                          STATE OF MICHIGAN

                           COURT OF APPEALS



TENNINE CORPORATION,                                                FOR PUBLICATION
                                                                    March 31, 2016
               Plaintiff-Appellant,                                 9:00 a.m.

v                                                                   No. 323257; 324480
                                                                    Kent Circuit Court
BOARDWALK COMMERCIAL, L.L.C.,                                       LC No. 12-006963-CE
BOARDWALK CONDOS, L.L.C., CENTRAL
MICHIGAN RAILWAY COMPANY, STRAITS
CORPORATION, DARK PROPERTIES, INC.,
and PARKPLACE PROPERTIES OF WEST MI,
L.L.C.,

               Defendants-Appellees.


Before: SAAD, P.J., and STEPHENS and O’BRIEN, JJ.

O’BRIEN, J.

        In Docket No. 323257, plaintiff, Tennine Corporation, appeals as of right the trial court’s
opinion and order granting summary disposition in favor of defendant, Central Michigan
Railway Company (CMR).1 We reverse the trial court’s dispositive motion decision regarding
CMR and remand for further proceedings consistent with this opinion. In Docket No. 324480,
plaintiff appeals as of right the trial court’s opinion and order granting the motion for costs and
attorney fees in favor of defendants, Boardwalk Commercial, L.L.C., Boardwalk Condos, L.L.C.,
and Parkplace Properties of West MI, L.L.C. (the Boardwalk defendants). We affirm the trial
court’s award of actual costs and attorney fees in their favor.




1
  The trial court granted summary disposition in favor of all defendants except for plaintiff’s
claim against CMR for trespass. However, plaintiff voluntarily dismissed the trespass claim in
order to proceed with the appeal. The trial court’s rationale for granting summary disposition in
favor of defendants was contingent on the party at issue, the claim raised, and the evidence
produced. Plaintiff’s challenge to the summary disposition decision solely involves the issue of
standing, and the trial court’s standing decision only impacted CMR. Accordingly, we do not
address the trial court’s summary disposition decision involving the other defendants.


                                                -1-
                      I. BASIC FACTS AND PROCEDURAL HISTORY

        This case concerns real property located in Grand Rapids, Michigan, conveyed from the
Berkey & Gay Furniture Company to the Grand Trunk Western Railroad Company (Grand
Trunk) in 1914, and from Grand Trunk to defendant CMR in 1987. There is no dispute that this
property was conveyed to CMR as a railroad right-of-way (ROW) and was to remain in its
possession “as long as” the property was used for railway purposes. The Railroad Code, MCL
462.101 et seq., defines a ROW as “the track or roadbed owned by a railroad and that property
owned by a railroad which is located on either side of its tracks and which is readily recognizable
to a reasonable person as being railroad property . . . .” MCL 462.273(2).

         The relevant portion of the ROW began at Monroe Street and continued south to Mason
Street. William Tingley, plaintiff’s general manager, averred that the northern portion of the
ROW between Monroe Street and Walbridge Street was adjacent to plaintiff’s property located
at 1009 Ottawa Street NW. CMR purchased all rights, title, and interest in the ROW with the
intent of using it as a railroad and transported paper to and from the building that housed the
Grand Rapids Press. Its use ceased as a railroad after the Grand Rapids Press moved to another
city in 2004. CMR then attempted to abandon the ROW and have it converted into a recreational
trail.

        Pursuant to federal law, CMR was required to file an application regarding its
abandonment of the ROW with the federal Surface Transportation Board (STB). See 49 USC
10903(a)(1) (stating that a rail carrier intending to “abandon any part of its railroad lines” “must
file an application relating thereto with the [STB]. An abandonment or discontinuance may be
carried out only as authorized under this chapter.”). That is, CMR could not abandon the ROW
without authorization from the STB. In instances of railroad abandonment, federal law directed
the STB to encourage the establishment of recreational trails “in furtherance of the national
policy to preserve established railroad rights-of-way for future reactivation of rail service, to
protect rail transportation corridors, and to encourage energy efficient transportation use . . . .”
16 USC 1247(d).

