When can I start collecting money on a judgment in Michigan?

When can I collect on a Judgment in MichiganThe simple answer is 21 days after you have a “final judgment”, sometimes referred to as a “final order”. That’s when the judge issues an order that disposes of all the claims of all the parties to a case, and awards a party money damages.

The issue becomes more complicated when a question arises with respect to when a judgment or order is, in fact, final.

A case determinative order may be entered by way of bench trial, jury verdict or motion for summary disposition. If however, and for example only, the losing party files a motion for a new trial or a motion for reconsideration within 21 days of the initial order, the time is extended until the court decides such motion. If the court denies the motion for a new trial or reconsideration, then the verdict is “final”. The 21 day clock starts ticking again at the time of the court order on the motion.

Assuming that a losing party has exhausted all their post award or verdict relief in the court that rendered it, the judgment is final. The losing party must preserve their appeal of right by filing a claim of appeal within 21 days from the order denying their motion for new trial. Otherwise, collection activities may begin 21 days after the court order denying post judgment relief.

But what if the court has not yet decided about an award of costs and attorney fees?

The above is true even if an award of attorney fees is pending! The reason is the final post judgment relief order, when combined with the original judgment, constitutes a final order for purposes of MCR 7.202.

MCR 7.202(6)(a)(i) provides that a “final judgment” includes “the first judgment or order that disposes of all the claims and adjudicates the rights and liabilities of all the parties, including such an order entered after reversal of an earlier final judgment or order.” In that same rule MCR 7.202(6)(a)(iv), a “final judgment” is further defined as “a postjudgment order awarding or denying attorney fees and costs under MCR 2.403, 2.405, 2.625 or other law or court rule.” In other words, the court rule (and case law) quite clearly distinguishes between a “final judgment” on the claims involved in the case, and a “final judgment” on a post-judgment motion for attorney fees.  Both are considered “final judgments” and both are separately appealable and subject to the appeal time limits set forth in the Michigan Court Rules.

When the attorney fees issue is later decided, the losing party may file a separate appeal from that order. But an appeal from the fee award does not preserve right to appeal from the original judgment if a claim of appeal is not timely filed from that final order. In such a situation, two separate appeals must be filed. See McIntosh v McIntosh, 282 Mich App 471, 483-484 (2009), holding that there must be two appeals filed in this circumstance.

This result also follows from the explicit language of MCR 7.202(6)(a)(iv) and MCR 7.203(A). The first of these rules specifies that a post judgment order granting or denying attorney fees is appealable by right. The language of this rule refers explicitly to a prior judgment having been entered. It is that judgment that constitutes a final order as well under the court rules.

Moreover, MCR 7.203(A) expressly confirms that if the defendants were to claim an appeal from the yet-to-be-decided order regarding attorney fees their appeal would be specifically limited to the attorney fees issues. In most circumstances, they would have no right to appeal the underlying judgment.

The clear language of MCR 2.614(A) also supports this conclusion. That rule provides that, absent a stay, collection efforts on a judgment can begin 21 days after the denial or a motion for other post-judgment relief. Thus, even without recourse to the final judgment considerations, the court rules explicitly allow a prevailing party to execute on a judgment in light of a court’s denial of post judgment motion(s).

This position is also fully supported by MCR 7.208(I), the court rule that explicitly recognizes that a circuit court has jurisdiction to consider a request for attorney fees despite the fact that an appeal has been filed. The only reason why this court rule exists is because, under the final order rule, there will be situations of which a request for fees will be filed after an appeal is taken. Again, this is a recognition of the fact that an appeal will be taken from a final order before the question of attorney fees is decided.

If a losing party does not file a timely claim of appeal on the original judgment’s final order, they cannot appeal it.  Hence, even if the 21 days have run on final order, collection efforts may begin, even if the attorney fees issue has yet to be decided.

But what if the court order doesn’t contain the language “final judgment” or “final order”?

The Court of Appeals has explicitly held that language in a court order declaring that an order is or is not a final judgment is in no way binding on the Court of Appeals in its determination of whether the order being appealed is a final judgment. See Faircloth v Family Independent Agency, 232 Mich App 391, 400-401 (1998).  An order’s status as a “final judgment” is to be determined by the Court of Appeals on the basis of the court rules and the decisional authority interpreting them, not the language that the parties or the court choose to place in an order.  If an order disposes of all the claims of all the parties to a case, it is final.

The best way to collect on your judgment is with an experienced Michigan business lawyer.

Marc Beginin is currently pursuing other non-legal business pursuits. Visit https://lrs.michbar.org/ for the State Bar of Michigan lawyer referral service.