IN RE ACQUISITION OF LAND PARCEL 818
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STATE OF MICHIGAN
COURT OF APPEALS
__________________________________________
IN RE ACQUISITION OF LAND PARCEL 818
CITY OF DETROIT,
UNPUBLISHED
April 3, 1998
Plaintiff,
v
SPEROS G. ATSALAKIS, GEORGIA
ATSALAKIS, and ATSALIS BROTHERS PAINT &
MAINTENANCE COMPANY,
No. 196262
Wayne Circuit Court
LC No. 91-103693-CC
Defendants/Appellants/
Cross-Appellees,
and
ACKERMAN & ACKERMAN, P.C.,
Defendant/Appellee/
Cross-Appellant.
Before: Michael J. Kelly, P.J., and Cavanagh and N.J. Lambros*, JJ.
PER CURIAM.
Defendants, Speros G. Atsalakis, Georgia Atsalakis, and Atsalis Brothers Paint & Maintenance
Company (hereinafter referred to as “defendants”), appeal as of right from a June 20, 1996, order
determining the amount of attorney fees owed to Ackerman & Ackerman, P.C. (hereinafter referred to
as “the law firm”), the counsel of record for defendants in this condemnation action brought by the City
* Circuit judge, sitting on the Court of Appeals by assignment.
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of Detroit. The law firm filed a cross-appeal. We affirm in part, reverse in part, and remand for a
recalculation and award of prejudgment interest from June 28, 1991.
The law firm represented defendants in a condemnation action brought by the City of Detroit.
An April 30, 1987, fee agreement provided that the law firm’s fee would be one third of the difference
between the city’s first offer and the final award to defendants. That agreement was supplemented by a
May 15, 1987, letter from Alan Ackerman to Tony Atsalakis, providing that should the law firm
succeed in obtaining payment for “inventory,” the fee to defendants would be no greater than five
percent. The underlying condemnation action was resolved by a June 28, 1991, consent judgment,
awarding $2,600,000 to defendants and allowing them to take movable business property, including
items contained in the appraisal report, inventory, and other items. Defendants auctioned off certain
items, and retained some items that were listed in the appraisal report. A dispute arose between
defendants and the law firm concerning the amount of attorney fees owed. The trial court ordered that
the law firm was entitled to a five percent fee for the items sold at the auction and the items retained,
because such property was “inventory” and was therefore governed by the supplement to the fee
agreement. This Court reversed and remanded, holding that a factual development was necessary to
determine the parties’ intent with regard to the meaning of inventory. On remand, an evidentiary hearing
was held, following which the trial court determined that the parties intended inventory to mean paint
when they entered the supplemental fee agreement. Therefore, the value of the items auctioned, except
for the paint, and the value of the items retained but not auctioned, were subject to the original
agreement providing for a one third attorney fee. Thus, a net increase in attorney fees of $80,307.34
was awarded, along with interest from April 15, 1993, the date on which funds were released from an
escrow account following the original determination of attorney fees before the first appeal.
Defendants’ first argument on appeal is that the trial court clearly erred when it found that the
parties came to a meeting of the minds and understood inventory to mean paint at the time of the May
15, 1987, supplement to the fee agreement. We disagree. We review a trial court’s factual findings for
clear error. MCR 2.613(C). “A finding is clearly erroneous when, although there is evidence to
support the finding, this Court is left with a definite and firm conviction that a mistake has been made.”
Berry v State Farm, 219 Mich App 340, 345; 556 NW2d 207 (1996). Moreover, we defer to the
trial court’s special opportunity to judge the credibility of witnesses. MCR 2.613(C). Here, the trial
court’s finding that the parties understood inventory to mean paint was not clearly erroneous. Alan
Ackerman’s testimony indicated that the sale of paint to the city was the primary concern and area of
discussion of the parties around the time of the formation of the supplemental fee agreement. The terms
paint and inventory were used interchangeably in these discussions. Paint was the only item of concern
at that time. Although Tony Atsalakis testified that inventory meant anything not on the appraisal list,
that testimony was impeached by Atsalakis’ prior deposition testimony that inventory referred to paint
stock, and that the law firm was entitled to one third of the auction proceeds. The trial court may have
reasonably determined that Ackerman’s testimony concerning the parties’ understanding of inventory
was more credible than Atsalakis’. MCR 2.613(C). Therefore, the evidence presented at the
evidentiary hearing, including testimony concerning the express words of the parties, indicated that a
meeting of the minds had been reached, and that inventory was understood to mean paint. Heritage v
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Wilson, 170 Mich App 812, 818; 428 NW2d 784 (1988). The trial court’s finding was not clearly
erroneous.