        On March 12, 2009, CMR applied to the STB for authorization to abandon the ROW and
have it converted to recreational use pursuant to 16 USC 1247(d). Defendant, Dark Properties,
Inc., was created for the purpose of assisting CMR with transforming the ROW to recreational
use after the STB authorized abandonment. However, the STB did not grant CMR authorization
to abandon the ROW because negotiations were not completed.

        Defendants, Boardwalk Commercial, L.L.C., and Boardwalk Condos, L.L.C., acquired
title to real property that was formerly part of the Berkey & Gay Furniture Company and
constructed condominiums on this property. Included in the property was a reversionary interest
in the southern segment of the ROW, which began at Walbridge Street and ended at Mason
Street. On April 28, 2012, these defendants transferred their reversionary interest in the southern
segment of the ROW to Parkplace Properties of West MI, L.L.C.

       Plaintiff’s representative averred that on November 17, 2011, a work crew from Jaeger
Salvage entered its property and demolished the tracks and rails on the northern and southern
parts of the ROW. The crew stacked railroad ties on plaintiff’s property. On November 18,

                                                -2-
2011, the crew returned with two backhoes to continue the demolition. Soil from the ROW
clung to the backhoes and was allegedly tracked onto plaintiff’s property. Plaintiff’s
representative told the crew that the soil on the ROW was contaminated with hazardous
chemicals and that the crew did not have permission to enter plaintiff’s property. A crew
member purportedly indicated that Beth Visser, an agent of the Boardwalk defendants, gave the
crew permission to enter the property. The crew complied with plaintiff’s request that they stop
work, and they removed the railroad ties from plaintiff’s property. This activity serves as the
impetus for this litigation.

        Plaintiff gave notice of its intent to file a claim pursuant to Michigan’s Natural Resources
and Environmental Protection Act (NREPA), MCL 324.101 et seq. On July 30, 2012, plaintiff
filed suit against defendants alleging violations of the NREPA, trespass, and nuisance. All
defendants filed motions for summary disposition. Pertinent to the appeal, the trial court held
that plaintiff did not have standing to raise the NREPA claim against CMR. Following the grant
of summary disposition to the Boardwalk defendants, the trial court granted their request for
actual costs, including attorney fees, pursuant to MCR 2.405, because plaintiff did not accept
their offer of judgment. From these rulings, plaintiff appeals. On November 25, 2014, the
appeals were consolidated “to advance the efficient administration of the appellate process.”
Tennine Corp v Boardwalk Commercial, LLC, unpublished order of the Court of Appeals, issued
November 25, 2014 (Docket Nos. 323257, 324480).

                                     II. DOCKET NO. 323257

      Plaintiff alleges that the trial court erred in concluding that it lacked standing to pursue
the NREPA or environmental claims against CMR. We agree.

        The question of whether a party has standing presents a question of law subject to de
novo review on appeal. Manuel v Gill, 481 Mich 637, 642-643; 753 NW2d 48 (2008). The
standing doctrine’s purpose is to determine whether a litigant has a sufficient interest to “ensure
sufficient and vigorous advocacy.” Lansing Sch Ed Ass’n v Lansing Bd of Ed, 487 Mich 349,
355; 792 NW2d 686 (2010) (citation omitted). The standing requirement ensures that only those
with a substantial interest may raise a claim in court. Trademark Props of Mich, LLC v Fed
Nat’l Mtg Ass’n, 308 Mich App 132, 136; 863 NW2d 344 (2014). When a party’s standing is
contested, the issue becomes whether the proper party is seeking adjudication, not the
justiciability of the issue, and standing is not contingent on the merits of the case. Id. at 136-137.
Standing may be conferred by legislative expression or implied by duties that arise from the law.
Lansing Sch Ed Ass’n, 487 Mich at 357-358. A corporation has the power, in furtherance of its
corporate purposes, to sue and be sued and “participate in actions and proceedings, judicial,
administrative, arbitrative, or otherwise, in the same manner as natural persons.” MCL
450.1261(b).

