Cynthia Barton-Spencer v. Farm Bureau Life Insurance Company of Mi
892 N.W.2d 794
| Mich. | 2017Background
- Cynthia Barton-Spencer (agent) sued Farm Bureau entities after termination, alleging breach of contract, unpaid commissions, CPA and CRA claims; jury trial demanded on "all issues unless expressly waived."
- The jury found for defendants on breach claim, found plaintiff owed some commissions and also awarded plaintiff some unpaid commissions; defendants prevailed on counterclaim to recoup commissions from 11 refunded policies.
- Defendants sought contractual attorney fees under the Agent Agreement provision stating plaintiff would "reimburse [defendants’] attorney fees and costs as may be fixed by the court."
- The trial court awarded contractual attorney fees and MCR 2.403(O) case-evaluation sanctions (adjusted to avoid overlap).
- The Court of Appeals reversed the contractual-fee award and the sanctions, holding (1) contractual fees are damages and therefore the reasonableness must be decided by a jury under Mich. Const. art. 1, § 14, and (2) the phrase "fixed by the court" was ambiguous and did not constitute an express jury-waiver.
- The Michigan Supreme Court granted leave in lieu of appeal and held the contract language unambiguous: "court" means judge, so plaintiff waived jury rights as to the fee amount; Court of Appeals’ reversals on fees and sanctions were reversed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the phrase "fixed by the court" in the Agent Agreement requires a judge (not a jury) to determine attorney fees | Barton-Spencer: phrase ambiguous and does not expressly waive jury; jury must decide reasonableness | Farm Bureau: "court" ordinarily means judge; parties agreed judge would fix fees | Held: "fixed by the court" is unambiguous; "court" refers to judge, so fee amount is for the judge to fix |
| Whether contractual attorney fees are "damages" entitling plaintiff to a jury determination under Mich. Const. art. 1, § 14 | Barton-Spencer: contractual fees are damages, so jury trial right preserved | Farm Bureau: parties contracted to have judge fix fees, waiving jury on that issue | Held: Supreme Court did not decide the constitutional question; because parties validly agreed judge decides fees, plaintiff waived any jury right and bore burden to contest contract validity |
| Who bears the burden to avoid an agreement that waives a jury right | Barton-Spencer: contest jury demand sufficed; fees should have been submitted to jury | Farm Bureau: burden on plaintiff to show contract invalid to avoid waiver | Held: Burden rests with the party seeking to avoid the contractual waiver; plaintiff did not raise contractual defenses (duress, fraud, etc.) |
| Whether the trial court’s case-evaluation sanctions must be recalculated because the judge determined contractual fees | Barton-Spencer: sanctions depended on judge-fixed fee amount; reversal required | Farm Bureau: sanctions properly calculated once judge fixed fees | Held: Because judge-fixed fees were valid, Court of Appeals’ reversal of sanctions was reversed and remand recalculation directive vacated where dependent on that error |
Key Cases Cited
- Allstate Ins. Co. v. McCarn, 471 Mich. 283 (discussing contractual interpretation and ordinary meaning).
- Wilkie v. Auto-Owners Ins. Co., 469 Mich. 41 (framework for determining contract ambiguity).
- Klapp v. United Ins. Group Agency, Inc., 468 Mich. 459 (contracts construed to give effect to every word).
- Raska v. Farm Bureau Mut. Ins. Co. of Mich., 412 Mich. 355 (ambiguity rule: inartful phrasing may still have single interpretation).
- Morris v. Metriyakool, 418 Mich. 423 (burden to avoid arbitration/contractual agreements rests on the party seeking to avoid them).
- Madugula v. Taub, 496 Mich. 685 (jury-trial right analysis under Mich. Const. art. 1, § 14).
- Zeeland Farm Servs., Inc. v. JBL Enterprises, Inc., 219 Mich. App. 190 (example of jury evaluating attorney-fee reasonableness).