ALKEN-ZIEGLER INC V LARRY KEN HAGUEAnnotate this Case
STATE OF MICHIGAN
COURT OF APPEALS
March 31, 2009
Kalkaska Circuit Court
LC No. 06-009066-CZ
LARRY KEN HAGUE, a/k/a KEN HAGUE,
Advance Sheets Version
Before: Murphy, P.J., and Fitzgerald and Markey, JJ.
We granted plaintiff’s delayed application for leave to appeal the June 5, 2007, order
modifying a judgment entered in plaintiff’s favor. We vacate the June 5, 2007, order and remand
this case to the trail court.
Defendant worked as a maintenance supervisor for plaintiff, a manufacturer of steel parts
for the automobile and other industries, until plaintiff terminated defendant’s employment on
February 1, 2006. On February 3, 2006, plaintiff brought this action against defendant, alleging
that defendant embezzled and converted approximately $38,000 of plaintiff’s property by selling
scrap metal owned by plaintiff to a third party who paid defendant. Plaintiff sought damages
under MCL 600.2919a, which permits the recovery of treble damages for embezzlement and
Plaintiff moved for summary disposition under MCR 2.116(C)(10). Plaintiff’s motion
asserted that defendant had admitted the embezzlement and had failed to respond to
interrogatories or a request for admissions. On September 19, 2006, the trial court granted
plaintiff summary disposition of its embezzlement and conversion claims and entered a judgment
of $114,091.90, with statutory interest, costs, and reasonable attorney fees to be determined.
The record also reveals that criminal charges stemming from defendant’s conduct were filed in
the Kalkaska Circuit Court.
This judgment apparently reflects the trebling of the $38,030.63 that defendant embezzled from
On October 9, 2006, plaintiff filed a motion for taxation of costs and reasonable attorney
fees. The trial court conducted hearings on the motion on November 7, 2006,2 and March 19,
2007. It came to light at the beginning of the hearing that plaintiff’s insurer had reimbursed
plaintiff for all but $5,0003 of the loss it sustained from defendant’s embezzlement. Defendant
argued that plaintiff’s actual loss was therefore only $5,000, and that the judgment should be
reduced to reflect actual damages of $5,000, with treble damages of $15,000. Plaintiff
maintained that it sustained actual damages of $38,030.63 as a result of defendant’s
embezzlement regardless of whether its insurer reimbursed it for the loss.4 Thus, the question
arose whether plaintiff’s actual damages for purposes of trebling under MCL 600.2919a was the
amount that defendant embezzled or the difference between that amount and the amount that
plaintiff was reimbursed by its insurer.
The trial court ultimately adopted the latter position, concluding that plaintiff’s actual
damages consisted of the $5,000 in embezzlement losses that plaintiff’s insurance did not cover.
In an order entered on June 5, 2007, the trial court modified the judgment, reducing the amount
awarded to plaintiff to $15,000. The order also awarded plaintiff $9,740 in attorney fees and
$430.93 in costs.
Pursuant to MCL 600.2919a(1)(a), a person damaged as a result of another person’s
stealing or embezzling property or converting property to the other person’s own use may
recover three times the amount of actual damages. Plaintiff argues that “actual damages” under
this statute are the amount a defendant actually embezzled. Resolution of the issue presented
turns on the definition of actual damages, which presents a question of law that this Court
reviews de novo. Northville Charter Twp v Northville Pub Schools, 469 Mich 285, 289; 666
NW2d 213 (2003).
The statute does not define the term “actual damages.” When interpreting statutory
language, our obligation is to ascertain the legislative intent that may be reasonably inferred from
the words expressed in the statute. Wickens v Oakwood Healthcare Sys, 465 Mich 53, 60; 631
NW2d 686 (2001). When the Legislature has unambiguously conveyed its intent in a statute, the
statute speaks for itself, and judicial construction is not permitted. Huggett v Dep’t of Nat’l
Resources, 464 Mich 711, 717; 629 NW2d 915 (2001). We give undefined statutory terms their
The hearing apparently commenced after the sentencing hearing in defendant’s criminal case
concluded. The judgment of sentence apparently included an order for restitution.