        The purpose of Part 201 of the NREPA, titled Environmental Remediation, MCL
324.20101 to MCL 324.20142, is “to provide for appropriate response activity to eliminate
unacceptable risks to public health, safety, or welfare, or to the environment from environmental
contamination at facilities within the state.” MCL 324.20102(c). Pursuant to the NREPA, MCL
324.101 et seq., a plaintiff shall give a written notice advising of the intent to sue, the basis for
the suit, and the relief requested at least 60 days in advance of the filing of a complaint. MCL

                                                 -3-
324.30135(3)(a). The notice2 must be sent to the DEQ, the attorney general, and the proposed
defendants. Id. MCL 324.20135 addresses who may pursue a NREPA action and provides in
relevant part:

                  (1) Except as otherwise provided in this part, a person, including a local
          unit of government on behalf of its citizens, whose health or enjoyment of the
          environment is or may be adversely affected by a release from a facility or threat
          of release from a facility, other than a permitted release or a release in compliance
          with applicable federal, state, and local air pollution control laws, by a violation
          of this part or a rule promulgated or order issued under this part, or by the failure
          of the directors to perform a nondiscretionary act or duty under this part, may
          commence a civil action against any of the following:

                   (a) An owner or operator who is liable under section 20126 for injunctive
          relief necessary to prevent irreparable harm to the public health, safety, or
          welfare, or the environment from a release or threatened release in relation to that
          facility.

                   (b) A person who is liable under section 20126 for a violation of this part
          or a rule promulgated under this part or an order issued under this part in relation
          to that facility.

The NREPA defines a “person” as “an individual, partnership, corporation, association,
governmental entity, or other legal entity.” MCL 324.301(h) (emphasis added). The circuit
court has jurisdiction to remedy the NREPA violation, and the remedies include injunctive relief,
civil fines, and action necessary to correct the violation. MCL 324.20135(2).

        MCL 324.20126 establishes who is liable under the NREPA, and it includes, “[t]he
owner or operator of a facility if the owner or operator is responsible for an activity causing a
release or threat of release.” MCL 324.20126(1)(a). An “operator” encompasses a “person who
is in control of or responsible for the operation of a facility,” MCL 324.20101(1)(jj), and an
“owner” involves a “person who owns a facility,” MCL 324.20101(1)(kk). A “facility” is
defined as “any area, place, parcel or parcels or property, or portion of a parcel of property where
a hazardous substance in excess of the concentrations that satisfy the cleanup criteria for
unrestricted residential use has been released, deposited, disposed of, or otherwise comes to be
located.” MCL 324.20101(s). A “[r]elease includes, but is not limited to, any spilling, leaking,
pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, or
disposing of a hazardous substance into the environment . . . .” MCL 324.20101(pp). A
“hazardous substance” includes any substance defined as a hazardous substance under the
Comprehensive Environmental Response Compensation and Liability Act (CERCLA). MCL
324.20101(x)(ii). CERCLA’s definition of hazardous substance involves “any hazardous air
pollutant listed under section 112 of the Clean Air Act . . . .” 42 USC 9601(14). The Clean Air
Act includes arsenic and lead compounds among its list of pollutants. 42 USC 7412(b)(1).


2
    The parties do not contest that notice was given or its sufficiency.


                                                   -4-
        MCL 324.20135 is classified as the “citizens suit” provision of the NREPA. 1031 Lapeer
LLC v Rice, 290 Mich App 225, 235; 810 NW2d 293 (2010). This provision is intended to
govern lawsuits brought by persons when their health or enjoyment of the environment is at risk
from a facility or threat of a release from a facility. Id. When a plaintiff does not bring suit as a
person “whose health or enjoyment of the environment” was adversely affected by a release or
threat of release of hazardous substances, but rather, seeks only to recover the monetary costs
associated with remediation, he lacks standing to sue under the NREPA. Flanders Indus, Inc v
Michigan, 203 Mich App 15, 34; 512 NW2d 328 (1993).

