atkins, 47 Mich App 558; 209 NW2d 735 (1973), lv granted, 391 Mich 766 (1974). Therefore it was not error for the trial court to refuse to give the requested instruction.

Subsequent to defendant’s trial, the Supreme Court decided People v Atkins, 397 Mich 163; 243 NW2d 292 (1976). In Atkins, the Supreme Court, at 170, noted that it "would not be adverse” to an instruction similar to the one requested in the instant case. In the future, therefore, an instruction concerning special scrutiny of the testimony of addict-informants should be given upon request, where the testimony of the informant is the only evidence linking the defendant to the offense. We note that a majority of the Supreme Court in Atkins, 397 Mich at 171, refused to adopt an argument similar to defendant’s argument that the logic of People v McCoy, 392 Mich 231; 220 NW2d 456 (1974), changed the law in Michigan and made it necessary that the instruction in question be given. The circumstances in McCoy are distinguishable, as mentioned by the Supreme Court in Atkins, and we do not find that McCoy affects the decision in this case.

Affirmed.

      CJI 5:2:04 suggests the form for such an instruction.