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STATE OF MICHIGAN
COURT OF APPEALS


CARL HARDIES, Personal Representative of the Estate of VERLYN HARDIES, Deceased, Plaintiff-Appellee/Cross-Appellant, v

UNPUBLISHED January 21, 1997

No. 185577 Lapeer Circuit Court No. 93-019526-NF

HORACE MANN INSURANCE COMPANY, Defendant-Appellant/Cross-Appellee.

Before: Griffin, P.J., and T.G. Kavanagh* and D.B. Leiber,** JJ. PER CURIAM. Defendant appeals the confirmation of an arbitration award in plaintiff's favor which included prejudgment interest. Plaintiff cross-appeals, arguing that the circuit court should have awarded interest for the period between the date of the arbitration award and the date it was paid, plaintiff's actual costs and attorney fees associated with the arbitration, and penalty interest pursuant to MCL 500.2006(4); MSA 24.12006(4). We affirm the circuit court's confirmation of the award of prejudgment interest and its denial of plaintiff's request for costs and attorney fees associated with the arbitration, but remand for further proceedings. This case arose after plaintiff's decedent was killed in an automobile accident. The owner of the automobile that struck the automobile driven by decedent was underinsured and the driver was uninsured at the time of the accident. Plaintiff's underinsured motorist claim, brought pursuant to plaintiff's insurance contract with defendant, was arbitrated and plaintiff was awarded the full amount of its coverage, $300,000. The arbitration panel also included prejudgment interest on the arbitration award in the amount of $23,040.

* Former Supreme Court Justice, sitting on the Court of Appeals by
assignment pursuant to Administrative Order 1996-10.
** Circuit judge, sitting on the Court of Appeals by assignment.
-1

Defendant first argues that the circuit court erred in confirming that portion of the arbitration award that awarded plaintiff prejudgment interest on the principal amount. We disagree. As defendant correctly points out, this is an instance of common law, rather than statutory, arbitration. EE Tripp Excavating Contractor Inc, v Jackson Co, 60 Mich App 221, 237; 230 NW2d 556 (1975). However, contrary to defendant's argument, we do not believe that the arbitrators exceeded the scope of their authority as delineated in the insurance contract. Arbitration awards are presumed to be within the scope of the arbitrators' authority absent express language to the contrary. Gordon Sel-Way v Spence Bros, 438 Mich 488, 497; 475 NW2d 704 (1991). Thus, where there is no provision in the contract that specifically prohibits awarding prejudgment interest, we must presume that the arbitration panel was authorized to award it. Further, "Michigan has long recognized the common-law doctrine of awarding interest as an element of damages." Id., 499. Consequently, we are not persuaded by defendant's reliance on Moultrie v DAIIE , 123 Mich App 403; 333 NW2d 298 (1983), for defendant's argument that "damages," as delineated in the contract, do not include prejudgment interest. Additionally, contrary to defendant's argument, an insurer can be held liable for prejudgment interest beyond the policy limits of the insurance contract pursuant to MCL 600.6013; MSA 24A.6013. Denham v Bedford, 407 Mich 517, 533-535; 287 NW2d 168(1980). Further, we note that plaintiff instituted this action against defendant, subsequently filed several motions to compel arbitration and ultimately sought judicial confirmation of the award. Where arbitration is ordered by the court and the arbitration award is subsequently confirmed, prejudgment interest pursuant to

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