        In Flanders, the plaintiff—a corporation—purchased an industrial plant on the shores of
Green Bay in 1982. Before the purchase, the owner and operator, a furniture manufacturer,
discharged paint sludge into Green Bay; a fact unknown to the plaintiff. Because of the paint
sludge, the land under Green Bay was contaminated, and the state owned this land. Id. at 18-19.
In 1989, the DNR notified the plaintiff that it was subject to liability and must remediate the
contamination pursuant to the Michigan Environmental Response Act (MERA), MCL 299.601 et
seq.3 The plaintiff incurred expenses in removing the sludge. Id. at 19. In 1992, the plaintiff
sued the state, raising several counts arising from the costs it incurred, including a claim for
injunctive relief under former MCL 299.615(1), which allowed “[a] person . . . whose health or
enjoyment of the environment is or may be adversely affected by a release from a facility or
threat of release from a facility” to bring a civil action against certain entities. Id. at 32. This
Court held that the plaintiff lacked standing to sue under former MCL 299.615:

               Section 15 [i.e., former MCL 299.615] provides that “a person . . . whose
       health or enjoyment of the environment is or may be adversely affected by a
       release from a facility or threat of release” may bring suit. Plaintiff is not a
       person whose health may be affected. Rather, plaintiff is seeking relief only from
       the monetary costs associated with the release caused by [the furniture company].
       Plaintiff, therefore, is not within the class of persons who may seek relief under
       the provisions of [former MCL 299.615]. [Flanders, 203 Mich App at 34.]

Because the plaintiff lacked standing to sue under the former MERA, this Court concluded that
the trial court properly dismissed the plaintiff’s claim under that provision. Id. Similarly in 1031
Lapeer LLC, 290 Mich App at 235, this Court held that the plaintiffs could not maintain their suit
premised on environmental violations when the foundation for the fraud and statutory violations
arose from the parties’ contract. Because the plaintiffs sought rescission of the contract and
damages, but not injunctive relief for the environmental contamination, MCL 324.20135 did not
apply. Id.

       In the present case, the trial court held that because plaintiff was a corporation, plaintiff
was not a person whose health or enjoyment of the environment could be adversely affected by a


3
  The MERA was repealed by the Legislature, effective March 30, 1994, 1994 PA 451, but the
MERA’s provisions were recodified at Part 201, MCL 324.20101 et seq., of the NREPA. RCO
Engineering, Inc v ACR Indus, Inc (On Remand), 246 Mich App 510, 514; 633 NW2d 449
(2001).


                                                -5-
release of hazardous chemicals, relying on the decision in Flanders. However, the Flanders
Court did not hold that a corporation lacked standing under the NREPA simply because of its
corporate status. Rather, it held that the plaintiff lacked standing because it brought suit under
the former MERA to obtain relief for the costs of remediation ordered by the DNR. Flanders,
203 Mich App at 34. The plaintiff did not bring suit in the capacity of a person whose health or
enjoyment of the environment was adversely affected; therefore, it lacked standing under that
statute. Id.

         In contrast, in this case, plaintiff alleged in its complaint that the removal activity on the
ROW released or threatened to release hazardous substances that would endanger the health of
people on plaintiff’s property and reduce the value of plaintiff’s property. Additionally, plaintiff
advised in its notice to sue that the removal activity was adversely affecting its health and
enjoyment of the environment. Because plaintiff sued as a person whose health and enjoyment
of the environment was adversely affected by a release of contamination, the reason for the
plaintiff’s lack of standing in Flanders, 203 Mich App at 34—that the plaintiff sued not as a
person whose health or enjoyment of the environment was adversely affected, but rather for
relief from the costs of remediation—does not apply to plaintiff. Consequently, we must address
whether a corporation has standing to sue under the NREPA when that corporation sues as a
person whose health and enjoyment of the environment may be affected by contamination.

        The interpretation and application of a statute presents a question of law that the appellate
court reviews de novo. Tomecek v Bavas, 482 Mich 484, 490; 759 NW2d 178 (2008). The
principal rule of statutory construction is to discern and give effect to the legislative intent by
examining the most reliable evidence of intent, the statutory language. Gardner v Dep’t of
Treasury, 498 Mich 1, 5-6; 869 NW2d 199 (2015). When the statutory language is
unambiguous, the Legislature intended the meaning clearly expressed, the statute is enforced as
written, and no further judicial construction is necessary. Krusac v Covenant Med Ctr, Inc, 497
Mich 251, 256; 865 NW2d 908 (2015).