Plaintiff’s insurance deductible was $5,000.
Plaintiff also asserted that it was obligated to repay its insurer pursuant to a subrogation clause
in the insurance contract.
plan and ordinary meanings. Oakland Co Bd of Co Rd Comm’rs v Michigan Prop & Cas
Guaranty Ass’n, 456 Mich 590, 604; 575 NW2d 751 (1998). In those situations, we may consult
dictionary definitions. Id.
Black’s Law Dictionary (8th ed) defines “actual damages” as: “An amount awarded to a
complainant to compensate for a proven injury or loss; damages that repay actual losses.”
Applying this definition to MCL 600.2919a, “actual damages” means the actual loss a
complainant suffered as a result of a defendant’s criminal conduct. Here, there is no dispute that
defendant embezzled $38,030.63 from plaintiff. Defendant did not pay back any of these funds.5
This figure clearly represents the actual loss suffered by plaintiff as a result of defendant’s
embezzlement. The trial court initially entered a judgment awarding plaintiff three times that
amount, or $114,091.90.
Upon discovering that plaintiff’s insurer reimbursed plaintiff all but $5,000 of the
embezzled funds, the trial court modified its judgment to reduce plaintiff’s actual damages to
$5,000. The definition of “actual damages,” however, does not contemplate the victim’s receipt
of insurance proceeds in determining actual damages. Actual damages must exist in the first
instance before the question of insurance proceeds properly arises. Once inflicted and created,
actual damages do not change simply because an insurer has a contractual obligation to
compensate the victim in whole or in part. The statute in question is not designed or intended to
minimize a defendant’s liability for his criminal conduct if his victim had the wherewithal to
purchase insurance coverage to protect itself from the criminal conduct of third parties. It is the
embezzler’s misconduct, not the interplay between the embezzler and the victim’s insurer, that
creates actual damages. Indeed, MCL 600.2919a is a punitive statute that provides for recovery
of three times the amount embezzled. Punitive damages reflect a worthy public policy
consideration of punishing dishonest defendants and setting an example for similar wrongdoers.
To define “actual damages” as the amount embezzled less the amount a victim receives in
insurance benefits as a result of a covered loss thwarts the purpose of the statute.6
If defendant had repaid any of the funds, he might be entitled to offset the amount he repaid to
determine the amount of actual damages. See, e.g., In re Hamama, 182 BR 757 (ED Mich,
1995). In this case, however, defendant did not repay any of the embezzled funds. To the extent
that the record in this case includes mention of a criminal conviction and restitution order, the
record does not include documents relating to those matters, and they are not at issue in this
Indeed, defining “actual damages” as the amount embezzled less any amount received as
insurance proceeds in this matter would result in treble damages of $15,000, less than half the
amount embezzled. Additionally, MCL 600.2919a(2) notes that the remedy provided in MCL
600.2919a is cumulative to other rights or remedies the person may have at law. Plaintiff’s
right to collect under an insurance policy for the loss incurred as a result of defendant’s
embezzlement does not diminish plaintiff’s right to recover three times the amount of actual
damages under MCL 600.2919a.
We conclude that the trial court erred by modifying the judgment and reducing the
amount of the judgment on the basis that plaintiff’s actual damages did not include the amount
reimbursed by its insurer. We therefore vacate the order modifying the judgment and remand to
the trial court to reinstate the original judgment of $114,091.90. Plaintiff, being the prevailing
party, may tax costs pursuant to MCR 7.219. We do not retain jurisdiction.
Order vacated and case remanded.
/s/ William B. Murphy
/s/ E. Thomas Fitzgerald
/s/ Jane E. Markey