Anthony Davis v. Tyler Ross
358167
| Mich. Ct. App. | Jun 9, 2022Background
- Plaintiff obtained a $23,960 judgment against ROCO Real Estate, LLC in Mississippi and filed a Notice of Entry of Foreign Judgment in Michigan district court.
- After discovery and denied sanctions/fees in district court, plaintiff sued four ROCO managers in Oakland Circuit Court alleging transfer with intent to defraud, MUVTA voidable transfer, and lack of a bona fide transaction.
- Plaintiff pleaded damages as the judgment plus attorney fees and expenses, asserting the amount in controversy exceeded Michigan circuit-court threshold ($25,000).
- Defendants moved for summary disposition under MCR 2.116(C)(4), arguing subject-matter jurisdiction was lacking because the amount in controversy was $23,960 (below $25,000).
- The trial court granted dismissal, reasoning the amount in controversy was the underlying judgment and plaintiff offered no binding authority that MUVTA allowed inclusion of attorney fees.
- The Court of Appeals reversed and remanded, holding it was not a legal certainty the amount in controversy was less than $25,000 because plaintiff plausibly alleged recoverable attorney fees (under the wrongful-acts exception and possibly MUVTA), and thus jurisdictional dismissal was improper.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the circuit court has subject-matter jurisdiction (amount in controversy) | Plaintiff contends attorney fees (past and prospective) are recoverable damages and must be included, pushing total over $25,000 | Defendants say amount in controversy is limited to the underlying $23,960 judgment; attorney fees excluded under the American rule | Reversed: cannot say with legal certainty amount < $25,000 because plausible attorney-fee claims may push amount over threshold |
| Whether attorney fees from prior litigation are includable ("wrongful acts" exception) | Fees incurred in prior collection proceedings are recoverable from third parties who caused the litigation, so include in amount-in-controversy calculation | Fees are litigation expenses and generally excluded; plaintiff offered no binding proof he can recover them | Court held plaintiff pleaded a plausible wrongful-acts claim and a reasonable estimate of fees; fees may be included for jurisdictional purposes |
| Whether statutory attorney fees under the MUVTA (MCL 566.37(1)(c)(iii)) can be claimed and included | Plaintiff argues MUVTA authorizes "any other relief the court determines appropriate," plausibly including attorney fees, so include them | Defendants note no Michigan authority holds MUVTA allows recovery of attorney fees and contend they should be excluded | Court held that, absent Michigan precedent, a plausible statutory-fee claim exists and statutory fees (if recoverable) are an exception to the exclusion rule—thus jurisdictional certainty not established |
Key Cases Cited
- Hodge v. State Farm Mut. Auto. Ins. Co., 499 Mich 211 (Mich. 2016) (amount-in-controversy uses the prayer for relief exclusive of fees, costs, and interest unless exceptions apply)
- Meisner Law Group PC v. Weston Downs Condo. Ass'n, 321 Mich App 702 (Mich. Ct. App. 2017) (standard for reviewing MCR 2.116(C)(4) jurisdictional challenges)
- Bonner v. Chicago Title Ins. Co., 194 Mich App 462 (Mich. Ct. App. 1992) ("wrongful acts" exception permits recovery of attorney fees expended in prior related litigation from a third party)
- Peters v. Gunnell, Inc., 253 Mich App 211 (Mich. Ct. App. 2002) (recognition—albeit dicta—that statutory attorney fees may be included in amount-in-controversy)
- Burnside v. State Farm Fire & Cas. Co., 208 Mich App 422 (Mich. Ct. App. 1995) (discussion of the American rule and recognized exceptions for fee recovery)
- Nathan v. Rock Springs Distilling Co., 10 F.2d 268 (6th Cir. 1926) (federal precedent holding a non-frivolous claim for attorney fees should be included in amount-in-controversy determination)