        “Courts may not speculate regarding legislative intent beyond the words expressed in a
statute. Hence, nothing may be read into a statute that is not within the manifest intent of the
Legislature as derived from the act itself.” Mich Ed Ass’n v Secretary of State (On Rehearing),
489 Mich 194, 217-218; 801 NW2d 35 (2011) (quotation omitted). “The words used by the
Legislature are given their common and ordinary meaning.” Joseph v Auto Club Ins Ass’n, 491
Mich 200, 206; 815 NW2d 412 (2012). This Court may consult a dictionary to define terms that
are undefined in the statute. Koontz v Ameritech Servs, Inc, 466 Mich 304, 312; 645 NW2d 34
(2002). “Only where the statutory language is ambiguous may a court properly go beyond the
words of the statute to ascertain legislative intent.” Sun Valley Foods Co v Ward, 460 Mich 230,
236; 596 NW2d 119 (1999). A legal provision is ambiguous only if it irreconcilably conflicts
with another provision or when it is equally susceptible to two or more meanings. Mayor of City
of Lansing v Pub Serv Comm, 470 Mich 154, 166; 680 NW2d 840 (2004) (quotation marks and
citation omitted). “[A] finding of ambiguity is to be reached only after all other conventional
means of [] interpretation have been applied and found wanting.” Id. at 165 (quotation marks
and citation omitted).

       First, plaintiff is a corporation, and the NREPA includes a corporation in the definition of
a person. MCL 324.301(h). Therefore, plaintiff is a person under the NREPA. See Hayes v

                                                 -6-
Neshewat, 477 Mich 29, 35; 729 NW2d 488 (2007) (“When a statute specifically defines a given
term, that definition alone controls.”). However, under the specific language of MCL
324.20135(1), Krusac, 497 Mich at 256, not all persons have standing; rather, only those persons
“whose health or enjoyment of the environment is or may be adversely affected by a release from
a facility or threat of release from a facility” may commence a civil action.

        Plaintiff did not present any evidence that the health of its employees was compromised
as a result of the removal activity in the ROW. Consequently, we focus on whether plaintiff, as a
corporation, may suffer from loss of the enjoyment of the environment as a result of any release.
MCL 324.20135(1).

         The NREPA defines “environment” as “land, surface water, groundwater, subsurface
strata, air, fish, wildlife, or biota within the state.” MCL 324.20101(1)(o). The statute does not
define “enjoyment,” consequently this Court may refer to a dictionary to determine its meaning.
Koontz, 466 Mich at 312. Black’s Law Dictionary (10th ed) defines “enjoyment” as “1.
Possession and use, esp. of rights of property. 2. The exercise of a right.” Furthermore,
Merriam-Webster’s Collegiate Dictionary (11th ed) defines “enjoyment” as “possession and use
. . . .” In light of these definitions, we conclude that a corporation may exercise the right to use
its land or water—in other words, a corporation may enjoy the environment. Indeed, our
Supreme Court has long held that a corporation may “enjoy” its real property. See, e.g., Grand
Rapids, N & LSR Co v Grand Rapids & IR Co, 35 Mich 265, 271; 24 Am Rep 545 (1877)
(stating that a corporation’s right to “enjoy” its land and property is “sacredly guarded and
protected under our constitution”). Therefore, under the statute’s plain language, a corporation
may have standing to sue. Krusac, 497 Mich at 256.

        And, clearly, a corporation’s enjoyment of the environment may be adversely affected by
the release or threat of release of hazardous substances. For example, contaminants may prevent
a corporation from using its land or water in certain ways. See MCL 324.20102(c) (stating that a
purpose of the NREPA is to eliminate risks to environmental contamination). Therefore, the
plain language of MCL 324.20135(1) affords a corporation standing to sue if its “enjoyment of
the environment is or may be adversely affected by” a release or threat of release of hazardous
substances. Krusac, 497 Mich at 256.

