Augustine v. Allstate Insurance
292 Mich. App. 408
| Mich. Ct. App. | 2011Background
- This is a first-party, no-fault-insurance case where Augustine seeks attorney fees under MCL 500.3148(1) after prevailing on benefits.
- On initial appeal this Court vacated the attorney-fee award and remanded to apply Smith v Khouri’s framework for determining reasonable fees.
- Remand instructions required specific findings on each attorney’s fees, using Smith’s process and considering locality-based rates and time expended.
- At remand, the trial court held an evidentiary hearing, allowed discovery disputes about the litigation file, and admitted four letters from other attorneys as evidence in support of fees.
- The trial court ultimately awarded $250,000 in fees, but this Court found multiple errors in applying Smith, in considering discovery, in admitting letters, and in hours calculation.
- The appellate court vacated the fee award and remanded for rehearing and redetermination consistent with Smith and this opinion.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the trial court complied with Smith on remand | Augustine asserts Smith framework applied correctly | Allstate argues remand complied with Smith | Abused: failed to apply Smith steps and law-of-the-case |
| Whether discovery of the litigation file was properly limited and governed by privilege/work-product rules | Discovery not needed; file contains privileged material | Redacted materials could be obtained for review | Abused: trial court erred by denying meaningful, redacted discovery |
| Whether the four letters from other attorneys were admissible to prove fees | Letters are trustworthy evidence of customary rates | Letters are hearsay and not business records | Abused: letters improperly admitted; not admissible under MRE 803 |
| Whether the court properly determined hours and rate under Smith/MRPC 1.5(a) factors | Hours and rate supported by billing summary; proper analysis under Smith | Record lacking corroboration; inadequate findings on hours and rate | Abused: hours inadequately supported; rate not properly tied to locality and factors |
| Whether law-of-the-case required Smith-based, per-attorney findings and locality-rate determination | Law-of-the-case requires Smith-compliant findings for each attorney | Smith framework unnecessary to the extent previously awarded | Abused: law-of-the-case required Smith-based findings; not met |
Key Cases Cited
- Smith v. Khouri, 481 Mich 519 (2008) (frames stepwise Smith approach to attorney-fee awards)
- Wood v. DAIIE, 413 Mich 573 (1982) (six Wood factors for fee reasonableness)
- MRPC 1.5(a), MRPC 1.5(a) (1982) (guide to reasonableness factors for fees)
- Crawley v. Schick, 48 Mich App 728 (1973) (related to fee-related considerations)
- Univ Rehab. Alliance, Inc. v. Farm Bureau Gen Ins Co of Mich, 279 Mich App 691 (2008) (distinguishes Smith applicability to contingency vs hourly fees)
- Kasben v. Hoffman, 278 Mich App 466 (2008) (law-of-the-case and remand guidance principles)
- Dorsey v. International Union, 273 Mich App 26 (2006) (totality-of-the-circumstances approach to admission of evidence)