Kay et al v. United of Omaha Life Insurance Company

Filing 123

ORDER Regarding Proposed Judgment. Signed by District Judge John Corbett O'Meara. (WBar)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION

CLAIRE J. KAY and CLAYMORE
CONSTRUCTION CO.,
Plaintiffs/Counter-Defendants,

Case No. 09-11887
Honorable John Corbett O’Meara

v.
UNITED OF OMAHA LIFE INSURANCE
COMPANY d/b/a MUTUAL OF OMAHA
INSURANCE COMPANY,
Defendants,
And
FLAGSTAR BANK,
Intervening Defendant/Counter-Plaintiff.
/
ORDER REGARDING PROPOSED JUDGMENT
This matter came before the court on Plaintiffs' May 18, 2012 proposed judgment submitted
to the court following a jury verdict rendered in Plaintiffs' favor. Defendant United of Omaha Life
Insurance Company filed objections to Plaintiffs' proposed judgment May 23, 2012; and Plaintiffs
filed a response to the objections June 1, 2012.
Defendant objects to the award of interest pursuant to Mich. Comp. Laws Ann. § 500.2006(4),
arguing that Plaintiffs are not entitled to 12% interest provided by the statute. Defendant claims the
interest is "not available if the 'claim is reasonably in dispute.'" Defendant's br. at 2. However, the
Michigan Court of Appeals has held that a first-party insured is entitled to 12% penalty interest if
a claim is not timely paid by the insurer, regardless of whether the claim was reasonably in dispute.

Griswold Properties, L.L.C. v. Lexington Ins. Co., 276 Mich. App. 551 (2007). Therefore, Plaintiffs
are entitled to the 12% penalty interest.
Although Defendant complains about paying costs and attorney fees in the amount of nearly
$350,000.00, the court has awarded those fees. A substantial amount of legal work was incurred in
this case, including a jury trial; and the court finds that the award is appropriate.
A judgment will be entered separately.

s/John Corbett O'Meara
United States District Judge
Date: July 26, 2012

I hereby certify that a copy of the foregoing document was served upon counsel of record on
this date, July 26, 2012, using the ECF system.

s/William Barkholz
Case Manager

2