        Furthermore, when construing a statute, a “court must consider the object of the statute in
light of the harm it is designed to remedy and apply a reasonable construction that best
accomplishes the purposes of the statute.” CD Barnes Assoc, Inc v Star Heaven, LLC, 300 Mich
App 389, 408; 834 NW2d 878 (2013). An examination of the purposes of the NREPA indicates
that the Legislature did not intend corporations to be without standing simply because of the
corporate status. As discussed supra, the purpose of Part 201 of the NREPA is “to provide for
appropriate response activity to eliminate unacceptable risks to public health, safety, welfare, or
to the environment from environmental contamination at facilities within the state.” MCL
324.20102(c). And, the Legislature stated “[t]hat to the extent possible, consistent with
requirements under this part and rules promulgated under this part, response activities shall be
undertaken by persons liable under this part.” MCL 324.20102(g). The Legislature further
declared that Part 201 “is intended to foster the redevelopment and reuse of vacant
manufacturing facilities and abandoned industrial sites that have economic development
potential, if that redevelopment or reuse assures the protection of the public health, safety,

                                                -7-
welfare, and the environment.” MCL 324.20102(l). Accordingly, preventing a corporation from
bringing suit under the NREPA would be contrary to the stated purpose and goals of Part 201.

        In sum, plaintiff is a corporation, and its health or enjoyment of the environment may be
adversely affected by a release or threat of release from a facility. Indeed, such injury is
precisely what plaintiff alleged in its complaint to the trial court. In other words, plaintiff
“brought suit in the position of [a person] whose health or enjoyment of the environment may be
adversely affected by the” alleged contamination. 1031 Lapeer LLC, 290 Mich App at 235.
Therefore, plaintiff had standing to sue under the NREPA, and the trial court erred in granting
CMR’s motion for summary disposition of plaintiff’s claim pursuant to the NREPA for lack of
standing.4

                                    III. DOCKET NO. 324480

      Lastly, plaintiff asserts that the trial court erred by awarding offer of judgment sanctions
when such an award was unwarranted pursuant to the interest of justice exception. We disagree.

        In May 2013, each Boardwalk defendant submitted an offer of judgment of $500.
Plaintiff did not accept the offers, but instead requested additional information regarding
ownership of the parcel. However, there is no indication that plaintiff filed a motion to compel
the Boardwalk defendants to disclose ownership information. In January 2014, the Boardwalk
defendants moved for summary disposition, and the trial court granted the motion, concluding
that there was no evidence that they held an ownership interest or that the criteria for reversion of
the property was satisfied. Additionally, the trial court rejected the contention that an agent of
the Boardwalk defendants authorized the work because the evidence was premised on hearsay.
Subsequently, the Boardwalk defendants moved for offer of judgment sanctions. The trial court
found that the failure to accept the offers of judgment entitled the Boardwalk defendants to an
award of $23.04 in costs and $21,368.53 in attorney fees. Plaintiff does not contest the amount
of the award on appeal, but only disputes the failure to apply the interest of justice exception,
MCR 2.405(D)(3). Because the basis of the trial court’s grant of summary disposition in favor of
the Boardwalk defendants was not challenged, Derderian v Genesys Health Care Sys, 263 Mich
App 364, 381; 689 NW2d 145 (2004), the propriety of their dismissal is not at issue,5 and we
address the merits of the award in their favor.

       The proper interpretation of a court rule is reviewed de novo, and the same principles
governing the construction of statutes are applied. Fraser Trebilcock Davis & Dunlap PC v


4
  We express no opinion regarding whether CMR’s actions constitute a release and whether a
facility was involved. On remand, the parties may address other applicable provisions of the
NREPA.
5
  Plaintiff’s statement of the issue in its brief on appeal solely challenges whether it had standing
to pursue a claim pursuant to the NREPA. The standing decision by the trial court only pertained
to CMR. Accordingly, the summary disposition ruling addressing the Boardwalk defendants was
abandoned. MCR 7.212(C)(5); Busch v Holmes, 256 Mich App 4, 12; 662 NW2d 64 (2003).


