Michigan Court Reversed Litigation Cost Ruling
The ruling requires losing parties to pay $2,065 in actual costs to homeowners after an offer of judgment was ignored.
Updated on Oct. 7, 2026 in Residential
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An appellate court in Michigan has reversed a lower court decision that previously denied a recovery of litigation costs to Brandon and Pam McEwen. The ruling confirms that the McEwens are entitled to collect $2,065.15 in actual costs and expert fees following a rejected offer of judgment.
Why it matters
This decision clarifies the application of the interest of justice exception when a party fails to respond to an offer of judgment within the required 21 days. It impacts how real estate litigants in Michigan must account for potential financial liabilities when weighing settlement offers during active disputes.
The court ordered $2,065.15 in total actual costs, including $1,315.15 in litigation expenses and $750.00 for expert fees. This reversal impacts cases where parties fail to respond to an offer of judgment within the state-mandated 21-day period.
The players
Brandon and Pam McEwen
Property owners who were awarded actual litigation costs following a real estate dispute.
The Sheltons
The parties in the litigation who failed to respond to a formal offer of judgment.
The details
The court applied MCR 2.405(D)(3) to determine the obligation for actual costs, finding the trial court abused its discretion by applying the interest of justice exception. Because the adjusted verdict obtained by the McEwens was more favorable than the offer of judgment the Sheltons rejected, the court ruled that the costs must be paid. The case will now return to the trial court to finalize the award of these costs.
Timeline
May 1, 2025: The trial court issued an order denying actual costs and fees.
October 6, 2026: The appellate court issued a decision reversing the denial of costs.
Money Landscape
This decision affirms the structured framework of Michigan Court Rule MCR 2.405, which governs how settlement offers impact final litigation costs. It limits judicial discretion to waive these costs, reinforcing the financial consequences of rejecting formal settlement proposals.
Homeowners involved in civil litigation should consult a qualified legal professional to understand how an offer of judgment can shift responsibility for expert fees and court costs. Reviewing all settlement timelines closely is essential, as missing the 21-day window can result in significant out-of-pocket costs.
The takeaway
This ruling highlights that ignoring formal settlement offers can lead to substantial financial liability for litigation costs. Parties currently in disputes should maintain clear records of all settlement communications and discuss the implications of rejecting offers with a qualified legal professional.
Further reading
For more on property disputes, visit the Residential section.
Source note: This article includes information reported by Michigan Lawyers Weekly.
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