Defendants’ second argument on appeal is that the trial court erred by awarding prejudgment
interest from the date that funds were released from escrow following the initial attorney fee
determination rather than from June 20, 1996, the date that the judgment was entered awarding a net
increase in attorney fees. The law firm’s argument on cross-appeal is that the trial court should have
awarded prejudgment interest from June 28, 1991, the date that the consent judgment was entered in
the underlying condemnation action. We agree with the law firm’s argument. We review de novo the
award of prejudgment interest under MCL 600.6013; MSA 27A.6013. Beach v State Farm, 216
Mich App 612, 623-624; 550 NW2d 580 (1996). That statute entitles the prevailing party to
prejudgment interest from the date the complaint was filed. Id., p 624. The purpose of the statute is to
compensate the prevailing party for the delay in the payment of money damages. Foremost v Waters
(On Rem), 125 Mich App 799, 803; 337 NW2d 29 (1983). However, where, as here, the prevailing
party’s claim arises after the complaint is filed, awarding interest from the date that the complaint was
filed would exceed the purpose of the statute in compensating for the delay in payment and would
overcompensate the prevailing party. Beach, supra, 216 Mich App 624. Therefore, prejudgment
interest for claims arising after the complaint is filed should be awarded from the “date of delay” in
payment. Id. The attorney fee dispute involved in the instant case arose in the course of the
condemnation action. Awarding interest from the date that the condemnation complaint was filed by the
city would overcompensate the law firm. Therefore, interest should have been awarded from the date
of delay in defendants’ payment of the attorney fee. The statutory purpose of compensating the law firm
for that delay would best be served by awarding interest from June 28, 1991, the date that the consent
judgment was entered. Foremost, supra, 125 Mich App 802-804. Since the law firm was entitled
under the fee agreement to one third of the value of the items defendants retained by virtue of the
consent judgment, the date that the consent judgment was entered is the date of delay in payment of the
attorney fee for purposes of calculating the prejudgment interest owed.
Defendants’ argument that the purpose behind the prejudgment interest statute would not be
served in this case is without merit. The law firm was denied the use of funds to which it was entitled
under the fee agreement after the consent judgment had been entered. The firm is entitled to
compensation for such loss. Foremost, supra, 125 Mich App 802-803. In addition, defendants’
argument that an award of attorney fees is equitable in nature, and that the prejudgment interest statute
therefore does not apply, is not properly supported by authority. “This Court will not search for
authority to support a party’s position.” Winiemko v Valenti, 203 Mich App 411, 419; 513 NW2d
181 (1994). We therefore conclude that the trial court erred by awarding interest from the date that
funds were released from escrow. On remand, the trial court should recalculate and award
prejudgment interest from June 28, 1991, the date on which the consent judgment was entered.
Finally, we note that the law firm’s argument that the rate of the interest awarded should be that
allowed for actions on written instruments as provided in MCL 600.6013(5); MSA 27A.6013(5), as
opposed to the rate permitted under other subsections of § 6013, is not preserved for appellate review.
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The law firm failed to raise that issue in the statement of issues presented. Meagher v McNeely &
Lincoln, 212 Mich App 154, 156; 536 NW2d 851 (1995). Moreover, the issue was not raised
before and considered by the trial court. Adam v Sylvan Glynn, 197 Mich App 95, 98; 494 NW2d
791 (1992).
Affirmed in part, reversed in part, and remanded for further proceedings consistent with this
opinion.
/s/ Michael J. Kelly
/s/ Mark C. Cavanagh
/s/ Nicholas J. Lambros*
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