                                                -8-
Boyce Trust 2350, 497 Mich 265, 271; 870 NW2d 494 (2015). However, the factual findings
underlying an award of attorney fees are reviewed for clear error. AFP Specialties, Inc v
Vereyken, 303 Mich App 497, 516; 844 NW2d 470 (2014). “A finding of the trial court is
clearly erroneous when, although there is evidence to support it, this Court is left with a definite
and firm conviction that a mistake was made.” Id. However, the trial court’s determination that
the interest of justice exception applies to the facts of a specific case is reviewed for an abuse of
discretion. Derderian, 263 Mich App at 374. A trial court abuses its discretion when its
decision falls outside the range of reasonable and principled outcomes. Maldonado v Ford
Motor Co, 476 Mich 372, 388; 719 NW2d 809 (2006).

        Michigan follows the “American rule” which prohibits an award of attorney fees unless a
statute, court rule, or contractual provision expressly provides to the contrary. Haliw v Sterling
Hts, 471 Mich 700, 706-707; 691 NW2d 753 (2005); Watkins v Manchester, 220 Mich App 337,
342; 559 NW2d 81 (1996). Attorney fees may be awarded under MCR 2.405, which is known as
“the offer of judgment rule.” Lech v Huntmore Estates Condo Ass’n, ___ Mich App ___, ___;
___ NW2d ___ (2015) (Docket No. 320028), slip op at 3; Marilyn Froling Revocable Living
Trust v Bloomfield Hills Country Club, 283 Mich App 264, 297; 769 NW2d 234 (2009). The
purpose of the offer of judgment rule is to avoid protracted litigation and encourage settlements.
This rule permits a party to serve on the opponent a written offer to stipulate to the entry of
judgment. If the offeree rejects the offer and the adjusted verdict is more favorable to the offeror
than the average offer, recovery of actual costs from the offeree is permitted. Id.

        A judgment arising from the grant of a dispositive motion constitutes a verdict for
purposes of MCR 2.405, and allows for the imposition of sanctions. Id. The court rule provides,
in relevant part:

               If an offer is rejected, costs are payable as follows:

               (1) If the adjusted verdict is more favorable to the offeror than the average
       offer, the offeree must pay to the offeror the offeror’s actual costs incurred in the
       prosecution or defense of the action.

                                                ***

               (3) The court shall determine the actual costs incurred. The court may, in
       the interest of justice, refuse to award an attorney fee under this rule. [MCR
       2.405(D).]

Because the interest of justice provision is the exception to a general rule, it should not be
applied absent unusual circumstances. Luidens v 63rd Dist Court, 219 Mich App 24, 33; 555
NW2d 709 (1996).

               Factors such as the reasonableness of the offeree’s refusal of the offer, the
       party’s ability to pay, and the fact that the claim was not frivolous “are too
       common” to constitute the unusual circumstances encompassed by the “interest of
       justice” exception. However, the exception may be applicable when an offer is
       made in the spirit of “gamesmanship . . . , rather than a sincere effort at
       negotiation,” or when litigation of the case affects the public interest, such as a
                                                 -9-
       case resolving an issue of first impression. [Derderian, 263 Mich App at 391
       (citations omitted).]

         In AFP Specialties, 303 Mich App at 500, the defendant purchased real property in
Kalkaska County with the intent to convert the property into a restaurant. Michigan’s
construction code required the defendant to install a fire suppression system on the property, and
the defendant hired the plaintiff, AFP Specialties, to install the system. Id. The plaintiff
subcontracted Etna to install it. When the defendant failed to pay the plaintiff, it filed suit for
breach of contract, requesting money damages and foreclosure on its construction lien. Id. at
501. Etna filed a counterclaim against the plaintiff for money damages, and after Etna prevailed
at trial, the trial court awarded Etna attorney fees under MCR 2.405. Id. at 499. On appeal, the
plaintiff argued that the trial court abused its discretion in awarding attorney fees because the
interest of justice exception precluded the award because Etna engaged in gamesmanship. Id. at
519-520.

        This Court rejected the plaintiff’s argument that Etna engaged in gamesmanship because
its offer of judgment did not serve as a compromise or encourage settlement. Id. at 519. We
concluded that evidence of gamesmanship or a de minimis offer was lacking where “there was no
case evaluation award to compare with Etna’s offer of judgment.” Rather, Etna’s offer of
judgment was only slightly more than what AFP admitted that it clearly owed to Etna.” Id. at
519-520 (emphasis in original). Furthermore, there was no indication that the plaintiff made a
counteroffer in an attempt to resolve the legal dispute between the parties. Rather, the record
indicated that the plaintiff was “simply unwilling to compromise at all” to resolve its dispute
with Etna. Although the plaintiff’s rejection of Etna’s offers of judgment may have been
reasonable, this Court held that the reasonableness of the plaintiff’s rejection was not an unusual
circumstance encompassed in the interest of justice exception. Id. This Court thus concluded
that the trial court did not abuse its discretion in refusing to apply the interest of justice
exception. Id. at 520.

        In the present case, plaintiff does not dispute that the actual verdict is more favorable to
the Boardwalk defendants as the offerors or contest the amount of costs and attorney fees
awarded. Rather, it only contends that the interest of justice exception should be applied because
the Boardwalk defendants did not respond to informal requests from plaintiff’s counsel regarding
documentation of ownership and the minimal amount of the offers demonstrated that it was not a
legitimate offer but gamesmanship. The question of ownership was raised in the context of
defendants’ motions for summary disposition. With regard to the Boardwalk defendants,
plaintiff did not present evidence that those entities owned the disputed parcel. Indeed, although
the issue of ownership may present a factual question, the nonmoving party must establish a
genuine issue of material fact with admissible documentary evidence. Ghaffari v Turner Constr
Co (On Remand), 268 Mich App 460, 463; 708 NW2d 448 (2005). Although plaintiff contends
that the Boardwalk defendants failed to offer any evidence regarding ownership, there is no
indication that plaintiff identified information that was withheld or filed a motion to compel
production of evidence regarding ownership. Moreover, the allegations that the Boardwalk
defendants had an ownership interest or obtained a reversion interest through abandonment is
belied by the evidence submitted on behalf of CMR.



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        Although plaintiff argues that the Boardwalk defendants’ offers of judgment were de
minimis, there is no amount with which to compare their offers. There was no case evaluation
award, and plaintiff did not request a specific amount of monetary damages. There is no
information that plaintiff made a counteroffer under MCR 2.405, which could provide the trial
court a manner in which to determine whether the offers were de minimis. See AFP Specialties,
303 Mich App at 519-520. Therefore, the trial court did not clearly err in finding that the
amounts of the offers failed to indicate that the Boardwalk defendants engaged in gamesmanship.
Id.6 Accordingly, the trial court did not abuse its discretion in holding that the interest of justice
exception did not bar an award costs and fees under MCR 2.405. Derderian, 263 Mich App at
374.

        Affirmed in part, reversed in part, and remanded for proceedings consistent with this
opinion. We do not retain jurisdiction. In light of the public question involved, the parties may
not tax costs. MCR 7.219(A).



                                                              /s/ Colleen A. O’Brien
                                                              /s/ Henry William Saad
                                                              /s/ Cynthia D. Stephens




6
  Plaintiff also asserted that unusual circumstances warrant application of the interest of justice
exception because the complaint requested equitable relief. However, its reliance on a
concurring opinion is inappropriate because plurality decisions in which a majority of the
participating justices do not agree to the reasoning is not a binding interpretation pursuant to the
doctrine of stare decisis. Negri v Slotkin, 397 Mich 105, 109; 244 NW2d 98 (1976). Moreover,
this Court has explicitly held that MCR 2.405 applies where a plaintiff seeks both equitable and
monetary relief. McManus v Toler, 289 Mich App 283, 290; 810 NW2d 38 (2010).


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